Atlas Inc. is a toy bicycle manufacturing company producing a five-inch small version of the bike that Lance Armstrong rode to win his first Tour de France. The assembly line at Atlas Inc. consists of seven work stations, each performing a single step. Stations and processing times are summarized below:
Step 1 (30 sec): The plastic tube for the frame is cut to size.
Step 2 (20 sec): The tube is put together
Step 3 (35 sec): The frame is glued together
Step 4 (25 sec): The frame is cleaned
Step 5 (30 sec): Paint is sprayed onto the frame
Step 6 (45 sec): Wheels are assembled
Step 7 (40 sec): All other parts are assembled to the frame.
Under the current process layout, workers are allocated to the stations as shown below.
Worker 1: Steps 1, 2
Worker 2: Steps 3, 4
Worker 3: Step 5
Worker 4: Step 6
Worker 5: Step 7
a. What is the bottleneck in this process?
b. What is the capacity of this assembly line, in finished units/hr?
c. What is the utilization of Worker 4, ignoring the production of the first and last units?
d. How long does it take to finish production of 100 units, starting with an empty process?
e. What is the average labor utilization of the workers, ignoring the production of the first and last units?
f. Assume the workers are paid $15 per hour. What is the cost of direct labor for the bicycle?
g. Based on recommendations of a consultant, Atlas Inc. decides to reallocate the tasks among the workers to achieve maximum process capacity. Assume that if a worker is in charge of two tasks, then the tasks have to go adjacent to each other. Also, assume that the sequence of steps cannot be changed. What is the maximum possible capacity, in units per hour, that can be achieved by this reallocation?
h. Again, assume a wage rate of $15 per hour. What would be the cost of direct lab or if one single worker would perform all seven steps? You can ignore benefits of specialization, set-up times, or quality problems.
i. On account of a reduced demand forecast, management has decided to let go of one worker. If work is to be allocated among the four workers such that (i) the tasks can't be divided, (ii) if one workers is in charge of two tasks, the tasks have to be adjacent, (iii) the tasks are designed in the most efficient way and (iv) each step can only be carried out by one worker, what is the new capacity of the line (in finished units/hr)?