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  • 1.  Part 1 query.

    Posted 12-10-2023 04:02 PM
    Hello folks!

    Can anyone help me out with this question ?

    EEK Industries produces thingamajigs. The thingamajigs sell for $200 per unit. The product goes through three processes. The processes, costs and volumes are as follows:

       Molding  Heat Transfer  Trimming
    Direct labor required per unit @ $25/hr. 0.5 hrs. (2 units/hr.) 0.25 hrs. (4 units/hr.) 0.5 hrs. (2 units/hr.)
    Direct labor hours available per day 225 hrs. 100 hrs. 200 hrs.
    Direct materials $100 per unit $20 per unit $0 per unit
    Annual fixed manufacturing overhead $1,000,000 $750,000 $250,000
    Fixed selling and admin. exp. (allocated 
         according to available DL hours)    		 
    $428,571    		 
    $190,476    		 
    $380,953
    Daily capacity in units based on DL hrs. available 450 units 400 units 400 units
    Annual capacity (260 working days per year) 117,000 units 104,000 units 104,000 units
    Annual production & sales 104,000 units 104,000 units 104,000 units

    EEK has a policy of not laying off idle workers but instead finds other work for them to do such as maintenance on equipment. The company can sell all it can produce.

    The Heat Transfer and Trimming processes are very labor-intensive. How could EEK better assign its existing workers to increase its operating income, according to theory of constraints?

    a.By reassigning an employee for 5 hours per day from Molding to Heat Transfer.

    b. By reassigning an employee for 5 hours per day from Molding to Heat Transfer and reassigning employees for 10 hours per day from Molding to Trimming.

    c. By reassigning employees for 10 hours per day from Molding to Heat Transfer and reassigning an employee for 5 hours per day from Molding to Trimming.


    d. By reassigning an employee for 5 hours per day from Molding to Heat Transfer and reassigning an employee for 5 hours per day from Molding to Trimming.



    Option B is the right answer.


    Thanks.







  • 2.  RE: Part 1 query.

    Posted 12-11-2023 12:09 AM

    This is Theory of constrain Model Question

    We have re arrange the number of hours worked to get maximum production with out idle time 

    See below chart 

                                                       Modeling         Heat             Trim

    Total hours                                     225              100                200

    Per Hour Production                        2                   4                    2

    Total Production                             450                400               400 

    New Scenario (Answer B)

     Hours Transfer                              (15)                   5                   10

    New Total Hours                           210                   105                210

    Unit Produce per hour                   2                          4                   2

    Total Units                                    420                       420              420

    See here now there is no idle time in any department and production increased from 400 to 420

    Thanks 

    Majeed

    majeedabm@...



    ------------------------------
    Abdul Kunnam Padath
    Accountant
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