Question

One employee is in charge of the following activities at a refreshment stand:

Activity	Activity Time per Customer
Greet customer	5 seconds
Take order	25 seconds
Process order	1.5 minutes
Print receipt	30 seconds

If demand rate is 20 customers per hour and the process is not constrained by input raw materials, what are the flow rate (in customers per hour), utilization, and cycle time (in minutes per customer)?

Note: Here "cycle time" is the reciprocal of the Flow Rate.

A. 24, 1, 0.04

B. 24, 1, 2.5

C. 20, 0.83, 0.05

D. 20, 0.83, 3

E. None of the options provided are correct.

Answer 1

To be calculated:

(a) Flow rate

(b) Utilization

(c) Cycle time

Given values:

Greet customer = 5 seconds

Take order = 25 seconds

Process order = 1.5 minutes = (1.5 x 60) = 90 seconds

Print receipt = 30 seconds

Demand rate = 20 customers per hour

Solution:

Before calculating flow rate, we need to compute the values of processing time and process capacity first. From the given information, processing time and process capacity are calculated as below:

Processing time = Sum of processing times of all the given activities

Processing time = (5 + 25 + 90 + 30) seconds

Processing time = 150 seconds

Process capacity = Time in seconds / Processing time

Process capacity = (60 minutes/hour x 60 seconds/minute) / 150 seconds

Process capacity = 24 customers per hour

Now,

(a) Flow rate is calculated as;

Flow rate = Minimum of (Demand and Process capacity)

Flow rate = Minimum of (20 and 24)

Flow rate = 20 customers per hour

(b) Utilization is calculated as;

Utilization = Flow rate / Process capacity

Utilization = 20 customers per hour / 24 customers per hour

Utilization = 0.83

(c) Cycle time is calculated as;

Cycle time = 1/Flow rate

Cycle time = (1 / 20 customers per hour) x 60 minutes/hour

Cycle time = 3 minutes per customer

Answer: (D) 20, 0.83, 3