Question

Determine the utilization and the efficiency for each of these situations:

A loan processing operation that processes an average of 4 loans per day. The operation has a design capacity of 11 loans per day and an effective capacity of 9 loans per day.

Answer 1

The utilization and efficiency for the loan processing operation are determined to be 36.36% and 44.44% respectively, calculated based on the average output and the given design and effective capacities.

Step-by-step explanation:

To determine the utilization and the efficiency for a loan processing operation that processes an average of 4 loans per day, we need to use the given design and effective capacities. Utilization is defined as the ratio of the average actual output to the design capacity, while efficiency is the ratio of the average actual output to the effective capacity.

To calculate utilization:

1. Utilization = Average output / Design capacity
2. Utilization = 4 loans per day / 11 loans per day
3. Utilization = 0.3636 or 36.36%

To calculate efficiency:

1. Efficiency = Average output / Effective capacity
2. Efficiency = 4 loans per day / 9 loans per day
3. Efficiency = 0.4444 or 44.44%

Therefore, the utilization of the loan processing operation is 36.36% and the efficiency is 44.44%.