Exercise: Analyze production at your factory Definitions Process = Activities (tasks) and Resources (workers, machines, inventory, etc) o Demand = Activities (generated by orders/input) Supply = Resources Capacity Resource Capacity: Max amount the resource can produce in a given time unit (ex. 10 cars per day) Process Capacity: MIN(capacity of resource 1, capacity of resource 2, ..., capacity of resource n) Can also be measured in units of time (ex. Machine running 8 hours/day) Bottleneck = Resource with smallest capacity Flow rate or throughput = MIN (available input rate, demand rate, process capacity). (ex. Number of customers (if service business) or products that pass through in a given unit of time) Utilization is flow rate divided by capacity (always WS2 -> WS3. Example: WS1 makes the frame, WS2 screws it together and stains it, WS3 puts on the padding. The base case factory used to look like this: Input (orders) WS 1 WS2 WS 3 Output (finished goods) Worker 1 10 min/chair 6 min/chair 16 min/chair Worker 2 N/A N/A N/A Worker 3 N/A N/A N/A However, your factory has expanded over the years, and your boss hands you a list of the new factory layout (workstations, workers, processing time) as follows: Workstation 1 2 3 Processing Time per worker (min/unit) 10 6 16 # of workers 2 1 3 To help you get started, I've created a flow diagram for you below. Use it to answer the questions below on the provided Excel answer sheet (show your formulas where indicated!). : WS 3 WS 1 Input (orders) WS2 WS 3 Output (finished goods) WS 1 WS 3 Worker 1 Worker 2 Worker 3 10 min/chair 10 min/chair N/A 6 min/chair N/A N/A 16 min/chair 16 min/chair 16 min/chair Questions: A. What is the bottleneck? B. What is the process capacity? C. What is the flow rate if demand is eight units per hour? D. What is the utilization of each resource if demand is eight units per hour? Use formulas in this table: Utilization Processing Time per worker Workstation (min/unit) 1 10 2 6 3 16 Hourly capacity # of workers (units/hr) 2 12 1 3 11.25 10 Question A: What is the bottleneck? Step 1: Compute (hourly) capacity of each resource or workstation See table above Step 2: Identify the bottleneck WS2 (10 units/hr) Question B: What is the process capacity? Question C: What is the flow rate if demand is eight units per hour? Question D: what is the utilization of each resource if demand is 8 units per hour