Solved Example – 1(A)

Chocolate chip cookies

https://www.youtube.com/watch?v=kUlA3cBhApw

Questions

a) Explain the process in not more than 250 words.

b) Draw process flow diagram.
c) What extra information do you require for process flow analysis? (Show in a tabular form)

Answers

a) The process starts with adding ingredients like white sugar, brown sugar & butter to a big size
mixture where the mixture is mixed till butter becomes soft & sugar gets dispersed. Next, they
add chocolate chips, flour, baking soda salt, beaten eggs & vanilla essence. The mixing is
resumed till everything is well blended which usually takes about 5 mins. The workers then
turn the cookie dough to a machine which pushes the dough to a round shape dough rounds
solidify in 5 mins when they are kept at freeze tunnel. Now the dough round passes to the
metal detector to ensure they did not contain metal particles & the cookies are ready.

b) Process flow diagram can be drawn from the information available in the video

Adding & Mixing Cookie dough

Adding & Mixing Round pieces Round pieces goes
choco chips, pushed to round
ingredients solidfy to metal detector
flour & salt pieces & are finally ready

5 min/Process 5 min/Process

c) For process flow analysis, we need process time of P1, P3 & P5

Process Given/Not Given Data Provided

P1 Not Given
P2 Given 5 min
P3 Not Given
P4 Given 5 min
P5 Not Given
 Solved example – 2

A newly proposed AADHAAR enrolment process has 5 stages. Following is the enrolment process- First,
the documents produced by the customer are verified manually at the verification desk. This takes 2
minutes per customer. Next, details of an individual are enteredand uploaded through a computer at data
desk. There are two data desks, and each take 4 minutes per customer. Once the data is uploaded,
customer reaches Biometric station whichtakes fingerprints and iris scans. It takes 3 minutes per customer
to capture and upload Biometrics to central server. Now, a server level verification of biometric is
performed to ensure that there are no duplicates. Upon successful verification, which takes 2 minutes
per person, AADHAAR card is printed at a rate of 30 cards per hour.

(a) Draw the process flow diagram, find throughput time (TPT), Bottleneck (B/N) resourceand cycle
time (CT)
(b) If enrolment centre works 9 AM to 6 PM, with one-hour lunch-break (1 PM to 2 PM), what is the
daily capacity of the centre?
(c) If demand is 160 person per day (assume uniformly distributed demand duringworking hours),
what is the utilization of each of the stages?
(d) If per day demand is either 170 or 150 with equal probability, what is the average utilization of
Biometric station?
(e) A new customer arrives at centre at 11:26 AM, there are 10 people waiting before each of the
stages except first stage where there are nine people excluding her. The new customer is
wondering by when will she be served before 1:30 PM? What is the earliest and latest time by
which she will be served (No rush orders allowed)?
 Practice Problem – 2

Problem 1: For the Solved example-2 (AADHAAR enrolment), answer the followingquestions:
(a) You are worried about the limited capacity of the AADHAAR enrolment system. A friend of your who owns
a start-up has pioneered the automated document verification (ADF)which can verify documents for a
customer in 10 seconds. Your friend is ready to provide ADF machines for free on trial basis (for 3
months). Later, you may have to pay INR 10 for verifying documents for 100 customers. What should you
do?
(b) A third identical data desk is added to the system. How would your analysis for part (e) of the Solved
example-2 change?
Problem 2: Objective question 11 (page 363 of the 17e textbook)
Problem 3: Objective question 14 (page 364 of the 17e textbook)
 Solved example – 3

You visit a shop selling hot samosas and wondered if the samosas served there are made using
fresh ingredients. You closely observed the samosa making process and found that dough
making and stuff making are two simultaneous processes which are performed before stuffing
is stuffed into dough. Post that, stuffed raw samosas are deep fried until they turn golden
brown which takes around 20 minutes per batch of 20 samosas. Samosas made at this shop
are in very high demand and whatever produced is consumed in a very short time. Following
are the details of samosa making process for a batch size of 20:
Part 1- Stuff making: Involves boiling potato (15 minutes per batch), mashing and spice mixing
(10 minutes per batch).
Part 2- Dough making: Starts with dough mixing which takes 10 minutes per batch, then,
dough ball making (30 seconds per ball). Finally, roll-out, which involves flattening of dough
ball (takes 30 sec per samosa).
Once part 1 and 2 are completed, stuffing is sealed inside dough flats and given the conical
looking shape of samosas. This takes 50 seconds per samosa. Finally, the raw samosas are
deep fried. Each activity happens only in batches, that is, until all units of a batch are
processed using one activity, another activity cannot be performed.

(a) Draw the process flow diagram, find TPT, CT and B/N.
(b) Draw the Gantt chart for the process mentioned above.
(c) The shop works for 12 hours a day (works seven days a week), what is the per day
capacity of the shop?
(d) You found that average inventory (post boiling and dough mixing) at shop is 1500
samosa equivalent, are these samosas made using fresh ingredients?
 Practice Problem – 3

Problem 1: For the Solved example-3 (“Samosa shop”), answer the following questions:
(a) Instead of using the batch size of 20 the shop has started using the batch size of 30.
Moreover, additional resources were acquired to maintain the process time of each of
the operations to the original level. For example, boil potato still takes 15 minutes even
for batch size of 30. What is the freshness of samosas ingredients if average WIP
inventory remains unchanged at 1500?
(b) If the shop owner wants to maintain a freshness level of 1 day, what actions should he
take?
(c) How would the problem analysis change if process time for boiling potato was 30
minutes per batch instead of 15 minutes per batch?
Problem 2: Objective question 5 (page 363 of the 17e textbook)
Problem 3: Objective question 7 (page 363 of the 17e textbook)
 Solved example – 4

Students arrive at the Night Canteen at the rate of one every three minutes. The time required
to pick tea and snack from the counter varies randomly due to various factors such as serving
size, level of inspection (Yes, some people don’t pick food until they scrutinize it using their
microscopic vision!) etc. It has been found that on average a student spends 2 minutes on the
counter (excluding the waiting time). The arrivals follow Poisson distribution and time spent
on counter (service time) follows exponential distribution.

(a) What is the probability that there are at most three students in the system?

(b) On average, how many students are in the queue?

(c) On average, how many students are in the system?

(d) How much is the average waiting time in the queue?

(e) On average, how many minutes are spent by a student in the system?
 Practice Problem – 4

Problem 1: For the Solved example-4 (“Night Canteen”), answer the following questions:
(a) The night canteen wants to commit that 90% of the times students will get order with in
“X” minutes of joining queue. What is “X” for the current system? (Hint: Due dates)
(b) How would the analysis change if additional identical counter is opened and two
separate queues are maintained for each counter?
(c) What if a common queue feeds both the counters?
Problem 2: Objective question 6 (page 322of the 17
etextbook)
(d) Problem 3: Objective question 8 (page 323 of the 17 e
textbook)
 Solved example – 5

Problem 1: Example 20.2 (Page 641 of the 17e text book)

Problem 2: Solved problem 2 (Page 659 of the text book)

Problem 3: You own a car battery retail outlet. You buy batteries from a supplier at INR 10000
per battery. The monthly demand for battery is 60 units. Every time you place an order for
the batteries, it costs you INR 2000. A battery requires careful storage, enough space for
ventilation and needs to be charged to maintain desired charge level while it is stocked at
your retail outlet (before being sold). You found that due to factors mentioned above, the
inventory carrying charge is 10% per unit per annum.
(a) How many batteries should you order every time?
(b) How many orders would you place in a year?
(c) What would be the time between orders?
(d) What is the minimum total annual cost possible?
What would be the total annual cost if you order 25% more than the EOQ
 Practice Problem – 5

Problem 1: Objective question 12 (page 663 of the 17etextbook)

Problem 2: Objective question 18 (page 664 of the 17etextbook)
Problem 3: For the Problem 3 of Solved example 5 (“Battery retailer”), answer the following
questions:
(a) EOQ was 53.66 units but, you can order only integer number of batteries. On what
basis would you decide whether to order 53 unit or 54 units?
(b) What is the impact of an erroneous choice? That is, if 53 was the best order quantity
but you decide to order 54 units, then what would be loss due this error?
(c) What is the impact of change in inventory carrying charge (from 10% to 15%) on the
EOQ and the error?
 Solved example – 6

Problem 1: Example 20.3 (Page 644 of the 17e text book)

Problem 2: Example 20.4 (Page 645 of the 17e text book)

Problem 3: A pen manufacturer produces pen as well the refills of the pen. The refills are usedin
the final production of the pen and therefore, sold as a part of the pen. Moreover, the refillsare
also sold separately in the market to satisfy the demands from existing pen owner. The key
ingredient for the refill manufacturing process is the ink which costs INR 1000 per litre. Storage
of the ink requires special attention and it is estimated that annual inventory carryingcharge
stands at 20%. A recent inhouse analysis revealed that the equivalent weekly ink demand for
the refills sold with pen follow normal distribution with mean and standard deviation of 5000
litres and 1000 litres, respectively. Moreover, equivalent weekly ink demand for the refills sold
separately in the market is normally distributed with mean 8000 litres and standard deviation
2500 litres. Furthermore, these two demands are found to be independent of each other. The
ink used in the plant is procured from an external supplier. Every time the pen manufacturer
places an order for pen it costs INR 1000 and it takes 1 weekto receive those orders. If the pen
manufacturer intends to maintain a service level of 95%, answer the following questions if it is
decided that ink inventory management would be executed through continuous review policy:
(a) Design the inventory policy
(b) What would be the total cost?
 Practice Problem – 6

Problem 1: Objective question 19 (page 665 of the 17 e textbook)

Problem 2: Objective question 22 (page 665 of the 17e textbook)
Problem 3: For the Problem 3 of Solved example 6 (“Pen manufacturer”), answer the
following questions:
(a) How would your analysis (i.e. inventory policy decisions and total cost) would change
if the demand distributions DP and DR are not independent rather jointly normally
distributed with coefficient of correlation (ρ) = 0.8?
(b) Let’s assume originally each refill required 10 ml of the ink. Now, due to new findings
and technological improvements in ink characteristics, only 8 ml of ink is required
per refill. Moreover, the demand for pen refill and separate refill (in units not litres)
remain same as earlier. What would be the impact of this change on the inventory
policy and total cost?
 Solved example – 7

Problem 1: Example 20.5 (Page 647 of the 17etext book)

Problem 2: Solved problem 3 (Page 659of the 17e text
book)

Problem 3: Solved problem 4 (Page 659-660 of the

17etext book)
Problem 4: For the Problem 3 of Solved eg 6 (“Pen manufacturer”), design the inventory policy
if ink inventory management is done through periodic review policy.
 Practice Problem – 7

Problem 1: Objective question 14 (page 664 of the 17 e textbook)

Problem 2: Objective question 26 (page 665 of the 17 e textbook)
Problem 3: For the Problem 4 of Solved example 7 (“Pen manufacturer”), answer the
following questions:
(a) It was decided that ink order would be placed once in week. However, you continue
to work with older order upto level (S= 20408.18 litres). What is the impact of this
decision?
(b) Design the periodic review policy inline with the decision mentioned in part (a) i.e.
period = 1 week.
 Solved example – 8

Problem 1: Example 20.1 (Page 637 of the 17e text book)

Problem 2: Solved problem 1 (Page 658 of the 17e text book)
Problem 3: An apparel brand “United Colors of India”, UCI produces jersey for Mumba Indians
(MI) team of Nationwide Cricket League (NCL). NCL is organised every year and to keep up
with dynamic trend and sponsors, the design of the jersey used by players is updated every
year. Fans supporting MI show clear inclination toward buying these jerseys during NCL
season. Not surprisingly, UCI enchases this fan frenzy by launching MI jersey every season.
One jersey is sold at INR 1800 and it costs INR 1000 to produce it (including transportation).
Once the NCL season is over, fans see very little or no value in MI jersey. Therefore, these
jerseys are sold at a discounted price of INR 800. NCL 2020 would be the 63 rd edition of the
NCL and previous record show that the demand for UCI MI jersey follows a normal distribution
with mean 15,000 and standard deviation 4000. How many MI jersey should UCI produce this
year for retail?
 Practice Problem – 8

Problem 1: Objective question 4 (page 662 of the 17e textbook)

Problem 2: Objective question 6 (page 662 of the 17e textbook)
Problem 3: For the Problem 3 of Solved example 8 (“UCI, jersey”), answer the following questions-
(a) Under what condition would UCI’s manufacturing quantity be less than the mean
demand? What does that signify?
(b) Find optimal production for following price, cost, salvage cost pairs-
I. P = 1800, C = 1000, S = 400
II. P = 1800, C = 1600, S = 800
III. P = 1800, C = 1600, S = 1400
(c) Plot the demand (normal distribution with mean at 15K and std dev of 4K). Now, position each of the
four Q* calculated on the plot (one in original problem and three from part (b)). What are your
observations from the plot?