Car Washing Case Solution

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Finally, profit is suffered by variable process capacity. Because the cycle time and throughput time of the whole process is longer, this will decrease the total number of carwash, as a result, profit per hour in challenge 2 is less than profit in challenge 1, $86.25 in comparison with $103.13. In conclusion, variability has a significant impact on the operational and financial performance of a system.

- What really determines process capacity? Please discuss by referring all relevant concepts.

Capacity is the maximum rate of output of a process or a system, process capacity is determined by the lowest capacity which is called bottleneck, this means that process capacity is equivalent with the capacity at bottleneck. First of all, the bottleneck is the part at the top of the bottle, how large the bottom of the bottle is not important, the size of the neck will determine the flow coming out. In most cases, there is always at least one limiting factor that will restrict process output. Therefore, when there is exist of constraint at any process, capacity will become imbalanced, increasing capacity of an overall process depends on increasing the capacity of the bottleneck, in other words, regardless of where the bottleneck is, firm has to increase the capacity of its bottleneck if it wants to increase the throughput of the whole process. There is no effect in system capacity when improving the non-bottlenecks. Ultimately, the key to improve a variety of performance measures is finding the bottleneck of the process.

REFERENCE

Krajewski, L, Malhotra, MK & Ritzman, LP, 2013, Operations management processes and supply chains, p.222, viewed 11 February 2016.