Production Planning, Capacity & Bottleneck Analysis
You manage the production process in the high-tech facility of Dale Computers Inc. The facility consists of three different assembly lines (1, 2, 3) making two different products, X and Y. Assembly Line 2 is dedicated to the assembly of product X, and assembly line 3 is dedicated to product Y. Assembly Line 1 can assemble both the products. The production process begins with the procurement of raw materials from suppliers. Next, the raw materials are processed into six independent subassemblies, A-F, in separate work areas within the facility. Each product is then assembled from these subassemblies in one of the assembly lines. Product X involves the assembly of subassemblies A, B, C, and E. Product Y requires that subassemblies B, C, D, E, and F be assembled. Subsequent to assembly, each product is finished, customized (painted and other options added), packaged and shipped. Current trends indicate that 20% of product X and 50% of product Y are customized.
Following are the capacities of the work areas producing the subassemblies:
|
Subassembly Type
|
Capacity (Units/Week)
|
|
A
|
2500
|
|
B
|
2400
|
|
C
|
2400
|
|
D
|
2250
|
|
E
|
3500
|
|
F
|
1200
|
The annual demands for the products are as shown below:
|
Product
|
Sub-assemblies required for one unit of product
|
Annual Unit Sales
|
|
X
|
(2 of A); (1 of B, C, E)
|
52,000
|
|
Y
|
(1 of B, C, F); (2 of D, E)
|
52,000
|
The capacities of the assembly lines and the finishing, packaging and customizing areas are as given below:
Assembly line 1 1200 units/week Finishing 2500 units/week
Assembly line 2 500 units/week Customizing 820 units/week
Assembly line 3 600 units/week Packaging 3000 units/week
Notes: (1) Assume 52 operating weeks/year.
(2) Plan production to just meet the demand (do not overproduce).
Answer the following questions Show your calculations (Please be sure to show in Excel or all formulas used).
1) The key business problem in such situation is identification of the bottleneck resource. With the weekly demands of 1000 for each product X and Y, what is the current bottleneck resource?
2) Management must deal with changing demand and resource constraint, by analyzing alternative business scenarios. If the weekly demand for X and Y increased proportionately, identify the top three resources that are bottleneck candidates.
3) What does the above analysis tell you about the effect of demand changes in the product mix of a multiple product plant, on bottleneck shift? Justify your answer.