om chap1and 9

© 2006 Prentice Hall, Inc. 1 – 1

OM TutorialOM Tutorial


What Is Operations What Is Operations Management?Management?

ProductionProduction is the creation of is the creation of goods and servicesgoods and services

Operations management (OM)Operations management (OM) is the set of activities that is the set of activities that

creates value in the form of creates value in the form of goods and services by goods and services by

transforming inputs into transforming inputs into outputsoutputs


Measure of process improvementMeasure of process improvement

Represents output relative to inputRepresents output relative to input

Only through productivity increases Only through productivity increases can our standard of living improvecan our standard of living improve

ProductivityProductivity

Productivity =Productivity =Units producedUnits produced

Input usedInput used


Productivity CalculationsProductivity Calculations

Productivity =Productivity =Units producedUnits produced

Labor-hours usedLabor-hours used

= = = = 44 units/labor-hour units/labor-hour1,0001,000

250250

Labor ProductivityLabor Productivity


Multi-Factor Productivity Multi-Factor Productivity

OutputOutput

Labor + Material + Energy Labor + Material + Energy + Capital + Miscellaneous+ Capital + Miscellaneous

Productivity =Productivity =

Also known as total factor productivityAlso known as total factor productivity

Output and inputs are often expressed Output and inputs are often expressed in dollarsin dollars


Productivity VariablesProductivity Variables

LaborLabor - contributes about - contributes about 10%10% of of the annual increasethe annual increase

CapitalCapital - contributes about - contributes about 32%32% of the annual increaseof the annual increase

ManagementManagement - contributes about - contributes about 52%52% of the annual increase of the annual increase


Strategic Importance of Strategic Importance of Layout DecisionsLayout Decisions

The objective of layout strategy The objective of layout strategy is to develop an economic layout is to develop an economic layout

that will meet the firm’s that will meet the firm’s competitive requirementscompetitive requirements


Types of LayoutTypes of Layout

1.1. Office layout Office layout

2.2. Retail layout Retail layout

3.3. Warehouse layoutWarehouse layout

4.4. Fixed-position layoutFixed-position layout

5.5. Process-oriented layoutProcess-oriented layout

6.6. Work cell layout Work cell layout

7.7. Product-oriented layoutProduct-oriented layout


Good Layouts ConsiderGood Layouts Consider

1.1. Material handling equipmentMaterial handling equipment

2.2. Capacity and space requirementsCapacity and space requirements

3.3. Environment and aestheticsEnvironment and aesthetics

4.4. Flows of informationFlows of information

5.5. Cost of moving between various Cost of moving between various work areaswork areas


Tutorial QTutorial Q

1.5 Lori produces “final exam cargo package” for resale by her sorority. She is currently working a total of 5hrs per day to produce to produce 100 care packages.a) What is Lori’s productivity?B) Lori think that by redesigning the package , she can increase her total productivity to 133 care package per day. What will be her new productivity?c) What will be the percentage increase in productivity if lori makes the change?


Last year Now Unit produced 1,000 1,000Labor (hours) 300 275Resin(pounds) 50 45capital invested($) 10,000 11,000Energy (BTU) 3,000 2,850

1.6 Eric Johnson makes billiard in his new England plant. With recent increases in his cost , he has newfound interest in efficiency . Eric is interested in determining the productivity of his organization. he would like to know if his organization is maintaining the manufacturing average 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year. Show the productivity percentage change for each category and then determine the improvement for labor-hours, the typical standard .


1.7 Eric Johnson ( using data from problem 1.6) determines his cost to be as follows ; Labor : $ 10 per hrResin: $5 per hrCapital expense: 1% per month of investmentEnergy: $ .50 per BTUShow the percentage change in productivity for one month last year versus one month this year, on a multi factor basis with dollars as common denominator.


labor 400 hr per day @12.50 per hr

Raw material 20,000 pounds per day @ $1 per pound

Energy $ 5000 per dayCapital $ 10, 000 per day

1.9 David Upton is president of Upton manufacturing, a producer of go Go-kart tires. Upton makes 1,000 tires per day with following with the following resources;•What is the productivity per labor –hour for these tires at Upton manufacturing?•What is the multifactor productivity for these tires at Upton manufacturing?•What is the percent change in multifactor productivity if Upton can reduce the energy bill by $1000 per day without cutting production or changing any other input?


1.12 Lake Charles sea food makes 500 wooden packing boxes for fresh seafood per day, working in 10 hr shift. Due to increased demand, the plant managers have decided to operate three 8-hours shift instead. The plant is now able to produce 650 boxes per day. Calculate the company’s productivity before the change in work rule and after the change. What is the percent increase in productivity??


site Fixed cost per year

Variable cost per unit

1 $500 $112 1,000 73 1,700 4

8.16 the fixed and variable costs for three optimal manufacturing plant site for a rattan chair weaver are shown

a. Over what range of production is each optimal?b. For a production of 200 unit , which site best


8.218.21

A chain of home health care firms in Louisiana need to locate a central office from A chain of home health care firms in Louisiana need to locate a central office from which to conduct internal audits and other periodic reviews of its facilities. These which to conduct internal audits and other periodic reviews of its facilities. These facilities are scattered throughout the stat, as detailed in the following table. Each site, facilities are scattered throughout the stat, as detailed in the following table. Each site, except for Houma, will be visited three times each year by a team of workers, who will except for Houma, will be visited three times each year by a team of workers, who will drive from the central office to the site. Houma will be visited five times a year. Which drive from the central office to the site. Houma will be visited five times a year. Which coordinates represent a good central location for this office ? What other factors might coordinates represent a good central location for this office ? What other factors might influence the office location decision? Where would you place this office ? Explain.influence the office location decision? Where would you place this office ? Explain.

Map CoordinatesMap CoordinatesCity City XX YYCovingtonCovington 9.29.2 3.53.5DonaldsonvilleDonaldsonville 7.37.3 2.52.5HoumaHouma 7.87.8 1.41.4MonroeMonroe 5.05.0 8.48.4NatchitochesNatchitoches 2.82.8 6.56.5New IberiaNew Iberia 5.55.5 2.42.4OpelousasOpelousas 5.05.0 3.63.6RustonRuston 3.83.8 8.58.5


8.24 Eagel electronics must expand by building a second facility. The search has been narrowed down to locate the new facility in one of four cities: Atlanta(A), Baltimore(B), Chicago(C),or dalas (D)

•Using factor rating method, what is the recommended site for Eagle Electronics’s new facility?•For what range of value for the weight ( currently W7=10) does the site given us the answer to part (a) remain a recommended site?

i Score by site Factor Weight(wi) A B C D

1 Labor quality 20 5 4 4 52 Quality of life 16 2 3 4 13 Transportation 16 3 4 3 24 Proximity to markets 14 5 3 4 45 Proximity to

suppliers12 2 3 3 4

6 Taxes 12 2 5 5 57 Energy supplies 10 5 4 3 3


9.6 You have been just hired as the director of operations for Home chocolates, a purveyor of exceptionally fine candles. Home chocolates has two kitchen layouts under consideration for its recipe making and testing department. The strategy is to provide the best kitchen layout possible so that the food scientists can devote their time and energy to product improvement, not wasted effort in the kitchen. You have been asked to evaluate these two kitchen layouts and recommendation for your boss, Mr. Sumit, so that he can proceed to place the contract for building the kitchens.

See the alternative layoutsSee the alternative layouts

Tutorial QuestionsTutorial Questions


Refrig. 1

Counter 2

sink 3

storage 4

stove 5

44 4 4

sink 3

storage 4

Refrig. 1

Counter 2stove

5

7

12

7

4

6

9

8

5

Number of trips between work center

Kitchen layout #1

Kitchen layout #2

Walking Distance in feet

Walking Distance in feet


TaskTask Performance time ( sec)Performance time ( sec) PredecessorsPredecessors

AA 2020 nonenone

BB 3030 AA

CC 1515 AA

DD 1515 AA

EE 1010 B,CB,C

FF 3030 D,ED,E

9.14 The Toys r There Company has decided to manufacture a new toy tractor,the production is of broken in to six steps. The demand for the tractor is 4800 units per 40-hr work week:

a. Draw a precedence diagram of this operation b. Given the demand, what is the cycle time for this operation? c. What is the theoretical minimum number of workstations? d. Assign tasks to workstations. e. How much total idle time is present each cycle? F. what is the over all efficiency of the assembly line with five stations; and with six stations?

om chap1and 9

Documents