Concept explainers
a)
To determine: The cost of direct labor for the bicycle.
a)
Explanation of Solution
Given information:
Identification of bottleneck:
Worker 1 performs Step 1 and Step 2 with a total time of 50 seconds.
Worker 2 performs Step 3 and Step 4 with a total time of 60 seconds.
Worker 3 performs Step 5 with a time of 50 seconds.
Worker 4 performs Step 6 with a time of 45 seconds.
Worker 5 performs Step 7 with a time of 40 seconds.
Therefore, the bottleneck is Worker 2 with 60 seconds.
Calculation of cost of direct labor for the bicycle:
The cost of direct labor per bicycle is $1.25.
b)
To determine: The profit per hour of the company.
b)
Explanation of Solution
Given information:
Calculation of profit per hour:
The bottleneck time is 60 seconds. Therefore, 60 units are produced every hour. Therefore, the flow rate is 60 units per hour.
The profit per hour is $25.
c)
To determine: The profit per hour of the company if the sourcing cost is 10% cheaper.
c)
Explanation of Solution
Given information:
Calculation of profit per hour:
The bottleneck time is 60 seconds. Therefore, 60 units are produced every hour. Therefore, the flow rate is 60 units per hour.
The profit per hour is $31.
d)
To determine: The profit per hour of the company if the fixed cost is 10% less.
d)
Explanation of Solution
Given information:
Calculation of profit per hour:
The bottleneck time is 60 seconds. Therefore, 60 units are produced every hour. Therefore, the flow rate is 60 units per hour.
The profit per hour is $45.
e)
To determine: The profit per hour of the company if the bottleneck time is reduced by 5 seconds per unit.
e)
Explanation of Solution
Given information:
Calculation of profit per hour:
The bottleneck time is 55 seconds. Therefore, the flow rate is:
The profit per hour is $52.25.
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Chapter 4 Solutions
Operations Management
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Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,