# Question & Answer: 2. Determine the utilization and the efficiency for each of these situations & answer…..

2. Determine the utilization and the efficiency for each of these situations & answer the question:

A) A shipping company has a vehicle repair department with the following data: Design capacity = 50 trucks per day Effective capacity = 40 trucks per day Actual output = 36 trucks per day
(1) State both formulas:

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(3) Which should you focus efforts on – improving design capacity or effective capacity? Why?

B) A computer repair service has a design capacity of 80 repairs per day. Its effective capacity, however, is 64 repairs per day, and its actual output is 62 repairs per day.
(1) State both formulas:

(3) Which of the following factors would you recommend that the manager investigate: quality problems, absenteeism, or scheduling and balancing? Why

A)

1) Efficiency = Actual output/ Effective capacity

Utilization = Actual output/ Design capacity

2) Efficiency = 36 trucks per day / 40 trucks per day = 90%

Utilization = 36 trucks per day/ 50 trucks per day = 72%

3) If effective capacity of 40 trucks per day is compared to the actual capacity of 36 trucks per day it looks quite good, if it is compared with with the design capapcity of 50 trucks per day actual capacity of 36 trucks per day seems less impressive but a more meaningful comparision. To improve capacity utilization, effective capacity must be improved.