How To Calculate The Utilisation and Frequency


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The management team at Wooden Bakery is trying to decide if they should add a second oven or not. Then, they wanted to assess their waste management system they are recently applying. This problem will go through that analysis in five parts: in part one you will study the current operations; in part two you will analyze the costs of running one or two ovens; in part three you will consider the future in the analysis; in part four a final conclusion will be drawn in this regard; and in part five, you will assess their wastes.

Part 1: Current Operations.

Wooden Bakery first studied their current situation and found that each oven has a design capacity of 250 loaves per day. However, given the time they spend on cleaning and maintenance the effective capacity is 235 loaves. Looking at past data they found that on average they actually produce 230 loaves per day.

(a) (1 point) Calculate the utilization.

(b) (1 point) Calculate the efficiency.

(c) (1 point) Based on the utilization and efficiency, do you think Wooden Bakery should invest in a new oven? Explain.

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