1. Canon produces digital and film (35 mm) cameras. For the purposes of the question, let's assume they are producing one model of each. Canon produces its cameras as much as demanded, and the ratio of demand for digital cameras is 4 times of the demand for the film cameras. The flow time for digital cameras is 5 hours and the flow time for film cameras is 6 hours.
a. What is the average flow time for Canon?
Let the demand of film be X
Therefore demand for digital = 4X
Total Flow time for X units (film) = 6hours = 6X
Flow time for 4X units (digital) = 5hours = 5*4X= 20X
Total Units produced = 4X+X = 5 X
Avg Flow time = 26X/5X = 5.2 Hours
If the total inventory they have is 10,400:
b. What is the total demand for Canon cameras?
Demand x flow time = inventory
Demand = 10,400/5.2 = 2,000 units
c. If digital cameras sell for $300 on average, and if the film cameras sell for $200 on average, what is Canon's expected revenue?
Digital = 1600 units and film = 400 units
Expected revenue= 1600 x 300 + 400x200 = $560,000
2. What is the relationship between flow time efficiency and capacity utilization?
The higher is the capacity utilization, lower would be the flow time efficiency.In other words, Flow Time Efficiency = K / Capacity Utilization, where K is a constant
3. What is the main purpose of using batches in production?
a. To reduce set up times of machines by using batch production (this way many quantities can be made by setting up machine just once)
b. It is used for products that have bulk usage and exact quantities are difficult to forecast (example: color, inks, shoes, etc...)
? Greater flexibility in terms of quantity produced, factory layout and manufacturing process.
 Can adjust to changes in demand.
 Less time wasted during machinery-breakdowns.
 Less expensive machinery
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