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Process Practice Analysis and Capacity Management
BUAD311 Operations Management
Spring 2011
1. Dello is a world-class PC company. Management believes that they understand
their products and customers better than any outsourcing company; therefore
Dello should provide customer service in-house. Ideally, Dellos customer service
department wants to handle all the customer phone calls. During peak hours,
however, Dello receives so many customer calls that they ask an outsourcing
company, Telemate, to help handle incoming calls. Dellos switchboard system is
programmed in the following way; A customer calls Dello at its 1-800 number. If
there are 14 or less callers in the system waiting to speak with one of the customer
service representatives, then the call stays within Dellos system and the customer
inquiry will be answered by a Dello customer service representative. If, on the
other hand, there are 15 or more calls waiting within Dellos system, then the
incoming call is forwarded to the outsourcer Telemate, and the call will be
answered by a Telemate agent.
Draw the process flowchart for Dellos customer service call handling process.
2. Getaway is another computer company known for mass customization. Its secret
is to always maintain an inventory of base models, and to offer its customers addon options. The process is as follows:
The first step is receiving the order. After receiving an order, the order is
checked for add-ons. If needed, add-ons are added to the base model.
(Note that base models are held in inventory). Then the computer is
packed, and finally shipped.
Draw a process flow diagram for the above process.
3.
Kate is managing his companys production facility. Consider the following
production process. Note: some triangles may be intentionally omitted.
Machine A
Operator A
Machine B
Operator B
Machine C
Operator C
Raw materials go through machines A, B, and then C, to produce a final product.
Capacity, or service rate, of each machine is as follows:
Machine A: 200 units per hour
Machine B: 180 units per hour
Machine C: 120 units per hour
(All these numbers are expressed in terms of units of final product.)
a)
Identify the bottleneck process. Is it A, B, or C? Explain briefly.
Kate sincerely believes that she must keep high utilization of machines. Every
time she sees an operator idle, therefore, she orders the operator to go back to the
machine and continue operating.
b) What is she doing wrong? What is the most likely result if she manages the
factory this way?
4. Eastern Coffee follows the flow chart below to serve its customers. Note that
some triangles may be omitted intentionally. It takes a worker two minutes to take
order and receive payment, two minutes to prepare coffee, and three minutes to
clean equipment.
Take order
and receive
payment
Prepare the
coffee
Clean
equipment
Eastern Coffee has two workers: worker A takes order and prepares coffee, while
worker B handles the cleaning.
a) On average, 10 customers per hour show up and order coffee. What is the
utilization rate of worker A? And what is the utilization rate of worker B?
b) How many customers can Eastern Coffee serve per hour?
Western Coffee follows the same flow chart above, and each activity takes the
same amount of time as Eastern. Western Coffee also has two workers: worker C
only takes order and payment, while worker D handles the coffee preparation and
cleaning.
c) How many customers can Western Coffee serve per hour?
d) The manager of Western Coffee notices that cleaning is not a critical activity
in the sense that it can be delayed and be finished when there are fewer
customers. Therefore, during the peak hour when many customers come in,
workers can focus on serving customers and temporarily ignore the cleaning
activity. Then how many customers can Western Coffee serve during the peak
hour?
5. At Spotted Cow Coffee Shop, one cashier can take 30 orders per hour and one
skilled worker can prepare 20 orders per hour. Assume that the cashier and the
worker are not cross-trained.
a. Suppose that there are only one cashier and one worker in Spotted Cow.
What is the capacity of Spotted Cow? And which resource is the
bottleneck? Explain.
b. Suppose that Spotted Cow hires one more skilled worker who can also
prepare 20 orders per hour. What is the capacity of Spotted Cow? And
which resource is the bottleneck? Explain.
6. Pavichs Brick Oven Pizza is known for its speedy delivery time of piping hot
pizza. Its secret is to always maintain an inventory of uncooked, assembled,
cheese pizzas, and to offer its customers only cheese and pepperoni pizza. If a
customer orders a cheese pizza, uncooked cheese pizza goes immediately into the
oven. If a customer orders a pepperoni pizza, pepperoni is added to the cheese
pizza, and then the pizza is cooked, and finally delivered. Draw the process
flowchart diagram for Pavichs Brick Oven Pizza. In your flowchart, use at least
two inverted triangles.
7. Campus Credit Union has 5 representatives, 2 of them specialized in business
customers and 3 of them specialized in personal customers. On average, each
business customer takes 15 minutes, and each personal customer takes 12 minutes
to finish the service. During the 4-5pm rush hour, 10 business customers and 10
personal customers show up.
a. Does the Credit Union have enough capacity during the rush hour?
b. If the Credit Union cross-trains the representatives so that all of them can
handle both the business and personal customers, does the Credit Union
have enough capacity during the rush hour?
c. The Credit Union is unable to cross-train all but representatives, can crosstrain one of the representatives originally specialized in business
customers. Should the Credit Union pursue this opportunity?
d. The Credit Union is unable to cross-train all representatives, but can crosstrain one of the representatives originally specialized in personal
customers. Should the Credit Union pursue this opportunity?
8. The following flow chart describes a simple burger making process.
Raw Material
Cook
Assemble
Deliver
One stove is available to cook patties. It can cook patties in 3 minutes and holds 40
patties at one time. On average, it takes 45 seconds for a worker to assemble a
burger. There are 12 workers available to assemble. The time it takes to deliver can
be omitted. Assume that one burger needs only one patty.
a. What is the capacity of the cooking stage? What is the capacity of the
assembly stage? What is the capacity of the entire process?
b. Suppose that on average 600 burgers per hour are ordered from customers.
What is the utilization rate of the stove? What is the utilization rate of the
worker, on average?
9. A small medical center would like to determine the capacity requirements for the
next month. Currently there are 11 doctors working 8 hours a day and 5 days a
week. They provide care for three types of patients: patients come for regular
check-ups (type A), patients with minor problems (type B), and patients with
serious problems (type C). The management had estimated the number of patients
for the next four weeks as follows:
Type A
Type B
Type C
Week # 1
250
150
200
Weekly numbers of patients
Week # 2
Week # 3
50
100
300
150
150
250
Week # 4
500
300
150
All the doctors can provide care for all types of patients. Type A patients require
15 minutes of care, type B patients require 30 minutes of care, and type C patients
require 60 minutes of care.
a. What are the average utilization rates of the doctors for each of the next 4
weeks?
b. Does this medical center have enough capacity?
10. A clothing company produces 5 types of shirts (A, B, C, D, and E). The final
manufacturing steps in the shirt production process are to (a) attach a care label to
every shirt, and (b) brand the companys name on every shirt. The company has
one machine for attaching care labels, and one machine for branding. For any
shirt type, branding requires 8 minutes of processing on the machine. Due to
differences between shirt designs, attaching care labels requires the following
shirt-dependent processing times (in minutes):
Shirt Type
A
B
C
D
E
Processing Time
4
10
5
6
8
The demand per day for the different shirt types is:
Shirt Type
A
B
C
D
E
Demand
20
5
25
10
15
Assume each machine is available to work 8 hours per day. Does the company have
the capacity to satisfy its demand? Explain your answer fully.
.
11. InnovB is a call center company. InnovB has a highly sophisticated switchboard
system called Virtual Agent that takes customer calls. There are 20 telephone
lines and therefore 20 Virtual Agents. Virtual Agent asks a caller some basic
questions such as the callers preferred language, account number, etc. On
average, a customer spends 3 minutes within Virtual Agent system. Depending on
the nature of the transaction and customers account history, Virtual Agent puts a
call through to either a high-skilled or a low-skilled customer service
representative (CSR). Virtual Agent is programmed so that all difficult calls are
handled by high-skilled CSRs, and all the easy calls are handled by low-skilled
CSRs. It takes, on average, 6 minutes for a high-skilled CSR to process a difficult
call, and it takes 4 minutes for a low-skilled CSR to take care of an easy call.
There are 15 high-skilled and 20 low-skilled CSRs. At the end of the transaction,
both difficult and easy calls are transferred to the companys customer satisfaction
survey system. It takes on average 2 minutes to take the survey. Since there are 20
telephone lines, there can be up to 20 callers taking the survey at one time.
a. Draw the process flowchart diagram for InnovB. Use at least one inverted
triangle. Use only one rectangle for the survey process. Use arrows, not
lines.
b. Can InnovB handle 125 difficult calls per hour? Explain.
c. Can InnovB handle 285 easy calls per hour? Explain.
d. Can InnovB handle 125 difficult calls and 285 easy calls per hour?
Explain.
e. If your answer to part d is Yes, how many more easy calls can InnovB
handle? If your answer to part d is No, what can InnovB do to expand
capacity?
12. The following flow chart describes a simple make-to-order burger making
process.
Raw Material
Cook
Assemble
Deliver
Order
Taking
There are two cashiers taking orders. It takes, on average, 20 seconds to take an order
and receive payment. Only after an order is placed, we start producing a burger. One
stove is available to cook patties. It can cook patties in 3 minutes and holds 40 patties
at one time. On average, it takes 2 minutes for a worker to assemble a burger. There
are 10 workers available to assemble. The time it takes to deliver a burger can be
omitted. Assume that one burger needs exactly one patty. Also assume a customer
orders exactly one burger.
a. What is the capacity of the order-taking stage? What is the capacity of the
cooking stage? What is the capacity of the assembly stage? What is the
capacity of the entire process?
b. Suppose cashiers and assembly workers are cross trained. Now cashiers
can also assemble burgers, and assembly workers can also take orders.
What is the capacity of the entire process? (Assume there are many cash
registers and assembly benches.)