Operations management processes and supply chains 11th edition solutions manual

In the case of our banking example, a manager might: 1 reduce processing time by providing forms to be filled out by the customer before the customer reaches the teller window, 2 reduce

5-1

DISCUSSION QUESTIONS

1 Examples of everyday bottlenecks include traffic lights, drive-thru windows at the bank or fast food restaurants On the highway merging lanes and speed zones Efficiency can be improved by maintaining constant speeds, setting traffic lights to coordinate traffic patterns and only allowing highway construction after rush hour Fast food restaurants have two windows, pull over spots and new cash card options

to reduce time at the window

2 A change in demand can easily shift bottlenecks For instance, fast food restaurants can provide promotional pricing on certain types of sandwiches or fries, which would make their workstations take longer than normal and become capacity constrained Banks can provide incentives for new accounts to be opened, causing bottlenecks at teller windows where none existed before

3 There are many ways that process efficiency may be improved further In the case

of our banking example, a manager might: (1) reduce processing time by providing forms to be filled out by the customer before the customer reaches the teller window, (2) reduce processing variability by restricting each customer to three transactions, (3) reduce the arrival variability of customers by requiring that

Chapter

customers make an appointment to see a teller, (4) add resource capacity by increasing the number of tellers during busy periods, (5) improve resource flexibility by ensuring that all tellers are cross trained and will help co-workers with complex transactions, (6) improve resource availability by restricting lunch and break time for tellers, (7) coordinate the movement of customers by making sure that all teller windows are available to all arriving customers, (8) outsource non-value-adding activities such as rework by rerouting difficult customers to branch management, and (9) create standardized work procedures for routine, non-complex processes

or 4 per hour

3 Barbara’s Boutique

a 3 [the bottleneck is step T4 at 18 minutes – 3.33 customers per hour or 3]

b Step T6 at 22 minutes limits Type B to 60/22 = 2.73 customers/hr

c 3.33(.3) + 2.73(.7) = 2.91 customers on average

With an arrival rate greater than 5 customers per hour into the process, then type A customers may wait at step T1, T2 and T4 Waiting occurs at these steps because the arrival rate of customers into their step is greater than that step’s processing rate Also assuming that the arrival rate is greater than 5 customers per hour, type B customers may wait steps T1, T5, and T6 because these steps’ processing times are slower than the processing time of their immediate preceding steps

Managing Bottlenecks in Manufacturing Processes

4 CKC

Station X is the bottleneck – 2600 minutes

Work Station Product A Product B Total Load

5 Super Fun Industries

a Since the plant is open for (16 hours*5 days+8 hours)60 mins =5280 mins/week

A-148 takes 6 minutes at Processing Station 1: 5280/6 = 880 units

b Station 1 is the bottleneck with a utilization of (4850/5280) = 91.9%

A-148 B-356 B-457 C-843

Total Load Processing Time Station 1 6 5 0 8 4850

Processing Time Station 2 4 4 5 2 3650

Processing Time Station 3 5 7 4 2 4350

Processing Time Station 4 3 0 10 1 3400

6 Super Fun Industries continued

Station 3 is the new bottleneck with a utilization of (4500/5280) = 85.2%

A-148 B-356 B-457 C-843

Total Load Processing Time Station 1 6 5 0 8 3400

Processing Time Station 2 4 4 5 2 3450

Processing Time Station 3 5 7 4 2 4500

Processing Time Station 4 3 0 10 1 2900

While maximizing the production of C-843, note that station 1 has the longest processing time at 8 mins/unit Thus 5280 mins of capacity – 3400 mins used =1880 mins remaining Additional units of C-843 that could be produced = 1880/8 = 235 units or

335 units produced in total This calculation is confirmed in the table below

A-148 B-356 B-457 C-843

Total Load Processing Time Station 1 6 5 0 8 5280

Processing Time Station 2 4 4 5 2 3920

Processing Time Station 3 5 7 4 2 4970

Processing Time Station 4 3 0 10 1 3135

7 YPI Bottleneck

Station W is the bottleneck

W 12*60= 720 9*80= 720 20*60= 1200 2640

Contribution margin per minute 5.00 2.75

Work Station Minutes at

Make 90 units of A (900 minutes used – leaves 1500 minutes) can make 75 units of B

Product Overhead Raw Mat’l Labor Purchase

Parts

Total Costs

Revenues

B 75 x 5 = 375 75 x 5 = 375 75 x $65 = 4875 Totals 3500 555 3 x $6 x 40 hrs

= 720

640 5415 9825

Profit=Revenue – costs

$9,825 – $5,415 = $4,410

c $4,410- $3,955 = $455 increase using TOC, which is a 12% increase

9 YPI profits by traditional method:

Order would be C-A-B

60C (1200 minutes) 60 A (720 minutes) 53 B (477 minutes)

Product Overhead Raw Mat’l Labor Purchase Parts Total

Order would be B-A-C

80B (720 minutes) 60 A (720 minutes) 48 C (960 minutes)

Product Overhead Raw Mat’l Labor Purchase

Parts

Total Costs

Deluxe Super Duper

Work Center Minutes at the Start

Minutes Left after Making 60 Super Duper

Can only make 40 Deluxe

Contribution margin per minute $4.40 $2.33

Based on the bottleneck method the manufacturing sequence should be Deluxe then Super Duper

Work Center

Minutes at the Start

Minutes Left after Making 50 Deluxe

Can only make 55 Super Duper

Profit = $8,450 - $1,300 - $1,920 - $2,000 = $3,230 per week

11 Cooper River Glass Works (CRGW)

a Only 8640 minutes are available for production next month 1)=8640) As seen in the following Excel spreadsheet, Station 2 has the largest load which exceeds available capacity and is thereby the bottleneck

(20*8*60*(1-Identify the bottleneck

Product Station 1 Station 2 Station 3 Station 4 Demand Alpha 10 min 5 min 15 min 10 min 200 units

Charlie 5 min 15 min 5 min 20 min 150 units Delta 20 min 5 min 10 min 10 min 225 units Load 7250 min 9375 min 8500 min 7250 min

b The profit produced from the traditional method is $52,620 All demand is for products Alpha, Bravo, and Charlie is satisfied, but only enough capacity remains

to produce 78 units of Delta

Traditional Method

Capacity Station 1 Station 2 Station 3 Station 4

Profit Product Margin Production Initial 8640 min 8640 min 8640 min 8640 min

Bravo $ 85.00 250 units

Remaining

8640 min 3640 min 6140 min 8640 min $ 21,250 Charlie $ 82.00 150 units 7890 min 1390 min 5390 min 5640 min $ 12,300 Alpha $ 70.00 200 units 5890 min 390 min 2390 min 3640 min $ 14,000 Delta $ 65.00 78 units 4330 min 0 min 1610 min 2860 min $ 5,070

$ 52,620

c The profit produced from the bottleneck method is $59,030 All demand

is for products Alpha, Charlie and Delta is satisfied, but only enough capacity remains to produce 213 units of Bravo

Bottleneck Method

Capacity Station 1 Station 2 Station 3 Station 4

Profit Product Margin Production Initial 8640 min 8640 min 8640 min 8640 min

Alpha $ 70.00 200 units

Remaining

6640 min 7640 min 5640 min 6640 min $ 14,000 Delta $ 65.00 225 units 2140 min 6515 min 3390 min 4390 min $ 14,625 Charlie $ 82.00 150 units 1390 min 4265 min 2640 min 1390 min $ 12,300 Bravo $ 85.00 213 units 1390 min 5 min 510 min 1390 min $ 18,105

Minutes Left after Making 100 A

Can only make

16 C

Can still Make 75 B

Contribution margin per minute $6 66 Not Defined $13.00

Based on the bottleneck method the manufacturing sequence should be B, C and A Model B is scheduled first because it does not consume any resources at the bottleneck

Work Center

Minutes at the Start

Minutes Left after Making 75 B

Minutes Left after Making 40 C

Can only Make 88 A

Profit = $89,600 - $11,800 - $27,000 - $35,000 = $15,800 per week

Managing Constraints in Line Processes

13 Quick Stop Pharmacy

14 Assembly-line balancing with longest work element rule to produce 40 units per hour

c S1 = {A, C, E}, S2 = {B}, S3 = {G, D}, S4 = {H, F, I}, S5 = {J, K}

e S1 = {A, C, E}, S2 = {B}, S3 = {F,D,H}, S4 = {G, I}, S5 = {J, K}

b Task assignments using longest work-element time rule:

Cumulative Idle Time

Six workstations are required

c Efficiency with 5 workstations:

Efficiency  (100%) 91.33%

605

274

%)100

 

c t

16 Trim line at PW

a Precedence diagram for PW

A D I

F E

K H

M L

J G C

or6.43

8.13

Actual # of stations = 6 Time allocated (cyc*sta) = 18 minutes per cycle Time needed (sum task) = 13.8 minutes per unit Idle time 4.2 minutes per cycle Efficiency = 76.67%

Balance Delay = 23.33%

e The most followers decision rule provides the following solution: S1= {A,B,E}, S2={C,G,F}, S3={D,H}, S4={J,I}, S5={K,L,M} Since this solution only requires 5 stations, the efficiency is improved The POM for Windows solution follows

Balance Work Ready Work Station element Time Time left elements A(7),B(4),C(3)

1 A 1.8 1.2 B(4),C(3),D(2),E(4)

B 4 .8 C(3),D(2),E(4),G(3)

Cycle time = 3 minutes Min (theoretical) # of stations = 5

Actual # of stations = 5 Time allocated (cyc*sta) = 15 minutes per cycle Time needed (sum task) = 13.8 minutes per unit Idle time 1.2 minutes per cycle Efficiency = 92%

Balance Delay = 8%

17 Trim line at PW (part 2)

Precedence diagram for PW

F E

K H

M L

J G C

or6.43

8

Work Elements Total

S5 K, L, M 2.3 0.7

The following solution works with the same results:

S1={A,E,B}, S2={C,H}, S3={D,I}, S4={G,F,J}, S5={L,K,M}

Efficiency  138    5 3 10092%

18 Penny’s Pie Shop

a Output rate equals 50/week which is 50/40 or 1.25 per hour

Cycle time = 1/ 1.25 hours per unit or 48 minutes per unit

min48

c Efficiency with 4 workstations

Efficiency

4

min70

%)100

 

c t

(60 min/hr)/(3.0 min/unit) = 20 units/hr

b The cycle time would be 3 minutes, allowing no idle time for the “bottleneck” station S3

c Idle time is 3.9 minutes per cycle Because 20 units are made each hour, the total idle time lost over a 10-hour shift is:

(3.9 min/unit)(20 units/hr)(10 hr/shift) = 780 min/shift, or 13 hr/shift

d Efficiency = [(l4.l)/(6)(3)]l00 = 78.3%

20 Jane’s Custom Cards

a Output rate equals 10/ 8 hours which is 1.25 per hour

Cycle time = 1/ 1.25 hours per unit or 48 minutes per unit

b

2or46.1min48

c Efficiency with 5 workstations

Efficiency  (100%) 29.167%

min485

min70

%)100

 

c t

Balance Delay = 100-29.167 = 70.833 percent

d The cycle time would increase from 48 minutes to 96 minutes The new theoretical minimum would be 70/96 or 729 or 1 This is a decrease of

approximately 50% from the previous TM of 1.46

21 Six Points Saco

a With one employee, the cycle time = total of all task times (because one person has to do all tasks) = 177 seconds / customer

Hourly production capacity = (3,600 seconds/hr) / (177 seconds/order) = 20.33 customers/hr

b Output rate equals 3600sec/45 customers or 80 sec/customer The minimum number of employees will then be 177/80 = 2.21 or 3 employees

c Using trial and error the maximum output with 3 workstations is 53

d The total production capacity corresponding to the cycle time of 35 (longest single task) seconds is (3,600 seconds/hr) / (35 seconds/car) = 102.5 customer cars/hr

e From part d, we know that the bottleneck task is Task C (35 seconds) Thus, Greg should add one worker to help out with task C, thereby reducing the effective task time for C to 17.5 seconds But when we change task time for C

to 17.5 seconds, the next bottleneck task is Task D (32 seconds) If we compute with a “Given Cycle Time = 32 seconds”, then the best staffing possible is 7 workers In reality this means we need 8 workers to support a cycle time of 32 seconds (because task C really requires two workers to maintain an effective task time of 17.5 seconds)

Thus, the conclusion is that we cannot increase the output capacity of the thru with just one additional worker beyond what we obtained using part d staffing configuration

drive-EXPERIENTIAL LEARNING: MIN-YO GARMENT COMPANY

A Synopsis

The Min-Yo Garment simulation case is intended to be used in conjunction with Chapter 7 The case describes a company that has established a sound reputation in the garment industry but has not established a consistent market strategy The company is opportunistic, trying to maintain the make-to-stock business on which it had built its reputation while branching out into more lucrative markets Its manufacturing strategy is

to build flexibility in the production process This was accomplished by investing in a machine that can produce every product the firm manufactures However, the machine

is not a perfect match for any of the markets the firm is pursuing Profits are declining,

and delivery performance is deteriorating The company must do a better job of aligning its market strategy with its manufacturing strategy using the theory of constraints Because the case is a simulation involving teams, it can be used to emphasize the need for collaboration between the marketing and manufacturing functions Team members can represent Marketing, Manufacturing, and Accounting/Finance It could also be used

at the end of the course to emphasize the interrelatedness of manufacturing strategy, inventory management, and master scheduling The case provides the basis for a discussion of the theory of constraints and how it can be used to identify the markets the manufacturing system can best support

B Simulation

The simulation is designed for one class period The number of weeks the simulation can cover is up to the instructor, depending on the time available The recommended procedure is to assign the case and make the team assignments the session before the simulation is to be conducted, asking the students to read the case and think about the possible strategies that might be successful On class day, the introduction to the case and review of exhibits will take about 20 minutes The first period of play takes the longest time, with each successive period requiring less time Be prepared to answer many questions about the details of the simulation in the first few periods of play The analysis of the results will take another 20 minutes, depending on the depth the instructor wants to discuss All together, a simulation of 6 weeks should take about 100 minutes, including introduction and analysis If 100 minutes is too long, consider discussing the analysis in the following period

If your class is only 75 minutes long, consider making the team assignments the class before the simulation day Go through the first four points listed below to preserve time for specific questions and game play The assignment for the teams is to prepare the first week’s production schedule before game day

The following is a suggested outline for the simulation, including ten periods of demand/order information

1 Review the game instructions in the case Provide all students with the Min-Yo

Guide prior to simulation day (see below) Assign students to teams if you have not already done so Get each member of the team to play one of the following roles: Marketing, Manufacturing, or Accounting/Finance Teams of three are ideal, but four members are fine Rather than using teams with five members, consider using teams of two and three

2 Distribute the company report to each team The company report contains the

changeover times for each product on the garment maker The report has the changeover times for Dragon Shirts high, thereby making smaller orders of Dragon Shirts a bad choice for Min-Yo The instructor can change the setup times to create a different environment for the simulation

3 Review Exhibit 1, Exhibit 2, Exhibit 3 and Exhibit 4 Make sure everyone is

comfortable with the mechanics of working with the Min-Yo Tables spreadsheet and the Open Order file, Profit & Loss statement, Production Schedule, and Summary Use the following trial period data for the demonstration of the spreadsheet:

 Suppose there are Dragon order opportunities as follows:

Order 1 50 due wk 1