Concept explainers
a)
To determine: The utilization and efficiency rate for the given scenario.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
b)
To determine: The utilization and efficiency for the given scenario.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
c)
To determine: Whether the given statement is true.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
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Operations Management
- A computer repair service has a design capacity of 80 repairs per day. Its effective capacity, however, is 64 repairs per day, and its actual output is 62 repairs per day. The manager would like to increase the number of repairs per day. Which of the following factors should the manager investigate: quality problems, absenteeism, or scheduling and balancing? Explain .arrow_forwardA loan processing operation that processes an average of 8 loans per day. The operation has a design capacity of 10 loans per day and an effective capacity of 9 loans per day. a. Calculate the Utilization b. Calculate the Efficiencyarrow_forwardMajestic Corporation provides call-center ordering services for Essential Oils magazine. Majestic receives an annual fee of $200,000 for providing such services and is also eligible to receive a performance bonus up to $65,000 if the average customer wait times are below certain thresholds at the end of the year. Using historical results as well as current expectations, Majestic estimates the chances of achieving the different performance bonuses as shown in the table here. Assume there are NO revenue constraints, and the entity uses the expected value approach to record variable consideration when recognizing revenue during the period. Which is the amount of the performance bonus management can recognize in the transaction price? Average wait times Performance Bonus % Chance of Achieving $65,000 15% < 1 minute < 2 minutes < 3 minutes < 4 minutes < 5 minutes $45,000 $25,000 $5,000 0 10% 50% 20% 5% a. Management would include the variable consideration in the transaction price in the…arrow_forward
- Capacity planning are strategic decisions, because: a. Impact organizations ability to meet future demands b. Affect operating costs cDo not involve long-term commitment of resources d. Cannot affect competitiveness e. Alternatives a) and b) are both correctarrow_forwardTwo trouble-shooters handle service calls for 10 machines. The average time between service requirements is 18 days, and service time averages 2 days. Assume exponential distributions. While running, each machine can produce 1,500 pieces per day. Hint: Finite Source Determine: (i) the percentage of time trouble-shooters are idle (ii) each machine's net productivity (iii) If trouble-shooters represent a cost of $150 per day, and machine downtime cost is $600 per day, would another trouble-shooter be justified? Explain.arrow_forwardIt wrongarrow_forward
- 1. A 32,000-seat baseball stadium is used 17 times for games, concerts, and graduation ceremonies. Each event averages five hours and assumes the stadium is full for each event. The stadium is available 365 days a year from 7 am to midnight. (Notice: the focus is stadium “seat” utilization). a. What is stadium (seat) utilization using Equation 7.1 (pg 146)? (Show your calculations) b. If in the above scenario, the utilization was 75% during the 17 events, but there were 2 additional events that garnered 100% utilization, would this be an increase or decrease in overall utilization from the result in “a”? (Show calculations) c. As an Operations Manager how would you improve utilization at the stadium? Provide at least three optional improvement plans with details. EQUATION 7.1 is : UTILIZATION (U) = Resources used / resources avaliable EQUATION 7.2 is: UTILIZATION (U) = Demand Rate / [Service Rate * Number of Servers]arrow_forward(Use an excel sheet to show formulas used)arrow_forwardEffective capacity is:a) the capacity a firm expects to achieve, given the currentoperating constraints.b) the percentage of design capacity actually achieved.c) the percentage of capacity actually achieved.d) actual output.e) efficiency.arrow_forward
- Piatinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in recent years and the company has been losing business to larger web design firms. Summary data concerning the last two years of operations follow: Estimated hours of service denanded Estimated overhead cost Actual hours of service provided Actual overhead cost incurred Hours of service available at capacity Last Year This Year 1,800 $ 117,000 $ 117,000 1,700 $ 117,000 $ 117,000 2,600 1,550 1,450 2,600 The company applies its overhead costs to jobs using the hours of service provided as the allocation base. For example, this year and last year, 35 service-hours were required to maintain the website for a small company called Verde Consulting. All of Platinum's overhead costs are fixed, and the actual overhead cost incurred was exactly as estimated at the beginning of the year in last year and this year. Required: 1. Platinum Web Services computes its predetermined…arrow_forward8. Two alternative motors are being considered for installation to a metal sheet pressing machine. Both motors have an output power of 180 x 0.746 kW and are projected to have a zero salvage value after a service duration of 10 years. The first and second motors operate with input-output efficiency levels of 79% and 76%, respetively, and cost $5,200 and $3,500, again, respectively. Annual operational costs for each motor will be 14% of its initial value. If power costs are five cents per kW-hour, what is the minimum hours of operation required per year to justify the purchase of the more expensive alternative at i= 12%? The motor should be used for a minimum of hours per year to justify the purchase of the more expensive alternative. (Round up to the nearest integer.)arrow_forwardShow what would happen if this plan were implemented. (If the answer is void please enter 0, do not leave any fields blank.) Plan 1 2 3 4 Number of clients Hour required Regular time hours Undertime hoursarrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,