Numerical S

ABC Analysis
Category of items Percentage of Total cost Percentage of total items

A Category 70% 10%
B Category 20% 20%
C Category 10% 70%
Ex. Problem: ABC Analysis
The following is the data of a repair shop consisting of 10 items. Identify the suitable inventory
controlling technique and classify the items accordingly.
Component Code C01 C02 C03 C04 C05 C06 C07 C08 C09 C10
Price per unit (Rs) 110 3000 225 60 310 7000 500 1000 7000 800
Units / Year 125 40 310 720 425 525 900 90 510 600
Solution
Suitable inventory controlling technique is ABC Analysis
Comp. Cost Quantity Total Descending Respective Cumulative

Category
No. (Rs.) (Nos.) cost (Rs.) order Comp. No. cost
C01 110 125 13750 3675000 C06 3675000 A
C02 3000 40 120000 3570000 C09 7245000 B
C03 225 310 69750 480000 C10 7725000 B
C04 60 720 43200 450000 C07 8175000 C
C05 310 425 131750 131750 C05 8306750 C
C06 7000 525 3675000 120000 C02 8426750 C
C07 500 900 450000 90000 C08 8516750 C
C08 1000 90 90000 69750 C03 8586500 C
C09 7000 510 3570000 43200 C04 8629700 C
C10 800 600 480000 13750 C01 8643450 C
Contd…
A category = 70% of total cost
= (70/100) x 86,43,450
= 60,50,415
B Category = 20% of total cost

= [(20/100) x 86,43,450] + 60,50,415
= 77,79,105
C Category = 10% of total cost

= Till the end
= 86,43,450
A category = Rs. 0 to Rs. 60,50,415 [C06]

B Category = Rs. 60,50,416 to 77,79,105 [C09, C10]
C Category = Rs. 77,79,106 to 86,43,450 [C01, C02, C03, C04, C05, C07, C08]
Time study- numerical
The time study engineer of a company was asked to fix the standard time of making a spindle using
a lathe. The data of the time study are shown in below Table. The performance rating of the worker
is 110 percent. Find the standard time for the spindle by assuming an allowance percentage of 15
percent.
Cycle time
28 29 30 31 32
(mins)
Frequency 10 7 12 13 8
Solution
Cycle time = (28 x 10) + (29 x 7) + (30 x 12) + (31 x 13) + (32 x 8) /
(10 + 7 + 12 + 13 + 8)
= 1502 / 50 = 30.04
Normal time = Cycle time x Performance rating

= 30.04 x 110% = 30.04 x (110/100)
= 30.04 x 1.1 = 33.04 mins.
Standard time = Normal time / (1-% of Allowance)

= 33.04 / [1 – (15/100)]= 33.04 / 0.85)
= 38.88 mins.
Numerical
Determine the standard time for each work element in Varshini publishing company ltd. Total
duration of the study is 500 mins, total units produced is 200 units, and allowance factor is 15%.
Proof
Work element number Composing Printing
reading
Frequency of performance 80 90 80
Performance rating (%) 90 140 120

Contd…
No. of observation = 250 (80 + 90 + 80 = 250)
Observed time (minutes) Standard

Percentage of working = Time =
Work = (Total time X % of Observed time
element (Frequency of working X Performance / (1 –
number performance / Total no. rating) / No. of Allowance)
of observations) X 100 acceptable units
produced
(500 X 0.32 X 0.9) / 200 = 0.72 / (1-0.15)
Composing (80/250) X 100 = 32%
0.72 = 0.85
Proof (500 X 0.36 X 1.4) / 200 = 1.26 / (1-0.15)
(90/250) X 100 = 36%
reading 1.26 = 1.48
(500 X 0.32 X 1.2) / 200 = 0.96 / (1-0.15)
Printing (80/250) X 100 = 32%
0.96 = 1.13
Total standard time 3.46
Quality analysis
The illustration below shows a normal curve for a distribution with
◦ A mean of 69,
◦ A mean -3 standard deviations value of 63.463,
◦ A mean +3 standard deviations value of 74.674.
Values, or measurements, less than 63.463.4 or greater than 74.674.6 are extremely
unlikely.
These laws of probability are the foundation of the control chart.
Control charts Focus as per
our Syllabus
• X Bar (Mean) and R (Range) Chart
C Chart (No. of Defects - Count Chart)

P Chart (Percentage of Defectives Chart)
Variable data – voltage stabiliser
Go No Go
Determination of process parameters for
X Bar and R Chart
Ex. Problem 5.1
The following data were obtained over a 5 day period for a
quality characteristic of a certain manufacturing product that
had required a substantial amount of rework. All the figures
apply to the product made on a single machine by a single
operator. Construct the appropriate control chart and comment on
the process. For n=5, A = 0.58; B = 2.11; and C = 0
Sample Number 1 2 3 4 5 6 7 8 9 10
1 3 4 4 1 5 1 3 2 3 2
2 3 1 3 2 5 6 3 4 1 4
3 3 4 3 3 6 3 6 4 5 1
Observations
4 4 2 2 3 6 3 3 4 3 4
5 2 4 2 2 7 3 3 1 5 4
Solution to Ex. Problem 5.1
Quality parameters:
X bar for sample no.
1:
= (3+3+3+4+2) / 5
=3
X bar for sample no.
2:
= (4+1+4+2+4) / 5
=3
R value for sample

No. 1:
= Max – Min
= 4-2 =2
R value for sample
No. 2:
= 4-1 =3
Contd…
Sample No. 1 2 3 4 5 6 7 8 9 10
X bar value 3 3 2.8 2.2 5.8 3.2 3.6 3 3.4 3
Comment: Since 5th sample is located beyond the upper control limit, the
process is out of control.
Contd…
Sample No. 1 2 3 4 5 6 7 8 9 10
R values 2 3 2 2 2 5 3 3 4 3
Comment: Since all the points are falling between upper control limit and lower
control limit, process is within control

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ABC Analysis

Category of items Percentage of Total cost Percentage of total items

Comp. Cost Quantity Total Descending Respective Cumulative

B Category = 20% of total cost

C Category = 10% of total cost

A category = Rs. 0 to Rs. 60,50,415 [C06]

Normal time = Cycle time x Performance rating

Standard time = Normal time / (1-% of Allowance)

Performance rating (%) 90 140 120

Observed time (minutes) Standard

• X Bar (Mean) and R (Range) Chart

C Chart (No. of Defects - Count Chart)

R value for sample

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