Assignment No.

2 Operation Management

Q7. Suppose you are in charge…..corner of each envelope (0.10

minutes each).

A.

Matched with Stuffed into

correct Folded correct
envelope envelope
(012 min Each)
(0.2 min Each) (0.1 min Each)

Envelopes are
Stamped
sealed
Placed
(0.05 min
(0.1 min Each)
Each)

The time require to complete the process is 0.57 minutes.

B. Labor Cost for 2000 envelopes is

(2000x0.57x8)= $9120.

C. Changes that would reduce the time and cost of the process:

1. A letterhead with Dear Alumnus will make step 1 process letter not
necessary, saving 400 minutes and $53.33.

2. If envelopes are to be stamped by a postage meter, it will take, 10

minutes. This results in a saving 190 minutes and $25.33.

3. Window envelopes eliminate the need to match envelopes to letters,

resulting in a saving of 53.33.
D. Using the letter with Dear Alumnus may reduce the effectiveness of
the project because it would be less personal. This concern goes also
for the use of mailing labels.

E. The second third and fourth process will increase the effectiveness
in such a way that more letters will be processed and sent which will
help in reaching more alumnus and more contributions will be
collected.

Q8. Diagrams of two self-service gasoline…..people through each

station.

A. In station A, the cars from each road can enter, fill gas and make
payments to cashier’s booth and then exist on to the same road easily
so station A has a efficient flow as the cashier booth is separated from
the two filling islands and there is no interference between the two
flows. In station B the placement of cashier’s booth, filling islands and
grass area makes the flow very unhandy within the station.

B. Station A is likely to lose more customers because the entrance and

exist gate are same so the customer will find difficulty to enter
because another car will be headed in front of them in the other
direction.

C. At station A, customer can pay without getting of the car because

the cashier’s booth placement is in the center of the two filling
islands.
Q9. The management of the Just Like Home Restaurant……or by a
customer (for takeout)

A.

Summary
Activity Number of steps Time (min) Distance (ft)
Operation 6 1.70
Transportation 6 0.80 31
Inspection 1 0.25
Delay 1 0.50
Store - -

B. Each cycle of making a single scoop takes 3.25 min. The total labor
cost is ($10/hr)x(3.25min/cone/60 min)x(10cones/hr)x(10 hr/day)x(363
days/yr) = 19,662.5.

C. To make this process more efficient, we can eliminate, delay and

reduce travelling by having pre-cleaned scoops available. Summary of
the chart follows

Summary
Activity Number of steps Time (min) Distance (ft)
Operation 5 1.65
Transportation 4 0.45 15
Inspection 1 0.25
Delay - -
Store - -

The cycle time is reduce to 2.35 minutes. The total labor cost is
($10/hr)x(2.35min/cone/60min)x(10cones/hr)x(10 hr/day)x(363 days/yr)
= $14,217.5.

The annual labor saving is $19662.5-14217.5= $5,445.

Q12. Refer to the process chart for the automobile oil change in

A. The total labor cost is ($45/hr)x(28min/60min)x(2cars/hr)x(10

hr/day)x(330 day/yr) = $138,600.

B. if steps 7, 10, 12 and 15 are eliminated then summary will be

 Summary
Activity Number of steps Time (min) Distance (ft)
Operation 7 16.50
Transportation 4 2.8 220
Inspection 4 5.0
Delay 1 0.70
Store 1 0.30

The cycle time is reduced to 25.3 minutes. The total labor cost is
($45/hr)x(25.3min/60min)x(2cars/hr)x(10 hr/day)x(330 day/yr) =
$125,235.

The annual labor saving is $138,600-125,235= $13,365.