Consider the following process, which has three steps (i.e., three activities) which must be completed in sequence.

Below each activity are four numbers:

1. The time it takes to process 1 unit at this activity. Each unit is always processed on a single machine.

2. The number of machines. Notice that some activities have multiple machines. The machines are identical and work in parallel, each working on one unit at a time. Remember, each unit is only processed on a single machine.

3. Availability, i.e., the proportion of time that the machine(s) are processing work.

4. Yield, i.e., the percentage of units that pass a quality check and continue to be processed by the downstream activity (the units that fail the quality check are immediately scrapped and exit the process).

Please answer the following questions.

1. What is the capacity of Activity 1, 2 and 3?

2. What is the capacity of the overall 3-activity process?

3. What is the utilization of Activity 1, 2 and 3?

4. Which activities are regular bottlenecks, and which activities are yield bottlenecks? Explain your reasoning.

5. Assume end customer demand is higher than the capacity of the overall process. Describe in words how we should prioritize spending to increase the capacity of certain activities, with the goal of meeting the full demand.

1 2 3 6 minutes/unit 1 Machine 100% Availability 100% Yield 10 minutes/unit 2 Machines 100% Availability 80% Yield 15 minutes/unit 3 Machines 100% Availability 90% Yield