What are Happy Family (Likith Muddu Krishna)
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School
Case Western Reserve University *
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Course
408
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
Pages
3
Uploaded by BarristerFogBadger41
1.
What are Happy Family’s top two or three operational excellence issues and/or
opportunities to be solved? Please be precise and concise
Ans:
•
Even after the additional FSS production line FSS, Happy Family was not
seeing the throughput it had expected to see. Demand for its pouches was
increasing and Production was not able to reach the demand.
•
The company was dealing with various backups in the baby food pouch
production line.
•
The quality checks required by the items that come out of the FFS line as
FFS has quality concerns which in turn slowed down the production.
2.
Use the data provided in the spreadsheet “Base Case” to analyze the current
process. What is the current bottleneck and what is its capacity?
Ans:
•
As the FFS line has a demand of 7,500 Pouches/hr but as depicted in the
process flow, FFS station in the production line can only produce 6,000
Pouches/hr. Therefore, the FFS station is the bottleneck and its capacity is
6,000 Pouches/hr and the total System capacity is 6,000 + 3,900 = 9,900
Pouches/hr(Which includes FSS and PF production line)
3. What are the implications on the overall capacity of adding:
1.
A.
One additional FFS machine?
Adding one additional machine to the FFS line improves the FFS
line capacity to 12,000 Pouches/hr and the FFS line is no longer the
bottleneck as the bottleneck shifts to Quality Check which has a
capacity of 7,500 Pouches/hr.
We get 7,500 Pouches/hr from the FFS line and 3,900 Pouches/hr
from the PF line which is equal to 11,400 Pouches/hr but the
Loading becomes the bottleneck for the overall process which has a
capacity of 10,500 Pouches/hr therefore the total system capacity
is 10,500 Pouches/hr.
B.
One additional FFS machine plus one loading dock
?
Adding one additional machine to the FFS line improves the overall
FFS line capacity to 12,000 Pouches/hr and the FFS line is no
longer the bottleneck as the bottleneck shifts to Quality Check
which has a capacity of 7,500 Pouches/hr
We get 7,500 Pouches/hr from the FFS line and 3,900 Pouches/hr
from the PF line which is equal to 11,400 Pouches/hr and now with
an additional machine in Loading improves its capacity to 14,000
Pouches/hr. therefore, the total system capacity is 11,400
Pouches/hr. The demand is 11,250 Pouches/hr (7,500+3,750).
One additional FFS machine plus one loading dock plus additional
QC staff
?
With the addition of one machine to the FFS line, its capacity
increases to 12,000 Pouches/hr, and it is no longer the bottleneck.
The bottleneck now shifts to the Quality Check, which has a
capacity of 7,500 Pouches/hr but The Quality Check procedure can
currently handle 7,500 Pouches per hour with just three employees.
If each employee can check pouches at the same rate as the current
employees, adding one more employee to the quality check process
should raise its capacity to 10,000 Pouches/hr. This is what would
happen if the Quality Check procedure had four employees (three
employees plus one more employee).
In total, you are now getting 10,000 Pouches/hr from the FFS line
and 3,900 Pouches/hr from the PF line. Furthermore, the addition
of an extra machine in the Loading process has improved its
capacity to 14,000 Pouches/hr. But the Mixer capacity is 12,000
Pouches/hr. Therefore, the overall system capacity is 12,000
Pouches/hr.
3.
What are the payback periods associated with the three scenarios above?
Ans.
1 FFS Machine
(at 6000 pph)
1PF Machine
(at 2000 pph)
1 Loading Dock
(at 3500 pph)
One-time investment
$1.25 million
$1.0 million
$0
Ongoing cost
(regular time)
$400,000
(5 employees/shift)
$160,000
(2 employees/shift)
$80,000
(1 employee/shift)
Scenario 1:
One additional FFS machine
Investments = Additional FFS machine + 5 employees =
12,50,000
Savings = Reduction of 2.86 extra hours for all FFS employees - Overtime for the 5
new employees
–
(Addition of FFS machine + 5) = 5,14,285.71 - 42,750.00 -
4,00,000.00 =
71,535.71
Payback time
=
Investment/ Savings = 12,50,000/71,535.71 = 17.47 years
Scenario 2:
One additional FFS machine plus one loading dock
Investment = Addition FFS machine and 5 FFS employees = 12,50,000
Savings = Reduction of 4 extra hours for all employees to run FFS line overtime -
Addition of 1 Loading dock + employee - Addition FFS machine and 5 FFS employees
= 7,20,000-80,000-4,00,000 = 2,40,000
Payback time
=
Investment/ Savings = 12,50,000/2,40,000 = 5.2 years
Scenario 3:
One additional FFS machine plus one loading dock plus additional QC
staff
Investment : Addition FFS machine and 5 FFS employees
Savings = Reduction of 4 extra hours for all employees to run FFS line overtime -
Addition of 1 Loading dock + employee - Addition FFS machine and 5 FFS employees
+ additional QC = 270,000
Payback time
=
Investment/ Savings = 12,50,000/2,70,000 = 4.63 years
4.
Which would you select, and why?
Ans.
I would Scenario 3: One additional FFS machine plus one loading dock plus additional
QC staff because we have as better payback when compared to the three
scenario’s
and also Eliminates Overtime and the problems from overtime.
6. Is there another way to increase capacity (other than the three above) that might have
an even shorter payback period? Explain in detail (conceptually and numerically).
Purchase 4 more PF line and a Loading dock
Investment = $ 40,00,000
Savings = Reduction in overtime+ Removal of FFS machines and
employees
–
Additional
employees for PF line = 720000+1600000-720000 = 16,00,000
Payback time
=
Investment/ Savings =
40,00,000
/
16,00,000
= 2.5 years
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