The Continental Luggage Company manufactures several different styles of soft- a

Question

The Continental Luggage Company manufactures several different styles of soft- and hardcover luggage, briefcases, hanging bags, and purses. Their best-selling item is a line of hardcover luggage called the "Trotter."

It is produced in a basic five-stage assembly process that can accommodate several different outer coverings and colors. The assembly process includes constructing a heavy-duty plastic and metal frame; attaching the outer covering; joining the top and bottom and attaching the hinge mechanism; attaching the latches, lock, and handle: and doing the finishing work, including the luggage lining.

The market for luggage is extremely competitive, and product quality is a very important component in product sales and market share. Customers normally expect luggage to be able to withstand rough handling while retaining its shape and an attractive appearance and protecting the clothing and personal items inside the bag. They also prefer the bag to be lightweight and not cumbersome. Furthermore, customers expect the latches and locks to work properly over an extended period of time. Another key factor in sales is that the luggage must be stylish and visually appealing.

Because of the importance of quality, company management has established a process control procedure that includes inspection at each stage of the five major stages of the assembly process. The following table shows the percentage of good-quality units yielded at each stage of the assembly process and the percentage of bad units that can be reworked, on average.

The first stage of the process is construction of the frame, and it is very difficult to rework the frame if an item is defective, which is reflected in the low percentage of reworked items. Answer the following:

A) 800 new pieces of luggage are initiated through the assembly process each week. Find the weekly product yield.

B) Further, the company would like to know the impact on product yield (given 800 initial starting units) if a quality-improvement program were introduced that would increase the average percentage of good-quality units at each stage by 1 percent. (For example, for stage 1 average percentage of good quality will be (94%+1%= 95%). Find the weekly yield with the new percentages of good quality. (% reworkable rates do not change).

Assembly Stage % good quality 94 94.5 95.5 97 97.5 % Rework able 20 80 50 60 74 4

Explanation / Answer

Answer to question A :

Following to be noted :

Proportion of input units which comes out as output of the process

= percentage of good quality/100 + ( 1 – percentage of good quality /100) x ( percentage of reworkable/100 )

Therefore ,

Proportion of input units which comes out as output at assembly stage 1

= 0.94 + ( 1 – 0.94) x 0.20

= 0.94 x 0.012

= 0.952

Proportion of input units which comes out as output at assembly stage 2

= 0.945 + ( 1 – 0.945) x 0.80

= 0.945 + 0.044

= 0.989

Proportion of input units which come out as output at assembly stage 3

= 0.955 + ( 1 – 0.955) x 0.50

= 0.955 + 0.0225

= 0.9775

Proportion of input units which com out as output at assembly stage 4

= 0.97 + ( 1 – 0.97) x 0.60

= 0.97 + 0.018

= 0.988

Proportion of input units which com out as output at assembly stage 5

= 0.975 + ( 1 – 0.975 ) x 0.74

= 0.975 +0.0185

= 0.9935

Since output of a particular stage of assembly works out as input for the next stage, if input at assembly 1 is 1 unit, output from assembly stage 5 will be equal to = 0.952 x 0.989 x 0.9775 x 0.988 x 0.9935 = 0.903389

Thus if input is = 800 pieces,

Weekly product yield = 800 x 0.903389 = 722.71 pieces of luggage ( 723 pieces rounded to nearest whole number)

Weekly product yield = 723 pieces of luggage

Answer to question B :

The revised calculation with increase of average percentage of good quality units by 1 percent at each stage as follows :

Proportion of input units which comes out as output at assembly stage 1

= 0.95 + ( 1 – 0.95) x 0.20

= 0.95 + 0.001

= 0.951

Proportion of input units which comes out as output at assembly stage 2

= 0.955 + ( 1 – 0.955) x 0.80

= 0.955 + 0.036

= 0.991

Proportion of input units which come out as output at assembly stage 3

= 0.965 + ( 1 – 0.965) x 0.50

= 0.965 + 0.0175

= 0.9825

Proportion of input units which comes out as output at assembly stage 4

= 0.98 + ( 1 – 0.98) x 0.60

= 0.98 + 0.012

= 0.992

Proportion of input units which com out as output at assembly stage 5

= 0.985 + ( 1 – 0.985 ) x 0.74

= 0.985 + 0.0111

= 0.9961

Since output of a particular stage of assembly works out as input for the next stage, if input at assembly 1 is 1 unit, output from assembly stage 5 will be equal to = 0.951 x 0.991 x 0.9825 x 0.992 x 0.9961 = 0.914958

Therefore,

Revised weekly yield = 800 x 0.914958 = 731.98 ( 732 rounded to nearest whole number )

Revised weekly yield = 732 pieces of luggage

Weekly product yield = 723 pieces of luggage

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