You have option to lease the warehouse

Assignment Help Operation Management

Reference no: EM132134925

CAN YOU DO CAPACITY ANALYSIS PLEASE

Your warehouse is a bit cramped and is estimated to be at 90% capacity but you have an option to lease the warehouse which, would double your capacity, next door. You used it afew years ago at a cost of $15K/year but prices have risen and now it is about $25K per annum. Additionally you could expand your own warehouse, but that would take about five months and the cost would be approximately $100K.

You have, in your factory, two metal saws which have a set up time of 8 hours. Once set up they operate at 95% capacity at the present production levels. You could buy another at the cost of $12.5K each, but the lead time to acquire and set up the machine and get it ready for production is one month. The saws have two operators for each machine.

Your Bending operation is run with three machines and each is operating at 60% capacity. Others are readily available on the market for about $10K per machine. Your team tells you that you could acquire one and get it operating within one month. The benders similarly need two operators per machine to operate safely. You are unsure if you need all the operators you currently have and you have been asked to evaluate that?

Your deburring operation is a manually operated process with hand tools. Currently you have 3 people per shift and there are no issues, but headcount would need to increase along with workload.

Both tube and final frame welding is a manual process. You currently do all welding on first shift with the team of 6 operators who work in an assembly line process. You can easily add staff as there are several welding operations in the area which you could recruit from, but expected lead time to get a new employee is 2 weeks. There is ample welding equipment available on site and space to handle staff to support double the workload however a change to the process would require an 8 hour set up.

Finally, painting and chroming operations are a two-step process. The first is dipping the final assembled frame into an acid wash and the second (after an hour of drying) is dipping the frame into a paint or chrome vat and then hanging the part to dry in an oven overnight.

Reference no: EM132134925

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