Operational Management

Taylor Inc. manufactures widgets. There is a particular assembly line for Widget X. This assembly line includes the assembly of various raw materials, subassemblies, and packing of the finished widget. Currently, approximately 27% of the total labor time is utilized in walking by assembly line personnel to obtain the needed parts required to accomplish their assigned tasks. The average hourly cost, including all benefits, is $43 per hour. Seventeen people are required on the assembly line. Lifting containers that weigh approximately 42 pounds is required in several of the respective tasks. The current output of finished widgets is 208 per 8-hour shift. The company incurs an average of four worker’s compensation claims per year in back injuries due to lifting. An average claim equals $109,000 and the employee is out for an average of 280 hours. The injured worker must be replaced to sustain production. By improving the physical layout, productivity may be improved and worker’s comp claims reduced. Two layouts have been proposed.
Alternative One reduces wasted motion (walking) to 1% of total labor used on the assembly line. Physical lifting is reduced to no more then 12 pounds. Six people will be required on the assembly line. Productivity in finished goods per 8-hour shift will increase to 392. It is anticipated that worker’s comp claims will be reduced to .3 per year; however, a capital investment of $1.3 million is required in robotics and mobile storage carts. Useful life of the equipment is 7 years.

Alternative Two reduces wasted motion to 7% of total labor time while physical lifting is reduced to no more then 23 pounds. Nine people are required to staff the assembly line. Productivity will be 288 widgets per 8-shift. Worker’s comp claims are estimated at 1.9 per year. Capital investments are $967,000 with a useful life of 5 years for the equipment.

• Evaluate Taylor Inc. operations-management processes to help them maximize labor productivity based on the scenario above. Management for Taylor Inc. would also like you to suggest alternative management techniques to improve productivity.

• Write a 350- to 500-word executive summary that provides justification for the particular alternative you select. As part of your justification, provide

o A cost-benefit matrix that compares the alternatives.
o The effects the alternative will have on productivity.
o Possible benefits of using a network strategy to streamline operational procedures.

Note: The lowest cost alternative may not be the best alternative.

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  1. Please note that this is a HELP site, but not a DO site. Just what have you done on this assignment and how do you specifically wish us to help you?


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  2. I need help with the cost benefit matrix. This is what I have so far....
    Alternative 1

    Number of employees 6
    Hourly salary $43
    Number of claims per year 0.3
    Capital Invested $1,300,000
    $61,920 labor cost per month/ 30 days

    $32,700 claims per year based on $109,000 per claim
    Alternative 2

    Number of employees 9
    Hourly Salary $43
    Number of claims 1.9
    capital invested $967,000
    $92,880 labor cost per month/ 30 days

    $207,100 claims per year based on $109,000 per claim

    $61,920 $92,800
    32,700 207,100
    1,300,000 967,000
    $1,394,620 $1,266,900

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  3. I think alternative B is the best because the total cost is $1,266,900 compared to Alternative A at $1,394,620. B has more people but less money spent

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  4. I just want to make sure I am on the right track with my numbers. I can do the writing part of the assignment with no problem. Math is just not my strong suit.

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