Posh Nails Lindsey Posh runs an upscale nail salon in Kansas

Posh Nails

Lindsey Posh runs an upscale nail salon in Kansas City. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in the parentheses)

Activity 1: Welcome a guest (1 minute)

Activity 2: Clip and file nails (3 minutes)

Activity 3: Paint (5 minutes)

Activity 4: Dry (10 minutes)

Activity 5: Check out the customer (4 minutes)

Three nail artists offer the services in the worker-paced line. The assignment of tasks to servers is the following.

S1 does activity 1.

S2 does Activities 2 and 3

S3 does Activities 4 and 5

The drying process does not require server 3’s attention; she needs to only escort the customer to the salon’s drying chair (equipped with fans for drying). The time to do this is negligible. There is only one chair in the salon.

PN1: What is the average labor utilization of the servers? Assumer that is unlimited demand and the process only admits customers at the rate of the bottleneck.  (5 points)

PN2: Assumer a wage rate of $15 per hour. What is the direct labor costs for onecustomer. (5 points)

Solution

1.

S1 can process 60/1 customers per minute or 60 customers per hour

S2 can process 60/8 minute customers per minute or 7.5 customers per hour

S3 can process 60/15 minute customers per minute or 15 customers per hour

S2 has the lowest capacity therefore it is the bottleneck in the process.

Process capacity is equal to the capacity of bottleneck which is 7.5 customers per hour

Cycle time = 13 minutes per customer

Labor content = 1+8+14 = 23 minutes/customer

Idle time of S1= cycle time- processing time of S1 = 13-1 = 12 minutes/ customer

Idle time of S2= cycle time- processing time of S2 = 13-8 = 5 minutes/ customer

Idle time of S3= cycle time- processing time of S3 = 13-4 = 9 minutes/ customer

Total idle time = 12+5+9 = 26 minutes/customer

Average labor utilization = labor content /(labor content + total idle time) = 23/(23+26) = 46.93%

2.

Direct labor cost = total wage paid per hour /flow rate in customer per hour

= (3workers*$15/hours)/ (7.5 customer per hour)

= $6 per customer