2.1 A plant produces three product lines: A, B, and C.

There are 6 models within product line A, 4 models

within B, and 8 within C. Average annual production quantities of each A model is 500 units, 700 units for
each B model, and 1100 units for each C model. Determine the values of (a) P and (b) Qf for this plant.
Solution: (a) The parameter P is the total number of different product models produced.
P = 6 + 4 + 8 = 18 different models.
(b) Qf is the total production quantity of all products made in the factory.
Qf = 6(500) + 4(700) + 8(1100) = 3000 + 2800 + 8800 = 14,600 units
2.2 The XYZ Company is planning to introduce a new product line and will build a new factory to produce the
parts and assembly the final products for the product line. The new product line will include 100 different
models. Annual production of each model is expected to be 1000 units. Each product will be assembled of
600 components. All processing of parts and assembly of products will be accomplished in one factory.
There are an average of 10 processing steps required to produce each component, and each processing step
takes 30 sec. (includes an allowance for setup time and part handling). Each final unit of product takes 3.0
hours to assemble. All processing operations are performed at work cells that each includes a production
machine and a human worker. Products are assembled on single workstations consisting of two workers
each. If each work cell and each workstation require 200 ft2, and the factory operates one shift (2000 hr/yr),
determine: (a) how many production operations, (b) how much floorspace, and (c) how many workers will
be required in the plant.
Solution: (a) Qf = PQ = 100(1000) = 100,000 products/yr
Number of final assembly operations = 100,000 asby ops/yr
Number of processing operations nof = PQnpno = 100(1000)(600)(10) = 600,000,000 proc ops/yr
(c) Total processing operation time = (600 x 106 ops)(0.5 min./(60 min./hr)) = 5,000,000 hr/yr.
Total assembly operation time = (100 x 103 asby ops)(3 hr/product) = 300,000 hr/yr
Total processing and assembly time = 5,300,000 hr/yr
5,300,000hr / yr
At 2000 hours/yr per worker, w = = 2650 workers.
2000hr / wor ker
(b) With 1 worker per workstation for processing operations, n = w = 2500 = 2500 workstations.
With 2 workers per stations for assembly, n = w/2 = 150/2 = 75 workstations.
Total floor space A = (2575 stations)(200 ft2/station) = 515,000 ft2
2.3 If the company in Problem 2.2 were to operate three shifts (6000 hr/yr) instead of one shift, determine the
answers to (a), (b), and (c).
Solution: (a) Same total number of processing and assembly operations but spread over three shifts.
Number of final assembly operations = 100,000 asby ops/yr
Number of processing operations nof = PQnpno = 100(1000)(600)(10) = 600,000,000 operations/yr
(c) Same total number of workers required but spread over three shifts.
Total workers w = 2650 workers. Number of workers/shift = w/3 = 883.33  884 workers/shift.
(b) Number of workers for processing operations = 2500/3 = 833 worker per shift (884 on one shift)
Number of workers for assembly = 150/3 = 50 workers per shift.
Number of workstations n = 833 + 50/2 = 858 (859 on one of the shifts).
Using the higher number, Total floor space A = (859 stations)(200 ft2/station) = 171,800 ft2

3.4 An average of 20 new orders are started through a certain factory each month. On average, an order consists
of 50 parts that are processed sequentially through 10 machines in the factory. The operation time per
machine for each part = 15 min. The nonoperation time per order at each machine averages 8 hours, and the
required setup time per order = 4 hours. There are a total of 25 machines in the factory working in parallel.
Each of the machines can be set up for any type of job processed in the plant. Only 80% of the machines are
operational at any time (the other 20% are in repair or maintenance). The plant operates 160 hours per
month. However, the plant manager complains that a total of 100 overtime machine-hours must be
authorized each month in order to keep up with the production schedule. (a) What is the manufacturing lead
time for an average order? (b) What is the plant capacity (on a monthly basis) and why must the overtime be
authorized? (c) What is the utilization of the plant according to the definition given in the text? (d)
Determine the average level of work-in-process (number of parts-in-process) in the plant.
Solution: (a) MLT = 10(4 + 50x0.25 + 8) = 245 hr/order
 (b) Tp = (4 + 50x0.25)/50 = 16.5/50 = 0.33 hr/pc, Rp = 3.0303 pc/hr
PC = (25x0.80)(160)(3.0303)/10 = 969.7 pc/month
Parts launched per month = 20x25 = 1000 pc/month
Schedule exceeds plant capacity by 1000 - 969.7 = 30.3 pc.
This requires overtime in the amount = (30.303 pc x 10 machines)/(3.0303 pc/hr) = 100 hr.
(c) Utilization U = (1000 pc)/(969.7 pc) = 1.03125 = 103.125%
(d) WIP = (245 hr)(969.7 pc/mo)(1.03125)/(160 hr/mo) = 1531.25 parts

3.12 Costs have been compiled for a certain manufacturing company for the most recent year. The summary is
shown in the table below. The company operates two different manufacturing plants, plus a corporate
headquarters. Determine (a) the factory overhead rate for each plant, and (b) the corporate overhead rate.
The firm will use these rates in the following year.

Expense category Plant 1 Plant 2 Corporate headquarters

Direct labor $1,000,000 $1,750,000
Materials $3,500,000 $4,000,000
Factory expense $1,300,000 $2,300,000
Corporate expense $5,000,000

1,300,000
Solution: (a) Plant 1: Factory overhead rate FOHR1 = = 1.30 = 130%
1,000,000
2,300,000
Plant 2: Factory overhead rate FOHR2 = = 1.3143 = 131.43%
1,750,000
5,000,000
(b) Corporate overhead rate COHR = = 1.8182 = 181.82%
1,000,000  1,750,000
 IE 324 / ISE324 Homework # 1
 Best due date Monday, March 7th at 1:00pm (extra grade)
 Deadline Friday, March 11th at 11:30 am (No homework will be accepted after this
time)
 Homeworks are personal work, if copying on classmates is detected both students
will get zero.

1. A plant produces three product lines: A, B, and C. There are 7 models within product line A, 5
models within B, and 7 within C. Average annual production quantities of each A model is 1500
units, 400 units for each B model, and 800 units for each C model. Determine the values of (a) P
and (b) Qf for this plant.
2. The XYZ Company is planning to introduce a new product line and will build a new factory to
produce the parts and assembly the final products for the product line. The new product line will
include 110 different models. Annual production of each model is expected to be 1100 units. Each
product will be assembled of 700 components. All processing of parts and assembly of products
will be accomplished in one factory. There are an average of 12 processing steps required to
produce each component, and each processing step takes 90 sec. (includes an allowance for setup
time and part handling). Each final unit of product takes 2.0 hours to assemble. All processing
operations are performed at work cells that each includes a production machine and a human
worker. Products are assembled on single workstations consisting of two workers each. If each
work cell and each workstation require 200 ft2, and the factory operates one shift (2000 hr/yr),
determine: (a) how many production operations, (b) how much floorspace, and (c) how many
workers will be required in the plant. If the company were to operate three shifts (6000 hr/yr)
instead of one shift, determine the answers to (a), (b), and (c).
3. An average of 20 new orders are started through a certain factory each month. On average, an
order consists of 50 parts that are processed sequentially through 10 machines in the factory.
The operation time per machine for each part = 15 min. The nonoperation time per order at each
machine averages 8 hours, and the required setup time per order = 4 hours. There are a total of
25 machines in the factory working in parallel. Each of the machines can be set up for any type
of job processed in the plant. Only 80% of the machines are operational at any time (the other
20% are in repair or maintenance). The plant operates 160 hours per month. However, the plant
manager complains that a total of 100 overtime machine-hours must be authorized each month
in order to keep up with the production schedule. (a) What is the manufacturing lead time for an
average order? (b) What is the plant capacity (on a monthly basis) and why must the overtime
be authorized? (c) What is the utilization of the plant according to the definition given in the
text? (d) Determine the average level of work-in-process (number of parts-in-process) in the
plant.
4. Costs have been compiled for a certain manufacturing company for the most recent year. The
summary is shown in the table below. The company operates two different manufacturing plants,
plus a corporate headquarters. Determine (a) the factory overhead rate for each plant, and (b) the
corporate overhead rate. The firm will use these rates in the following year.

Expense category Plant 1 Plant 2 Corporate headquarters

Direct labor $1,200,000 $1,650,000
Materials $3,800,000 $4,100,000
Factory expense $1,100,000 $2,100,000
Corporate expense $5,200,000