Question

Birdies produces four different models of footwear (detailed production information is provided in table below). The operations manager knows that total monthly demand exceeds the capacity available for production. Demand next month is estimated to be 200 units of model Blackbird, 250 units of model Heron, 150 units of model Starling, and 225 units of model Hummingbird. Birdie operates only one 8-hour shift per day and is scheduled to work 20 days next month (no overtime). Further, each station requires a 10 percent capacity cushion.

Product Station 1 Station 2 Station 3 Station 4 Blackbird 10 min 10 min 5 min 20 min 15 min 5 min Heron Starling Hummingbird RM Price ($) 10 8 0 1095 90 5 70 15 min 10 min 5 min 10 min O 5 min 20 min 20 min 10 min

The bottleneck utilization is ___________ % (enter response rounded to one decimal place).

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Question 30.25 pts

Birdies produces four different models of footwear (detailed production information is provided in table below). The operations manager knows that total monthly demand exceeds the capacity available for production. Demand next month is estimated to be 200 units of model Blackbird, 250 units of model Heron, 150 units of model Starling, and 225 units of model Hummingbird. Birdie operates only one 8-hour shift per day and is scheduled to work 20 days next month (no overtime). Further, each station requires a 10 percent capacity cushion.

Product Station 1 Station 2 Station 3 Station 4 Blackbird 10 min 10 min 5 min 20 min 15 min 5 min Heron Starling Hummingbird RM Price ($) 10 8 0 1095 90 5 70 15 min 10 min 5 min 10 min O 5 min 20 min 20 min 10 min

The profit produced from bottleneck method is $________________ (enter integer).

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Question 40.25 pts

Birdies produces four different models of footwear (detailed production information is provided in table below). The operations manager knows that total monthly demand exceeds the capacity available for production. Demand next month is estimated to be 200 units of model Blackbird, 250 units of model Heron, 150 units of model Starling, and 225 units of model Hummingbird. Birdie operates only one 8-hour shift per day and is scheduled to work 20 days next month (no overtime). Further, each station requires a 10 percent capacity cushion.

Product Station 1 Station 2 Station 3 Station 4 Blackbird 10 min 10 min 5 min 20 min 15 min 5 min Heron Starling Hummingbird RM Price ($) 10 8 0 1095 90 5 70 15 min 10 min 5 min 10 min O 5 min 20 min 20 min 10 min

The profit produced from the traditional method is $___________ (enter integer).

Answer 1

Traditional method

Step 1: Identify bottleneck station

Capacity of each station = 20 days*8 hours*60 minutes

= 9600 minutes

Available capacity net of 10% Capacity cushion = 9600*(1-10%)

= 8640 minutes

Load of station 1 = 200*10+250*0+150*5+225*20 = 7250 minutes

Load of station 2 = 200*5+250*20+150*15+225*5 = 9375 minutes

Load of station 3 = 200*15+250*10+150*5+225*10 = 8500 minutes

Load of station 4 = 200*10+250*0+150*20+225*10 = 7250 minutes

Load of station 2 is greater than Available Capacity.

Therefore, station 2 is the bottleneck.

Step 2: Determine profit of each product

Profit of Blackbird = 80-10 = $ 70

Profit of Heron = 95-10 = $ 85

Profit of Starling = 90-8 = $ 82

Profit of Hummingbird = 70-5 = $ 65

Step 3: Determine product mix

Product mix is prioritized on the basis of profit, giving highest priority to product with highest profit and lowest priority to product with least profit.

Based on profit, the priority is: Heron, Starling, Blackbird and Hummingbird

Available minutes on bottleneck station after production of first three products = 8640 - (250*20+150*15+200*5) = 390 minutes

Quantity of Hummingbird that can be produced in remaining time = 390 / 5 = 78 units

Therefore, optimal product mix is:

Blackbird = 200

Heron = 250

Starling = 150

Hummingbird = 78

Total profit using traditional method = 200*70+250*85+150*82+78*65 = $ 52,620

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Bottleneck method

Step 1: Identify bottleneck station

As already identified in previous section, station 2 is the bottleneck.

Step 2: Determine profit per minute of bottleneck time for each product

Profit per minute of bottleneck time for Blackbird = 70/5 = $ 14

Profit per minute of bottleneck time for Heron = 85/20 = $ 4.25

Profit per minute of bottleneck time for Starling = 82/15 = $ 5.47

Profit per minute of bottleneck time for Hummingbird = 65/5 = $ 13

Step 3: Determine product mix

Product mix is prioritized on the basis of profit per minute of bottleneck time, giving highest priority to product with highest profit per bottleneck minute and lowest priority to product with least profit per bottleneck minute.

Based on profit per bottleneck minute, the priority is: Blackbird, Hummingbird, Starling, and Heron

Available minutes on bottleneck station after production of first three products (Blackbird, Hummingbird, Starling) = 8640 - (200*5+225*5+150*15) = 4265 minutes

Quantity of Heron that can be produced in remaining time = 4265/20 = 213 units

Therefore, optimal product mix is:

Blackbird = 200

Heron = 213

Starling = 150

Hummingbird = 225

Total profit using traditional method = 200*70+213*85+150*82+225*65 = $ 59,030

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Q1. The bottleneck (implied) utilization is = load of bottleneck station / available capacity

= 9375 / 8640

= 108.51 %

Q2. The profit produced from bottleneck method is $ 59,030

Q3. The profit produced from traditional method is $ 52,620