Ch. 4, Process Improvement

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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


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