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Transcript

FONTS

Case Study Ch. 8: Bank USA cash movement

Discussion Question 1

What is the best way to group the work represented by the 16 workgroups for an average demand of 306 outgoing wires per day? What is your line balance if peak demand is 450 wires per day? What is assembly-line efficiency for each line balance solution?

Assembly line balancing

C=1.0 min/wire (457 wires/day)

Cycle time: 1.47 minutes/wire (306 wires/day)

Work station Tasks Total Time Idle time

1 1 0.8 .20

2 2 0.3 .70

3 3,4 0.9 .10

4 5 1.0 0.0

5 6,7,8 0.9 .10

6 9 1.0 0.0

7 10,11,12,13 1.0 0.0

8 14,15 0.4 .60

9 16 0.75 .25

Work station Tasks Total Time Idle time

1 1,2 1.1 .37

2 3,4 0.9 .57

3 5,6,7 1.4 .07

4 8 0.5 .97

5 9,10,11,12 1.25 .22

6 13,14,15 1.15 .32

7 16 0.75 .72

Total 7.05 min 3.24 min

Total 7.05 Min 3.24 Min

summary

Final recommendations

Advantage of 9 employees: saves money, less idle time, room to work with employees

Disadvantages of 9 employees: doesn't save as much money

Advantages of 7 employees: saves the most money

disadvantages of 7 employees: a lot of risk, and high cost of failure

Having 9 employees seems most reasonable

  • The cash movement (CM) operating unit is responsible for transferring money for BankUSA and any of its customers.
  • Cycle time for outgoing wires is computed as follows CT= A/R= [(7.5hrs/day)(60min/hr)]/(306wires/day)= 1.47min/wire
  • Process work flow: 47 detailed steps consolidated into 16 workgroups.
  • A wire transfer request can "fail" in several ways with consequences to the bank.
  • CM processes 1,500 outgoing wires per week with about 1 error every two weeks.
  • different types of errors include: the same wire being sent out twice, not sent out at all, sent with inaccurate information on it including dollar amount, or sent to the wrong place.
  • The cost of these errors can be so high that 5 quality control steps are built into the cash management process.

employ 21 people:

  • 3 managers
  • 11 associates in outgoing wires
  • 2 associates in incoming wires
  • 3 associates in checks
  • 2 associates in other areas

Quality control checkpoints:

1. Verify the receipt of Fax

2. Verify the accuracy of the wire request

3. Verify the accuracy of the keyed wire

4. Verify the wire was sent correctly

5. Verify the appropriate funds were taken

from the customer's account

Average annual salary = $30,000

Discussion Question 2

How many people are needed for outgoing wires using assembly line balancing methods versus the current staffing level of 11 full-time equivalent employees?

By grouping work using assembly line balancing you

need 7 people not 11 as currently assigned if you plan for average demand of 306 wires per day.

Labor Savings: (4 employees)($30,000)(1.30)=$156,000

Total Time Available = (# work stations)(Cycle Time) = N*CT = 7(1.47)= 10.29 minutes

Total Idle Time = N*CT-Et = 7(1.47) - 7.05 = 3.24 minutes

Assembly Line Efficiency = Et/(N*CT) = 7.05/(7*1.47) = 68.85%

Balance Delay = 1 - Assembly Line Efficiency = 1.0 - .6885 = .3115 or 31.15%

Therefore, by grouping work using assembly line balancing you need 9 people, not 11 as currently assigned

labor savings= 9 (2 employees)($30,000)(1.30)= $78,000

Total Time Available = (N*CT) = 9(1)=9.0 min

Total Idle Time= N*CT-Et= 9(1)-7.05=1.95 min

Assembly Line Efficiency= Et/(N*CT)= 7.05/(9*1)= 78.33%

Balance Delay= 1 - Assembly Line Efficiency= 1.0-.7833= 21.67%

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