Question

Identifying and Exploiting Constraints, Constraint Elevation

Confer Company produces two different metal components used in medical equipment (Component X and Component Y). The company has three processes: molding, grinding, and finishing. In molding, molds are created, and molten metal is poured into the shell. Grinding removes the gates that allowed the molten metal to flow into the mold’s cavities. In finishing, rough edges caused by the grinders are removed by small, handheld pneumatic tools. In molding, the setup time is one hour. The other two processes have no setup time required. The demand for Component X is 600 units per day, and the demand for Component Y is 1,000 units per day. The minutes required per unit for each product are as follows:

	Minutes Required per Unit of Product
Product	Molding	Grinding	Finishing
Component X	5	10	15
Component Y	10	15	20

The company operates one eight-hour shift. The molding process employs 24 workers (who each work eight hours). Two hours of their time, however, are used for setups (assuming both products are produced). The grinding process has sufficient equipment and workers to provide 400 grinding hours per shift.

The Finishing Department is labor intensive and employs 70 workers, who each work eight hours per day. The only significant unit-level variable costs are materials and power. For Component X, the variable cost per unit is $40, and for Component Y, it is $50. Selling prices for X and Y are $90 and $110, respectively. Confer’s policy is to use two setups per day: an initial setup to produce all that is scheduled for Component X and a second setup (changeover) to produce all that is scheduled for Component Y. The amount scheduled does not necessarily correspond to each product’s daily demand.

Required:

1. Calculate the time (in minutes) needed each day to meet the daily market demand for Component X and Component Y.

	Net Time Required
Molding	________minutes
Grinding	________minutes
Finishing	________minutes

What is the major internal constraint facing Confer Company?

Molding

2. Describe how Confer should exploit its major binding constraint. Specifically, identify the product mix that will maximize daily throughput.

	Number of Units Produced
Component X	_________units
Component Y	_________units

3. Assume that manufacturing engineering has found a way to reduce the molding setup time from one hour to 10 minutes. How many units of Component X and Component Y would be produced?

	Number of Units Produced
Component X	_________units
Component Y	_________units

Answer 1

			Minutes Required per Unit of Product
		Product	Molding	Grinding	Finishing
	A	Component X	5	10	15
	B	Component Y	10	15	20
	C=600*A	Total time Required for X	3000	6000	9000
	D=1000*B	Total time Required for Y	10000	15000	20000
	E=C+D	Total time required per day	13000	21000	29000
		Time (in minutes) needed each day to meet the daily market demand for Component X and Component Y.
		Net Time Required
		Molding	13000	minutes
		Grinding	21000	minutes
		Finishing	29000	minutes
		Available Capacity in minutes
		Molding	8640	(6 *60*24)
		Grinding	24000	(400*60)
		Finishing	33600	(8*60*70)
		Major InternalConstraint:
		Molding
		PRODUCT MIX to maximize Daily Throughput
		Component X require less molding time per unit
		To maximize daily throughput , we should produce maximum of product X
		Daily requirement ofmolding time for X	3000
		Balance molding minutes available	5640	(8640-3000)
		Number of Product Y can be manufactured	564	(5640/10)
		Product mix that willmaximize daily throughput
		Number of Units Produced
		Component X	600	Units
		Component Y	564	Units
	3	Molding minutes available=8640+2*50=	9640
		Time required per unit of product X	5	minutes
		Time required 600 unit of product X	3000	minutes
		Balance time available	5740	minutes(8640+50*2-3000)
		Number of units of product Y to be produced	574	(5740/10)
		Number of Units Produced
		Component X	600	Units
		Component Y	574	Units