Calculate the capacity capacity utilization average dollars

Calculate the capacity, capacity utilization, average dollars of WIP inventory, and throughput time for the Prestige line in 2012. Capacity should be given in units/year and throughput time should be given in days.

Solution

Capacity in 2012

Total time available for run = 360x8x2 = 5760 hours

One cycle = time taken for producing 15000 units ( lot size) + 90 min ( Lot change time)

= 15000x0.4 sec + 90 min. = 6000 sec + 90min = 190 min. = 190/60 hours

Total cycles of production = 5760 / 3.16 = 1819

Total capacity that can be produced = 1819 x15000 = 27284210 units

Capacity utilization = units produced / capacity = 18684799 / 27284210 = 0.684 = 68.4%

We see that 15000 units need 15000x0.4 sec +90 min time = 190 min. time

Throughput rate = 15000 /190 = 78.94 units per min. = 78.94x60 units per hour =4736

WIP in dollar terms = cost taken by one unit to produce x throughput rate

= 129429876 / 18684799 x 4736 = $32806