Ch 5,6,7,8,16
What are the responsibilities of capacity management?
A. determining the capacity needed to achieve the priority plans B. providing, monitoring, and controlling that capacity so the priority plan can be met.
Critical ratio
Considers due dates and process time, and is an index of the relative priority of an order to other orders at a work center. It is based on the ratio of time remaining to work remaining.
What is operation overlapping? What is its purpose?
In operation overlapping, the next operation is allowed to begin before the entire lot is completed on the previous operation. This reduces the total manufacturing lead times because the second operation starts before the first operation finishes all the parts in the order. Operation overlapping is a method of expediting an order. a. Process batch is the total lot size that has been released to production. b. A Transfer batch is that quantity that moves from work center to work center. A process batch may consist of one or more transfer batches
What is capacity planning?
The process of determining the resources required to meet the priority plan and the methods needed to make that capacity available.
What is empowerment, and why is it important in TQM?
a. Giving people the authority to make decisions and take action in their work areas without getting prior approval. b. Giving people the authority to make decisions motivates them to take ownership of their jobs to accomplish the goals and objectives of the organization.
What are the responsibilities of the purchasing department in follow-up?
a. Ensuring that suppliers deliver the items ordered on time. b. Working with the supplier on any changes in delivery requirements
What do customers expect from their suppliers?
a. High quality level. b. High flexibility to change such things as volume, specifications, and delivery. c. High service level. d. Short lead times. e. Low variability in meeting targets. f. Low cost.
What is total quality management, and what are its objectives?
a. It is an approach to improving both customer satisfaction and the way organizations do business. It is based on the participation of all members of an organization in improving processes, products, services, and the culture in which they work b. The objective of TQM is to provide a quality product to customers at a fair price. By increasing quality and decreasing cost, profit and growth will increase, which in turn, will increase job security and employment. c. TQM is both a philosophy and a set of guiding principles that lead to a continuously improving organization.
What is the difference between sole sourcing and single sourcing?
refer to :name and describe the 3 types of sourcing card
The text discusses four principles of forecasting. Name and describe each.
a. Forecasts are usually incorrect b. Forecasts tend to be more accurate for families or groups of products c. Forecasts tend to be more accurate for time periods closer to the present d. Every forecast should include an estimate of error
What is a work center load report? What information does it contain?
The work center load report shows future capacity requirements based on released and planned orders for each time period of the plan.
What is a bottleneck operation?
"A facility, function, department, or resource whose capacity is less than the demand placed upon it."
Describe the three steps of capacity planning
*1. Determine the capacity available at each work center in each time period.* *2. Determine the load at each work center in each time period. * a.Translate the priority plan into the hours of work required at each work center in each time period. b. Sum up the capacities required for each item on each work center to determine the load on each work center in each time period. *3. Resolve differences between available capacity and required capacity.* a. If possible, adjust available capacity to match the load. b. Otherwise, the priority plans must be changed to match the available capacity.
What is a schedule?
A timetable for planned occurrences.
What is a dispatch list?
The dispatch list is the instrument of priority control.
What is the difference between variables and attributes?
An attribute refers to quality characteristics that either conform to specification or do not, for example, visual inspection for color, missing parts, and scratches. A go/no-go gauge is a good example. Either the part is within tolerance or it is not. These characteristics cannot be measured, but they can be counted. Attributes are usually plotted using a proportion defective or p chart.
When is it appropriate to use 100% inspection?
A 100% inspection means testing every unit in the lot. This is appropriate when the cost of inspection is less than the cost of any loss resulting from failure of the parts, for example, when inspection is very easy to do or the inspection is part of the process.
What is an X (BAR) and R chart?
A control chart for averages and ranges (X - Bar and R chart) tracks the two critical characteristics of a frequency distribution—the center and the spread. Small samples (typically three to nine pieces) are taken on a regular basis over time and the sample averages and range plotted. The range is used rather than the standard deviation because it is easier to calculate. Samples are used in control charts rather than individual observations because average values will indicate a change in variation much faster.
What is assignable variation?
Chance is not the only cause of variation. A tool may shift, a gauge may move, a machine may wear, or an operator may make a mistake. There is a specific reason for these causes of variation, which is called assignable variation.
What technique is used to organize the VOC?
House of Quality
What is the purpose of process control? What kind of variation does it try to detect?
Process control attempts to prevent the production of defects by showing that when the standard deviation increases or when there is a significant change in the average, there is an assignable cause for variation.
What is a run chart?
Samples are taken periodically and measured. The average of the samples is then plotted on a chart called a run chart. While it gives a visual description of what is happening with the process, it does not distinguish between random variation and assignable cause variation.
What is the arithmetic mean or average?
The center of the distribution.
What is a normal distribution? Why is it important in quality control?
The normal distribution has most results clustered near one central point, with progressively fewer results occurring away from this center. Data tends to be distributed equally around a central value, with no bias to the left or right.
What are upper and lower control limits?
These limits are statistically determined lines on a control chart that are established to help in assessing the significance of the variation produced by the process. Control limits are set so that there is a 99.7% probability that if the process is in control, the sample value will fall within the control limits.
What is the purpose of performance measurement?
To determine an organization's performance, its progress must be measured
What does the acronym VOC stand for?
Voice of the Customer
What percentage of the observations will fall within 1, 2, and 3 standard deviations of the mean?
a. 1 standard deviations: 68.3% of observations b. 2 standard deviations: 95.4% of observations c. 3 standard deviations: 99.7% of observations
What is acceptance sampling? When is it appropriate to use?
a. Acceptance sampling consists of taking a sample of a batch of product and using it to estimate the overall quality of the batch. Based on the results of the inspection, a decision is made to reject or accept the entire batch. b. There are four reasons for using sample inspection: i. Testing the product is destructive. The ultimate pull strength of a rope or the sweetness of an apple can be decided only by destroying the product. ii. There is not enough time to give 100% inspection to a batch of product. For many companies, inspecting every unit in a batch would cause shipments to be delayed. Experience may have proven that sampling is enough to ensure that the entire lot is of acceptable quality. iii. It is too expensive to test all of the batch. Market sampling is an example of this, as are surveys of public attitude. iv. Human error is estimated to be as high as 20% when performing long-term repetitive testing. There are good reasons to have a representative sample taken of a batch rather than to hazard this high an error.
What is benchmarking, and how is it different from continuous improvement?
a. Benchmarking is a systematic method by which organizations can compare their performance in a particular process to that of a "best-in-class" organization, finding out how that organization achieves those performance levels and applying them to their own organization. b. Continuous improvement seeks to make improvement by looking inward and analyzing current practices. Benchmarking looks outward to see what competitors and excellent performers outside the industry are doing.
Quality costs fall under two categories. Name each category and think of an example to illustrate the category.
a. Costs of Failure i. Internal failure costs ii. External failure costs b. Costs of Controlling Quality i. Prevention costs ii. Appraisal costs
What is chance variation? What are its causes? How can it be altered?
a. In nature or any manufacturing process, one can expect to find a certain amount of unexplained random variation that is inherent in the process and occurs by chance. b. Caused by: 1. People. Poorly trained operators tend to be more inconsistent compared to well-trained operators. 2. Machine. Well-maintained machines tend to give more consistent output than a poorly maintained machine. 3. Material. Consistent raw materials give better results than poor quality, inconsistent, or ungraded materials. 4. Method. Changes in the method of doing a job will alter the quality. 5. Environment. Changes in temperature, humidity, dust, and so on can affect some processes. 6. Measurement. Measuring tools that may be in error can cause incorrect adjustments and poor process performance.
What is the first step in quality function deployment? What is the output from QFD?
a. QFD is a decision-making technique used in the development of new products or the improvement of existing products, which helps ensure that the wants, needs, and expectations of the customer are reflected in a company's designs. b. QFD begins by gathering the needs of the customer using various survey methods or by comparing a company's own products against the competition. c. The output are engineering specifications.
What is meant by process spread? What are the two measures of it?
a. Range b. Standard deviation
In which two ways can a process create defects?
a. Spread beyond the specification limits b. Shift in the mean
What are the consumer's risk and the producer's risk?
a. The probability of accepting a bad lot is called the consumer's risk. Since sampling inspection does not produce results with 100% accuracy, there is always a risk that a lot containing more than the desired number of defects will be accepted. The consumer will want to be sure that the sampling plan has a low probability of accepting bad lots. b. The probability of rejecting a good lot is called the producer's risk. Since sampling involves probabilities, there is a chance that a batch of good products will be rejected. The producer will want to ensure that the sampling plan has a low probability of rejecting good lots.
What is the purpose of the process capability index Cp and the Cpk? How do they differ?
a. The process capability index (Cp) combines the process spread and the tolerance into one index making it easier for operators and managers to quickly determine the capability of a process. It assumes that the process is centered between the upper and lower specification limits—that there has been no shift of the mean. As well, the index assumes that processes are 6σ wide, representing 99.7% of the output of a normal process. If the 6σ process spread is smaller than the specification doorway then the process is said to be capable. b. This index measures the effect of both center and variation at the same time. The philosophy of the Cpk index is that if the process distribution is well within specification on the worst-case side, and is capable according to the Cp, then it is sure to be acceptable for the other specification limit.
What is tolerance, and how does it relate to the USL and LSL?
a. Tolerances are the limits of deviation from perfection. b. The lower specification limit (LSL) is the minimum acceptable level of output. The upper specification limit (USL) is defined as the maximum acceptable level of output.
What are the three key factors in employee involvement?
a. Training b. Organization c. Local Ownership
What are the major functions of control?
Once plans are made and shop orders released, the process must be monitored to learn what is actually happening. The results are compared to the plan to decide whether corrective action is necessary. Production activity control will do the following: *1. Rank the shop orders in desired priority sequence by work center and establish a dispatch list based on this information.* *2. Track the actual performance of work orders and compare it to planned schedules. Where necessary, PAC must take corrective action by replanning, rescheduling, or adjusting capacity to meet final delivery requirements.* *3. Monitor and control work-in-process, lead times, and work center queues.* *4. Report work center efficiency, operation times, order quantities, and scrap.*
What are the major functions of implementation?
Once the plans are made, production activity control must put them into action by advising the shop floor what must be done. Instructions can be given by issuing a shop order with the relevant information, or by simply producing a schedule that shows product information, quantities, and dates. Production activity control will: *1. Gather the information needed by the shop floor to make the product.* *2. Release orders to the shop floor as authorized by the material requirements plan. This is called dispatching.*
How is safety capacity used?
One other type of capacity that is often used by companies is known as safety capacity. This capacity is available capacity that is planned to exceed capacity required. It is used to protect against unplanned activities, such as breakdowns, poor quality, preventive maintenance, and so forth. It is also referred to as a capacity cushion, and can be used as an alternative to safety stock. Care should be taken in using both safety capacity and safety stock, as this can cause additional costs for the firm.
What are the major characteristics of project manufacturing?
Project manufacturing usually involves the creation of one unit or a small number of units. 1. Initiating the project, which includes identifying the project requirements 2. Planning the project, including the scope, schedule and tasks, budget, resources, and risks 3. Executing the project by carrying out the tasks 4. Monitoring and controlling the project tasks and resources, and communicating the status of the project to stakeholders v. Closing the project, which includes documenting the results, as well as any variances in time and costs
What is the definition of quality?
Quality means user satisfaction: that goods or services satisfy the needs and expectations of the user
Describe which of the 3 Rs has the most beneficial impact on the environment.
Reducing the use or generation of materials, whether hazardous or scrap, is the most environmentally friendly of the 3 Rs. The purchasing department, having direct contact with suppliers, is the first to learn of new environmentally friendly materials. Lead-free solder and water-based solvents are just two examples of materials that have been developed by suppliers to help their customers reduce their environmental impact and reduce their costs. Lean principles, when applied to suppliers, involves reducing waste for all stages of the supply chain. The use of returnable racks or packaging is widely used in many industries, reducing both costs and environmental impact.
What are the five things discussed in the text that are important in managing bottlenecks?
*1. Establish a time buffer before each bottleneck.* a A time buffer is an inventory (queue) before each bottleneck. Because it is of the utmost importance to keep the bottleneck working, it must never be starved for material by disrupting the flow from feeding workstations. The time buffer should be only as long as the time of any expected delay caused by feeding workstations. In this way, the time buffer ensures that the bottleneck will not be shut down for lack of work and this queue will be held at a predetermined minimum quantity. *2. Control the rate of material feeding the bottleneck.* a. A bottleneck must be fed at a rate equal to its capacity so the time buffer remains constant. The first operation in the sequence of operations is called a gateway operation. This operation and any other operations prior to the bottleneck control the work feeding the bottleneck and must operate at a rate equal to the output of the bottleneck so the time buffer queue is maintained. *3. Do everything to provide the needed bottleneck capacity. * a. Anything that increases the capacity of the bottleneck increases the capacity of the process. Better utilization, fewer setups, and improved methods to reduce setup and run time are some methods for increasing capacity. *4. Adjust loads.* a. This is similar to item 3 but puts emphasis on reducing the load on a bottleneck by using such things as alternate work centers and subcontracting. These may be more costly than using the bottleneck, but utilization of nonbottlenecks and throughput of the total facility are increased, which will result in more efficient operations, and a potential for increased sales and profits. *5. Change the schedule.* a. As discussed earlier, this should be done as a final resort, but may be necessary in order to provide accurate delivery promises.
Describe each of the following dispatching rules giving their advantages and disadvantages.
*1. First come, first served.* a. Jobs are performed in the sequence in which they are received. This rule ignores due dates and processing time *2. Earliest due date.* a. Jobs are performed according to their due dates. Due dates are considered, but processing time is not. *3. Earliest operation due date* a. Jobs are performed according to their operation due dates. Due dates and processing time are taken into account. *4. Shortest processing time* a. Jobs are sequenced according to their process time. This rule ignores due dates, but it maximizes the number of jobs processed
What are the four types of planning data used in production activity control? What information does each contain?
*1. Item Master* a. Part number. A unique number assigned to a component. b. Part description. c. Manufacturing lead time. The normal time needed to make this part. d. Lot-size quantity. The quantity normally ordered at one time. *2. Product Structure* a. Also called Bill of Material (BOM), it contains a list of the single-level components and quantities needed to assemble a parent. It forms a basis for a pick list to be used by storeroom personnel to collect the parts required to make the assembly. *3. Routing* a. The routing consists of a series of operations required to make the item. For each product, a step-by-step set of instructions is provided describing how the product is made. It gives details of the following: 1. The operations required to make the product and the sequence in which those operations are performed. 2. A brief description of each operation. 3. Equipment, tools, and accessories needed for each operation. 4. Setup times, the standard time required for setting up the equipment for each operation. 5. Run times, the standard time required to process one unit through each operation. 6. Lead times for each operation. *4. Work Center Master* a. Work center number. b. Capacity. c. Number of shifts worked per week. d. Number of machine hours per shift. e. Number of labor hours per shift. f. Efficiency. g. Utilization. h. Queue time, the average time that a job waits at the work center before work is begun. i. Alternate work centers, work centers that may be used as alternatives
What are the seven bottleneck principles discussed in the text?
*1. Utilization of a nonbottleneck resource is not determined by its potential but by another constraint in the process.* a. In the previous example problem, the utilization of the wheel assembly operation was determined by the handle assembly operation. *2. Using a nonbottleneck resource 100% of the time does not produce 100% utilization.* a. If the wheel assembly operation was utilized 100% of the time, it would produce 1200 sets of wheels a week, 300 sets more than needed. Because of the buildup of inventory, this operation would eventually have to stop. *3. The capacity of the facility depends on the capacity of the bottleneck.* a. If the handle assembly operation breaks down, the throughput of the factory is reduced. *4. Time saved at a nonbottleneck does not save capacity elsewhere.* a. If the industrial engineering department increased the capacity of the wheel assembly operation to 1500 units a week, the extra capacity could not be utilized, and nothing would be gained. *5. Capacity and priority must be considered together.* a. Suppose the wagon manufacturer made wagons with two styles of handles. During setup, nothing is produced, which reduces the capacity of the system. Since handle assembly is the bottleneck, every setup in this operation reduces the throughput of the system. Ideally, the company would run one style of handle for six months, then switch over to the second style. However, customers wanting the second style of handle might not be willing to wait six months. A compromise is needed whereby runs are as long as possible but priority (demand) is satisfied. *6. Loads can, and should, be split.* a. Suppose the handle assembly operation (the bottleneck) produces one style of handle for two weeks, then switches to the second style. The batch size is 900 handles. Rather than waiting until the 900 are produced before moving them to the final assembly area, the manufacturer can move a day's production (90) at a time. The process batch size (900) and the transfer batch size (90) are different. Thus, delivery to the final assembly is matched to usage, and work-in-process inventory is reduced. *7. Focus should be on balancing the flow through the shop.* a. The key is total throughput that ends up in saleable goods.
What is a shop packet? What kind of information does it usually contain?
*A shop packet that contains the shop order and whatever other information that is needed by manufacturing can be compiled.* It may include any of the following: a. Shop order showing the shop order number, part number, name, description, and quantity. b. Engineering drawings. c. Bills of material. d. Route sheets showing the operations to be performed, equipment and accessories needed, materials to use, and setup and run times. e. Material issue tickets that authorize manufacturing to get the required material from stores. These are also used for charging the material against the shop order. f. Tool requisitions authorizing manufacturing to withdraw necessary tooling from the tool crib. g. Job tickets for each operation to be performed. As well as authorizing the individual operations to be performed, they also can function as part of a reporting system. The worker can log on and off the job using the job ticket, and it then becomes a record of that operation. h. Move tickets that authorize and direct the movement of work between operations.
Work center
*A work center is comprised of a number of machines or workers capable of doing the same work.* a. The *move time* is the time normally taken to move material from one workstation to another. b.The *wait time* is the time a job is at a work center after completion and before being moved. c. The *queue time* is the time a job waits at a work center before being processed.
Describe the advantages and disadvantages of the following ways of describing functional requirements. Give examples of when each is used.
*A. By brand.* *Advantage* 1. The customer is relying on the reputation and integrity of the supplier. *Disadvantage* 1. Branded items, as a group, usually have price levels that are higher than non-branded items. 2. It restricts the number of potential suppliers and reduces competition. *Used when* 1. Items are patented, or the process is secret. 2. The supplier has special expertise that the buyer does not have. 3. The quantity bought is so small that it is not worth the buyer's effort to develop specifications. 4. The supplier, through advertising or direct sales effort, has created a preference on the part of the buyer's customers or staff. *Examples* 1. Kleenex 2. Kenmore 3. Kirkland *B. By specification of physical and chemical characteristics, material and method of manufacture, and performance.* *Advantage* 1. Allow for multiple sources and for competitive bidding. 2. If the product does not give the desired results, the seller is responsible. 3. Performance specifications are relatively easy to prepare and take advantage of the supplier's special knowledge. *Disadvantage* 1. Not all items lend themselves to specification 2. May be no more suitable, and a great deal more expensive, than a supplier's standard product. 3. They may be expensive to develop. 4. Must be carefully designed. *Used when* 1. For physical and chemical characteristics, the buyer must define the physical and chemical properties of the materials wanted. 2. For material and method of manufacture, the method of manufacture determines the performance and use of a product. 3. Performance is used when the buyer is concerned with what the item is required to do and is prepared to have the supplier decide how performance is to be attained. *Examples* 1. Petroleum products, pharmaceuticals, and paints are often specified by physical and chemical characteristics. 2. Hot- and cold-rolled steels are made differently and have different characteristics; they might be specified by material and method of manufacture. 3. A water pump might be specified as having to deliver so many gallons per minute
Define capacity available. What are the four factors that affect it?
*Capacity available is the capacity of a system or resource to produce a quantity of output in a given time period.* It is affected by: 1. Product specifications 2. Product mix 3. Plant and equipment 4. Work effort
Would critical ratio be better utilized as a static ratio or a dynamic ratio, and why?
*Dynamic* - The critical ratio of an order may change as the actual time remaining and lead time remaining change.
Describe forward and backward scheduling. Why is backward scheduling preferred?
*Forward scheduling*- Assumes that material procurement and operation scheduling for a component start when the order is received, whatever the due date, and that operations are scheduled forward from this date. The result is completion before the due date, which usually results in a buildup of inventory. This method is used to decide the earliest delivery date for a product. *Backward scheduling*- The last operation on the routing is scheduled first and is scheduled for completion at the due date. Previous operations are scheduled back from the last operation. This schedules items to be available as needed and uses the same logic as the MRP system. Work-in-process inventory is reduced, but because there is little slack time in the system, customer service may suffer. Backward scheduling is used to determine when an order must be started. Backward scheduling is common in a make-to-stock environment because it reduces inventory.
Describe infinite and finite loading.
*Infinite loading*- The assumption is made that the workstations in which each operation is processed have capacity available when required. It does not consider the existence of other shop orders competing for capacity at these work centers. It assumes infinite capacity will be available. *Finite loading* -Assumes there is a defined limit to available capacity at any workstation. If there is not enough capacity available at a workstation because of other shop orders, the order has to be scheduled in a different time period.
What are the inputs to the CRP process? Where is this information obtained?
*Inputs:* a. open shop orders b. planned order releases c. routings, time standards d. lead times e. work center capacities. *This information can be obtained from the following data:* 1. Open orders. 2. Material requirements plan. 3. Routings. 4. Work centers
Why is standard time usually used to measure capacity?
*It is often possible to use a unit common to all products.* Paper mills measure capacity in tons of paper, breweries in barrels of beer, and automobile manufacturers in numbers of cars. However, if a variety of products is made, a good common unit may not exist. In this case, the unit common to all products is time.
What is the responsibility of production activity control?
*Production activity control (PAC) is responsible for executing the master production schedule (MPS) and the material requirements plan (MRP).* At the same time, it must make good use of labor and machines, minimize work-in-process inventory, and maintain customer service. The objectives of production activity control are to meet delivery dates and to make the best use of company resources.
Routing
*The path that work follows from work center to work center as it is completed.* A routing is specified on a route sheet or in a computer routing file or table. Routing data should exist for every component manufactured and contain the following information: a. Operations to be performed. b. Sequence of operations. c. Work centers to be used. d. Possible alternate work centers. e. Tooling needed at each operation. f. Standard times: setup times and run times per piece
What is a shop calendar? Why is it needed?
*a. Manufacturing facility or workshop calendar in which the weekends and holidays are not shown and all working days are sequentially numbered.* b. It helps in scheduling and tracking, and answers the questions such as "When will a job starting on March 10 and requiring 41 days of work will finish?"
Relate the three levels of priority planning to capacity planning. Describe each level in terms of the detail and the time horizons used.
*a. Resource planning* involves long-range capacity resource requirements and is directly linked to production planning. Typically, it involves translating monthly, quarterly, or annual product priorities from the production plan into some total measure of capacity, such as gross labor hours. Resource planning involves changes in staffing, capital equipment, product design, or other facility changes that take a long time to acquire and eliminate. If a resource plan cannot be devised to meet the production plan, the production plan has to be changed. The two plans set the limits and levels for production. If they are realistic, the master production schedule (MPS) should be achievable. *b. Rough-cut capacity planning (RCCP)* takes capacity planning to the next level of detail. The master production schedule is the primary information source for RCCP. The purpose of rough-cut capacity planning is to check the feasibility of the MPS, provide warnings of any bottlenecks, ensure utilization of work centers, and advise vendors of capacity requirements. *c. Capacity requirements planning (CRP)* is capacity planning at a more detailed level and is directly linked to the material requirements plan. Since this type of planning focuses on component parts, greater detail is involved than in rough-cut capacity planning. It is concerned with individual orders at individual work centers and calculates work center loads and labor requirements for each time period at each work center.
What are the six basic concepts of TQM?
1. A committed and involved management 2. Focus on the customer 3. Total employee involvement 4. Continuous process improvement 5. Supplier partnering 6. Performance measures
What two things must be done to control queue and meet delivery commitments?
1. Control the work going into and coming out of a work center. This is generally called input/output control. 2. Set the correct priority of orders to run at each work center, which is referred to as dispatching
What are the five objectives of purchasing?
1. Obtaining goods and services of the required quantity and quality. 2. Obtaining goods and services at the lowest total cost. 3. Ensuring the best possible service and prompt delivery by the supplier. 4. Developing and maintaining good supplier relations and developing potential suppliers. 5. Selecting products and suppliers that minimize the impact on the environment
Name and describe the eight dimensions to quality.
1. Performance 2. Features 3. Conformance 4. Warranty 5. Service 6. Aesthetics 7. Perceived quality 8. Price
In which four areas must quality be considered? How do they interrelate?
1. Quality and product policy 2. Quality and product design 3. Quality and manufacturing 4. Quality and use
List the seven steps in the purchasing cycle.
1. Receiving and analyzing purchase requisitions. 2. Selecting suppliers, including researching and finding potential suppliers, issuing requests for quotations, receiving and analyzing quotations, and selecting the right supplier. 3. Determining the right price. 4. Issuing purchase orders and agreements. 5. Following up to ensure delivery dates are met. 6. Receiving and accepting goods. 7. Approving supplier's invoice for payment
If the time remaining to complete a job is 10 days and the lead time remaining is 12 days, what is the critical ratio? Is the order ahead of schedule, on schedule, or behind schedule
10/12 = .83 ; Order is behind schedule
Who is the customer?
A customer is considered to be a person or organization who receives products or services.
Open order
An open shop order appears as a scheduled receipt on the material requirements plan. *It is a released order for a quantity of a part to be manufactured and completed on a specific date.* It shows all relevant information, such as quantities, due dates, and operations. A record of all the active shop orders is maintained manually or as a computer file or table.
What does customer focus mean?
An organization that is dedicated to delighting the customer by meeting or exceeding customer expectations. It means not only understanding present customer needs but also anticipating customers' future needs.
Why is production activity control more complex in intermittent manufacturing?
Because of the number of products made, the variety of routings, and scheduling problems, PAC is a major activity in this type of manufacturing. Planning and control are typically exercised using shop orders or detailed schedules for each batch being produced.
What action should be taken when unacceptable error is found in tracking a forecast?
Bias exists when cumulative actual demand varies from forecast. The problem is in guessing whether the variance is due to random variation or bias. If the variation is due to random variation, the error will correct itself, and nothing should be done to adjust the forecast. However, if the error is due to bias, the forecast should be corrected. Using the mean absolute deviation, judgment can be made about the reasonableness of the error. Under normal circumstances, the actual period demand will be within ±3 MAD of the average 98% of the time. If actual period demand varies from the forecast by more than 3 MAD, there is about 98% probability that the forecast is in error.
What information is used for controlling production?
Control in intermittent manufacturing is exercised through shop orders and the data contained on these orders *a. Shop order master* 1. Shop order number, a unique number identifying the shop order. 2. Order quantity. 3. Quantity completed. 4. Quantity scrapped. 5. Quantity of material issued to the order. 6. Due date, the date the order is expected to be finished. 7. Priority, a value used to rank the order in relation to others. 8. Balance due, the quantity not yet completed. 9. Cost information *b. Operation Record* 1. Operation number. 2. Setup hours, planned and actual. 3. Run hours, planned and actual. 4. Quantity reported complete at that operation. 5. Quantity reported scrapped at that operation. 6. Due date or lead time remaining.
What is dispatching?
Dispatching is the function of selecting and sequencing available jobs to be run at individual work centers.
What is the mean absolute deviation (MAD)? Why is it useful in forecasting?
Forecast error must be measured before it can be used to revise the forecast or to help in planning. There are several ways to measure error. One method commonly used due to its ease of calculation is mean absolute deviation (MAD).
Describe the duties of the receiving department upon receipt of goods.
Inspects the goods to be sure the correct items have been sent, are in the right quantity, and have not been damaged in transit. Provided the goods are in order and require no further inspection, they will be sent to the requisitioning department or to inventory. If further inspection is required, such as by quality control, the goods are sent to quality control or held in receiving for inspection.
What are the major characteristics of intermittent?
Intermittent manufacturing is characterized by many variations in product design, process requirements, and order quantities. 1. Flow of work through the shop is varied and depends on the design of a particular product. As orders are processed, they may take more time at one workstation than at another. Thus, the work flow is not balanced. 2. Machinery and workers must be flexible enough to do the variety of work involved in intermittent manufacturing. Machinery and work centers are usually grouped according to the function they perform, for example, all lathes in one department. 3. Throughput times are generally long. Scheduling work to arrive just when needed is difficult, the time taken by an order at each work center varies, and work queues before work centers, causing long delays in processing. Work-inprocess inventory is often large. 4. The capacity required depends on the particular mix of products being built and is sometimes difficult to predict.
What are the major characteristics of flow?
Intermittent manufacturing is characterized by many variations in product design, process requirements, and order quantities. 1. Flow of work through the shop is varied and depends on the design of a particular product. As orders are processed, they may take more time at one workstation than at another. Thus, the work flow is not balanced. 2. Machinery and workers must be flexible enough to do the variety of work involved in intermittent manufacturing. Machinery and work centers are usually grouped according to the function they perform, for example, all lathes in one department. 3. Throughput times are generally long. Scheduling work to arrive just when needed is difficult, the time taken by an order at each work center varies, and work queues before work centers, causing long delays in processing. Work-in process inventory is often large. 4. The capacity required depends on the particular mix of products being built and is sometimes difficult to predict.
What is a seasonal index?
It is an estimate of how much the demand during the season will be above or below the average demand for the product.
What is manufacturing lead time? Name and describe each of its elements.
Manufacturing lead time is the time normally required to produce an item in a typical lot quantity. Typically, it consists of five elements: 1. Queue time, amount of time the job is waiting at a work center before operation begins. 2. Setup time, time required to prepare the work center for operation. 3. Run time, time needed to run the order through the operation. 4. Wait time, amount of time the job is at the work center before being moved to the next work center. 5. Move time, transit time between work centers
What is meant by the term deseasonalized demand?
The average demand for all periods is a value that averages out seasonality. This is called the deseasonalized demand.
What are the major functions of planning?
The flow of work through each of the work centers must be planned to meet delivery dates, which means production activity control must do the following: *1. Ensure that the required materials, tooling, personnel, and information are available to manufacture the components when needed.* *2. Schedule start and completion dates for each shop order at each work center so the scheduled completion date of the order can be met. This will involve the planner in developing a load profile for the work centers.*
What is measured or demonstrated capacity? How is it different from rated capacity?
The historical output, or capacity, of a work center.
How is input controlled?
The input rate is controlled by the release of orders to the shop floor.
What is an input/output control system designed to do?
The input/output control system is a method of managing queues and work-in-process lead times by monitoring and controlling the input to, and output from, a facility. It is designed to balance the input rate in hours with the output rate so these will be controlled
What is load?
The load on a work center is the sum of the required times for all the planned and actual orders to be run on the work center in a specified period.
What should production activity control check before releasing a shop order?
The order should be reviewed to be sure that the necessary tooling, material, and capacity are available. If they are not, the order cannot be completed and should not be released.
How is output controlled?
The output rate is controlled by increasing or decreasing the capacity of a work center.
What are the two ways of balancing capacity available and load? Which is preferred? Why?
There are two ways of balancing capacity available and load: alter the load, or change the capacity available. Altering the load means shifting orders ahead or back so the load is leveled. If orders are processed on other work stations, the schedule and load on the other work stations have to be changed as well. It may also mean that other components should be rescheduled and the master production schedule changed. Changing the load is usually not the preferred course of action.
What is the bullwhip concept?
This effect occurs when there is uncertainty in the supply chain based on the use of forecasts, and that uncertainty is then exaggerated as material moves through the supply chain. The effect can produce large fluctuations in demand for raw materials based on relatively small changes in demand from the customer end of the supply chain.
What information does a load report contain? Why is it useful to production activity control?
This report tells PAC what the load is on the work center. PAC uses it to make decisions on when to release a shop order based on availability of capacity.
What is the definition of throughput?
Throughput is the total volume of production passing through a facility
Describe the process of backward scheduling.
To schedule back from the due date to get the completion and start dates for each operation. To do so, not only must the operation times be known, but also the queue, wait, and move times.
Why must we forecast?
To supply inputs to the Manufacturing Planning and Control activities.
What is random variation?
Variation is the tendency of a process to deviate from the norm. Process variation determines the stability and predictability of the process
Type of product is a factor that influences the approach to negotiation. Name the four categories of products and state what room there is for negotiation.
a. *Commodities.* These are materials such as copper, coal, wheat, meat, and metals. Price is set by market supply and demand and can fluctuate widely. Negotiation is concerned with contracts for future prices. b. *Standard products.* These items are provided by many suppliers. Since the items are standard and the choice of suppliers large, prices are determined on the basis of published prices. There is not much room for negotiation except for large purchases. c. *Items of small value.* These are items such as maintenance or cleaning supplies and represent purchases of such small value that price negotiation is of little purpose. The prime objective should be to keep the cost of ordering low. Firms will negotiate a contract with a supplier that can supply many items and set up a simple ordering system that reduces the cost of ordering. d. *Made-to-order items.* This category includes items made to specification or for which quotations from several sources are received. These can generally be negotiated.
Besides functional specifications, what other specifications must be determined? Why is each important?
a. *Quantity requirements.* i. The quantity is important because it will be a factor in the way the product is designed, specified, and manufactured. ii. For example, if the demand was for only one item, it would be designed to be made at the least cost, or a suitable standard item would be selected. However, if the demand were for several thousand, the item would be designed to take advantage of economies of scale, thus satisfying the functional needs at a better price b. *Price requirements.* i. The price specification represents the economic value that the buyer puts on the item, and the amount the company is willing to pay. If the item is to be sold at a low price, the manufacturer will not want to pay a high price for a component part. The economic value placed on the item must relate to the use of the item and its anticipated selling price.
What are theoretical capacity, rated capacity, utilization, and efficiency? How are they related?
a. *Theoretical capacity* is the maximum capacity available, with no regard for downtime, utilization, or efficiency. If a company uses two 8-hour shifts at a work center, the theoretical daily capacity would be 16 hours. b. The available capacity at a work center for a period of time, and accounting for the average utilization and efficiency of that work center, is known as -calculated or *rated capacity* c. The percentage of time that the work center is active compared to the available time is called work center *utilization* d. *Efficiency* measures the output as compared to the standard
Why is it important to select the right supplier and to maintain a relationship with that supplier?
a. A good supplier is one that has the technology to make the product to the required quality, has the capacity to make the quantities needed, and can run the business well enough to make a profit and still sell a product competitively. b. Ideally, the relationship will be ongoing with a mutual dependency. The supplier can rely on future business, and the buyer will be ensured of a supply of quality product, technical support, and product improvement. Communications between buyer and supplier must be open and complete so both parties understand the problems of the other and can work together to solve problems to their mutual advantage.
Describe and give the advantages and disadvantages of (a) moving averages and (b) exponential smoothing.
a. A moving average always lags a trend, and the more periods included in the average, the greater the lag will be. Moving averages are best used for forecasting products with stable demand where there is little trend or seasonality. Moving averages are also useful to filter out random fluctuations. b. Exponential smoothing provides a routine method for regularly updating item forecasts. It works quite well when dealing with stable items. Generally, it has been found satisfactory for short-range forecasting. It is not satisfactory where the demand is low or intermittent. Exponential smoothing will detect trends, although the forecast will lag actual demand if a definite trend exists.
Where would you find the following information?
a. A scheduled receipt-->MRP Record b. A planned receipt-->MRP Record c. Efficiency and utilization-->Work Center Record d. Sequence of operations on a part-->Routing
What is bias error in forecasting? What are some of the causes?
a. Bias exists when the cumulative actual demand varies from the cumulative forecast. Bias is a systematic error in which the actual demand is consistently above or below the forecast demand. b. Caused by: exceptional one-time events or timing.
The text describes three characteristics of demand. Name and describe each.
a. Demand Patterns b. Stable Versus Dynamic c. Dependent Versus Independent Demand
What is demand management? What functions does it include?
a. Demand management is the function of recognizing and managing all demands for products and/or services. b. A proactive approach to demand management (market driven) includes four major activities: i. Sensing the demand. i. Shaping demand—based on strategic and market plans. iii. Shifting demand iv. Responding to demand
Provide an explanation of Drum-Buffer-Rope and give an example of how it would be used.
a. Drum-buffer-rope describes how the TOC works by setting an overall pace of material flow, ensuring bottlenecks never run out of material, and linking the output of one work center to another *Drum* 1. The drum of the system refers to the "drumbeat" or pace of production. It represents the master schedule for the operation, which is focused around the pace of throughput as defined by the constraint ii. *Buffer* 1. A time buffer is often established in front of the constraint. It is called a time buffer because it represents the amount of time that the inventory in the buffer protects the constraint from disruptions. *Rope* 1. The rope "pulls" production to the constraint for necessary processing. The rope schedules release of raw material into production at a pace that maintains the buffer, ensures the constraint is not "starved" for material, and that excessive inventory does not build up. It is basically defined by the processing capability of the constraint process b. Four primary plant types are defined, and they are used to specify the flow of materials through a production process. They can therefore be helpful in understanding how to manage the operation using the theory of constraints. They include: *I-plant*, where one raw material is used to make one final product. Processing is usually done in a straight line. *A-plant*, where numerous subassemblies merge into a single final assembly. *V-plant*, where few raw materials can be made into several end products. *T-plant*, where multiple straight lines can split into several assemblies.
What are five savings that can result from adopting a supply chain management approach?
a. More effective product specification, allowing for efficient product substitutions and product specifications focused on fitness of use. b. Better leveraging of volume discounts and supplier consolidation. c. Long-term contracts with efficient communication systems, significantly reducing the administrative cost of ordering and order tracking. d. More effective use of techniques such as electronic commerce, using credit cards for payments, and blanket ordering. e. Reducing environmental costs by avoiding potentially hazardous materials and exercising the 3 Rs of reduce, reuse, and recycle.
A student of operations management has decided to apply critical ratio to his homework assignments. Describe what is happening if his critical ratio for various assignments is:
a. Negative - Assignment is past due. b. Zero - The assignment is due today. c. Between zero and 1 - The assignment may not be finished by the due date. d. Greater than 1 - There is enough time to complete the assignment by the due date.
What is operation splitting? What is its purpose?
a. Operation splitting is a second method of reducing manufacturing lead time. The order is split into two or more lots or transfer batches and run on two or more machines simultaneously. If the lot is split in two, the run-time component of lead time is effectively cut in half, although an additional setup is incurred. b. Operation splitting is practical when: b1. Setup time is low compared to run time. b2. A suitable work center is idle. b3. It is possible for an operator to run more than one machine at a time. b4. Duplicate tooling or equipment is available
What factors influence the demand for a firm's products?
a. Price b. Income levels c. Competition d. Fashions e. Other
What is lot traceability? Why is it important to safety related products?
a. Process of tracking parts and materials back to their origins. b. Should a product prove unsafe, it is possible for the manufacturer to trace back to find the source of all materials and recall all finished products that used that particular lot.
Name two sources of specifications.
a. Product Planning b. Product Design
What is the purpose of production reporting? Why is it needed?
a. Production reporting provides feedback of what is actually happening on the plant floor. It allows PAC to maintain valid records of on-hand and on-order balances, job status, shortages, scrap, material shortages, etc. b. Production activity control needs this information to establish proper priorities and to answer questions regarding deliveries, shortages, and the status of orders. c. Manufacturing management needs this information to make decisions about plant operations. d. Payroll needs this information to calculate employees' pay.
Describe the purposes, similarities, and differences among purchase requisitions, purchase orders, and requests for quotation.
a. Purchase requisitions - the planner or buyer/planner releases a planned order authorizing the purchasing department to go ahead and process a purchase order. b. Purchase orders - A purchase order is a legal offer to purchase. c. Requests for Quotation (RFQ) - written inquiry that is sent to enough suppliers to be sure competitive and reliable quotations are received. quotations are analyzed for price, total cost, compliance to specification, terms and conditions of sale, delivery, and payment terms
Describe the characteristics and differences between qualitative, quantitative, extrinsic, and intrinsic forecasting techniques.
a. Qualitative techniques are projections based on judgment, intuition, and informed opinions. By their nature, they are subjective. Such techniques are used to forecast general business trends and the potential demand for large families of products over an extended period of time. As such, they are used mainly by senior management. Production and inventory forecasting is usually concerned with the demand for particular end items, and qualitative techniques are seldom appropriate. b. Quantitative techniques are projections based on historical or numerical data, whether it be from inside or outside the organization. c. Extrinsic forecasting techniques are projections based on external (extrinsic) indicators that relate to the demand for a company's products. Examples of such data would be housing starts, birth rates, and disposable income. d. Intrinsic forecasting techniques use historical data to forecast.
What are the advantages of using standard specifications?
a. Standard specifications are widely known and accepted and are readily available from most suppliers. b. Items manufactured using standard specifications are lower in price than nonstandard items. c. Standard specifications are usually adaptable to the needs of many purchasers.
Describe the factors that should be used in selecting a supplier.
a. Technical ability b. Manufacturing capability c. Reliability d. After-sales service e. Supplier location f. Lean capabilities g. Price--> Landed cost vs. Total cost of ownership h. Other considerations include i. Credit terms, reciprocal business, supplier health and safety record, willingness to hold inventory for the buyer, etc.
Describe the purpose of forecasting for strategic business planning, sales and operations planning, and master production scheduling.
a. The strategic plan and the business plan are concerned with overall markets and the direction of the economy over the next 2 to 10 years or more. Their purpose is to provide time to plan for those things that take long to change. The level of detail is not high, and usually forecasts are in sales units, sales dollars, or capacity. Forecasts and planning will probably be reviewed quarterly or yearly. b. Sales and operations planning is concerned with manufacturing activity for the next one to three years. Forecasts are made for groups or families of products rather than specific end items. Forecasts and plans will probably be reviewed monthly, c. Master production scheduling is concerned with production activity from the present to a few months ahead. Forecasts are made for individual items, as found on a master production schedule, individual item inventory levels, raw materials and component parts, labor planning, and so forth. Forecasts and plans will probably be reviewed weekly.
What is meant by the term tracking the forecast? In which two ways can forecasts go wrong?
a. Tracking the forecast is the process of comparing actual demand with the forecast. b. Error can occur in two ways: bias and random variation.
Describe trend, seasonality, random, and variation as applied to forecasting.
a. Trend: When demand is increasing or decreasing in a steady pattern of demand from year to year. There are different shapes, such as linear, geometric or exponential. The trend can be level, having no change from period to period, or it can rise or fall. b. Seasonality: Each year's demand fluctuates depending on the time of year. This fluctuation may be the result of the weather, holiday seasons, or particular events that take place on a seasonal basis. Seasonality is usually thought of as occurring on a yearly basis, but it can also occur on a weekly or even daily basis. A restaurant's demand varies with the hour of the day, and supermarket sales vary with the day of the week. c. Random: Random variation occurs where many factors affect demand during specific periods and occur on a random basis. The variation may be small, with actual demand falling close to the pattern, or it may be large, with the points widely scattered
To plan the flow of materials through manufacturing, what four things must production activity control know? Where will information on each be obtained?
a. What and how much to produce. b. When parts are needed so the completion date can be met. c. What operations are required to make the product and how long the operations will take. d. What the available capacities of the various work centers are.
Name and describe the three types of sourcing
a.* Sole sourcing* implies that only one supplier is available because of patents, technical specifications, raw material, location, and so forth. b. *Multiple sourcing* is the use of more than one supplier for an item. The potential advantages of multiple sourcing are that competition will result in lower price and better service and that there will be a continuity of supply. c. *Single sourcing* is a planned decision by the organization to select one supplier for an item when several sources are available. It is intended to produce a long-term partnership.
What are some of the ways capacity available can be altered in the short run?
• *Schedule overtime or undertime.* This will provide a temporary solution for cases where the load/capacity imbalance is not too large or long term. •* Adjust the level of the workforce by hiring or laying off workers.* The ability to do so will depend on the availability of the skills required and the training needed. The higher the skill level and the longer the training needed, the more difficult it becomes to change the level of the workforce quickly. • *Shift workforce from underloaded to overloaded work centers.* This may require a flexible cross-trained workforce, or adaptable equipment. • *Use alternate routings to shift some load to another work center.* Often the other work center is not as efficient as the original. Nevertheless, the important thing is to meet the schedule, and this is a valid way of doing so. • *Subcontract work when more capacity is needed or bring in previously subcontracted work to increase load.* It may be more costly to subcontract rather than make the item in-house, but again, it is important to maintain the schedule.
