Practical Operations Management
Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 5, Problem 12P
Summary Introduction

Interpretation: Type of capacity that assumes normal operating conditions, including breaks and maintenance.

Concept Introduction: Effective capacity represents the potential of a system to utilize its designed capacity. The effective capacity will be less than the designed capacity. In other words, it is the percentage of designed capacity utilized by a system under regular working conditions.

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Knott’s Industries manufactures standard and super premium backyard swing sets. Currently it has four identical swing-set-making machines, which are operated 250 days per year and 8 hours each day. A capacity cushion of 20 percent is desired. The following information is also known:   Standard Model Super PremiumModel Annual Demand Standard Processing Time Average Lot Size Standard Setup Time per Lot 20,000 7 min 50 30 min 10,000 20 min 30 45 min a. Does Knott’s have sufficient capacity to meet annual demand?b. If Knott’s was able to reduce the setup time for the Super Premium Model from 45 minutes to 30 minutes, would there be enough current capacity to produce 20,000 units of each type of swing set?
11. Leo manages a receiving station for rice. Farmers deliver their loads of rice from 7 am to 7 pm. Leo can process them at a rate of 4.5 tons an hour, and on a heavy day, a total of 96 tons can be expected. The station has room to hold only 15 tons of rice in inventory prior to processing. Once this space is filled, the farmers’ trucks must wait to dump their contents. What is the throughput (flow) rate after 7 pm (in tons/hr)?
Discuss how inventory levels can impact queuing theory for food or alcohol distribution (Compare food trucks, fast food and sit down restaurants).
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