Capacity is the measure of an organization’s ability to provide customers with the demanded services or goods in the amount requested and in a timely manner (Vonderembse & White, 2013). Beck Manufacturing requires assistance with determining capacity of each of their systems and how the capacity can be increased. Beck has four departments including milling, grinding, boring and drilling and each department is essential in producing steering gears. A manufactured product is often an assembly of multiple parts (Obi, 2010).
There are several machines within each department that work to produce a piece of the gear. The president of Beck Manufacturing, Al Beck has provided the information necessary to conduct the capacity analysis. The table below explains the capacity per department.
Since the boring department seems to be the bottleneck, capacity should be increased by an additional piece per minute. Currently there is a slack in the milling department of 1, in the grinding department of 2, 0 in the boring department and 1.5 in the drilling department, an increase of 1 would cut back on the slack in each department. If Mr. Beck would like to expand capacity without purchasing new equipment, he must add a third shift for the boring department to ensure production of the additional pieces.
Adding thethird shift will ensure the company will not need to purchase an additional machine and more than 180 pieces can be produced. Material cost should be controlled as much as possible as it contributes to the final product cost. The cost of outsourcing the part to the cost of producing it in the plant (Obi, 2010). Material costs include the additional machines required to produce the product.