Lecture 4 - BUS 105 Production and Operations Management...

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Unformatted text preview: BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&' ()*+,-./*0$10+$234)1./*05$ 610174840. .+#/$0*"1'3,45#+& Tasks or operations Examples: Giving an admission ticket to a customer, installing an engine in car etc engine in a car, etc. Examples: How much change should be given to a customer, which wrench should be used, etc. 4 Process Analysis and Selection Decision Points BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&&'()*+,&-& Process: Is any part of an organization that takes inputs and transforms them into outputs. ! Process Analysis helps a company understand how its processes work ! " .+#/$0*"1'3,45#+& Storage areas or queues Examples: Sheds, lines of people waiting for a service, etc. Ensures its competitiveness Flows of materials or customers ! A process that does not match the needs of the firm will punish the firm every minute that the firm operates 2 Examples: Customers moving to a seat, mechanic getting a tool, etc. 5 BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&&'.+#/$0*"1-)2 Process flowcharting is the use of a diagram to represent the major elements of a process. ! The basic elements can include tasks or operations, flows of materials or customers, decision points, and storage areas or queues. ! It is an ideal methodology by which to begin analyzing a process. ! 3 .+#/$0*"1'#6'*'3178%)1'9#-)2'1#'3$0##+' Go to school today? Yes Drive to school Walk to class No Goof off 6 Copyright: Mohsen ElHafsi 2011 1 BUS 105: Production and Operations Management BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&'(&)*'+$%%$% Single-stage Process Stage 1 14'+5.03&-06&7/-*8.03 ! Blocking occurs when the activities in a stage must stop because there is no place to deposit the item just completed " If there is no room for an employee to place a unit of work down, the employee will hold on to it not able to continue working on the next unit Multi-stage Process Stage 1 Stage 2 Stage 3 7 ! Starving occurs when the activities in a stage must stop because there is no work " If an employee is waiting at a work station and no work is coming to the employee to process, the employee will remain idle until the next unit of work comes 12 BUS 105: Production and Operations Management BUS 105: Production and Operations Management )*'+$%%&,-*.-/.'0% Alternative paths 1'//4$0$+59&)-+.03 ! Bottleneck occurs when the limited capacity of a process causes work to pile up or become unevenly distributed in the flow of a process " Parallel activities If an employee works too slow in a multi-stage process, work will begin to pile up in front of that employee. In this case the employee represents the limited capacity causing the bottleneck ! Different Products produced 8 Pacing refers to the fixed timing of the movement of items through the process 13 BUS 105: Production and Operations Management BUS 105: Production and Operations Management 12(($*.03 ! 1'//4$0$+5 100 units to be produced A buffer refers to a storage area between stages where the output of a stage is placed prior to being used in a downstream stage Multi-stage Process with Buffer Buffer Stage 1 30 sec. Cycle Time Stage 2 45 sec. Cycle Time Stage 1 Stage 2 Stage 1 Buffer Stage 2 11 14 Copyright: Mohsen ElHafsi 2011 2 BUS 105: Production and Operations Management BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&&'!%"(#")*+$%',%-".$& ! 34*)51%6'7'8"%*9',*:.+;'!"#$%&& Operation Time = Setup Time + Run Time " " Setup Time: time required to prepare a machine to make a particular item Run Time: time required to produce a batch of parts 1. Bread making: one line Raw Material Bread Making Cycle time: 1 hour/100 loaves WIP Packing Cycle time: ! hour/100 loaves Finished Goods Cycle Time = Average time between completions of successive units ! Throughput Time = Average time for a unit to move through the system ! 15 18 BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&&'!%"(#")*+$%',%-".$& Throughput Rate ! 1 34*)51%6'7'8"%*9',*:.+;'!"#$%&& Cycle Time Actual Output Efficiency ! !"#$%#&% Output Output '&(%)* tivity ! Input Time Activated Utilization ! Time Available 16 2. Bread making: two lines Raw Material Bread Making Cycle time: 1 hour/100 loaves Bread Making Cycle time: 1 hour/100 loaves WIP Packing Cycle time: ! hour/100 loaves Finished Goods 19 BUS 105: Production and Operations Management BUS 105: Production and Operations Management /0$1%'2.)%'34*)51% Suppose you had to produce 600 units in 80 hours to meet the demand requirements of a product. What is the cycle time to meet this demand requirement? ! Answer: There are 4,800 minutes (60 minutes/hour x 80 hours) in 80 hours. So the average time between completions would have to be: Cycle time = 4,800/600 units = 8 minutes. ! 17 34*)51%6'7'8"%*9',*:.+;'!"#$%&& ! Bread making runs two shifts " Produces 200 x 8 x 2 = 3,200 ! Packaging runs three shifts " Produces 133.3 x 8 x 3 = 3,200 ! Capacities are roughly equal 20 Copyright: Mohsen ElHafsi 2011 3 BUS 105: Production and Operations Management BUS 105: Production and Operations Management 6"75)(85'(#)*#9*!"#$%&'(#)*!"#&+,,+, ! Project layout " !"#$%&'(#)*!"#&+,,+, ! Workcenter (Job Shop) " The product remains in a fixed location. Equipment is moved to the product rather than vice versa. Similar equipment or functions are grouped together in one area (drilling machines, heat treatment machines, stamping machines, …) A dedicated area where products that are similar in processing requirements are produced Work stations arranged according to the progressive steps by which the product is made (auto manufacturing) Similar to assembly line but the flow is continuous (sugar refinery) ! Manufacturing cell " ! Assembly Line " ! Continuous Process " 30 BUS 105: Production and Operations Management !"#$%&'(#)*!"#&+,,+, Production Process is used to make everything that we buy ! Computer ! Piece of furniture ! Dish Washer ! DVDs !… ! !"#$%&':!"#&+,,*;5'"(<=*>"5?+@#"A* B+,&"(C()7*D5/#%'*1'"5'+7(+, BUS 105: Production and Operations Management 22 33 BUS 105: Production and Operations Management BUS 105: Production and Operations Management -).+)'#"/*!#,('(#)*()*'0+*1%223/*405() !"#&+,,*1+3+&'(#) Refers to the strategic decision of selecting which kind of production processes to use to produce a product or provide a service ! It has major implications ! " " " " Capacity planning Layout of facilities Equipment Design of work systems 23 34 Copyright: Mohsen ElHafsi 2011 4 BUS 105: Production and Operations Management BUS 105: Production and Operations Management BUS 105: Production and Operations Management !"#$%&'"()$%*&)$&+,&-$.*/0,%,0 ! Nature 1%,"2&45,.&6."78*/* TC = F + vQ TCB = FA + vBQ = 0 + $200Q TCL = FL + vLQ = $80,000 + $75Q $80 $75 TCM = FM + vMQ = $200,000 + $15Q of product/service demand ! Degree of vertical integration ! Production flexibility ! Degree of automation ! Product/Service quality 35 38 7-36 BUS 105: Production and Operations Management 1%,"2345,.&6."78*/* ! 1%,"2&45,.&6."78*/* A standard approach to choosing among alternative processes or equipment Model seeks to determine the quantity produced (and sold) where we will start making profit on the process or equipment Model seeks to determine the quantity produced (and sold) where total revenue and total cost are equal Breakeven Quantity ! Purchase cos t of process or equipment Price per unit " Cost per unit Total fixed cos ts of process or equipment Unit price to customer " Variable cos t per unit 39 ! ! or ! BUS 105: Production and Operations Management BUS 105: Production and Operations Management 49":;7, ! 1%,"2&45,.&6."78*/* Point A $80,000 # $75Q ! $200,000 # $15Q $80,000 # $60Q ! $200,000 Q! $60Q ! $120,000 $120, 000 ! 2,000 $60 Point B $200Q ! $80,000 # $75Q $125Q ! $80,000 $80,000 Q! ! 640 $125 A manufacturer has identified the following options for obtaining a machined part: It can buy the part at $200 per unit (including Materials); it can make the part on a numerically controlled semiautomatic lathe at $75 per unit (including materials); or it can make the part on a machining center at $15 per unit (including materials). There is negligible fixed cost if the item is purchased; a semiautomatic lathe costs $80,000; and a machining center costs $200,000 B: Buy option L: Produce using lathe option M: Produce using machining center option 37 40 Copyright: Mohsen ElHafsi 2011 5 BUS 105: Production and Operations Management BUS 105: Production and Operations Management !""#$%&'%()*+,-)./')!01#2)34(56)7833 ! ! ! Read Chapter 5, 6 Chapter 5 " Problems 6, 7 pp. 132-133 Problems: 2, 6, 7, 8 pp. 174-176 Chapter 6 " 41 Copyright: Mohsen ElHafsi 2011 6 ...
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This note was uploaded on 04/19/2011 for the course BUSINESS 105 taught by Professor Elhasfi during the Spring '11 term at UC Riverside.

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