A steel product is manufactured by starting with raw material (carbon steel wire) and then processing it sequentially through five operations using machines A to E, respectively (see table below). This is the only use that the five machines are put to. The hourly rates for each machine are given in the table.

Consider the following questions.

a) What is the maximum output per hour of the steel product?

b) By how much would the output be improved if the output of B was increased to 90 per hour?

c) By how much would the output be improved if the output for C was increased to 50 per hour?

d) By how much would the output be improved if the output for C was increased to 70 per hour?

e) What is the effect on the system if machine A can only manage an output of 90 in one hour?

f) What is the effect on the system if machine C can only manage an output of 30 in one hour?

g) What is the effect on the system if machine B is allowed to drop to an output of 30 in one hour?

40 units per hour are the highest production per hour. The highest output per hour equals the production of the bottleneck activity, which has the lowest output per hour.

The bottleneck is C. Increases in per unit output of a non-bottleneck activity do not affect overall process throughput. There would be a 0.00% increase in overall production

While C is the bottleneck, boosting its output will raise the hourly production rates to 50 per hour. 10 units would increase the production per hour.

Therefore,

= 50 – 40

=10

By increasing C's production to 70 per hour, machine D becomes the program's bottleneck operation. Because machine D produces 60 units per hour, the system's output would rise by 20 units per hour.

Therefore,

= 60 – 40

= 20

While machine A is not the bottleneck activity, reducing its output does not influence the overall throughput.

As C is the system's bottleneck process, reducing its output would reduce the hourly production rate to 30 units per hour. 10 units would reduce the overall production.

Therefore,

= 40 – 30

= 10

When the production of machine B is reduced to 30 units per hour, it becomes the system's bottleneck activity. This means that 10 units would reduce overall production.

Therefore,

= 40 – 30

= 10