Production Planning Horizons

Long-Range
Long-Range Capacity Planning (years)

Medium-Range
Aggregate Planning (3-18 months)

Short-Range
Master Production Scheduling (weeks)

Very-Short-Range
Production Planning and Control Systems
(hours - days)

Pond Draining Push Pull Focusing on

Systems Systems Systems Bottlenecks
 Production-Planning and Control
Systems

 Pond-Draining Systems
 Push Systems
 Pull Systems
 Focusing on Bottlenecks
1. Pond-Draining Systems
 Emphasis on holding inventories (reservoirs)
of materials to support production
 Little information passes through the system
 As the level of inventory is drawn down,
orders are placed with the supplying
operation to replenish inventory
 May lead to excessive inventories and is
rather inflexible in its ability to respond to
customer needs
2. Push Systems
 Use information about customers, suppliers,
and production to manage material flows
 Flows of materials are planned and controlled
by a series of production schedules that state
when batches of each particular item should
come out of each stage of production
 Can result in great reductions of raw-
materials inventories and in greater worker
and process utilization than pond-draining
systems
3. Pull Systems
 Look only at the next stage of production and
determine what is needed there, and produce
only that.
 Raw materials and parts are pulled from the
back of the system toward the front where
they become finished goods
 Raw-material and in-process inventories
approach zero
 Successful implementation requires much
preparation
4. Focusing on Bottlenecks
 Bottleneck Operations:
 Impede (delay) production because they have less
capacity than upstream or downstream stages
 upstream (supply side of the sc) and
downstream (demand side of SC) flows
 Work arrives faster than it can be completed
 is binding capacity constraint that control the
capacity of the system.
 Optimized Production Technology (OPT) is
needed to minimize bottleneck operations
4.2 Materials Requirement
Planning
 Definitions of MRP Systems

 Material requirements planning (MRP):

is computer-based information system that translates
master schedule requirements for end items into time-
phased requirements for subassemblies, components,
and raw materials.
 MRP-----cond
 MRP has become a centerpiece for all manufacturing
systems.
 The key to successful operations management in a
manufacturing company is the balancing of
requirements and capacities. It’s that simple and
yet very challenging.
 MRP is a computer based technique to determine the
quantity and timing for the acquisition of dependent
demand items needed to satisfy the master production
schedule (MPS) requirement.
 It is used for lumpy or erratic demands. Since the
control of purchasing depends on the order for the
finished products, the technique is said to be one of
‘dependent demand’.
 BASIC MRP CONCEPTS

 Material requirement planning is based on

several basic concepts, which are implicitly
defined. These concepts are:
 1.Independent versus dependent demand
 2. Lumpy demand
 3. Lead time
 4. Common use item
 5.Time phasing.
 1. Independent versus dependent demand
 Independent demand exists when a demand for a particular
item is unrelated to a demand for other item or when it is not
a function of demand of other inventory item. Independent
demands are not derivable or calculable from the demand of
something else hence they must be forecasted.
 When demand for items is derived from plans to make certain
products as it is with raw materials, parts, and assemblies
used in producing a finished product, those items are said to
have dependent demand.
 Once the independent demand is known, the dependent
demand can be determined
 MRP is the appropriate technique for determining quantities of
dependent demand item
Independent and Dependent
Demand----cond
Independent Demand

X Dependent Demand

D(3) K(2)

E(2) J(1) E(3) L(2)

Independent demand is uncertain.

Dependent demand is certain.
 Dependent vs. Independent Demand

Demand
Demand

“Lumpy” demand
Stable demand

Time Time
Amount on hand

Amount on hand
Safety stock
Time Time

Independent demand is fairly stable once allowances are made

for seasonal variations, but dependent demand tends to be
sporadic or “lumpy”; large quantities are used at specific
points in time with little or no usage at other times
I. MRP Inputs
MRP has three Inputs
1- Master Schedule Plan: states which end items are
to be produced, when these are needed, and in
what quantities.
2- Bill of Materials (BOM): contains a listing of all of
the assemblies, subassemblies, parts and raw
materials that are needed to produce one unit of
a finished product. Thus, each finished product
has its own bill of materials.
3- Inventory Records: stored information on the
status of each item by time period, called time
buckets.
 
A product structure tree for end item x

Level
0 X

1 B (2) C

2 D (3) E E (2) F (2)

3 E (4)
 Let’s consider the product structure tree shown in the above figure.
 End item X is composed of two Bs and one C. Moreover, each B requires three Ds

and E, and each D requires four Es. Similarly, each C is made up of two Es and two
Fs.
 These requirements are listed by level, beginning with ‘0’ for the end item, then ‘1’

for the next level, and so on.

 The items at each level are components of the next level up and, as in a

family tree, are parents of their respective components.

 N.B : the quantities of each item in the product structure tree refer only to the
amounts needed to complete the assembly at the next higher level.
 BOM Example

 Using the information presented in

the Figure,
Determine the quantities of B, C, D,

E, and F, needed to assemble one

X.
 BOM Example:- Solution 

B: 2 X 1 = 2 B (2) C: 1 X 1 = 1 C

D (3) E E (2) F (2)

D: 3 X 2 = 6
E: 1 X 2 = 2 E: 2 X 1 = 2 F: 2 X 1 = 2
E (4)
E: 4 X 6 = 24
Thus, one X will require
  B: 2
C: 1
D: 6
E: 28 (Note that E occurs in three places, with requirements of 24 + 2 + 2 = 28)
F: 2
 Class Work
 Using the information presented in the Figure,
Determine the quantities of these components that will be

required to assemble 10 Xs, taking into account the quantities on

hand of various components:

Component On hand (inventory)

B 4
C 10
D 8
E 60
 Solution: (B) 
X
B: 2 X 10 = 20 C: 1 X 10 = 10 (No lower-

-4 B (2) C Level components

- 10
required)
16 0
D (3) E: 1 X 16 = 16
D: 3 X 16 = 48 E E (2) F (2)
-8
E: 4 X 40 = 160
40 E (4)
- 60
100
Thus, given the amounts of on-hand inventory, 10 Xs will require
B: 16
C: 0
D: 40
E: 116 (100 + 16 )
F: 0
 
 2. LUMPY DEMAND
 Manufacturing is frequently done on an intermittent
(irregular) basis in lots, or models, of one type or another.

 The components of a finished product are needed

only when the product is being manufactured. Thus,
there may be large demands on inventory at some
times and none at other times, making the demand
‘lumpy’ (uneven, unequal)
 When the demand occurs in large steps, it is referred
to as “lumpy demand.”
 MRP is an appropriate approach for dealing with
inventory situations characterized by lumpy demand.
 3. LEAD TIME OF ITEM
 The lead-time for a certain job is the time that must be allowed to
complete the job from start to finish.
 In manufacturing, lead-time is divided into ordering lead-time and

manufacturing lead-time:
1. An ordering lead time for an item is the time required from initiation
of the purchase requisition to receipt of the item from the vendor
2. Manufacturing lead time is the time needed to process the part
through the sequence of machines specified on the route sheet. It
includes not only the operation time but also the non-productive time
that must be allowed.
 In MRP, lead times are used to determine starting dates for

assembling final products and sub-assemblies, for producing

component parts and for ordering raw materials.
 4. COMMON USE ITEMS
 In manufacturing, one raw material is often used to produce
more than one component type. And a component type
may be used on more than one final product.
 MRP collects these common use items from different products to
effect economies in ordering the raw materials and
manufacturing the components.
Product Structure
 5. TIME PHASING
 Time phasing means adding the time dimension to inventory status data
by recording and storing the information on either specific dates or planning
periods with which the respective quantities are associated. Inventory
availability is an important issue here.
 “Availability” is the difference between the quantity required and the sum of

on-hand and on-order quantities.

 Using classic inventory status equation we can write as:

X= a + b – c
Where; x = quantity available (for future requirements)
a = quantity on hand, b = quantity on order
c = quantity required
 Generally, time phasing means developing the information on timing to

provide answers to questions like:

- When is the quantity on order due to come in, and is it a single order or are
there more than one?
- When will the stock run out?
- When should the replenishment order be completed?
- When should it be released?
 MRP calculates item demand and time-phases for all inventory.
 MRP processing
MRP Inputs MRP Processing MRP Outputs
Changes

Orders
Order releases
Master
Planned-order
Forecast schedule
schedules
Primary
Design reports Exception reports
Changes Bill of Planning reports
materials MRP computer Secondary
programs Performance-
reports control
reports

Receipts
Inventory
records Inventory
Withdrawals
transaction
 MRP Outputs

 MRP systems have the ability to

provide management with a fairly
broad range of outputs.
 These are often classified as primary
reports, which are the main reports,
and secondary reports, which are
optional outputs.
 Primary Reports
 Production and inventory planning and control are
part of primary reports. These reports normally
include the following:
1- Planned orders, a schedule indicating the
amount and timing of future orders.
2- Order releases, authorizing the execution of
planned orders.
3. Changes to planned orders, including
revisions of due dates or order quantities and
cancellations of orders.
 Secondary Reports
 Performance control, planning, and exceptions belong to secondary
reports.
1- Performance-control reports evaluate system operation. They aid
managers by measuring deviations from plans, including missed deliveries
and stock outs, and by providing information that can be used to assess
cost performance.
2- Planning reports are useful in forecasting future inventory
requirements. They include purchase commitments and other data that
can be used to assess future material requirements.
3- Exception reports call attention to major discrepancies such as late/
overdue orders, excessive scrap rates, reporting errors, and requirements
for non existent parts.
OTHER CONSIDERATIONS
 
 Aside from the main details of inputs,
outputs, and processing, managers
must be knowledgeable about a
number of other aspects of MRP.
 These include the holding of safety
stock, lot-sizing choices, and the
possible use of MRP for
unfinished products.
 SAFETY STOCK
 Theoretically, inventory systems with dependent
demand should not require safety stock below the
end item level. This is one of the main advantages of
the MRP approach. Because the manager can project
precise usage quantities once the master schedule
has been established because demand is not variable.
 Practically, however, there may be exceptions that
create shortage (e.g. a bottleneck process, varying
scrap rates, late orders, late fabrications, longer than
expected assembly times)
 Safety Stock---cond
 On the surface, these conditions lend themselves
to the use of safety stock to maintain smooth
operations; but the problem becomes more
complicated when dealing with multiechelon
items (i.e., multiple-level arenas such as
assembled products) because a shortage of any
component will prevent manufacture of the final
assembly.
 However, a major advantage of MRP is lost by
holding safety stock for all lower-level items.
 LOT SIZING
 Determining a lot size to order or to produce is an important issue in
inventory management for both independent- and dependent-demand
items.
 This is called lot sizing (choosing a lot size for ordering or production).
 For independent-demand items, managers often use economic order
sizes and economic production quantities.
 For dependent-demand systems, however, a much wider variety of
plans used to determine lot sizes, mainly because no single plan has a
clear advantage over the others.
 A primary goal of inventory management for both independent-and
dependent-demand systems is to minimize the sum of ordering cost (or
set up cost) and holding cost
 Models used to handle lot sizing
 1.Lot-for-Lot Ordering
 Order just what is required for production based on net requirements
 Perhaps the simplest of all the methods is lot-for-lot ordering. The order or
run size for each period is set equal to demand for that period.
 Not only the order size is obvious, it also virtually eliminates holding costs for
parts carried over to other periods. Hence, lot-for-lot ordering minimizes
investment in inventory.
 Its two chief drawbacks are that it usually involves many different order sizes
that it cannot take advantage of the economies of fixed order size (e.g.,
standard containers and other standardized procedures), and it requires a
new setup for each production run.
 If set up costs can be significantly reduced, this method may approximate a
minimum-cost lot size.
Lot-for-Lot Example
1 2 3 4 5 6 7 8 9 10
Gross 35 30 40 0 10 40 30 0 30 55
requirements
Scheduled
receipts
Projected on 35 35 0 0 0 0 0 0 0 0 0
hand
Net 0 30 40 0 10 40 30 0 30 55
requirements
Planned order
receipts (PORcpt) 30 40 10 40 30 30 55

Planned order
30 40 10 40 30 30 55
releases

If Holding cost = $1/week; Setup cost = $100/set up

No on-hand inventory is carried through the system, Net req. = PORcpt
Total holding cost = $0, Total setup cost= ?

There are seven setups(PORcpt) for this item in this plan

Total setup cost = 7 x $100 = $700
 Models used to handle lot sizing ------cond

 2. Economic Order Quantity Model

 Economic order quantity (EOQ) models can lead to
minimum costs if usage is fairly uniform.
 This is sometimes the case for lower-level items that are
common to different parents and for raw materials.
 However, the more lumpy at the end item level, EOQ
models tend to be less useful for end items than for items
and materials at the lowest levels.
 EOQ expects a known constant demand and
 MRP systems often deal with unknown and variable demand
 Class Work: EOQ Lot Size
1 2 3 4 5 6 7 8 9 10
Gross
35 30 40 0 10 40 30 0 30 55
requirements
Scheduled
receipts
Projected on
hand 35 35 0 0 0 0 0 0 0 0 0

Net
requirements 0 30 0 0 7 0 4 0 0 16

Planned order
73 73 73 73
receipts
Planned order
releases 73 73 73 73

Holding cost = $1/week; Setup cost = $100;

Average weekly gross requirements = 27; EOQ = 73 units

Annual demand = 1,404 = 27 x 52

Total cost = ? Cost for 10 weeks = ?
Total cost = setup cost + holding cost
Solution:
 EOQ= √ (2ACo/Cc);
 A= Annual demand in units for the inventory item
 Co= set-up or ordering cost for each order,
Cc= Holding or carrying cost per unit per
year
 Total cost = setup cost + holding cost
 Annual Set-up cost = (A/Q) x Co
 Annual carrying cost = (Q/2) x Cc
 Total cost = ? Cost for 10 weeks = ?
Solution----cond
 Holding cost = $1/week; Setup cost (Co) = $100;
 EOQ = 73 units

 Annual demand = 1,404

 Total cost = setup cost + holding cost
 Annual Set-up cost = A/Q x Co
 Annual carrying cost = (Q/2) x Cc
 Total cost = (1,404/73) x $100 + (73/2) x ($1 x 52
weeks)
 Total cost = $3,798
 Cost for 10 weeks = $3,798 x (10 weeks/52 weeks) =
$730
37
 Models used to handle lot sizing --------cond
 3. Fixed-period Ordering
 This type of ordering is used for some predetermined number
of periods (e.g., two or three).
 In some instances, the span is simply arbitrary; in other cases,
a review of historical demand patterns may lead to a more
rational designation of a fixed period length.
 A simple rule is: Order to cover a two-period interval. The rule
can be modified when common sense suggests a better way.
Period
___________________________
1 2 3 4 5
70 50 1 80 4
Demand
70 120 121 201 205
Cumulative DD

 An order size of 120 units would cover the first two periods. The next two periods would be
covered by an order size of 81 units. However, the demands in periods 3 and 5 are small, it
would make sense to combine them both with the 80 units and order 85 units.
 MRP IN SERVICES

 MRP has applications in services as well as in

manufacturing. These applications may involve materials
that form a part of the product-service package, or they
may involve mainly service components.
 Some services or service items are directly linked to
demand for other services
 These can be treated as dependent demand services or
items. E.g.:
 Restaurants
 Hospitals
 Hotels
Benefits and Requirements of MRP
 Benefits:
 Low levels of in-process inventories
 Ability to track material requirements
 Ability to evaluate capacity requirements
 Means of allocating production time
 Requirements:
 Computer and necessary software
 Accurate and up-to-date
 Master schedules
 Bills of materials
 Inventory records
 Integrity of data
 MRP II (Manufacturing resource planning )

 MRP was essentially aimed at the planning and

control of production and inventory in
manufacturing businesses.
 However, the concepts have been extended to
other areas of the business.
 Without MRP II integrated systems, separate
databases are held by different functions.
 For example, a product structure or bill of
materials is held in engineering and also in
materials management
 MRP II----cond
 .
 If engineering changes are made to the
design of products, both databases have to be
updated.
 It is difficult to keep both databases entirely
identical and discrepancies between them
cause problems, which often are not apparent
until a member of staff is supplied with the
wrong parts to manufacture the product.
MRP III- ERP (Enterprise Resource Planning)
 Is often called the rightful next step in an evolution that
began with MPR and evolved into MRP II, it typically has
MRP core.
 It is integration of financial, manufacturing, and human
resources on a single computer system.
 ERP represents an expanded effort to integrate
standardized record keeping that will permit information
sharing among different areas of an organization in order
to manage the system more effectively.
 ERP Strategy Considerations include:
1. High initial cost
2. High cost to maintain
3. High cost of Future upgrades
4. High cost of Training
 ERP-----cond
 It is an extension of the MRP system
to tie in customers and suppliers. It:
1. allows automation and integration of
many business processes
2. shares common data bases and
business practices
3. produces information in real time
 Coordinates business from supplier
evaluation to customer invoicing.
 Advantages of ERP Systems

1. Provides integration of the supply-chain,

production, and administration
2. Creates commonality of databases
3. Can incorporate improved best processes
4. Increases communication and collaboration
between business units and sites
5. Has an off-the-shelf software database
6. May provide a strategic advantage
 Disadvantages of ERP Systems
1. Is very expensive to purchase and even
more to customize
2. Implementation may require major
changes in the company and its processes
3. Is so complex that many companies cannot
adjust to it
4. Involves an ongoing, possibly never
ending, process for implementation
5. Expertise is limited with ongoing staffing
problems
 Chapter – 4
Operations Planning and Control

4.3 Operations Scheduling

Scheduling
 Scheduling deals with the timing of
operations
 It is establishing timing of the use of
equipment, facilities and human
activities in an organization

48
 Capacity Planning
(long term; years)
Changes in facilities
Changes in equipment etc

Scheduling…cond
Aggregate Planning
(intermediate term; quarterly or monthly)
Facility utilization
 It is the last Personnel changes
Subcontracting etc
stage of planning
before Master Schedule
production (short range; weeks)
It is the result of Disaggregating
occurs aggregate plan

Production planning and

control
(very short term; days, hours, minutes)
Work center loading
Job sequencing
49
Goals of Scheduling
 Efficient utilization of:
 staff
 equipment
 facilities
 Minimization of
 customer waiting time
 inventories
 processing time

50
Scheduling Operations
 Companies differ based on product volume
and product variety which affects how
companies organizes their operations
 Each kind of company operation needs
different scheduling techniques
 Scheduling has specific definitions for routing,
bottleneck, due date, slack and queues

51
 Scheduling definition for:
 Routing: The operations to be performed, their
sequence, the work centers, & the time standards
 Bottleneck: A resource whose capacity is less
than the demand placed on it
 Due date: When the job is supposed to be
finished
 Slack: the amount of time a task can be delayed
without causing another task to be delayed or impacting
the completion date of your project. Slack time =
Latest time to start - Earliest time to start.
 Queue: A waiting line 52
 Importance of Scheduling

 Scheduling executes a company’s strategic business plan

 Scheduling affects functional areas
 Accounting relies on schedule information and completion of
customer orders to develop revenue projections
 Marketing uses schedule effectiveness measurement to determine
whether the company is using lead times for competitive advantage
 Operations uses the schedule to maintain its priorities and to
provide customer service by finishing jobs on time

53
 Type of Scheduling
 Forward scheduling
 Scheduling ahead, from some point
in time
 Forward scheduling starts as soon
as the requirements are known or
when a job is received
 Frequently results in buildup of
work-in-process inventory
Due
Now Date
 Backward scheduling
 Scheduling by working
backwards from the due
date
 begin scheduling the job’s
last activity so that the job
is finished on due date
Due
Now Date
54
 Scheduling Operations----cond
 Scheduling tasks are largely a function of the
volume of system output
 Different kinds of operations need different
scheduling techniques
 Scheduling in High-Volume Operations
 Scheduling in Intermediate-Volume Operations
 Scheduling in Low-Volume Operations

55
 High-Volume Operations

 Also known as flow operations (flow systems)

 Scheduling encompasses allocating workloads to
specific work centers and determining the
sequence in which operations are to be performed
 Characterized by standardized equipment and
activities that provide high-volume standard items
 Designed for high efficiency and high utilization of
labor and equipment

56
 High-Volume Operations---cond
 Bottlenecks are easily identified
 Because of the highly repetitive nature of
operations , many of the loading and sequence
decisions are determined during the design of the
operations system.
 Scheduling in the high-volume operations is
typically done through line balancing
 allocating the required tasks to workstations so that they satisfy technical
(sequencing) constraints and are balanced with respect to equal work
times among work stations

57
 High-Volume Operations---cond
The success of High-volume operations depends on
the following factors:
 Process and product design -(interms of cost and manufacturability)
 Preventive maintenance
 Rapid repair when breakdown occurs
 Optimal product mixes
 Minimization of quality problems
 Reliability and timing of supplies

58
 Intermediate-Volume Operations
 Outputs are between standardized high-volume systems and made-
to-order job shops
 Typically produce relatively low-volume standard outputs of similar
products using intermittent process
 Work centers periodically shift from one job to another
 The run (batch) size of jobs, the timing of the job, and the
sequencing of jobs are of significant concern to schedulers
 The larger the run size, the fewer the number of runs needed and,
hence, the lower the annual set up costs and set up times.
 Set up costs are costs required to prepare equipments for job, such as
cleaning, adjusting, and changing tools and fixtures-with every
production run.

59
 Low-Volume Operations
 Low-volume, job shop operations, are designed for
flexibility
 Use more general purpose equipment
 Customized products with higher margins
 The variable work-flow paths and processing time
generates queues, work-in-process inventories, and
capacity utilization concerns that can require more day-to-
day attention than in the high- or intermediate-volume
systems
 Scheduling in a low-volume operations typically involves
the use of priority rules
60
 Job-shop Scheduling
 Job-shops scheduling is scheduling for low-volume operations with
many variations in requirements
 Two basic issues in job shop processing
 Loading
 Assignment of jobs to processing centers (Work centers)
 Infinite loading
 Finite loading
Assignment- Hungarian method
 Sequencing
 Determining the order in which jobs at a work center will be

processed
 Priority rule

 Sequencing N Jobs on Two Machines: Johnson’s Rule

 Cyclical Scheduling--services enterprises

61
Scheduling Criteria
1. Minimize completion time
2. Maximize utilization of facilities
3. Minimize work-in-process inventory
4. Minimize customer waiting time

Optimize the use of resources so that

production objectives are met
Assignment Method of Linear Programming
 One of the approaches that can be used to assign
jobs to resources is assignment method.
 Assignment method is a type of linear
programming model for optimal assignment of
tasks and resources.
 It is a special class of linear programming models
that assign tasks or jobs to resources.
 Its objective is to minimize cost or time
 Only one job (worker) is assigned to one machine
(project)
 Hungarian method is the method of assigning jobs
by a one for one matching to identify the lowest
cost solution
Hungarian Method: Steps
􀂾 First of all, acquire the relevant cost information and
arrange it in tabular form
􀂾 Second, obtain the Row Reduction; this is obtained by
subtracting the smallest number in each row from every
number in the row. Enter the results in a new table.
􀂾 Third, Obtain the Column Reduction by subtracting the
smallest number in each column of the new table from
every number in the column.
􀂾 Fourth, test whether an optimum assignment can be made.
You do this by determining the minimum number of lines
needed to cover ( i.e.) cross out all zeros. If the number of
lines equal the number of rows, an optimum assignment
is possible. In that case move to final step
 Hungarian Method: Steps ------------Cont.
Fifth, if the numbers of lines is less than the number
of rows, modify the table in the following manner
o Subtract the smallest uncovered number from
every uncovered number in the table.
o Add the smallest uncovered number to the
numbers at the intersections of covering lines.
o Numbers crossed out but not at intersections of
cross out lines carry over unchanged to the next
table.
 Hungarian Method: Steps ------------Cont.
􀂾 Sixth, Repeat steps fourth and fifth
unless an Optimal table is obtained
􀂾 Seventh, make the assignments.
Begin with rows or columns with only
one zero. Match items that have
zeros, using only one match for each
row and each column. Cross out both
the row and column for each row.
 Hungarian Method Example
 Determine the optimal assignment of jobs
to machines for the following data. How
much is the optimum cost?
 STEP-1 Acquire the relevant cost
information and arrange it in tabular form
MACHINE

JOB A B C D

1 8 6 2 4

2 6 7 11 10

3 3 5 7 6

4 5 10 12 9
Step-2 Select the Row Minimum

MACHINE
JOB A B C D ROW MIN
1 8 6 2 4 2
2 6 7 11 10 6
3 3 5 7 6 3
4 5 10 12 9 5
Step-3 Subtract the smallest number in each row
to form a new table and select column minimum

MACHINE
JOB A B C D
1 6 4 0 2
2 0 1 5 4
3 0 2 4 3
4 0 5 7 4
COL MIN 0 1 0 2
Step-3 (Cont.)Subtract the smallest number in each
column & Enter the results to form a new table

MACHINE
JOB A B C D
1 6 3 0 0
2 0 0 5 2
3 0 1 4 1
4 0 4 7 2
Step-4 Determine the minimum number of lines needed to cross Out all
zeros. Here we have three lines only and rows are 4, so the solution is not
optimal. Note that the smallest uncovered value is 1

MACHINE
JOB A B C D
1 6 3 0 0
2 0 0 5 2
3 0 1 4 1
4 0 4 7 2
Step-5 Subtract the smallest value that has not been crossed out from
every number that has not been crossed out (1 here) and add this to
numbers that are at intersections of covering lines

MACHINE
JOB A B C D
1 6+1=7 3 0 0
2 0+1=1 0 5 2
3 0 1-1=0 4-1=3 1-1=0
4 0 4-1= 3 7-1=6 2-1=1
Step-6 Determine the minimum number of lines
needed to cross out all ‘0’s, since this equals the
number of rows (4) , we obtain the optimum
assignment.

MACHINE
JOB A B C D
1 7 3 0 0
2 1 0 5 2
3 0 0 3 0
4 0 3 6 1
Step-7 Make the assignments, start with rows and columns with
Only one ‘0’. Match jobs with machines that have ‘0’ costs

MACHINE
JOB A B C D
1 7 3 0 0
2 1 0 5 2
3 0 0 3 0
4 0 3 6 1

Assignments Cost (From the original cost table)

1-C $2
2-B 7
3-D 6
4-A 5
$20 = optimum cost
 Loading
 Loading refers to the assignment of jobs to
processing centers (work centers).
 Loading decisions involve assigning specific jobs to
work centers and to various machines in the work
centers.
 Although loading decisions determine the machines
or work centers that will be used to process a
specific job, they do not indicate the order in which
the jobs waiting at a given work center are to be
processed
Scheduling, loading and sequencing

 Job scheduling is establishing timing

of the use of equipment, facilities and
human activities in an organization. 
 Loading refers to the assignment of
jobs to processing centers (work
centers).
 Sequencing is the selection of an order for
a series of jobs to be done on a number of
service facilities (machine). 76
 Sequencing
 Sequencing: Determine the order in which jobs at
a work center will be processed.
 Managers require order for sequencing at all
work centers as well as sequencing at individual
work centers.

Terms in sequencing:
 Workstation: is an area where one person works,
usually with special equipment, on a specialized
job.
 Sequencing ---------Cont.
 Job time: is time needed for setup and processing
of a job.
 Priority rules: is simple heuristics (Commonsense
rules) used to select the order in which jobs will be
processed.
1. Local Rules ( pertaining to single workstation)
2. Global Rules( pertaining to multiple workstation)
 Job processing times and due dates are important
pieces of information.
 Job time consists of processing time and setup
times
 Priority Rules
1. FCFS – (First Come, First Served): Jobs are processed in
the order in which they arrive at a machine or work center.
2. SPT- (Shortest Processing Time): Jobs are processed
according to processing time at a machine or work center,
shortest job first.
3. EDD – (Earliest Due Date): Jobs are processed according to
due date, earliest due date first.
4. CR – (Critical Ratio): Jobs are processed according to
smallest ratio of time remaining until due date to processing
time remaining.
5. S/O – (Slack per Operation): Jobs are processed according
to average slack time (time until due date minus remaining
time to process). Computed by dividing slack time by number
of remaining operations, including the current one.
6. Rush: Emergency or Preferred Customers first. Top Priority
 Assumptions of Priority Rules
 1. The set of jobs is known, no new
jobs arrive after processing begins
and no jobs are canceled.
 2. Setup time is deterministic
 3. Processing times are deterministic
rather than variables.
 4. There will be no interruptions in
processing such as machine
breakdowns , accidents or worker
illnesses.
Performance Measures
 The effectiveness of any given sequence is frequently judged in
terms of one or more of the following performance measures:
 Job Flow Time: is the length of time a job is in the
shop at a particular workstation or work center.
 Job Lateness/ tardiness: is the length of time the job
completion date is expected to exceed the date the job
was due or promised to a customer.
 Makespan: is the total time needed to complete a group
of jobs. It is the length of time between the start of the
first job in the group and the completion of the last job in
the group.
 Average Number of Jobs: Jobs that are in a shop are
considered to be work-in-process. The average work-in-
process for a group of jobs can be computed as:
 Average Number of Jobs= Total Flow Time / Makespan
Example-1
 Processing times (including setup times) and due dates for six jobs
waiting to be processed at a work center are given in the following
table
 Determine the sequence of jobs, the average flow time,
average tardiness/lateness, and average number of jobs at
the work center, for each of these rules:
 A. FCFS
 B. SPT
 C. EDD
Job Processing Due
 D. CR Time (days) Date (days)
Assume jobs arrived
A 2 7
in the order shown
B 8 16
C 4 4
D 10 17
E 5 15
F 12 18
 a. Solution (FCFS)
The FCFS sequence is simply A-B-C-D-E-F. Measures of effectiveness are:
(1)Average Flow time= Total C. Flow Time/Number of Jobs=120/6=20 days
(2)Average Tardiness (lateness) =54/6=9
The makespan =41 days
(3)Average Number of Jobs at workstation= 120/41=2.93 jobs per workstation

Job Processing Flow Time Due Days Tardy

Sequence Time (days) (cumulative Date (0 if negative)
processing
(1) time) (2) (3) (2)-(3)
A 2 2 7 0
B 8 10 16 0
C 4 14 4 10
D 10 24 17 7
E 5 29 15 14
F 12 41 18 23
41 120 54
 b. Solution (SPT) EDD Class work
 The SPT sequence is A-C-E-B-D-F. The measures of effectiveness are:
(1)Average Flow time= Total Cum. Flow Time/Number of Jobs=108/6=18 days
(2)Average Tardiness=40/6=6.67days
The makespan =41 days
(3)Average Number of Jobs at workstation=108/41=2.63 jobs per workstation

Job Processing Flow Time Due Days Tardy

Sequence Time (days) (cumulative Date (0 if negative)
processing
(1) time) (2) (3) (2)-(3)
A 2 2 7 0
C 4 6 4 2
E 5 11 15 0
B 8 19 16 3
D 10 29 17 12
F 12 41 18 23
41 108 40
 c. Solution (EDD)
 The EDD sequence is C-A-E-B-D-F. The measures of effectiveness are:
(1)Average Flow time= Total Cum. Flow Time/Number of Jobs=110/6=18.33 days
(2)Average Tardiness=38/6=6.33 days
The makespan =41 days
(3)Average Number of Jobs at workstation=110/41=2.68 jobs per workstation

Job Processing Flow Time Due Days Tardy

Sequence Time (days) (cumulative Date (0 if negative)
processing
(1) time) (2) (3) (2)-(3)
C 4 4 4 0
A 2 6 7 0
E 5 11 15 0
B 8 19 16 3
D 10 29 17 12
F 12 41 18 23
41 110 38
 D. Solution (CR)
 Using the critical ratio we find
Job Processing Due Critical Ratio
Sequence Time (days) Date (days) Computed
A 2 7 (7-0)/2 = 3.5
B 8 16 (16-0)/8 = 2.0
C 4 4 (4-0)/4 = 1.0 (lowest)
D 10 17 (17-0)/10 =1.7
E 5 15 (15-0)/5 = 3.0
F 12 18 (18-0)/12 = 1.5

Processing Time remaining Due date – pro.time consumed

CR = =
Workdays remaining Processing (lead) time
At day 4 (C completed), the critical ratios are

Job Processing Due Critical Ratio

Sequence Time (days) Date (days) Calculation
A 2 7 (7-4)/2 = 1.5
B 8 16 (16-4)/8 = 1.5
C -- -- --
D 10 17 (17-4)/10 =1.3
E 5 15 (15-4)/5 = 2.2
F 12 18 (18-4)/12 = 1.17 (lowest)
AT DAY 16 (C AND F COMPLETED), THE CRITICAL
RATIOS ARE

Job Processing Due Critical Ratio

Sequence Time (days) Date (days) Calculation
A 2 7 (7-16)/2 = -4.5 (lowest)
B 8 16 (16-16)/8 = 0.0
C -- -- --
D 10 17 (17-16)/10 =0.1
E 5 15 (15-16)/5 =
- 0.2
F -- -- --
AT DAY 18 (C, F AND A COMPLETED), THE CRITICAL
RATIOS ARE

Job Processing Due Critical Ratio

Sequence Time (days) Date (days) Calculation
A -- -- --
B 8 16 (16-18)/8 = -0.25
C -- -- --
D 10 17 (17-18)/10 =
-0.10
E 5 15 (15-18)/5 = -0.60 (lowest
F -- -- --
AT DAY 23 (C, F, A AND E COMPLETED), THE CRITICAL RATIOS ARE

Job Processing Due Critical Ratio

Sequence Time (days) Date (days) Calculation
A -- -- --
B 8 16 (16-23)/8 = -0.875
(lowest)
C -- -- --
D 10 17 (17-23)/10= -0.60
E -- -- --
F -- -- --
THE JOB SEQUENCE IS C-F-A-E-B-D
 The CR sequence is C-F-A-E-B-D. The measures of effectiveness are:
(1)Average Flow time= Total cum. Flow Time/Number of Jobs=133/6=22.17 days
(2)Average Tardiness=58/6=9.67 days
The makespan =41 days
(3)Average Number of Jobs at workstation=133/41=3.24 jobs per workstation

Job Processing Flow Time Due Days Tardy

Sequence Time (days) (cumulative Date (0 if negative)
processing
(1) time) (2) (3) (2)-(3)
C 4 4 4 0
F 12 16 18 0
A 2 18 7 11
E 5 23 15 8
B 8 31 16 15
D 10 41 17 24
41 133 58
 Comparison of the four rules for the above example

Priority Average Average Average Number of Jobs at

Rule Flow Time Lateness the Work Center
(Days) (Days)
FCFS 20.00 9.00 2.93
SPT 18.00 6.67 2.63
EDD 18.33 6.33 2.68
CR 22.17 9.67 3.24

 In this example, the SPT rule was the best

according to two of the measures of
effectiveness and a little worse than the EDD
rule on average tardiness.
 Comparison-----cond
1. Generally speaking FCFS and CR rule seems to be
the least effective.
2. CR is the worst in each aspect of measurement.
3. The primary limitation of FCFS is that long jobs will
tend to delay other jobs.
4. However, in scheduling of service systems, the
FCFS has the advantage of simplicity, mainly
because of the inherent fairness (first come first
served).
Scheduling Service Operations
 Appointment systems
 Controls customer arrivals for service
 Reservation systems
 Estimates demand for service
 Scheduling the workforce
 Manages capacity for service
 Scheduling multiple resources
 Coordinates use of more than one resource
Service Operation Problems
 Cannot store or inventory services
 Customer service requests are random

 Scheduling service involves:

 Customers
 Workforce
 Equipment