Identifying and Exploiting Constraints, Constraint Elevation Confer Company prod

Question

Identifying and Exploiting Constraints, Constraint Elevation

Confer Company produces two different metal components used in medical equipment (Component X and Component Y). The company has three processes: molding, grinding, and finishing. In molding, molds are created, and molten metal is poured into the shell. Grinding removes the gates that allowed the molten metal to flow into the mold’s cavities. In finishing, rough edges caused by the grinders are removed by small, handheld pneumatic tools. In molding, the setup time is one hour. The other two processes have no setup time required. The demand for Component X is 600 units per day, and the demand for Component Y is 1,000 units per day. The minutes required per unit for each product are as follows:

The company operates one eight-hour shift. The molding process employs 24 workers (who each work eight hours). Two hours of their time, however, are used for setups (assuming both products are produced). The grinding process has sufficient equipment and workers to provide 400 grinding hours per shift.

The Finishing Department is labor intensive and employs 70 workers, who each work eight hours per day. The only significant unit-level variable costs are materials and power. For Component X, the variable cost per unit is $40, and for Component Y, it is $50. Selling prices for X and Y are $90 and $110, respectively. Confer’s policy is to use two setups per day: an initial setup to produce all that is scheduled for Component X and a second setup (changeover) to produce all that is scheduled for Component Y. The amount scheduled does not necessarily correspond to each product’s daily demand.

Required:

1. Calculate the time (in minutes) needed each day to meet the daily market demand for Component X and Component Y.

What is the major internal constraint facing Confer Company?

Molding

2. Describe how Confer should exploit its major binding constraint. Specifically, identify the product mix that will maximize daily throughput.

3. Assume that manufacturing engineering has found a way to reduce the molding setup time from one hour to 10 minutes. How many units of Component X and Component Y would be produced?

Explanation / Answer

Minutes Required per Unit of Product Product Molding Grinding Finishing A Component X 5 10 15 B Component Y 10 15 20 C=600*A Total time Required for X 3000 6000 9000 D=1000*B Total time Required for Y 10000 15000 20000 E=C+D Total time required per day 13000 21000 29000 Time (in minutes) needed each day to meet the daily market demand for Component X and Component Y. Net Time Required Molding 13000 minutes Grinding 21000 minutes Finishing 29000 minutes Available Capacity in minutes Molding 8640 (6 *60*24) Grinding 24000 (400*60) Finishing 33600 (8*60*70) Major InternalConstraint: Molding PRODUCT MIX to maximize Daily Throughput Component X require less molding time per unit To maximize daily throughput , we should produce maximum of product X Daily requirement ofmolding time for X 3000 Balance molding minutes available 5640 (8640-3000) Number of Product Y can be manufactured 564 (5640/10) Product mix that willmaximize daily throughput Number of Units Produced Component X 600 Units Component Y 564 Units 3 Molding minutes available=8640+2*50= 9640 Time required per unit of product X 5 minutes Time required 600 unit of product X 3000 minutes Balance time available 5740 minutes(8640+50*2-3000) Number of units of product Y to be produced 574 (5740/10) Number of Units Produced Component X 600 Units Component Y 574 Units

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.