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3. The Goodparts Company produces a component that consists of (3) individual parts, A, B, and C, that are purchased from the outside and cost $0.52, $0.39, and $0.18 per piece, respectively. Parts A and B are assembled at a Sub-Assembly operation, SA-1, at a rate of 140 completed pieces per hour. These completed components then move to Final Assembly. Part C undergoes a drilling operation (in-house) before moving to Final Assembly, where it will be assembled to the component coming from SA-1. There are a total of (6) drilling machines available, but only (3) are operating daily. Each drilling machine drills part C at a rate of 50 pieces per hour. The Final Assembly operation joins drilled Part C to the output of SA-1 at a rate of 160 finished components per hour. Presently components are being manufactured 8 hours per day, 5 days per week. Management understands that a second shift could be added if supported by demand. The cost of assembly labor is $0.45 per part for each of the assembly lines (Sub-Assembly PLUS Final Assembly). The labor cost to drill each part is $0.23 per part. The cost of electricity to drill each part is $0.03. Total overhead costs (supervision, etc.) are determined to be $1,710 per week, and depreciation for the equipment is determined to be $50 per week.

A. Draw a simple process flow diagram and determine process capacity (number of components capable of being produced each WEEK) for each of the operations. (10 pts) HINT: Start with the purchased parts on the left side, with A and B feeding into the Sub-Assembly operation, then into Final Assembly. Part C starts on the left, feeds, into DRILLING, then into Final Assembly.

B. Suppose a second shift of 8 hours is added for Sub-Assembly and for Final Assembly. In addition, (4) of the (6) machines are made operational, but only for (8) hours per day, 5 days per week. What is the NEW process capacity (number of components produced each week)? (5 pts) Which of the (3) processes is the limiting factor (bottleneck)? (5 pts)

C. Management decides to run a second shift of 8 hours for Sub-Assembly and a second shift of only (4) hours on Final Assembly. They have made (5) of the (6) drilling machines operational for 8 hours each day. What is the new capacity? (number of components produced each week) (5 pts.) Which of the (3) processes is the limiting factor (bottleneck)? (5 pts)

D. Determine the cost per unit for questions b and c. (20 pts)