Types of layouts and their characteristics.
1. Think of two companies in the same industry that use different process structures. Why is
this the case? Is one process structure a better choice than the other? Why, or why not?
2. (a) Identify the four types of layouts and their characteristics.
(b) Think about your favorite fast-food restaurant. What type of layout is used in the food
preparation area? Is this layout a good fit with the organization? Why or why not?
3. The manufacturing engineers at Suny Manufacturing were working on a new remotecontrolled
toy Monster Truck. They hired a production consultant to help them determine
the best type of production process to meet the forecasted demand for this new product.
The consultant recommended that they use a product layout. He told the manufacturing
engineers that the line must be able to produce 600 Monster Trucks per day to meet the
demand forecast. The workers in the plant work eight hours per day. The task information
for the new Monster Truck is given below:
Task Time (seconds) Predecessors
A 28 -
B 13 -
C 35 B
D 11 A
E 20 C,D
F 6 E
G 23 F
H 25 F
I 37 G
J 11 G,H
K 27 I,J
a. Draw the precedence diagram.
b. What is the number of trucks that can be produced by a single station? What is the
maximum number of trucks that can be produced?
c. What is the takt time?
d. What is the theoretical minimum number of workstations?
e. Assign the tasks to the workstations to balance the line using the longest operating
time rule.
f. What is the efficiency of the balanced line?
4. The Jazzy Java Company is considering upgrading its espresso machine to reduce the
time to make each cup of coffee. The current machine has fixed costs of $3,000 per year
and variable costs of $.75 per cup of coffee. With the new machine, fixed costs increase
to $7,000 per year and variable costs are $.40 per cup of coffee. On average, the price of
coffee is $3.00 per cup.
a. What is the break-even point of the current process?
b. What is the net income with the current process if 8,000 cups of coffee are sold per
year?
c. What is the indifference point between the two processes?
d. If the forecast is for 12,500 cups of coffee to be sold each year, which process should
be used? Why?