Production and Operations Management

2)Discussing an Operations Unit and its functioning

a) We are discussing operations management
i) The General Phase- Input/transformation/output
ii) Strategy 5PO's

iii) Design a) Design Products and Servoces

b) Design Process capacity Facility
Location
layout
Suppliers
delivery network
c) Technology
d) Job Design

iv) Planning and Control

v) Improvement
vi) Challenges
 p
p
5 Performance Objectives p
5PO's p
Q Quality knowing what you want to become Marketing p
S speed
D dependibility
F flexibility
C cost Operations capacity, layout, produ
knowing what you are
F/O/H
ty, layout, product, process, technology, job design, integrated planning, Quality
Strategy

5 Performance Objective what you want to become mktg fn

Q
S
D
F what you are Operations
C
 p
p
p
p
p

Operations F/O/H
capacity, layout, product, process, technology, job design, integrated planning, Quality
ing, Quality
 IIPM-S RED
IIPM-N BLACK
HIGH COST LOW COST
LOW VOLUME HIGH
Haldiram Haldiram
Angel Mall CP

HIGH VARIETY LOW

Taxi DTC, Metro

HIGH VARIATION LOW

Alka IN DEMAND Park Hotel
Nainital CP
HIGH VISIBILITY LOW
Benetton www.B.com.

Out of the 4 V's Volume and Variety have the most profound implications on the opera
d implications on the operations
 IIPM-S RED
IIPM-N BLACK
HIGH COST LOW COST
LOW VOLUME HIGH
HALDIRAM HALDIRAM
KAUSHAMBI CP

HIGH VARIETY LOW

TAXI DTC
METRO

HIGH VARIATION LOW

HOTEL ALKA IN DEMAND PARK HOTEL
CP
HIGH VISIBILITY LOW
BENNETON WWW.B.COM

Out of the 4 V's Volume and Variety have the most profound implications on the opera
d implications on the operations
Process Types General Management characteristics with which to manage operations
1) Project Process volume very low, variety very high. Only one product is made. There is no repetition in
making the product. In case there is repetition then it is after a very very long time.

2) Jobbing process volume increases slightly and variety reduces slightly. There is repetition
in making the product after long time. Example 1)visiting card 2) Furniture
restorer 3) small job shops in large manufacturing organizations
3) Batch Processes Most processes in the world are batch processes. Volume increases substantially
variety reduces substantially, there is repetion in making the product after
regular time intervals 4) Mass Processes are batch process
Tractors Implement Escorts TIA machine shop with a larger production run
Accessories 45 gears 2015a Coca Cola

Setup Time (2 days) setup time (5 days)

run time (3 days) run time (3 months)

3000 EBQ/EOQ for production run 3,000,000

90 Time period for production run (3 months) 3 months

5 T T
85

5) Continuous Process 24 hours 365 days running Electricity, Steel, Petroleum, Large Chemical Plants
are batch process

Chemical Plants
Layout Types it means how the physically transforming resources (machine, material and manpower)
would be layed out in the plant

1) Fixed Position Layout also known as Stationary Layout, Project Layout,

The product to be manufactured/processed remains fixed/stationary, however, the man, machine,
material required to make the product; moves around the product. This happens when
the product is too heavy to move, too delicate to move, too voluminous to move examples

2) Process Layout:- it is also know as functional layout, jobshop layout

Similar processes/machines Large Hospital such as AIIMS TIA machine shop in Escorts
in one room Faridabad

AIIMS
GF

TIA Turning Machines

broaching machines
milling machines
hobbing machines
grinding
chrome plating

4) Product Layout:- also know as line layout, assembly line layout

Machines layed out one after the other. This happens because either the volume is too large
or the sequence of steps required to make the product necessitate that the machines be layed out
one after the other. car assembley, car washing, shoe manufacturing, shoe sole manufacturing

1) cutting machine or Clicking machine

2) Edge Trimming Machine
3) Stamping Machine 7%
4) Milling Machine 7%
5) Skyving Machine 3%
6) Assembly sole with heel to make complete sole
7) Painting

3) Cell Layout or Group Technology Layout

To make a few products, their machine in one room. This happens when the volume is
large and the variety is less. Cell Layout resembles a "shop within a shop", "Plant within a Plant",
"Factory within a Factory" concept
 Cardio Thorachic unit

AIIMS
manpower)
SRM ISCM

SCM
CRM
customer customer customer

Dell CITIBANK saloon

Supplier suppliers supplier

customers
Pull
retailers

stockist

distributor
Push
pharmaceutical

suppliers
concepts
1 3
pull Demand Uncertainity
push Implied Demand Uncertainity

salt cell phones

low high
Implied Demand Uncertainity Implied Demand Uncertainity

Implied Demand Uncertainity

increases

Increases

increases

increases

i
i

Implied Demand Uncertainity

i
i

i
 4
Responsive Supply Chain (Agile)
Efficient Supply Chain (Lean SCM)

doing faster
slower transportation more Inventory more cost responsive customer is more satisfied

faster transportation less inventory less cost Efficient company is being cost consious
 2
Bullwhip Effect
Drivers Metrics
1) Facilities capacity utilization
2) Inventory EOQ
3) Transportation Inbound/Outboud transportation cost
4) Information Forecsts
5) Sourcing Average Purchase price
6) Pricing Average Sales Price
Forecasting alpha=
Month Demand ('000) Cumm Avg 3 M M Avg 3 M W M A SES (alpha=0.84)
Jan
Feb
Mar
Apr
May
Jun
July

Executive Method Forecast (July)

Cumm Avg
3 M M Avg
3MWMA n-point moving average
w1 0.1 3 month moving averag
w2 0.3
w3 0.6 n-point weighted moving average
SES (alpha=0.84) 3 month weighted moving average
Something about weights
1) the sum of all weights should be equal to one
2) the weights may be subjectively decided or objectivel assessed
sum-of-year-digit-method
Time Pd 1 2 3
Weights

3) while using weights to forecast; the largest weight will be multi

by the immediate preceeding month

SES forecast of the first month may be taken in either o

1) it may assumed or given
2) It may be taken as average of the first 3 months
Eq 1 F1= A1 3)forecast of the first month is equal actuals of firs
Eq 2 Ft+1= At +(1-alpha)Ft
Forecast of = Actual of this
the next month month
 cided or objectivel assessed by

4 5
10
15
largest weight will be multiplied

nth may be taken in either of the three ways

verage of the first 3 months

month is equal actuals of first month

+ (1-alpha) * forecast of
this month
Forecasting
Month Months (x) Demand ('000) (y)
Jan 1
Feb 2
Mar 3
Apr 4
May 5
Jun 6

Linear Regression
y=a+bx
a(intercept)
b (slope)=
r (correl)
R Sq. (RSQ)
Forecast(forecast) July x= 7
8
 At 3MMA |At-Ft| SES ALPHA
DAY DEMAND FORECAST (Ft) ERROR (ERROR)Sq. (|At-Ft|/At)*100 FORECAST (Ft) ERROR
1 210
2 215
3 212
4 220
5 218
6 216
7 210
8 215
9 213
10 214

n= 10
MAD MEAN ABSOLUTE DEVIATION k= 5 we will average last five
MSE MEAN SQAURE ERROR
MAPE MEAN ABSOLUTE PERCENTAGE ERROR 3MMA
MAD
MSE
MAPE

The method that gives least MAD or MSE

Looking at MAD we find that SES a bette

 0.3 EO |At-Ft|
(ERROR)Sq. (|At-Ft|/At)*100 FORECAST (Ft) ERROR (ERROR)Sq. (|At-Ft|/At)*100
210
210
210
210
210
217
217
217
217
217

we will average last five readings

SES EO

that gives least MAD or MSE or MAPE is the preferred method

MAD we find that SES a better technique of forecasting

MONTH DEMAND FORECAST (Ft) ACTUALS (At) DEVIATION RSFE ABS DEV CUMM ABS DEV
1 1000 950
2 1000 1070
3 1000 1100
4 1000 960
5 1000 1090
6 1000 1050

RSFE RUNNING SUM OF FORECAST ERROR

THESE ARE CUMMULATIVE OF DEVIATIONS

TS TRACKING SIGNAL
MAD (for the time period) TS=(RSFE/MAD)
3.75 -3.75
3.75 -3.75
3.75 -3.75
3.75 -3.75
3.75 -3.75
3.75 -3.75

±3.75 MAD
Time Series

1) Trend Component (T), (Secular Trend)

a) Time Series Regression b is +ve r will be positve

Y=a+bX x= independent variable and always time b is -ve r will be negative

b) n-point moving average

i) Wether to use even point moving average (2,4,6…..) or odd point moving average (3,5,7……)
when using even point moving the result needs to be centered
when using odd point moving the result is already centered
ii) whether to use long term moving average (9,10,11,12…..) or short term moving average (2,3,4,5…)
The above two decisions are based on
The amount of data that is available and periodicity of the data

2) Seasonal Component (S)

yearly/quaterly/monthly
ice cream
daily/weekly
foot fall in a mall
hourly
Canteen
3) Cyclic Component (C.)

4) Random Component / Irregular Component (R/I) noise/error/bias

 r will be positve
r will be negative

average (3,5,7……)

moving average (2,3,4,5…)

 4 QTR MOVING CENTERED 4 QTR
YEAR QTR DEMAND AVG. MOVING AVG.
2004 Q1 48

Q2 35

Q3 43

Q4 30

2005 Q1 35

Q2 27

Q3 35

Q4 24

2006 Q1 32

Q2 21

Q3 27

Q4 17
Capacity Planning
Takes into account long term forecasts and projects man and machine requirement
over this extended time period. Capacity planning therefore decides the overall
size and stength of the facility.
10 classrooms 100 students 1000 students
1yr 2nd yr 3rd year 4th year 5th year
800 925 1000 1175 1350
 600,000 1,200,000
Individual Machine MBA Student Studying Spresso Ertiga
Design Capacity 14 1000 4 5 7

Planned Reason

Effective Capacity 10 800 3 4 4

Unplanned Reason

Actual Output 6 600 1 1 1

Cap Utilized 0.25 0.2 0.142857

Cap efficiency 0.333333333333333 0.25 0.25

Capacity utilization = actual output/design capacity

Capacity efficiency = actual output/effective capacity

Weighted Score method for the three sites
Factor Rating Method / Weighted Score Method

Criteria Importance Weighting

Cost of the Site 4
Local Tax 2
Skills Availability 1
Access to MotorWays 1
Access to Airport 1
Potential for Expansion 1
Total Weighted Scores
Since Area C has the highest weighted score, it is the preferred
s
ethod
Scores Sites
Area A Area B Area C
40 45 70
50 50 30
70 70 60
70 70 60
80 65 45
30 50 70
510 535 575
ore, it is the preferred site
rea C
Coca Cola Warehouse Location

70

60

50

40

30

20

10

(0,0) 10 20 30 40 50 60 70 80 90
 Location Coordinates
x y Volume
Abu Dhabi 60 35 150,000
Dubai 70 45 200,000
Sharjah +Ajman 80 50 100,000
Umm+RasK+Fuj 90 55 75,000
525,000 Total
Coordinates of CG x 37750000 71.90476
y 23375000 44.52381

100
PRODUCTION RATE @
(CAPACITY FXD @10000 APPX) J F M A M J J

use anyone of the above strategy called pure aggrgate plan

use a mixture of above strategy called mixed stategy plan

calculate the total cost of the plans

A S O N D 120,000
 MIXED STRATEGY FALL WINTER SPRING SUMMER DETAILS
FORECAST OVERTIME MAX.
BEGINNING INV. WORKERS =
PRODUCTION REQD. PRODUCTIVITY =
HOURS =
PROD.HRS REQD. NO. OF DAYS =
BEGINNING INV. =
DAYS
WORKERS WORKING COSTS
BACKORDERING =
PROD.HRS AVAILABLE OVERTIME =
HIRING =
OVERTIME FIRING (LAYOFF)=
HIRING INV. HOLDING =
FIRING STRAIGHT TIME =
CALCULTION FOR HIRI
ACTUAL PROD.HRS PROD. HRS AVB
ACTUAL PRODUCTION PROD. HRS REQUIRED
NET WORKERS WORKING EXCESS/DEFICIT HRS
ENDING INVENTORY HIRING =
COSTS FIRING =
BACKORDERING Facts
1) Hiring and Firing only
OVERTIME 2) Overtime in winter or s
3) Demand must be met
HIRING 4) No overtime in Fall

FIRING

INV. HOLDING

REGULAR COST

TOTAL GRAND TOTAL =

OVERTIME MAX.
WORKERS =
PRODUCTIVITY = UNITS PER HR 1 UNIT IN 2 HOURS
HOURS =
NO. OF DAYS = PER QUARTER
BEGINNING INV. =

BACKORDERING = PER UNIT

OVERTIME = PER HOUR
PER WORKER
FIRING (LAYOFF)= PER WORKER
INV. HOLDING = PER UNIT PER MONTH
STRAIGHT TIME = PER HOUR
CALCULTION FOR HIRING/FIRING WORKERS
PROD. HRS AVB
PROD. HRS REQUIRED
EXCESS/DEFICIT HRS

1) Hiring and Firing only in summer

2) Overtime in winter or spring
3) Demand must be met in winter and spring
4) No overtime in Fall
 OVERTIME STRATEGY FALL WINTER SPRING SUMMER DETAILS
FORECAST OVERTIME MAX.
BEGINNING INV. WORKERS =
PRODUCTION REQD. PRODUCTIVITY =
HOURS =
PROD.HRS REQD. NO. OF DAYS =
BEGINNING INV. =
DAYS
WORKERS WORKING COSTS
BACKORDERING =
PROD.HRS AVAILABLE OVERTIME =
HIRING =
OVERTIME FIRING (LAYOFF)=
HIRING INV. HOLDING =
FIRING STRAIGHT TIME =

ACTUAL PROD.HRS
ACTUAL PRODUCTION
NET WORKERS WORKING
ENDING INVENTORY
COSTS
BACKORDERING

OVERTIME

HIRING

FIRING

INV. HOLDING

REGULAR COST

TOTAL GRAND TOTAL = 0

OVERTIME MAX.
WORKERS = 30
PRODUCTIVITY = 0.5 UNITS PER HR 1 UNIT IN 2 HOURS
HOURS = 8
NO. OF DAYS = 60 PER QUARTER
BEGINNING INV. = 500

BACKORDERING = 10 PER UNIT

OVERTIME = 8 PER HOUR
100 PER WORKER
FIRING (LAYOFF)= 200 PER WORKER
INV. HOLDING = 5 PER UNIT PER MONTH
STRAIGHT TIME = 5 PER HOUR
 CHASE STRATEGY FALL WINTER SPRING SUMMER DETAILS
FORECAST OVERTIME MAX.
BEGINNING INV. WORKERS =
PRODUCTION REQD. PRODUCTIVITY =
HOURS =
PROD.HRS REQD. NO. OF DAYS =
BEGINNING INV. =
DAYS
WORKERS WORKING COSTS
BACKORDERING =
PROD.HRS AVAILABLE OVERTIME =
HIRING =
OVERTIME FIRING (LAYOFF)=
HIRING INV. HOLDING =
FIRING STRAIGHT TIME =
CALCULTION FOR HIRI
ACTUAL PROD.HRS
ACTUAL PRODUCTION PROD. HRS AVB
NET WORKERS WORKING PROD. HRS REQUIRED
ENDING INVENTORY EXCESS/DEFICIT HRS
COSTS HIRING =
BACKORDERING FIRING =
HIRING (ROUNDUP) =
OVERTIME FIRING (ROUNDDOWN
** NOTE:- WE WILL ALL
HIRING

FIRING

INV. HOLDING

REGULAR COST

TOTAL GRAND TOTAL = 0

OVERTIME MAX.
WORKERS = 30
PRODUCTIVITY = 0.5 UNITS PER HR 1 UNIT IN 2 HOURS
HOURS = 8
NO. OF DAYS = 60 PER QUARTER
BEGINNING INV. = 500

BACKORDERING = 10 PER UNIT

OVERTIME = 8 PER HOUR
100 PER WORKER
FIRING (LAYOFF)= 200 PER WORKER
INV. HOLDING = 5 PER UNIT PER MONTH
STRAIGHT TIME = 5 PER HOUR
CALCULTION FOR HIRING/FIRING WORKERS
FALL WINTER SPRING SUMMER
PROD. HRS AVB
PROD. HRS REQUIRED
EXCESS/DEFICIT HRS

HIRING (ROUNDUP) =
FIRING (ROUNDDOWN)=
** NOTE:- WE WILL ALLOW WORKERS TO WORK LESS SO THAT THERE IS NO ENDING INVENTORY
INVENTORY
LEVEL STRATEGY (WITH BACKORDERING) FALL WINTER SPRING SUMMER
FORECAST 10000 8000 7000 12000
BEGINNING INV. 500
NET DEMAND 9500
CUMMULATIVE DEMAND
DAYS
CUMMULATIVE DAYS
PRODUCTION@152.08---- PER DAY
TOTAL PRODUCTION
ENDING INVENTORY
NO. OF WORKERS WORKING
COSTS
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST

TOTAL GRAND TOTAL =

 DETAILS
OVERTIME MAX.
WORKERS =
PRODUCTIVITY =
HOURS =
NO. OF DAYS =
BEGINNING INV. =

COSTS
BACKORDERING =
OVERTIME =
HIRING =
FIRING (LAYOFF)=
INV. HOLDING =
STRAIGHT TIME =
CUMMULATIVE DAYS 0
CUMMULATIVE DEMAND 0

SLOPE OF LINE (GREEN LINE) THIS IS THE PRODUCTION REQD PER DAY
GRAND TOTAL = 0 HOURS REQUIRED PER DAY (ONE UNIT IN TWO HOURS)
WORKERS REQUIRED PER DAY 0
OVERTIME MAX.
WORKERS = 30
PRODUCTIVITY = 0.5 UNITS PE 1 UNIT IN 2 HOURS
HOURS = 8
NO. OF DAYS = 60 PER QUARTER
BEGINNING INV. = 500

BACKORDERING = 10 PER UNIT

OVERTIME = 8 PER HOUR
100 PER WORKER
FIRING (LAYOFF)= 200 PER WORKER
INV. HOLDING = 5 PER UNIT PER MONTH
STRAIGHT TIME = 5 PER HOUR

HE PRODUCTION REQD PER DAY

T IN TWO HOURS)
LEVEL STRATEGY (WITHOUT BACKORDERING) FALL WINTER SPRING SUMMER
FORECAST 10000 8000 7000 12000
BEGINNING INV. 500
NET DEMAND 9500
CUMMULATIVE DEMAND
DAYS
CUMMULATIVE DAYS
PRODUCTION@152.08---- PER DAY
TOTAL PRODUCTION
ENDING INVENTORY
NO. OF WORKERS WORKING
COSTS
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST

TOTAL GRAND TOTAL =

 DETAILS
CUMMULATIVE DEMAND OVERTIME MAX.
WORKERS =
40000
PRODUCTIVITY =
35000
HOURS =
30000 NO. OF DAYS =
25000 BEGINNING INV. =
20000
COSTS
15000
BACKORDERING =
10000 OVERTIME =
5000 HIRING =
0
FIRING (LAYOFF)=
0 50 100 150 200 250 300 INV. HOLDING =
STRAIGHT TIME =
CUMMULATIVE DAYS 0
CUMMULATIVE DEMAND 0

SLOPE OF LINE (RED LINE) THIS IS THE PRODUCTION REQD PER DAY
GRAND TOTAL = 0 HOURS REQUIRED PER DAY (ONE UNIT IN TWO HOURS)
WORKERS REQUIRED PER DAY 0
OVERTIME MAX.
WORKERS = 30
PRODUCTIVITY = 0.5 UNITS PE 1 UNIT IN 2 HOURS
HOURS = 8
NO. OF DAYS = 60 PER QUARTER
BEGINNING INV. = 500

BACKORDERING = 10 PER UNIT

OVERTIME = 8 PER HOUR
100 PER WORKER
FIRING (LAYOFF)= 200 PER WORKER
INV. HOLDING = 5 PER UNIT PER MONTH
STRAIGHT TIME = 5 PER HOUR

HE PRODUCTION REQD PER DAY

T IN TWO HOURS)
STRATEGY COST
MIXED
OVERTIME
CHASE (HIRING FIRING)
LEVEL (WITH BACKORDERING)
LEVEL (WITHOUT BACKORDERING)
 Weeks
1 2 3 4 5 6 7 8 9

Prajit Engine 185

Nirnoy 185
Eng. Acc Sirisha 185
Body & Chasis

Harshal 825
tyres

level 2 level 1

10.27778 11 11
9 2
9 2
11 0
9 2
15.41667 16 If you cannot make in 2 weeks then I
start from week 7
 10 11 12

Aditi car 185

200 cars
15 in Inventory

100 tyre in inventory

925

level 0
Alto car

2
4
4
6
not make in 2 weeks then I give you 3 weeks
Case:- Lift All Company(MRP)
A company manufactures two types of lifting aides. The Pax Model and the Dax Model. A customer has pla
in week 7 and a further 100 in week 10; he requires a further 200 of the Dax Model in week 9. The simplifi
The Pax Model Requires one Rain Cover, two Handles and four Pulley Assemblies. The Dax Model Requi
Each Pulley Assembly comprises of 20 mtr of Rope and three Pulleys. Lot sizes, starting on-hand-inventor
that orders can only accepted for these lot sizes or multiples of them. The firm only manufactures products
Master Production Schedule, a complete set of Materials Requirements Schedules and a Planned Order R

Master Production Schedule for :-

Item Time Period
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement

Master Production Schedule for :-

Item Time Period
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Material Requirement Schedule for :-

Lead Time:-
Lot Size:-
Level:-
Time Period
Parent:-
1 2 3 4 5
Gross Requirements
On-hand inventory
Net Requirement
Scheduled Receipts
Planned Order Release

Planned Order Release Report

Item Time Period
1 2 3 4 5
 odel. A customer has placed the following orders:- He requires 50 of the Pax Model
l in week 9. The simplified product structure for the Pax and Dax Model is shown.
s. The Dax Model Requires one Handle and two Pulley Assemblies.
tarting on-hand-inventory and lead times are given. The lot sizes shown indicate
y manufactures products for which it has firm orders. Prepare a
s and a Planned Order Release Report based on the information given.

6 7 8 9 10 11 12

6 7 8 9 10 11 12

6 7 8 9 10 11 12
6 7 8 9 10 11 12

6 7 8 9 10 11 12

6 7 8 9 10 11 12
6 7 8 9 10 11 12

6 7 8 9 10 11 12

6 7 8 9 10 11 12

6 7 8 9 10 11 12
6 7 8 9 10 11 12

6 7 8 9 10 11 12
 1)Loading – i) Finite ii) Infinite
2)Routing How the work will be done
3)M/C limited or Human Limited
4)Scheduling – i)Forward Scheduling ii)Backword Sche
5)Sequencing
6)Dispatching Giving instructions to "Begin Work"
7)Expediting
8)Follow-up

Loading Finite
Infinite

Here we deal with the following types of problems :-

“n” Jobs “2” machines
“n” Jobs “3” machines
“n” Jobs “k” machines
“n” Jobs “n” machines (Assignment Problem)
“n” Jobs “1” Machine ( We study this problem now)
ackword Scheduling

n Work"
Jobs(in Order of Arrival) Processing Time (Days/hrs) Due Date (Days Hence) Vaishali
A 3 5 1.66666666666667
B 4 6 1.5
C 2 7 3.5
D 6 9 1.5
E 1 2 2

STR
CR
SIRO

Rules AVG DELAY AVG WAIT AVG JOBS IN SYSTEM

FCFS
SOT
EDD
1) First Come First Served (FCFS)
SEQUENCE PROCESSING TIMES DUE DATE PROCESSING

TOTAL PROCESSING TIME= ← This is also known as Makespan time.

AVG DELAY = Makespan time remains the same for all rules
AVG WAIT =
AVG JOBS IN SYSTEM
 2) SOT/MOPT (Shortest Operating Time Rule/ Minimum Operating time rule)
DELAY/TARDINESS WAIT/ FLOW SEQUENCE PROCESSING TIMES DUE DATE

espan time. TOTAL PROCESSING TIME=

same for all rules AVG DELAY =
AVG WAIT =
AVG JOBS IN SYSTEM
mum Operating time rule) 3) EDD Rule (Earliest Due Date Rule)
PROCESSING DELAY/TARDINESS WAIT/ FLOW SEQUENCE

TOTAL PROCESSING TIME=

AVG DELAY =
AVG WAIT =
AVG JOBS IN SYSTEM
st Due Date Rule)
PROCESSING TIMES DUE DATE PROCESSING DELAY/TARDINESS WAIT/ FLOW
Jobs(in Order
Processing
of Arrival)
Time
Due(Days/hrs)
Date (Days Hence) Jobs(in Order
Processing
of Arrival)
Time
Due(Days/hrs)
Date (Days Hence) Jobs(in Order of Arrival)
A 3 5 E 1 2
B 4 6 C 2 7
C 2 7 A 3 5
D 6 9 B 4 6
E 1 2 D 6 9
Jobs(in Order
Processing
of Arrival)
Time
Due(Days/hrs)
Date (Days Hence)
E 1 2
A 3 5
B 4 6
C 2 7
D 6 9
1) WHAT IS INVENTORY
2) WHAT ARE THE TYPES OF INVENTORY
3) WHAT IS THE PURPOSE OF INVENTORY
4) VARIOUS INVENTORY MANAGEMENT SYSTEMS
5) WHAT ARE THE VARIOUS COSTS OF INVENTORY

MODEL 1 EOQ = ECONOMIC ORDER QTY

DEMAND D= 10000 PER TIME PERIOD

(USUALLY PER ANNUM)

COST OF ITEM Ci 2 RS. PER UNIT

ORDERING COST C 36 RS PER ORDER

ACQUISITON COST (O, Co, S)
SETUP COST
PROCUREMENT COST

HOLDING COST H 9% RS PER UNIT PER TIME PERIOD

CARRYING COST (h,I, Ci) 0.18 1) THE TIME PERIOD SHOULD BE THE SAME AS DEMAND
CARRYING RATE 2) SOME HOLDING COST IS GIVEN IN % THEN IT WILL TAKEN TO % OF COST OF

BACKORDERING COST S RS PER UNIT

SHORTAGE COST
Ritwika
RICE 20 KG PER MONTH
COST RS 50 PER KG
Q Fixed Cost Ordering Cost
20 1000 10
10 1000 20
5 1000 40
4 1000 50
2 1000 100
1 1000 200
 QTY FIXD BUT NOT TIME Q TYPE FIXED QTY EOQ
FIXED REORDER LEVEL SYSTEM
FIXED ORDER POINT SYSTEM

TIME IS FIXED BUT NOT THE QTY P TYPE FIXED TIME PERIOD SYSTEM

EOQ SQRT(2*D*C/H)

ORDERING COST HOLDING COST

TC D*Ci +(D/Q)*C +1/2(Q*H)
20000 180 180
FXD COST ORDERING COST HOLDING COST

LET US ASSUME THAT NUMBER OF WORKING DAYS ARE 300 DAYS

N= NUMBER OF ORDERS= (D/Q)

T=TIME PERIOD BETWEEN EACH ORDER =(1/N)*NO.OF WORKING DAYS

TAKEN TO % OF COST OF ITEM 60

DAILY DEMAND RATE= 33.33333333333

LET LEAD TIME = 3

REORDER LEVEL=ROL= DAILY DEMAND RATE*LEAD TIME

Holding Cost 100
100
80
60
50
40
20
 2000

+(D/Q)*C = +1/2(Q*H)
20360

YS ARE 300 DAYS

5

)*NO.OF WORKING DAYS

EOQ is the quantity that balances your cost of ordering and holding Inventory
Eoq is also defined as the quantity that minimizes your total cost of operating inventory per a
DAYS Lead Time is the time between placing an order and physically receiving the goods in stock

DEMAND RATE*LEAD TIME

ding Inventory
t of operating inventory per annum
eceiving the goods in stock
1) WHAT IS INVENTORY
2) WHAT ARE THE TYPES OF INVENTORY
3) WHAT IS THE PURPOSE OF INVENTORY
4) VARIOUS INVENTORY MANAGEMENT SYSTEMS
5) WHAT ARE THE VARIOUS COSTS OF INVENTORY

MODEL 1 EOQ = ECONOMIC ORDER QTY

DEMAND D= 3200 PER TIME PERIOD pa

(USUALLY PER ANNUM)

COST OF ITEM Ci 6 RS. PER UNIT

ORDERING COST C 150 RS PER ORDER

ACQUISITON COST (O, Co, S)
SETUP COST
PROCUREMENT COST

HOLDING COST H 25% RS PER UNIT PER TIME PERIOD

CARRYING COST (h,I, Ci) 1.5 1) THE TIME PERIOD SHOULD BE THE SAME AS DEMAND
CARRYING RATE/charges 2) SOME HOLDING COST IS GIVEN IN % THEN IT WILL TAKEN TO % OF COST OF

BACKORDERING COST S RS PER UNIT

SHORTAGE COST
Ritwika
RICE 20 KG PER MONTH
COST RS 50 PER KG
Q Fixed Cost Ordering Cost
20 1000 10
10 1000 20
5 1000 40
4 1000 50
2 1000 100
1 1000 200
 QTY FIXD BUT NOT TIME Q TYPE FIXED QTY EOQ
FIXED REORDER LEVEL SYSTEM
FIXED ORDER POINT SYSTEM

TIME IS FIXED BUT NOT THE QTY P TYPE FIXED TIME PERIOD SYSTEM

EOQ SQRT(2*D*C/H) 800

Average Inventory 400
ORDERING COST HOLDING COST
TC D*Ci +(D/Q)*C +1/2(Q*H)
19200 600 600
FXD COST ORDERING COST HOLDING COST

LET US ASSUME THAT NUMBER OF WORKING DAYS ARE 300 DAYS

N= NUMBER OF ORDERS= (D/Q)

T=TIME PERIOD BETWEEN EACH ORDER =(1/N)*NO.OF WORKING DAYS

TAKEN TO % OF COST OF ITEM 75

DAILY DEMAND RATE= 10.66666666667

LET LEAD TIME = 4

REORDER LEVEL=ROL= DAILY DEMAND RATE*LEAD TIM

Holding Cost 42.66666666667
100
80
60
50
40
20
 +(D/Q)*C = +1/2(Q*H)
20400

YS ARE 300 DAYS

4

)*NO.OF WORKING DAYS

EOQ is the quantity that balances your cost of ordering and holding Inventory
Eoq is also defined as the quantity that minimizes your total cost of operating inventory per a
DAYS Lead Time is the time between placing an order and physically receiving the goods in stock

DEMAND RATE*LEAD TIME The manager has the following choices

1) order as per EOQ 800
2) Order five times a year 640
3) Order 1600 units every time an order is placed 1600
What is the consequence of this decision

1) supposing the demand increases by 25%

2) supposing the demand decreases by 25%
what is the implication on EOQ and TC
ng Inventory
of operating inventory per annum
eiving the goods in stock
INVENTORY

1) WHAT IS INVENTORY
2) WHAT ARE THE TYPES OF INVENTORY
3) WHY ARE INVENTORIES REQUIRED
4) WHAT ARE THE VARIOUS INVENTORY MANAGEMENT SYSTEM
5) VARIOUS COSTS INVOLVED IN INVENTORY

MODEL 1 EOQ ECONOMIC ORDER QTY

DEMAND D= 18000 UNITS PER TIME PERIOD

PA (USUALLY PER ANNUM)

COST OF ITEM Ci 5 RS PER UNIT

ORDERING COST C 50 RS PER ORDER

ACQUISITION COST
SETUP COST

HOLDING COST H 9% RS PER UNIT PER TIME PERIOD

CARRYING COST 0.45 1) THE TIME PERIOD OF DEMAND AND HOLDING COST SHOULD BE THE SAME
CARRYING RATE 2) SOME TIMES HOLDING IS GIVEN IN %, THEN IT IS TAKEN TO BE % OF COST OF

SHORTAGE COST B RS PER UNIT

BACKORDERING COST
ANURADHA

DEMAND=20 KG
COST OF RS 50/KG
ORDERING HOLDING
Q FXD COST COST COST
20 1000 10 100
10 1000 20 70
5 1000 40 60
4 1000 50 50
2 1000 100 25
 QTY IS FIXED BUT NOT THE TIME Q TYPE EOQ
FIXED REORDER SYSTEM
FIXED REORDER POINT/TIME SYSTEM

TIME PERIOD FIXED BUT NOT QTY P TYPE PERIODIC REVIEW

FIXED TIME PERIOD SYSTEM

ORDERING COST (D/Q)*C

HOLDING COST 1/2*Q*H

1/2*Q*H = (D/Q)*C

EOQ Q = √2*D*C/H 2000

ORDERING HOLDING
TC = FIXED COST COST COST

SHOULD BE THE SAME TC= D*Ci +(D/Q)*C + 1/2*Q*H

KEN TO BE % OF COST OF ITEM 90000 450 450
90900

N = NUMBER OF ORDERS 9

LET THE NUMBER OF WORKING DAYS = 300 DAYS IN A YEAR

T= TIME PERIOD BETWEEN ORDERS= (1/N)*NUMBER OF WORKING DAYS
33.33333333
DAILY DEMAND RATE= 60

LET THE LEAD TIME= 3 DAYS

REORDER LEVEL (ROL)= DAILY DEMAND RATE *LEAD TIME

180
Project Management
1) CPM Critical Path Method A
2) PERT Programme Evaluation and Review Technique
A

Immediate
Activity Predecessor
A - B E
B - G
C - START A D
D A
E B
F C C F
G D,E
H F,G

rashi ritwika
Immediate
Activity Predecessor DAYS 0,2 2,5
A - 2 0,0 0,2 3,6
B A 3 START A2 B3
C A 4 2,6
D B,C 6 C4
E - 2 2,6
F E 8 0,2
E2
2,4

For each node we will calculate Activity

forward pass Ei (Es) = Earliest Start time Start
Ej (Ef)= Earliest Finish time A
backward pass Li (Ls)= Latest Start time B
Lj (Lf) = Latest Finish time C
the project gets over in 12 days D
E
F
End

HES HEAD EVENT SLACK

Lf (of the activity in consideration)- Es (of the following/activit

FF free float
total float - HES

IF Independent Float
Es(of activity ahead)-Lf(of activity behind)-duration (of activity
 H END

shonali

11/18/2021
6,12
D6 12,12 all paths from START to END
6,12 END A-B-D 11
2,10 A-C-D 12
F8 E-F 10
4, 12

Ls-Es or Lf-Ef
Li-Ei or Lj-Ej

DAYS Ei (Es) = Ej (Ef)= Li (Ls)= Lj (Lf) = total float HES FF IF

baad main pahley

on)- Es (of the following/activity ahead)

ty behind)-duration (of activity under consideration)

 Immediate
Activity Predecessor DAYS 0,2 2,5
A - 2 0,0 0,2 3,6
B A 3 START A2 B3
C A 4 2,6
D B,C 6 C4
E - 2 2,6
F E 8 0,2
E2
2,4

For each node we will calculate Activity DAYS

forward pass Ei (Es) = Earliest Start time Start 0
Ej (Ef)= Earliest Finish time A 10
backward pass Li (Ls)= Latest Start time B 8
Lj (Lf) = Latest Finish time C 7
the project gets over in 12 days D 12
E 18
F 12
End

HES HEAD EVENT SLACK

Lf (of the activity in consideration)- Es (of the following/activity ah

FF free float
total float - HES

IF Independent Float
Es(of activity ahead)-Lf(of activity behind)-duration (of activity un
 11/18/2021
6,12
D6 12,12 all paths from START to END
6,12 END A-B-D 11
2,10 A-C-D 12
F8 E-F 10
4, 12

Ls-Es or Lf-Ef
Li-Ei or Lj-Ej

Ei (Es) = Ej (Ef)= Li (Ls)= Lj (Lf) = total float HES FF IF

0 0 0 0
0 10 3 13 3 0 3 0
0 8 0 8 0 0 0 1
10 17 13 20 3 0 3 0
8 20 8 20 0 0 0 0
8 26 14 32 6 2 4 0
20 32 20 32 0 0 0 0
12 12 12 12 baad main pahley

he following/activity ahead)

duration (of activity under consideration)

SELECTIVE INVENTORY CONTROL TECHNIQUE
ABC ANALYSIS
80:20 PRINCIPLE
SELECTIVE INVENTORY CONTROL TECHNIQUE
ABC ANALYSIS
80:20 PRINCIPLE PARETO ANALYIS
LEAN MANUFACTURING
JUST IN TIME
JIT

INVENTORY
MRP PUSH SYSTEM OF PRODUCTION

JIT/LEAN PULL SYSTEM DEMAND PULLS PRODUCTION

SYNCHRONOUS MANUFACTURING
 BIG JIT HAVING AND ENVIRONMENT FOR JIT TO WORK

JIT
(LEAN)
LITTLE JIT MECHANISM BY WHICH JIT WILL WORK
BIN
KANBAN
CARD
GOLF
LIGHT
QUALITY CONTROL
quality 400

99.74% 398.96

95.44% 381.76

68.26% 273

135 140 mean=150cm 160 165

mean - 3 sigma std dev=5cm mean+3 sigma

QUALITY CONTROL
FACT NO. 1
NORMAL DISTRIBUTION TELLS US THAT 99.74% OF OBSERVATIONS/VALUES/ERROR/READINGS WILL LIE BETWEEN MEAN(+-) 3

FACT NO.2
VARIATIONS ARE INHERENT MAY IT BE IN YOUR HANDWRITING OR MACHINE MAKING PRODUCTS
VARIATIONS ARE CAUSED BECAUSE OF TWO CAUSES
a) CHANCE CAUSE OR COMMON CAUSE
b) ASSIGNABLE CAUSE OR SPECIAL CAUSE
1) INCOMING IMPURITY IN RAW MATERIAL
2) LACK OF TRAINING
3) UNSKILLED WORKER
4) MACHINE BREAKDOWN
5) WEAR AND TEAR OF TOOLS

FACT NO.3 QUALITY HAS MANY ANNOTATIONS OR NOTATIONS

INNATE EXCELLENCE
FITNESS OF USE
PRODUCT FEATURES OR PERFORMANCE
CHEAP AND BEST
QUALITY FOR PRODUCTION PEOPLE CONFORMANCETO SPECIFICATIONS
 399

382

WILL LIE BETWEEN MEAN(+-) 3 SIGMA

 •Meeting the needs and expectations of custo
•Covering all parts of the organization
internal customers
external customers
If the internal customers are hasseled then external customers also suffer

•Including every person in the organization

it is said that most quality control programmes tend to fail because of lack of commitment by the top managem

•Examining all costs which are related to qual

1) Prevention Cost
2) Appraisal Cost
3) Internal Failure Cost
4) External Failure Cost

If we spend more on Prevention and Appraisal Cost then the internal failure cost and External failure cost are bo

•Getting things right first time i.e. designing in

QFD- Quality Function Deployment also known as Voice of Customer or House of Qulaity
VA/VE Value Analysis / Value Engineering Cost to function analysis
DFMA Design for Manufacturing and Assembly
Taguchi Methods
Poka Yokes fail safing devices Shiego Shingo
Boka Yoke

Developing the system and procedures which suppo

BIS ISI

9001 2015
9002
ISO ISO 9001: 2015 9003
9004
QCM
Awards MR

DEMING MALCOLM EQCA RGNQA

JUSE BALDRIDGE
 1989

1)Developing a continuous process of improvemen

BREAK THROUGH
RADICAL CHANGES BUSINESS PROCESS RE-ENGINNERING BPR
M J HAMMER

CONTINUOUS IMPROVEMENT MAINTENANCE STRATEGY

INCREMENTAL IMPROVEMENT
-DEMING WHEEL -RUN TO BREAKDOWN MAINTENANCE
-KAIZEN CYCLE -CONDITIONAL BASED MAINTENANCE
-P-D-C-A -PREVENTIVE MAINTENANCE

TPM TOTAL PREVENTIVE MAINTENANCE

TPM TOTAL PRODUCTIVE MAINTENANCE
tions of customers
ation

ganization
ommitment by the top management

lated to quality, especially failure cost

t and External failure cost are bound to go down; out of which the external failure cost is exteremely severe

. designing in quality rather than inspecting it

er or House of Qulaity
VA/VE It is different from cost cutting
VE is before the product is launched
VA is after the product is launched
Taxi 400 Rs
auto 200 Rs
Bus 40 Rs

s which support quality and improvement

f improvement.

WN MAINTENANCE
D MAINTENANCE

EVENTIVE MAINTENANCE
ODUCTIVE MAINTENANCE
 QFD- Quality Function Deployment also known as Voice of Customer or

ting it

m
o
t
h
e b
C r a
a b t
VOC s o t
i a e
n r r
VOC g d y
Price 4.32
BB 3.98
Durability 3.54
Features 4.22
Lightweight 3.87

4 HP (me) 5 3
4 Lenovo 4
5 Dell 5
5 Acer 3
n as Voice of Customer or House of Qulaity

1 is bad
H
P L5 is very good
e
( n D A
m o e c
e v l e
) o l r
4 4 5 5
3 4 5 4
4 4 5 5
5 4 4 4
4 5 4 3
 statistical quality control/statistical process control
SQC / SPC

FOR VARIABLES FOR ATTRIBUTES

( CONTINUOUS, DECIMAL VALUES, ( DISCRETE, WHOLE NUMBER
INFINITE VALUES, MEASURED, FINITE, COUNTED)
MEASURING INSTURMENT)

X BAR CHART R BAR CHART P BAR CHART

(MEAN CHART) (RANGE CHART) (PROPORTION / FRACTION,
DEFECTIVE CHART)
UCL
CL
LCL mean(+-)3sigma variables

continuous

discrete attributes
tical process control

variable
E, WHOLE NUMBER

continuous
values in decimal, inifinte values
NP BAR CHART C BAR CHART measured, measuring instrument
TION / FRACTION, (NUMBER PROPORTION/ (NUMBER
FRACTION DEFECTIVE DEFECTS discrete
CHART) CHART) whole number, finite values
counted
mean(+)3sigma R R 200.25
UCL s s s

cl=mean 200.00

R
mean(-)3sigma R 199.75
LCL

SIGMA= 0.333

quality control charts with 3 sigma limits

CL= mean 99.74%
UCL mean(+)3sigma
LCL mean(-)3sigma
 1±0.005 R&D
UTL/LTL
UTL= 1.005
CL= 1
LTL 0.995

5±0.05
USL/LSL
USL 5.05
COUGH SYRUP 5%
CL 5

LSL 4.95

Cpk= PROCESS CAPABILITY 2

conformance to specifications

VA/VE cost to function analysis cost cutting

taxi/car 200
Auto 100

bus 40
SIX SIGMA

DPMO 150000 4
4

DPMO=DEFECTS PER MILLION OPPURTUNITY

LOAN
2 DEFECTS OUT OF 1 BILLION SIX SIGMA
4 DEFECTS OUT OF 1 MILLION

CCR/CTQ CCR/CTQ
10 DAYS NO DELAYED DELIVERIES
NO WRONG DELIVERIES
NO CRUMPPLED DELIVERIES

DMAIC CYCLE FOR SIX SIGMA IMPLEMENTAION

DEFINE
MEASURE
ANALYSE
IMPROVE
CONTROL
1) Give Examples of Queueing QUEUEING
2) Queues are not only humans
3) Queue does not mean a straight line
λ= arrival rate arrival is poisson distributed while inter arrival time is exponential distributed
μ= service rate service rate is exponential distributed
λ (or) ra ta
Arrival Process customer/hr
a) According to source Finite
Infinite

b) According to Numbers single

group

c) AccordinG to time deterministic

stochastic or random

Service Process
a) Single Server or Multiple server

Structure of the service system

a) Single Service Facility
b) Multiple parallel Facility with single queue
c) Multiple parallel Facility with Multiple Queues
d) Service in Series

Order of Delivering Service

1) FCFS/FIFO This is most followed
2)LCFS/LIFO
3) Priority Service
4) Service in Random Order

Jockeying :- Jumping Queues

Reneging :- joining line and later leaving due to long wait
Balking :- seeing length of line and leaving without ever waiting
μ (or) rs ts
The manager of an office is confused as to why large queues seem to build up at the enquiry desk.
It is known that customers arrive at a rate of around 10 per hour and that an average query takes 5 minutes to be dealt with

λ= arrival rate cust/hr ra = arrival rate

ta = time period between arrivals
μ= service rate cust/hr rs = service rate
ts average service time

1) Service intensity=Utilization parameter=probalility that the server is busy

ρ= λ/μ =

2) Probability that the server is idle

Po=(1-λ/μ)=1-ρ

3) Length of system Ls
Ls=λ/(μ-λ)=

4) Waiting Time in System Ws

Ws = Ls/λ = 1/(μ-λ)= hr
MIN

5) Length of Queue Lq
Lq=λ2/μ(μ-λ)

6) Waiting time in Queue Wq hr

Wq= Lq/λ= λ/μ(μ-λ) min
minutes to be dealt with.

min

min
Vehicles arrive at a motorway toll at a rate of 140 per hour. Only one toll booth is open and the average time that it takes to
Assuming that the inter-arrival time and service time are both exponentially distributed, what is the average number of cars

λ= arrival rate cars/hr ra = arrival rate

ta = time period between arrivals
μ= service rate cars/hr rs = service rate
ts average service time

1) Service intensity=Utilization parameter=probalility that the server is busy

ρ= λ/μ =

2) Probability that the server is idle

Po=(1-λ/μ)=1-ρ

3) Length of system Ls
Ls=λ/(μ-λ)=

4) Waiting Time in System Ws hr

Ws = Ls/λ = 1/(μ-λ)= min
sec

5) Length of Queue Lq
Lq=λ2/μ(μ-λ)

6) Waiting time in Queue Wq hr

Wq= Lq/λ= λ/μ(μ-λ) min
sec
 average time that it takes to take the driver’s money, give change etc is 20 seconds.
s the average number of cars at the toll and the average time that a driver has to wait before exiting the toll?

cars/hr
sec

sec
question type study from where
NN No Need
N Numeric
T Theroy

slides +lecture video