Current rate of production is 50 seconds per unit per line

Number of units in 1 hour = 3600/50 * 4 = 288

Number of units per shift = 288 * 10 = 2,880
Number of Units per day = 2,888* 2 = 5,760
Number of Units per week = 5,776 * 6 = 34,560
Number of Units per month = 1,38,240
Although we are able to meet our target, the management feels that this model is
not very sustainable. We can think of providing additional incentives to workers for
the overtime.

Option 2 Introduce a third shift of 8 hours

With the current rate of production of 50 seconds per unit per line, our monthly
production is
Number of units in 1 hour = 3600/50 * 4 = 288
Number of units per shift = 288 * 8 = 2,304
Number of Units per day = 2,304 * 3 = 6,912
Number of Units per week = 6,912 * 6 = 41,472
Number of Units per month = 1,65,888
If one more shift of same size is added, then production increases by 50% or 55,296
units.
Total units per day will be 165,888 units and the entire assembly line can work on
78% efficiency to produce 130,000 units.
Total working hours per day are 24.
But because of breaks, each shift in actual if of 9 hours. Hence we can add 8 hour
shift with 7 working hours.
We know that 110,592 units per month are produced with 16 working hours per day.
Hence 6,912 units per month are produced with 1 working hour per day.
This means, we only need 3 additional work hours per day to meet the excess
demand to reach 130,000.
Thus, although this option with a third shift will meet the demand with some buffer
time available, for just additional 3 working hours, option 1 is better. */

New Analysis : We are able to produce well above the targeted 1,30,000. Hence,
Floaters may not be required which was one of the area of concern studied by an

internal task force. Chen who was assigned to analyse the permanent need of
floaters can save labour cost(which is rising at a rapid pace in the Shenzhen area) of
floaters.
Also, even the labour cost of main assembly line workers can be reduced by
decreasing the shift hour to 7 working hours per shift as compared to 8 hours
earlier.
Number of units in 1 hour = 3600/50 * 4 = 288
Number of units per shift = 288 * 7 = 2,016
Number of Units per day = 2,016 * 3 = 6,048
Number of Units per week = 6,048 * 6 = 36,288
Number of Units per month = 1,45,152
Thus, even with the three 7 working hour shifts, we are able to produce well above
the expected demand of 1,30,000 Netbooks per month.
Option 3 Introduce another assembly line:
/* We are currently producing 110,592 units per month with 4 assembly lines.
Hence, units per month per line = 27,648
If we introduce one more assembly line, total production per month = 110,592 +
27,648 = 138,642
This will cater to the demand although additional cost required to set-up the
assembly line would be huge.
*/
5 assembly lines with two shifts of 9 hours (8 working hours )
Number of units in 1 hour = 3600/50 * 5 = 360
Number of units per shift = 360 * 8 = 2,880
Number of Units per day = 2,016 * 2 = 5,760
Number of Units per week = 5,760* 6 = 34,560
Number of Units per month = 1,38,240
Thus, introducing a new assembly line yields the same output as delivered by
current approach. This is not a preferred option because investing in a new
assembly line would not increase my capacity(given the shifts are not extended
beyond regular hours)
Option 2 is the best choice, as it increases my capacity and makes full utilization of
the four assembly lines. There would be cost associated with training new workers
for the third shift but the total labour cost once the new workers get trained would
almost be the same as in the case of introduction of a new assembly line