OM 335 -Operations Management; Homework 01 P3. Argue for or against For each sta
ID: 415860 • Letter: O
Question
OM 335 -Operations Management; Homework 01 P3. Argue for or against For each statement below, argue for or against it. (a) A business process cannot increase its revenues through increasing process capacity, but only through increasing its demand rate (through, for example, an advertising campaign). [Hint: How (b) The bottleneck resources of a process always have the highest utilization among all resources. (c) It is impossible to increase the average utilization of the employees of a process without laying (d) If a process has a flow rate of 10 units/hour, then the total time a flow unit spends in this about capacity-constrained business processes?] [Hint: How is resource utilization defined?] off some employees. [Hint: How about the DPS example?] process is 6 minutes [Hint: What is the difference between flow time and cycle time?]Explanation / Answer
Against it
It is a false statement, revenue are limited by minimum of process capacity and the demand. If the demand is lower the increasing the capacity will not work and if the process capacity is lower increasing the demand will not work.
b)
For it.
Bottleneck is the lowest capacity stations in a process. This means that it always become overloaded because other will finish the work before and bottleneck will remain busy for 100% of time. This leads to highest utilization of the bottleneck.
c)
It is incorrect because laying off some employees will not increase the utilization. Average utilization can also be increased by allocating the task in a better way and using cross training of workers.
d)
Flow time is the total time a unit spends in a process, cycle time is the time between the two subsequent production of units. Hence, this is a false statement
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