Current rate of production is 50 seconds per unit per line

Number of units in 1 hour = 3600/50 * 4 = 288

Number of units per shift = 288 * 10 = 2,880
Number of Units per day = 2,888* 2 = 5,760
Number of Units per week = 5,776 * 6 = 34,560
Number of Units per month = 1,38,240

Although we are able to meet our target, the management feels that this model is not very sustainable.
We can think of providing additional incentives to workers for the overtime.

Option 2 – Introduce a third shift of 8 hours

With the current rate of production of 50 seconds per unit per line, our monthly production is

Number of units in 1 hour = 3600/50 * 4 = 288

Number of units per shift = 288 * 8 = 2,304
Number of Units per day = 2,304 * 3 = 6,912
Number of Units per week = 6,912 * 6 = 41,472
Number of Units per month = 1,65,888

If one more shift of same size is added, then production increases by 50% or 55,296 units.

Total units per day will be 165,888 units and the entire assembly line can work on 78% efficiency to
produce 130,000 units.

Total working hours per day are 24.

But because of breaks, each shift in actual if of 9 hours. Hence we can add 8 hour shift with 7 working
hours.

We know that 110,592 units per month are produced with 16 working hours per day. Hence 6,912 units
per month are produced with 1 working hour per day.

This means, we only need 3 additional work hours per day to meet the excess demand to reach 130,000.
Thus, although this option with a third shift will meet the demand with some buffer time available, for
just additional 3 working hours, option 1 is better. */
New Analysis : We are able to produce well above the targeted 1,30,000. Hence, Floaters may not be
required which was one of the area of concern studied by an internal task force. Chen who was assigned
to analyse the permanent need of floaters can save labour cost(which is rising at a rapid pace in the
Shenzhen area) of floaters.

Also, even the labour cost of main assembly line workers can be reduced by decreasing the shift hour to
7 working hours per shift as compared to 8 hours earlier.

Number of units in 1 hour = 3600/50 * 4 = 288

Number of units per shift = 288 * 7 = 2,016
Number of Units per day = 2,016 * 3 = 6,048
Number of Units per week = 6,048 * 6 = 36,288
Number of Units per month = 1,45,152

Thus, even with the three 7 working hour shifts, we are able to produce well above the expected
demand of 1,30,000 Netbooks per month.

Option 3 – Introduce another assembly line:

/* We are currently producing 110,592 units per month with 4 assembly lines.

Hence, units per month per line = 27,648

If we introduce one more assembly line, total production per month = 110,592 + 27,648 = 138,642

This will cater to the demand although additional cost required to set-up the assembly line would be
huge.
*/

5 assembly lines with two shifts of 9 hours (8 working hours ) –

Number of units in 1 hour = 3600/50 * 5 = 360

Number of units per shift = 360 * 8 = 2,880
Number of Units per day = 2,016 * 2 = 5,760
Number of Units per week = 5,760* 6 = 34,560
Number of Units per month = 1,38,240

Thus, introducing a new assembly line yields the same output as delivered by current approach. This is
not a preferred option because investing in a new assembly line would not increase my capacity(given
the shifts are not extended beyond regular hours)
Option 2 is the best choice, as it increases my capacity and makes full utilization of the four assembly
lines. There would be cost associated with training new workers for the third shift but the total labour
cost once the new workers get trained would almost be the same as in the case of introduction of a new
assembly line