Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following simple assembly process: A Raw Material 3 min/unit B C 5 min/unit 2 min/unit Finished Goods The numbers below each step

image text in transcribed

Consider the following simple assembly process: A Raw Material 3 min/unit B C 5 min/unit 2 min/unit Finished Goods The numbers below each step refer to the time necessary to process one unit of the product at that step. The process is staffed by three operators with one operator assigned to each of the three steps. Assume no set ups are required, processing times are constant and no Work in Process (WIP) is permitted beyond that actually being worked on at each process step (i.e., there are no buffers between process steps). a) What is the Capacity of the process? b) What is the Capacity Utilization of the operator at Step A? c) Each operator receives regular wages of $12/hour for the first 8 hours, and overtime wages of $18/hour for any additional time. Twelve hours per day is the maximum work time permitted. A finished unit sells for $10 while its direct material cost is $6/unit. Does it pay to use overtime under this cost structure (assuming sufficient demand exists)? d) Would you hire a skilled operator whose wage rate were $20/hour (regular time), but could perform Step B at a processing time of 4 minutes/unit? e) Same as (d), but performs Step A at a processing time of 2minutes/unit?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Successful Project Management

Authors: Jack Gido, Jim Clements

4th Edition

9780324656152, 324656130, 978-0324656138

More Books

Students also viewed these General Management questions

Question

Am I trying to change or control others?

Answered: 1 week ago