Steve, an operations manager at Clan Corp. is promoted to manage the process defined by the four stages A to D below. This process could be human resource management, marketing, accounting, finance, or engineering process, and Steve is the manager. This is his chance to impress his boss and get promoted again. After three months on the job, Steve realizes something is not right with the process. His employees experience big pile up of work, things take too long to be processed, the opportunity for error is increasing, and the entire process is almost chaotic. Do a process and capacity analysis of this process. The numbers in parenthesis (#) are the time in minutes to complete one unit of work. Demand on the process averages 30 units per hour and each unit must be worked on by all four stages. Administrative clerk(s) do Stage A work. The assistant manager(s) are cross-trained to do both Stages C and D work. The coding specialist(s) do Stage B work.
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-How many administrative clerks should be hired to do Stage A work, assuming a target utilization of 85 percent?
A) One
B) Two
C) Three
D) Four

Question

Steve, an operations manager at Clan Corp. is promoted to manage the process defined by the four stages A to D below. This process could be human resource management, marketing, accounting, finance, or engineering process, and Steve is the manager. This is his chance to impress his boss and get promoted again. After three months on the job, Steve realizes something is not right with the process. His employees experience big pile up of work, things take too long to be processed, the opportunity for error is increasing, and the entire process is almost chaotic. Do a process and capacity analysis of this process. The numbers in parenthesis (#) are the time in minutes to complete one unit of work. Demand on the process averages 30 units per hour and each unit must be worked on by all four stages. Administrative clerk(s) do Stage A work. The assistant manager(s) are cross-trained to do both Stages C and D work. The coding specialist(s) do Stage B work.
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-How many administrative clerks should be hired to do Stage A work, assuming a target utilization of 85 percent?
A) One 
B) Two 
C) Three 
D) Four

Quizplus · Accepted Answer

To do a process and capacity analysis of the process, we need to calculate the capacity of each stage and identify the bottleneck stage.

Stage A:

Capacity = 60 / 1.8 = 33.33 units per hour

Stage B:

Capacity = 60 / 1 = 60 units per hour

Stage C:

Capacity = 60 / 2 = 30 units per hour

Stage D:

Capacity = 60 / 1.5 = 40 units per hour

The bottleneck stage is Stage A with a capacity of 33.33 units per hour. This means that Stage A is limiting the overall capacity of the process.

To determine how many administrative clerks should be hired to do Stage A work, we can use the following formula:

Number of clerks = (required capacity – existing capacity) / (existing capacity * target utilization)

Assuming a target utilization of 85 percent:

Required capacity = 30 units per hour

Existing capacity = 33.33 units per hour

Number of clerks = (30 – 33.33) / (33.33 * 0.85)

Number of clerks = 1.02

Rounding up, we get that two administrative clerks should be hired to do Stage A work.

Therefore, the best choice is:

Answer: B

Hiring two administrative clerks will increase the capacity of Stage A to 66.67 units per hour, which is higher than the required capacity of 30 units per hour. This will help alleviate the bottleneck at Stage A and improve the overall efficiency of the process.

Steve, an Operations Manager at Clan Corp