Mr K’s is a very popular hair salon. It offers high-quality hair-styling and phy

Question

Mr K’s is a very popular hair salon. It offers high-quality hair-styling 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 parentheses):

Activity 1: Welcome a guest and offer homemade herb tea (13 minutes)

Activity 2: Wash and condition hair (7 minutes)

Activity 3: Neck, shoulder and back stress release massage (12 minutes)

Activity 4: Design the hairstyle and do the hair (29 minutes)

Activity 5: Sort out the guest’s bill (7 minutes)

Three servers (S1, S2, 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.

A. What is labor content? Minutes per customer

B. What is average labor utilization? Percent

C. At a wage rate of $20 per hour, what is the cost of direcr labor per customer?

D. Mr. K considers considers hiring a new employee to help any one (and only one) of the servers without changing the tasks performed by each server. What would the new direct labor cost be?

E. Mr. K also contemplates redesiging 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?

Explanation / Answer

A. Labor content = 13+7+12+29+7

= 68 minutes per customer

_____________________

B.

Flow time of S1 = 13 minutes

Flow time of S2 = 7+12 = 19 minutes

Flow time of S3 = 29+7 = 36 minutes

Flow time of S3 is the maximum. Therefore, it is the bottleneck.

Cycle time = 36 minutes

Lead time = Cycle time * Number of servers = 36*3 = 108 minutes

Average labor utilization = Labor content / Lead time = 68/108 = 0.63 or 63 %

_____________________

C.

Flow rate = 60/36 = 1.67 customers per hour

Total cost of labor per hour = 20*3 = 60

Cost of direct labor per customer = Total cost of labor per hour / Flow rate = 60/1.67 = $ 36 per customer

_____________________

D.

S3 is the bottleneck. Soi new employee will be assigned to help S3.

Its flow time will be = 36/2 = 18 minutes

Now, S2 is the bottleneck with time of 19 minutes

Flow rate = 60/19 = 3.16 customers per hour

New direct labor cost per customer = 4*20/3.16 = $ 25.33 per cusomter

_____________________

E.

Without adding a new employee, after redesigning the assignment of tasks, the flow time of servers will be as follows:

Flow time of S1 = 7+13 = 20 minutes

Flow time of S2 = 7+12 = 19 minutes

Flow time of S3 = 29 minutes

Now S3 is the bottleneck. Cycle time = 29 minutes

Flow rate = 60/29 = 2.07 customers per hour

New Direct labor cost per customer = 3*20/2.07 = $ 29 per customer

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