Question

A mortgage service office has the following four activities involved in approving a loan application. Note that a working day is 8 hours and there are 60 minutes in one hour.

Activity	Time (minutes)
A. Property survey	20
B. Credit report	20
C. Title search	40
D. Final decision	30

• Solution inputs are numbers only, no symbols. Percentage is kept as 0.76 instead of 76%.
• Numbers can be in the format of either 3000 or 3,000; 0.95 or .95
• Keep two decimals if not exact, do not round. For example, 3.24923... will be kept as 3.24, but the exact value of 0.625 will be kept as 0.625

1. If each activity is performed by a different person, with four employees, what would be the maximum number of loan applications the office can process per day?   And what is the office's direct labor utilization (DLU) ?

2. Activities B and C are combined together and assigned to two employees, while the other two employees are responsible for activities A and D respectively. What would be the maximum number of loan applications the office can process per day?   And what is the office's direct labor utilization (DLU) ?

3. The office now has only three employees, activities B and C are combined together and assigned to one employee, while the other two employees are responsible for activities A and D respectively. Under this setting, what would be the maximum number of loan applications the office can process per day?    And what is the office's direct labor utilization (DLU) ?  

4. The office now has only three employees, activities A, B and C are combined together and assigned to two employees, while the other employee is responsible for the last activity D . Under this setting, what would be the maximum number of loan applications the office can process per day?    And what is the office's direct labor utilization (DLU) ?  

5. With three employees, every employee can perform any activity and more than one activity. Under this setting, What would be the maximum number of loan applications the office can process per day?   And what is the office's direct labor utilization (DLU) ?  

Answer 1

ANSWER 1 :

Total avaialbe hour is =8*60*4=1920 hours

Bottleneck activity is 40 min activity C hence total output will be only 12.

Therefore with 12 output only 1320 hours direct labour is utilized which means it is 0.6875 DLU.

ANSWER 2 :

B&C combined = total time is 60 min and with two people working on this in each 60 min two cases will be processed hence for each case time is equal to 30 min.

B&C combined = total time is 50 min and with two people working on this in each 50 min two cases will be processed hence for each case time is equal to 25 min.

Hence bottleneck is B&C combined together which is equal to 30 min per case. Therefore the total output will be = 480/30=16

DLU = (30*16+25*16)/480*2=0.9166=0.92

ANSWER 3 :

Task	Time
A	20
B&C	60
D	30

Bottleneck is B&C with 60 min each task, hence the total output = 480/60= 8

DLU = (20*8+60*8+30*8)/480*3=0.61

ANSWER 4 :

Task	Time to process one case
A, B & C	40
D	30

Output would be =480/40=12 cases

DLU = (40*2+30*1)/480*2=0.875

ANSWER 5 :

Total time to complete the task = 110 and average time each person will work = 110/4=27.5

Output possible = 480/27.5=17.45

DLU = Maximum possible = (17.45*110)/1960=1

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