QUESTION 1 A standard work year is 2000 hours at the Luther Mill and it takes ab

Question

QUESTION 1 A standard work year is 2000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order. The manager at the mill is always concerned about employee idle time, so he aims for a capacity cushion of two percent. Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car, so he hopes that here is an increase o 15% n customer orders or next year. How many workers will the manager need to have at the mill next year? 16 O 19 10 O13

Explanation / Answer

It is given that order for last year was 15000

Therefore , order for next year ( with 15% increase ) = 15000 x 1.15 = 17250

Cumulative amount of time required to fill customers order ( @1.5 hours/ order ) = 17250 x 1.5 = 25875

It is also given that standard work year = 2000 hours

Therefore , effective work year ( with 2 % capacity cushion )

= Standard work year x ( 1 – Capacity cushion %/100)

= 2000 x 0.98

= 1960 hours

Therefore , number of workers needed by manager

= Cumulative amount of time required to fill customers orders / effective work year

= 25875 / 1960

= 13.20 ( 13 rounded to nearest whole number )

NUMBER OF WORKERS MANAGER NEED TO HAVE AT THE MILL NEXT YEAR = 13

NUMBER OF WORKERS MANAGER NEED TO HAVE AT THE MILL NEXT YEAR = 13

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