Consider a process consisting of three resources. Assume there exists unlimited
ID: 388914 • Letter: C
Question
Consider a process consisting of three resources. Assume there exists unlimited demand for the product. Resource 1 has a processing time of 9 minutes per unit. Resource 2 has a processing time of 2 minutes per unit. Resource 3 has a processing time of 6 minutes per unit. All three resources are staffed by one worker and each worker gets paid $13 per hour nstruction: "Round "cost of direct labor and "target manpower" to 2 decimal places. Round 'average labor utilization" percent and "takt time" to 2 decimal places. a. What is the cost of direct labor? per unit b. What is the labor content? minutes per unit How much idle time does the worker at resource 3 have minutes per unit C. :per unit? d. What is the average labor utilization? percent e. Assume the demand rate is 20 units per hour. What is the takt time? minutes per unit Assume the demand rate is 20 units per hour. What is the target manpower? minutes per unit
Explanation / Answer
b) Labour content = 9 + 2 + 6 = 17 minutes per unit
a)The bottleneck resource is resource 1 which takes 9 minutes per unit. Therefore , overall process capacity is also 9 minutes per unit. Therefore, hourly output for the process = 60 /9
Total wages paid in 1 hour to 3 workers = $13 / worker x 3 workers = $39
Therefore, cost of direct labour
= Total hourly wages paid/Hourly output for the process
= $39/ ( 60/9)
= $39 x 9/60
= $5.85
Cost of direct labour = $5.85 / unit
c)Idle time worker at resource 3 will have per unit
= Time required per unit at bottleneck activity – Time required per unit at resource 3
= ( 9 – 6 ) minutes
= 3 minutes/ unit
Idle time worker at resource 3 will have per unit = 3 minutes
d)Average labour utilization
= Labour content/ ( 3 i.e. number of resource x Process capacity in terms of minutes per unit) x 100
= 17/ ( 3 x 6 ) x 100
= ( 17/18) x 100
= 94.44%
e)Takt time for demand rate of 20 units of per hour or 60 minutes
= 60 / 20
= 3 minutes per unit
Resource 1 : 3 persons ( which will make effective processing time of 9/3 = 3 minutes per unit)
Resource 2 : 1 person ( will have processing time of 2 minutes per unit )
Resource 3 : 2 persons ( which will make effective processing time of 6/2 = 3 minutes per unit )
Target manpower = 3 + 1 + 2 = 6 persons
Target manpower = 6 persons
Cost of direct labour = $5.85 / unit
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