Production and

Operation Management

Presented by
Naveen (2103116)
 ABC
Analysis:
Q. A stationery divides its items into 3 classes according to its usage. Categorize the below items into
A,B and C categories based on their usage.
Annual consumption value= Annual number of units sold (per item) x cost per unit
 Items in A, B and C categories are split as A=80%, B=15% and
C=5%

Annual % of Annual
Annual No. Cost per consumption consumption cumulative
Item of units unit %
value value
sold
Diaries 50,000 3.5 175000 54.20% 54.2
upto 80% A
Notepads 40,000 2 80000 24.80% 79.00%
Correcting 16,000 1.5 24000 7.40% 86.40%
fluid
Staplers 10,000 1.5 15000 4.60% 91.00% Upto 95% B
Boxes of 21,000 0.5 10500 3.20% 94.20%
paperclips
pens 1,20,000 0.05 6000 1.90% 96.10%

Boxes of 10,000 0.5 5000 1.50% 97.60%

staples Upto 100% C
Rulers 15,000 0.25 3750 1.20% 98.80%
Pencils 80,000 0.03 2400 0.70% 99.50%
Erasers 15,000 0.1 1500 0.50% 100.00%
TOTAL 323150
EOQ
MODEL:
Q. From the following particulars, calculate the Economic Order Quantity (EOQ):
Annual requirements 1,600 units Cost of materials per units Rs. 40
Cost of placing and receiving one order: Rs. 50 Annual carrying cost for inventory value 10%

Solution:
2∗AD∗OC
EOQ=
𝐶
𝐶

Carrying cost = 40*10% =

4/-
2 ∗1600∗50
EOQ=
4

EOQ = 200
units
 CONTROL
CHART
Q. The following:data gives the readings for 8 samples of size 6 each in the production of a certain product. Find the
control limits using mean chart.
 X bar control chart
360

350 351

340
342
UCL=341.54
333
330
326 Mean=328.5
320 319
LCL=315.45
310

300 300

290

280

270
1 2 3 4 5 6

Therefore, The samples are out of control limits. We can observe that, there are 2 samples lying outside the
upper control limit and 1 sample outside lower control limit.
R bar = 27
LCL=𝐷3𝑅ത = 0 * 27 =
0
UCL= 𝐷 𝑅ത = 2.004 * 27 =
4
54.1
UCL = 54.1
R Chart
40 37

35
30
30 28

25
25
22
R bar = 27
20
20

15

10

0 LCL=0
1 2 3 4 5 6

Therefore, all the range values are in

control.
Q. Calculcate the UCL and LCL for the given data.

No. of defects found in

Casting inspection
C Chart UCL=8.196
6
1 2 5
5
2 4 4
4

3 1 3
3

4 5 2
2
C bar= 3
1
5 3 1

TOTAL 15 0
1 2 3 4 5
LCL =0

C bar = 15/5 =3
𝑐ҧ =8.196
UCL= 𝑐ҧ + 3 Therefore, the values are under control.
ҧ =-2.196 =
LCL = 𝑐ҧ − 3 𝑐0
 Day Number Invoices Inspected (n) Number Defective (np) Fraction Defective (p)
P CHART 1
2
100
100
22
33
0.22
0.33
3 100 24 0.24
Q .A team in an accounting
group has been working on 4 100 20 0.20
improving the processing of 5 100 18 0.18
invoices. The team is trying 6 100 24 0.24
to reduce the cost of 7 100 24 0.24
processing invoices by
decreasing the fraction of 8 100 29 0.29
invoices with errors. The 9 100 18 0.18
team developed the 10 100 27 0.27
following operational 11 100 31 0.31
definition for a defective
invoice: an invoice is 12 100 26 0.26
defective if it has incorrect 13 100 31 0.31
price, incorrect quantity, 14 100 24 0.24
incorrect coding, incorrect
address, or incorrect name. 15 100 22 0.22
The team decided to pull a 16 100 22 0.22
random sample of 100 17 100 29 0.29
invoices per day. If the 18 100 31 0.31
invoice had one or more
errors it was defective. The 19 100 21 0.21
data from the last 25 days 20 100 26 0.26
are given in the table. 21 100 24 0.24
22 100 32 0.32
23 100 17 0.17
24 100 25 0.25
25 100 21 0.21
JOHNSON SEQUENCING
MODEL:
Q: Processing time of 6 jobs on two machines are given below. Use Johnson’s rule to
schedule these job.

JOB J1 J2 J3 J4 J5 J6
M1 4 6 7 8 9 1
M2 5 8 1 3 6 10

Optimal Sequence:

J6 J1 J2 J5 J4 J3
 M1 M2
JOBS TIME IN TIME OUT TIME IN TIME OUT

J6 0 1 1 11

J1 1 5 11 16

J2 5 11 16 24

J5 11 20 24 30

J4 20 28 30 33

J3 28 35 35 36

Total elapsed time = 36 hours

Idle time for M1 = Total elapsed time – Total busy time for M1 = 36 – 35 = 1 hour
Idle time for M2 = 1+2 = 3 hours
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(AWS):
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YOU!