Operations Management

Wind Tunnel Testing Carbon Bike Frames
As an equipment provider for several Olympic cyclists, Carbon Bike Frames

(CBF) operates a very expensive wind tunnel facility near San Diego, CA. The
wind tunnel is used to find the best compromise between ergonomics and
aerodynamics for the cyclist. Presently, more and more cyclists are
interested in CBFs services, so the company considers building a second
facility. However, given the enormous costs of the wind tunnel, they also
want to explore a more effective use of the current facility. An initial data
collection reveals that:
-The standard fitting time for a cyclist is 2h. On average, the wind tunnel is
used for 7 fitting procedures a day (new customers or customers who want a
refit). The wind tunnel is available 24 hours a day.
-CBF offers a free second session should the customer not be entirely
satisfied with their bike fit (internally also known as rework sessions).
About 2 out of 5 customers come back for such a refit, which takes the
same amount of time as the initial fit.
-20 minutes of the each fitting procedure is spent on setting up the bike on a
stationary trainer and getting the athlete ready. Almost all of this could
happen outside the wind tunnel, i.e. while another fitting procedure is still
going on.
-About one day out of 10, the wind tunnel is down for maintenance or repair.
CBF1. How many new fits are conducted on a typical day when the wind
tunnel is in use (assume the wind tunnel is open that day)?
Answer
2 x 7=14 hrs per day
2 out of 5 are defective

3 out of 5 are perfect
One day out of 10the tunnel is down

new fits per day=
14 x 3
=4.2 4 units
10
CBF2. What is the OEE of the wind tunnel? Recall that the wind tunnel can
be used 24h a day.
Answer
OEE=
14 x 2 x 9
=0.21
24 x 5 x 10
Tasty Tims
Tasty Tims is a specialty taco restaurant. The following tasks are required for
the successful assembly of a Tasty taco (times are in seconds per taco):
Chop and trim meat 30
Chop vegetables 20
Grill meat 240
Grill vegetables 180
Prepare toppings
Lettuce - 10
Tomato - 15
Guacamole - 40
Assemble taco
Add meat - 5
Add vegetables - 5
Add cheese - 5
Add toppings - 10
Wrap taco - 20
During the lunch hour, Tasty Tims encounters demand for 120 tacos.
TT1. What is the labor content of one of Tasty Tims tacos?
Answer
The labor content of a single taco=60
TT2. What is the takt time for Tasty Tims taco shop?
Answer
The takt time for thetaco shop=
1
=0.00833 hrs x 3600=30 seconds /unit
120
TT3. In an ideal world, how many workers should Tim hire to make tacos?
Answer
number of workers required=
Approximately 19 workers
60
( 9.333 ) =18.67
30
TT4. During off-peak afternoon hours, demand at Tasty Tims drops to 40

tacos each hour. How many employees should Tim schedule to work during
the afternoon? Again, ignore any effects of idle time or inefficiency due to
poor line balancing.
Answer
number of employees =
1
=0.025 x 3600=90 sec for each unit
40
60
( 9.33 ) =6.22
90
Approximately 7 employees
FastBus Inc.
FastBus Inc. offers low-cost bus transportation between Philadelphia and New
York City. The company has 2 buses, each bought for $300,000. Each bus can
carry 40 passengers per trip and does 7 daily round trips between
Philadelphia and New York City. The price of each one-way ticket is $12. The
company sells 28 seats on average per one-way trip, so the load factor is
70%. The annual fixed cost of running the company is $3,000,000. The major
variable cost in their line of business is gasoline, which costs $25 per oneway trip. Fast Bus Inc. buses operate 365 days a year.
Define the return on invested capital as the ratio of the profits (PER YEAR)
and the invested capital. You can draw an ROIC tree in the same way that we
drew a KPI tree in class. Simply have the ROIC as the root of the tree
instead of profits. Then answer the following questions:
FB1. What is the current number of customers that are served each year?
Assume that FastBus operates 365 days per year and that each customer
buys only one one-way ticket per person.
Answer
CNOC served =(365 x 7 x 2 x 2 x 28)=286,160
FB2. What is the current ROIC? (Please give your answer in decimal form.
For example, 0.25 for 25%)
Answer
CNOC served =286,160
Current Revenue=3,433,920
Available cost=3,000,000
Available Variable cost=365 x 7 x 2 x 2 x 25=255,500

Difference=3,433,920( 255500+3000000 )=178420
Av ailable Capital=300,000
Current percentage ROIC =
178420
x 100=0.595
300000
FB3. What is the minimum load factor at which the company breaks even?
(Please give your answer in decimal form. For example, 0.25 for 25%)
Answer
Let l be the load factor
3 , 000 ,000+ 255 ,500=40 xl x 7 x 2 x 2 x 12
3,255500=4905600l
l=0.664

Operations Management

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Operations Management

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Wind Tunnel Testing Carbon Bike Frames

As an equipment provider for several Olympic cyclists, Carbon Bike Frames

2 out of 5 are defective

One day out of 10the tunnel is down

TT4. During off-peak afternoon hours, demand at Tasty Tims drops to 40

Available Variable cost=365 x 7 x 2 x 2 x 25=255,500

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