Question

Question 1. AUMexx manufactures tables in its production plant. The plant takes custom orders from clients. Each order is processed in three stations. First, information about the order is passed to Station A where an employee spends 1.5 hours at Station A to create the legs for the custom table. The information about the order and table legs are then transferred to Station B where an employee takes 2.5 hours to create a table top. The order information, legs, and top are then transferred to Station C where an employee takes 1 hour to assemble the table. Each station has one employee devoted to the assigned task.

Part-I: Use the information above to answer the questions a to c.

(1.5 points) Which station is the bottleneck?

(0.5 point) What is the hourly production capacity of the process (measured in number of orders completed per hour)?

(1 point) Suppose 1 order arrives every 3 hours. Can this facility start processing incoming orders without any delays? Explain why or why not. Does your answer change if the number of arrivals is subject to variability and 1 order arrives every 3 hours on the average? Explain clearly why or why not.

Part-II: Unexpected events at AUMexx influence the production times and the demand. Use the information below to answer questions d and e.

(2 points) It takes AUMexx an average of 5 days to complete an order. The process is in steady state, i.e., it works at a stable rate. At any time, not all pieces associated with an order have been manufactured and assembled. There are some intermediate products (such as table legs, table tops, half assembled tables) in the plant. These are considered work-in-process inventory (WIP). The average WIP is estimated to be 80 orders at any given time. That is, 80 orders are at various stages of manufacturing. What is the number of orders completed by AUMexx in a day?

(3 points) Of the 80 orders that constitute the WIP in the plant, 17 are at station A, 41 are at station B and 22 are at station C. How long (in days) does an order spend at each of the stations:

i. at station A?

ii. at station B?

iii. at station C?

Answer 1

1)

Station A time = 1.5 hours

Station B time = 2.5 hours

Station C time = 1 hour

a) Station B is bottleneck due to highest time

b) Hourly production capacity = Capacity of bottleneck process = 1/2.5 orders per hour = 0.4 orders per hour

c) Yes, the facility can start processing orders without delay in case order comes in every 3 hours as the bottleneck process time is less than incoming order frequency.

In case there is variability in arrival, then there might be delay if two orders come with little gap between them. Example: If gap between order is 1 hour only, then, it will have to wait in station A and B.