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Purple swift manufactures birdhouses in lots of 1010. each birdhouse takes 4545 minutes to paint. after 1010 birdhouses are​ painted, the company switches paint color which requires a one hourone hour changeover. assume that the company should changeover at the very beginning of the process. the company works 88 hours per​ shift, one shift per​ day, 215215 days per year. currently the company has one point booth. what is purple​ swift's paint capacity cushion if it builds 1 comma 8001,800 birdhouses per​ year?

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meerkat18

Utilization can be calculated using the formula utilization = average output rate / maximum capacity.

Utilization = number of lots x setup time + processing time x number of units / number of hours per day x working days per year  

Utilization = [200 x 1 + (45/60) x 2000] / (8 x 215)  = 1700 / 1720 

Utilization = 0.9884   

The utilization is 0.9884 or 98.84%. capacity cushion can be calculated by subtracting the utilization from 1. The capacity cushion is 0.01163 or 1.17%

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