Knott\'s Industries manufactures standard and super premium backyard swing sets.
ID: 325146 • Letter: K
Question
Knott's Industries manufactures standard and super premium backyard swing sets. Currently it has four identical? swing-set-making machines, which are operated 250 days per year and 8 hours each day. A capacity cushion of 25 percent is desired. The following information is also? known:???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
Standard Model
Super Premium Model
Annual Demand
?20,000
?10,000
Standard Processing Time
55
2020
Average Lot Size
60
25
Standard Setup Time per Lot
30 min
45 min
a. Does? Knott's have sufficient capacity to meet annual? demand?
______ have sufficient capacity to meet annual demand because _______machines are needed.
B if knott was able to reduc the set up time for from 45 to 30 would there be enogh current capacity to produce 20,000 of each swing? Yes or no, how many machines would be needed
Standard Model
Super Premium Model
Annual Demand
?20,000
?10,000
Standard Processing Time
55
min2020
minAverage Lot Size
60
25
Standard Setup Time per Lot
30 min
45 min
Explanation / Answer
Gross annual capacity of each swing set making machine = 8 hours/ day x 250 days = 2000 hours
Therefore, gross annual capacity of 4 swing set making machines = 2000 x 4 = 8000 hours
Since capacity cushion = 25%
Net available time of 4 swing set making machines = 75% of 8000 hours = 6000 hours ( or 360,000 minutes)
Calculation for standard model :
Annual demand = 20000
Lot size = 60
Therefore, number of lots = 20000/60
Standard set up time per lot = 30 minutes
Therefore, total set up time = ( 20000/60) x 30 minutes = 10,000 minutes
Standard processing time = 5 minutes/ unit x 20,000 units = 100,000 minutes
Total time = Totalset up time + total Processing time = 10,000 + 100,000 = 110,000 minutes
Calculation for super premium model :
Annual demand = 10,000
Lot size = 25
Therefore, number of lots = 10,000/ 25 =400
Standard set up time per lot = 45 min
Therefore , total set up time = 400 x 45 minutes = 18000 minutes
Standard processing time = 20 minutes/ unit x 10,000 = 200,000 minutes
Total time = Total set up time + Total processing time = 18000 + 200,000 minutes = 218,000 minutes
Cumulative time required for standard as well as deluxe model = 110,000 minutes + 218,000 minutes = 328,000 minutes
Thus net available time of 4 swing machines ( 360,000 minutes ) > Cumulative time required for standard and deluxe machines
Therefore ,
Knotts have sufficient capacity because 4 machines it has are sufficient to meet the total requirement of both models
KNOTT’S HAVE SUFFICIENT CAPACITY TO MEET ANNUAL DEMAND BECAUSE 4 MACHINES ARE NEEDED
The data Standard model remain unchanged
The revised data for super premium model :
Annual demand = 20,000
Standard set up time = 30 minutes
The revised calculations as follows :
Annual demand = 20,000
Lot size = 25
Therefore, number of lots = 20,000/ 25 =800
Standard set up time per lot = 30 minutes
Therefore , total set up time = 800 x 30 minutes = 24000 minutes
Standard processing time = 20 minutes/ unit x 20,000 = 400,000 minutes
Total time = Total set up time + Total processing time = 24,000 + 400,000 = 424,000 minutes
Cumulative time required for standard as well as deluxe model = 110,000 minutes + 424,000 minutes = 534,000 minutes
Thus net available time of 4 swing machines ( 360,000 minutes ) < Cumulative time required for standard and deluxe machines
Therefore ,
THERE IS NO CURRENT CAPACITY TO PRODUCE 20000 OF EACH SWING
Net available time for each machine =75 % of 8 hours/ day x 250 days =1500 hours or 90,000 minutes
Therefore , number of machines needed = 534,000 / 90000 = 5.93 ( 6 rounded to nearest whole number )
6 MACHINCES WOULD BE NEEDED
KNOTT’S HAVE SUFFICIENT CAPACITY TO MEET ANNUAL DEMAND BECAUSE 4 MACHINES ARE NEEDED
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