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Manufacturing can be defined as the application of physical and/or chemical processes to alter the geometry, properties,
and/or appearance of a given starting material to make parts or products. Manufacturing also includes the joining of
multiple parts to make assembled products.
Solution
Suppose a company has designed a new product line and is planning to build a new plant to manufacture this
product line. The new line consists of 100 different product types, and for each product type the company wants to
produce 10,000 units annually. The products average 1,000 components each, and the average number of processing
steps required for each component is 10. All parts will be made in the factory. Each processing step takes an average
of 1 min. Determine (a) how many products, (b) how many parts, and (c) how many production operations will be
required each year, and (d) how many workers will be needed in the plant, if each worker works 8 hr per shift for 250
days/yr (2,000 hr/yr)?
Solution
d) First consider the total time TT to perform these operations. If each operation takes 1 min (1/60 hr)
If each worker works 2,000 hr/yr, then the total number of workers required is
Manufacturing
Manufacturing Lead Time MLT
MLT is defined as the total time required to process a given part or product through the plant, including any time
due to delays, parts being moved between operations, time spent in queues, and so on.
Let Tc = the operation cycle time at a given machine, and Tno = the nonoperation time associated with each
operation. Further, suppose that the number of separate operations (machines) through which the work unit
must be routed = no. In batch production, there are Q work units in the batch. A setup is generally required to
prepare each machine for the particular product, which requires a time = Tsu. Given these terms, manufacturing
lead time for a given batch is defined as
EXAMPLE
A certain part is produced in batch sizes of 100 units. The batches must be routed through five operations to
complete the processing of the parts. Average setup time is 3.0 hr/batch, and average operation time is 6.0
min/pc. Average nonoperation time is 7.5 hr for each operation. Determine the manufacturing lead time to
complete one batch, assuming the plant runs 8 hr/ day, 5 days/wk.
Solution
A variable cost is one that varies in proportion to production output. As output increases, variable cost increases.
Examples include direct labor, raw materials, and electric power to operate the production equipment. The ideal
concept of variable cost is that it is directly proportional to output level. Adding fixed and variable costs results in
the following total cost equation:
When comparing automated and manual production methods, it is typical that the fixed cost of the automated
method is high relative to the manual method, and the variable cost of automation is low relative to the manual
method, as pictured in Figure. Consequently, the manual method has a cost advantage in the low quantity range,
while automation has an advantage for high quantities.
EXAMPLE
Two production methods are being compared, one manual and the other automated. The manual method produces
10 pc/hr and requires one worker at $15.00/hr. Fixed cost of the manual method is $5,000/yr. The automated
method produces 25 pc/hr, has a fixed cost of $55,000/yr, and a variable cost of $4.50/hr. Determine the break-even
point for the two methods; that is, determine the annual production quantity at which the two methods have the
same annual cost. Ignore the costs of materials used in the two methods.
Solution
Solution