EXERCISES 1. The Best Beer Corporation has a beer-processing facility located in

Question

EXERCISES 1. The Best Beer Corporation has a beer-processing facility located in Columbus, Ohio. The beer facility has a system efficiency of 90 percent, and the utilization is 80 percent. Three sub-facilities are used for processing. The facilities operate fivie days a week and three 8-hour shifts per day. What is the rated weekly capacity for the facility? 2. Best has decided to increase its facilities by adding one sub-faciliry. Doing this, how. ever, will reduce the overall system efficiency to 78 percent. Compute the new rated capacity under this situation. 3 During the last several years, demand for beer has been steady and predictable. Furthermore, there has been a direct relationship between barrels of beer processed and rated capacity expressed in hours per week. This relationship has allowed the executives of Best to forecast rated capacity with a fair degree of accuracy. The production manager provided the following historical data for rated capacity. MONTH Jan. Feb. Mar. Apr. May June RATED CAPACITY(HR. WK.) 2013 500 510 514 520 524 529

Explanation / Answer

1. Rated capacity = Design Capacity * Effective Capacity Utilization * Capacity Efficiency

=> Rated Weekly Capacity = (5*3*8)*80%*90% = 120*0.80*0.90 = 86.4 actual production hours per week.

Note that here we have calculated weekly rated capacity in hours since production rate is not given.

2. Rated capacity formula will remain the same. However, we have 2 facilities now. So, no. of available hours are double now.

New Rated Weekly Capacity = (2*5*3*8)*80%*78% = 240*0.80*0.78 = 149.76 actual production hours per week.

Hope your problem #2 gets solved now.

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