Do a and d? PA 4-2 Consider a process consisting of... Consider a process consis

Question

Do a and d?

PA 4-2 Consider a process consisting of... Consider a process consisting of three resources. Assume there exists unlimited demand for the product. Resource 1 has a processing time of 6 minutes per unit. Resource 2 has a processing time of 3 minutes per unit. Resource 3 has a processing time of 5 minutes per unit. Each resources are staffed by one worker and each worker gets paid $12 per hour. Instruction: Round "cost of direct labor" and "target manpower" to 2 decimal places. Round average labor utilization" percent to 2 decimal places

Explanation / Answer

A.

Time to produce one unit = bottleneck time = 6 minutes per unit

Number of units produced per hour = 60/6 = 10 units

Labor cost per hour = 3*12 = $36

So,

Labor cost per unit = 36/10 = $3.6 per unit

D.

Average labor utilization rate = Labor content /( labor content + idle time)

Average labor utilization rate = 14/(14+0+3+1) = 77.78%

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