Question

Please do the second part only." Prof Mathien has started a new business, and she forecasts the following demand for her product (in thousands of units) over the next 5 years:"

Directions: Show ALL work. Solve each part of the below problem. Bring work to class via hard copy on due date and submit a copy or picture to the appropriate drop box on Blackboard by the due date/time.

1) A dental office has a mix of procedures and each requires a set up time (like a job shop). Assume the following for a dentist:

• 9-hour day with 1 hour total for lunch/breaks
• Dentist does all work, including cleaning and setting up
• Set up and processing times shown below
• Set up performed for every patient – because that’s gross if they don’t use clean equipment!

Procedure	# Appts	Setup or changeover time (minutes)	Processing time (minutes)	Demand (# patients scheduled)	Total setup time	Total processing time	Total setup and processing time)
Crown	1st 2nd	15 10	90 30	2 1
Whiten	1st	5	30	4
Denture	1st 2nd 3rd	20 10 5	30 20 30	3 0 2

• Complete the empty columns in the chart above. (3 points)
• Is there sufficient capacity to perform all the work? What is the amount of either excess capacity or shortage? (2 points)
• What percent of the dentist’s capacity (available total time) is used to set up and changeover from one procedure to another? (1 point)
• If setup times could be reduced by 50%, what would new total set up time be? What would the capacity shortage/overage be? (2 points)

2) Prof Mathien has started a new business, and she forecasts the following demand for her product (in thousands of units) over the next 5 years:

Year	1	2	3	4	5
Forecasted Demand	60	79	81	84	84

She currently has 7 machines that operate on a 2-shift basis (8 hours per shift). 20 days are available for scheduled maintenance (downtime) with no product output. Assume there are 250 workdays per year. Each product takes 25 minutes to produce.

• What is the capacity of the business? (1 point)
• At what capacity level (% of normal capacity) would her business be operating for each of the next 5 years based on forecasted demand? (HINT: Compute the ratio of demand to capacity per year.) (5 points)
• Does Prof Mathien need to buy more machines? If so, how many and in what year? Justify your answer/explain. (3 points)

Answer 1

Given:

Number of Machine= 7

shift= 2

hours of shift= 8 hrs

workdays=250 days

maintenance time (downtime)= 20 days

duration for production= 25 minutes

What is the capacity of the business?

Available time for one machine per year = (250 - 20) days per year x 16 hours per day x 60 minutes per hour = 220800 minutes per year

Each product takes 25 minutes to produce.

Capacity of a single machine = 220800 / 25 = 8,832 units per annum

Therefore, the capacity for the seven machines = 8832*7 = 61,824 units per annum

At what capacity level (% of normal capacity) would her business be operating for each of the next 5 years based on forecasted demand?

The Demand to Capacity ratio is calculated by dividing demand by capacity

Year	1	2	3	4	5
Forecasted Demand	60,000	79,000	81,000	84,000	84,000
Capacity	61,824	61,824	61,824	61,824	61,824
Demand / Capacity	97.05%	127.78%	131.02%	135.87%	135.87%
Ratio	0.9705	1.2778	1.3102	1.3587	1.3587

Does Prof Mathien need to buy more machines? If so, how many and in what year? Justify your answer/explain

The capacity is higher than demand for first year; but from second year onwards, capacity is lower than demand. Therefore, new machines are required from second year onwards. Requirement of new machines can be calculated by multiplying number of machines multiplied by demand to caapcity ratio. Therefore, requirements are as follows:

Year-2: 7 * 1.2778 = 9
Year-3: 7 * 1.3102 = 10
Year-4: 7 * 1.3587 = 10
Year-5: 7 * 1.3587 = 10

Therefore requirement of machines are 9 in second year, 10 in third year, 10 in fourth year and 10 in fifth year.