12. You have just been promoted to manage the process defined by the five stages

Question

12. You have just been promoted to manage the process defined by the five stages A to E shown in the accompanying figure. After three months on the job you realize something is not right with process capacity ise your employees experience big pile-ups of work things take too long to be processed, the opportumity for error is increasing; and the entire process is approaching chaos. Do a capacity analysis of this process. The numbers in parentheses(#) are the time in minutes to complete one unit of work. Demand on the process averages 27 units per hour and each unit must be worked on by all five stages. Administrative clerks complete Stages A and B. The assistant manager completes Stages D and E. Processing times per stage can be combined when labor is assigned two or more stages (i.e., the resources are pooled). The coding specialist takes care of Stage C a. How many administrative cdlerks should be hired, assuming a target utilization for them of 85 percent? b. What is the current labor utilization of the coders if two coding specialists are currently on duty? What is the total process (output) capacity in units per hour for the five-stage process A to E, assuming three administrative clerks, two coding specialists and four assistant managers are on duty? c. d. Where do any botlenecks exist, and what do you recommend to improve this process? Stage C (6) Stage E (4) Stage A (5)Stage B (3) Stage D (4)

Explanation / Answer

a) Utilization = Demand Rate/ (service rate * number of server

Capacity of A = 12 units.hr

B= 20 units/hour

C= 10 units/hour

D = 15 units/hour

E = 15 units/hour

Ad ministrative clerk process A and B so pooled capacity = 60/(5+3) = 7.5 units /hour

Putting it in utilization equation

0.85=27/(7.5*N)

N = 4.23 clerks = 4 clerks

b) Coding service rate = service rate of C = 10 units per hour

Number of coders = 2

Utilization = 27/2*10= 1.35= 135%

c) Stage A and B by clerk Pooled capacity = 7.5*3 = 22.5 units/hour

Stage C by coders = 10*2=20 units/hour

Satge D and E by Assistant managers = 7.5*4= 30 units/ hour

Bottle neck is the coding units having least output

So total process output = 20 units/hour

d) the bottleneck exist at the process C i.e. with coders

Hiring labors and reducing standard processing time are the good option to avoid it.

Please comment if any doubt

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Thanks

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