In: Operations Management
3. [2.1,2.2] Consider software projects flowing through three main activities: requirement planning, development, and testing/implementation. Three different types of resource-types (employees) are needed at each step: analysts for requirement planning; programmers for code development and testers for system testing. There are 2 analysts, 1 developer and 3 testers. Software projects arrive at the rate of 4 per month (30 days). A project typically takes 10 days for requirement planning, 6 days for code development, and 16 days for testing/implementation.
(a) What is the process capacity in projects per month? (show all work). Which resource-type is the bottleneck? What is the utilization of each resource-type?
(b) Suppose user-training work is a new activity that must be carried out on each project. It is supposed to take 2 days for each project. Which of the three resource-types should perform this activity and what is the new process capacity?
(c) For this part, include user-training work in your calculations. There may be additional work (more than current process capacity) available in the market and, therefore, the firm wants to increase its process capacity. First idea is to re-train a tester and assign him to development work. Would you recommend this idea and why? The second idea is to cross-train this tester to do any kind of work. What is your process capacity under the second idea (make any necessary assumptions)? Finally, the third idea is to cross-train all employees so that each employee can do any kind of work. What maximum process capacity can be theoretically achieved under the third idea?
Part a:
Effective Capacity = # of units of resources / processing time per unit
Resource |
# of units |
processing time per project (days) |
processing time per project (months) (time / 30 days per month) |
Effective Capacity (projects per month) (# of resources / processing time per month) |
Analyst |
2 |
10 |
0.3333 |
6 |
Developer |
1 |
6 |
0.2000 |
5 |
Tester |
3 |
16 |
0.5333 |
5.625 |
Lowest capacity is 5 projects per month for the resource Developer. Since the developer has lowest capacity per month, it is bottleneck resource.
The process capacity = Capacity of bottleneck resource = 5 projects per month
The demand for the firm = 4 projects per month
Throughput for the process = min (process capacity , demand ) = min (5 , 4) = 4 projects per month
Utilization = Throughput rate /(Effective Capacity per month)
Resource |
Effective Capacity (projects per month) |
Throughput = min(demand, process capacity) = min(4 , 5) = 5 |
Utilization = throughput/resource capacity |
Analyst |
6 |
4 |
4/6 = 0.67 |
Developer |
5 |
4 |
0.80 |
Tester |
5.625 |
4 |
0.71 |
Part b:
The new activity should be assigned to the resource with the lowest utilization factor. The lowest utilization is of the resource – analyst, thus assign the new activity to resource-type – Analyst.
Resource |
# of units |
processing time per project (days) |
Processing time per project (months) |
Effective Capacity (projects per month) |
||
(time / 30 days per month) |
(# of resources / processing time per month) |
Throughput |
Utilization |
|||
Analyst |
2 |
12 |
0.4000 |
5 |
4 |
0.80 |
Developer |
1 |
6 |
0.2000 |
5 |
4 |
0.80 |
Tester |
3 |
16 |
0.5333 |
5.625 |
4 |
0.71 |
Lowest capacity is 5 projects per month for the resources – Analyst and Developer. Thus, both are bottleneck resources.
New process capacity = Capacity of bottleneck resource = 5 projects per month
Part c:
Option 1: Re-train the tester and assign to the developer
The changes in capacities are determined as follows:
Resource |
# of units |
processing time per project (days) |
processing time per project (months) |
Effective Capacity (projects per month) |
(time / 30 days per month) |
(# of resources / processing time per month) |
|||
Analyst |
2 |
12 |
0.4000 |
5 |
Developer |
2 |
6 |
0.2000 |
10 |
Tester |
2 |
16 |
0.5333 |
3.75 |
Lowest capacity is 3.75 projects per month for the resources – Tester. Thus, Tester is bottleneck resource.
New process capacity = Capacity of bottleneck resource = 3.75 projects per month
Since the process capacity is decreased than the previous capacity of 5 projects per month, this option is not advisable.