a) Which server is the bottleneck of the process ? b) What is the utilization of server 2 ? c) What is the average labor utilization of the servers ? d) Assume a wage rate of $18 per hour. What is the cost of direct labor for one guest ?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Mr. K’s is a very popular hair salon. It offers high-quality hair styling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis):
Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)
Activity 2: Wash and condition hair. (10 minutes)
Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)
Activity 4: Design the hairstyle and do the hair. (25 minutes)
Activity 5: Check out the guest. (5 minutes)
Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:
S1 does Activity 1.
S2 does Activities 2 and Activity 3.
S3 does Activities 4 and Activity 5.
- a) Which server is the bottleneck of the process ?
- b) What is the utilization of server 2 ?
- c) What is the average labor utilization of the servers ?
- d) Assume a wage rate of $18 per hour. What is the cost of direct labor for one guest ?
To increase the service rate, Mr. K’s is considering two alternatives:
- Hire a new employee to help any one (and only one) of the servers without changing the tasks performed by each server.
- To redesign the assignment of tasks to servers. For this, Mr. K’s is evaluating to reassign Activity 5 from S3 to S1.
- e) What would be the costs of direct labor of serving one guest under each of the two alternatives? Which alternative would you recommend to Mr. K ?
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