Respuesta :
Final answer :
The design capacity is far enough over the demand of 10,000 to accommodate the order.
How effective is the capacity utilization?
Efficiency is frequently calculated as a ratio of actual to anticipated production.
On the other hand, capacity utilization measures how effectively a company employs its productive capacity. It is the correlation between the maximum possible output, theoretically speaking, and the output of the actual production.
Explanation :
Consider the given information as shown below:
Production each hour - 100 razors each hour.
Working days -5 days a week.
Working hours per day -12 hours.
Downtime for maintenance - 5 % of the available time.
Efficiency level - 87%
Calculate the expected weekly output as shown below:
Expected weekly output= total available time x efficiency level
Expected weekly output (12 x 5 x 0.87) x 0.87) x 100 = 4,542
Hence, the expected weekly output of wheels for this company are 4,542
The expected weekly output derived above with 87 % efficiency is 4,542. But in reality, the efficiency percentage derived with expected output is 4,542/6,000 = 0.757
It means the company has achieved the utilization goal of >= 75%.
Hence, the Action motor sports has not achieved utilization goal of 75%
If the company received 10,000 units per week and switched to 18 hour operation then, the current capacity can be doubled. The present weekly output is 4,542 can be achieved with 12 hour operation. Then, 10,000 units per 18 hour operation can be achieved.
Hence, the design capacity is far enough over the demand of 10,000 to accommodate the order.
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