Mr. K\'s is a very popular hair salon. It offers high-quality hairstyling and ph

Question

Mr. K's is a very popular hair salon. It offers high-quality hairstyling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis) Activity 1: Welcome a guest and offer homemade herb tea. (8 minutes) Activity 2: Wash and condition hair. (14 minutes) Activity 3: Neck, shoulder, and back stress release massage. (14 minutes) Activity 4: Design the hairstyle and do the hair. (20 minutes) Activity 5: Check out the guest. (5 minutes) Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following: S1 does Activity 1. S2 does activities 2 and 3. S3 does activities 4 and 5 Instruction: Do not round your intermediate calculations. Round average labor utilization to 2 decimal places and all direct labor costs to 2 decimal places a. What is the labor content? minutes per customer b. What is the average labor utilization? percent At a wage rate of $25 per hour, what is the cost of direct labor per customer? per customer Mr. K. considers hiring a new employee to help any one (and d only one) of the servers without changing the tasks per customer performed by each server. What would the new direct labor cost be Mr. K also contemplates redesigning the assignment of tasks to servers. For this, Mr. K is evaluating the reassignment of Activity 5 from S3 to S1. What would the new direct labor cost be? per customer

Explanation / Answer

Active hours of S1= 8 min

Active hours of S2= 14+14 = 28 min

Active hours of S3= 20+5 = 25 min

S1 can process 1/8 customers per min

S2 can process 1/28 customers per min

S3 can process 1/25 customers per min

So, S2 has lowest capacity. It is the bottleneck. As is there is unlimited demand, the flow rate is equal to the capacity of process, therefore., 60/28 = 2.14 customers per hour

a. The labor content is = sum of time of all processes = 8+14+14+20+5 = 61 min per customer

b. Total idle time = Sum of Idle time of S1,S2,S3 = 20 +0+ 3 = 23 min

Average labour utilization = 61/(61+23) = 61/84 = 72.61%

c. Wage rate = $25 per hour

As there are 3 servers (one employee per server), so total wages = 25*3 = $75 per hour

Cost of direct labour per customer = 75/2.14 = $ 35.04

d. As S2 is bottleneck, the new employee would be assigned to S2. So, now S2 will have capacity of 1/14 customers per minute.

S3 will become bottleneck. Now, it has lowest capacity. As is there is unlimited demand, the flow rate is equal to the capacity of process, therefore., 60/25 = 2.4 customers per hour

Wages for 4 employees = 25*4 = 100

Cost of direct labour per customer = 100/2.4 = 41.66

e. After re-assignment, S2 is still the bottleneck. And no. of customers served still are same as before. So, direct labour cost is also the same as was calculated in part. C

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