Problem Solving. Show solutions in GOOD using a separate sheet of paper.

This will be passed as soon as classes

resume.

A. Tough Guy Rider Inc. manufactures touring bikes and mountain bikes in a variety of frame sizes, colors, and
component combinations. Identical bicycles are produced in lots of 100. The projected demand, lot size, and
time standards are shown in the following table.
Item Touring Mountain
Demand forecast 5000 units/year 10,000 units/year
Lot size 100 units 100 units
Standard processing time ¼ hour/unit ½ hour/unit
Standard set up time 2 hours/lot 3 hours/lot
The shop currently works eight hours a day, five days a week, 50 weeks a year. It has five work stations,
each producing one bicycle in the time shown in the table. The shop maintains a 15% capacity cushion. How
many work stations will be required next year to meet expected demand without using overtime and without
decreasing the firm’s current capacity cushion? Determine capacity gap.

B. Ped Rowoperates Ped’s Garage and Manhole Cover Recycling Center at the corner of Ruff Road and Curba
Road. Ped’s Garage has only one bay dedicated to wheel alignments. Although the recycling center is open
at night, the garage is normally open only on weekdays from 7am to 6pm and on Saturdays from 7am to
noon. An alignment takes an average of 40 minutes to complete, although Ped charges customers for two
hours according to a nationally published mechanic’s labor standard manual. During May, the height of
pothole season, Ped’s garage is open from 7am to 9pm all throughout the week.

1. What is the garage’s peak and effective capacities, in alignments per week?
2. During the second week in May, Ped’s garage completed 90 alignments. What is the utilization as
percentage of effective capacity? As a percentage of peak capacity?