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Question 1- Bottlenecks

A mining company has to perform following operations:-

1. extract the ore;


2. load the ore into trucks;
3. truck the ore to the crusher;
4. crush the ore;
5. concentrate the crushed ore.

Data

• No. of shovels = 3
• All three shovels can operate at the same time
• Time taken by the each shovel to load the truck = 10 minutes
• No. of crushing lines = 3
• Crushing lines operational at a given time = 2
• Maximum output from each crusher = 520 tonnes / hr
• The ore concentrator can process 1200 tonnes/hr
• Total loading time for loading a truck = 10 minutes
• Time for a trip from pit to crusher = 15 minutes
• Time for unloading at the crusher = 10 minutes
• Time for the return trip = 10 minutes
• Each truck can carry 80 tonnes of ore
• Operation time for company = 24 hours a day, 7 days a week
• Production of the company = 24,000 tonnes per day
a) Determine the minimum no of trucks required

Number of Trips / truck


Total cycle time for one truck to pick up ore from shovels and depositing them at the
crusher and back to the shovel = 10 + 15 + 10 + 10 = 45 minutes

Number of minutes in a day = 60 x 24 = 1440 minutes

Total Cycle time for one truck to pick up ore from shovels in a day
One cycle time
Therefore

1440 = 32 Trips
45

Number of tonnes a truck can carry / day

A tuck can carry 80 tonnes in one trip


Number of round up trips / truck can make in a day = 32

Number of tonnes in a day = load in each truck x Total trips in a day

= 80 x 32 = 2560 tonnes

Output of concentrated ore = 24,000 tonnes per day

Minimum number of trucks required in a day = Total output of concentrated ore


Number of tonnes in a day

= 24,000 / 2560
= 9.3750 ≈ 10 trucks
b) Percent Utilization

i. Percentage utilization of shovels:

Each shovel can load a truck in 10 minutes, and each truck can carry 80 tonnes of load
therefore each shovel can load 80 tonnes in 10 minutes.

Thus, in one hour 1 Shovel can load 6 times 80 tonnes = 480 tonnes (6 * 80).

Similarly

In one Hour 3 shovels can load = 480 x 3 = 1440 tonnes

In 24 Hours 3 shovels can load = 1440 * 24 = 34,560 tonnes (Maximum Capacity)

Percentage utilization of shovels: (Actual capacity ÷ Maximum capacity) * 100

=> (24,000 ÷ 34,560) x 100 = 69.44 %

ii. Percentage utilization of Trucks:

Number of hours in a day = 24 hrs.


Number of minutes in 24 hours = 24 x 60 = 1440

Every 45 minutes a truck completes one whole cycle from the quarry to the pit.

Minimum No. of trucks in a day = 10

Every 45 minutes one load of 80 tonnes by one truck


In 1440 minutes 32 loads of 80 tonnes = 32 x 80 = 2560 tonnes

As there are 10 trucks working in a day:

In 1440 minutes (32 x 80) x 10 = 25,600 tonnes (Maximum Capacity)

Percentage utilization of trucks: (Actual capacity ÷ Maximum capacity) * 100


Where actual capacity = 24,000

=> (24,000 ÷ 25,600) * 100 = 93.75%

iii. Percentage utilization of crusher:

No. of operational Crushers at any given time = 2


Maximum output from both crushers in one hour = 2 x 520 = 1040 tonnes

In 24 hours output from crushers = 1040 x 24 = 24,960 (Maximum capacity)

Percentage utilization of crusher: (Actual capacity ÷ Maximum capacity) * 100

Actual capacity = 24,000

=> (24,000 ÷ 24,960) * 100 = 96.15%

iv. Percentage utilization of the concentrator

Output of the concentrator in hour = 1200 tonnes


Total output in a day = 1200 x 24 = 28800 tonnes (maximum capacity)

Percentage utilization of concentrator: (Actual capacity ÷ Maximum capacity) * 100

Actual capacity = 24,000

Thus: = (24,000 ÷ 28,800) x 100 = 83.33%

Shovels = 69.44%
Trucks = 93.75%
Crushers = 96.15%
Concentrator = 83.33%
c) Bottleneck Operation.

The evident bottleneck is the crusher as it has the highest percent utilization recorded as
96.15%.

d) Recommendation

To relieve the bottleneck the system capacity can be increased by repairing the third
crushing line. If all the crushing lines are operated the crusher % utilization can be
reduced. Let us see how this will be done.

No. of operational Crushers at any given time = 3

Maximum output from all three crushers in one hour = 3 x 520 = 1560 tonnes

In 24 hours output from crushers = 1560 x 24 = 37,440 (Maximum Utilization)

(Actual utilization ÷ Maximum utilization) * 100

Actual utilization = 24,000

Thus: = (24,000 ÷ 37,440) * 100 = 64.10% utilization

As we can see the percent utilization will be reduced by around 32% if all three crushing
lines are operational.
Question 2- Line Balancing

a) Precedence Diagram

A11

D11
G7

B7

C12 E5 F13

H9 I 15

b) Calculating the minimum number of workstations, ignoring precedence


requirement and idle time

Total task time = 90 seconds

No. of workstations = (Total output x total task time) / total operations time

Total output = 1000 toys

Total task time = 1.5 minutes (90s).

Factory operates for 450 minutes a day

Thus, = (1000 x 1.5) / 450 = 3.33 ≈ 4 workstations


c) Calculating the control cycle time for assembly process

Control cycle time = (total operations time) / total output

= (60 x 450) / 1000 = 27 seconds.

d) Line Balancing

A11 D11 B7 C12 E5 F13 H9 G7 I15


22 22 24 22

Workstation 1 Workstation 2 Workstation 3 Workstation 4

e) Idle Time

i. The overall Percentage idle time for the process

At an average it took 27 seconds to produced 1 toy

Available time = 450 x 4 workstations = 1800

Required time = 1000 x 1.5 min= 1500 minutes

Idle time = total time – required time


= 1800 – 1500 = 300 minutes

Overall percentage idle time = (idle time / total time) x 100


(300 / 1800) x 100 = 16.66%

ii. The percentage idle time at each workstation


[(Process time – cycle time) / cycle time] x 100

Therefore,

Work station 1:

Process time = 22, Cycle time = 27

= [(22-27) / 27] x100 = 18.51%

Workstation 2:

Process time = 24, Cycle time = 27

= [(24-27) / 27] x 100 = 11.11%

Workstation 3:

Process time = 22, Cycle time = 27

= [(22-27) / 27] x 100 = 18.51%

Workstation 4:

Process time = 22, Cycle time = 27

= [(22-27) ÷ 27] x 100 = 18.51%

Question 3 – Quality Control


Data: mean = μ population = Χ =1.00

Standard deviation= σ population = 0.0035


Sample

1 2 3 4 5
1.0050 0.9963 1.0115 0.9875 1.0085
1.0022 0.9995 1.0003 0.9930 0.9803
0.9930 1.0210 0.9915 1.0100 0.9935
0.9895 1.0005 1.0055 1.0003 1.0215

a) Mean of the sample = 1.00

Standard deviation= σx = σ = 0.0035 = 0.00078


√n √20

b) 3σ control limits

UCL (Upper Control Limits) =Χ + 3σ sample


= 1.00 + 3(0.00078)
= 1.00234

LCL (Lower Control Limits) =Χ - 3σ sample


= 1.00 - 3(0.00078)
= 0.9977

c) Control Chart
Sample Χ
1 0.9974
2 1.0043
3 1.0022
4 0.9977
5 1.0009

The Control Chart:

1.0050

1.0043
1.0040

1.0030
UCL
X (mean)

1.0023 1.0022
1.0020

1.0010 1.0009

1.0000

0.9990

0.9980 LCL
0.9977 0.9977
0.9974
0.9970
0 1 2 3 4 5
Sample

The chart shows that X of sample 1 and sample 2 point outside the control limits. The
mean of sample 1 (X = 0.9974) is out of control criterion of LCL = 0.09977 and mean of
sample 2 (X = 1.0043) is out of control criterion of UCL which is equal to 1.0023.

Question 4- Workers Method


a) Construct a worker-machine bar chart and use it to determine the number of
items that the worker can produce during an eight-hour day at 100% of
standard

S.no Worker Machine 1 Machine 2


1 Unloading M1 = 0.25 Unloading M1 = 0.25 Running time = 1.65

2 Reloading M1 = 0.30 Reloading M1 = 0.3


3 Internal time M1= 0.40 Running time M1 = 1.90
4 Internal time M2 = 0.52
Introduce Idle time =
5 Idle time = 0.12
0.30
Unloading M2 = 0.30
6 Unloading M2 = 0.30

7 Reloading M2 = 0.38 Reloading M2 =0.38


Total cycle time = 2.45 Total cycle time = 2.45 Total cycle time = 2.45
% Utilization = 87.76 % Utilization = 100 % Utilization = 95.10
% Idle time = 12.24 % Idle time = 0 % Idle time = 4.90

The total cycle time is calculated as 2.45 min and worker will work (8 hours) 480 min /
per day.

Therefore, number of units produced per day = 480 min / 2.45 min

=195 units / day / worker

b) Reduction time

(i) 115% of Standard pay; (i.e. 15% bonus)


If the bonus of 15% is to be paid, items must be shaped 100 / 115 of the standard time

Therefore, the new cycle time = (100 / 115) x 2.45 Min

= 2.13 min

The new external time M1 = 2.13-1.90

= 0.23 min

Reduced from = 0.55 min previously

The new external time M2 = 2.13-1.65

= 0.48 min

Reduced from = 0.68 previously

New Process Cycle 115% of Standard pay.


S.no Worker Machine 1 Machine 2
Unloading Reducing Unloading
1 Running time = 1.65
M1 = 0.25 time by M1 = 0.25 Reduction
0.23 time by
Reloading Reloading
2 0.23
M1 = 0.30 M1 = 0.3

3 Internal time M1= 0.40 Running time M1 = 1.90


4 Internal time M2 = 0.52
5 Idle time = 0.30
Unloading Unloading
6 Reduction
M2 = 0.30 Reduction in M2 = 0.30
in time
Reloading time by 0.48 Reloading
7 by 0.48
M2 = 0.38 M2 =0.38

8 Total cycle time = 2.45 Total cycle time = 2.45 Total cycle time = 2.45

(ii) 130% of Standard pay; (i.e. 45% bonus)

If the bonus of 30% is to be paid, items must be processed 100 / 130 of the standard time
(2.45 min).

Therefore, new total cycle time = (100 / 130) x 2.45 Min

= 1.88 min

New external time for M1 = 1.88-1.90

= -0.02

Question 5-Critical Path

a) The network diagram


C1 F4

A2 H4 J3

critical path
D4 G7 L6

B4 E1 I6 K5

b) Normal completion for the project


Because of critical path is the longest part in the project and total calendar time for
required project, therefore normal completion time for the project is however total
time for accomplishing the critical path in this project.
Normal completion time = A + D + G + H + J + L
=2+4+7+4+3+6
= 26 weeks

c) The critical path

The critical path is the longest network single path


A–D–G–H–J–L

d) Over time management


The Manager has signed the contract to complete the project in 24 weeks, with a
penalty cost of $325 for every week over 24. The normal completion time is 26
weeks. This means that the manager exceeds by two weeks as against the contract.
The total penalty for two weeks is $650 (325 *2). If the manager has to use the
overtime at all then has to choose the activity where extra cost of overtime per week
is lowest and where length activity can be shortened. Thus the manager should use
overtime at activity D and H where the cost of overtime is $275 and $300
respectively. This way the total cost would be $575 and the manager will save $75 by
not paying the penalty cost of $650.

e) Action to avoid activity F delay

If the activities outside the critical path getting slow down (within limits), total
project time does not change. Similarly, if the manager found that equipment was
causing activity F to be delayed an extra two weeks, it would affect to the other
schedule activity and target completion time of the whole project. It is because
activity G still will take longer time to be complete than activity F with extra 2 weeks
in order to continue to the next activity, that is H. Therefore the manager should not
take any actions against activity F.

Question 6- Inventory Control

Data
D= annual demand in units for inventory item = 40x52= 2080 units

S = setup or ordering cost for each order = $10

H= holding or carrying cost per year =$20 x 23%= $4.60

(a) E.O.Q =
2x D x S
H

= 2 x 2080 x $10
$4.60
= 95 units

(b) No. of orders each year = Demand


No. of units

= 2080 units
95 units

= ~22 order / year

(c) Total annual variable cost = Setup cost + Holding cost

ordering EOQ = (D/Q)*S + (Q/2)*H

= 2080/95*10 + 95/2*4.6

= 218.94 + 218.5

= $437.44

(d) Total annual variable cost = Setup cost + Holding cost

Ordering lots of 100 = (D/Q)*S + (Q/2)*H

= 2080/100*10 + 100/2*4.6

= 208 + 230
= $438

(e) The clerk’s policy of adopting the policy of ordering through EOQ will be
better because the total cost is with EOQ is slightly lower than total cost
with lots of 100. The holding cost through EOQ is also lower as compared
to that of lots of 100 and is helpful for companies which hold and stock
larger inventories for their operations. The EOQ model also gives
reasonable answers with better accuracy even when there is variation in
variables such as setup costs, holding costs, demand or even the EOQ
while calculating the total cost.