Piper Manufacturing company makes a line of industrial control machinery. The company buys components that if them assembles into finished products in the following sequence:
component assembly, which can assemble 100 units a day
system test, which can test 200 units a day, and painting and final inspection, which can finish 150 units per day
a) How many units a day can the company the company ship to customers? it may help you if you draw the flow diagram of the above steps first?
b) PMC operates on what is known as a level production strategy. meaning that all steps produce at the same rate(units per day) so that there is no inventory build-up between steps. When it operates at the production level identified in (a), what is the capacity utilization of each step?
c) If PMC wanted to increase its shipments to 150 units per day, in which step would it need to expand capacity and by how much?