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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
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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 SteinerWallace 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.
Management has estimated the following chances for demand:
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 Spring '11
 acc101

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