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Example problems and some answers for chapter 9 Problems 1 Joe's Tasty Burger has determined that its production facility has a design capacity of 400 hamburgers per day. The effective capacity, however, is 250 hamburgers per day. Lately Joe has noticed that output has been 300 hamburgers per day. Compute both design and effective capacity utilization measures. What can you conclude? Answer: The utilization rates show that the facility's current output is below its design capacity and considerably higher than its effective capacity. If the effective capacity is realistically set, it is expected that the facility will operate over that level for a short time. 2 A manufacturer of printed circuit boards has a design capacity of 1000 boards per day. The effective capacity, however, is 700 boards per day. Recently, the production facility has been producing 950 boards per day. Compute the design and effective capacity utilization measures. What do they tell you? 3 Beth's Bakery can comfortably produce 60 brownies in one day. If Beth takes some unusual measures, such as hiring her two aunts to help in the kitchen and work overtime, she can produce up to 100 brownies in one day. (a) What are the design and effective capacities for Beth's Bakery? (b) If Beth is currently producing 64 brownies, compute the capacity utilization for both measures. What can you conclude? Answer: (a) Effective capacity = 60 brownies Design capacity = 100 brownies (b) The utilization rates show that the facility's current output is far below its design capacity and higher than its effective capacity. The design capacity occurs only with extra help. 4 The town barber shop can accommodate 35 customers per day. The manager has determined that if two additional barbers are hired, the shop can accommodate 80 customers per day. What are the design and effective capacities for the barber shop? 5 The design and effective capacities for a local paper manufacturer are 1000 and 600 pounds of paper per day, respectively. At present, the manufacturer is producing 500 pounds per day. Compute capacity utilization for both measures. What can you conclude? Answer: The computed utilization rates show that the facility's current output is below its design and effective capacities. This illustrates that the manufacturer is not using capacity to its fullest extent and there is room for improvement. 6 The design and effective capacities for a local emergency facility are 300 and 260 patients per day, respectively. Currently, the emergency room processes 250 patients per day. What can you conclude from these figures? 7 The Steiner-Wallace Corporation has determined that it needs to expand in order to accommodate growing demand for its laptop computers. The decision has come down to either expanding now with a large facility, incurring additional costs and taking the risk that the demand will not materialize, or expanding small, knowing that in three years management will need to reconsider the question.... View Full Document