Question

ANSWER #23

22. An Ice cream shop in Queens offers a wide selection of ice cream and frozen yogurt. It has three employees. Assuming that there is unlimited demand. Employee #1 – greets the customer and takes an order – 3 minutes per customer. Employee #2 - prepares an order- 6 min per customer. Employee #3 – takes payments – 5 min per customer. 22. a. Capacity of Employee 1 =Flow rate * 60=1/3 *60 =20 customers per hour b.Bottle neck of the process is the employee with the longest processing time per customer(6 min).Hence, Employee #2 is the bottleneck in the process. c.Assuming unlimited demand, the flow rate is equal to the flow rate of Employee #2(bottleneck) Flow rate of the process=1/6 =0.1667 customers per minute d.Utilization of employee # 1=Actual output of Employee 1/Design capacity of employee = Capacity of the process/Capacity of Employee #1 =Capacity of employee # 2/20 customers per hour =10/20 =0.5 or 50 % e.Time taken to process 30 customers =Time taken to process one customer *30=Processing time of Employee #2*30 =6*30 =180 minutes =3 hours 23. Consider the ice cream shop described in the previous problem (22). Each Employee is paid $12 per hour. a. What is the cost of direct labor? b. What is the labor content? c. How much idle time does Employee #3 has per customer? d. What is the average labor utilization?

Answer 1

Solution:

Employee 1 takes 3 min per customer

Employee 2 takes 6 min per customer

Employee 3 takes 5 min per customer

wage per worker per hour= $12

a.

The bottleneck of the process is task is doing by the employee 2 which is 6 minutes per customer

So we need to calculate the flow rate of task 2

Flow rate = Total time/ Actual time=60/6=10 customers

Total wage per unit time= $12*3= $36

As we know, the cost of direct labor=Total wages per unit time/ Flow rate

= $36/10=$3.6 per customer

b.

Labor content= Sum of all the process time=3+6+5=14 minutes

c.

Idle time= Cycle time- Activity time

Cycle time is the bottleneck of the process which is 6 min in task 2

we need to calculate the idle time for employee 3

So the Idle time=6-5=1 minute per customer

d.

Average labor utilization = Total labor content/ (Total labor content+Total Idle time)

Total Idle time=Idle time of task 1+Idle time of task 2+Idle time of task 3

= (6-3)+(6-6)+(6-5)= 3+0+1= 4 minutes

Average labor utilization= 14/(14+4)=14/18=0.7778

So the Average lobor utilization= 77.78%