1. The Smooth Chin Device Company is a manufacturer of high-end electric razors. These razors are produced using a machine-paced process. For each razor, a tray with components enters the process at the beginning of a conveyor belt. The tray then passes through the six steps (consisting of various tasks) explained in the table below. Workers perform the assembly operations on the moving tray. The last step consists of an inspection of the then fully assembled razor. The activity times of the process are as follows:

Station A Preparation:

- Lay out chassis (12 seconds); lay out screws (15 seconds); lay out other componenents (17 seconds) --- Total 44 seconds

Station B Assembly-1

- Perform Task AS1 (10 seconds) ; Perform task AS2 (10 seconds) ; Perform task AS3 (20 seconds) --- Total 40 seconds

Station C Assembly 2

- Perform Task AS4 (14 seconds) ; Perform task AS5 (16 seconds) ; Perform task AS6 (20 seconds); Perform Task AS7 (5 seconds) --- Total 55 seconds

Station D Assembly 3

- Perform Task AS8 (30 seconds) ; Perform task AS9 (30 seconds) --- Total 60 seconds

Station E Assembly 4

- Perform Task AS10 (11 seconds) ; Perform task AS11 (19 seconds) ; Perform task AS12 (20 seconds) --- Total 50 seconds

Station F Inspection

- Inspect Electrics (20 seconds) Inspect aesthetics (20 seconds) ---- Total 40 seconds.

There are six workers, one at each of the six stations (A-F). They begin their workday at 8:00 a.m. and work steadily until 4:00 pm. (They are replaced with other workers for breaks and lunches, but the production is not slowed or stopped during these times.) Their hourly wage rate is $25 per hour. You can assume unlimited demand.

What is the process capacity (you can ignore any start-up or empty system effects), in razors/hour?

2. What are the direct labor costs (you can ignore any start-up or empty system effects)associated with producing one razor, in dollars?

3. What is the average labor utilization (you can ignore any start-up or empty system effects)of the six workers? Please give your answer in decimal form (e.g. 0.5 for 50% utilization).

4. Strohrmann, a large-scale bakery in Pennsylvania, is laying out a new production process for their packaged bread, which they sell to several grocery chains. It takes 12 minutes to bake the bread.

How large an oven is required so that the company is able to produce 4,000 units of bread per hour (give your answer in terms of the number of units that can be baked simultaneously)?

5. The following data shows financial data (year 2009) for two US retailers: Save-A-Lot Retailers and Wallys Mart.

Assume that both companies have an average annual holding cost rate of 20% (i.e. it costs both retailers $2 to hold an item for one entire year that they procured for $10).

Save-A-lot- Invenetories: $5,743 million; Sales: $59,217 million; COGS: $53,962 million

Walmart- Invenetories: $40,694 million; Sales: $397,206 million; COGS: $316,606 million

How many days, on average, does a product stay in Save-A-Lots inventory before it is sold? Assume that stores operate 365 days a year.

6. How much lower, on average, is the inventory cost for Save-A-Lot compared to Wallys Mart of a household cleaner valued at $50 COGS? Give your answer in terms of dollars. Assume that the unit cost of the household cleaner is the same for both companies and that the price and the inventory turns of an item are independent.

7. Great Valley is a small accounting firm supporting wealthy individuals in their preparation of annual income tax statements. Every December, GV sends out a short survey to their customers, asking for the information required for preparing the tax statements. Based on 50 years of experience, GV categorizes their cases into the following groups: Group 1 (new customers, easy): 15 percent of cases

Group 2 (new customers, complex): 5 percent of cases

Group 3 (repeat customers, easy): 50 percent of cases

Group 4 (repeat customers, complex): 30 percent of cases

Here, easy versus complex refers to the complexity of the customers earning situation.

In order to prepare the income tax statement, GV needs to complete the following set of activities. Processing times (and even which activities need to be carried out) depend on which group a tax statement falls into. All of the following processing times are expressed in minutes per income tax statement.

Group1: Filing: 20; Initial Meeting: 30; Preparation: 120; Review by Senior Accountant: 20; Writing 50

Group2: Filing: 40; Initial Meeting: 90; Preparation: 300; Review by Senior Accountant: 60; Writing 80

Group3: Filing: 20; Initial Meeting: did not need meeting; Preparation: 80; Review by Senior Accountant: 5; Writing 30

Group4: Filing: 20; Initial Meeting: did not need meeting; Preparation: 200; Review by Senior Accountant: 30; Writing 60

The activities are carried out by the following three people:

Administrative support person: filing and writing.

Senior accountant (who is also the owner): initial meeting, review by senior accountant.

Junior accountant: preparation.

Assume that all three people work eight hours per day and 20 days a month. For the following questions, assume the product mix as described above. Assume that there are 50 income tax statements arriving each month.

Which person is the bottleneck?

c. Junior accountant

a. Administrator

b. Senior accountant

8. Assume that all three people in the above question work eight hours per day and 20 days a month. For the following questions, assume the product mix as described above. Assume that there are 50 income tax statements arriving each month.

What is the (implied) utilization of the senior accountant?

9. What is the (implied) utilization of the junior accountant?

10. What is the (implied) utilization of the administrative support person?