Ch. 4, Process Improvement
Suppose the flow rate is 100 customers per hour, the average price is $10, the variable cost is $8, and the fixed cost is $50 per hour. What is the profit?
$150
Given the following information, calculate the daily profit for the firm. Flow rate = 100 units/day, Average price = $5.00, Average cost = $2.50
$250
if one resource in a process ALWAYS produces defective parts, then the process yield is BLANK percent
0%
if demand for flow unit type 1 is 20 units per hour and the implied utilization of each resource it requires is less than 100% then the flow rate for flow unit type 1 is BLANK units per hour
20
suppose, the demand rate for flow units of type 1 is 4 units per hour and implied utilization is 125%. What is the flow rate for flow units of type 1?
3.2 units per hour
What shape is used to represent resources in a process flow diagram?
BOX
the BLANK rate is the number of flow units that customers want per unit of time
DEMAND
when the takt time increases, the demand rate must have _________
Decreased
True or false: When average price exceeds variable cost the firm is profitable.
False
True or false: Average labor utilization can be greater than 100%.
False Reason: Like utilization of any resource, labor utilization can not exceed 100%.
When wages per unit of time go up but flow rate stays the same, costs of direct labor
Increase
When wages per unit of time go up but flow rate stays the same, costs of direct labor ________
Increase
Suppose the flow rate for a process is 200 units per hour and a process improvement reduces variable cost by $1. What will happen to profits?
Increase by $200 per hour
________ the flow rate improves profits.
Inreasing
When analyzing a process with rework, which is impacted by rework? a. implied utilization b. work-load matrix c. available time
a. implied utilization b. work-load matrix
to increase the capacity of a process one should, a. increase the capacity of the bottleneck resources regardless of where it is located in the process b. increase the capacity of the first resource int he process because then flow units can get to the second resource more quickly c. increase the capacity of the last resource in the process so flow units can exit the process more quickly
a. increase the capacity of the bottleneck resource regardless of where it is located in the process
to calculate the flow rte across all units, you BLANK the flow rates of each unit
add
to calculate the total demand rte for a resource
add the demand matrix entries in the appropriate row for the resource
The calculation of labor content requires ______ all of the processing times for serving one flow unit.
adding
a resources will have idle time when it comes BLANK the bottleneck in the process
after
to depict different flow units, different colors or labels are attached to the BLANK in the diagram
arrows
Which of the following contribute to labor content? a. the time the flow unit spends as buffer inventory b. the time a worker works on the flow unit c. the time an unmanned spends working on a flow unit d. the time a worker spends inspecting a flow unit
b. the time a worker works on the flow unit d. the time a worker spends inspecting a flow unit
If we know the flow rate and capacity of each labor resource that work in a process, we ______ compute the average labor utilization across employees.
can
If cycle time is greater than the takt time then the process is ______ constrained.
capacity
process BLANK determines the maximum flow rate a process can provide per unit of time
capacity
when the flow rate is less than the demand rate the process is referred to as BLANK constrained
capacity
the amount of work that goes into serving one customer is called labor _________
content
Costs of direct labor measure the labor cost associated with serving one ________
customer
an appropriate unit for throughput is BLANK
customers/minute burgers/second
Being able to line balance without having to observe a fixed sequence will _______ idle time
decrease
When flow rate goes up but wages per unit of time stay the same, costs of direct labor
decrease
an organization that wants to fulfill customer orders more quickly should make the cycle time of their fulfillment process BLANK
decrease
if the flow time for a process goes down them the time to finish X units starting with empty inventory buffers will BLANK
decrease
when the flow rate goes up but wages per unit of time stay the same, costs of direct labor BLANK
decrease
If the cycle time increases--and everything else remains constant--average labor utilization ______.
decreases
if processing time increases, then the capacity at a resources with a single employee BLANK
decreases
increasing the yield BLANK the number of flow units that need to be processed to get a certain number of good flow units
decreases
when cycle time goes up, average labor utilization BLANK
decreases
when idle time goes up, average labor utilization
decreases
you can off-load the bottleneck by _________the processing time it spends per flow unit
decreasing
removing BLANK flow units from the process is known as scrapping
defective
Takt time is solely driven by ________ rate.
demand
if process capacity is 100 units per hour and customers desire 80 units per hour then the process is BLANK constrained
demand
if the utilization of the bottleneck is less than 100% then the process is BLANK constrained
demand
a process flow diagram is a graphical way to BLANK the process
describe
the labor cost associated with serving one customer is called the costs of __________ labor
direct
when using yields to determine a demand matrix, you BLANK the number of good units needed by the yield
divide
Average labor utilization equals labor content
divided by
to satisfy all demand we want cycle time to be BLANK takt time
equal to
when implied utilization is less than 100%, the flow rate will be BLANK the demand rate
equal to
true or false: a process that is demand constrained can have utilization of 100%
false
true or false: if a resource has implied utilization greater than 100%, then it is always the bottleneck
false
true or false: in a worker-paced line each worker always works at the same rate
false
true or false: process analysis is only applicable to manufacturing settings
false
true or false: utilization can be greater than 100%
false
true or false: when average price exceeds variable cost the firm is profitable
false
true or false; average labor utilization can be greater than 100%
false
Specialization usually leads to __________ set-ups.
fewer
if the activities have to be carried out in a given order they are said to have a BLANK sequence
fixed
each column in the work-load matrix refers to a single BLANK type
flow unit
to be profitable, margins should be BLANK zero
greater than
to have an implied utilization that is greater than 100%, a resource must face demand that is BLANK 60 minutes per hour
greater than
A process that is efficient is one where labor utilization is as ______ as possible.
high
the higher the desired capacity at a resource, the BLANK the target manpower
higher
the higher the total demand at a resource, the BLANK its implied utilization
higher
the less a process produces defective flow units, the BLANK its yield
higher
to calculate the flow rate for a flow unit type when the process is capacity constrained you divide the demand rate by the BLANK implied utilization
highest
the time a resource is paid but not working is referred to as BLANK time
idle
when determining which resource to add capacity to, one should consider both BLANK utilization and BLANK margin
implied utilization profit margin
When takt time is less than cycle time target, manpower should ________.
increase
being able to line balance without having to observe a fixed sequence should __________average labor utilization
increase
from little's law we see that if inventory stays the same but flow time increases then cycle time must BLANK
increase
if flow rate goes up then profit will BLANK
increase
when the takt time is less than cycle time target, manpower should BLANK
increase
work cells lead to a(n) BLANK in the number of set-ups
increase
when the demand quantity goes down, the takt time _______
increases
when you increase the flow rate of a process while keeping the number of resources used the same you are BLANK the efficiency of the process
increasing
Labor utilization ______ a measure of efficiency.
is
If takt time is 30 seconds and cycle time is 40 seconds then all demand _____ satisfied
is not
raising the staffing level will do what to the cost of direct labor?
it depends
if cycle time stays constant but inventory goes down what will happen to lead time?
it will go down
if cycle time goes up what will happen to lead time?
it will go up
the higher the margin, the BLANK the profits
larger
capacity alone does not dictate the bottleneck because the resource with the lowest capacity may be visited the BLANK often
least
the bottleneck contributes the BLANK to total idle time
least
the better a process does at producing high-quality flow units, the BLANK it has rework
less
the more stations in a process, the BLANK the time the first flow unit needs to flow through the system when it is empty
longer
a process wherein each step reliably performs high-quality work will have BLANK attrition losses
low
the higher the implied utilization of a resource, the BLANK its capacity in good units per unit of time
lower
when different products follow different paths through a process, the process has BLANK flow units
multiple
if takt time is less than cycle time then we are ________ demand
not satisfying all demand
We refer to the improvement strategy of moving work away from the bottleneck step as _____.
off-loading the bottleneck
the BLANK time of a resources is how long that particular resources takes to complete one flow unit
processing
the combination of different flow unit types moving through a process in the BLANK mix
product
BLANK help the flow units to move from being a unit of input to becoming a unit of output
resources
Process analysis is a _______ framework for understanding the detailed operations of a business
rigorous
An accurate measure of labor content is ______.
seconds per customer
An appropriate unit for takt time is: (Select all that apply.) -hours -seconds/burger -minutes -hours/customers
seconds/burger hours/customers
specialization typically BLANK the training period
shortens
specialization usually leads to ______processing times
shorter
As process capacity increases, takt time
stays the same
TRUE OR FALSE: a process flow diagram outlines a directional flow in the process
true
true of false: when two products require different resources in a process you must define them as different flow units
true
true or false: for a process that is capacity constrained the idle time of the bottleneck will be zero
true
true or false: in a machine-paced line each worker always work at the same time
true
true or false: the yield of a resource is between 0% and 100%
true
the demand matrix shows the number of flow units of each BLANK that need to be proccessed by each BLANK
type resource
