Choose any company and do the following: Show work please Select a process and d
ID: 364433 • Letter: C
Question
Choose any company and do the following: Show work please Select a process and describe it briefly. Estimate the capacity of this process. Would you use input or output measures to measure capacity? Estimate the demand placed on this process. How does the capacity compare relative to the demand - adequate, high, low? For this process, what would be some reasons to maintain a capacity cushion? Discuss, with examples, the advantages and disadvantages of holding a large versus small capacity cushion. Based on your analysis, what level of capacity cushion is appropriate?Explanation / Answer
Select a process and describe it briefly.
We would select the Picking process for order fulfillment in a warehouse. A typical flow would be there are 3 pickers who report to duty at 900 hrs. The first batch of pick lists is printed at 915. Typically these are all orders which were either not picked previous day or ordered overnight. Now the pickers take a set of 5 pick lists and go to the shelves with a forklift and pick all items into the 5 baskets meant for the 5 orders. Once all the orders are picked completely they come and drop the 5 baskets at the packing stations. This completes the picking process.
Estimate the capacity of this process.
The capacity of this process is as follows. A worker works for 9 hours a day minus 1 hour for his lunch, tea breaks thus the effective hours is 8 per worker per day. Next on an average (long term average) it takes 15 min to pick an order completely and thus each worker can complete 8*60/15 = 32 orders in a day.
Since we have only 3 forklifts in our warehouse, w can have only 3 pickers in any shift and we operate just one shift every day, we find that the picking process capacity is 32*3 = 96 orders a day
Would you use input or output measures to measure capacity.
Yes we use output measures that is picks completed (output parameter) and not the picklist generated (input parameter) as a measure to evaluate the process capacity.
How does capacity compare relative to the demand- Adequate, High, Low
The capacity for the process is adequate given the size of our business and an average flow of approx 100 orders a day.
For this process what would be some reasons to maintain capacity cushion
Although currently we do not maintain a capacity cushion, but during peak sales season (Christmas), we do hire a forklift for a few months and the operator as temp labour. This is done to ensure that all the orders are picked everyday and shipped across. Typically we see 30-40% increase in order during Christmas sales and thus maintain 1 additional forklift. If not done, we would have a backlog of orders every day and it would keep piling up since the rate of input is more than the rate of output.
This will lead to lot of order cancellation and business loss.
Advantages and disadvantages of holding a large versus small capacity cushion
Advantages:
Disadvantages:
Based on your analysis what level of capacity Cushion is adequate
A cushion of approximate 10-20% is enough for most of the processes as all of them typically possess input fluctuations within this range.