Monique Food Processing Produces Light Snacks

Monique Food Processing Company Produces Light Snacks That Can Be Heat

Monique Food Processing Company manufactures light snacks that can be heated in a microwave. The production process includes several sequential steps, each with its own capacity measured in units per hour. The steps are as follows:

• Prepare food: 200 units/hour
• Measure and place in plastic pouch: 175 units/hour
• Prepare cardboard box: 200 units/hour
• Insert pouch into box: 300 units/hour
• Shrink wrap box: 200 units/hour

The primary questions involve determining the system's overall capacity, identifying the bottleneck department, assessing slack capacity in other departments, evaluating potential gains from increasing capacity at the bottleneck, and examining reasons for capacity adjustments. Additionally, understanding why an organization might reduce capacity is considered. All calculations related to these aspects are included to give a comprehensive analysis.

Paper For Above instruction

To accurately evaluate the system capacity of Monique Food Processing Company, it is crucial to analyze each step in the process and identify the bottleneck. The bottleneck in a production line determines the maximum output, as it is the slowest stage with the lowest capacity. The overall capacity of the production system cannot exceed the capacity of the bottleneck process. In this scenario, the capacities per hour for each step are as follows: prepare food (200 units), measure and place in pouch (175 units), prepare cardboard box (200 units), insert pouch into box (300 units), and shrink wrap (200 units).

Identifying the Bottleneck and System Capacity

Since the bottleneck process is the one with the lowest capacity, it limits the entire production line. Here, the step "Measure and place in plastic pouch" has the lowest capacity at 175 units/hour. Therefore, the system's maximum production capacity is 175 units per hour, constrained by this process.

Slack Capacity in Other Departments

The slack (unused capacity) in each department can be calculated by subtracting the system capacity from each process’s individual capacity. The calculations are as follows:

• Prepare food: 200 - 175 = 25 units/hour
• Prepare cardboard box: 200 - 175 = 25 units/hour
• Insert pouch into box: 300 - 175 = 125 units/hour
• Shrink wrap box: 200 - 175 = 25 units/hour

Thus, the departments for preparing food, preparing the box, and shrink wrapping each have a slack capacity of 25 units/hour, while the "Insert pouch into box" step has a slack of 125 units/hour, which is not constraining the overall system capacity.

Potential Capacity Gain from Increasing Bottleneck Capacity

Enhancing the capacity of the bottleneck step "Measure and place in plastic pouch" from 175 to a higher capacity would directly increase the overall system capacity. For example, increasing capacity to 200 units/hour would eliminate the bottleneck, allowing the system to produce up to 200 units per hour. This would be a 25-unit increase in system capacity because the bottleneck would be once again at 200 units/hour. Therefore, the maximum capacity gain equals the increase in the bottleneck process, moving from 175 to 200 units/hour, equating to a 25-unit improvement.

Factors Influencing When to Add Capacity

Deciding when to add capacity depends on several key factors:

• The level of current demand versus system capacity: When demand exceeds existing capacity consistently, capacity expansion is necessary.
• Cost of capacity expansion versus lost sales: If the potential revenue from additional sales exceeds the cost of expanding capacity, it justifies investment.
• Impact on production lead times and customer satisfaction: Higher capacity can reduce lead times and improve service levels.
• Potential bottlenecks elsewhere in the process after capacity increase: Identify if other processes become limiting as capacity expands.
• Strategic considerations, such as future growth plans and market expansion opportunities.

Why an Organization Might Want to Reduce Capacity

While increasing capacity is often necessary to meet rising demand, organizations may also consider reducing capacity for several reasons:

• Decreased demand or changes in market conditions reducing the need for high production levels.
• To improve operational efficiency and reduce costs associated with excess capacity, such as maintenance, labor, and inventory holding costs.
• To focus on higher-margin products or processes, reallocating resources more efficiently.
• Environmental considerations, reducing energy consumption, or minimizing waste associated with overproduction.
• Strategic shifts, such as outsourcing or automation, making some capacity redundant.

Conclusion

In conclusion, the analysis indicates that the bottleneck process in Monique Food Processing Company is the "Measure and place in plastic pouch" step with a capacity of 175 units/hour. The overall system capacity is limited to this figure, with slack capacity in other processes. To increase production, investing in capacity expansion at the bottleneck would be most effective, potentially increasing system capacity by 25 units/hour if capacity is increased to match the next level. Deciding whether to add capacity depends on demand levels, costs, and strategic goals. Conversely, reducing capacity can be equally strategic when demand decreases or operational costs need to be minimized, highlighting the importance of aligning capacity with organizational objectives.

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