Executive Shirt Company

Executive Shirt Company, Inc.

Questions 1:

Here is the table where the values are summarized. He calculations can be found below.

Calculations

Mike’s Plan

a) Actual Cycle Time (ACT)

There are 8h per working day, i.e. 8*60 = 480 minutes per working day.

The factory should produce 18,000 shirts per month (including the custom shirts), which means

18,000 shirts/20 days=900 shirts per day

ACT = 480 mins/900 shirts = 0,53 minutes per shirt

b) Manufacturing Lead Time (MLT)

MLT = ACT x WIP (see how we get WIP under point c) = 0,53 mins/shirt x 1980 shirts = 1049,4 mins = 17,49 h = 2,2 working days

c) WIP Inventory

WIP = (36+288+24+24+24)*5=1980 shirts

d) Production Capacity (PC)

Bottle neck is cuffs = 0,5 minutes per shirt (this is the cycle time)

PC = 480 mins prer day/0,5 mins per shirt = 960 shirts per day

e) Capacity Utilization (CU)

We produce 900 shirts er day, but we can produce 960 shirts per day

CU = 900/960 = 0,9375 = 93,75%

f) Direct Labour Content (DLC)

In order to find DLC, we need to know time for cutting on both machines.

For the old machine, time for cutting (Tc), would be

Tc = 1,5 mins * 60 layers + 30 mins = 120 mins

For the new machine, time for cutting (Tc) is given, Tc = 2,5 mins

The old machine cuts 8*60 = 480 shirts per 120 minutes. The cycle time (CT) for the old machine is CT = 120/480 = 0,25 mins per shirt.

The new machine cuts 5 shirts per 2,5 minutes, so the CT for the new machine is CT = 2,5/5 = 0,5 minutes.

The old machine is serviced by 4 workers, hence labour content for 1 shirt equals 0,25 * 4 = 1 minute, whereas the new machine is serviced by 1 worker, which gives 0,5 * 1 = 0,5 minute as the labour content for it.

Total labour content for cutting = 1 minute + 0,5 minute = 1,5 minutes

Total labour content for other steps = 25,51 minutes

DLC = 1,5 + 25,51 = 27,01 minutes per shirt

g) Direct Labour Utilization (DLU)

Total labour available = 480 mins per day * 65 workers/900 shirt s...