Question

Consider a process consisting of three resources. Assume there exists unlimited demand for the product, and that all activities are always performed in the following sequence. 

• Resource 1 has a processing time of 7 minutes per unit. 

• Resource 2 has a processing time of 4 minutes per unit. 

• Resource 3 has a processing time of 6 minutes per unit. 

All three resources are staffed by one worker and each worker gets paid $10 per hour. 

 

a. What is the cost of direct labor? 

b. What is the labor content? 

c. What is the average labor utilization? percent

Do not round your intermediate calculations.

d. Assume the demand rate is 18 units per hour. What is the takt time? 

e. Assume the demand rate is 18 units per hour. What is the target manpower? 

 

Answer 1

Output of resource 1 = 60/7 =8.5714 per hour

Output of resource 2 = 60/4 =15 per hour

Output of resource 3 = 60/6 =10 per hour

Resource 1 is bottleneck which restricts the output to 8.5714 per hour

(a) Cost of direct labour = 3x10 =30 per hour

  Cost of direct labour per unit = 30/8.5714 =3.5

(b) Labour content = 7+4+6 =17 min

(c) Utilisation of 1 = 8.5714/8.5714 =1

Utilisation of 2 = 8.5714/ 15 =0.5714

Utilisation of 3 = 8.5714/10 =0.8571

Avg utilisation = 0.8095

(d) Takt time = time available / units to be made = 60/18 =3.33 minutes

(e) For making 18 minutes per hour.

Resource 1 needed = 18/8.5714 = 3

Resource 2 needed = 18/15 =2
Resource 3 needed = 18/10 =2

Total manpower = 3+2+2=7