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Bottleneck Operations

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1. What production or service bottleneck operations exist at your workplace?
2. How are they managed and scheduled?
3. What are the causes of a moving bottleneck?
4. How do forward and backward loading apply to bottleneck scheduling?
5. How would you describe drum-buffer-rope? Could it be applied to operations at your organization? Why or why not?

I need 300 words.

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1. The production bottleneck that exists at my workplace is the planing machine. At my workplace pipefitting is made. Whenever, a fitting requires planing the time taken is disproportionately high. There is only one planing machine and work piles on at the planing machine. The result is time delays.

2. This bottleneck is managed by the planing crew. They schedule planing of those items whose delivery is to be made the earliest. These decisions are often provided by the production manager. The production manager discusses deliveries with the marketing executives and schedules deliveries in consultation with them. The overall effect of the bottleneck is that work in progress increases to high levels. The single planing machine ...

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The solution offers detailed discussion for Product Pricing and Profit Analysis with Bottleneck Operations.

Atlas Steel Company produces three grades of steel: high, good, and regular grade. Each of these products (grades) has high demand in the market, and Atlas is able to sell as much as it can produce of all three. The furnace operation is a bottleneck in the process and is running at 100% of capacity. Atlas wants to improve steel operation profitability. The variable conversion cost is $6 per process hour. The fixed cost is$1,530,000. In addition, the cost analyst was able to determine the following information about the three products:

High-grade Good Grade Regular Grade
Budgeted units produced 6,000 6,000 6,000
Total process hours per unit 15 15 12
Furnace hours per unit 5 3 2
Unit selling price $375 $350 $320
Direct materials cost per unit $160 $140 $130

The furnace operation is part of the total process for each of these three products. Thus, for example, 5 of the 15 hours required to process High Grade steel are associated with the furnace.

Determine the unit contribution margin for each product.
Provide an analysis to determine the relative product profitabilities, assuming that the furnace is a bottleneck.
Assume that management wishes to improve profitability by increasing prices on selected products. At what price would High and Good grades need to be offered in order to produce the same relative profitability as Regular Grade Steel?

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