Michael works in assembly at Metsirk building electronic circuit boards. These are the steps
First, he mounts 4 empty boards in a tray, which takes 3 minutes to do all 4 boards. There are always a sufficient number of trays for him to complete the task.
Next, the automated insertion machine places all the required components in these 4 boards. This machine takes 20 minutes to process a tray of 4 boards. The machine is capable of discharging the completed tray and grabbing and starting a new tray without operator assistance.
Next, Michael takes the completed boards in the tray, unmounts them from the tray and places them in a tester. The tester has 15 slots, each of which operates independently and can take one board. Michael takes 4 minutes to unmount the 4 boards from the tray and insert them in the tester.
The tester takes just under 1 hour to test a board from the time it is placed in a slot. You can assume the machine is busy for exactly 1 hour, including the time for the board to be placed in the slot, starting the testing, testing, and removal of the board. Finally, when the testing is complete, Michael removes the boards from the tester and packs them for shipment. This final packing step takes 1 minutes/board. Assume there is no variation in the times given above. You can assume all boards are of high quality and free of defects.
The demand rate for the product is 18 boards per hour.
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(3 points) Identify the items (flow units), tasks, and resources.
(3 points) Draw a process flow diagram. Make sure you indicate the resources, tasks, and times on your flow diagram. You can include possible storage points for work-in-process inventory or finished goods inventory on your diagram.
(6 points) Compute the processing time per unit for each resource. Show your work. Express your answer in minutes per board.
(3 points) What is the capacity of each resource? Show your work. Express your answer in boards/hour.
(1 point) Which resource is the bottleneck?
(2 points) What is the capacity of the process? Show your work. Express your answer in boards/hour.
(1 point) What is the flow rate of the process? Express your answer in boards/hour.
(11 points) Because demand is expected to increase, management wants to increase the capacity of the process. Each board brings a profit of $25. Several proposals are considered. Which of the proposals is the best for the company? Compute the profit rate ($ per hour) and discuss additional pros and cons for each option before you make a recommendation. You must show all your work. Make sure you explain clearly why you think one option is better than the other two.
Proposal 1: Do not change anything. The current cost of the machines and resources are negligible.
Proposal 2: Replace the old insertion machine with a new automated insertion machine that takes 12 minutes to do a tray of 4 boards. The new automated insertion machine is leased at a cost of $100/hr.
Proposal 3: Replace the old insertion machine with a new automated insertion machine that takes 12 minutes to do a tray of 4 boards. The new automated insertion machine is leased at a cost of $100/hr. In addition, acquire another tester with 15 slots at a leasing cost of $90/hr.
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