1.

Determine the utilization and efficiency for each of these situations:

a. A loan processing operation that processes an average of 7 loans per day. The operation has a design
capacity of 10 loans per day and an effective capacity of 8 loans per day.

b. A furnace repair team that services an average of four furnaces a day if the design capacity is six
furnaces a day and effective capacity is five furnaces a day.

c. Would you say that systems that have higher efficiency ratios than other systems will always have
higher utilization ratios than those other systems? Explain.

2a. ABC is contemplating acquisition of a copy centre for preparation of bound reports for two clients.

The centre is equipped with 2 machines and is expected to operate 250 days per year with 8-hour shift
with a capacity cushion of 15 %.

The following table gives the necessary information for each client.

Calculate the number of machines required and identify gaps if any.

ITEM CLIENT X CLIENT Y

Annual demand (reports) 50 100

Lot size (copies per report) 40 60

Standard processing time 0.5 0.7

(hr/copy)

Standard set-up time(hr/report) 5 8