Operation Management 2

1. The total production of the mobile company last week is 160,000 items. The design capacity of the factory of this company is 900 items per hour. The effective capacity of this factory is 195,000 items. The staff of this factory operate 5 days/week, 5 and 9 hours shift.

a. Find out the design capacity of this factory? (20 Point)

Actual Output = 160,000 items

Design Capacity = 900 items per hour

Effective Capicity =195,000 items

Design Capacity = (5 days/week x 5 and 9 hours shift) (design capacity per hour)

= (5 x 5 x 9) (900)

= (225) (900)

= 202.500

b. Calculate the capacity utilization and efficiency of this factory? (20 Point)

Utilization = Actual Output / Design Capacity x 100

= 160,000 / 202,500 x 100

= 79.01%

Efficiency = Actual Output / Effective Capacity x 100

= 160,000 / 195,000 x 100

= 82.05%