Question

Determine the utilization and the efficiency for each of these situations: a. A loan processing operation that processes an average of 4 loans per day. The operation has a design capacity of 12 loans per day and an effective capacity of 11 loans per day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.) Utilization % Efficiency % b. A furnace repair team that services an average of 3 furnaces a day if the design capacity is 7 furnaces a day and the effective capacity is 5 furnaces a day. (Round your answer to 1 decimal place. Omit the "%" sign in your response.) Utilization % Efficiency % c. Would you say that systems that have higher efficiency ratios than other systems will always have higher utilization ratios than those other systems? This is not necessarily . If the design capacity is relatively , the utilization could be even though the efficiency was . Next Visit question mapQuestion 1 of 5 Total

Answer 1

Question – a:

Loan processing operation:

Design Capacity = 12 loans per day

Effective capacity = 11 loans per day

Actual capacity = 4 loans per day

We know that, Efficiency = (Effective capacity/Design Capacity)*100% = (11/12)*100% = 91.66667 = 91.7%

Utilization = (Actual capacity/effective capacity)*100% = (4/11)*100% = 36.36% = 36.4%

Efficiency = 91.7%

Utilization = 36.4%

Question – b:

Furnace repair team:

Design Capacity = 7 furnaces per day

Effective capacity = 5 furnaces per day

Actual capacity = 3 furnaces per day

We know that, Efficiency = (Effective capacity/Design Capacity)*100% = (5/7)*100% = 71.42% = 71.4%

Utilization = (Actual capacity/effective capacity)*100% = (3/5)*100% = 60%

Efficiency = 71.4%

Utilization = 60.0%

Question – c:

It is not necessary that if efficiency is high utilization will also be high. (this is because, if the design capacity is 10, effective capacity is 6 (60%) but the actual capacity is 5 (83.3%). here the utilization is more than the efficiency.

If the design capacity is relatively high, the utilization could be high even though the efficiency was low. (this answer requires the option to answer correctly. If you have any doubt, kindly post the options in the comment. I will help you out.)

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