Question

Determine the utilization and the efficiency for each situations:A. A loan processing operation that processes an average of 7 loans per day. The operation has a design capacity of 10 loans per day and an effective capacity of 8 loans per day.B. A furnace repair team that services and average of four furnaces a day if the design capacity is six furnaces a day and the effective capacity is five furnaces a day.

Answer 1

Answer:

A) Utilization = 70%

Efficiency = 87.5%

B) Utilization = 66.67%

Efficiency = 80%

Step-by-step explanation:

Determine the utilization and the efficiency for each situations:

A. A loan processing operation that processes an average of 7 loans per day. The operation has a design capacity of 10 loans per day and an effective capacity of 8 loans per day.

Formula for Utilization = Actual Output /

Design Capacity × 100

Actual output = 7 loans per day

Design capacity = 10 loans per day

Utilization = 7/10 × 100

= 70%

Efficiency = Actual output / Effective capacity × 100

Actual output = 7 loans per day

Effective capacity = 8 loans per day

Efficiency = 7/8 × 100

= 87.5%

B. A furnace repair team that services and average of four furnaces a day if the design capacity is six furnaces a day and the effective capacity is five furnaces a day.

Formula for Utilization = Actual Output /

Design Capacity × 100

Actual output = four furnaces a day

Design capacity = six furnaces a day

Utilization = 4/6 × 100

= 66.67%

Efficiency = Actual output / Effective capacity × 100

Actual output = four furnaces a day

Effective capacity = five furnaces a day

Efficiency = 4/5 × 100

= 80%