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Capstone DesignEconomic analysis through line balancing

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Contents

Introduction to Team members & Topic1

Reason of topic selection2

Market conditions3

Progress direction of project4

Schedules5

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Introduction toTeam members & Topic1

Economic analysis through line balance

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Capstone Design

Engineering Economics

Quality Control

Production Management

Senior

Junior

Reason of topic selection

2

Productivity, Line-Balance,

Plant Management

Reliability, Defective ratio

Investment analysis

Utilize all of IE’s tools

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Market conditions3

Increase over last year 27.1 %

Increase over last year 27 %

<Market present condition of domestic family washing machine>

자료출처 : 통계청 광업ㆍ제조업 통계조사 보고서

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Market conditions3

Distinction

Number of companiesProduction

Amount(1million won)shipment

Amount(1million won)

Yearlyaverage

Yearlyaverage

Growth rate

Yearlyaverage

Yearlyaverage

Growth rate

Yearlyaverage

Yearlyaverage

Growth rate

2004-2007 9 19.35% 1,822,261 10.05% 1,825,660 9.88%

<Market present condition analysis of domestic family washing machine>

자료출처 : ( 주 ) 밸류애드

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Error process

ProcessFormGrasp Line-Balance

Productivity

DefectiveRatio

Analysis

Analysis of economy

The direction of project4

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules5

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Contents

Introduce to Company1

Production Flow2

Analysis by Process3

4 Schedules

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Company Introduction1

Company Name :

Dongyang Inotek

Owner : Yang jong-hyeon

History : Established in 2007

Manufactured Items :

Washing machine Shaft

Last year Sales : 6 billion

Location :

1235-21 ok-dong, gwangsangu

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Production Flow

Factory inside photo

2

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Production Flow

Materials Centering Process Lathe turning Process

Heat treatment Process Press-in Process Form rolling Process

Polishing Process TAP Process Product

2

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Process Name :

Centering Process

Drill holes on both sides of materials center

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Process Name :

Lathe turning Process

Using a CNC lathe machining

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Process Name :

Heat treatment Process

Heat treatment

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Process Name :Press-in process

Put the bearings

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Process Name :Form rolling Process

Screw Machining

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Process Name :Polishing Process

Trim surface

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Process Name :TAP Process

Screw Machining

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity /

Defective ratio

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules4

4Plan Run

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Contents

Working time & Production volume 1

Error process analysis2

Defective ratio & Productivity analysis3

4 Schedules

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Working time & Production volume1

Weekday = 36,600 sec / day(10hour 10min)

Saturday = 27,600 sec / day(7hour 40min)

A month Working hours

= 22(day) X 36,600(sec) + 4(day) X 27,600(sec)

= 805,200(sec) + 110,400(sec)

= 915,600(sec)=254hour 20min

Average monthly production = 8,100 EA

Average daily production = 312 EA

Heat treatment process

Press – in process

Form rolling process

Polishing process

TAP process

Lathe turning process

Centering process (1 machine)

(2 machine)

(1 machine)

(1 machine)

(1 machine)

(1 machine)

(1 machine)

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Error process analysis

One Process – One machine

Total work time per 1EA 25 200 40 25 35 18 50 393Efficiency (E) = = = 0.2807 = 28.07%

Number of workplace Cycle-Time 7 200 1400

Time(sec)

Process name

2

Unbalance Rate(D) = 1 - Efficiency = 1 - 0.2807 = 0.7193 = 71.93%

( ) (Number of workplace Cycle-Time) - Total work time per 1EA = (7 200) - 393 = 1007(sec) = 16min 47secIdle Time IT

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Error process analysis

Actual Process : Used 2 lathe turning machine

Time(sec)

Process name



2

Unbalance Rate(D) = 1 - Efficiency = 1 - 0.4186 = 0.5814 = 58.14%

( ) (Number of workplace Cycle-Time) - Total work time per 1EA = (7 100) - 293 = 407(sec) = 6min 47secIdle Time IT

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Defective ratio & Productivity analysis

3

Number of defective 1Defective ratio = = = 0.00125 = 0.125%

Number of good products 800

Productivity = 1 - Defective ratio = 1 - 0.00125 = 0.99875 = 99.875%

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity /

Defective ratio

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules4

4Plan Run

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Contents

Calculation of objectives cycle-time1

Calculate the minimum workplace2

Relationship between number ofequipment and line efficiency3

4 Schedules

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Calculation of objectivescycle-time

Process flow photo

1

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1

(Day at work)

3,125 EA

per

month

5,625 EA

per

month

(Day and night work)(Day at work)(Day at work)

3,125 EA

per

month

3,125 EA

per

month

14,580 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

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1

1month production : 8,100 EA

Sum of production day work : 8,100 EA X 9 month = 72,900 EA

Sum of production night work : (8,100 EA X 1.8) X 3 month= 43,740 EA

1year total production : 72,900 EA + 43,740 EA = 116,640 EA

Currently cycle-time : 293 sec per 1EA

Objective tact-time : 915,600 sec / 9,720 EA = 94.19 sec per 1EA

1month production objectives : 116,640EA / 12month = 9,720 EA

Day and night 1month production work : 8,100 EA X 1.8= 14,580 EA

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..

Currently cycle-time 293Minimum workplace = = = 3.1 = 4

Objective tact-time 94.19

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Process name

Time(Sec)

1machine

4machine

1machine

1machine

1machine

1machine

1machine

※ Note : Currently Efficiency = 41.86 %



..

Currently cycle-time 293Minimum workplace = = = 3.1 = 4

Objective tact-time 94.19

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Relationship between number ofequipment and line efficiency

3

30 60 90 120 150 180 210 270240 330 360300

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Cycle-time

Number ofequipment

Efficiency

41.86 %

69.42 %

79.51 %

244.16 sec

159.1 sec

243 sec

293 sec

208 sec 74.29 %

Centering : 25 sec (1 machine) Lathe turning : 40 sec (5 machine) Heat treatment : 40 sec (1 machine) Press-in : 25 sec (1 machine) Form rolling : 35 sec (1 machine) Polishing : 18 sec (1 machine) TAP : 25 sec (2 machine)

Total : 208sec (12 machine)

2080.7429 74.29%

7 40E

Centering : 25 sec (1 machine) Lathe turning : 28.6 sec (7 machine) Heat treatment : 20 sec (2 machine) Press-in : 25 sec (1 machine) Form rolling : 17.5 sec (2 machine) Polishing : 18 sec (1 machine) TAP : 25 sec (2 machine)

Total : 159.1sec (16 machine)

159.10.7951 79.51%

7 28.6E

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity /

Defective ratio

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules4

4Plan Run

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Contents

Correction contents1

2

Simulation modeling3

4 Result & Analyze

Raw data for simulation

Schedules5

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Average monthly production = 8,100 EA

Working time per month = 915,600 / sec

Net working time per month 915,600Tact time = 113 / sec

Production per month 8,100

Total production of 1 year = 116,640 EA

Objective monthly production = 116,640 / 12 = 9,720 EA

Net working time per month 915,600Objective tact time = 94.20 94.12sec

Production per month 9,720

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(Day at work)

3,125 EA

per

month

5,625 EA

per

month

(Day and night work)(Day at work)(Day at work)

3,125 EA

per

month

3,125 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

14,580 EA

per

month

14,580 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

14,580 EA

per

month

Used 2 lathe turning machines

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(Day at work)

3,125 EA

per

month

5,625 EA

per

month

(Day at work)(Day at work)(Day at work)

3,125 EA

per

month

3,125 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

14,580 EA

per

month

14,580 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

9,720 EA

per

month

9,720 EA

per

month

9,720 EA

per

month

9,720 EA

per

month


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Number of equipment to satisfy 94.12 seconds

Time(sec)

Process name

2

94.12 / sec

Used 3 Lathe turning machines cycle time = 66.67 sec

<Used 3 Lathe turning machines>

3,125 EA

per

month

8,100 EA

per

month

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3,125 EA

per

month

8,100 EA

per

month

9,720 EA

per

month

Each process cycle time & process form

Working hours a day

3,125 EA

per

month 8,100 EA

per

month

<Used 2 lathe turning machine>

Week : 36,600 sec

Weekend : 27,600 sec

Objective Tact-time = 94.12 sec

Centering : 25sec Lathe turning : 200sec Heat treatment : 40sec

Press-in : 25sec Form rolling : 35sec Polishing : 18sec Tap : 50sec

2

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Simulation modeling


Time constraints

Constraints for

only one hour’s operation

Input the raw material

throughout the

lathe turning process

Finished product

from heat treatment

3

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Simulation modeling


3

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Result & Analyze

3,125 EA

per

month

5,625 EA

per

month

3,125 EA

per

month

3,125 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

9,720 EA

per

month

Used 2 lathe turning machine

4

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Result & Analyze

3,125 EA

per

month

5,625 EA

per

month

3,125 EA

per

month

3,125 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

8,100 EA

per

month

9,720 EA

per

month

Used 3 lathe turning machine

4

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity /

Defective ratio

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules4 Plan Run5

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Simulation model

3,125 EA

per

month

8,100 EA

per

month

Show the simulation model

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Contents

Raw data for economical analyze1

2

Economical analyze3

4 Result

Method of economical analyze

Schedules5

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Row data foreconomical analyze

1

Machine investment cost

New Lathe Turning machine

66,000,000 won

Payment (Unit : won)

Minimum wage : 4,320

Weekend / Over time : 4,320 x 1.5 = 6,480

Night at work : 4,320 x 2 = 8,640

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1

Wage calculation

Weekday(1worker) : 34,560(8h) + 16,200(2h 30m) = 50,760

50,760 x 22(day/month) = 1,116,720

Weekend(1worker) : 6,480 x 8 = 51,840

51,840 x 4(day/month) = 207,360

1year = 10,592,640 x 12(month) = 127,111,680

1month = 1,324,080 x 8(worker) = 10,592,640

1worker wage / month = 1,116,720 + 207,360 = 1,324,080

Increase machine / year = 1,324,080 x 9(worker) = 143,000,640

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1

Night at work wage calculation

PM 20:00 ~ PM 22:00 : (4,320 x 1.5) x 2 = 12,960

PM 22:00 ~ AM 06:00 :(4,320 x 2) x 8 = 69,120

Sum = 82,080 / day

(82,080 x 8(worker)) x 22(weekday) = 14,446,080(month) x 3(month)

= 43,338,240

1year(day at work + night at work) = 127,111,680 + 433,338,240

= 170,449,920

Minimum wage increase rate

Year 2008 2009 2010 2011

Increase rate 8.3 % 6.1 % 2.8 % 5.1 %

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1

Warehouse cost estimate

Warehouse area : 20(pyeong)

Cost : 15,000,000

Incidental expenses

middle rack(10EA) = 250,000 x 10 = 2,500,000

Total cost = 15,000,000 + 2,500,000 = 17,500,000

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Method ofeconomical analyze

Depreciation(Decline-balance method)

2

1 1

N 10Depreciation factor ( ) = 1-(0.05) = 1-(0.05) 0.2588

N D-factor Dn Bn

0 0 0 66,000,000

1 0.2588 Bn x factor = 17,085,126 Bn – Dn1 =48,914,874

2 0.2588 Dn1 x factor = 12,662,376 Bn1 – Dn2 = 36,252,498

.

.10

0.2588.0.2588

.

.Dn9 x factor

.Bn 8 – Dn9 3,300,000(Salvage value)

N=Machine’s durable years(10)0.05 = Salvage value

A Compound Interest

(1 )NF P i i = interest rate

N = term

P = present value

F = future value

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Method ofeconomical analyze

Wages calculated according to the wage increase

4ponit moving average

2

t t-1 t-2 t-3 t-N+1t

D + D + D + D + + DAverage : A =

N

t tForecast : F +1 = A

t

t

t+1

N = Term

D = Actual value of T-term

A = Average of T-term

F = Value of T+1 term

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Economical analyze3

Actual

N YearForecast increase

Pay

0 2011 - ₩170,449,920

1 2012 5.56% ₩179,926,936

2 2013 4.88% ₩188,707,370

3 2014 4.57% ₩197,331,297

4 2015 5.03% ₩207,252,128

5 2016 5.01% ₩217,634,164

6 2017 4.87% ₩228,236,688

7 2018 4.87% ₩239,351,013

8 2019 4.94% ₩251,185,868

9 2020 4.92% ₩263,553,823

10 2021 4.90% ₩276,474,386

　　 SUM of payment

₩2,420,103,593

Calculate future wage 10 years trough 4point moving average forecast method (Wage increase)

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Economical analyze3

After

Year Forecast Increase Pay D-factor Dn Bn

2011 - ₩143,000,640 - - ₩66,000,000

2012 5.56% ₩150,951,476 0.258865551 ₩17,085,126 ₩48,914,874

2013 4.88% ₩158,317,908 0.258865551 ₩12,662,376 ₩36,252,498

2014 4.57% ₩165,553,036 0.258865551 ₩9,384,523 ₩26,867,975

2015 5.03% ₩173,876,215 0.258865551 ₩6,955,193 ₩19,912,782

2016 5.01% ₩182,586,326 0.258865551 ₩5,154,733 ₩14,758,049

2017 4.87% ₩191,481,419 0.258865551 ₩3,820,350 ₩10,937,698

2018 4.87% ₩200,805,891 0.258865551 ₩2,831,393 ₩8,106,305

2019 4.94% ₩210,734,860 0.258865551 ₩2,098,443 ₩6,007,862

2020 4.92% ₩221,111,077 0.258865551 ₩1,555,228 ₩4,452,633

2021 4.90% ₩231,950,911 0.258865551 ₩1,152,633 ₩3,300,000

　 SUM ₩2,030,369,757 　 ₩62,700,000 ₩66,000,000.00

　SUM of pay and

total depreciation value (1)

₩2,093,069,757 　　　

　SUM of (1) and

Warehouse investment

₩2,110,569,757 　　　

Machine’s cost basis : 66,000,000

1

101 (0.05)

66,000,000 x 0.258865551

48,914,874 x 0.258865551

36,252,498 x 0.258865551

26,867,975 x 0.258865551

19,912,782 x 0.258865551

14,758,049 x 0.258865551

10,937,698 x 0.258865551

8,106,305 x 0.258865551

6,007,862 x 0.258865551

4,452,633 x 0.258865551

66,000,000 - 17,085,126

48,914,874 - 12,662,376

36,252,498 - 9,384,523

26,867,975 - 6,955,193

19,912,782 - 5,154,733

14,758,049 - 3,820,350

10,937,698 - 2,831,393

8,106,305 - 2,098,443

6,007,862 - 1,555,228

4,452,633 - 1,152,633

2,030,369,757 + 62,700,000

2,093,069,757 + 17,500,000

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Result

Result

Actual

4

After

N YearForecast

FactorPay

0 2011 - ₩170,449,920

1 2012 5.56% ₩179,926,936

2 2013 4.88% ₩188,707,370

3 2014 4.57% ₩197,331,297

4 2015 5.03% ₩207,252,128

5 2016 5.01% ₩217,634,164

6 2017 4.87% ₩228,236,688

7 2018 4.87% ₩239,351,013

8 2019 4.94% ₩251,185,868

9 2020 4.92% ₩263,553,823

10 2021 4.90% ₩276,474,386

　　 SUM of payment

₩2,420,103,593

YearForecast Factor

Pay D-factor Dn Bn

2011

-₩143,000,64

00 0 ₩66,000,000

2012

5.56%₩150,951,47

60.2588655

51₩17,085,1

26 ₩48,914,874

2013

4.88%₩158,317,90

80.2588655

51₩12,662,3

76 ₩36,252,498

2014

4.57%₩165,553,03

60.2588655

51₩9,384,52

3 ₩26,867,975

2015

5.03%₩173,876,21

50.2588655

51₩6,955,19

3 ₩19,912,782

2016

5.01%₩182,586,32

60.2588655

51₩5,154,73

3 ₩14,758,049

2017

4.87%₩191,481,41

90.2588655

51₩3,820,35

0 ₩10,937,698

2018

4.87%₩200,805,89

10.2588655

51₩2,831,39

3 ₩8,106,305

2019

4.94%₩210,734,86

00.2588655

51₩2,098,44

3 ₩6,007,862

2020

4.92%₩221,111,07

70.2588655

51₩1,555,22

8 ₩4,452,633

2021

4.90%₩231,950,91

10.2588655

51₩1,152,63

3 ₩3,300,000

　 SUM₩2,030,369,7

57　 ₩62,700,0

00 ₩66,000,000.0

0SUM of pay

and total depreciation

value (1)

₩2,093,069,757

　

SUM of (1) and

Warehouse investment

₩2,110,569,757

　　　

Salvage Value 0.05%

Total Depreciation value

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Result

Result

4

Alternative A(Operation like present)

For worker wages during 10 years the future 2,420,103,593 won occurrence

Alternative B(1 Equipment and 1 workers increase)

As equipment investment expense, worker wages and warehouse investment expense during 10 years the future 2,110,569,757 won occurrence

So, it is reasonable that select alternative B

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Week 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Report the plan

Visit to field

Process form

grasp

Error process

analysis

Productivity /

Defective ratio

analysis

Line-Balance

analysis

Simulation modeling

Economical

evaluation

Resultant

report

Schedules4 Plan Run5

logo capstone design economic analysis through line balancing

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