A local bakery, Main Street Bakery, produces and sells to a national grocery chain five varieties of pastry: Muffin Tops, Doughnut Slices, Cookies, Cream Puffs, and Fritters. Assuming that Main Street operates a single shift for 1,800 hours per year, calculate the required capacity. The processing time per unit, setup time per lot, annual demand, and lot size are given in the table below. Assume that the times given are for a production cell of four workers each, so the required capacity should be in terms of the number of production cells needed. Main Street would like to maintain a 10 percent capacity cushion.
- Muffin Doughnut Cookie Puffs Fritters
- Annual demand 400,000 500,000 1,000,000 220,000 160,000
- Processing time (min's) .1 .1 .06 .2 .15
- Avg. lot size 400 300 1,000 200 300
- Setup time (min's) 20 10 5 20 15
[∑(Dp+(D/Q)xS)] ÷ N(1-C/100)Need to understand the correct computation for determining 'N' (processing hours per year for each piece of equipment) in the above capacity formula.