Owl Electronics wants your team to investigate improvements to one of its electronic component manufacturing
Components arrive at this process from two other plants. They arrive pre-assembled as either Component 602A or Component 917AT. Each component will arrive separately so, initially, there are two separate process lines until the Burn-In station where both components go through a burn-in process.
Component 602A arrives in batches of 3. The time between arrivals is described as triangularly distributed with a minimum of 10 minutes, a mode of 20 minutes, and a maximum of 30 minutes. Component 917AT arrives in batches of 6 with an interarrival time described as triangularly distributed with minimum of 10 minutes, a mode of 25 minutes, and maximum of 40 minutes between batches.
Once they arrive at the receiving dock, the components go through an involved testing procedure and a burn-in operation before they are packaged and shipped.
At the test station, you will require a test person to operate each test machine. Testers are cross-trained to work on either the 602A or the 917AT test station. Initial testing time at the separate test stations for a 602A component is exponentially distributed with a mean of 9 minutes, and for 917AT, it is uniformly distributed with minimum and maximum values of 15 and 25 minutes, respectively. All components are tested where, historically, 15% of all units will fail and require rework. Testing of 602A and 917AT should be prioritized by highest attribute value.
Rework is accomplished by a rework person at separate 602A and 917AT rework stations where units are typically processed on a FIFO basis. Reworkers are also cross-trained to work either station. Rework for 602A's can be done at a constant rate of 1 per hour and 917AT's at a rate of 2 per hour. A reworked component requires testing again so all reworked components return to the testing queue where it has priority over non-reworked units. A unit can fail multiple times and be reworked multiple times. Rework of 602A and 917AT should be prioritized by first in, first out.
Once a component passes testing, it is ready for burn-in. Burn-in causes the component to be exercised for a period of 1.25 hours for 602A's and 1.5 hours for 917AT's. Burn-in is done on a large rack machine where the component is automatically plugged in (no worker needed). This rack machine will allow up to 60 units to be burned-in simultaneously. Burn-in of 602A and 917AT should be prioritized by first in, first out. Historically, 98% of all units pass the burn-in and go on to final packaging. 2% fail and are trashed.
Final packaging requires a packager worker where labeling and boxing are done. This job is normally distributed with a mean of 7.5 minutes, standard deviation of 2.5 minutes. Final packaging of 602A and 917AT should be prioritized by first in, first out.
Run the simulation for 120 hours at 8 hrs/day and make appropriate recommendations to this company given the following information:
- The selling price of the finished components are:
- $110 for each good 602A board and $125 for each good 917AT board as final packaged
- Personnel costs are:
- Test Technician makes $26.00 per hour
- Rework Technician makes $16.00 per hour
- Final Packaging Worker makes $10.00 per hour
- Reworked material costs are $20.00 per unit reworked.
- Trashed components cost $30.00 per unit trashed (after burn-in).
- You cannot have more than 25 test stations because it's too expensive.
Your objective is to maximize the net profit (total revenue$-laborcost$-reworked$-trashed$). Change your resource numbers to help you maximize your net profit. Tell Owl Electronics your findings or recommendations. Set up Category Overview as your output report.
Include the following item in your HW3 submission:
A .doe file of your net profit model. Use Variable Displays to display your costs and counts. Be sure to include: Variable displays for costs, counts, and net profit.
Answer the following questions on the face of your model. Be sure to include:
- Total number of components shipped?
- Final number of Testers?
- Final number of Reworkers?
- Final number of Packagers?
- Final utilization of the Burn-in machine?
- Total number of Test Stations?
- Final average throughput time for EACH completed component (602A & 917AT)?
- Final 602A Income?
- Final 917AT Income?
- Final Labor Cost?
- Final Rework Cost?
- Final Trash Cost?
- What was your Net Profit?
- Set up the Category Overview report
Use Arena to solve and attach file or picture of simulation