Question

Consider the process of manufacturing orange juice concentrates. The facility operated at capacity, with one 8-hour shift per-day, six days a week, for a total of 36 weeks per year during the prime orange growing season. To simplify, capacity was measured in terms of the equivalent amount of finished juice concentrate. The key elements of the continuous production process are as follows:

(1) Storage: There are three sizes of oranges (small, medium and large) each stored separately in a bin with a capacity of 80,000 pounds.

(2) Juice Extraction: The extractor can process oranges of only one size at a time. The changeover time from one size to the other is 20 minutes. Irrespective of the size of the oranges, the extractor had the capacity to produce up to 20,000 pounds/hour of finished juice concentrate.

(3) Juice Filtration: Here seeds and small pieces of orange peel were filtered from the juice and discarded. The processing capacity of this step is 20,000 pounds/hour of finished concentrate. After it ran for 90 minutes, the machine’s filter had to be changed to clear the debris. The setup time (the time required to shut down the machine, change the filter, and restart the machine) is 30 minutes.

(4) Juice Concentration: Here, some of the water in the juice was removed as it flowed through the machine. No setups were required for this operation and had a capacity of up to 18,000 pounds of finished concentrate per hour. (5) Juice Testing and Storage: Here concentrated juice is tested for color and sugar content and separated into one of four large storage tanks. The total capacity of these four tanks is 250,000 pounds of concentrate. (6) Blending: The blending operation mixed juice concentrate from these four tanks (the proportion depended on each customer’s specification) at a rate of up to 22,000 pounds of finished product per hour. A 40-minute setup time was required to change from one blend to another.

The movement of oranges from delivery to storage bins and bins to extraction occurred with conveyer belts. Following extraction, the juice was pumped through pipes from one process step to another. The residue from extraction was removed and discarded continuously during the extraction. Assume that the production system was running only ONE size of oranges. Consider just the process steps two through four: extraction, filtration, and concentration.

Answer the following questions:

1. How much orange juice concentrate can be processed in one 8-hour workday?

2. Assume extraction had previously been setup for the size oranges being processed. How much idle time will there be in the extraction operation during one 8-hour workday?

3. If you could add storage capacity somewhere between steps two and four in this production line in order to increase daily output, where would you place it? How much storage would you add? Why?

4. If the cost of adding storage was $30/pound and the cost of reducing setup time by 50% using additional fixtures was $20,000 for the filter process and $10,000 for the extraction process, what action would you recommend in order to maximize the output of this production line?

5. How much will you recommend improvement(s) cost? How much additional capacity do you create?

Answer 1

1. How much orange juice concentrate can be processed in one 8-hour workday?

       20,000 pounds/hour of finished juice concentrate

2. Assume extraction had previously been setup for the size oranges being processed. How much idle time will there be in the extraction operation during one 8-hour workday?

Since extraction had previously been set up for all size oranges to be processed the idle time in extraction operation during one -8 hour / work day will be zero

3 . If you could add storage capacity somewhere between steps two and four in this production line in order to increase daily output, where would you place it? How much storage would you add? Why?

In order to increase the daily output , Storage capacity can be setup in the step 3 using additional fixture that combines filter process and extraction process . storage bin of capacity 60000 pounds can be added because the initial storage capacity of oranges of any size 80000 pounds has been crushed and squeezed in to 20000 pound juice concentrate    

4. 4. If the cost of adding storage was $30/pound and the cost of reducing setup time by 50% using additional fixtures was $20,000 for the filter process and $10,000 for the extraction process, what action would you recommend in order to maximize the output of this production line?

Cost of adding a storage = $ 30/POUND

Cost of reducing setup time = 50% [ cost of additional fixture + cost of extraction process]

                                                  = [(50/100) ($ 20000+$10000)]

                                                  = $600

In order to maximize the output of a production line a new storage can be set up at a cost of $ 30 pound , since it reduce the setup time by $ 600