MGMT400 Assignment 2 – Chapter 3 a. Explain the differences between maximum capacity and effective capacity. b. How would you define the maximum capacity for the front desk of a hotel? What is meant by the effective capacity? Define the difference in these two terms relative to the number of customers that can be checked into the hotel in a given period. Penny’s Pies is a small specialty supplier to a national coffee-house chain. Penny’s makes three types of pies (apple, cherry, and pecan). Penny’s operates 250 days per year with a single eight-hour shift. Capacity is controlled by the number of production lines within the bakery (a line consists of mixing equipment, rolling and cutting equipment, an oven, and packaging equipment). Based on the information provided in the table, determine the number of production lines Penny’s should have. New Time DVDs (NTD) is a new on-line DVD rental service. In the field, it is trying to compete by offering its customers access to all of the major new DVD releases in one business day. That is, if you order a DVD from NTD, you can expect it in one business day from the time when you placed the order. When you are done with the DVD, you simply drop it in the prepaid mail envelope and return it. All DVDs arrive in a sorting facility located in the Midwest where envelopes with the DVDs are opened, checked, (right DVD with the right sleeve, no scratches, no dirt on the DVDs), and made ready to be sent out again. As the manager of this facility, your goal is to have the returned DVDs processed and ready for another rental in 6 hours (a shift is 8 hours long). You have the following information: Average Inventory: 570,000 DVDs Average Throughput: 415,000 DVDs per shift Calculate the expected average flow time in hours. To meet the goal of processing a returned DVD within 6 hours, how many DVDs per shift does the facility need to process? What changes would you recommend to meet the 6 hour turn-around goal? Pie Demand Forecast (pies/year) Processing Time (minutes/pie) Apple 72,000 3 Cherry 40,000 6 Pecan 26,000 5 4. Cooper’s Copy Shop is considering two different processes for completing copying jobs brought in by customers. Process A uses one person to setup the job and do the copying. If this approach is used, one experienced person can complete an average of 15 jobs per day. Process B uses two people. One person does the setup and the second person does the actual copying. Setup on one job can be done while copying is being completed on another but copying must be completed on a job before the copying machine can start copying the next. After some practice, process B can be completed with a standard time of 12 minutes for setup and 20 minutes for actual copying. In either case, assume an 8-hour work day, 5 days per week, 250 days per year. Assuming ideal conditions (and that the initial 12 min setup can be completed the previous night), what is the maximum daily capacity of process B? How many weeks would it take to process 350 jobs using process A (assume only one worker and one machine)? How many weeks would it take to process 350 jobs using process B (assume only one “production line with one machine”)? If Cooper’s owner is primarily interested in providing low cost to customers, which process should he put in place? Why? If Cooper’s owner is primarily interested in providing quick service to customers, which process should he put in place? Why?
