An Exercise on Assembly Line

Atlas Inc. is a toy bicycle manufacturing company producing a 5 – inch small version of the bike that
Lance Armstrong rode to win his first Tour De France. The assembly line at Atlas Inc. consists of
seven work stations, each performing a single step. Stations and processing times are summarized as
follows:

Step 1 (30 Sec.): The plastic tube for the frame is cut to size.

Step 2 (20 Sec.): The tube is put together.

Step 3 (35 Sec.): The frame is glued together.

Step 4 (25 Sec.): The frame is cleaned.

Step 5 (30 Sec.): Paint is sprayed onto the frame.

Step 6 (45 Sec.): Wheels are assembled.

Step 7 (40 Sec.): All other parts are assembled to the frame.

Under the current process layout, workers are allocated to the stations as shown below:

Worker 1: Steps 1, 2

Worker 2: Steps 3, 4

Worker 3: Step 5

Worker 4: Step 6

Worker 5: Step 7

a) What is the bottleneck in the process?

b) What is the capacity of this assembly line, in finished units/hour?
c) What is the utilization of Worker 4, ignoring the production of the first and the last units?
d) How long does it take to finish production of 100 units, starting with an empty process?
e) What is the average labour utilization of the workers, ignoring the production of the first and
the last units?
f) Assume that the workers are paid $15 per hour. What is the cost of direct labour for the
bicycle?
g) Based on the recommendation of a consultant, Atlas Inc. decides to reallocate the tasks
among the workers to achieve the maximum process capacity. Assume that if a worker is in
charge of two tasks, then the tasks have to be adjacent to each other. Also, assume that the
sequence of steps cannot be changed. What is the maximum possible capacity, in units per
hour, that can be achieved by this reallocation?
h) Again, assume a wage rate of $15 per hour. What would be the cost of direct labour hour if
one single worker would perform all seven steps? You can ignore benefits of specialization,
set-up times, or quality problems.
i) On account of a reduced demand forecast, management has decided to let go one worker. If
a work is to be allocated among the 4 workers such that (i) the tasks can’t be divided, (ii) if
one worker is in charge of two tasks, the tasks have to be adjacent, (iii) the tasks are
assigned in the most efficient way and (iv) each step can only be carried out by one worker,
what is the new capacity of the line (in finished units/hour)?