Chapters 5, 6 and 8
A. determine the evaluation criteria B. identify important factors C. develop location alternatives D. evaluate alternatives and make a selection E. request input regarding alternatives - - - - - - - D. evaluate alternatives and make a selection
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A. expand an existing facility B. add a new location C. relocate from one location to another D. do nothing E. All are possible options. - - - - - - E. All are possible options.
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A. fair employment practices B. idle time analysis C. line balancing D. cycle time optimization E. none of the above 4. The advantages of auto - - - - - - C. line balancing
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A. margin protect B. line balance C. capacity cushion D. timing bubble E. none of the above - - - - - C. capacity cushion
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A. output equals capacity B. total cost equals total revenue C. total cost equals profit D. variable cost equals fixed cost E. variable cost equals total revenue - - - - - B. total cost equals total revenue
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A. process B. product C. fixed-position D. mass E. Unit - - - - - - - A. process
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A. substantial investment of both money and effort B. long-term commitment C. significant impact on short-term efficiency D. usually well-received by operative personnel E. all of the above - - - - - - D. usually well-received by operative personnel
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A. total costs are minimum B. average unit costs are minimum C. marginal costs are minimum D. rate of output is maximum E. total revenue is maximum- - - - - - B. average unit costs are minimum
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At the break-even point:
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Capacity in excess of expected demand that is intended to offset uncertainty is a:
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Design Capacity = 50 trucks per day Effective Capacity = 40 trucks per day Actual Output = 36 trucks per day What is the efficiency? Utilization?
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In which type of operations are you likely to see, at most, only minor variations in the product or service being produced using the same process and the same equipment?
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In which type of processing system would gasoline be produced from crude oil?
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Production units have an optimal rate of output where:
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The advantages of automation include: (I) Reduced output variability. (II) Reduced variable costs. (III) Machines don't strike or file grievances. (IV) Machines are always less expensive than human labor.
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The method for evaluating location alternatives which uses their total cost curves is:
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The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements is called:
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The type of layout which features departments or other functional groupings in which similar activities are performed is:
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When a location evaluation includes both quantitative and qualitative inputs, a technique that can be used is ___________.
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Which of the following is a factor that affects service capacity planning?
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Which of the following is not a characteristic of layout decisions in system design?
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Which of the following is not a location option that management can consider in location planning?
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Which of the following is not an information requirement for the design of a process layout?
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Which of the following is the last step in the procedure for making location decisions?
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Which one of the following is not considered an important factor in service layout design?
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Which type of processing system tends to produce the most product variety?
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limits the rate of output possible B. affects operating costs C. is a major determinant of initial costs D. is a long-term commitment of resources E. all of the above - - - - - E
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A. cost-volume analysis B. transportation model analysis C. factor rating analysis D. linear regression analysis E. MODI analysis - - - - - - - A. cost-volume analysis
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. Utilization is defined as the ratio of:
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A location analysis has been narrowed down to two locations, Akron and Boston. The main factors in the decision will be the supply of raw materials, which has a weight of .50, transportation cost, which has a weight of .40, and labor cost, which has a weight of .10. The scores for raw materials, transportation, and labor are for Akron 60, 80, and 70, respectively- for Boston 70, 50, and 90, respectively. Given this information and a minimum acceptable composite score of 75, we can say that the manager should:
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A. Assembly B. Job-Shop C. Batch D. Continuous E. Project - - - - - - B. Job-Shop
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A. I and IV B. II and III C. I, II, and III D. I and III E. II and IV - - - - - - C. I, II, and III
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A. Job Shop B. Batch C. Assembly D. Continuous E. Project - - - - - - D. Continuous
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A. Linear programming B. Consumer surveys C. Factor rating D. Transportation models E. Center of gravity methods - - - - - - - C. Factor rating
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A. The need to be near customers B. The inability to store services C. The degree of volatility of demand D. The customer's willingness to wait E. All of the above - - - - - - E. All of the above
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A. a list of departments or work centers B. a projection of work flows between the work centers C. the distance between locations D. the cost per unit of distance to move loads E. a list of product cycle times for every product manufactured - - - - - - E. a list of product cycle times for every product manufactured
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A. a project B. a job shop C. repetitive production D. batch processing E. continuous production - - - - - - C. repetitive production
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A. actual output to effective capacity B. actual output to design capacity C. design capacity to effective capacity D. effective capacity to actual output E. design capacity to actual output - - - - - B. actual output to design capacity
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A. be indifferent between these locations B. choose Akron C. choose Boston D. reject both locations E. build a plant in both cities - - - - - - D
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A. cost minimization and product flow B. frequency of orders C. customer attitude and image D. all are important E. none are important - - - - - - A. cost minimization and product flow
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Product layout Process layout Service layout
<p>What are the 4 basic layout types?</p>
Variety How much? Equipment flexibility To what degree? Volume Expected output?
<p>What drives Process Selection?</p>
Technique for evaluating location choices in economic terms Steps: Determine the fixed and variable costs for each alternative Plot the total-cost lines for all alternatives on the same graph Determine the location that will have the lowest total cost (or highest profit) for the expected level of output
<p>What is, and when is it used, Cost-Profit-Volume Analysis? What are the assumptions?</p>
Why are location decisions strategically important?
Are closely tied to an organization's strategies Low-cost Convenience to attract market share - Effect capacity and flexibility Represent a long-term commitment of resources Effect investment requirements, operating costs, revenues, and operations Impact competitive advantage Importance to supply chains
What are the 4 options in location planning?
Expand an existing facility Add new locations while retaining existing facilities Shut down one location and move to another Do nothing
The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Goal: Obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and labor Why is line balancing important? It allows us to use labor and equipment more efficiently. To avoid fairness issues that arise when one workstation must work harder than another.
How are Process Layouts designed?
Cost-volume analysis is a viable tool for comparing capacity alternatives if certain assumptions are satisfied One product is involved Everything produced can be sold The variable cost per unit is the same regardless of volume Fixed costs do not change with volume changes, or they are step changes The revenue per unit is the same regardless of volume Revenue per unit exceeds variable cost per unit
How do companies do their own SWOT analysis? Use a weighting system to avoid the common problem of bias What does calculating Processing Requirements tell you? The number of machines needed, assuming the same machine type A basic question in capacity planning is: all of the above A reason for the importance of capacity decisions is that capacity:
What are the primary site location considerations?
Land Transportation Zoning Other restrictions
What the primary factors in identifying a country for locations? Government, cultural differences, customer preferences for local buying, labor costs (wages, training, language barrier), availability of resources, financial considerations, competition and safety. What are the factors of identifying a region?
Location of raw materials Necessity Perishability Transportation costs Location of markets - As part of a profit-oriented company's competitive strategy So not-for-profits can meet the needs of their service users Distribution costs and perishability - Labor factors Cost of labor Availability of suitably skilled workers Wage rates in the area Labor productivity Attitudes toward work Whether unions pose a serious potential problem - Other factors Climate and taxes may play an important role in location decisions
What are the risks of global locations? (not the same as disadvantages)
Political instability and unrest Terrorism Economic instability Legal regulation Ethical considerations Cultural differences
What are the 4 Multiple Plant Manufacturing Strategies?
Product plant strategy Entire products or product lines are produced in separate plants, and each plant usually supplies the entire domestic market - Market area plant strategy Plants are designated to serve a particular geographic segment of the market Plants produce most, if not all, of a company's products - Process plant strategy Different plants focus on different aspects of a process automobile manufacturers â€
What makes a community attractive to a business?
Quality of life Services Attitudes Taxes Environmental regulations Utilities Development support
What are the steps of the location decision?
Steps: Decide on the criteria to use for evaluating location alternatives Identify important factors, such as location of markets or raw materials Develop location alternatives Identify the country or countries for location Identify the general region for location Identify a small number of community alternatives Identify the site alternatives among the community alternatives Evaluate the alternatives and make a decision
What are some supply chain considerations in location choice?
Supply chain management must address supply chain configuration: Number and location of suppliers, production facilities, warehouses and distribution centers Centralized vs. decentralized distribution - The importance of such decisions is underscored by their reflection of the basic strategy for accessing customer markets
The volume of output at which total cost and total revenue are equal Profit (P) = TR â€
TC = R x Q â€
What are the disadvantages of global locations?
Transportation costs Security costs Unskilled labor Import restrictions Criticism for locating out-of-country
evolved from programmable automation. It uses equipment that is more customized than that of programmable automation. A key difference between the two is that flexible automation requires significantly less changeover time. FMS (Flexible Manufacturing System) A group of machines designed to handle intermittent processing requirements and produce a variety of similar products CIM (Computer Integrated Manufacturing) A system for linking a broad range of manufacturing activities through an integrated computer system OVERALL goal is linking to rapidly respond to customer orders, product changes, and reduce indirect labor costs
What are the fundamental blocks of building a Flexible Manufacturing System (FMS)? What is FMS?
The need to be near customers Convenience The inability to store services Cannot store services for consumption later The degree of demand volatility Volume and timing of demand Time required to service individual customers
What Demand Management Strategies are used to bring supply and demand closer together?
Fixed Position layout Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed
What are the 2 Combination Layouts?
A system for linking a broad range of manufacturing activities through an integrated computer system Activities include Engineering design FMS Purchasing Order processing Production planning and control The overall goal of CIM is to link various parts of an organization to achieve rapid response to customer orders and/or product changes, to allow rapid production and to reduce indirect labor costs
What are the 3 basic layout types?
Design flexibility into systems Take stage of life cycle into account Take a “big-picture†approach to capacity changes Prepare to deal with capacity “chunks†Attempt to smooth capacity requirements Identify the optimal operating level Choose a strategy if expansion is involved
What are the 3 capacity strategies?
impact the ability of the organization to meet future demands affect operating costs are a major determinant of initial cost often involve long-term commitment of resources can affect competitiveness affect the ease of management have become more important and complex due to globalization need to be planned for in advance due to their consumption of financial and other resources
What are the 3 types of capacity? What are the differences among them?
engine plant, body stamping plant, etc. Coordination across the system becomes a significant issue - General-purpose plant strategy Plants are flexible and capable of handling a range of products
What are the 4 techniques for Evaluating Location Alternatives?
Refers to deciding on the way production of goods or services will be organized It has major implications for Capacity planning Layout of facilities Equipment Design of work systems
What are the 4 types of Processing? Give their descriptions as well.
Numerical Controlled machines are the blocks because they determine flexibility and capability - A group of machines designed to handle intermittent processing requirements and produce a variety of similar products Have some of the benefits of automation and some of the flexibility of individual, or stand-alone, machines Includes supervisory computer control, automatic material handling, and robots or other automated processing equipment
What are the applications of FMS?
FC
What are the assumptions of Cost-Volume analysis?
Long-term considerations relate to overall level of capacity requirements Require forecasting demand over a time horizon and converting those needs into capacity requirements Short-term considerations relate to probable variations in capacity requirements Less concerned with cycles and trends than with seasonal variations and other variations from average
What are the challenges related to Service Capacity Planning?
Estimate future capacity requirements Evaluate existing capacity and facilities- identify gaps Identify alternatives for meeting requirements Conduct financial analyses Assess key qualitative issues Select the best alternative for the long term Implement alternative chosen Monitor results
What are the requirements of Capacity Forecasting?
Extra capacity used to offset demand uncertainty Capacity cushion = 100% - Utilization Capacity cushion strategy Organizations that have greater demand uncertainty typically have greater capacity cushion Organizations that have standard products and services generally have greater capacity cushion
What are the steps in Capacity Planning?
E=90% U=72%
What assumptions and predictions is strategy based upon?
Pricing Promotions Discounts Other tactics to shift demand from peak periods into slow periods
What can be done to better manage capacity?
applications: Location decisions Compare location alternatives in terms of their impact cost on the total distribution costs for the system Involves working through a separate model for each location being considered - Production planning Capacity planning Transshipment - assumptions The items to be shipped are homogeneous Shipping cost per unit is the same regardless of the number of units shipped There is only one route or mode of transportation being used between each origin and destination - Information requirements A list of the origins and each one's capacity or supply quantity per period A list of the destinations and each one's demand per period The unit cost of shipping items from each origin to each destination
What drives Process Selection?
Method for locating a distribution center that minimizes distribution costs Treats distribution costs as a linear function of the distance and the quantity shipped The quantity to be shipped to each destination is assumed to be fixed The method includes the use of a map that shows the locations of destinations The map must be accurate and drawn to scale A coordinate system is overlaid on the map to determine relative locations - X= Sum of x values/number of destinations Y= Sum of y values/number of destinations
What if the shipments to each destination are not equal in the Center of Gravity Method?
Cost-volume analysis Focuses on the relationship between cost, revenue, and volume of output Fixed Costs (FC) tend to remain constant regardless of output volume Variable Costs (VC) vary directly with volume of output VC = Quantity(Q) x variable cost per unit (v) Total Cost TC = FC + VC Total Revenue (TR) TR = revenue per unit (R) x Q
What is Break-Even Point Analysis?
Metal-cutting machining Metal forming Assembly Joining-welding (arc , spot), glueing Surface treatment Inspection Testing
What is Computer Integrated Manufacturing (CIM)?
Leading Build capacity in anticipation of future demand increases Following Build capacity when demand exceeds current capacity Tracking Similar to the following strategy, but adds capacity in relatively small increments to keep pace with increasing demand
What is Cost-Volume analysis?
<p>Technique for evaluating location choices in economic terms Steps: Determine the fixed and variable costs for each alternative Plot the total-cost lines for all alternatives on the same graph Determine the location that will have the lowest total cost (or highest profit) for the expected level of output - Assumptions: Fixed costs are constant for the range of probable output Variable costs are linear for the range of probable output The required level of output can be closely estimated Only one product is involved </p>
What is Factor Rating? What is the procedure?
Process layouts Layouts that can handle varied processing requirements Used for Batch or Job Shop Advantages Can handle a variety of processing requirements Not particularly vulnerable to equipment failures General-purpose equipment is often less costly and easier and less costly to maintain It is possible to use individual incentive systems - Disadvantages In-process inventories can be high Routing and scheduling pose continual challenges Equipment utilization rates are low Material handling is slow and inefficient Reduced spans of supervision Special attention necessary for each product or customer Accounting, inventory control, and purchasing are more involved
What is Fixed Positions Layout?
Involves the use of high-cost, general-purpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation Computer-Aided Manufacturing (CAM) The use of computers in process control, ranging from robots to automated quality control Numerically Controlled (N/C) Machines Machines that perform operations by following mathematical processing instructions Robot A machine consisting of a mechanical arm, a power supply, and a controller
What is Flexible Automation?
Service layouts can be categorized as: product, process, or fixed position Service layout requirements are somewhat different due to such factors as: Degree of customer contact Degree of customization Common service layouts: Warehouse and storage layouts Retail layouts Office layouts - Two key factors: Customer contact Degree of customization Layouts: Warehouse and storage layouts Retail layouts Office layouts
What is Line Balancing?
Product layout Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow Used to repetitive processes Advantages High rate of output Low unit cost Labor specialization Low material handling cost per unit High utilization of labor and equipment Established routing and scheduling Routine accounting, purchasing, and inventory control - Disadvantages Creates dull, repetitive jobs Poorly skilled workers may not maintain equipment or quality of output Fairly inflexible to changes in volume or product or process design Highly susceptible to shutdowns Preventive maintenance, capacity for quick repair and spare-parts inventories are necessary expenses Individual incentive plans are impractical
What is Process Layout? Advantages and disadvantages?
<p>Variety How much? Equipment flexibility To what degree? Volume Expected output? DEMAND DRIVEN</p>
What is Process Selection and for what 4 areas does it have major implications?
<p>Product layouts Process layouts Fixed-Position layout Combination layouts</p>
What is Product Layout? Advantages and disadvantages?
Technological Innovation The discovery and development of new or improved products, services, or processes for producing or providing them Technology The application of scientific discoveries to the development and improvement of products and services and/or the processes that produce or provide them
What is Programmable Automation?
Cellular production Layout in which workstations are grouped into a cell that can process items that have similar processing requirements Groupings are determined by the operations needed to perform the work for a set of similar items, part families, that require similar processing The cells become, in effect, miniature versions of product layouts - Group technology The grouping into part families of items with similar design or manufacturing characteristics Design Characteristics: Size Shape Function Manufacturing or processing characteristics Type of operations required Sequence of operations required Requires a systematic analysis of parts to identify the part families
What is Service Layout?
Long-term demand patterns Technological change Competitor behavior
What is a capacity cushion?
Job Shop- Customized goods, wide variety of production, slow/high cost per unit, complex scheduling - Batch- Semi-standard goods, flexible, moderate cost per unit, moderate scheduling - Repetitive- Standard goods, low per unit cost, efficient, low flexibility - Continuous- Highly standardized, very efficient and very high volume, very rigid, costly to change
What is product/service profiling and what does it involve?
General approach to evaluating locations that includes quantitative and qualitative inputs Procedure: Determine which factors are relevant Assign a weight to each factor that indicates its relative importance compared with all other factors. Weights typically sum to 1.00 Decide on a common scale for all factors, and set a minimum acceptable score if necessary Score each location alternative Multiply the factor weight by the score for each factor, and sum the results for each location alternative Choose the alternative that has the highest composite score, unless it fails to meet the minimum acceptable score
What is the Center of Gravity Method? What is the equation for finding the X and Y coordinates?
Process selection involves Substantial investment in equipment Has a very specific influence on layout Product or service profiling Linking key product or service requirements to process capabilities Key dimensions relate to Range of products or services that will be processed Expected order sizes Pricing strategies Expected frequency of schedule changes Order-winning requirements
What is the difference between technology and technological innovation?
Design capacity Maximum output rate or service capacity an operation, process, or facility is designed for - Effective capacity Design capacity minus allowances such as personal time, maintenance, and scrap - Actual output Rate of output actually achieved--cannot exceed effective capacity.
What is the equation for efficiency? Efficiency= Actual Output/Effective Capacity What is the equation for utilization? Utilization= Actual Output/Design Capacity
The main issue in designing process layouts concerns the relative placement of the departments Measuring effectiveness A major objective in designing process layouts is to minimize transportation cost, distance, or time - In designing process layouts, the following information is required: A list of departments to be arranged and their dimensions A projection of future work flows between the pairs of work centers The distance between locations and the cost per unit of distance to move loads between them The amount of money to be invested in the layout A list of any special considerations The location of key utilities, access and exit points, etc.
What is the goal of Strategic Capacity Planning?
Locational cost-volume-profit analysis Transportation model Factor rating Center of gravity method
What is, and when is it used, Cost-Profit-Volume Analysis?
Each X and Y value must be weighted according to the quanity, then divided by the total quantity instead of the number of destinations. i.e. X Y Weekly Quantity 2 2 800 3 5 900 Total: 1,700 X=[(2x800)+(3x900)]/1,700 Y=[(2x800)+(5x900)]/1,700
When is the Transportation Model used? What are it's assumptions? What information does it require?
To achieve a match between the long-term supply capabilities of an organization and the predicted level of long-term demand Overcapacityïƒ operating costs that are too high Undercapacityïƒ strained resources and possible loss of customers
Why are capacity decisions important?
(FC +v x Q) = Q(R â€
v) â€
