Capacity Planning - Practice Problems Section B

A manufacturing company designed to produce 8000 machine parts per day could
produce 6800 due to the breakdown of an important equipment. What is the
utilization? If the effective capacity is 7000 and only 5040 parts could be produced
due to material delay and employee absence, what is the efficiency? If the efficiency
is 80% what is the actual output?

Super Castings supplies a molded part to several large automobile manufacturers. Its
molding department works eight hours a day, five days a week, and has 10 machines,
under ideal operating conditions, each machine is capable of producing 50 parts per
hour. The molding department produced 350,000 parts during the past six months
(i.e.25 working weeks), and management believes that this output can be sustained
economically over periods of time. To meet the current level of demand, each
machine produces at the rate of 40 parts per hour.
a) What is the peak capacity of the department in parts per day? Currently, what
is the utilization of the department relative to its peak capacity?
b) What is the effective capacity of the department in parts per day? Currently,
what is the utilization of the department relative to its effective capacity?
c) What is the current capacity cushion in the molding department?

3.

Swastik Company produces two models of foot pedals and has the following data:
Model A
Model B
Demand forecast
32000 units per year
22000 units per year
Lot size
160 units
110 units
Standard processing time 0.4 hours per unit
1.1 hour per unit
Standard setup time
3.0 hours per lot
4.0 hours per lot
The production department works two shifts per day, eight hours per shift, 200 days
per year. There are currently four machines and a 25% capacity cushion is required.
How many machines need to be added to meet the demand without resorting to any
short term capacity options?

4.

Look Well is a beauty parlor where four persons can be attended to at a time. During
the wedding season, the parlor operates from 9 AM to 6 PM on all the week days,
with a lunch break of one hour. Simple makeup takes 20 minutes and special makeup
requires 40 minutes. During two consecutive weeks the number of simple and special
makeup done were 200 and 160 in week one, and 210 and 140 respectively in week 2.
In which week the facility made better utilization?