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. (10 minutes) Activity 2: Wash and condition hair. (11 minutes) Activity 3: Neck, shoulder, and back stress release massage. (7 minutes) Activity 4: Design the hairstyle and do the hair. (29 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 performed per customer 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

a) Labor content = 10+11+7+29+5 = 62 minutes per customer

b) Time of resource S1 = 10 minutes

Time of resource S2 = 11+7 = 18 minutes

Time of resource S3 = 29+5 = 34 minutes

Maximum time is 34 minutes, of resource S3 Therefore resource S3 is the bottleneck

Process Cycle time =34 minutes

Average labor utilization = Labor content / (Cycle time*Number of resources)

= 62 / (34*3)

= 0.6078

= 60.78 percent

c) Cost of direct labor = Cycle time in hours * Number of resources * Labor rate per hour

= (34/60)*3*25

= $ 42.50 per customer

d) New employee would be assigned to bottleneck resource, which is S3

With a new emplpoyee, Time of resource S3 is halved = 34/2 = 17 minutes

Now resource S2 is bottleneck with cycle time = 18 minutes

Cost of direct labor = Cycle time in hours * Number of resources * Labor rate per hour

= (18/60)*4*25

= $ 30 per customer

e) After the reassignment of activities, S3 is still the bottleneck

Process cycle time = 29 minutes

Cost of direct labor = Cycle time in hours * Number of resources * Labor rate per hour

= (29/60)*3*25

= $ 36.25 per customer

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