Reference no: EM133118811
Question - ABC Corporation makes toys for cats and kittens. ABC's managers have recently learned that they can calculate the average waiting time for an order from the time an order is received and the time it is manufactured. They have asked your help and have provided the following information:
Expected annual number of orders for the product: 2,000
Manufacturing time per order: 240 minutes
Quarterly machine capacity in hours: 2,500
Required -
1. Calculate the average waiting time per order.
2. After learning about the average waiting time. ABC's managers are confused. They do not understand why, If annual machine capacity is greater than required to manufacture the average number of orders for the product, there would be any waiting time at all. Clarify the situation.
3. The managers have asked for your suggestion on what they can do to minimize or eliminate waiting time. How would you respond?
4. Management is expecting sales to increase. Will average waiting time increase or decrease? Explain briefly.
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