Exam 5: Constraint Management

The focus for a process improvement exercise should be on balancing:

Explain why a bottleneck limits system output.

Table 5.2 A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce; Product B sells for $90 but needs $45 of materials and $20 of labor to produce; Product C sells for $110 but needs $50 of materials and $30 of labor to produce; Product D sells for $135 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. -Use the information in Table 5.2. Using the traditional method, in what sequence should products be scheduled for production?

Table 5.4 The Superior Management Company assembles muffalettas in The Big Easy. The steps to making a world class sandwich and the time required (in seconds) for each step are shown in the table. -Customers demand muffalettas at the rate of 20 sandwiches per hour. Use the information in Table 5.4 to determine which tasks are assigned to station 3 in the most efficient balance that meets the desired output rate exactly.

Table 5.1 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. -Use the information in Table 5.1. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation)?

Table 5.3 King Supply makes four different types of plumbing fixtures: W, X, Y and Z. The contribution margins for these products are: $70 for Product W, $60 for Product X, $90 for Product Y and $100 for Product Z. Fixed overhead is estimated at $5,500 per week. The manufacture of each fixture requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 70 Ws, 60 Xs, 50 Ys and 30 Zs. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. -Use the information in Table 5.3. Using the bottleneck method, which product should be scheduled first?

Consider the following production process. It is trying to meet a market demand of 250 units per week. Step 1: Material release schedule Step 2: Drilling (capacity is 300 units/week) Step 3: Tapping (capacity is 150 units/week) Step 4: Grinding (capacity is 300 units/week) Step 5: Coating (capacity is 200 units/week) Step 6: Inspection (capacity is 500 units/week) a. Where should buffers be placed? b. Which resource is the drum? c. Where should the rope be placed? d. Which resource is the bottleneck? e. Which resource is the CCR?

Which of the following statements concerning line balancing is True?

To generate the maximum output, the cycle time should be set as the longest elemental task time.

Figure 5.3 The figure above shows the process for customers arriving at Hobbies Unlimited for several advertised crafts demonstrations. After signing in, customers are routed to different locations in the store for the two different programs provided. The numbers in parentheses are the time in minutes for each step of the process. -Use the information in Figure 5.3. What is the throughput time for the A-B-E-F-G routing?

Regardless of the number of tasks or their lengths, a line balance efficiency of 100% is possible if the number of stations is ________.

Table 5.2 A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce; Product B sells for $90 but needs $45 of materials and $20 of labor to produce; Product C sells for $110 but needs $50 of materials and $30 of labor to produce; Product D sells for $135 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. -Use the information in Table 5.2. Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation)?

The second step in Theory of Constraints application, "exploit the bottleneck(s)," means that the analyst should:

Table 5.4 The Superior Management Company assembles muffalettas in The Big Easy. The steps to making a world class sandwich and the time required (in seconds) for each step are shown in the table. -Customers demand muffalettas at the rate of 24 sandwiches per hour. Use the information in Table 5.4 to determine the minimum number of work stations needed to achieve exactly the output rate of customer demand.

A bottleneck process has the lowest capacity and the longest total time from the start to the finish.

A firm's actual throughput and profit depend more on the contribution margin generated at the bottleneck than by the contribution margin of each individual product produced.

Table 5.1 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. -Use the information in Table 5.1. Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation)?

Figure 5.3 The figure above shows the process for customers arriving at Hobbies Unlimited for several advertised crafts demonstrations. After signing in, customers are routed to different locations in the store for the two different programs provided. The numbers in parentheses are the time in minutes for each step of the process. -Use the information in Figure 5.3. How many customers can be processed through the A-B-E-F-G routing during a 4-hour evening session?

Figure 5.2 The figure above shows the process for customers arriving at Pierre's Spa and Salon. After signing in, customers are routed to different locations in the Spa for the two different services provided. The numbers in parentheses are the time in minutes for each step of the process. -Use the information in Figure 5.2. What is the throughput time for the A-B-C-D-H routing?

A(n) ________ line is a product line that produces several items belonging to the same family.