Reference no: EM132287797

You have been asked by a small Chocolatier to assist with the improvement of its capacity utilisation. At the moment their four-step production process, from raw materials to finished units looks like this: Cocoa beans -» ROASTING -» MELTING -» MOULDING- » REMOVING -» Chocolates

Roasting takes 5 minutes, melting 10 minutes, moulding 7 minutes, and removing the chocolates from the moulds takes one minute. In other words, the activity time (throughput time) to process one unit of product at the respective tasks is 5, 10, 7 and 1 minutes. There is one operator working on each task. We can assume that there is no variability in the process and all operations work fully efficiently. No additional inventory between the tasks is permitted in order to guarantee the quality of the chocolates. Each operator is paid £20 per hour and works 8 hours per day, five days a week. The factory will not run less than 40 hours a week. The unit cost of one chocolate bar is £2 material costs plus the cost of labour. The very exclusive and labour intensive chocolates sell for £25 each. Projected sales for the next ten-week period up until New Year are 3,500 chocolates.

(a) What is the Capacity/Throughput of this production process per week?

(b) What is the utilisation % for each of the processes?

(c) What is the margin, excluding overhead cost, for each chocolate?

(d) Can the Chocolatier double its production without adding any new operator? How to optimize the production capacity without adding any new operator? What is the new capacity?

(e) If one new operator were employed, which of the four steps should the new operator be doing? What is the new operation throughput after optimization.