At Powder Coat, Inc., the powder-coating process is a bottleneck. Typically, it takes approximately two hours to switch between jobs. The time is spent cleaning nozzles and paint tanks and recalibrating equipment. Currently the company runs relatively small batch sizes through the process but is considering increasing them to reduce setup time.
With small batch sizes, powder coating can process approximately 2,100 units per 8 hour shift, and products have an average contribution margin of $54. With large batch sizes, powder coating can process approximately 2,990 units per 8-hour shift.
What is the additional profit associated with running larger batch sizes through the powder-coating process?