(b) Daffy Dave\'s Sub Shop makes custom submarine sandwiches to order. It is ana
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Question
(b) Daffy Dave's Sub Shop makes custom submarine sandwiches to order. It is analysing the processes at its shop. The general flow of the process is shown below. A different person is working at each of the steps in the process Take the order (1 min/order) Slice the bun and add the meat/cheese (3 min/order) Add the toppings and condiments 4 min/order) Bag the order (2 min/order) Required: Daffy Dave wants to figure out the following for a typical 8-hour work day i. What is the current daily capacity of the process? ii. What is the throughput time? iii. If we add anothe l mark mar 2 marks r person, where should we add him or her and what is the benefit? Is there a benefit if we can shift1 minute from Bun and Meat to Order Taking? Assume we do not make the change in part (iii) above. Is there a benefit if we shift 1 minute of work from Condiments to Bagging? Assume we do not make the changes in parts (iii) and (iv) above. Explain why doubling the capacity of a bottleneck may not double the system capacity iv. 1 mark v. 1 mark vi. 2 marks A small firm intends to increase the capacity of a bottleneck operation by adding a new machine Two alternatives, A and B, have been identified, with the associated costs and revenues estimated Annual fixed costs would be $40,000 for A and $30,000 for B; variable costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15 Reguired: (c) i. Plot the total cost and total revenue lines for alternatives A and B ii. Determine the break-even point in units for each alterative. 2 marks 2 marks iii. At what volume of output would the two alternatives yield the same profit? mark iv. If expected annual demand is 12,000 units, which alternative would yield a 1 mark higher profit?Explanation / Answer
Answer: B(i) -
Current daily capacity of the process = Total Production time / unit time for bottleneck operation = (8 * 60 min) / 4 min
= 480 / 4
= 120 numbers.
Thus the production line has the capacity arpound 120 numbers.
Answer B (ii)
Thorugh put time of the process = lead time of all the operations of the process
= Lead time of operation 1 + Operation2 + operation 3 + Operation 4
= 1 min + 3 min + 4 min + 2 min
= 10 mins. ...Answer....This is the throughput time of the process.
Answer b (iii)
If we add another person, we should add the person at the operation which has highest lead time or to the bottleneck operation. so in this process the bottleneck operation is operation third - Add the tapping and condiments - This operation has lead time 4 min / order. This is the highest lead time among all operations. Hence this is the bottleneck operation.
By adding a perosn to this operation, we can try to reduce the lead time of the bottleneck . If we add the person , we may get the lead time convert from 4 min/ order to 2 min / order. Thus it will increase the productivity of the operation. The person adding at bottleneck will inrease the productivity of the process.
Answer b (iv) - No, if we shift 1 min from bun and meat to order operation, then we will not get any benefit, because it will not increase the productivity of the process. This reduce in lead time of non-bottleneck operation will not result in productivity improvement.
Answer b (v) - Yes, if we shift one minute from condiments to bagging , it will benefit us by increasing the productivity of the process. Since condimennts is the bottleneck operation and if we reduce the lead time from 4 min/ operation to 3 min/operation, then it will increase the productivity, as the bottleneck lead time is reduced from 4/min to 3/min per operation.
Answer b (vi) - Doubling the capacity of bottleneck may not double the process capacity, because there may be other operation which may have higher lead time than the half of the bottleneck operation. Thus if we reduce the lead time of bottleneck operation, then there may be other operation which will become bottleneck for the process. Ex. In the above process the bottleneck operation has 4min/operation. If we reduce its lead time to 2min/operation, then the second operation will become the bottleneck operation as its lead time is 3min/operation.
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