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Process Analysis and Capacity Management Essay

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, Dello’s 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. Dello’s 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 Dello’s 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 Dello’s 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 Dello’s 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 add-on 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.

If you want to be stricter, you can have triangles for add-on parts inventory and work-in-process between packing and shipping.

3. Kate is managing his company’s production facility. Consider the following production process. Note: some triangles may be intentionally omitted. [pic]

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.

Machine C, since it’s the slowest process of all.

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?

She doesn’t seem to understand that the bottleneck process defines throughput of the entire system. In other words, the production facility can process just as fast as the bottleneck. If she tells every operator to produce all the time, most likely result is that she will have unnecessarily large WIP built-up between machines.

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.

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?

Capacity of worker A: 60/(2+2) = 15 customers/hour
Capacity of worker B: 60/3 = 20 customers/hour
Utilization of A: 10/15 = 0.666 or 66.6…%
Utilization of B: 10/20 = 0.5 or 50%

b) How many customers can Eastern Coffee serve per hour?

From the above, Capacity of Eastern Coffee is 15 customers/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?

Capacity of worker C: 60/2 = 30 customers/hour
Capacity of worker D: 60/(2+3) = 12 customers/hour
Capacity of Western Coffee is 12 customers/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?

Capacity of worker D during the peak hour: 60/2 = 30 customers/hour Capacity of Western Coffee is 30 customers/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.

The worker is the bottleneck as she pushes the smallest amount of job in an hour. The capacity of Spotted Cow is 20 orders per hour, which is decided by the bottleneck.

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.

The cashier is the bottleneck as she can take at most 30 orders per hour. While the two workers can prepare in total 40 orders per hour. The capacity of Spotted Cow is 30 orders per hour, which is decided by the bottleneck.

6. Pavich’s 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 Pavich’s Brick Oven Pizza. In your flowchart, use at least two inverted triangles.

You can of course have an arrow from uncooked cheese pizza inventory to cooking process.

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?

Each hour, a representative can serve 60/15=4 business customers and 60/12=5 personal customers.

During the rush hour, the capacity for business customers is 4*2=810. The Credit Union will have enough capacity for all the customers. 8. The following flow chart describes a simple burger making process. [pic]

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?

The stove can cook 40*60/3 = 800 patties per hour. The workers can assemble 12 * 60 / 0.75 = 960 burgers per hour. The stove is the bottleneck. The capacity of the entire process is 800 burgers per hour.

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?

Utilization rate of the stove: 600 per hour / 800 per hour = 75%
Utilization rate of the workers, on average: 600 per hour / 960 per hour = 62.5%.

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:

| |Weekly numbers of patients | | |Week # 1 |Week # 2 |Week # 3 |Week # 4 | |Type A |250 |50 |100 |500 | |Type B |150 |300 |150 |300 | |Type C |200 |150 |250 |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?

Requirements in # hours
| |Number of hours needed | | |Week # 1 |Week # 2 |Week # 3 |Week # 4 | |Type A |62.5 |12.5 |25 |125 | |Type B |75 |150
|75 |150 | |Type C |200 |150 |250 |150 | |Total |337.5 |312.5 |350 |425 | |Utilizations |76.7% |71.0% |79.5% |96.6% |

Total available doctors time = 11*8*5 = 440 hours

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 company’s 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 Processing Time
A 4
B 10
C 5
D 6
E 8

The demand per day for the different shirt types is:

Shirt Type Demand
A 20
B 5
C 25
D 10
E 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.

The demand for the branding machine is:
(20 + 5 + 25+ 10 + 15) * 8 = 600 minutes, or 600/60 = 10 hours. There is not enough capacity on the branding machine to satisfy demand. This machine is a bottleneck resource.

The demand for the label attaching machine is:
20 * 4 + 5 * 10 + 25 * 5 + 10 * 6 + 15 * 8 = 435 minutes, or 435 / 60 = 7.25 hours. There is enough capacity on the label attaching machine to satisfy demand.

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 caller’s preferred language, account number, etc. On average, a customer spends 3 minutes within Virtual Agent system. Depending on the nature of the transaction and customer’s 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 company’s 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.

Capacity of Virtual Agent= 20*20 = 400 customers/hr
Capacity of high skilled = 10*15 = 150 customers/hr
Capacity of low skilled = 15*20 = 300 customers/hr
Capacity of survey system = 30*20 = 600 customers/hr
Yes, 125 is possible. (125

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