Question

PowerToys Inc. produces a small remote-controlled toy truck on a conveyor belt with nine stations. Each station has, under the current process layout, one worker assigned to it. Stations and processing times are summarized in the following table:

Station	Task	Processing Times (seconds)
1	Mount battery units	70
2	Insert remote control receiver	80
3	Insert chip	90
4	Mount front axle	60
5	Mount back axle	65
6	Install electric motor	50
7	Connect motor to battery unit	75
8	Connect motor to rear axle	60
9	Mount plastic body	75

a. What is the bottleneck in this process?

b. What is the capacity, in toy trucks per hour, of the assembly line?

c. What is the direct labor cost for the toy truck with the current process if each worker receives $20/hour, expressed in dollars per toy truck? (Round your final answer to two decimal places.)

d. What would be the direct labor cost for the toy truck if work would be organized in a work cell; that is, one worker performs all tasks? Assume that the processing times would remain unchanged (i.e., there are no specialization gains). (Round your final answer to two decimal places.)

e. What is the utilization of the worker in station 2? (Round your final answer to two decimal place.)

Because of a drastically reduced forecast, the plant management has decided to cut staffing from nine to six workers per shift. Assume that (i) the nine tasks in the preceding table cannot be divided; (ii) the nine tasks are assigned to the six workers in the most efficient way possible; and (iii) if one worker is in charge of two tasks, the tasks have to be adjacent (i.e., one worker cannot work on tasks 1 and 3, unless the worker also does task 2).

f. How would you assign the nine tasks to the six workers? (Round " Capacity (units per hour)" values to two decimal places.)

g. What is the new capacity of the line (in toy trucks per hour)? (Round your final answer to two decimal places.)

Answer 1

(a)

Station-3 i.e. 'Insert chip' is the bottleneck in that the processing time per unit is the highest.

(b)

The capacity of the line = Capacity of the bottleneck = 1 units in 90 seconds = 40 units in 3600 seconds = 40 units per hr.

(c)

Assuming unlimited demand, flow rate = capacity = 40 units per hr.

Total wages paid per hr. = $20 per hour per worker * 9 workers = $180 per hr.

So,

Cost of direct labor = Total wages per hrs. / flow rate = 180 / 40 = $4.50 per unit

(d)

Sum of all task times = 625 seconds

So, the capacity and flow rate of the cell will be = 3600/625 = 5.76 units per hr.

Total wages paid per hr. = $20 per hour per worker * 1 worker = $20 per hr.

So,

Cost of direct labor = Total wages per hrs. / flow rate = 20 / 5.76 = $3.47 per unit

(e)

Capacity of station-2 = 3600/80 = 45 units per hr.

Utilization of station-2 = Flow rate / Capacity of station-2 = 40 / 45 = 0.89 or 88.89%