Thispaper will focus on the case study of . From thecase, the company is involved in the production of steering gears forvehicle manufacturers. The company has four machine centers, whichinclude drilling, milling, grinding, and boring. The purpose of thereport is to calculate the capacity of each of the center, as well asthe capacity of the system. Besides, the report will also recommendhow the entity can expand its capacity.
TheCapacity of Each Machine Center and the Capacity of the System
Thereare four machine centers: milling, grinding, boring, and drilling.From the data provided in the case study, the capacity of each of themachine center, as well as the capacity of the system will bediscussed in the paragraphs that follow.
Fromthe case, in the milling center, one machine has a run time of twominutes in producing one unit. The data also points out that thereare two shifts in a day, where each takes 8 hours. This implies thatthe total hours that a milling machine is going to run is 16 hours (8hrs * 2 shifts). However, the hours have to be converted into minutesbecause the production of one unit is provided in minutes. Thus, thetotal run time for the milling machine is 16 hrs * 60, which will be960 minutes. If one unit is produced within two minutes, in 960minutes, 480 units will be produced (960/2). This is the productioncapacity of just one machine. In the milling center, there are 5machines, which implies that the total number units that will beproduced in the milling center by the 5 machines will be 480 units *5, which is equal 2400 units. Nevertheless, there is a reject rate of3%. The units that will be rejected are 72 units, which means thatthe total capacity produced in the milling center will drop to 2328units because of the rejection rate.
Fromthe case, one grinding machine has the capacity of making one unit ina run time of three minutes. Since there are two shifts, where eachtakes 8 hours (480 minutes), the total run time for the machines inthe center is 960 minutes. Therefore, one machine in the center willmake 320 units (960/3). Because there are 7 machines in the grindingcenter, the total output without considering rejects is 2240 units(320 units * 7). However, since the reject rate is 5%, it impliesthat the total output will decrease by 5%. The rejected output willbe 112 units. Hence, the total units from the grinding center, takingcare of the rejected units will be 2128 units.
Theinformation from the case indicates that one unit can be made by onemachine within a run time of one minute. Because there are two shiftswhose total hours are 16, it can be argued that the total run timefor a machine in the boring center is 960 minutes (16hrs * 60). Fromthe data, it can be indicated that the total units that can beproduced by one machine in the boring center are 960 units. There are3 machines in the center, which implies that the total unitsgenerated in the center will be 2880 units however, this value doesnot take care of the rejected units. The data from the case indicatesthat there is a rejection rate of 2% from the boring center. Byconsidering the rate, it implies that 57.6 units will be rejected.Thus, the total units after deducting the rejected units from theboring center will be 2822.4 units.
Inthe drilling center, one unit can be produced at a run time of 2.5minutes using one machine. Since the total operating run time is 960minutes, it implies that 384 units will be produced by one machine,but there are 6 machines in the center, which means that the totalunits generated in the center will be 2304 units. Since there is arejection rate of 7%, the total units less the rejected ones will be2142.72 units.
Infinding the system’s capacity, the capacities from the four centersabove have to be considered and the one having the lowest units afterdeducting the rejected outputs will provide the system’s capacity(Anderson et al., 2013). The output in the grinding center is theminimum having 2128 units, which implies that this is the system’scapacity.
Effortsto Increase Capacity
Fromthe data provided in the case, it has emerged that the capacity ofthe system is 2128 units however, it is possible to increase thecapacity of the organization through different aspects. One of theways that can be utilized in increasing the capacity of the entity isthrough purchasing new machines that will increase the number ofunits produced (Reid & Sanders, 2013). Since the grindingcapacity has the impact of balancing the output of other machines, itis important to focus on increasing the number of machines for thiscenter. Also, the firm should consider how it can increase itscapacity by reducing the time it produces one unit by 30 seconds. Forinstance, if this is the case, it is feasible to increase thecapacity by 560 units.
Expansionwithout Purchasing New Equipment
BeckManufacturing can increase its capacity without necessarily buyingnew equipment. One of the ways that the company can increase itscapacity by disregarding the option of purchasing new equipment wouldbe increasing the efficiencies in the production process. This can beachieved by training employees in order to make them proficient inusing the machines. Such a move would reduce the turn time by severalseconds, which can help in enhancing the output. Besides, thecapacity of the organization can be increased through decreasing therejection rates (Vollert, 2012). By mitigating the rejection rates,it would be feasible to increase the firm’s capacity since therejected units reduce the capacity of the organization. This can beachieved through ensuring that there is proper supervision in theproduction lines and using highly–skilled workers. Furthermore, aregular check of the machines would help in decreasing inefficienciesand increase capacity generated.
Tosum up, it is possible for to increase itscapacity by buying new equipment however, this is not the only way.The company can also enhance its capacity through reducing therejection rates in its different production centers. This can beattained through reducing the inefficiencies in the productionprocess, which may be brought by machines or employees.
Anderson,M. A., Consumer, D. S., Anderson, E. G., & Parker, G. (2013).Operationsmanagement for dummies.Mississauga, Ontario: John Wiley & Sons Canada, Limited.
Reid,R. D., & Sanders, N. R. (2013). Operationsmanagement.Hoboken, NJ: John Wiley & Sons.
Vollert,A. (2012). AStochastic Control Framework for Real Options in StrategicEvaluation.Boston, MA: Birkhäuser Boston.