MANUFACTURING

OPERATIONS
MCE 493/ MCE 593
Spring 2019
January 16, 2019
PARTIAL REVIEW OF LAST
LECTURE
Product Variety (P) V s Production
er us

Quantity (Q)
Product/Production Relationships
P
• Total number of product units  Qf   Q j
j 1

• Product variety
• Hard product variety = differences between products
• Soft product variety = differences between models of
products
• Product and part complexity
• Product complexity np = number of parts in product
• Part complexity no = number of operations per part
Factory Operations Model
• Simplified for purposes of conceptualization:
• Total number of product units Qf  PQ
• Total number of parts produced npf  PQnp
• Total number of operations nof  PQnp no
Problem 2.5
• The ABC Company is planning a new product line and a new plant to produce
the parts for the line. The product line will include 8 different models. Annual
production of each model is expected to be 900 units. Each product will be
assembled of 180 components. All processing of parts will be accomplished
in the new plant. On average, 6 processing operations are required to
produce each component, and each operation takes an average of 1.0 min
(including an allowance for setup time and part handling). All processing
operations are performed at workstations, each of which includes a
production machine and a human worker. The plant operates one shift.
Determine the number of (a) components, (b) processing operations, and (c)
workers that will be needed to accomplish the processing operations if each
worker works 2000 hr/yr.
Problem 2.5 Solution
(a) Number of components produced in the plant:
npf = PQnp = 8(900)(180) = 1,296,000 components
(b)Number of operations performed in the plant:
nof = PQnpno = 8(900)(180)(6) = 7,776,000 operations in the plant/year
(c)Total operation time TT = nofTp, where Tp = time for one processing
operation.
TT = 7,776,000(1.0) = 7,776,000 min = 129,600 hr of processing time
At 2000 hours/yr per worker, number of workers w = 129,600/2000 = 64.8
workers This should be rounded up to 65 workers.
Production Performance Metrics
• Cycle time Tc
• Production rate Rp
• Availability A
• Production capacity PC
• Utilization U
• Manufacturing lead time MLT
• Work-in-progress WIP
Operation Cycle Time
Typical cycle time for a production operation:

Tc  To  Th  Tt

where Tc = cycle time,

To = processing time for the operation,
Th = handling time (e.g., loading and unloading the production machine), and
Tt = tool handling time (e.g., time to change tools)
Types of Discrete Production
(a) Job shop, Q = 1, (b) batch production, sequential, (c) batch production,
simultaneous, (d) quantity mass production, (e) flow line mass production
Production Rate
Job shop production:
For Q  1, Tp  Tsu  Tc
Batch production: batch time Tb  Tsu  QTc

Average production time per work unit Tp  Tb Q

Production rate Rp  1 Tp

For quantity high production:

Rp  Rc  60 / Tp since Tsu / Q  0

For flow line production

Tc  Tr  Max To and Rc  60 / Tc
Availability (1 of 2)

Availability = proportion uptime of the equipment

MTBF  MTTR
A
MTBF

where MTBF = mean time between failures, and MTTR = mean

time to repair
Availability (2 of 2)

Key: MTBF = mean time between failures, MTTR = mean time to repair.
Problem 3.3
• The setup time in a sequential batch production operation is 2.0 hours, and the actual
processing time of 1.60 min per cycle. Three parts are produced each cycle. No tool
handling time is included in the cycle. Part handling time each cycle is 45 sec. It consists
of the worker obtaining two starting work units from a parts tray, loading them into the
machine, and then after processing, unloading the completed parts and placing them
into the same tray. Each tray holds 24 parts. When all of the starting work units have
been replaced with completed parts, the tray of completed parts is moved aside and a
new tray of starting units is moved into position at the machine. This irregular work
element takes 4.0 min. Batch quantity is 2400 units. Determine (a) average cycle time,
(b) time to complete the batch, and (c) average production rate.
Problem 3.3 Solution
(a) Th = 45/60 sec = 0.75 min/cycle, To = 1.60 min, and Tt = 0.
The irregular work element of replacing the parts trays is an additional component of work
handling time that must be done every 24 parts or 24/3 = 8 cycles:
Th2 = 4.0/8 = 0.5 min
Cycle time Tc = 0.75 + 1.60 + 0.5 = 2.85 min
(b) Batch time Tb = 2.0(60) + (2400/3)(2.85) = 120 + 2280 = 2400 min = 40 hr
(c) Average production time Tp = 2400/800 = 3.00 min/cycle = 1.0 min/pc
Production rate Rp = 60/1.0 = 60 pc/hr
Problem 3.7
• Setup time on a certain production machine is 3.0 hours. Batch size is 36 parts, and
operation cycle time is 2.5 min. Parts are processed sequentially. The reliability of this
machine is characterized by a mean time between failures of 47 hours and a mean
time to repair of 48 min.
• (a) If availability is ignored, what is the average hourly production rate of the machine.
• (b) Taking into account the availability of the machine, determine its average hourly
production rate.
• (c) Suppose that availability only applied during the actual run time of the machine
and not during the setup time. Determine the average hourly production rate of the
machine under this scenario
Problem 3.7 Solution
(a) Batch time Tb = 3.0(60) + 36(2.5) = 180 + 90 = 270 min
• Tp = 270/36 = 7.5 min and production rate Rp = 60/7.5 = 8.0 pc/hr
•
• (b) Availability A = (47 – 48/60)/47 = 0.983 = 98.3%
• Production rate including effect of availability = ARp = 0.983(8.0) = 7.86 pc/hr
•
• (c) If availability only applies during run time, then
• Tb = 3(60) + 36(2.5/0.983) = 180 + 91.56 = 271.56 min
• Tp = 271.56/36 = 7.54 min and
• Production rate Rp = 60/7.54 = 7.95 pc/hr
Workload
• Defined as the total amount of time required to complete a
given amount of work
• When used for production, workload refers to the total number
of work hours required to produce a given number of work units
during a given period of interest

WL  QTp

where WL = workload, h r; Q = quantity of units to be completed,

ou

pc/wk; and Tp = production time per unit, h r/pc

ou
Production Capacity
• Defined as the maximum rate of output that a production
facility (or production line, or group of machines) is able to
produce under a given set of operating conditions
• When referring to a plant or factory, the term plant capacity is
used
• Assumed operating conditions refer to:
• Number of shifts per day
• Number of hours per shift
• Employment levels
Plant Capacity
Simplest case is quantity production in which there are:
• s = production machines (servers) in the plant and they all
produce the same part or product
• Each machine produces as the same rate Rp
PCw  sHw Rp

where PCw = plant capacity for a defined period (week), Hw =

number of hours in the period being used to measure plant
capacity (h r/week)
ou
How to Adjust Plant Capacity
• Over the short term:
• Increase of decrease number workers w
• Increase or decrease shifts per week
• Increase or decrease hours per shift (e.g., overtime)
• Over the intermediate and long terms:
• Increase number of machines n
• Increase production rate Rp by methods improvements
and/or processing technology
How to Adjust Plant Capacity
• Over the short term:
• Increase of decrease number workers w
• Increase or decrease shifts per week
• Increase or decrease hours per shift (e.g., overtime)
• Over the intermediate and long terms:
• Increase number of machines n
• Increase production rate Rp by methods improvements
and/or processing technology
Utilization
Defined as the proportion of time that a productive resource (e.g.,
a production machine) is used relative to the time available under
the definition of plant capacity
U  WL / PC
where U = utilization, WL = workload, and PC = production
capacity
Problem 3.11
• A factory produces cardboard boxes. The production sequence consists of three operations: (1)
cutting, (2) indenting, and (3) printing. There are three machines in the factory, one for each
operation. The machines are 100% reliable and operate as follows when operating at 100%
utilization: (1) In cutting, large rolls of cardboard are fed into the cutting machine and cut into
blanks. Each large roll contains enough material for 4,000 blanks. Production cycle time = 0.03
minute per blank during a production run, but it takes 35 minutes to change rolls between runs. (2)
In indenting, indentation lines are pressed into the blanks to allow the blanks to later be bent into
boxes. The blanks from the previous cutting operation are divided and consolidated into batches
whose starting quantity = 2,000 blanks. Indenting is performed at 4.5 minutes per 100 blanks. Time
to change dies on the indentation machine = 30 min. (3) In printing, the indented blanks are printed
with labels for a particular customer. The blanks from the previous indenting operation are divided
and consolidated into batches whose starting quantity = 1,000 blanks. Printing cycle rate = 30 blanks
per min. Between batches, changeover of the printing plates is required, which takes 20 minutes. In-
process inventory is allowed to build up between machines 1 and 2, and between machines 2 and 3,
so that the machines can operate independently as much as possible. Determine the maximum
possible output of this factory during a 40-hour week, in completed blanks per week (completed
blanks have been cut, indented, and printed)? Assume steady state operation, not startup.
Problem 3.11 Solution
Determine maximum production rate Rp for each of the three operations:
Operation (1) - cutting: Tb = 35 min. + 4000 pc×0.03 min/pc = 35 + 120 = 155
min/batch
Rp = 4000 pc/batch/(155 min/batch) =25.806 pc/min = 1548.4 pc/hr
Operation (2) - indenting: Tb = 30 min. + 2000 pc(4.5/100 min./pc) = 30 + 90 = 120
min/batch
Rp = 2000 pc/batch/(120 min/batch) = 16.667 pc/min = 1000 pc/hr
Operation (3) - printing: Tb = 20 min. + 1000 pc/(30 pc/min) = 20 + 33.33 = 53.33
min/batch
Rp = 1000 pc/(53.33 min/batch) = 18.751 = 1125 pc/hr
Bottleneck process is operation (2).
output = (40 hr/wk)(1000 pc/hr) = 40,000 blanks/wk
Problem 3.12
A machine shop has ten machines in its automatic lathe section. Setup time
on an automatic lathe is 5 hours. Batch size is 100 for parts processed
through the section. Cycle time per part is 9.0 minutes. Under shop rules, an
operator can be assigned to run one or two machines. Accordingly, there are
five operators in the section for the ten lathes. In addition to the lathe
operators, there are two setup workers who only perform machine setups.
These setup workers are busy the full shift. The section runs one 8-hour shift
per day, 5 days per week. Scrap losses are negligible and availability = 100%.
The production control manager claims that the capacity of the section
should be 2000 parts per week. However, the actual output is only 1600 units
per week. What is the problem? Recommend a solution.
Problem 3.12 Solution
Hours/week = 40 hr Tp = (5 + 100 × 9/60)/100 = 20 hr/100 pc = 0.20 hr/pc,
Rp = 5 pc/hr Production capacity of automatic lathe section:
PC = (40 hr/wk)(5 pc/hr)(10 machines) = 2000 pc/wk
But the actual output = 1600 pc/wk. Why?
Consider the workload of the setup workers.
Number of setups per week = (2 setup workers)(40 hr/wk)/(5 hr/setup) = 16 setups/wk
= 16 batches/wk.
At 100 pc/batch, total pc/week = 16 × 100 = 1600 pc/week
The problem is that the setup workers represent a bottleneck.
To solve the problem, hire one more setup worker.
With three setup workers, number of batches per week = 3(40)/5 = 24 batches/wk. At
100 pc/batch, total output could be 24 × 100 = 2400 pc/week
Problem 3.12 Solution (Continued)
Comments: (1) There are 10 machines but with 2 setup workers each setting
up during the 40-hr week, this means that only 8 machines are producing
parts at any given moment. Thus two of the five machine operators only have
one machine to tend at any given moment. To maximize worker utilization,
each machine operator should be tending two machines at all times. An ideal
situation would be to have 12 machines, in which two machines are being set
up at any given time, and 10 machines are producing, so that there are two
machines for each of the five machine operators.
(2) In order to increase output and balance the workloads between the
machine operators and setup workers, the shop should consider purchasing
two additional automatic lathes. Three setup workers would be capable of (3)
(40 hr/wk)/(5 hr/setup) = 24 setups/wk. Each batch takes 20 hr, so each
machine can complete 2 batches/wk. Total batches with 12 machines is 24/wk
or 24 setups/wk.
Bottleneck Model (1 of 5)

• In job-shop and batch production, it is typical for parts to be

processed sequentially through more than one workstation
• Consider such a factory that has n workstation types; let

subscript i identify the stations: i  1, 2, . . . n

• Each station has one or more servers; let si denote the
number of servers at station i
• P part styles are processed through the factory; let j
denote the part styles, j  1, 2, . . . P
Bottleneck Model (2 of 5)

• The terms part mix and product mix refer to the relative
proportions of part or product styles; let pj denote the relative
proportion of parts style j processed through the factory

p
j 1
j  1.0

• Each part style j is processed through a certain sequence of

stations, which is likely to be different from stations through
which other part styles are processed
• If several part styles visit the same stations, then the processes
are probably different, so Tsu and Tc differ
Bottleneck Model (3 of 5)

• The bottleneck model derives its name from the fact that the
output of the production facility has an upper limit that is
determined by the part of product mix values (pj)
• To determine the output limit, a weighted average workload is
calculated for each station
P
WLi   p jTpij
j 1

• The bottleneck station is identified as the station with the

highest workload per server: (WLi / si )
Bottleneck Model (4 of 5)

• Let WL and s  equal the workload and number of servers,

respectively, for the bottleneck station
• Then the maximum production rate of all part or product styles
produced by the factory is determined as the ratio

s
Rp 
WL
• Maximum production rates for individual part or product styles
are determined as

Rpj = p j Rp
Bottleneck Model (5 of 5)

• The utilization of each server at workstation i is the proportion

of time that its servers are working and not idle, computed as

Ui =
WLi 
si
Rp  
• The utilization of the factory is the weighted average of server
utilizations
n
 si Ui
i=1
U= n
 si
i=1
Manufacturing Lead Time
Defined as the total time required to process a given part or
product through the plant, including any time for delays, material
handling, queues before machines, etc.
noj

MLT j =  Tsuij + QbjTcij +Tnoij 
i=1

where MLT = manufacturing lead time, j = part or product j, i =

operation i in the operation sequence for part or product j, no =
number of operations, Tsu = setup time, Q = batch quantity, Tc cycle
time per part, and Tno = non-operation time
Work-In-Process
Defined as the quantity of parts or products currently located in
the factory that either are being processed or are between
processing operations
WIP = Rp*  MLT 

where WIP = work-in-process, pc; R*p = hourly plant

production rate, pc/h r; MLT = manufacturing lead time, h r
ou ou
 Problem 3.18
• (A) A batch of parts is routed through six machines in a batch production plant. Batch
size is 100. At each machine, the parts are processed sequentially. Setup times and
cycle times are given in the table below. Average nonoperation time per machine is 12
hours. Determine (a) manufacturing lead time and (b) hourly production rate for
operation 3.

Machine 1 2 3 4 5 6
Setup Time (hours) 4.5 2.0 5.0 3.0 2.5 4.0
Cycle Time (min) 5.0 3.5 6.2 1.9 4.1 2.5
 Problem 3.18 Solution
(a) MLT = 4.5 + 100(5.0/60) + 2.0 + 100(3.5/60) + 5.0 + 100(6.2/60) + 3.0 + 100(1.9/60) +
2.5 + 100(4.1/60) + 4.0 + 100(2.5/60) + 6(12)
MLT = 12.833 + 7.833 + 15.333 + 6.167 + 9.333 + 8.167 + 72.0 = 131.67 hr
b) Rp for operation 3: Tp = 5.0(60)/100 + 6.2 = 3.0 + 6.2 = 9.2 min/pc
Production rate Rp = 60/9.2 = 6.52 pc/hr.
R*p = hourly plant
 Problem 3.19
• Suppose the part in the previous problem is made in very large quantities on a
production line in which an automated work handling system is used to transfer parts
between stations. Transfer time between stations is 15 sec. Total time required to set
up the entire line is 150 hours. The operation times at the individual stations remain
the same as in the previous problem. Determine
• (a) manufacturing lead time for a part coming off the line,
• (b) production rate for operation 3,
• (c) theoretical production rate for the entire production line.
• (d) How long would it take to produce 10,000 parts after the setup has been
completed?
• (e) Given the cycle times for the individual stations, determine the average station
utilization on the line
 Problem 3.19 Solution
• (a) Given that operation 3 is the bottleneck station,
• Tc = 6.2 + 0.25 = 6.45 min For first part including setup,
• MLT =6(6.45)/60 + 150 = 150.645 hr For each part after steady state operation is
achieved, MLT = 6(6.45) = 38.7 min
• (b) Tp for operation 3 = 6.45 min
• Production rate for operation 3 is Rp = 60/6.45 = 9.302 pc/hr
• (c) Theoretical production rate for line = 9.302 pc/hr since station 3 is the bottleneck
station.
• (d) Time to produce 10,000 parts after Tsu = 6(6.45/60) + 9,999(6.45/60) = 1075.54 hr
• (e) Average station U = (1/6)(5.0+3.5+6.2+1.9+4.1+2.5)/6.45 = 0.5995 = 59.95%
Manufacturing Costs (1 of 2)

• Two major categories of manufacturing costs:

1. Fixed costs - remain constant for any output level
2. Variable costs - vary in proportion to production output level

• Adding fixed and variable costs

TC = FC +VC(Q)

where TC = total costs, FC = fixed costs (e.g., building,

equipment, taxes), VC = variable costs (e.g., labor, materials,
utilities), Q = output level.
Fixed and Variable Costs
Manufacturing Costs (2 of 2)

• Alternative classification of manufacturing costs:

1. Direct labor - wages and benefits paid to workers
2. Materials - costs of raw materials
3. Overhead - all of the other expenses associated with
running the manufacturing firm
• Factory overhead
• Corporate overhead
Typical Manufacturing Costs (J
Black)
Overhead Rates
Factory overhead rate:
FOHC
FOHR =
DLC
Corporate overhead rate:
COHC
COHR =
DLC
where DLC = direct labor costs
Cost of a Manufactured Part
Defined as the sum of the production cost, material cost, and tooling cost

Cost for each unit operation = CoiTpi + Cti

where Coi = cost rate to perform unit operation i, Tpi = production

time for operation i, Cti = tooling cost for operation i
Total unit cost is the sum of the unit costs plus material cost

Cpc = Cm  (CoiTpi  Cti )

where Cpc = cost per piece, Cm = cost of starting material

 Problem 3.25
• The break-even point is to be determined for two production methods, one manual
and the other automated. The manual method requires two workers at $16.50 per
hour each. Together, their production rate is 30 units per hour. The automated method
has an initial cost of $125,000, a 4-year service life, no salvage value, and annual
maintenance costs = $3000. No labor (except for maintenance) is required for the
machine, but the power to operate it is 50 kW (when running). Cost of electric power
is $0.05 per kWh. The production rate for the automated machine is 55 units per hour.
• (a) Determine the break-even point for the two methods, using a rate of return = 25%.
• (b) How many hours of operation per year would be required for each method to reach
the breakeven point?
 Problem 3.25 Solution
• (a) Manual method: variable cost = (2 workers)($16.50/hr)/(30 pc/hr) = $1.10/pc Total
cost as a function of Q is TC = 1.10 Q assuming no fixed costs.
• Automated method: (A/P,25%,4) = = (0.4234)
• UAC = 125,000(A/P, 25%, 4) + 3000 = 125,000(0.4234) + 3000 = $55,930/yr
• Variable cost = (50 kWh/hr × $0.13/kWh)/(55 pc/hr) = $0.182/pc
• Total cost as a function of Q = 55,930 + 0.182 Q
• Break-even point: 1.10 Q = 55,930 + 0.182 Q 0.918Q = 55,930 Q = 60,913 pc/yr (b)
Hours of manual method per year: H = 60,913/30 = 2030 hr/yr For the automated
method: H = 60,913/55 = 1108 hr/yr