Chapter 6 & 7

Factory design
 Lecture Outline

 Elements of modern manufacturing plants

 Manufacturing organization types/ Process
Selection
 Technology Decisions

6-2
Elements of Modern Manufacturing Plants

6-3
 A Technology Primer
Product Technology
 Computer-aided  Creates and communicates designs
design (CAD) electronically
 Group technology  Classifies designs into families for easy
(GT) retrieval and modification
 Computer-aided  Tests functionality of CAD designs
engineering (CAE) electronically
 Collaborative
product commerce  Facilitates electronic communication and
(CPC) exchange of information among designers
and suppliers

6-4
 A Technology Primer (cont.)
Product Technology
 Product data  Keeps track of design specs and revisions
management
(PDM) for the life of the product
 Product life cycle  Integrates decisions of those involved in
management product development, manufacturing, sales,
(PLC) customer service, recycling, and disposal
 Confines products “built” by customers who
 Product definition have selected among various options,
usually from a Web site

6-5
 A Technology Primer (cont.)
Process Technology
 Standard for  Set standards for communication among
exchange of different CAD vendors; translates CAD data
product model data into requirements for automated inspection
(STEP) and manufacture
 Computer-aided  Electronic link between automated design
design and (CAD) and automated manufacture (CAM)
manufacture
(CAD/CAM)
 Generates process plans based on
 Computer aided database of similar requirements
process (CAPP)
 Electronic procurement of items from e-
 E-procurement marketplaces, auctions, or company
websites

6-6
 A Technology Primer (cont.)
Manufacturing Technology
 Computer  Machines controlled by software code to perform a
numerically control variety of operations with the help of automated
(CNC) tool changers; also collects processing information
and quality data
 Flexible  A collection of CNC machines connected by an
manufacturing automated material handling system to produce a
system (FMS) wide variety of parts
 Manipulators that can be programmed to perform
 Robots repetitive tasks; more consistent than workers but
less flexible
 Conveyors  Fixed-path material handling; moves items along a
belt or overhead chain; “reads” packages and
diverts them to different directions; can be very fast

6-7
 A Technology Primer (cont.)
Manufacturing Technology
 Automatic guided  A driverless truck that moves material along a
vehicle (AGV) specified path; directed by wire or tape embedded
in floor or by radio frequencies; very flexible

 Automated storage  An automated warehouse—some 26 stores high—

and retrieval system in which items are placed in a carousel-type
(ASRS) storage system and retrieved by fast-moving
stacker cranes; controlled by computer
 Continuous monitoring of automated equipment;
 Process Control makes real-time decisions on ongoing operation,
maintenance, and quality
 Computer-integrated  Automated manufacturing systems integrated
manufacturing (CIM) through computer technology; also called e-
manufacturing

6-8
 A Technology Primer (cont.)
Information Technology
 Business – to –  Electronic transactions between businesses
Business (B2B) usually over the Internet
 Business – to –  Electronic transactions between businesses and
Customer (B2C) their customers usually over the Internet
 Internet  A global information system of computer networks
that facilitates communication and data transfer
 Intranet  Communication networks internal to an
organization; can be password (i.e., firewall)
protected sites on the Internet
 Intranets connected to the Internet for shared
 Extranet access with select suppliers, customers, and
trading partners

6-9
 A Technology Primer (cont.)
Information Technology
 Bar Codes  A series of vertical lines printed on most packages that
identifies item and other information when read by a
scanner
 Radio Frequency
Identification tags  An integrated circuit embedded in a tag that can send
(RFID) and receive information; a twenty-first century bar code
with read/write capabilities
 A computer-to-computer exchange of business
 Electronic data documents over a proprietary network; very expensive
interchange (EDI) and inflexible
 A programming language that enables computer – to -
 Extensive markup computer communication over the Internet by tagging
language (XML) data before its is sent
 Software for managing basic requirements of an
 Enterprise resource enterprise, including sales & marketing, finance and
planning (ERP) accounting, production & materials management, and
human resources

6-10
 A Technology Primer (cont.)
Information Technology
 Software for managing flow of goods and information
 Supply chain among a network of suppliers, manufacturers and
management (SCM) distributors
 Software for managing interactions with customers and
 Customer relationship compiling and analyzing customer data
management (CRM)
 An information system that helps managers make
 Decision support decisions includes a quantitative modeling component
systems (DSS) and an interactive component for what-if analysis
 A computer system that uses an expert knowledge base
 Expert systems (ES) to diagnose or solve a problem
 A field of study that attempts to replicate elements of
 Artificial intelligence human thought in computer processes; includes expert
(AI) systems, genetic algorithms, neural networks, and fuzzy
logic

6-11
 Process related decisions

 Capital intensity
 mix of capital (i.e., equipment, automation) and labor
resources used in production process
 Process flexibility
 ease with which resources can be adjusted in response to
changes in demand, technology, products or services, and
resource availability
 Vertical integration
 extent to which firm will produce inputs and control outputs
of each stage of production process
 Customer involvement
 role of customer in production process

6-12
 Make or Buy Decisions

 Cost  Speed
 Capacity  Reliability
 Quality  Expertise

6-13
 Levels of Sourcing

Vertical Joint Strategic Arms-Length

Integration Venture Alliance Relationship
(100% (equity (long-term (short-term contract
ownership) partner) supplier or
contract; single purchasing
collaborative decision)
relationship)

Source: Adapted from Robert Hayes, Gary Pisano, David Upton, and
Steven Wheelwright, Operations Strategy and Technology: Pursuing
the Competitive Edge (Hoboken, NJ: 2005), p. 120

6-14
Financial justification of
process technology
 Financial justification of technology
 Purchase cost
 Operating Costs
 Annual Savings
 Revenue Enhancement
 Replacement Analysis

 Process Planning
 Process Analysis

6-15
 Methods of analysis

 Break Even point

 Payback period
 Net Present value

6-16
 Process Selection with
Break-Even Analysis
 Cost
 Fixed costs
 constant regardless of the number of units produced
 Variable costs
 vary with the volume of units produced
 Total revenue
 is sales price times volume sold
 Profit
 difference between total revenue and total cost

6-17
 Process Selection with
Break-Even Analysis (cont.)

Total cost = fixed cost + total variable cost

TC = cf + vcv
Total revenue = volume x price
TR = vp
Profit = total revenue - total cost
Z = TR – TC = vp - (cf + vcv)

6-18
Process Selection with
Break-Even Analysis (cont.)

TR = TC
vp = cf + vcv
vp - vcv = cf
v(p - cv) = cf
cf
v = p - cv
Solving for Break-Even Volume

6-19
Break-Even Analysis: Example

Fixed cost = cf = $2,000

Variable cost = cv = $5 per raft
Price = p = $10 per raft

Break-even point is
cf 2000
v= = = 400 rafts
p - cv 10 - 5

6-20
Break-Even Analysis: Graph

Total
$3,000 — cost
line

$2,000 —

$1,000 —
Total
revenue
line
400 Units
Break-even point

6-21
COMPARISON OF TWO
POSSIBLE INVESTMENT
CHOICES
6-22
 Total cost of
$20,000 — process A

Process Total cost of

Selection: $15,000 — process B

Graph $10,000 —

Choose Choose
$5,000 — process A process B

| | | |
1000 2000 3000 4000 Units

Point of indifference = 2,667 Units

Example 4.2

6-23
 Process Selection

Process A Process B
$2,000 + $5v = $10,000 + $2v
$3v = $8,000
v = 2,667 rafts

If life time volume expected to be Below 2,667,

choose process A. Otherwise choose B

6-24
Break-Even Example
Multiproduct Case

Break-even
point in dollars
(BEP$)

where V = variable cost per unit

P = price per unit
F = fixed costs
W = percent each product is of total dollar sales
expressed as a decimal
i = each product
 Multiproduct Example
Fixed costs (monthly rent for setting a restaurant = $3,000 per month
ANNUAL FORECASTED
ITEM SALES UNITS PRICE COST
Sandwich 9,000 $5.00 $3.00
Drink 9,000 1.50 .50
Baked potato 7,000 2.00 1.00

1 2 3 4 5 6 7 8 9
ANNUAL ANNUAL WEIGHTED
FORECASTED SELLING VARIABLE FORECASTED % OF SALES CONTRIBUTION
ITEM (i) SALES UNITS PRICE (Pi) COST (Vi) (Vi/Pi) 1 - (Vi/Pi) SALES $ (Wi) (COL 6 X COL 8)

9,000 $45,00
Sandwich $5.00 $3.00 .60 .40 0 .621 .248

Drinks 9,000 1.50 0.50 .33 .67 13,500 .186 .125

Baked 7,000
potato 2.00 1.00 .50 .50 14,000 .193 .097
$72,50
0 1.000 .470
 Multiproduct Example
Fixed costs = $3,000 per month
ANNUAL FORECASTED
ITEM SALES UNITS PRICE x 12
$3,000 COST
Sandwich 9,000 = $5.00 = $76,596
$3.00
.47
Drink 9,000 1.50 .50
Daily $76,596
Baked potato 7,000 = 2.00 1.00
= $245.50
sales 312 days
1 2 3 4 5 6 7 8 9
ANNUAL ANNUAL WEIGHTED
FORECASTED SELLING VARIABLE FORECASTED CONTRIBUTION
ITEM (i) SALES UNITS PRICE (P) COST (V) (V/P) 1 - (V/P) SALES $ % OF SALES (COL 5 X COL 7)

9,000 $45,00
Sandwich $5.00 $3.00 .60 .40 0 .621 .248

Drinks 9,000 1.50 0.50 .33 .67 13,500 .186 .125

Baked 7,000
potato 2.00 1.00 .50 .50 14,000 .193 .097
$72,50
0 1.000 .470
Payback method

6-28
Net present value

6-29
6-30
6-31
Excel Sol

Example 1
x 1/x
PV PWF
year r=10% 15243.41 4.355261
1 3500 1.1 3181.818 0.909091
2 3500 1.21 2892.562 0.826446
3 3500 1.331 2629.602 0.751315
4 3500 1.4641 2390.547 0.683013
5 3500 1.61051 2173.225 0.620921
6 3500 1.771561 1975.659 0.564474

6-32
6-33
 To be shown on excel solver

Example 2 per year cash flow required

1/x
PWF PV
year r=8% 2.577097 cash inflow outflow net
1 1.08 0.925926 -10000
2 1.1664 0.857339 -10000
3 1.259712 0.793832 -10000
4 1.360489 0.73503 -12000

for purchase salvage

-16000 2500
net required -13500

NPV 1E-06

6-34
Replacement analysis (rising maintenance cost)

6-35
6-36
 Use of Process Plans

 Set of documents that detail manufacturing and

service delivery specifications
 assembly charts
 operations sheets
 quality-control check-sheets

 Purpose: Ensure standard operating procedure and

reduce variations and quality problems. Also,
provides basis for process analysis and improvement

6-37
Sesame seed top bun
Beef patty
Assembly Chart
SA
Salt for a Big Mac
Cheese
Lettuce
First-layer assembly
Sauce
Onions
Middle bun
Beef patty
SA
Salt
Cheese
Lettuce
Second-layer assembly
Sauce
Onions
Pickles
Bottom bun
Wrapper
Completed Big Mac

6-38
 An Operations Sheet for a Plastic Part
Part name Crevice Tool
Part No. 52074
Usage Hand-Vac
Assembly No. 520

Oper. No. Description Dept. Machine/Tools Time

10 Pour in plastic bits 041 Injection molding 2 min
20 Insert mold 041 #076 2 min
30 Check settings 041 113, 67, 650 20 min
& start machine
40 Collect parts & lay flat 051 Plastics finishing 10 min
50 Remove & clean mold 042 Parts washer 15 min
60 Break off rough edges 051 Plastics finishing 10 min

6-39
6-40
 Layout design (Ch 7)
 Types of manufacturing plants
 Basic Layouts
 Designing Process Layouts
 Designing Service Layouts
 Designing Product Layouts
 Hybrid Layouts
 Types of manufacturing plants

 Projects
 one-of-a-kind production of a product to customer order
 Batch production
 systems process many different jobs through the system in
groups or batches
 Mass production
 produces large volumes of a standard product for a mass
market
 Continuous production
 used for very-high volume commodity products

6-42
Copyright 2006 John Wiley & Sons, Inc. 6-43
 Types of Processes
Job shop/
PROJECT MASS CONT.
BATCH

Type of Made-to-
Unique Made to
stock Commodity
product order
(standardized )

One-at-a- Few
Type of Mass Mass
customer time individual
market market
customers

Product
demand Infrequent Fluctuates Stable Very stable

Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
 Types of Processes (cont.)
PROJECT BATCH MASS CONT.

Demand Low to
Very low High Very high
volume medium

No. of Infinite Many,

different Few Very few
products variety varied

Repetitive, Continuous,
Production Long-term Discrete, job
system assembly process
project shops
lines industries
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
 Types of Processes (cont.)
PROJECT BATCH MASS CONT.

Varied General- Special- Highly

Equipment
purpose purpose automated

Primary Mixing,
type of Specialized
Fabrication Assembly treating,
work contracts
refining

Experts, Limited
Worker Wide range Equipment
skills crafts- range of
of skills monitors
persons skills
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
 Types of Processes (cont.)
PROJECT BATCH MASS CONT.

Efficiency, Highly efficient,

Custom work, Flexibility,
Advantages latest technology quality
speed, large capacity,
low cost ease of control

Capital
Non-repetitive, Costly, slow, Difficult to change,
Dis- investment;
small customer difficult to far-reaching errors,
advantages lack of
base, expensive manage limited variety
responsiveness

Machine shops, Automobiles,

Construction,
print shops, televisions, Paint, chemicals,
Examples shipbuilding,
bakeries, computers, foodstuffs
spacecraft
education fast food
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage
(New York:McGraw-Hill, 2001), p. 210
 Layout

Affects:
•How efficiently worker can do their job?
•How much and how fast goods can be produced?
•How difficult it is to automate the system?
•How responsive the system can be to changes?

Objectives of layout:
Ensure smooth flow of work, material, people and
information.
 Facility Layout
Broader objectives
 Minimize material-handling
costs
 Utilize space efficiently
 Utilize labor efficiently
 Eliminate bottlenecks
 Facilitate communication and
interaction
 Reduce manufacturing cycle
time
 Reduce customer service time
 Eliminate wasted or redundant
movement
 Increase capacity
 Facilitate entry, exit, and
placement of material, products,
and people
 Incorporate safety and security
measures
 Promote product and service
quality
 Encourage proper maintenance
activities
 Provide a visual control of
activities
 Provide flexibility to adapt to
changing conditions
 BASIC LAYOUTS

 Process layouts
 group similar activities together
according to process or function they
perform
 Product layouts
 arrange activities in line according to
sequence of operations for a particular
product or service
 Fixed-position layouts
 are used for projects in which product
cannot be moved
 Process Layout
Milling
Lathe Department Department Drilling Department
M M D D D D
L L

M M D D D D
L L

G G G P
L L

G G G P
L L
Grinding Painting Department
Department
L L
Receiving and A A A
Shipping Assembly
 A Product Layout
In

Out
 Comparison of Product
and Process Layouts
Product Process
 Description  Sequential  Functional
arrangement of grouping of
activities activities
 Continuous, mass  Intermittent, job
 Type of process
production, mainly shop, batch
assembly production, mainly
fabrication
 Product  Standardized, made  Varied, made to
to stock order
 Demand  Stable  Fluctuating
 Volume  High  Low
 Equipment  Special purpose  General purpose
 Comparison of Product
and Process Layouts
Product Process
 Workers  Limited skills  Varied skills
 Inventory  Low in-process, high  High in-process, low
finished goods finished goods
 Storage space  Small  Large
 Material handling  Fixed path (conveyor)  Variable path (forklift)
 Aisles  Narrow  Wide
 Scheduling  Part of balancing  Dynamic
 Layout decision  Line balancing  Machine location
 Goal  Equalize work at each  Minimize material
station handling cost
 Advantage  Efficiency  Flexibility
 Fixed-Position Layouts

 Typical of projects
 Equipment, workers,
materials, other
resources brought to the
site
 Highly skilled labor
 Often low fixed
 Typically high variable
costs
 Designing Process Layouts

 Goal: minimize material handling costs

 Relationship Diagramming
 based on location preference between areas
 use when quantitative data is not available
 Block Diagramming
 minimize nonadjacent loads
 use when quantitative data is available
 Relationship Diagramming

 Schematic diagram that

uses weighted lines to
denote location preference
 Muther’s grid
format for displaying
manager preferences for
department locations
 Relationship AE Absolutely necessary
Especially important
Diagramming: Example
I Important
O Okay
U Unimportant
Production X Undesirable
O
Offices A
U I
Stockroom O E
A X A
Shipping and
receiving U U
U O
Locker room O
O
Toolroom
 Relationship Diagrams: Example (cont.)
(a) Relationship diagram of original layout

Offices Locker Shipping

room and
receiving

Key: A
E
I
Stockroom Toolroom Production
O
U
X
 Relationship Diagrams: Example (cont.)
(b) Relationship diagram of revised layout

Stockroom

Offices Shipping
and
receiving

Locker Key: A
Toolroom Production
room E
I
O
U
X
 Block Diagramming

 Unit load  STEPS

 quantity in which  create load summary chart

material is normally  calculate composite (two

moved way) movements

 Nonadjacent load  develop trial layouts

 distance farther minimizing number of

than the next block nonadjacent loads
 Block Diagramming: Example

Load Summary Chart

FROM/TO DEPARTMENT
1 2 3
Department 1 2 3 4 5

1 — 100 50
2 — 200 50
4 5 3 60 — 40 50
4 100 — 60
5 50 —
 Block Diagramming:
Example (cont.)
Nonadjacent Loads:
2 3 200 loads
110+40=150
0
2 4 150 loads
1 3 110 loads 110
1 2 100 loads
4 5 60 loads 100 150
200
1 2 3
4
3 5 50 loads
2 5 50 loads 150 200
50 5050 40 60
110
3 4 40 loads 60 50
4 3
5 5
1 4 0 loads
1 5 0 loads Grid 2
1
40
 Next step: account for
area requirement

(a) Initial block diagram (b) Final block diagram

1 4
1 2 4 2

3 5 3 5
 Computerized layout
Solutions
 CRAFT
 Computerized Relative Allocation of Facilities
Technique
 CORELAP
 Computerized Relationship Layout Planning
 PROMODEL and EXTEND
 visual feedback
 allow user to quickly test a variety of scenarios
 Three-D modeling and CAD
 integrated layout analysis
 available in VisFactory and similar software
Types of Store Layouts
 Designing Service
Layouts
 Must be both attractive and functional
 Types
 Free flow layouts

 encourage browsing, increase impulse purchasing, are flexible

and visually appealing
 Grid layouts
 encourage customer familiarity, are low cost, easy to clean and
secure, and good for repeat customers
 Loop and Spine layouts
 both increase customer sightlines and exposure to products,
while encouraging customer to circulate through the entire
store
 Designing Product
Layouts
 Objective
 Balance the assembly line
 Line balancing
 tries to equalize the amount of work at each
workstation
 Precedence requirements
 physical restrictions on the order in which operations
are performed
 Cycle time
 maximum amount of time a product is allowed to
spend at each workstation
Cycle Time Example

production time available

Cd = desired units of output

(8 hours x 60 minutes / hour)

Cd = (120 units)
480
Cd = = 4 minutes
120
 Flow Time vs Cycle Time

 Cycle time = max time spent at any station

 Flow time = time to complete all stations

1 2 3
4 minutes 4 minutes 4 minutes

Flow time = 4 + 4 + 4 = 12 minutes

Cycle time = max (4, 4, 4) = 4 minutes
Efficiency of Line
Minimum number
Efficiency
of workstations

i i

t i t i

E = nC
i=1
N= i=1
Cd
a

where
ti = completion time for element i
j = number of work elements
n = actual number of workstations
Ca = actual cycle time
Cd = desired cycle time
 Line Balancing Procedure

1. Draw and label a precedence diagram

2. Calculate desired cycle time required for the line
3. Calculate theoretical minimum number of
workstations
4. Group elements into workstations, recognizing cycle
time and precedence constraints
5. Calculate efficiency of the line
6. Determine if the theoretical minimum number of
workstations or an acceptable efficiency level has
been reached. If not, go back to step 4.
 Line Balancing: Example
WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3

0.2
B
Requirement
6000 products
0.1 A D 0.3 to be produced
in a week of 40
C working hours
0.4
 Line Balancing: Example (cont.)
WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3

40 hours x 60 minutes / hour 2400

Cd = = = 0.4 minute
6,000 units 6000

0.1 + 0.2 + 0.3 + 0.4 1.0

N= = = 2.5  3 workstations
0.4 0.4
 Line Balancing: Example (cont.)
REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none

0.2 Cd = 0.4
B N = 2.5

0.1 A D 0.3

C
0.4
Line Balancing: Example (cont.)

Work Work Work

station 1 station 2 station 3
Cd = 0.4
N = 2.5
A, B C D
0.3 0.4 0.3
minute minute minute

0.1 + 0.2 + 0.3 + 0.4 1.0

E= = = 0.833 = 83.3%
3(0.4) 1.2
 Hybrids Layouts

 Cellular layouts
 group dissimilar machines into work centers
(called cells) that process families of parts with
similar shapes or processing requirements
 Flexible manufacturing system
 automated machining and material handling
systems which can produce an enormous variety
of items
 Mixed-model assembly line
 processes more than one product model in one
line
 Cellular Layouts

1. Identify families of parts with similar

flow paths
2. Group machines into cells based on
part families
3. Arrange cells so material movement
is minimized
4. Locate large shared machines at
point of use
Original Process Layout
Assembly

4 6 7 9

5 8

2 10 12

1 3 11

A B C Raw materials
Part Routing Matrix
Machines
Parts 1 2 3 4 5 6 7 8 9 10 11 12
A x x x x x
B x x x x
C x x x
D x x x x x
E x x x
F x x x
G x x x x
H x x x
Reordered Routing Matrix
Machines
Parts 1 2 4 8 10 3 6 9 5 7 11 12
A x x x x x
D x x x x x
F x x x
C x x x
G x x x x
B x x x x
H x x x
E x x x
Revised Cellular Layout
Assembly

8 10 9 12

11
4 Cell 1 Cell 2 6 Cell 3
7

2 1 3 5

A B C
Raw materials
 Automated Manufacturing Cell

Source: J. T. Black, “Cellular

Manufacturing Systems Reduce Setup
Time, Make Small Lot
Production Economical.” Industrial
Engineering (November 1983)
 Advantages and limitations
of Cellular Layouts
 Advantages
 Reduced material
handling and transit time
 Reduced setup time
 Reduced work-in-
process inventory
 Better use of human
resources
 Easier to control
 Easier to automate
 Limitations
 Inadequate part families
 Poorly balanced cells
 Expanded training and
scheduling
of workers
 Increased capital
investment
 Flexible Manufacturing
Systems (FMS)
 FMS consists of numerous programmable
machine tools connected by an automated
material handling system and controlled by
a common computer network
 FMS combines flexibility with efficiency
 FMS layouts differ based on
 variety of parts that the system can process
 size of parts processed
 average processing time required for part
completion
Full-Blown FMS
 Some standard FMS layouts

 Progressive layout
 Closed-loop layout
 Ladder layout
 Open field layout
 Mixed Model
Assembly Lines
 Produce multiple models in any order
on one assembly line
 Features of mixed model lines
 Line balancing
 U-shaped line
 Flexible workforce
 Model sequencing
 Balancing U-Shaped Lines
Precedence diagram:

A B C

Cycle time = 12 min

D E

(a) Balanced for a straight line (b) Balanced for a U-shaped line

A,B C,D E
A,B
9 min 12 min 3 min
24 24
Efficiency = = = .6666 = 66.7 % C,D
3(12) 36

24 24
Efficiency = = = 100 % 12 min 12 min
2(12) 24
 Example

 September forecast: 220 vehicles

 In general
 SUV: Car: Van=6:3:2
 With mixed model line, daily production
can be uniformly produce it
 It reduces WIP inventory at all levels
Mixed-Model Sequencing