Reference no: EM133033445

You are the production planner working for a beverage manufacturer.

The company sales department has the opportunity to sell an additional 140,000 cases to a new customer. You have been asked to determine if it is possible to produce this. First, you need to determine what the plant's performance is and what capacity you have to work with.

Operations Data:

The filling line runs at 250 bottles per minute. (This is the speed the filling line is designed to operate at.)

The bottles are packed into corrugated cases with 12 bottles per case.

The plant operates 5 days /wk, 16 hrs/day.

There are 48 weeks per year of operation. (Ignore the other 4 weeks due to statutory holidays and shutdowns)

1. Calculate the design capacity in cases per year based on the operations data above.

2. Calculate the effective capacity in cases per year based on the following:

To calculate effective capacity, we need to determine what the planned lost output will be. There are 4 hours per week of planned maintenance on the line every week, and there are 2 changeovers planned of 4 hours each every week.

Calculate how many planned hours will be lost per week and then per year.

Then determine how many cases of product would have been produced in those hours every year. This will be the lost output.

Then calculate the effective capacity in cases per year.

3. Calculate the actual output in cases per year based on the following:

From the plant downtime records, the production line has the following unplanned downtime per day: 30 minutes are lost due to starting up the line, 90 minutes are lost due to filler breakdowns, 80 minutes are lost due to jams in the casepacker, 40 minutes are lost due to waiting for packaging materials, and 30 minutes are lost due to a variety of quality issues.

Calculate the total downtime in hours per day.

Calculate the lost output per day, using the downtime per day and the design production rate.

Calculate the actual output per year, using the effective capacity per year and the lost output per year.

4. Calculate the utilization.

5. Calculate the efficiency.

6. The plant manager believes that by focusing on improving the operation of the production line and improving the efficiency to 75%, that the additional 140,000 cases per year could be produced.

Calculate the actual output if the efficiency is 75%.

What is the difference between the original actual output and the proposed actual output and is this sufficient to produce the additional 140,000 cases per year?