BE1401

Business Operations and Processes

Exercises on Process Setups

1. Auto Parts Manufacturing

A company specializing in auto parts manufacturing produces, among other items, two
parts: A and B. Given the tolerance requirements of A and B, the parts are produced
using a special purpose machine operated by a skilled machinist. Presently, the
company has only one machinist capable of operating this machine, and hence the
machine is operated only on a one‐shift basis. After allowing for factors such as lunch
break and rest periods, etc., the machinist operates the machine for 7 hours per day
throughout the week. In fabricating parts A and B, the machine requires a set up time of
4 hours whenever switching between the two parts types. Once the machine is
appropriately set up, the run time for either part A or for part B is only 0.01 hour per
unit. Currently, the company rotates its production between one batch of 1000 for part
A and one batch of 1000 for part B.

a) The company has recently received an inquiry from a major auto manufacturer
concerning the company’s ability to supply sets of parts A and B (with each set
consisting of one part A and one part B) on a long‐term basis. Specifically, the auto
manufacturer wants to know how many sets per day can the company supply?
Estimate the production capacity of the company (in terms of sets per day).

b) Satisfied with the company’s estimate, the auto manufacturer has agreed to
purchase sets of parts A and B from the company. However, it has added one
condition in the contract: the company, on a sustained basis, should be able to
supply sets of parts at a rate 10% more than the rate it has estimated above. For the
company to achieve this higher production rate, what batch sizes would you
recommend for A and for B?

c) What other alternate actions would you recommend that the company evaluate to
meet this condition? (The company has ruled out the overtime option.) What would
be the potential drawbacks and benefits of these actions? (No computations
pertaining to these alternate actions are required. A qualitative answer is adequate.)

2. Setups Everywhere

Consider the following batch‐flow process consisting of three process steps
performed by three machines:



Step 1 Step 2 Step 3


Activity Time: Activity Time: Activity Time:
0.25 min/part 0.20 min/part 0.15 min/part

Setup Time: Setup Time: Setup Time:
30 mins 20 mins 45 mins
Work is processed in batches at each step. Before a batch is processed at a step, the
machine at that step must be set up. (During a setup, the machine is unable to process
any product.) Assume that there is a dedicated setup operator for each machine (i.e. ,
there is always someone available to perform a setup at each machine.)

(a) What is the process capacity if the batch size is 40 parts? Which step is the
bottleneck?

(b) For what batch sizes is step 1 the bottleneck? Step 2? Step 3?


3. Metal Box Production

Metal window boxes are manufactured in 5 basic colors in a small plant in Bangkok.
The manufacturing process consists of 3 operations: stamping, painting, and assembly,
as shown below.

Each window box is made up of three pieces: a base (one part A) and two sides (two
part Bs). The parts are fabricated by a single stamping machine which requires a setup
time of 100 minutes whenever switching between the two part types. Once the machine
is setup, the run time for each part A is 1 minute while the run time for each part B is
only 30 seconds. Currently, the stamping machine rotates its production between one
batch of 300 for part A and one batch of 600 for part B. Completed parts move from the
stamping machine onto the painting station.
At the painting station, parts are painted by a robot in 1 of 5 colors. The robot takes 30
seconds to paint one part A and 15 seconds to paint one part B. The robot can easily
switch between painting the two parts, but a switch in color does require 20 minutes for
setup. Once a piece is painted, it must wait 120 minutes to dry before moving to
assembly. The painting robot is currently programmed to change color every time it
finishes one batch of 300 component sets (i.e., 300 of part A and 600 of part B).
At assembly, parts of the same color are assembled manually to form the finished
product. One base (part A) and two sides (two part Bs), as well as a number of small
purchased components, are required for each unit of final product. Each product
requires 26.67 minutes of labor time to assemble.
The factory runs on one shift per day, five days per week. Considering the need for
lunch break, rest periods, etc., each operation (stamping, painting and assembly) is
effectively run for only 400 minutes per shift. There are currently 15 workers: 12
assembly workers, two operators for the stamping machine, and one operator for the
robot.

(a) Identify the bottleneck for the current process and calculate the maximum daily
throughput rate in terms of the # of units of finished products produced per day.
What is the throughput time for a batch of 300 units of finished products (i.e., from
the time the stamping operation starts for a batch to the time the complete batch
of 300 window boxes is assembled)?

(b) What impact would doubling the batch sizes at the stamping operation have on
total daily throughput? Be number specific. Explain qualitatively what other,
possibly negative, effects this would have.

(c) Management is considering investing in a setup reduction program for the
stamping machine. Suppose the setup time could be reduced to 20 minutes, with
some additional investment cost. What would happen to the throughput rate if the
batch sizes remained the same (i.e., 300 for part A and 600 for part B)? Be number
specific. What would be the potential benefits of such a reduction in setup time if
the batch sizes were allowed to change (explain qualitatively)?