Based on training and severance, there is a one-time $2000 cost for hiring a wor

Question

Based on training and severance, there is a one-time $2000 cost for

hiring a worker and a $3000 for firing a worker due to production. Based

on these costs, what can you assume? You can arbitrarily set the worker

count on 1 January based on your production line estimation from the

previous month.

•The GCP 3000 and 4000 are high end machines retailing between $8000

and $10000 based on the market. What does that tell you?

Questions

1) Using line balancing, how you recommend structuring work? How many

assembly lines are needed based on a 36 hour workweek and 4 week

month.

Explanation / Answer

From the data we can see that there is a clear pattern of seasonality. The chart below confirms it. Since a high and low pattern stays for about 3 months, we can use a 3 period moving average to forecast the demand for GCP 4000.

The trend we can see is that the demand is pretty flat for the first half of the year. Post this, the demand increases for fall season and then reduces at winter. This has happened for both the year and we can expect similar nature in 2019 as well.

Now from the forecast and the demand data provided earlier we can see that the total demand will be approximately 169289 in 2019

Now that we know about the annual demand, we can calculate the line balancing problem. Calculating the line balancing on a per month basis may be too granular hence we shall calculate it on annual basis.

First, let’s calculate the takt time (cycle time). This is provided by the total available time divided by the total available demand.

Total available time is across 12 months, each month with 4 weeks and each week with 36 hours. This means the total available time is 12*4*36*60 = 103680 minutes in the year.

The takt time is 103680/169289 = 0.612 minutes

This means every 0.612 minute one unit of GCP 4000 needs to be produced.

Now we need to calculate the number of assembly lines that we shall need. The total task time to complete the work (step 1 to step 6) is 2+5+7+4+3+8= 29 minutes.

Number of assembly lines we need is total task time divided by the takt time. Hence we need

29/0.612 = 47.3 or 48 assembly lines in order to meet the demand.

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