2. Product P is made in-house by assembling two parts (parts 1 and 2): Part is f

Question

2. Product P is made in-house by assembling two parts (parts 1 and 2): Part is first processed on machine A for 15 minutes per unit and then processed on Machine B for 10 minutes per unit. Part 2 is processed on machine C for 20 minutes per unit. An assembler then assembles the two parts, with the assembly operaion taking 15 minutes. The process flow diagram is given below. Machining Part 1 on A Machining Part 1 on B Assembling Parts 1 and 2 Machining Part 2 on C> (a) What is the capacity of the process? Where is the bottleneck? (b) Assuming that the process is running at maximum capacity, calculate the utilization of each resource (c) Suppose the assembler has come up with an innovation that can reduce assembly time from 15 to 10 minutes. As a result of this innovation, wil the process capacity increase, decrease or remain unchanged? Justify your answer.

Explanation / Answer

A) Let us consider the Machines specifically used for Part 1

The capacity of Machine A is = 60/15 units/hour = 4 units/hour

The capacity of Machine B is = 60/10 units/hour = 6 units/hour

The limiting factor for the section corresponding to Part 1 is Machine A as it has the lowest capacity. Thus the Capacity of that section is 4 units/hour

Let us consider the Machines specifically used for Part 2

The capacity of Machine C is = 60/20 units/hour = 3 units/hour

Thus the capacity of this second section is = 3 units/hour

The capacity of Assembly Section is = 60/15 = 4 units/hour

Now considering all the three sections of the production set up, we find that the Machine C has the lowest capacity and hence, limits the capacity of entire assembly. Thus, Machine C is the bottleneck of the process and it make the capacity of the process to = 3 units/hour

B) Process is working in Max Capacity means, its is producing 3 units per hour.

Utilization of Machine A = Present Capacity utilized/ Max Capacity = 3/4 = 75%

Utilization of Machine B = Present Capacity utilized/ Max Capacity = 3/6 = 50%

Utilization of Machine C = Present Capacity utilized/ Max Capacity = 3/3 = 100%

Utilization of Assembly unit = Present Capacity utilized/ Max Capacity = 3/4 = 75%

C) If we reduce the Assembly time of the Assembler, we shall not receive any enhancement in the capacity of entire process. This is due to the fact that the assembler is not the limiting factor for the process capacity or the bottle neck of the process. Inspite of this renovation, the process will continue to function at the capacity of 3 units/hour. Moreover, the utilization of the Assemble unit will drop from 75% to 50%.

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