Question

vThere are 3 steps in a laundry shop: i) Washing, ii) Drying, iii) Folding. If we assume the time to
do each load is 25, 50 and 35 minutes, respectively. We can assume that there is no variability in
the process and all operations work fully efficiently.
a) What is the Lead Time of the laundry shop?
b) What is the Cycle Time? What is the throughput rate (loads per hour) of the laundry?
c) What is the utilization % for each step? Which step is the bottleneck?
d) How many loads the laundry could do per day?
a. Assume the laundry open 24hours/7days per week
b. Assume the laundry open every day, from 8am to 8pm. All loads have to be
completed before the laundry closes.
e) With the increase in the number of customers, the management decides to make a small
investment to, at least, double the capacity of the laundry. Assuming there is no limitation
in space, in access to electricity and water, and in discharging wastes.
a. How could they achieve this objective with minimum investment cost?
b. What is the Lead time, and Cycle time for this new set-up?
QUESTION 2
You have been asked by a small Chocolatier to assist with the improvement of its capacity
utilisation. At the moment their four-step production process, from raw materials to finished units
looks like this:
Cocoa beans à ROASTING à MELTING à MOULDING à REMOVING à Chocolates
Roasting takes 5 minutes, melting 10 minutes, moulding 7 minutes, and removing the chocolates
from the moulds takes one minute. In other words, the activity time (throughput time) to process
one unit of product at the respective tasks is 5, 10, 7 and 1 minutes. There is one operator working
on each task. We can assume that there is no variability in the process and all operations work
fully efficiently. No additional inventory between the tasks is permitted in order to guarantee the
quality of the chocolates.
Each operator is paid £20 per hour and works 8 hours per day, five days a week. The factory will
not run less than 40 hours a week. The unit cost of one chocolate bar is £2 material costs plus the
cost of labour. The very exclusive and labour intensive chocolates sell for £25 each. Projected
sales for the next ten-week period up until New Year are 3,500 chocolates.
(a) What is the Capacity/Throughput of this production process per week?
(b) What is the utilisation % for each of the processes?
(c) What is the margin, excluding overhead cost, for each chocolate?
(d) Can the Chocolatier double its production without adding any new operator? How to
optimize the production capacity without adding any new operator? What is the new
capacity?
(e) If one new operator were employed, which of the four steps should the new operator be
doing? What is the new operation throughput after optimization?

Answer 1

A	B	C	D	E	F	G	H	I
2
3		Activities	Time required
4		Washing	25	min
5		Drying	50	min
6		Folding	35	min
7
8		a)
9
10		Lead time is the time between order and delivery of a product or a service.
11		In this case activities between order and deliveries are washing, drying and folding.
12
13		Therefore,
14		Lead time	=Time required for washing + Time Required for Drying + Time required for folding
15			110	=D4+D5+D6
16
17		Hence the lead time is	110	min
18
19		b)
20
21		Cycle time is the time required to finish an item.
22		In this case activities in finishing the product are washing, drying and folding.
23
24		Therefore,
25		Cycle time	=Time required for washing + Time Required for Drying + Time required for folding
26			110	=D4+D5+D6
27
28		Hence the cycle time is	110	min
29
30		Cycle time in hour	1.83	hrs
31
32		Throughput rate	=Minimum {Capacity of Washing, Capacity of Drying, Capacity of Flolding }
33		The capacity is the inverse of the activity time.
34		Activities	Time required (Min)	Capacity (Loads per hour)
35		Washing	25	2.40	=1/(D35/60)
36		Drying	50	1.20	=1/(D36/60)
37		Folding	35	1.71	=1/(D37/60)
38
39		Throughput rate	=Minimum {Capacity of Washing, Capacity of Drying, Capacity of Flolding }
40			1.20
41
42		Hence throughput rate is	1.20	Loads per hour
43
44		c)
45
46		Utilization % of each activity	=Throughput rate / Capacity of each activity
47
48		Activities	Time required (Min)	Capacity (Loads per hour)	Utilization %
49		Washing	25	2.40	50.00%	=$D$42/E49
50		Drying	50	1.20	100.00%	=$D$42/E50
51		Folding	35	1.71	70.00%	=$D$42/E51
52
53		The drying process has the lowest capacity and hence it is the bottleneck step.
54
55		d)
56
57		a)
58		Assuming laundry is open 24 hours a days.
59
60		Number of hours available per day	24	hrs
61		Throughput rate	1.20	Loads per hour
62
63		Number of loads per day	=Total Hours per day*Throughput rate
64			28.8	=D60*D61
65
66		Hence Number of loads per day	28.8
67
68		b)
69		Assuming laundry is open 12 hours a days.
70
71		Number of hours available per day	12	hrs
72		Throughput rate	1.20	Loads per hour
73
74		Number of loads per day	=Total Hours per day*Throughput rate
75			14.4	=D71*D72
76
77		Hence Number of loads per day	14.4
78
79