Class3&4

# Class3&amp;4 - Operations Management Class 1: Class 2:...

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11 Operations Management Class 1: Introduction to OM and Process Analysis Class 2: Process Analysis Class 3 and 4: Process Analysis Continued » Capacity Analysis » Inventory Build-up » Little’s Law

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22 Summary of Class 1 and 2 Throughput Rate or Flow Rate: the actual rate at which units flow through a process Capacity rate: the maximum rate at which units can flow through a process Bottleneck: The resource with the lowest capacity rate in a process It determines the capacity rate of the process Flow Time or Throughput Time: length of time a unit spends in system In practice, flow time is often referred to as cycle time In theory, cycle time is the inverse of the capacity rate, which is the average time between completion of successive units
33 Learning Objectives: Class 3 and 4 Process analysis with multiple flow units Utilization and utilization profiles Inventory build-up diagram Little’s Law

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44 Process analysis with multiple flow units Resource Unit Load (minutes/unit) Product A Product B Product C 1 2.5 2.5 2.5 2 1.5 2 2.5 3 12 0 0 4 0 3 3 5 3 3 3 If you are producing only Product A, what is capacity rate of the process (per hour)? Which resource is the bottleneck? Bottleneck: resource 3 - Capacity rate: 60/12 = 5 If you have to produce 1 unit of Product A, 2 units of Product B and
55 Process analysis with multiple flow units Resource Unit Load (minutes/unit) Product A Product B Product C 1A + 2B + 2C 1 2.5 2.5 2.5 12.5 2 1.5 2 2.5 10.5 3 12 0 0 12 4 0 3 3 12 5 3 3 3 15 When multiple flow units go through a process, the “product mix” needs to be considered while determining the unit load and the capacity The bottleneck depends on the product mix

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66 Process analysis with multiple flow units Flow diagrams are not easy to draw How to identify bottleneck? Count the total amount of work per resource (also known as the “unit load”) When multiple flow units go through a process, the “product mix” needs to be considered while determining capacity The bottleneck depends on the product mix The bottlenecks can move as the product mix changes
77 Theoretical versus effective capacity Some capacity is lost due to machine maintenance, machine set-ups, etc. For example, changing over from one product type to another may require adjustments to the machine, tools, etc. (“set-ups”)

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88 What information do unit loads give us? Consider a process that has four tasks (A, B, C, D) each taking 5 minutes to complete Assume that one worker does all four tasks Assume 4 workers are working in parallel (the resource pool has four resources)
99 What information do unit loads give us? A+B+C+ D 20 minutes In this example Unit load (for each worker) = 20 minutes Capacity rate of each worker = 3 units/hour Capacity rate of the resource pool = 12 units/hr Worker 1 Worker 2 Worker 3 Worker 4 A+B+C+ D 20 minutes A+B+C+ D 20 minutes A+B+C+ D 20 minutes

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1010 What information do unit loads give us?
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## Class3&amp;4 - Operations Management Class 1: Class 2:...

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