1. A manufacturing shop is designed to operate most efficiently at an output of 550 units perday. In the past month the plant produced 490 units. What was its capacity utilization ratelast month?
2. A company has a factory that is designed so that it is most effi cient (average unit costis minimized) when producing 15,000 units of output each month. However, it has anabsolute maximum output capability of 17,250 units per month, and can produce as littleas 7,000 units per month without corporate headquarters shifting production to anotherplant. If the factory produces 10,925 units in October, what is the capacity utilization ratein October for this factory?
3. Hoosier Manufacturing operates a production shop that is designed to have the lowestunit production cost at an output rate of 100 units per hour. In the month of July, the companyoperated the production line for a total of 175 hours and produced 16,900 units ofoutput. What was its capacity utilization rate for the month?
LO5-2
4. Always Rain Irrigation, Inc., would like to determine capacity requirements for the nextfour years. Currently two production lines are in place for making bronze and plasticsprinklers. Three types of sprinklers are available in both bronze and plastic: 90-degreeSTRATEGIC CAPACITY MANAGEMENT chapter 5 125nozzle sprinklers, 180-degree nozzle sprinklers, and 360-degree nozzle sprinklers. Management
has forecast demand for the next four years as follows:
Yearly Demand
1 (in 000s) 2 (in 000s) 3 (in 000s) 4 (in 000s)
Plastic 90
Plastic 180
Plastic 360
Bronze 90
Bronze 180
Bronze 360
32
15
50
7
3
11
44
16
55
8
4
12
55
17
64
9
5
15
56
18
67
10
6
18
Both production lines can produce all the different types of nozzles. The bronze machinesneeded for the bronze sprinklers require two operators and can produce up to 12,000sprinklers. The plastic injection molding machine needed for the plastic sprinklers requiresfour operators and can produce up to 200,000 sprinklers. Three bronze machinesand only one injection molding machine are available. What are the capacity requirementsfor the next four years? (Assume that there is no learning.)
Plastic 360
Bronze 180
Bronze 360
32
15
50
11
6
15
44