Operations Management Exam 1

Number of Kanbans

(Demand during lead time + Safety Stock) / Size of Container

Batch Size

(Target capacity x Total setup time) / 1 - (Target capacity x Processing time)

Utility is composed of three components:

1. Consumption Utility a. Performance b. Fit 2. Price 3. Inconvenience

Seven sources of production waste

1. Waiting (idle time) 2. Overproduction 3. Inventory 4. Transport 5. Overprocessing 6. Rework 7. Unnecessary motions

It takes a color printer 10 seconds to print a large poster. What is the capacity of the printer expressed in posters per hour?

1/10 per second x 60 x 60 = 360 Posters

A call center has one operator who answers incoming calls. It takes the operator 6minutes to answer one call. What is the capacity of the call center expressed in calls per hour?

1/6 calls/min x 60 min/hr = 10 calls/hr

What is the highest possible yield a process can obtain?

100%

A product requires four parts that are made on the same lathe. Call the parts A, B, C, and D. The product requires 1 unit of A, 2 of B, 4 of C, and 8 of D. Which of the following production cycles is most appropriate?

100, B: 200, C: 400, D: 800

A process has 10 resources and two types of flow units. How many columns will there be in the demand table?

2

A process has six resources and three types of flow units. How many rows will there be in the demand table?

6 rows 3 columns for the flow types

A chemical process involves adding various agents to a vat and then waiting for the agents to react to make a final compound. The vat holds up to 1000 gallons. Chemical agents are added to the vat at a rate of 4.5 gallons per minute. Once the agents have been added to the vat, the reaction takes 85 minutes no matter the actual number of gallons in the batch. After the batch is complete, the vat must be cleaned. Cleaning always takes 15 minutes. What is the setup time of this process?

85 + 15 = 100

Value- added percentage

= Value-added time of a flow unit / Flow time

Efficiency

A process is efficient if it is able to achieve a high flow rate with few resources.

Process

A set of activities that take a collection of inputs, perform some work or activities with those inputs, and then yield a set of output

Average Labor Utilization

ALU = Labor Content / Idle Time

Target Capacity

Batch size / [Total setup time + (Batch size x Processing time)]

Which of the following items would be considered a resource in the operations of a soft drink manufacturer?

Bottling Machines

What are the two pillars of the Toyota Production System?

Built-in quality and just-in-time Correct

Which of the following items would be considered an input in the operations of a soft drink manufacturer?

Empty Bottles

A primary care doctor has the capacity to see 16 patients per day. The demand rate is, however, only 12 patients per day. a.What is the flow rate? b.What is the utilization of the doctor? c.What is the cycle time, assuming a 10hour workday?

FR = 12 patients/day U = 12/16 = 75% CT = 1/12 day/patient x 10 hours/day = 0.8333 hours/patient

The implied utilization can never be bigger than 100 percent.

False

Flow Time

Flow Time = I x Cycle Time T = I x 1/R

CodeDeskInc matches programmers with freelance jobs. It has 30 employees who staff its online chat room. It receives, on average, 240 chat requests per hour, and the average chat session takes 5 minutes to complete (i.e., from start to finish). On average, how many chat sessions are active (i.e., started but not completed)?

I = R x T R = 240 chats/hr / 30 employees = 8 chats/employee T = 5 minutes/60 = 0.0833 hr I = 0.0833hr x 8 chats/employee x 30 employees/hr= 20 chats

During a typical Friday, the West End Donut Shop serves 2400 customers during the 10 hours it is open. Each customer spends (an average) 5-minutes in the shop. On average, how many customers are in the shop simultaneously?

I = R x T R=2400 cust / (10hrx60min) = 4 cust/min I = 4 cust/min x 5 min = 20cust

Last year, there were 3,400,000 visitors to a national park and, on average, each visitor spent 22 hours in the park. Last year, on average, how many visitors were in the park?

I = R x T T = 22hr/24hr= 0.9167 day R = 3,400,000 visitors / 365 = 9,315 visitors/day I = 9,315 visitors/day * 0.9167 = 8,539 visitors

A campus deli serves 300 customers over its busy lunch period from 11:30 a.m. to 1:30 p.m. A quick count of the number of customers waiting in line and being served by the sandwich makers shows that an average of 10 customers are in process at any point in time. What is the average amount of time that a customer spends in process?

I = R x T I = 10 cust R = 300 cust / 120 min = 2.5 cust/min I/R = 10 cust / 2.5 cust/min = 4 min

A nonbottleneck worker currently has an idle time of 20 seconds per unit. Because of the large demand, the company improves the process by adding more capacity to the bottleneck. How does this impact the idle time of the worker?

Ide Time Decreases

Idle Time

Idle Time = Cycle Time - Process Time

What is the difference between a process with rework and a process with scrap?

In a scrap process units do not visit a resource multiple times whereas that is possible in a rework process. Correct

The batch size is tripled on a resource that has a setup time. What is the likely impact on the resource's capacity?

Increase by less than 300 percent Correct

Which of the following is likely to increase the utilization of a resource with a setup time?

Increase the flow rate

Suppose a resource has setup times and a setup time must be incurred each time the resource switches production to a different product. Requiring the resource to make a new product (that requires its own setup) is likely to have what effect on the process?

Inventory of all products is likely to increase. Correct`

A process has high fixed costs and low variable costs. It is currently capacity-constrained. Will the impact of an efficiency improvement be small or large?

Large Low variable costs result in a high unit margin, so every additional customer yields a significant contribution to profitability.

Which of the following flow units is probably best to use if a process has flow-dependent processing times?

Minutes or hours of work

Profit Maximization

Profit = FlowRate X (Average Price - Average Cost)

Bottleneck

Resource with the lowest capacity in the process

SMED

Single Minute Exchange of Dies Reduces time needed for equipment changeovers

A process has low fixed costs and high variable costs. It is currently capacity-constrained. Will the impact of an efficiency improvement be small or large?

Small High variable costs result in a low unit margin, which reduces the impact of each additional customer on profitability.

Take Time

TT=AvailableTime/RequiredQuantity

Demand-constrained

The case in which process capacity exceeds demand and thus the flow rate is equal to the demand rate

Capacity

The maximum number of flow units that can flow through that resource per unit of time 1 / Processing Time

Downstream

The parts of the process that are at the end of the process flow

Utilization

The ratio between the flow rate (how fast the process is currently operating) and the process capacity (capturing how fast the process could be operating if there was sufficient demand) Utilization = Flow Rate / Capacity

Pull system

The resource furthest downstream (closest to the market) is paced by market demand. In addition to its own production, it also relays the demand information to the next station upstream, thus ensuring that the upstream resource also is paced by demand.

Efficient Frontier

The set of firms that are not Pareto dominated Nothing to the upper right

How does the takt time change as the demand rate increases?

The takt time decreases

As the attrition loss in a process increases, what happens to the yield?

The yield decreases

What is the relationship between the number of kanban cards in a process and the inventory level?

There never can be more inventory in the process than what was authorized via Kanban cards

Cycle Time

Time between completing 2 consecutive flow units Cycle Time = 1 / Flow Rate

A national restaurant chain has just opened a sit-down location at Chicago's O'Hare International Airport. Next to the sit-down location, it has also established a "to-go" section where travelers can purchase premade sandwiches and salads, as well as drinks and snacks. Which dimension of the customer utility function is particularly emphasized with the "to-go" section?

Timing

implied utilization

Total Demand at Resource/Capacity at Resource

In a process with rework, we find the bottleneck as the resource with the highest implied utilization.

True

T/F It is possible to increase process capacity by balancing a process

True

T/F The bottleneck resource in a process has the least idle time

True

The total demand rate for a resource is the sum of the individual demand rates that need to be processed by the resource.

True

Costs of Direct Labor

Wages per unit of time / flow rate

just in time

a logistics process in which goods arrive when needed for production, use, or sale rather than sitting in storage

It takes a barber 15 minutes to serve one customer. a. What is the capacity of the barber expressed in customers per hour? b. Assuming the demand for the barber is 2 customers per hour, what is the flow rate? c. Assuming the demand for the barber is 2 customers per hour, what is the utilization? d. Assuming the demand for the barber is 2 customers per hour, what is the cycle time?

a. 60/ 15 min/cust = 4 cust/hr b. 2 customers/hr c. U = F/C 2 / 4 = 50% d. 1/F 1hr/2 customers = 30 minutes/cust

kaizen

continuous improvement

If the takt time increases, the operation requires

fewer workers

Resources

group of people/equipment that transforms inputs into outputs

The information turnaround time is driven primarily by

inventory in the process

Average labor utilization

measure of effificency

Over the course of a day, fans pour into a NASCAR venue at the rate of 8,000 people per hour. The average rate at which fans leave the venue ______.

must be exactly 8,000 people per hour Correct The flow rate into a process must equal the flow rate out of a process.

Students have to change buildings between classes, which often involves walks of 5 minutes or more. Walking from one building to another is

non-value-added time. Correct

The primary purpose of the "Single-Minute Exchange of Die" philosophy is to

reduce the setup time for a resource.

Demand during replenishment time

replenishment time x demand rate

Little's Law

tells us the average time a flow unit spends in the process inventory = flow rate x flow time I=R x T

Labor Content

the amount of work that goes into serving one customer (or, more generally, one flow unit), which is the sum of the processing times involving labor Higher number less desirable

Flow Unit

the basic unit that moves through a process

Capacity-constrained

the case in which demand exceeds supply and the flow rate is equal to process capacity

Demand Rate

the number of flow units that customers want per unit of time

System inhibitor

waste, variability, inflexibility