BJMP2033 PRODUCTION & OPERATIONS MANAGEMENT NUMERICAL INTELIGENCE WORKSHOP 7th DECEMBER 2012 DKG 2/1 8.30AM 12.

30PM

*AGENDA* 7.30 8.30 8.30 10.00 10.00 10.15 10.15 12.15 12.15 12.30 = REGISTRATION & TAKE A SEAT = CHAPTER 1 5 = BREAK (Kuih & Teh O) = CHAPTER 6 9 = LUNCH (Nasi Tomato & Air O)

CHAPTER 1 POM INTRODUCTION 1. What is Production? Production is the creation of products/goods and services. 2. What is Operations Management? It is the set of activities (input transformation output) that creates value in the form of products/goods and services. For examples; SONY produces SMART LED TV, and SAMSUNG creates TABLET GALAXY NOTE. 10.1 3. Hard Rock Caf in Orlando USS, Florida uses Likert scale to evaluate its quality of food and service at the caf. In what scales number the food and service is considered failed? The scores are rated on a 1 to 7 scale, and if the score is not a 7, the food and service is a failure. 4. Based on the figure below, list down all the (i), (ii) and (iii) by taking private hospital services as an example.

(i) Input: _________________________________________________________________ Beds, Patients, Doctors, Nurses, Medical Assistances _________________________________________________________________ Surgery Equipment, Management/Administrative Capital/Investment _________________________________________________________________ _________________________________________________________________

(ii) Transformation: _________________________________________________________________ Operations, Surgery _________________________________________________________________ Consultation, Medication, Therapy _________________________________________________________________

(iii) Output: Recovery Patients, Good Health _________________________________________________________________ Good Emotion, Physically

5. Changloon Truck Wash cleaned 65 trucks in November 2012, consuming the following resources: Labour Water Machine Rental (a) What is the labour productivity per dollar? = 65/(520 x $13) = 65/$6,750 = 0.0096 trucks per labour $ (b) What is the multifactor productivity? = 65/(520 x $13) + (100 x $5) + (20 x $50) = 65/($8, 260) = 0.00787 trucks per $ 520 hours at $13 per hour 100 litres at $5 per litres 20 days at $50 per day

6. Changloon Pizza Enterprise produced 6,600 customised pizzas in November 2012. The labour productivity is known to have been 0.10 pizzas per labour-hour during that month. There are 45 laboured were employed.

(a) How many hours did the average labourer work in that month? = 6,600 pizzas/x labour hours = 0.10 = x = 66,000 labour hours, there 45 labourers, thus = 66, 000 labour hours/45 labourers = 14, 66.68 labour hours/labourer on average per month

(b) If productivity can be increased to 0.12 pizzas per hour, how many hours would the average labourer work that month? = 6, 600 pizzas/x labor hours = 0.12 = x = 55,000 labor hour So, = 55, 000 labor hours/300 laborers = 183.33 labor hours/laborer on average, per month

~~END OF CHAPTER ONE~~ 2

CHAPTER 2 PROCESS, TECHNOLOGY & CAPACITY

1. What is process strategy? A process strategy (or transformation) is an organizations approach to transforming resources into goods and services. The objective of a process strategy is to build a production process that meets customer requirements and products specifications within cost and other managerial constraints. 2. Match each of the product with the suitable process strategy: Product (a) Coca-Cola (b) Samsung Galaxy Note 10.1 (c) Wedding Invitation Cards (d) Proton Inspira (d) A4 Paper (e) Sofware/Apps (f) Whooper Burgers (g) Custom Homes (h) Modenas KRISS II (i) Hard-drive Western Digital (j) Cakes Product Focus Mass Customization Process Focus/Job Shop Repetitive Focus Product Focus Mass Customization Repetitive Focus Product Focus/Job Shop Repetitive Focus Mass Customization Product Focus Process Focus

3. A single MP4 (song) production cost is $5500 and the conversion process is $8 per song. The MP4 can be sold for $20. How many MP4 units must be sold to breakeven point? How much $ for the breakeven point? v = cf/p cv v = 7800/20 6 v = 557 units

v = 557 x $20 = $11,140 4. Based on question 5, the new process of recording becomes $7800. However the conversion cost is cheaper by $2. What is the new breakeven point and breakeven in $? v = cf/p cv v = 458 x $20 = $9160 5. Central computer provides a lot of instructions to each workstation and to the material-handling equipment this system is known as an automated work cell or __________________________________. 6. Define what is a capacity? Capacity something that totally throughput or number of units a facility (e.g. cinema, stadium, mosque, classroom, car, airplane, etc.) can hold, receive, store, or produce in a period of time. E.g. Stadium Shah Alam can hold 100,000 audiences. v = 5500/20 8 v = 458 units

Problems: (i) Bakery The company is closed a day in a week and its operate in 24-hour basis. The employees work in three shifts and each shift can produces about 200 cakes per hour. (ii) Factory Changloon Tires Sdn. Bhd is a small factory that produces motorcycle tires. The factory operates five days a week with two 12-hour shift. In every shift, the workers can produce about 1,500 units. (iii) Classroom (BJMP2033): Mr. Zane is a lecturer who works two days in a week. He teaches only two classes and each class takes about three hours with approximately 160 students. 7. Based on above statement, calculate the design capacity for the cakes, tires and students. (i) The design capacity for bakery is: = (6-day business) x (3 shifts) x (8 hours) x (200 cakes per hour) = 28,800 cakes

(ii) The design capacity for factory is: = (5-day business) x (2 shift) x (12 hours) x (1,500 tires) = 180, 000 tires

(iii) The design capacity for classroom is: = (2-day teaching) x (2 CLASSES) x (3 hours) x (160 students) = 1,920 students

8. Read the statement and answer all the questions: Ahmad Bilis Sdn. Bhd is a factory produces Sambal Belacan Dari Sarawak for Mydin and Giant in East Malaysia. The company only closed it operations in Friday and approximately produces about 185,000 packets. The effective capacity is 240,500 packets. The production line operates with 8 hours in a shift and there were two shifts per day. The line was designed to process the Sambal Belacan with seafood fillings alga, squids, prawns, and blue anchovy at a rate of 2,100 UNITS per half an hour. (i) Calculate the design capacity for the company? = (6-day workings) X (2 shifts) X (8-hour) X (2,100 bottles x 2 per hour) = 403,200 bottles (ii) What is the utilization for the company? = Actual Output/Design Capacity = 185,000/403,200 = 45.88% (iii) What is the efficiency for the company? = Actual Output/Effective Capacity = 185,000/240,500 = 76.92%

~~END OF CHAPTER TWO~~

4

CHAPTER 3 QUALITY MANAGEMENT & SPC 1. What is Statistical Process Control? SPC is a process that uses to monitor the standards by taking measurements and corrective action as a product or service is being produced. It is also use to measure the performance of a process. 2. What is an assignable variation? Assignable variation is related to some causes or factors that occur in the production process which can be traced to its specific causes. For example, the wedges serve for the customers become oily and grease - maybe because of the wedges are not cook proper standard cold oils. 3. Briefly explain THREE (3) implications of quality. (i) Organization Reputation (ii) Product Liability (iii) Global Consequence 4. Illustrate and briefly explain the PDCA cycle. (i) Plan - identify the problem and make a plan (ii) Do - test the plan (iii) Check is the plan is working? (iv) Act implement the plan and make documentation

5. Briefly illustrate THREE (3) tools of TQM. (i) Check Sheets (ii) Scatter Diagram (iii) Cause and Effect Diagrams (iv) Pareto Charts (v) Histogram (vi) Flowcharts (vii) SPC 6. List THREE (3) concepts to Taguchis approach. (i) Quality Robustness (ii) Quality Loss Function (iii) Target-Oriented Quality

7. What is Poke-Yoke? A technique or a tool or a device that ensures production of good units in every time when needed. Example. Scoop for Ice-Cream Baskin Robins. 1 scoop for RM3.90 and three scoops for RM10.00. Advantages: (i) Provide an accurate value (gram, kilogram or others measurements) for an exchange for money and goods. (ii) Provide a good value of quality for products tastes, volumes and others.

8. Dapur Gas Reloaded Enterprise is a supplier that provides a delivery service of kitchens gas. They are now having an reflection the lateness of pick-up, service the gas, and arrivals of worker. The company wants to construct an X-chart and an R-chart to monitor the time of those activities is in control. Construct the charts with 3 control limits; plot the sample range values and comments on process control. Sample k 1 2 3 4 5 6 7 1 9.06 8.52 9.35 9.17 9.21 9.14 9.15 2 9.13 8.61 8.95 9.21 8.87 8.99 9.01 TOTAL R

9.10 8.57 9.15 9.19 9.04 9.07 9.08

63.19 X = x/n = 63.19/7 = 9.03

0.07 0.09 0.40 0.04 0.34 0.15 0.14 1.23

R = the highest point lowest point. R = Total R/k R = 1.23/7 = 0.18 To find A2 = 1.88 from Table above, n = 2 (the bar)

*THE TABLE IS IN PAGE 13*

UCL = X + A2R = 9.03 + (1.88)(0.18) = 9.37

LCL = X A2R = 9.03 (1.88)(0.18) = 8.69

The Range (R-Chart)

Sample k 1 2 3 4 5 6 7

1 9.06 8.52 9.35 9.17 9.21 9.14 9.15

2 9.13 8.61 8.95 9.21 8.87 8.99 9.01 TOTAL

9.10 8.57 9.15 9.19 9.04 9.07 9.08

63.19

0.07 0.09 0.40 0.04 0.34 0.15 0.14 1.23

R = total of R/k R = 1.23/7 R = 0.18

UCL = D4R = (3.27) (0.18) = 0.589

from the Table, n = 2, therefore, D3 = 0 and D4 = 3.27

*THE TABLE IS IN PAGE 13*

LCL = D3R = (0) (0.18) =0

The R- chart

~~END OF CHAPTER THREE~~

CHAPTER 4 SUPPLY CHAINS MANAGEMENT 1. Ubi & Kayu Plantation has total end-of-year assets of $4.3 million. First six months (1st term) of the year inventory was $235,000 and second six months of the year was increased 20% from the first term. The annual cost of goods sold was $5.5 million. The farm only closed for four weeks a year. Calculate the followings: Solutions: Total Inventory = $235 000 + $235 000 x 1.2 = $517 000 Total assets = $4.3 million COGS = $5.5 million Business Days = 48 x 7.019 = 337 days

a) TURNS = COGS/AAVI = 5, 500, 000/517 000 = 10.64 times b) Day of Supply = AAVI (COGS)/ (Business Days) = 517 000 5, 500, 000/ (337 days) = 31.68 days c) Week of Supply = AAVI (COGS)/(Weeks) = 517 000 5, 500, 000/(48) = 4.512 weeks d) PIII - Percentage Invested In Inventory = 517 000/4 300 000 x 100% = 12.02% The firm is kept its money in term of goods investment (inventory) which is about 12%.

2. NoLa Bakery Sdn. Bhd is a factory produces Avengers Sandwich for Tesco in Kedah and Pulau Pinang. A week, the factory produces about 258,000 packets. The effective capacity is 300,500 packets. The production line operates seven days a week, with quarterly shifts per day. The line was designed to process the sandwich with chicken fillets, tomatoes, BBQ cheese sauces, grill beef, salads, and some mixed mayonnaise, tartar sauces and cucumbers at a rate of 2,500 per hour. (a) Calculate the design capacity for the company? = (7 days) x (4 shifts) x (6 hours) x (2,500 per hour) = 420,000 packets (b) What is the utilization for the company? = Actual Output/Design Capacity = 258, 000/420,000 = 61.14% (c) What is the efficiency for the company? = Actual Output/Effective Capacity = 258, 000/300,500 = 85.86% 3. Zane & Sega Enterprise decided to open a burger kiosk in Tesco Arau Jaya, Perlis. They have invested $8,000 which acted as fixed costs. Other costs involve are material and ingredients for $1.20, a couple of workers cost about $1.00 each and processing costs around $0.90. If they managed to sell approximately 6,923 units of Wedding Burgers, how much the selling price for the burger? Solutions: Breakeven Point = F/Sp Vc 6923 = $8000/(Sp - $4.10) 6923(Sp - $4.10) = $8000 6923Sp $28,384.30 = $8000 6923Sp = $36,384.3 Sp = $5.26 Based on answer in above, how much money in total for Zane & Sega Enterprise to touch the break-even point? = 6923 units x $5.26 = $36,414.98 4. What means by Keiretsu networks? A Japanese word that describes suppliers who become part of company alliance. Members of the keiretsu are assured long-term relationships and are therefore expected to collaborate as partners, providing technical expertise and stable quality production to the manufacturer. ~~END OF CHAPTER FOUR~~

CHAPTER 5 INVENTORY MANAGEMENT

1. Slim Sokmo Sdn. Bhd is a small enterprise that produces Collagen Green-Jelly bottles for Macau-HongKong markets. They receive orders about 16000 units in the first term and 40% more in the second term. The enterprise operates six days a week. Regularly they produce the products at daily rate of 2.5% from yearly demand. The production run is RM350 quarterly and they have a holding cost about RM4 which be paid twice a year.

(i) How much the optimal size order quantity?

First Term = 16000

Second Term =22,400

D = 38,400

Daily rate (p) = 2.5% x 38,400 = 960 units Cc = RM8 Co = RM350 x 4 = RM1400 Operating Days = 6 x 52 weeks = 312 days

d = 38400/312 = 123.08 units per day

Q = 2 (1400) (38,400) 8(1 123.08/960)

Q = 107,520,000/6.974333333

Q = 3,926.39 units

(ii) What will be the annual inventory costs?

TCmin = CoD/Q + CcQ/2 (1 d/p) TCmin = (1400)(38,400)/3,926.39 + 8(3,926.39)/2 (1 123.08/960) TCmin = 13,691.96641 + 15,705.56 (0.871791666) TCmin = 13161.62589 + 13691.97632 TCmin = RM 27,383.94

10

(iii) The optimal number of production runs (orders) per year?

D/Q = 38,400/3,914.41

D/Q = 9.81 production runs a year (production is running when orders are being placed)

(iv) The optimum cycle time?

Working days = 6 days x 52 weeks = 312 days

Optimal Cycle Time = Working days D/Q

Optimal Cycle Time

= 312/(38,400/3,926.39) = 312/9.779976009 = 31.90 days

(v) The maximum inventory level?

Inventory Max = Q (1 d/p)

= 3,926.39 (1 123.08/960) = 3,926.39 (0.871791666) = 3,422.99 units

11

2. Semporna Jelly Sdn. Bhd is popular manufacturer of sea-grass based product in Sabah. Last year, they have exported the Sea-Grass Emas lotion for South American markets. They have received the orders; 26000 units in 1st quarter, 32000 units in 2nd quarter, increased by 40% in 3rd quarter (from 1st quarter) and declined 20% in 4th quarter (from 3rd quarter). The manufacturer operates 49 weeks in a year. The ordering cost was RM350 quarterly and they have a transportation cost about RM40 which be paid twice a year.

Workings: 1st = 26000, 2nd = 32000, 3rd = 1.4 x 26000 = 36400, 4th = 0.8 x 36400 = 29100, D = 123,520 Cc = RM50 Co = RM350 x 4 = RM1400 Operating Days = 49 weeks x 7.019 = 344 days

(i) How much the optimal size order quantity? Q = 2 (1400) (123520) 50 Q = 103,040,000/50 Q = 1435.55 units

(ii) What will be the annual inventory costs? TCmin = CoD/Q + CcQ/2 TCmin = (1400)(123,520)/ 1435.55 + (50)(1435.55)/2 TCmin = 120,461.1473 + 35,888.75 TCmin = RM 156,349.897

(iii) Number of orders received per year? D/Q = 123,520/1435.55 D/Q = 86.04 times

(iv) Order cycle time per year? Working days = 49 weeks x 7.019 = 344 days Optimal Cycle Time = Working days D/Q

Optimal Cycle Time

= 344/86.04 = 3.99 days

12

(v) Given the lead time is 14 days, determine the reorder point? R = dL R = (123,520/344) x (14 days) R = 5,026.98 units TABLE: FACTORS FOR DETERMINING CONTROL LIMITS FOR X AND R CHARTS

~~END OF CHAPTER FIVE~~

13

CHAPTER 6 AGGREGATE PLANNING

1. Complete the tables (a) and (b) based on given information respectively: March 1500 Apr 1200 May 1000 10 200 June 900 July 800 0 $30 Aug 1500 OT Prod SubK Prod Sept 2000 $40 $50 Oct 2500 Hired Fired Nov 8500 Dec 7000 $500 $800 Jan 4000 BkO Holding Feb 3000 $60 $2

Beg. Wkrs Unit/Wkr

Beg. Inv Reg Prod

(a) Produce to meet demand using hiring/firing with no OT and S/k Mth = Month Inv = Inventory Mth Jan Feb Mac Apr May June July Aug Sep Oct Nov Dec Total Reg = Regular Production OT = Overtime S/k = Subcontract BkO = Backorders Wkr = Workers H = Hired F = Fired Reg 4000 3000 1500 1200 1000 1000 800 1500 2000 2500 8600 7000 33900 OT S/k Inv 0 0 0 0 0 0 0 0 0 0 0 0 0 BkO Wkr 20 15 8 6 5 5 4 8 10 13 43 35 49 4 2 3 30 8 24 1 H 10 5 7 2 1 F

Demand 4000 3000 1500 1200 1000 900 800 1500 2000 2500 8600 7000 33900

Cost: 33900 x RM30 + 49 x RM500 + 24 x RM800 = 103200 + 24500 + 19200 = RM 1060700

14

March 1500

Apr 1200

May 1000 10 200

June 900

July 800 0 $30

Aug 1500 OT Prod SubK Prod

Sept 2000 $40 $50

Oct 2500 Hired Fired

Nov 8500

Dec 7000 $500 $800

Jan 4000 BkO Holding

Feb 3000 $60 $2

Beg. Wkrs Unit/Wkr

Beg. Inv Reg Prod

(b) Constant workforce of 8 workers (using S/k, inventory, OT which same to Reg) Mth = Month Inv = Inventory Mth Jan Feb Mac Apr May June July Aug Sep Oct Nov Dec Total Reg = Regular Production OT = Overtime S/k = Subcontract BkO = Backorders Wkr = Workers H = Hired F = Fired Reg 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 19200 1600 1600 6400 3700 3800 8300 OT 1600 1600 S/k 800 Inv 0 200 300 700 1300 2000 2800 2900 2500 1600 0 0 14300 BkO Wkr 8 8 8 8 8 8 8 8 8 8 8 8 96 2 H F 2

Demand 4000 3000 1500 1200 1000 900 800 1500 2000 2500 8500 7000 33900

Cost: 19200 x RM30 + 6400 x RM40 + 8300 x RM50 + 14300 x RM2 + 2 X RM800 = RM1, 277, 200

Chase demand Which strategy can save some money? ____________________________

15

2. Complete the questions (a) and (b) based on information provided; (a) Super-Size Pizza Sdn. Bhd. prepares a lot of pizzas based on international nations menu. One of its famous is Viking Salmons Pizza (shown in the picture). Based on information given, you are required to come out with one effective planning based on transportation method for its 4month future operations. Given the demand units for February and March are 900 and 300 respectively.

Month April May June July

Demand 50% more from a total of February and March Increased 300 units from April Decreased 400 units from May 200 units less than a total of February and March

Pengeluaran biasa Regular production Pengeluaran lebih masa Overtime production Subkontrak maksimum Maximum subcontracting Kos pengeluaran biasa Regular production costs Kos pengeluaran lebih masa Overtime production costs

Kos subkontrak Subcontracting costs

Kos pegangan inventori Inventory holding costs Inventory awalan Beginning inventory

1000 unit/bulan 1000 units/month 400 unit/bulan 400 units/month dari pengeluaran biasa of regular production $15 unit/bulan $15 unit/month Lebih 60% dari kos pengeluaran biasa 60% more than regular production costs Lebih 75% dari kos pengeluaran lebih biasa 75% more than overtime production costs $5 seunit sesuatu masa $5 per unit per period 100 unit/bulan 100 units/month

16

(i) Complete the Transportation Tableau.

Tempoh Pengeluaran Period of Production Tempoh Penggunaan Period of Use Kapasiti Tidak Guna Unused Capacity Kapasiti Capacity

April

Mei/May

Jun/June

Julai/July

Inv. Awalan Beg. Inventory Masa Biasa Regular Apr Lebih Masa Overtime Sub Kontrak Subcontract Masa Biasa Regular May Lebih Masa Overtime Sub Kontrak Subcontract Masa Biasa Regular June Lebih Masa Overtime Sub Kontrak Subcontract Masa Biasa Regular Lebih Masa Overtime July Sub Kontrak Subcontract Permintaan Demand

0
100 1000 15 24 42 300 200

5
20

1 0
25

15

100

30

1000 400

400

29 47

34 52

39 57

500

15

20

25

1000

1000 29 400 24 47 500 42 15 1000 29 400 300 42 1000 15 1000 24 47 400 20 52 34 400

500

1000

200

500

25

400

400

42

500

500

1800

2100

1700

1000

1100

7700

17

(ii) Develop an optimal production plan.

Masa Period

Permintaan Demand 1800

PELAN PENGELUARAN PRODUCTION PLAN Pengeluaran Biasa Lebih Masa Subkontrak Regular Overtime Subcontract Production 1000 400 500 1000 1000 1000 4000 400 400 1200 500 300 1300

Inventori Akhir Ending Inventory 100+1000+400+5001800 = 200 200+1000+400+5002100 = 0 0 +1000+400 +3001700 = 0 0 +1000-1000=0 200

April 2100 Mei/May 1700 Jun/June 1000 Julai/July JUMLAH TOTAL 6600

Total production costs: 4000 x $15 + 1200 x $24 + 1300 x $42 + 200 x $5 = $144, 400 3. What is chase demand strategy? Chase demand strategy is happening when company production rates or work force levels are adjusted to match demand requirements over the planning horizon. For example, 12 months. 4. How does aggregate planning in service differ from aggregate planning in manufacturing? Aggregate planning in services differs from aggregate planning in manufacturing in the following ways: Most services are perishable and cannot be inventoried. It is virtually impossible to produce the service early in anticipation of higher demand at a later time. Demand for services is often difficult to predict. Demand variations may be more severe and more frequent. Services are more customized than manufactured goods and can be offered in many different forms. This variability makes it difficult to allocate capacity. Units of capacity may also be hard to define. Because most services cannot be transported, service capacity must be available at the appropriate place as well as at the appropriate time. Service capacity is generally altered by changes in labor, rather than by equipment or space, and labor is a highly flexible resource. 5. What is level strategy? Level strategy or level scheduling is an aggregate plan in which production is uniform from period to period. Two reasons why this strategy is applied. (i) let the finished-goods inventory vary to buffer the difference between demand and production, and (ii) find the alternative work for employees. 6. Organization usually has three demand options, list down three of them. (i) Influencing Demand (ii) Back ordering during high-demand periods. (iii) Counter seasonal product and service mixing.
18

CHAPTER 7 MATERIAL RESOURCE PLANNING

1. Kitty & Hello Sdn. Bhd. produces 2 products for European markets; A & B which made from components C, D, & E. The ordering cost is $78 and the holding cost is $3. Given the following product structures, master scheduling requirements, and inventory information, determine when orders should be released for A, B, C, D & E and the size of those orders (planned order report). Item A B C D E On Hand 50 30 150 60 70 Scheduled Receipts 20, PERIOD 4 50, PERIOD 5 50, PERIOD 1 50, PERIOD 2 100, PERIOD 4 Lot Size L4L L4L MIN 150 MULT 100 MULT 150 MPS 300, PERIOD 7 40, PERIOD 4, 550, PERIOD 8 -

Item: A LLC: 0 Lot Size: L4L LT: 3 1

Gross Requirements Schedule Receipts Projected On Hand 50 Net Requirements Planned Order Receipts Planned Order Releases

Period 2 3 4 20 50 50 50 70 70 70 0 230 230 230 0 5 6 7 300 8

Costs: [(50 + 50 + 50 + 70 + 70 + 70)] X $ 3) + (1 X 78) = $

19

Item: B Lot Size:L4L

LLC: 0 LT: 2 1 2 3 4 40

Period 5 50 30 30 30 10 60 60 60 0 490 490 490 6 7 8 550

Gross Requirements Schedule Receipts Projected On Hand 30 Net Requirements Planned Order Receipts Planned Order Releases

Cost: [(30 + 30 + 30 + 10 + 60 + 60 + 60) X $3] + (1 X $78) =

Item: C LLC: 1 Lot Size: MIN150 LT:3 1

Gross Requirements Schedule Receipts Projected On Hand 150 Net Requirements Planned Order Receipts Planned Order Releases

Period 2 3 4 690 5 6 7 8

50 200 200 200 0 490 0 0 0 0

490

Cost:

Item: D LLC: 1 Lot Size:MULT100LT:2 1

Gross Requirements Schedule Receipts Projected On Hand 60 Net Requirements Planned Order Receipts Planned Order Releases

Period 2 50 60 110 110 50 350 400 400 1500 50 80 1420 1500 80 80 3 4 460 5 6 1470 7 8

Cost: [(60 + 110 + 110 + 50 + 50 + 80 + 80 + 80) X $3)] + (2 X $78) =

20

Item: E LLC: 1 Lot Size:MULT150LT:3 1

Gross Requirements Schedule Receipts Projected On Hand 70 Net Requirements Planned Order Receipts Planned Order Releases

Period 2 3 4 100 70 70 70 170 170 90 810 900 900 90 90 5 6 980 7 8

Cost: [(70 + 70 + 70 + 70 + 170 + 170 + 90 + 90 + 90)] X $3) + (1 X $78) =

Planned Order Report ( a summary of planned order releases from above tables) Item 1
A

Period 2 3 4 5 6 7 8

B C
D

E TOTAL

21

2. Given the following information, calculate each cost: c. Beg Inventory =

Co Cc d

0 $200 $2.00 30.00

EOQ POQ

Exact 77.46 2.58

Rounded 78 3

d = daily demand = 50 + 50 + 10 + 10/4 = 30 units Q = 2. Co. D/Cc Q = 2. $200 . 30/ $2 Q = 77.46 (78) units POQ = Q/d = (77.46)/(30) = 2.582 or 3
Period 1 50 0 50 50 50

Item: A LLC: 0 Lot Size: L4L 1 LT: 0 Gross Requirements Scheduled Receipts Projected on Hand 0 Net Requirements Planned Order Receipts Planned Order Releases

2 50 0 50 50 50

3 10 0 10 10 10

4 10 0 10 10 10

Cost of L4L $800.00

Item: A LLC: 0 Lot Size: EOQ 78 LT: 0 Gross Requirements Scheduled Receipts 0 Projected on Hand Net Requirements Planned Order Receipts Planned Order Releases Period 1 50 28 50 78 78

2 50 56 22 78 78

3 10 46

4 10 36

Cost of EOQ $732.00

Item: A LLC: 0 Lot Size: POQ 3 LT: 0 Gross Requirements Scheduled Receipts 0 Projected on Hand Net Requirements Planned Order Receipts Planned Order Releases Period 1 50 60 50 110 110

2 50 10

3 10 0

4 10 0 10 10 10

Cost of POQ $540.00 & Choose POQ

~~END OF CHAPTER SEVEN~~
22

CHAPTER 8 LEAN MANUFACTURING 1. Define the Just-In-Time and what is main objective? Just-in-time (JIT) is a production strategy that strives to improve a business' return on investment by reducing inprocess inventory and associated carrying costs. 2. What is the JITs philosophy? Philosophy of JIT is simple: inventory is waste. 3. List down FIVE (5) types of waste (according to JITs philosophy) a) b) c) d) e) f) g) Waste from overproduction - forecasting Waste of waiting time scheduling, Gantt Chart Transportation waste route analysis, GPS Processing waste - automation Inventory waste recycle, reuse, Waste of motion space arrangement Waste from product defects scrap, resell

4. What is Kanban? Kanban as literally means the signboard or billboard. It is a scheduling system that tells the company what to produce, when to produce it, and how much to produce. 5. Naira Lopez is a staff at White Coffee Ipoh Sdn. Bhd. Her daily work is related to filling, capping and labelling the packets of a few of white coffee flavours. Usually she can manage to process about 1550 packets per hour. If one Kanban can holds 250 packets, it takes about a quarter minutes to one hour before receiving a kanbans from previous workstation. As pre-caution procedure, the company uses a safety stock factor of 15%, and how many kanbans are needed for the packaging process? Solution: d = 1550 packets per hour L = 0.75 hour (45/60 minutes) = 0.75 hour S = 0.15 (1550 x 0.75hour) = 174.375 C = 250 packets

Then, N = dL + S/C N = 1550 (0.75) + 174.375 250 N = 5.35 kanbans (or 6 kanbans)

23

6. Pak Wan Satay is one of famous satay stalls at Pekan Janda Baik. Usually Pak Wan takes half an hour to grille about 1500 sticks. Then the satays are stored in a warm-up container before he himself or his son drives it to the stall which takes about 15 minutes. At his stall, he takes about 5 minutes to upload the satay into the grille place. As a pre-caution, Pak Wan uses about 20% as a safety factor. During the driving, there are about seven warm-up containers rotate between Pak Rahim and his son, Ahmad. What is the demand for the pizzas? Kitchen Pizza Solution: d=? L = 0.83 hour (30 minutes + 15 minutes + 5 MINUTES = 50 minutes) 50/60 = 0.83 S = 0.20(d x 0.83hour) C = 1500 N=7 Then, N = dL + S C 7 = d(0.83) + 0.2(d x 0.83) 1500 7 = 0.83d + 0.166d 1500 10,500 = 0.996d d = 10542.17 sticks

Recalculate: Solution: d = 10542.17 sticks L = 50 minutes = 0.83 hour S = 0.20(10542.17 x 0.83hour) = ____________ C = 1500 Then, N = dL + S C N = 10542.17 (0.83) + ----------------------1500 N = 7 Kanbans

~~END OF CHAPTER EIGHT~~

24

CHAPTER 9 PROJECT MANAGEMENT 1. What is project crashing? (a) The process by which the project is being shortens the duration of a project in the cheapest manner. (b) Crashing is also shortening activity time in a network to reduce time on the critical path so total completion time is reduced. 2. Determine the critical path and completion days for the following AON:

(a) Critical Path: A-C-F-H (b) Completion Days: 21 days

3. Determine the critical paths and completion hours for the following AON (in the table provided):

a) b) c) d) e)

Critical Path A-C-E-G B-D-F-G A-C-D-F-G B-E-G

Hours 19.5 24.9 28.7 (CP) 15.7

4. Gantt Chart is a tool that can help project manager to make sure that: (a) Activities are planned, (b) Order of performance is documented, (c) Activity time estimates are recorded, and (d) Overall project time is developed

25

5. Construct an AON network for these activities: Activity A B C D The answer: Predecessor(s) A A Activity E F G H Predecessor(s) B B C, E D, F

6. Based on above (Question 5), determine the ES, EF, LS, LF and slack for each activity. Find also the total project completion time and the CP. Activity A B C D Week(s) 6 7 3 2 Activity E F G H Week(s) 4 6 10 7

The answers:
Activity A B C D E F G H Time 6 7 3 2 4 6 10 7 ES 0 0 6 6 7 7 11 13 EF 6 7 9 8 11 13 21 20 LS 2 0 8 12 7 8 11 14 LF 8 7 11 14 11 14 21 21 Slack 2 0 2 6 0 1 0 1 Critical No Yes No No Yes No Yes No

Total project completion time = 21 weeks The CP = B-E-G

26

7. The activities necessary for the completion of this project are listed in the following table: Activity A B C D E F G Normal Time (weeks) 4 2 3 8 6 3 4 Crash Time (weeks) 3 1 3 4 3 2 2 Normal Cost $ 2,000 2,200 500 2,300 900 3,000 1,400 Crash Cost $ 2,600 2,800 500 2,600 1,200 4,200 2,000 Predecessor(s) A B C D, E

(a) What is the project completion date? = A-D-G = 4 + 8 + 4 = 16 WEEKS (b) What is the total cost required for completing this project on normal time? = A-D-G = $2,000 + $2,300 + $1,400 (c) If you wish to reduce the time required to complete this project by 1 week, which activity should be crashed, and how much will this increase the total cost?
Norm. Time Crash Time 1 1 0 4 3 1 2

Activity A B C D E F G

Crash $ Normal $ $600 600 0 300 300 1,200 600

$/time $600 600 75 100 1,200 300

(d) What is the maximum time can be crashed? How much would costs increase?

8. What would a project manager have to do to crash an activity? To crash an activity, the project manager would pay money to add resources; more employees, overtime, new equipment and other things. 9. What are the three phases involved in the management of a large project? The three phases involved in managing a large project are; Planning Scheduling Controlling

~~END OF CHAPTER 9~~

27