The process depicted in Figure 4.19 is initially staffed with 5 workers. Each worker is assigned to

Question:

The process depicted in Figure 4.19 is initially staffed with 5 workers. Each worker is assigned to one and only one step in the process. Step E does not require a human. The capacity of Step E is 4 units. Orders for 1 unit arrive every 6 minutes. Assume that the entire system is paced (i.e., the entire system works at the pace of the slowest/ bottleneck operation).
a. Determine the output in units per hour. Also, what is the utilization of Step C?
b. If you can assign 2 additional workers (each worker is assigned to work exclusively at one step), which two steps would be assigned an additional worker? Determine the output in units per hour. Also, what is the utilization of Step C?
c. What is the expected work-in-progress inventory at Step E?
d. If you can assign another worker (there is now a total of 8 workers), which step would be assigned an additional worker? Determine the output in units per hour. Will the process be able to produce and sell 50 units in an eighthour shift? If the units have a gross profit margin (after subtracting materials but not labor) of $35 per unit, what will the gross profit per hour be? What will the revenue per worker be?
e. If you can expand Step E to a capacity of 8, how does this change the output, utilization, and gross profit?
f. If demand can be increased to 1 unit every 4 minutes by decreasing the price so that the gross profit is $30 per unit, should you do this? Assume that you have a ninth worker.