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Unit 2 Manufacturing Operations: Sections
Unit 2 Manufacturing Operations: Sections
Sections:
1. Manufacturing Industries and Products
2. Manufacturing Operations
3. Production Facilities
4. Product/Production Relationships
5. Lean Production
6. Manufacturing Metrics
Manufacturing Lead Time
Rate of Production
Production Capacity
Work in Progress
Design Times
Utilisation/Availability
Industrial Automation
Architecture
Level 4
Business Information
(Business Office)
Level 3
Level 2
Level 1
Industrial Automation
(Shop Floor)
Level 0
Manufacturing Lead Time
Operating Times
Non-operating Times
Manufacturing Lead Time
30% 70%
Cutting Positioning, Loading
e.g.
Set-up Time
5% 95%
On Machine Moving and Waiting
Time
1.5% of total time - adds value
Manufacturing Lead Time
n1 n2 n3
Time
Operation Time
Non-operation Time
MLT = nm ( To + Tno )
Manufacturing Lead Time
n1 n2 n3
Q = Number of parts
n1 n2 n3
Order #1
Order #2
In practice
nq
Q i
Q i1
nQ
Operation Times
To = Tm + Th + Tth
Rate of Production
Tsu + QTo
Tp = Tsu + QTo
Q
Rate of Production
Rp = 1/Tp
Lead Times
nq
Production Capacity, Pc
Pc = WSwHRp
Pc = WSwHRp / Nm
Demand Rate
Dw = WSwHRp / Nm
WSwH = DwNm/ Rp
Generally:
WIP = PC U (MLT) / Sw H
WIP Ratio
PC U (MLT)
Sw H
WIP Ratio =
QTo
WU
Tsu + QTo
Utilisation, U = Output/Capacity
Q
Utilization: U =
PC
where
Q = quantity actually produced
PC = plant capacity
Availability
MTBF MTTR
Availability: A =
MTBF
Method 1:
Manual
Costs
VC 2 Method 2:
Automated
FC2
VC
1
Breakeven Point
FC1
Quantity, Q
Manufacturing Costs
FOHC
FOHR =
DLC
where
DLC = direct labor costs
Cost of Equipment Usage
where
Co = hourly rate, /hr
CL = labor rate, /hr
FOHRL = labor factory overhead rate
Cm = machine rate, /hr
FOHRm = machine factory overhead rate
Worked Problem
The break-even point is to be determined for two production methods,
one a manual method and the other automated. The manual method
requires two workers at 9.00/hr each. Together, they produce at a
rate of 36 units/hr. The automated method has an initial cost of
125,000, a 4-year service life, no salvage value, and annual
maintenance costs = 3000. No labour (except for maintenance) is
required to operate the machine, but the power required to run the
machine is 50 kW (when running). Cost of electric power is
0.05/kWh. If the production rate for the automated machine is 100
units/hr, determine the break-even point for the two methods, using a
rate of return = 25%. The solution requires familiarity with the Uniform
Annual Cost (UAC) method of determining an annual amount payable
(A) on a principle sum (P).
Solution
Manual method: variable cost = (2 workers)(9.00/hr)/(36 pc/hr) = 0.50/pc
Total cost as a function of Q is TC = 0.50 Q assuming no fixed costs.
Automated method: (A/P,25%,4) = = (0.4234)
UAC = 125,000(A/P,25%,4) + 3000 = 125,000(0.4234) + 3000 = 55,930/yr
Variable cost = = 0.025/pc
Total cost as a function of Q = 55,930 + 0.025 Q
Break even point: 0.50 Q = 55,930 + 0.025 Q, 0.475Q = 55,930, Q = 117,747
pc/yr
Hours of operation per year: Manual: H = = 3270.76 hr/yr.
Comment: This would require two shifts.
Automated: H = = 1177.47 hr/yr.
Comment: Plenty of additional capacity in one shift beyond the break-even
point.