# Chapter 13 What is the percentage utilization of the machine capacity

Document Type

Test Prep

Book Title

OM 5 5th Edition

Authors

David Alan Collier, James R. Evans

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OM5 C13

31. It is time for a company to do its MRP schedule, but they aren't sure which lot sizing

approach to use: lot-for-lot (LFL), fixed-order quantity (FOQ) using the EOQ approach, or

periodic-order quantity (POQ). They have the following information regarding the product they

wish to produce:

Week

1

2

3

4

5

6

Net Requirements

50

40

60

30

50

30

Carrying costs = $1 per unit per week

Setup costs = $125

Annual demand = 2000 units

Work year = 50 weeks

a.

What is the production lot size for Week 2 using the LFL method?

b.

What is the total cost using the LFL approach?

c.

What is the FOQ using the EOQ approach?

d.

What is the beginning inventory in Week 3 using the FOQ approach?

e.

What is the total cost using the FOQ method?

f.

What is the POQ?

g.

What is the ending inventory in Week 4 using the POQ approach?

h.

What is the total cost using the POQ method?

34

32. A sheet metal company has developed the following six-month production schedule (in

thousands of square yards):

Week

1

2

3

4

5

6

Metal

150

100

175

200

160

160

In addition, their monthly labor and machine capacities (in hours) available, and the production

standards (in hours per square yard) are:

Labor

Machine

Capacity Available

16,000

20,000

Production Standard

.10

.18

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35

a.

What is the percentage utilization of the labor capacity in month 4?

b.

What is the percentage utilization of the machine capacity in month 3?

c.

In which weeks are the labor requirements over capacity?

33. A special project in a manufacturing company has the following master production

schedule (MPS) for the next eight weeks:

Week

1

2

3

4

5

6

7

8

Units

750

625

800

925

1000

900

675

675

The weekly fabrication and welding capacity (in hours) available and production standards (in

hours per unit) are:

Fabrication

Welding

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36

Capacity Available

7,500

10,000

Production Standard

8

11

a.

What is the percentage utilization of the fabrication capacity in Week 5?

b.

What is the percentage utilization of the welding capacity in Week 2?

c.

In which weeks are the welding area requirements over capacity?

34. The Pacific Chemical Company produces high quality paint in Oregon for sale throughout

the western U.S. The company ships paint in gallon containers. The production manager has

developed the following master production schedule (MPS) for the next six months (data is in

thousands of gallons):

OM5 C13

Test Bank

37

Month

1

2

3

4

5

6

Paint

130

150

170

160

160

120

The company's monthly labor and machine capacity available (in hours) and its production

standards (in hours per gallon) are:

Labor

Machine

Capacity available

15,000

23,000

Production Standard

.09

.12

a.

What is the percentage utilization of the labor capacity in Week 4?

b.

What is the percentage utilization of the machine capacity in Week 2?

c.

In which weeks are the machine requirements over capacity?

35. A company is seeking to develop a master production schedule for its product. Their

beginning inventory is 1000 units, and they want to maintain a safety stock level of 1000 units.

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They produce the product in a fixed lot size of 1200 units. Information regarding weekly demand

is shown below:

Week

1

2

3

4

5

6

Demand

1000

1100

1300

900

500

1000

a.

What is the ending inventory level for Week 2?

b.

What is the production quantity for Week 4?

36. A firm produces one product on a produce-to-stock basis and is trying to develop a master

production schedule for production. The safety stock level for this product is 30 units, and the

fixed lot size is 50 units. The beginning inventory is given as 50 units. The demand for this

product comes from four different sources, and the demand estimates for the next four weeks are

given as:

Week

Source

1

2

3

4

Intra-company orders

10

0

0

20

Warehouse Orders

0

20

0

10

R & D Orders

10

0

10

0

Customer Orders

30

25

15

30

Total Weekly Demand

50

45

25

60

a.

What is the production quantity for Week 2?

b.

What is the beginning inventory for Week 4?

39

37. A firm produces two models of pagers, products A and B, on a produce-to-stock basis and is

trying to develop a master production schedule for its operation. Safety stock is 30 for product A

and 20 for product B. Fixed lot sizes are 70 for product A and 40 for product B. The beginning

inventories are 30 for A and 30 for B. The demand for these products comes from many different

sources, but the total weekly demand for each of the next six weeks is given as follows:

Week

Product

1

2

3

4

5

6

A

60

30

50

60

70

60

B

50

20

40

30

30

40

a.

What is the production quantity for Product A for Week 3?

b.

What is the ending inventory for Product A for Week 3?

c.

What is the production quantity for Product B for Week 5?

d.

What is the beginning inventory for Product B for Week 5?

38. A company produces two end items: Products A and B. They are concerned about the

OM5 C13

Test Bank

loading on their Finish Shop and are trying to develop a rough-cut capacity plan. To finish

Product A two hours are required and for Product B one hour. Total hours available in the Finish

Shop are 100. They have the following weekly production information:

Week

End Item

1

2

3

4

5

6

A

40

0

40

0

40

0

B

0

30

0

0

30

30

a.

What is the total hourly load on the Finish Shop in Week 3?

b.

In what week is the Finish Shop overloaded?

39. A furniture company produces two types of wooden chairs: Products A and B. They are

interested in developing a rough-cut capacity plan to prevent overloading their assembly facility.

Assembly time required for Product A is 2 hours and for product B, it is 3 hours. Total assembly

time available is 100 hours/week. They have the following weekly production information

available:

Week

End Item

1

2

3

4

5

6

A

10

20

20

10

30

10

B

20

20

20

10

20

30

a.

What is the total hourly load on the assembly facility in Week 4?

b.

In how many weeks is the assembly facility overloaded?

40. A local manufacturer produces two different products on the same production line. Product

A requires 0.5 hours of labor while Product B requires .8 hours of labor. The total labor available

in any one week is 600 hours. The production manager has just developed the following weekly

production schedule. Identify the weeks in this schedule where the production system will be

overloaded or underloaded.

Week

End Item

1

2

3

4

5

6

A

900

500

800

900

600

600

B

175

150

300

200

375

375

a.

What is the total hourly load on the line in Week 2?

b.

In what Week(s) is the line overloaded?

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