Exam 4: Capacity

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The single milling machine at Stout Manufacturing was severely overloaded last year.The plant operates eight hours per day,five days per week,and 50 weeks per year.Management prefers a capacity cushion of 15 percent.Two major types of products are routed through the milling machine.The annual demand for product A is 3000 units and 2000 units for product B.The batch size for A is 20 units and 40 units for B.The standard processing time for A is 0.5 hours/unit and 0.8 for B.The standard setup time for product A is 2 hours and 8 hours for product B.How many new milling machines are required if Stout does not resort to any short-term capacity options?

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Which one of the following statements about measuring capacity is best?

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The total time that a typical item spends in any process,termed the throughput time,decreases as the average level of work-in-process inventory in the process increases.

(True/False)
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Table 4.3 The North Bend Manufacturing Company is producing two types of products, A and B. Demand forecasts for 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 Standard processing time (hr/unit) 2.5 2 Standard setup time (hr/batch 18 24 Both products A and B are produced at the same operation called MASAC27A. -Using the information in Table 4.3,what is the total number of hours required for MASAC27A equipment for the next year?

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Random variation is introduced by chance and results from small changes or differences in equipment operations,people's behaviour,or environmental conditions.

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The throughput time for a specific item as it moves through a process includes

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According to the theory of constraints (TOC),the drum in the drum-buffer-rope method refers to the bottleneck of the process.

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What are the four steps involved in making capacity decisions?

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In an automobile service business (e.g.a muffler shop),measuring capacity based on the number of hours that the service bays will be required to satisfy expected demand is an example of an input measure of capacity.

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Table 4.3 The North Bend Manufacturing Company is producing two types of products, A and B. Demand forecasts for 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 Standard processing time (hr/unit) 2.5 2 Standard setup time (hr/batch 18 24 Both products A and B are produced at the same operation called MASAC27A. -Use the information in Table 4.3 to help answer this question.Additionally,the company works 250 days every year and operates 2 shifts,each of which covers 8 hours.If a 25 percent capacity cushion is maintained,how many machines does the company need next year to fully cover the demand?

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Table 4.2 High Tech, Inc. is producing two types of products: A and B. Both are produced at the same sawing operation. Because of demand uncertainties, the operations manager obtained three demand forecasts (pessimistic, expected, and optimistic). The demand forecasts, batch sizes (units/batch), processing times (hr/unit), and setup times (hr/batch) follow. Time Standard Demand Forecasts ( 000 units/yr) Product Processing Setup Batch Size Pessimistic Expected Optimistic A .20 2.0 40 200 240 300 B .15 3.0 50 160 180 200 The sawing machines operate on two 8-hour shifts, 5 days per week, and 50 weeks per year. The manager wants to maintain a 10 percent capacity cushion. -Using the information from Table 4.2,what is the maximum number of machines needed (assuming no reliance on short-term option)?

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The base case concept is to do nothing and simply lose orders from any demand that exceeds current capacity.

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Little's Law is a mathematical expression for relating

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Which one of the following statements about capacity cushion is best?

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Capacity gap is an addition to projected demand and current capacity.

(True/False)
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________ is a concept that states that the average unit cost of a good or service can be reduced by increasing its output.

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Process Management Triangle is made up of capacity utilization,quality and variability.

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Identify the three interrelated factors that implicitly determine process choice.The text refers to these factors as the "Process Management Triangle."

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Which one of the following statements about capacity is best?

(Multiple Choice)
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The Northern Manufacturing Company is producing products A and B,using the same machine called MASAC27A.Demand forecasts for 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 Standard processing time (hr/unit) 2.5 2 Standard setup time (hr/batch 16 24 The company works 250 days per year and operates 2 shifts each day,each shift covering 8 hours.If 25 percent of capacity cushion is maintained throughout the year,how many machines (MASAC27A)does the company need next year to meet the demand? Round your answer up to the next whole machine.

(Multiple Choice)
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