OREGON DSC 335, Spring 2014 Homework Assignment #2

Homework Assignment #2

DSC 335, Spring 2014

1. (Estimating capacity requirement) The Southeast Manufacturing Company is producing two types of products: A and B. Both of these products are produced at the same workstation, called the Automatic Lathe. It works 250 days per year with two 8-hour shifts and desires a 25 percent capacity cushion. Demand forecasts for the next year and other production-related information are provided in the following table:

	Product A	Product B
Demand forecast (units/yr)	4,000	12,000
Batch size (units/batch)	80	150
Processing time (hr/unit)	2.5	2.0
Setup time (hr/batch)	18	24

1) What’s the number of automatic lathes required to meet the demand for both products?

2. (Continue from Problem 1.) Suppose the company has 12 automatic lathes, and financial constraints prevent buying new machines for the next year. Consider the following alternatives:

2) The company can increase the batch size of product B to reduce the number of setups. What is the minimum batch size of product B that leads to a capacity requirement of 12 lathes or less?

3) The company can decrease the capacity cushion. At what cushion level the demand can be met with the current capacity of 12 lathes?

3. (Bottleneck analysis and inventory buildup) Wally’s Widget Warehouse accepts customer orders, pick them up from customers’ locations and then pack them. The manager wants to analyze the process and has provided the process flow diagram shown below.

The first step is to take the orders. The order taker accepts order from 7am to 7pm, and stops taking orders after 7pm. If the order taker is busy, an arriving customer is put on hold, and after 7pm all unaccepted customers orders will be lost. The second step is to pick the order from the customer by staff A. In the third step, the order is packaged for shipping by staff B. The capacity rates of the three workers are marked in the above diagram. Wally promises that every order accepted today gets shipped tomorrow. That is, staff A and staff B must finish all orders before they are shut down.

4) What’s the capacity rate of the whole process?

5) Wally had a very busy day, with demand rate being consistently higher than the capacity rates of all the three workers. Draw two inventory buildup diagrams (one for the buffer between the order taking and order picking, one for the buffer between the order picking and order packing). [Hint: here we do not need the actual demand rate, since it is consistently higher that the capacity rate of all workers. To draw an inventory buildup diagram for a buffer, we only need to know the actual input rate of the corresponding buffer, which should be restricted by the order taker.]

a) Inventory buildup diagram for buffer 1 (the buffer between order taking and order picking):

b) Inventory buildup diagram for buffer 2 (the buffer between order picking: and order packing):

6) How long would staff A and staff B have to work to finish all orders received for the day, respectively? (Hint: you may use buffer buildup diagrams you draw to assist your analysis.)

7) Throughout that day, what would be the highest number of orders waiting to be picked?

8) Throughout that day, what would be the highest number of orders waiting to be packed?

4. (Continue from problem 3.) We now double staff B’s capacity rate. That is, the company can package for 120 customers per hour.

9) How long will staff A and staff B have to work if we have a day with the maximum orders?

10) What is the maximum number of orders waiting to be picked?

11) What is the maximum number of orders waiting to be packed?

5. (Bottleneck analysis and capacity management) Daffi Dave’s Sub Shop makes custom submarine sandwiches to order. They are analyzing the processes at their shop. The general flow of the process is shown below. There are four workers working in the process.

12) What is the capacity rate of the process?

13) If we add another Staff E to perform one of the four tasks, who can take the order for 1 minute/order, slice bun and add meat/cheese for 2 minutes/order, add toppings and condiments for 4 minutes/order, and bag the orders for 1 minutes/order. Where should we add him/her? What’s the new capacity rate of the process?

14) Answer this question independent of question 13). What’s the new capacity rate of the process, if we ask staff C and staff D to work in parallel, i.e. both of them add the toppings and condiments and bag the orders? Assume that staff C can bag the orders for 2 minutes/order, and staff D can add the toppings and condiments for 4 minutes/order.