CHAPTER 5

Kahsu Mebrahtu (Asst. Prof.,)

Mekelle University
College of Business and Economics
Department of Management
Postgraduate Program (MBA)
• Process Selection refers to the strategic decision of
selecting
which kind of production processes to have in the plant .
• It refers to the way an organization chooses to produce its goods
or provide its service

•Classification of Processes:
Based on what they do :
•Conversion processes like changing iron ore into steel
•Fabrication processes like changing raw materials into
some specific form eg changing steel in to spare parts
•Assembly processes like assembling a fender into a car
(assembling parts to form a car)

Based on how they are designed:

Make-to-stock
Make-to-order
Product-Flow Characteristics
Types of Product Flow
Line Flow
 Repetitive/Assembly(Mass)
 Continuous

Intermittent Flow
 Batch flow
 Job shop flow

Project Flow

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 WS 1 WS 2 WS 3

WS Task or work station

Product flow

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Characteristics of Line Flow
MACHINE LABOUR Volume of Cost of
Requirement Requirement production Production

It requires Fairly low skill High volume of Results in

highly requirement output low cost of
standardized production
methods and
equipment

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 WS 2 WS 4

WS 1 WS 3 WS 5

WS Task or work station

Product flows
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Characteristics of Intermittent
Flow
MACHINE LABOUR Volume of Cost of
Requirement Requirement production Production

It requires Highly –semi Medium-low Results in

general skilled labor volume of high cost of
purpose output production
equipment

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 Task 2 Task 4

Start End

Task 1 Task 3

Task Task or activity

Precedence relationship

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 Process Types

Intermittent type of Production

Job shop
Small (low volume) scale but large number of different products
Customized products
The products require different production steps
Eg. Repair work, health care, beauty salon, lawyer services,
furniture, retail-sales, courses.
Batch
 Moderate volume of similar products
 Systems process many different jobs through the system in groups
or batches
4-9 Eg. Food processors, canned vegetables, books, toys
Con…
Line type of Production
Repetitive/assembly line(mass)/semi-continuous
High volumes of standardized goods or services
They produce highly similar but not identical products
Eg. Cars, Tvs , computers, calculators etc
Continuous (process Industries)
Very high volumes of non-discrete goods
They produced highly uniform products
used for very-high volume commodity products
Eg. Chemicals, newsprint, cement, water treatment
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 Types of Processes
PROJECT BATCH Assembly/MASS CONT.

Made-to- Made-to-
Type of order stock Commodit
Unique
product (customize (standardize y
d) d)
Few
One-at-a-
Type of individual Mass Mass
customer time
customer market market
s

Product Infrequen Fluctuate Very

demand Stable
t s stable

Copyright 2006 John Wiley &

Sons, Inc. 6-11
 Type of Processes
Job Shop Batch Repetitive/ Continuous
Assembly
Description Customized Semi- Standardized Highly
goods or standardized goods or standardized
services goods or services goods or
services services

Advantages Able to handle Flexibility Low unit cost, Very efficient,

a wide variety high volume, very high
of work efficient volume
Disadvantages Slow, high cost Moderate cost Low flexibility, Very rigid, lack
per unit, per unit, high cost of of variety,
complex moderate downtime costly to
planning and scheduling change, very
scheduling complexity high cost of
down time
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Process Types Cont…
Variety
Job shop Emergency
Room

Batch Commercial
Bakery

Repetitive Automatic
Carwash

Continuous Petroleum
Refinery

Low - ---------- Volume ------------ High

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Factors Affecting Process Choice
Market conditions and competition
Capital requirements
Labor supply and cost
Management skills
Materials supply and cost
State of technology

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The expected volume and demand pattern for the
products

The number of different products (product

variety)to be made by the system and the types of
processing each requires

The customer order type: make-to-stock and

make-to-order

The physical characteristics of the products

 Home Work
1. Aya-Hawey planned to open a new manufacturing plant in Tigrai
but he is confused what type of production system can employ.
Please tell him the pros and cons of the production systems .
2. Twenty samples of n=8 have been taken from a cleaning operation.
The average sample range for the 20 samples was 0.016 minutes ,and
the average mean was 3 minutes .Considering A2 =0. 37 determine
three sigma control limits for this process.

3. Mohammed produced 600 standard cakes last week using 12

workers and he produced 854 cakes this week using 8 workers . In
which week was productivity higher? Why ? Explain.

4. Assume that you are working in one of the commercial banks in

Ethiopia, what operational competencies are there in the bank?
Explain.
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 THANK YOU !!!

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