Question :
81)
Brown Laundry has a variable demand. The daily demand ranges : 1196143
81)
Brown Laundry has a variable demand. The daily demand ranges from 100 to 140 customers a day with an average of 5 items. The average daily demand is 110 customers. The laundry operates 10 hours a day. Each order takes approximately 5 minutes.
Required:
a.What is the average customer waiting time in minutes?
b.What is the cycle time for an order?
c.The manager has decided that the waiting time is too long and has increased the work day to 11 hours. What is the waiting time now? Will the customers be any happier? 81)
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82)
Canevil Unlimited makes small motorcycles. The monthly demand ranges from 80 to 100 motorcycles. The average demand is 92 motorcycles. The plant operates 300 hours a month. Each cycle takes approximately 1.5 hours.
If the company adds a new line of scooters, initial demand will be 20 per month. Each scooter will take 1 hour to make. To offset approaching production capacity, expanding the assembly line is possible. This will decrease manufacturing time for all products by 20 percent. However, this will increase the costs of cycles from $400 to $500 and scooters from $200 to $240. The change will also cause increases in prices from $700 to $750 for cycles and from $450 to $500 for scooters.
Required:
a.What is the average waiting time for cycles if they are the only item manufactured?
b.What is the average waiting time if both cycles and scooters are produced and the assembly line is not enlarged?
c.What is the average waiting time if both cycles and scooters are produced and the assembly line is enlarged?
d.What is the expected monthly margin without scooters if the company sells all 92 cycles it manufactures?
e.What are the expected monthly contribution margins if scooters are made with the current assembly line and with the new assembly line? Assume average sales and that sales equal production.
f.What action do you recommend? 82)
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83)
Brix, Inc. prepares frozen food for fast-food restaurants. It has two work stations, cooking and assembly. The cooking station is limited by the cooking time of the food. Assembly is limited by the speed of the workers. Assembly normally waits on food from cooking. Because the demand has increased in recent months to 2,800 dozen units, management is considering adding another cook station or else having the cooks start to work earlier. The monthly cost of operating the cooking station one more hour each day is $2,400. The cost of adding another cook station would add an average of $10 per hour. The current operating hours total eight hours a day, 22 days a month. The contribution margin of the finished products is currently $8 per dozen. Inventory carrying costs average $2.00 per dozen per month. Either the extra hour or the new cook station would increase production by 20 dozen a day with a long-run increase of 80 dozen units in finished goods inventory to 280 dozen.
Required:
a.What is the total production per month if the change is made?
b.What is the increase in the expected monthly product contribution for each of the possible changes? Assume long-run production equals sales. 83)
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84)
Palmateer Industries makes an electronic component in two departments, Machining and Assembly.
The capacity per month is 30,000 units in the Machining Department and 20,000 in the Assembly Department.
The only variable cost of the product is the direct material of $100 per unit.
All direct material cost is incurred in the Machining Department.
All other costs of operating the two departments are fixed costs.
Palmateer can sell as many units of this electronic component as it produces at a selling price of $300 per unit.
Required:
Assuming any defective unites produced in either department must be scrapped:
a.
Compute the loss that occurs if a defective unit is produced in the Machining Department.
b.
Compute the loss that occurs if a defective unit is produced in the Assembly Department.
c.
How do your answers in parts (a) and (b) relate to the theory of constraints?
Explain.
84)
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85)
Sof-T, Inc. manufactures foam products for upholstery companies. It has two work stations, mixing/heating and cutting/assembly. The mixing/heating station is limited by the capacity of the equipment. Cutting/assembly is limited by the speed of the cutting machine workers. Cutting/assembly normally lags behind mixing/heating. Because the demand has increased in recent months, management is considering adding another person to cutting/assembly. This would increase the department’s costs by $4,000 a month. If the person is moved from mixing/heating, that department’s cost would decline by $3,000. By keeping mixing/heating labourers the same, the department can increase production on-call by 10 percent. Current idle time in mixing/heating averages one-half person a day for a net cost of $1,400 a month.
Required:
a.What is the net affect of moving the employee from mixing/heating to cutting/assembly?
b.What is the net effect if a new employee is hired for cutting/assembly?
c.What is the cost of having possible on-call capacity increases of 10 percent in mixing/heating? 85)
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