Calculate maximum capacity of the system, per unit labor cost, total additional equipment cost, payback time in weeks for any equipment costs when

a)Add a second shift to Base Case

b)Add two workstation to each line and add a line

The new production facility for Parcel Guard was located inside the facility of the supplier of the cabinet, doors, and base for Parcel Guard. Located just east of Toronto, the supplier's facility was able to set aside enough space to meet the current demand and future growth. Fourteen people worked in the assembly facility for Danby: one supervisor, one material handler, and six people who worked on each of the two assembly lines (see Exhibit 2). The first operator on each line assembled the cabinet and fused the parts of the cabinet together using an ultrasonic welder. One operator could assemble and weld nine cabinets per hour. The second operator assembled the door for Parcel Guard. The door featured a complicated design, and a skilled operator could complete one door sub-assembly in 6.4 minutes. The third operator installed the wiring harness and door sub-assembly. Installing both the wiring harness and door sub-assembly took 8.1 minutes. The fourth operator completed the wiring by connecting the power supply to the lock mechanism, siren, load cells, and main control panel. One operator could install the various electrical components and complete the wiring for 8.5 units in one hour. The fifth operator was responsible for the final inspection as well as testing the electrical functions of Parcel Guard. The inspection took no more than 90 seconds, and the electrical test was automated through a dedicated software program designed to put Parcel Guard through a number of authentication procedures. The electrical test took a total of 15 minutes, including the labour to initiate the test procedure and read the results. The technician could test three Parcel Guards at one time. The sixth and final operation was packaging. One operator took a total of five minutes to package one unit; it then took four minutes to stack six packaged Parcel Guards onto a pallet and prepare the pallet for shipping. a INCREASING CAPACITY Martinelli was happy with how production staff was performing but knew that it would not be long before she would be expected to increase capacity. In anticipation of the growth in demand, Martinelli had looked at a number of options. The first option was to add two new workstations to each of the assembly lines and rebalance the assigned work. Martinelli's industrial engineers had proposed a line balance for eight operators, with an average cycle time of 5.1 minutes (see Exhibit 3). In addition to the added labour, Danby would also need to invest $14,000 in assembly equipment per line. The engineering team had also suggested the addition of a third line. The third line would be identical to the two existing production lines and would be located in the same facility, just east of Toronto. Although the new line would not require any additional supervision, one more material handler was required, in addition to the six line workers. The material handler received $20 per hour plus benefitsthe same rate as the operators who performed the electrical testing and $2 per hour more than all other production workers. In addition, Danby would need to invest $77,000 in machinery and equipment. > Martinelli had also considered the option to add a second and even a third shift. Each shift would require a team leader who could also perform the role of the material handler. In this case, the team leader would be paid $24 per hour, and all workers would receive a $0.50 premium per hour for the second shift and a $1 per hour premium for the third shift. In Martinelli's experience, the second and third shifts were not as efficient as the first shift, and output would have to be adjusted to 90 per cent of the first shift's hourly output. In addition, if a third shift was considered, the hours for each shift would have to be adjusted. In a two-shift operation, each shift would be scheduled for 8.5 hours, with two paid 15-minute breaks and a 30- minute unpaid lunch. However, under a three-shift scenario, each shift would be scheduled for eight hours, with two paid 15-minute breaks and a 30-minute unpaid lunch. a Finally, Martinelli had also wondered if the production line was the most appropriate approach for building Parcel Guard. Martinelli had experience with work cells and understood the value of having one operator perform all tasks to complete one Parcel Guard. Martinelli would need to pay the workers $19 per hour- a small premium to account for their additional skills and flexibility. Each work cell would cost $26,000 to build, and one work cell would be shared by three workers. CONCLUSION Martinelli was excited to see the new Parcel Guard product finally making it through production. She knew how important this launch would be to Danby, and she had little time to come up with a plan to increase production. The forecast called for an initial demand of 600 units per week. By the end of the month, the demand was forecasted to hit 1,000 units per week, and by the middle of summer, demand was expected to exceed 1,600 units per week. Martinelli was not sure if demand would continue to increase, or if part of the initial demand was to provide inventory for the distribution chain. Regardless, Martinelli knew that she would need a plan by the end of the week if any new equipment were to be ordered in time to meet the initial increase in demand. Operator Process Cycle time (mins.) 1 5.1 2 5.3 3 5.9 4 4.2 Cabinet sub-assembly Cabinet welding Door sub-assembly Wiring harness Door installation Electrical assembly & inspection Testing Packaging 5 4.4 6 4.8 7 5.0 5.7 8 Average Total 5.1 40.4 2 3 4 5 6 Raw materials Finished goods 2 3 4 5 6 Operator 1 2 3 4 5 6 OU AWN Process Cabinet sub-assembly & welding Door sub-assembly Door installation & wire harness Wiring and electrical assembly Testing Packaging The new production facility for Parcel Guard was located inside the facility of the supplier of the cabinet, doors, and base for Parcel Guard. Located just east of Toronto, the supplier's facility was able to set aside enough space to meet the current demand and future growth. Fourteen people worked in the assembly facility for Danby: one supervisor, one material handler, and six people who worked on each of the two assembly lines (see Exhibit 2). The first operator on each line assembled the cabinet and fused the parts of the cabinet together using an ultrasonic welder. One operator could assemble and weld nine cabinets per hour. The second operator assembled the door for Parcel Guard. The door featured a complicated design, and a skilled operator could complete one door sub-assembly in 6.4 minutes. The third operator installed the wiring harness and door sub-assembly. Installing both the wiring harness and door sub-assembly took 8.1 minutes. The fourth operator completed the wiring by connecting the power supply to the lock mechanism, siren, load cells, and main control panel. One operator could install the various electrical components and complete the wiring for 8.5 units in one hour. The fifth operator was responsible for the final inspection as well as testing the electrical functions of Parcel Guard. The inspection took no more than 90 seconds, and the electrical test was automated through a dedicated software program designed to put Parcel Guard through a number of authentication procedures. The electrical test took a total of 15 minutes, including the labour to initiate the test procedure and read the results. The technician could test three Parcel Guards at one time. The sixth and final operation was packaging. One operator took a total of five minutes to package one unit; it then took four minutes to stack six packaged Parcel Guards onto a pallet and prepare the pallet for shipping. a INCREASING CAPACITY Martinelli was happy with how production staff was performing but knew that it would not be long before she would be expected to increase capacity. In anticipation of the growth in demand, Martinelli had looked at a number of options. The first option was to add two new workstations to each of the assembly lines and rebalance the assigned work. Martinelli's industrial engineers had proposed a line balance for eight operators, with an average cycle time of 5.1 minutes (see Exhibit 3). In addition to the added labour, Danby would also need to invest $14,000 in assembly equipment per line. The engineering team had also suggested the addition of a third line. The third line would be identical to the two existing production lines and would be located in the same facility, just east of Toronto. Although the new line would not require any additional supervision, one more material handler was required, in addition to the six line workers. The material handler received $20 per hour plus benefitsthe same rate as the operators who performed the electrical testing and $2 per hour more than all other production workers. In addition, Danby would need to invest $77,000 in machinery and equipment. > Martinelli had also considered the option to add a second and even a third shift. Each shift would require a team leader who could also perform the role of the material handler. In this case, the team leader would be paid $24 per hour, and all workers would receive a $0.50 premium per hour for the second shift and a $1 per hour premium for the third shift. In Martinelli's experience, the second and third shifts were not as efficient as the first shift, and output would have to be adjusted to 90 per cent of the first shift's hourly output. In addition, if a third shift was considered, the hours for each shift would have to be adjusted. In a two-shift operation, each shift would be scheduled for 8.5 hours, with two paid 15-minute breaks and a 30- minute unpaid lunch. However, under a three-shift scenario, each shift would be scheduled for eight hours, with two paid 15-minute breaks and a 30-minute unpaid lunch. a Finally, Martinelli had also wondered if the production line was the most appropriate approach for building Parcel Guard. Martinelli had experience with work cells and understood the value of having one operator perform all tasks to complete one Parcel Guard. Martinelli would need to pay the workers $19 per hour- a small premium to account for their additional skills and flexibility. Each work cell would cost $26,000 to build, and one work cell would be shared by three workers. CONCLUSION Martinelli was excited to see the new Parcel Guard product finally making it through production. She knew how important this launch would be to Danby, and she had little time to come up with a plan to increase production. The forecast called for an initial demand of 600 units per week. By the end of the month, the demand was forecasted to hit 1,000 units per week, and by the middle of summer, demand was expected to exceed 1,600 units per week. Martinelli was not sure if demand would continue to increase, or if part of the initial demand was to provide inventory for the distribution chain. Regardless, Martinelli knew that she would need a plan by the end of the week if any new equipment were to be ordered in time to meet the initial increase in demand. Operator Process Cycle time (mins.) 1 5.1 2 5.3 3 5.9 4 4.2 Cabinet sub-assembly Cabinet welding Door sub-assembly Wiring harness Door installation Electrical assembly & inspection Testing Packaging 5 4.4 6 4.8 7 5.0 5.7 8 Average Total 5.1 40.4 2 3 4 5 6 Raw materials Finished goods 2 3 4 5 6 Operator 1 2 3 4 5 6 OU AWN Process Cabinet sub-assembly & welding Door sub-assembly Door installation & wire harness Wiring and electrical assembly Testing Packaging