Reference no: EM13839174

Holiday Canisters manufactures decorative tins that hold various food products such as popcorn, cookies, and candies.  The finished tins are sold to food packaging companies that fill the tins.  In making the actual tin, minus the lid, there are three steps involved:

• Step 1: Lithography - decorative patterns are "printed" on the cut piece of metal. There is one lithography machine, which requires some set-up of the inks and patterns prior to each batch of tins.
• Step 2: Molding/Sealing - the sheet of metal is molded into a cylinder and sealed at the seams. One machine is used in this step.
• Step 3: Assembly - pre-made bottoms are attached to the cylinder, completing the tin. One machine attaches the bottoms, and prior to each batch, the correct size bottoms must be loaded into the machine feeder and the machine calibrated to the correct size.

Table 1 lists the required processing times and set up times at each of the steps.  The demand greatly exceeds capacity for these decorative tins. There is unlimited space for buffer inventory between these steps.

Table 1: Processing Times and Set-up Times for Tin Manufacturing

Process step	1 Lithography	2 Molding / Sealing	3 Assembly
Set up time	50 min	0	20 min
Activity time	2 min/tin	3 min/tin	1 min/tin

(a) What is the process capacity in units per hour with a batch size of 100 tins?

(b) What batch size should be used in order to minimize inventory without sacrificing flow rate?

(c) Management is considering the purchase of a new lithography machine.  One model will reduce the set up time of Lithography by 10 minutes.  Another model will reduce the activity time of the Lithography machine by 0.1 minute but setup time will remain unchanged at 50 minutes. Which option will increase the process capacity(meaning, the capacity of the entire process) the most with a batch size of 100 tins?