5.4 (Setup Everywhere) Consider the following batch-flow process consisting of three process steps performed by three machines: Work is processed in batches at each step. Before a batch is processed at a step, the machine at that step must be set up. (During a setup, the machine is unable to process any product.) Assume that there is a dedicated setup operator for each machine (i.e., there is always someone available to perform a setup at each machine.) a. What is the capacity of step 1 if the batch size is 35 parts? [5.6] b. For what batch sizes is step 1(2,3) the bottleneck? [5.6] 5.5 (JCL Inc.) JCL Inc. is a major chip manufacturing firm that sells its products to computer manufacturers like Dell, HP, and others. In simplified terms, chip making at JCL Inc. involves three basic operations: depositing, patterning, and etching. - Depositing: Using chemical vapor deposition (CVD) technology, an insulating material is deposited on the wafer surface, forming a thin layer of solid material on the chip. - Patterning: Photolithography projects a microscopic circuit pattern on the wafer surface, which has a light-sensitive chemical like the emulsion on photographic film. It is repeated many times as each layer of the chip is built. - Etching: Etching removes selected material from the chip surface to create the device structures. The following table lists the required processing times and setup times at each of the steps. Assume that the unit of production is a wafer, from which individual chips are cut at a later stage. Note: A setup can only begin once the batch has arrived at the machine. a. What is the process capacity in units per hour with a batch size of 100 wafers? [5.1] b. For what batch size is step 3 (etching) the bottleneck? [5.6] c. Suppose JCL Inc. came up with a new technology that eliminated the setup time for step 1 (deposition), but increased the processing time to 0.45 minute/unit. What would be the batch size you would choose so as to maximize the overall capacity of the process? [5.6] 5.13 (Powered by Koffee) Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and you may assume that demand is perfectly steady throughout the year. PBK has signed a year-long contract to purchase its coffee from a local supplier, Phish Roasters, for a price of $25 per bag and an $85 fixed cost for every delivery independent of the order size. The holding cost due to storage is $1 per bag per month. PBK managers figure their cost of capital is approximately 2 percent per month. a. What is the optimal order size, in bags? [5.6] b. Given your answer in (a), how many times a year does PBK place orders? [5.6] c. Given your answer in (a), how many months of supply of coffee does PBK have on average? [5.6] d. On average, how many dollars per month does PBK spend to hold coffee (including cost of capital)? [5.6] Suppose that a South American import/export company has offered PBK a deal for the next year. PBK can buy a year's worth of coffee directly from South America for $20 per bag and a fixed cost for delivery of $500. Assume the estimated cost for inspection and storage is $1 per bag per month and the cost of capital is approximately 2 percent per month. e. Should PBK order from Phish Roasters or the South American import/export company? Quantitatively justify your answer. [5.6]