chapter 11 - maintenance

8/12/2019 CHAPTER 11 - Maintenance

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MAINTENANCE


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1. Able to define maintenance.2. Able to describe two types of

maintenance.

3. Able to identify the costs ofmaintenance.

4. Able to understand the concept of

Total Productive Maintenance.

Objectives


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Activities relating to keeping facilities andequipments in good working conditionincluding repairing breakdown when it occurs

at minimal cost.

Activities relating to keeping the entireproduction/operations system facilities or

specific equipment in the system in operatingcondition. It concerned with avoiding orminimizing downtime or avoid undesirableresults due to system failure.

DEFINITION


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1. Avoid production or servicedisruptions.

2. Not adding costs due toneglected maintenance work.

3. Maintain high quality product and

process.4. Avoid missed delivery date.

IMPORTANCE OF MAINTENANCE


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1. Breakdown Maintenance- breakdown maintenance is when an equipmentmalfunctions or damaged and immediate repairsare needed to put it back to working condition.(includes repairs, replacement of parts, or evenoverhaul to ensure the machines is put back inoperating)

2. Preventive Maintenance- involves performing routine inspections andservicing and keeping facilities in good repair.These activities are intended to build a systemthat will find potential failures and makes

changes or repairs that will prevent failure.


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Proactive option carried out on aregular basis.

Lubricate, adjust, clean, inspect,

replace. To reduce breakdown and

To reduce associated costs:- Idle time,schedule disruption,

injuries, loss of output


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Frequency of occurrence = Number of BreakdownThe total Period of Breakdown

Expected number of breakdowns =

Number of breakdowns x frequency of occurence Expected Cost for breakdown =

expected no of breakdown X cost of each breakdown Expected cost for preventive maintenance =

cost of preventive maintenance + cost of breakdown X average no of breakdown)


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Andersen and Associates is a CPA firm specializing in company tax preparation.

One of the firms valuable assets is a high-speed photocopy machine which hasbeen used to make copies of taxation assessments to be sent to the Inland

Revenue. The machine has been in the firm possession for almost 3 years. Over the

past 18 months, the machine has been continuously giving problem to the firm and

the breakdown figures are shown below:

Each time the machine breakdown, the firm has to payan average of RM600 for theService expenses. Recently, one of the Senior Partners has been approached by PM

Enterprise who made an offer to provide preventive maintenance with freebreakdown service, which will cost Andersen and Associates RM1,200per month.You are requested to help the partner to decide whether the contract of preventive

maintenance should be accepted.

Number of breakdowns 0 1 2 3Number of months that breakdown occured 2 2 6 8


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Number of

breakdowns

Number of

the

breakdownsoccured

Step 1 (a)Frequency of occurence =

Number of breakdown

The total Period of breakdwon

Step 2 (b)Expected number of breakdowns =

(Number of breakdowns x frequency

of occurence)

0 2 2/18 = 0.1111 0 X 0.1111 = 0

1 2 2/18 = 0.1111 1 X 0.1111 = 0.1111

2 6 6/18 = 0.3333 2 X 0.3333 = 0.6666

3 8 8/18 = 0.4444 3 X 0.4444 = 1.3333

= 18 = 2.111times per month

a. Compute the Frequency of Occurrence

b. Compute the Expected Number of Breakdown


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Step 3c. Breakdown cost

= 2.111 x RM600

= RM1,266.60 per month

Step 4d. Preventive Maintenance cost

= RM1,200 per month

Decision : Accept the preventive maintenance

offer because of RM1,266.60 RM1,200 = RM66.60 cost saving.


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e. The offer is to provide preventive maintenancethat cost Andersen and Associates RM1,200per month but there will still be one (1)

Breakdown every month.

Preventive Maintenance cost

= RM1,200 + RM600(1 breakdown)

= RM1,800 per month

Decision : Retain the breakdown maintenance policy because ofRM1800-RM1266.600) RM533.40 cost saving.


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Good Manufacturing, a firm specializing in production of modularcomponents. The firm has been successful in automating much of its work.The computerized approach, however has problems. Over the past 20

months, the machines have broken down at the rate indicated in thefollowing table:

Each time the machines breakdown, Good Manufacturing estimates that it

loses an average of RM400 in time and service expenses. One alternative isto purchase a service contract for preventive maintenance. Even if GoodManufacturing contracts for preventive maintenance, there will still bebreakdowns, averaging one breakdown per months. Give yourrecommendations whether Good Manufacturing should contract forpreventive maintenance or maintain with current breakdown policy.

Number of

breakdowns

Number of the

breakdowns

occured

0 4

1 2

2 5

3 4

4 5


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a. Compute the Frequency of Occurrence

b. Compute the Expected Number of Breakdown

c. Compute the expected costs for breakdown

d. Compute the expected cost for preventivemaintenance

e. Compare the two options and select the one thatwill cost less


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Gemilang Group's computer system has been down

several times over the past twelve months, as shownbelow:

Each time the system is down, the firm loses an averageof RM4,000 in time and service expenses. They areconsidering signing a contract for preventive maintenance.With preventive maintenance, the system would be serviced

on average twice a month with zero breakdowns. Thepreventive maintenance costs would be RM200 per service.Which is cheaper, breakdown or preventive maintenance?

Number of breakdowns 0 1 2 3 4Frequency of occurrence 0.45 0.10 0.10 0.20 0.05


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1. Compute the Frequency of Occurance

No calculation is needed because they arealready in the question.

2. Compute the Expected Number of Breakdown

ExpectednumberofB/down

0 x 0.45= 0 1 x 0.10= 0.1 2 x 0.10= 0.2 3 x 0.20= 0.6 4 x 0.05= 0.2= 0 + 0.1 + 0.2 + 0.6 + 0.2

=1.1 times per month


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3. Breakdown cost= RM4,000 per year

4. Preventive Maintenance cost

= RM200 per service x 2 times x 12 months= RM4,800 per year

Decision : Breakdown cost is cheaper because

it gives a cost saving of RM800.


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Total costs of

maintenance

Full cost of

breakdown

PM cost

Maintenance

Commitment

Costs


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The concept of employee involvement andexcellent maintenace record.

TPM includes:-1. Designing a reliable, easy to operate and maintain

machine2. Maintenance and service costs are included in the

agreement of purchasing the machine.

3. Train employees to operate and maintain any worn

out machines.


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Oct 2012 (A5) Apr 2011(A5)

Oct 2010 (Nil)

Apr 2010 (B3)

Oct 2009 (Nil)

Apr 2009 (B4)

Oct 2008 (A5)

Apr 2008 (B6) Oct 2007 (A5)

Apr 2007 (A5 - as seen)

Oct 2006 (B5)

chapter 11 - maintenance

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