Reference no: EM132293417
Jackson Manufacturing Company
Kathleen McFadden, vice president of operations at Jackson Manufacturing Company has just received a request for quote (RFQ) from DeKalb Electric Supply for 400 units per week of a motor armature. The components are standard and either easy to work into the existing production schedule or readily available from established suppliers on a JIT basis. But there is some difference in assembly. Ms. McFadden has identified eight tasks that Jackson must perform to assemble the armature. Seven of these tasks are very similar to ones performed by Jackson in the past; therefore, the average time and resulting labor standard of those tasks are known.
The eighth task, an overload test, requires performing a task that is very different from any performed previously, however. Kathleen has asked you to conduct a time study on the task to determine the standard time. Then an estimate can be made of the cost to assemble the armature. This information, combined with other cost data, will allow the firm to put together the information needed for the RFQ.
To determine a standard time for the task, an employee from an existing assembly station was trained in the new assembly process. Once proficient, the employee was then asked to perform the task 17 times so a standard could be determined. The actual times observed (in minutes) were as follows:
follows:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
2.05 1.92 2.01 1.89 1.77 1.80 1.86 1.83 1.93 1.96 1.95 2.05 1.79 1.82 1.85 1.85 1.99
The worker had a 115% performance rating. The task can be performed in a sitting position at a well-designed ergonomic work-station in an air-conditioned facility. Although the armature itself weighs 10.5 pounds, there is a carrier that holds it so that the operator need only rotate the armature. But the detail work remains high; therefore, the fatigue allowance should be 8%.
The company has an established personal allowance of 6%. Delay should be very low. Previous studies of delay in this department average 2%. This standard is to use the same figure.
The workday is 7.5 hours, but operators are paid for 8 hours at an average of $12.50 per hour.
Your client is Kathleen McFadden, Vice President of Operations at Jackson Manufacturing Company. The VP of Operations has engaged you, an independent consultant, to write a 1-2 page memo addressing the following questions:
1. What is the average time, normal time, and standard time of task 8---the overload test? Provide your supporting calculations in an excel file. Note that 17 data observations are available for the analysis.
2. Assess if the sample size of 17 observations is large enough to achieve the desired precision--99.73% confidence level and accuracy of +/- 5%. Provide your supporting calculations in an excel file. Recommend an appropriate sample size for the study.
3. What is the daily capacity of the overload test work station? Please provide your supporting calculations.
4. What is the cost per unit for the overload test workstation? Please provide your supporting calculations.
5. What additional considerations/assumptions would you include in your report?