An operator is currently operating two machines. Because of an increase in sales the company wishes to have the operator run the maximum number of machines without having machine idle time. The union opposes such a move, arguing that the operator should have idle time during a cycle. After considerable controversy, the company and union agree the operator will handle the maximum number of machines that will allow the operator to be idle at least 3 minutes per cycle. A time study is made, and the following standard times (minutes) are determined for a cycle under the existing assignment of two machines: Unload, load, and start machine: 2.00 Inspect parts and package: 0.80 Walk to machine 2: 0.20 Wait for machine 2 to stop: 3.50 Unload, load, and start machine 2: 2.00 Inspect parts and package: 0.80 Walk to machine 1: 0.20 Wait for machine 1 to stop: 3.50 What is the added cost per unit produced due to the union demand? Assume that the operator costs $15 per hour and each machine costs $30 per hour.

time taken per cycle = sum of all activities = 13 min.

Case 1 – When the operator does not take any rest,

no. of cycles completed in 8 hours = 480 /13 = 36.92

Units produced in 36.92 cycles = 73.84 =73 [ It is assumed that one unit per machine per cycle is produced]

Cost per 8 hrs. = 15×8 + 30x2x8 = 600

Cost per unit = 600/73 =8.219

Case II – Now, the cycle time inclusive of rest time of 3 min per cycle = 13+3 =16

No.of cycles completed in 8 hrs = 480 /16 = 30

Units produced in 8 hrs = 30×2 =60

New cost per unit = 600/60 =10 per unit

Hence the cost increases per unit by (10-8.219) = 1.78

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