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OPMAN Exercises 3 Capacity Planning 1. A computer repair service has a design capacity of ! repairs per day.

"ts effective capacity# ho$ever# is %& repairs per day and its actual output is %' repairs per day. (he manager $ould li)e to increase the num*er of repairs per day. +hich of the follo$ing factors $ould you recommend that the manager investigate, -uality pro*lems# a*senteeism# or scheduling and *alancing. Explain your reasoning. '. /etermine the utili0ation and the efficiency for each of the follo$ing, a. A loan processing operation that processes an average of 1 loans per day. (he operation has a design capacity of 1! loans per day and an effective capacity of loans per day. *. A furnace repair team that services an average of four furnaces a day if the design capacity is six furnaces a day and the effective capacity is five furnaces a day. c. +ould you say that systems that have higher efficiency ratios than other systems $ill al$ays have higher utili0ation ratios than those other systems. Explain. 3. A producer of pottery is considering the addition of a ne$ plant to a*sor* the *ac)log of demand that no$ exists. (he primary location *eing considered $ill have fixed costs of Php2!#!!!.!! per month and a varia*le cost of Php'2.!! per unit produced. Each item is sold to retailers at a price that averages Php&!.!!. a. +hat volume per month is re-uired in order to *rea) even. *. +hat profit $ould *e reali0ed on a monthly volume of %1#!!! units. 1#!!! units. c. +hat volume is needed to o*tain a profit of Php'2#!!!.!! per month. d. +hat volume is needed to provide a revenue of Php&!#!!!.!! per month. e. Plot the total cost and total revenue lines. &. (he follo$ing diagram sho$s a &3step process that *egins $ith Operation 1 and ends $ith Operation &. (he rates sho$n in each *ox represent the effective capacity of that operation. a. /etermine the capacity of this process. *. +hich action $ould yield the greatest increase in process capacity. 14 increase the capacity of Operation 1 *y 12 percent5 '4 increase the capacity of Operation ' *y 1! percent5 or 34 increase the capacity of Operation 3 *y 1! percent. 1' 6hr Operation1 12 6hr Operation' 11 6 hr Operation3 1& 6 hr Operation&