Question

vThere are 3 steps in a laundry shop: i) Washing, ii) Drying, iii) Folding. If we assume the time to
do each load is 25, 50 and 35 minutes, respectively. We can assume that there is no variability in
the process and all operations work fully efficiently.
a) What is the Lead Time of the laundry shop?
b) What is the Cycle Time? What is the throughput rate (loads per hour) of the laundry?
c) What is the utilization % for each step? Which step is the bottleneck?
d) How many loads the laundry could do per day?
a. Assume the laundry open 24hours/7days per week
b. Assume the laundry open every day, from 8am to 8pm. All loads have to be
completed before the laundry closes.
e) With the increase in the number of customers, the management decides to make a small
investment to, at least, double the capacity of the laundry. Assuming there is no limitation
in space, in access to electricity and water, and in discharging wastes.
a. How could they achieve this objective with minimum investment cost?
b. What is the Lead time, and Cycle time for this new set-up?
QUESTION 2
You have been asked by a small Chocolatier to assist with the improvement of its capacity
utilisation. At the moment their four-step production process, from raw materials to finished units
looks like this:
Cocoa beans à ROASTING à MELTING à MOULDING à REMOVING à Chocolates
Roasting takes 5 minutes, melting 10 minutes, moulding 7 minutes, and removing the chocolates
from the moulds takes one minute. In other words, the activity time (throughput time) to process
one unit of product at the respective tasks is 5, 10, 7 and 1 minutes. There is one operator working
on each task. We can assume that there is no variability in the process and all operations work
fully efficiently. No additional inventory between the tasks is permitted in order to guarantee the
quality of the chocolates.
Each operator is paid £20 per hour and works 8 hours per day, five days a week. The factory will
not run less than 40 hours a week. The unit cost of one chocolate bar is £2 material costs plus the
cost of labour. The very exclusive and labour intensive chocolates sell for £25 each. Projected
sales for the next ten-week period up until New Year are 3,500 chocolates.
(a) What is the Capacity/Throughput of this production process per week?
(b) What is the utilisation % for each of the processes?
(c) What is the margin, excluding overhead cost, for each chocolate?
(d) Can the Chocolatier double its production without adding any new operator? How to
optimize the production capacity without adding any new operator? What is the new
capacity?
(e) If one new operator were employed, which of the four steps should the new operator be
doing? What is the new operation throughput after optimization?

Answer 1