A small, privately owned Asian company is producing a private-label soft drink c
ID: 363048 • Letter: A
Question
A small, privately owned Asian company is producing a private-label soft drink called Yoggo. A bottling line puts the soft drinks into plastic bottles and then packages the bottles into boxes. The bottling line is comprised of the following four steps: (1) the bottling machine takes 1 second to fill a bottle, (2) the lid machine takes 3 seconds to cover the bottle with a lid, (3) a labeling machine takes 3 seconds per bottle, and (4) the packaging machine takes 4 seconds to place a bottle into a box. Problem data are summarized in the following table.
Process Step Number of Machines Seconds per Bottle
Bottling 1 1
Apply a lid 2 3
Labeling 4 3
Packaging 3 4
I What is the capacity (bottles/hour) at the resource “Apply a lid”?
II What is the bottleneck in the process?
III Assuming unlimited demand, what would be the flow rate
Iv Assuming unlimited demand, what would be the utilization at resource “Apply a lid”
v Assume the process started empty and that this is a machine-paced process. How long would it take to produce 500 bottles
VI If each machine is run by one worker, and each worker is paid $10/hour, then what is the cost of direct labor
VII What is the labor content?
VIII Assume that the demand rate is 5000 units/hour, what is the target manpower?
Explanation / Answer
Answer to question I :
Capacity at the resource “Apply a lid”
= 60 seconds/ 3 seconds per machine x 2 machines
= 40 machines
Answer to question II:
Bottles the bottling machine can produce in 1 minute using 1 machine
= 60 seconds/ 1 second per bottle
= 60 bottles
Total number of lids the 2 number of machines can apply in a minute
= 60 seconds/3 seconds x 2 machines
= 40 numbers
Total number of labelling 4 number of machines can do in a minute
= 60 seconds /3 seconds x 4
= 80 numbers
Total number of packaging the 3 number of machines can do in a minute
= 3 x 60/4
= 45 numbers
Out of above, “apply a lid “ has the minimum capacity of 40 numbers per minute and hence should be considered as the BOTTLENECK process
Answer to question III:
Flow rate will be decided by the bottleneck process which is “Apply a Lid”
Since 40 number of lids can be applied a minute or 60 seconds,
Flow rate = 60 seconds/ 40 numbers = 1.5 second per lid
FLOW RATE = 1.5 SECONDS
Answer to question IV:
Utilization at “Apply a lid” which is the BOTTLENECK is 100 %
Answer to question V:
When the process starts empty , total time to fill the pipeline by the first unit
= 60/60 + 60/40 + 60/80 + 60/45 seconds ( see answers to question 2 )
= 1 + 1.5 + 0.75 + 1.33 seconds
= 4.58 seconds
Flow rate = 1.5 seconds
Therefore , time taken to produce 500 bottles = 4.58 seconds + 1.5 x 500 seconds = 754.58 seconds
Answer to question VI :
There are toatl = 1 + 2 + 4 + 3 = 10 machines
And each machine is run by one worker
Therefore there are 10 workers
Each worker is paid $10/hour
Therefore, cost of direct labour = $100 per hour
Answer to question VII:
As has already been established , flow rate is 1.5 seconds per bottle.
Therefore, number of bottles it would process in 1 hour = 3600 seconds/ 1.5 second = 2400 numbers
Since direct labour cost = $100 per hour
It would cost $100 to produce 2400 number of bottles
Therefore labour content per item = $100/2400 = $0.04166
Answer to question VIII:
10 number of labor are required to produce 2400 number of bottles
Therefore, number of labor required to produce 5000 numbers = 5000/2400 x 10 = 20.83 ( 21 rounded to next higher number )
TARGET MANPOWER = 21
FLOW RATE = 1.5 SECONDS
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