Draw the process flow diagram:
Anand Dairy (AD) sources 150,000 litres of milk daily from large number of local villagers .The milk is collected from 4:00 AM to 6:00 am and stored in bulk cold storage .It is then processed and packaged into 500 ml pouches. The milk processing stages have a capacity to process 15,000 litres per hour. AD has 30 packaging lines of which only 20 are currently in use. Each packaging line employs 5 workers and can package 500 litres per hour .The 20 packaging lines thus employ 100 full time workers. Each worker is paid Rs10 per hour during regular time (4:00A.M to 2:00 P.M) and Rs 12 per hour of overtime. The dairy works one shift starting from 4:00 A.M and has a policy to not to have any overnight storage of milk.
AD has enough storage capacity for unprocessed milk. Additionally, it has capacity to store 20,000 litres of processed and packaged milk in its finished goods (FG) warehouse, and any additional storage capacity can be rented at Rs 100 per 100 litres per day. From this FG warehouse AD serve daily retail demand of 150,000 litres of milk through a network of milk dealers .Milk dealers arrive uniformly from 6:00 A. M to 4: 00 P.M with their milk vans that can hold 2500 litres of packaged milk each.
Till recently AD has enjoyed a monopoly, and milk dealers had no choice but to wait with their vans to collect their delivery. However with Baroda dairy setting up operations AD fears losing some of its dealers to its competitor.AD is quick to realise that its main concern is the long waiting time for its dealers with their milk vans. In order to retain its dealers AD has started compensating them for their wait at the rate of Rs 200 per hour for a waiting van.
1. Draw the process flow diagram
2. Determine the time when the first 500 ml pack will exit the packaging line .Determine the time when the first milk van is completely filled up and ready for despatch.
3. Determine the daily overtime wages cost for AD. Calculate the daily compensation that AD has to pay its waiting customers if the daily demand remains constant at 150,000 litres
4. AD is concerned with cost it has to incur due to waiting vans. So it decided to hire 5 additional workers to operate one additional packaging line. For this proposal calculate a) daily regular time cost b) daily overtime cost c) daily finished goods storage cost d) daily milk van waiting time cost
5. Consider the situation when 20 packaging lines are in use. Evaluate the following alternate proposals
a) Operate one additional packing line b) Operate 5 additional packing lines c) Operate 10 additional packing lines.