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(1) State both formulas:
(2) Calculate both answers:
(3) Which of the following factors would you recommend that the manager investigate: quality problems, absenteeism, or scheduling and balancing? Why
Expert Answer
Design capacity = 80 repairs per day
Effective Capacity = 64 repairs per day
Actual Output = 62 repairs per day
Answer 1.
Formula 1: Efficiency: (Actual Output / Effective Capacity ) * 100 %
It gives an idea about how well the system has been used in comparison to what is being available. In other words, helps to know design capacity of the system.
Formula 2: Utilization: (Actual Output / Design Capacity ) * 100 %
It signifies how well the system has been utilized or how operation is making use of its potential
Answer 2: Efficiency: (Actual Output / Effective Capacity ) * 100
: (62/64) * 100% = 96.875%
Utilization: (Actual Output / Design Capacity ) * 100 %
: (62/80)*100% = 77.5%
Answer 3: As clearly shown that efficiency is higher compared to utilization. Hence manager should try to ensure:
1. Increasing utilization or
2. Increasing effective capacity so as to lower done efficiency
From the given options scheduling and balancing seem to be the options that can affect effective capacity. Hence should be investigated
