Essay
1. The difference between design capacity and effective capacity
2. Assumptions from the Break Even analysis:
3. What can the operations manager do to deal with bottleneck operations?

Problem 1
Markland Manufacturing intends to increase capacity by overcoming bottleneck operations by adding new equipment. Two vendors have submitted proposals. The fixed fee for proposal A is $ 50,000, and for proposal B, $ 70,000. 

The variable cost for A is $ 12 and for B, $ 10. The income generated by each unit is $ 20.
a) What is the break-even point in the unit for proposal A?
b) What is the break-even point in the unit for proposal B?

Problem 2
3 work stations illustrated in the following figure have a product that must go through one of the two machines at station 1 (parallel) before proceeding to station 2.
"The attached image"

a) What is the system jam?

b) What is the bottleneck station of this work cell?
c) Throughput time?
d) If the company operates 10 hours per day, 5 days per week, what is the weekly capacity of this work cell?

Station 1 Machine A Capacty: 20 units/hr Station 2 Station 3 Station 1 Capacty. 5 units/hr Capacity: 12 unitshr Machine B Capacity: 20 units/hr