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    Case Background: - Mrs. Santha - Owner Small Assembly Shop - Production Line A

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    Abhishek Kumar
    Mrs. Santha owns a small assembly shop that received a new order for sub-assemblies. Production Line A currently produces 315 units per day but the new order is for 420 units, requiring one hour of overtime per day at an additional cost of Rs. 245. Two options are proposed to meet the new demand: adding one worker at a training cost of Rs. 12,000 or adding two workers at a training cost of Rs. 6,000 each. Line B also received a new order that exceeds current capacity, and two options are proposed to address this as well.

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    Case Background: - Mrs. Santha - Owner Small Assembly Shop - Production Line A

    Uploaded by

    Abhishek Kumar
    72 views12 pages
    Mrs. Santha owns a small assembly shop that received a new order for sub-assemblies. Production Line A currently produces 315 units per day but the new order is for 420 units, requiring one hour of overtime per day at an additional cost of Rs. 245. Two options are proposed to meet the new demand: adding one worker at a training cost of Rs. 12,000 or adding two workers at a training cost of Rs. 6,000 each. Line B also received a new order that exceeds current capacity, and two options are proposed to address this as well.

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    Don't Bother Me

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    Mrs. Santha owns a small assembly shop that received a new order for sub-assemblies. Production Line A currently produces 315 units per day but the new order is for 420 units, requiring one hour of overtime per day at an additional cost of Rs. 245. Two options are proposed to meet the new demand: adding one worker at a training cost of Rs. 12,000 or adding two workers at a training cost of Rs. 6,000 each. Line B also received a new order that exceeds current capacity, and two options are proposed to address this as well.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    72 views12 pages

    Case Background: - Mrs. Santha - Owner Small Assembly Shop - Production Line A

    Uploaded by

    Abhishek Kumar
    Mrs. Santha owns a small assembly shop that received a new order for sub-assemblies. Production Line A currently produces 315 units per day but the new order is for 420 units, requiring one hour of overtime per day at an additional cost of Rs. 245. Two options are proposed to meet the new demand: adding one worker at a training cost of Rs. 12,000 or adding two workers at a training cost of Rs. 6,000 each. Line B also received a new order that exceeds current capacity, and two options are proposed to address this as well.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 12

    Case Background

    Mrs. Santha Owner small assembly shop


    New order for two types of sub-assemblies
    Production Line A
    Current production 315 units/day
    New order size of 420 units/day (% inc. 33.33%)
    Contribution Rs. 30/unit
    7 workers
    Regular wage Rs. 18/hr/worker
    Overtime wage Rs. 30/hr/worker

    Case Background contd.
    16 different tasks
    Precedence relationship
    1
    2
    3
    4
    5
    8
    6
    7
    12
    9
    11
    16
    15
    10
    14
    13
    Organization of Line A
    t = 480 sec
    Time available = 7 * 60 * 60 = 25200 sec
    Actual cycle time = 25200/315 = 80 sec
    Production capacity = 25200/70 = 360 units/day
    Max OT = 2 hrs = 7200 sec
    Additional max production = 7200/70 = 102 (approx.)
    Max production = 360 + 102 = 462 units/day
    Max requirement = 420 units/day, implies feasible
    Worker 1 1 1 1 1 1 1
    Activities 1, 3 2, 5 4, 8 6, 9, 13 7, 10, 11 14, 15 12, 16
    Station Time 70 70 70 70 70 60 70
    Line A
    OT required = (420 360) * 70/(60 * 60) = 1.167 Hrs
    OT Cost/Day = 1.167 (OT) * 7 (Workers) * (Rs. 30/hr/worker) = Rs.
    245
    Line A Option 1
    CT
    Planned
    = 25200/420 = 60 sec
    Theoretical min. no. of workers reqd.
    = 480/60 = 8
    Additional worker required = 8 7 = 1
    Worker 1 1 1 1 1 1 1 1 1
    Activities 2 1, 5 3, 8 4, 6 9, 13 7, 14 10, 11 12, 15 16
    Station Time 50 50 60 60 60 60 60 40 40
    Actual no. of workers reqd. = 9
    CT achieved = 60 sec, implies; capacity = 420 units/day
    Training costs = Rs. 6000 * 2 = Rs. 12000
    Regular wage = 2 * 18 * 7 = Rs. 252/day
    Line A Option 2
    No. of workers required = 8
    Cycle time = 60 sec
    Capacity = 420 units/day
    Balance eff. = 100%
    Training cost = Rs. 6000
    Regular wage = 1 * 7 * 18 = Rs. 126
    Worker 2 1 1 1 1 2
    Activities 1, 2, 3 4, 6 5, 7, 8, 9 10, 11 14, 15 12, 13, 16
    Station Time 120 60 60 60 60 120
    Line B
    Mrs. Uma
    Two workers
    New order size = 210 units/day
    Current organization of line B
    Worker 1 1
    Activities a, b, c, d e, f, g, h
    Station Time 180 180
    Production capacity = 25200/180 = 140 units/day
    % inc. in reqt. = (210-140)/140 = 50%
    OT required/day = (210-140) * 180/(60 * 60) = 3.5 hrs
    Max OT available = 2 hrs
    Line B Option 1
    CT
    Planned
    = 25200/210 = 120 sec
    Theoretical min. no. of workers reqd.
    = 360/120 = 3
    Additional worker required = 3 2 = 1
    Worker 1 1 1
    Activities a, b, d c, e f, g, h
    Station Time 110 120 130
    CT achieved = 130 sec, implies; capacity = 193 units/day
    OT required = (210 193) * 130/(60 * 60) = 0.613 hrs
    OT required (1% rejection) = 0.613/0.99 = 0.62 hrs
    Training costs = Rs. 6000; Regular wage = 1 * 18 * 7 = Rs. 126/day;
    OT cost/day = 3 * 0.62 * 30 = Rs. 55.8; Rejection Cost/day = (210
    193) * 0.01 * 420 = Rs. 71.4. Total cost/day = Rs. 253.21
    Line B Option 2
    Worker 1 1 1 1
    Activities a, b c, d e, f g, h
    Station Time 90 90 90 90
    No. of workers required = 4
    Cycle time = 90 sec
    Capacity = 280 units/day
    Balance eff. = 100%
    Training cost = 2 * 6000 = Rs. 12000
    Regular wage/day = 2 * 7 * 18 = Rs. 252
    Trade-off between Option 1 &
    Option 2
    Let x be the no. of days to run the assembly
    line
    6000 + 253.21 * x = 12000 + 252 * x
    X = 5000 days = 13 years (approx.)
    Option 1 is better!
    Characteristics of Assembly Line
    Make to stock environment.
    Large to medium volume/standard products.
    High processing turnover
    Predefined standard Bill of Materials (BOM)
    High degree of labor & equipment utilization.
    Routing & scheduling fixed
    System fairly inflexible
    Pace of assembly line can be automatic (Machine
    paced) or manual (Worker paced)
    Assembly Line
    Key Issues in Managing Assembly Lines
    Time standards
    Assembly line balancing
    Rebalancing
    Material availability/Materials and Supplier relations.
    Worker incentives
    Capacity Planning
    Plant Loading/Production planning
    Product design
    Product Mix
    Sequencing (to maintain balance)

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