You have just been promoted to manage the process defined by the five stages A to E below. After three months on the job you realize something is not right with process capacity because your employees experience big pile-ups of work, things take too long to be processed, the opportunity for error is increasing, and the entire process is approaching chaos. Do a capacity analysis of this process. The numbers in parentheses (#) are the time in minutes to complete one unit of work. Demand on the process averages 27 units per hour and each unit must be worked on by all five stages. Administrative clerks complete Stages A and B. The assistant manager completes Stages D and E. Processing times per stage can be combined when labor is assigned two or more stages (i.e., the resources are pooled). The coding specialist takes care of Stage C.

Since demand is in units per hour we find that the capacity of Stage A = 12 units/hour, Stage B = 20 u/hr, Stage C = 10 u/hr., Stage D = 15 u/hr, and Stage E = 15 u/hr. This problem assumes all jobs (work) need to be processed on all five workstations and resources are pooled by skill category so they are cross-trained.
(a) How many administrative clerks should be hired, assuming a target utilization for them of 85 percent?
(b) What is the current labor utilization of the coders if two coding specialists are currently on duty?
(c) What is the total process (output) capacity in units per hour for the five stage process A to E assuming 4 administrative clerks, 2 coding specialist, and 3 assistant managers are on duty?
(d) Where do any bottlenecks exist and what do you recommend to improve this process?

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Stage C (6) Stage A (5) Stage B (3) Stage E (4) Stage D (4)