BiggerBetter Widgets Co. makes World-Class Widgets using a relatively simple process (see flow chart below) with the following parameters. Their factory works from 9 AM to 5 PM with a 30 minute lunch from 12:30 to 1:00.

Step 1: Metal Cutting

Metal Cutting is performed by an automated cutter which takes one person to operate. The operator loads coils of rolled steel into the cutter, which takes 7.5 minutes. After the coil is loaded, the cutting machine makes a cut every second. Each coil of steel makes exactly 6,000 blanks; one blank is required for each widget.

Step 2: Stamping

The Stamping process shapes the widget. This step is performed by one of three separate stamping presses. Two of the stamping machines are older models which stamp a blank into a widget every 3 seconds. The third stamping machine is more efficient and stamps a blank into a widget every 2 seconds.

Step 3: Polishing

Polishing step is performed manually by one of 8 employees. Each employee can polish one widget to its finished quality state in 8 seconds.

The profit per World-Class Widget $2.50/unit. Assume also that there is sufficient demand to match the capacity of the process.

Metal Cutting

Stamping

Polishing

a) (16 points) Calculate the processing rate (capacity) of this process in units/day

Cutting: _____________________________ units/day

Stamping: __________________________________ units/day

Polishing: ___________________________ units/day

Therefore, System Capacity: __________________________ units/day

b) (9 points) Report the utilization for each step at the factory.

Utilization at Cutting: ___________________________%

Utilization at Stamping: ___________________________%

Utilization at Polishing: ___________________________%

c) (3 points) Calculate the daily profits for World-Class Widgets.

Total Profits/day: $__________________________/day

The company is proposing to introduce a new Master-Class Widget that can serve 25% of its market, at an additional profit of $1.00/unit. However, it does not plan to add any further resources, even as the Master-Class Widget has the following changes to the manufacturing process:

Step 1: Metal Cutting

The Master-Class widget is the same size so each coil still provides 6,000 blanks of this type. The cutting step is still identical in the time aspects to the World-Class product.

Step 2: Stamping

The older stamping machines require one additional second to stamp the Master-Class Widget. The newer machine has no change.

Step 3: Polishing

The polishing process takes 20 seconds per Master-Class Widget. All employees at the Polishing process can polish either product.

d) (12 points) Calculate the processing rate (capacity) for the factory stations with this new product mix of World-Class and Master-Class Widgets in units/day. Please make sure to show your product mix calculations for each step.

Cutting: _____________________________ units/day

Stamping: __________________________________ units/day

Polishing: ___________________________ units/day

Therefore, Daily Profits with new product mix: $ _______________________ /day

e) (10 points) What is the average cycle time of the factory assuming this new product mix?

Average Cycle Time: ___________________________seconds