Halcyon Bank: Orders Are Piling Up

Operations
easy35 min0 submissions
BCG
Scenario

Halcyon Bank is a retail banking operation in UK. Demand is 904 units per day and rising, but the site is not shipping it. Work-in-progress is accumulating and the plant manager is asking for capital.

The line has four stages, each with its own maximum rate:

StageCapacity
Intake1,912 units/day
Processing707 units/day
Quality check1,498 units/day
Dispatch2,397 units/day

Other facts:

  • The plant manager has requested £10 M to upgrade the Dispatch stage, because that is where the visible backlog sits
  • Each additional unit shipped contributes £679
  • Overtime is available at any stage, at a premium

The site director wants to know whether to approve the request.

Supporting data

proposal

cost
10
stage
Dispatch

economics

contribution per unit
679

derived hints

bottleneck stage
Processing
system throughput
707
unmet demand per day
197
demand units per day904

stage capacity units per day

intake
1912
dispatch
2397
processing
707
quality check
1498
Your task

Advise the site director. Your answer should provide:

  1. Analysis — what the site's actual throughput is and where the constraint sits, computed.
  2. Risks — what your answer depends on.
  3. Recommendation — where to spend, and the throughput it should buy.

State any assumptions you make.

Ready to move forward? Up next: Kirana Connect: Orders Are Piling UpNext question
How you'll be graded

100 points, 60% to pass.

  • root cause25
  • recommendation20
  • problem structuring25
  • quantitative analysis30
Hint
Reveal suggested structure

Stage capacities; theory of constraints; value of relieving the bottleneck; re-check the next constraint