Transcript Review for Exam 1

HOMEWORK SET 1
b
b
b
b
b
b
b
Probs. 1-5, 1-12
Question 2-8
Probs. 2-1, 2-14
Case Prob. 2.4
Probs. 3-2, 3-14
Probs. 4-8, 4-14
Probs. 5-4 and 5-5
Problem 1.5
Labor Hours
Units of Output
Productivity
U.S.
89.5
136
1.52
Germany
83.6
100
1.20
Japan
72.7
102
1.40
The U.S. is the most productive.
Problem 1.12
Purchase cost
Alaskan
Seal
Brr Frost
$3,270
$4,000
$4,452
$5,450
3.61
3.88
6.68
29.07
$0.10
$0.10
$0.10
$0.10
Cold Case Deep Freeze
Daily energy consumption (kwh)
Cost per kwh
Daily energy cost
$0.36
$0.39
$0.67
$2.91
Daily purchase cost
$2.99
$3.65
$4.07
$4.98
Total cost
$3.35
$4.04
$4.73
$7.88
Volume (cu ft)
Productivity (cu ft/$)
Cost/cu ft
Choose Cold Case.
25
35
49
79
7.47
8.66
10.35
10.02
$0.13
$0.12
$0.10
$0.10
Problem 2.1a
Problem 2.1b
Prevention costs as % of quality Appraisal costs as % of quality costs
costs:
2006 2003:
2007 2004 :
2008 2005 :
2009 2006 :
2010 2007 :
3.2
 0.0171, or 1.71%;
187.2
10.7
 0.0530, or 5.3%;
201.7
28.3
 0.1332, or 13.32%;
212.5
42.6
 0.2197, or 21.97%;
193.9
50
 0.2996, or 29.96%;
166.9
26.3
 0.1404, or 14.04%
187.2
29.2
 0.1448, or 14.48%
201.7
30.6
 0.144, or 14.4%
212.5
24.1
 0.1243, or 12.43%
193.9
19.6
 0.1174, or 11.74%
166.9
Problem 2.1c
2006
2007
2008
2009
2010
Quality Sales
Index
6.93
7.50
7.85
6.90
5.79
Quality-Cost
Index
44.48
47.64
50.04
44.46
38.32
These index values do not provide much information
regarding the effectiveness of the quality assurance
program. They are, however, useful in making
comparisons from one period to the next and in showing
trends in product quality over time.
Problem 2.14
With an 8% defect rate:
Sales
Variable costs
Fixed costs
Profit
151200
61200
31000
59000
With zero defects:
Sales
Variable costs
Fixed costs
Profit
% decr in var costs
% inc in profits
151200
56305
31000
63895
7.998366
8.29661
Return on inv =
19.58 %
Case 2.4
b
Stage 1 yield: Y1 = (I)(%G) + (I)(1-%G)(%R)
– = 500 (.94) + 500(.06)(.23)
– = 470 + 6.9 = 476.9
b
Stg 2 yield: Y2=476.9(.96)+476.9*(.04)(.91)
– = 457.82 + 17.36 = 475.2
b
Stg 3 yield: Y3= 475.2(.95)+475.2*(.05)(.67)
– = 451.44 + 15.92 = 467.6
b
Stg 4 yield: Y4=467.6*(.97)+467.6*(.03)(.89)
– = 453.57 + 12.48 = 466.1
b
Stg 5 yield: Y5 = 466.1*(.98)+466.1*(.02)(.72)
– = 456.78 + 6.71 = 463.5
Case 2-4
Average Weekly Yield
Stage 3 yield : Y3  475.2 .95    475.2 .05 .67 
Stage 1 yield : Y1   I  %G   I 1  %G  % R 
 451.44  15.92
 500  0.94   500  0.06  0.23 
 470  6.9
 467.6
Stage 4 yield : Y4  467.6 .97    467.6 .03 .89 
Y1  476.9
Stage 2 yield : Y2   476.9  0.96   476.9  0.04  0.91
 457.82  17.36
Y2  475.2
 453.57  12.48
 466.1
Stage 5 yield : Y5  466.1.98   466.1 .02 .72 
 456.78  6.71
 463.5
Case 2-4
Increasing Good Quality Yield by 1% at Each Stage
Stage 1 yield : Y1  500  0.95   500  0.05  0.23 
Y1  480.75
Stage 2 yield : Y2  480.75  0.97   480.75  0.03  0.91
Y2  479.45
Stage 3 yield : Y3  479.45  0.96   479.45  0.04  0.67 
Y3  473.12
Stage 4 yield : Y4  473.11  0.98   473.11  0.02  0.89 
Y4  472.07
Stage 5 yield : Y5  472.07  0.99   472.07  0.01 0.72 
Y5  470.75
Difference in yields  470.75  463.5  7.25 units
Percentage increase 
7.25
 1.56%
436.2
Problem 3.2
Sample
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Proportion
Defective
0.14
0.12
0.09
0.10
0.11
0.07
0.08
0.14
0.16
0.17
0.18
0.10
0.19
0.20
0.17
0.18
0.18
0.22
0.24
0.23
P-Bar
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
0.1535
UCL
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
0.2256
LCL
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
0.0814
Number
Defective
14
12
9
10
11
7
8
14
16
17
18
10
19
20
17
18
18
22
24
23
307
P-Bar
0.154
UCL
0.226
LCL
0.081
Problem 3.2
Proportion Defective
0.30
0.25
0.20
0.15
0.10
0.05
0.00
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20
Sample Number
Problem 3.14
Problem 4.8
Problem 4-14
b
Provider MTBF
JCN (8*40)/50=6.4
Bell (8*40)/100=3.2
Com (8*40)/250=1.3
b
Best choice in terms of SA is JCN
b
b
b
MTTR
SA
3+2=5 6.4/(6.4+5)=.56
2+1=3 3.2/(3.2+3)=.52
1+.5=1.5 1.3/(1.3+1.5)=.46
Problem 5-4
Arrival rate =
7.5
parts per hour
Service rate =
10
parts per hour
Average number in the system (L) = 3.0 parts
Average number in the queue (Lq) = 2.25 parts
Average time in the system (W) =
24
minutes
Average time in the queue (Wq) =
18
minutes
Utilization factor (U) = 0.75
P(0) = 0.25
Problem 5-5
U =Arrival rate/service rate
U =Arrival rate/10
.90 =Arrival rate/10
Arrival rate =(10)*(.9) =
9 per hour
Arrival rate =
or one part every 6.67 minutes
60/9
Problem 5-14 – Not assigned
  90 per hour
  60 per hour
1
P0 
 1 1  90 n  1  90 2  2  60  
       

 0 n !  60   2!  60   120  90 
s2
 .143
s

  


L

P

0

 s  1! s   2
Lq  L 
W
L

Wq 

Lq

2
90  60 1.67 


.143  1.50  3.43
2
1! 30 

 3.43  1.50  1.93

3.43
 .038 hr  2.29 min 
90

1.93
 .021 hr 1.29 min 
90
Stitching Problem
b
b
b
Stitches and glue are redundant—i.e., in
parallel—not in series
Ask yourself—will the shoe ‘system’
function the first day with only glue and not
stitches, or vice versa?
System reliability of one row of stitches
and glue = .5 + .7 - .5*.7 = .85
Stitching Problem
b
b
b
b
Add a second row of stitches
Reliability = .85 + .5 - .85*.5 = .925
Add a third row of stitches
Reliability = .925 + .5 - .925*.5 = .9625
Review for Exam 1
This exam will be administered Tuesday
July 16, 2013 in this room—you will have the
entire period
Exam Structure
b
b
b
b
50 multiple choice worth 50%
4-5 problems worth 50%
Bring: pencils, erasure, 5-function
calculator, orange scantron sheet
Exam is closed-notes, closed-books,
closed-neighbors
Chapters covered
b
b
1, 2, 3, 4, 5, 6
No supplements to any of these chapters
Problems
b
b
b
Calculate product yield
Calculate product cost based on product
yield
Calculate reliability
• Like problem 4-8 in your HW
b
b
Calculate break-even volume and
indifference points
RE-ENGINEER A PROCESS
More problems
b
P-chart//R-chart//xbar chart
• Like problems 3-2 and 3-14 in your HW
b
b
Cpr/Cpk problem—standard deviation
given to you.
QFD (Quality Function Deployment) Problem
is not likely, but there will be Multiple
Choice on it
Chapter 1
b
Name some activities of operations managers
• Organizing work, selecting and innovating
processes, arranging layouts, locating facilities,
designing jobs, measuring performance,
controlling quality, scheduling work, managing
inventory, planning production
b
Is the Japanese success in Manufacturing a
cultural one?
• No. Witness what Matsushita did with Motorola’s
Quasar
Activities in Operations
Management include all but….
b
b
b
b
b
Organizing work
Controlling quality
Selecting processes
Controlling finances
Scheduling work
Operations at a Bank
b
b
b
b
b
b
b
b
Processing funds
Providing checks
Cashing checks
Preparing monthly statements
Reconciling statements
Approving loans
Loaning money
Tracking loan payments
Operations at a retail store
b
b
b
b
b
b
b
b
Purchasing goods
Stocking goods
Selling goods
Tracking inventory
Scheduling workers
Laying out the store
Locating the store
Forecasting demand
Operations at hospital
b
b
b
b
b
b
b
Preparing rooms
Scheduling doctors, nurses, operating rooms
Processing paperwork
Ordering supplies
Billing customers
Caring for patients
Maintaining the facility
Operations at a cable TV
company
b
b
b
b
b
b
b
Taking orders
Installing equipment
Maintaining equipment
Staying on the “air”
Scheduling work
Processing statements
Processing payments
Evolution of Operations
b
b
b
b
b
b
b
Industrial revolution—Adam Smith
Scientific management—Frederick Taylor
Human relations—Abraham Maslow
Operations research—George Dantzig
Quality revolution—W. Edwards Deming
Globalization—many contributors
Internet—Tim Berners Lee
Productivity is what exactly?
b
Output/Input
• Measured in $$$
b
b
The most common measure of
competitiveness of a country
Government reports measure CHANGES IN
PRODUCTIVITY from month to month
Name some trends in OM
b
b
b
b
b
b
b
b
b
Intense Competition
Global markets
Importance of Strategy
Product variety and mass customization
More services
Emphasis on quality
Flexibility
Advances in technology
Worker involvement
Name some barriers to entry of
new enterprises
b
b
b
b
b
Economies of Scale
Access to customers and suppliers
The capital investment required
Learning curves
{Which of these would cause the cost to
manufacture an airliner to decline from
$300M to $30M as the manufacturer
proceeds from the 1st to the 10th airplane??}
More Chapter 1
b
b
b
b
Would you say that cheap labor rates are
the strongest motivation for plant location?
Whose hourly wage rates are substantially
higher than ours?
Operations has been likened to a _____
process
The purpose is to add _____, more ____
than you add cost.
Chapter 1
b
b
b
b
b
b
_____ is the most common measure of
competitiveness of a country.
a) Operations
b) Process
c) Productivity
d) E-commerce
e) Positioning
How important is a country’s
competitiveness?
b
b
b
b
Somewhat
Not very
Not at all
Very important, if you value standard of
living
Operations Strategy
b
b
b
b
Primary tasks, core competencies, order
qualifiers--define these
Name four dimensions of competition
Today the focus in not on functions but
_____
Name four PROCESS (OPERATIONS) types
– project, batch, mass production, continuous
production
b
Which of these are low-volume, which are
high volume
Operations Strategy
b
b
What is meant by a core competence
What is meant by
• make to order
• make to stock
• assemble to order
Service Operations
b
There are four types
• Professional service, service shop, mass
service, service factory
• Schema coordinates are labor intensity and
customization
Competing On Cost
b
b
Eliminate all waste
Invest in
•updated facilities & equipment
•streamlining operations
•training & development
b
Examples
•Walmart
•Southwest Airlines
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 2 - 3
Competing On Quality
Please the customer
•Understand customer attitudes toward and
expectations of quality
•Example
– Ritz-Carlton Hotels
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Russell/Taylor Oper Mgt 3/e
Ch 2 - 4
Competing On Flexibility
b
b
b
b
b
Produce wide variety of products
Introduce new products quickly
Modify existing products quickly
Respond to customer needs
Example
•Anderson Windows
•Custom Foot Shoe Store
•National Bicycle Industrial company
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Russell/Taylor Oper Mgt 3/e
Ch 2 - 5
Competing On Speed
b
Fast moves
b
Fast adaptations
b
b
b
Tight linkages
Example: Dell
Another example: Walmart’s cross-docking
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Russell/Taylor Oper Mgt 3/e
Ch 2 - 6
Product-Process Matrix
Continuous
production
High
Volume
Mass
production
Batch
production
Projects
Low
Low
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Russell/Taylor Oper Mgt 3/e
Standardization
High
Ch 2 - 17
Service-Process Matrix
Low
Labor Intensity
Service
Factory
Mass
Service
Service
Shop
Professional
Service
High
High
Figure 2.4
Customization
Low
Chapter 2--Quality Management
b
Be able to calculate Yield and Product cost
• Formulas will be given to you
What we learn from problems 2-1 and 2-14?
That improvements in quality (Yield) produce
reductions in cost
Chapter 2-Quality Gurus
b
b
b
b
Who gave us P-D-C-A?
What was the name of his mentor?
Who Wrote the book QUALITY IS FREE?
Who proposed that TQM was a total
commitment among both management and
employees
Name the first five of Deming’s 14
points
b
b
b
b
b
Maintain constancy of purpose
Adopt a philosophy of prevention
Eliminate the need for inspection
Select a few suppliers
Constantly improve the production process
TQM
b
b
b
b
b
Relation to continuous process
improvement
Who defines quality??
Who provides the leadership for quality?
Is quality a strategic issue?
To what extent is quality a worker vs. a
managerial issue?
Measures of Quality
b
b
b
b
b
b
b
b
b
b
FOR PRODUCTS
Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics
Safety
Other
b
b
b
b
b
b
b
b
FOR SERVICES
Timeliness
Completeness
Courtesy
Consistency
Accuracy
Convenience
Responsiveness
The Meaning of Quality
Production
Producer’s Perspective
Consumer’s Perspective
Quality of Conformance
Quality of Design
•Conformance to
specifications
•Cost
•Quality characteristics
•Price
Marketing
Fitness for
Consumer Use
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 3 - 9
Strategic Implications Of TQM
b
b
b
b
b
b
Quality is key to effective strategy
Clear strategic goal, vision, mission
High quality goals
Operational plans & policies
Feedback mechanism
Strong leadership
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 3 - 16
DMAIC – what does it stand for?
b
b
b
b
b
Define
Measure
Analyze
Improve
Control
Cost Of Quality
b
Cost of achieving good quality
•Prevention
•Appraisal
b
Cost of poor quality
•Internal failure costs
•External failure costs
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 3 - 18
Companies underestimate their
failure costs
b
b
Because these are harder to measure
Crosby says these amount to 20-30% of
annual revenues, whereas the costs of
good quality are roughly 3-4% of annual
revenues
Seven Quality Control Tools
1. Pareto analysis
2. Flowcharts
3. Check sheets
4. Histograms
5. Scatter diagrams
6. Control charts
7. Fishbone diagram
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 3 - 37
Chapter 3--Statistical Process
Control
b
Be able to construct p-charts, c-charts
• For attributes
b
Be able to construct xbar charts, R-charts
• For variables
Variation
b
Common Causes
•Variation inherent in a process
•Can be eliminated only through improvements in
the system
b
Special Causes – it is visible on a control chart
•Variation due to identifiable factors
•Can be modified through operator or management
action
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 4 - 4
Types Of Data
b
Attribute data
– Product characteristic evaluated with a discrete
choice
– Good/bad, yes/no
b
Variable data
– Product characteristic that can be measured
– Length, size, weight, height, time, velocity
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 4 - 5
Control Charts
b
b
Graph establishing process control limits
Charts for attributes
•p charts and c charts
b
Charts for variables
•Mean (X-bar), Range (R-bar)
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 4 - 8
The x-bar chart is based on which
probability distribution?
b
b
b
b
b
Exponential distribution
Binomial distribution
Normal distribution
Beta distribution
Poisson distribution
Typically control limits of control
charts represent ____ sigma limits
b
b
b
b
b
2
3
4
5
6
Six sigma means what in terms of
defects
b
b
35,000 defects PMO
3.4 defects PMO
Chapter 4—Product Design
b
b
b
b
b
Design for manufacture
Design for assembly
Design for environment
Design for maintenance
Design for Robustness
Computing Reliability
Components in series
0.90
0.90
0.90 x 0.90 = 0.81
Components in parallel
.90
.95
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
0.95 + 0.90(1-0.95) = 0.995
Ch 5 - 15
A technique for improving the
design of a product vis-à-vis
b
b
b
Customer requirements
Comparing competitions’ products, is
called______
Taking apart the competitions’ products, is
called______
House Of Quality
5. Tradeoff
matrix
Importance
3. Product
characteristics
1. Customer
requirements
4. Relationship
matrix
2. Competitive
assessment
6. Technical assessment and
target values
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 5 - 37
Measures of Design Quality
include
b
b
b
b
b
b
b
b
Number of component parts and product options
% of standard parts
Use of existing manufacturing processes
Cost of first production run
Cost of engineering changes during the first six
months
Total product cost
Total product sales
Sustainable development
Concurrent Design
Customers
Marketing
Suppliers
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Design
Engineering
Production
Ch 5 - 20
DFM Guidelines
1. Minimize the number of parts
2. Develop a modular design
3. Design parts for multi-use
4. Avoid separate fasteners
5. Eliminate adjustments
6. Design for top-down assembly
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 5 - 25
Chapter 6—Processes,
Technologies & Capacity
b
b
b
Michael Hammer—eliminate _______??
Make work _____ again
Make processes _______
Process Flowchart Symbols
Operations
Inspection
Transportation
D
Delay
Storage
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 6 - 20
b
b
b
b
b
b
b
b
b
1.__________________ takes a long time to complete,
involves a large investment of funds and resources, and
produces one item at a time to customer order.
A. A project
B. Batch production
C. Mass production
D. A continuous process
2.Very high volume commodity products are best suited
to:
A. projects.
B. batch production.
C. mass production.
D. continuous production.
b
b
b
b
b
b
b
b
b
b
3.A process flow chart:
A. includes only productive activities.
B. shows the parent-component relationship in a product.
C. is derived from a floor plan of the facility.
D. traces the path of a product through the production
process.
E. All of the above.
4.Machine shops, printers, bakeries, education, and
furniture-making are examples of:
A. projects.
B. batch production.
C. mass production.
D. continuous production.
The focus of operations today is
not on functions, but _____
Which of the following refers to
dismantling a competitor’s
product?
b
Dismantling a competitor’s product in
order to improve one’s own product
•
•
•
•
Cluster charting
Benchmarking
Reverse engineering
Concurrent design
BPR VS PROCESS IMPROVEMENT
IMPROVEMENT
b
b
Level of change
Starting point
Frequency of change
Time required
Participation
Typical scope
Risk
Primary enabler
Incremental
Existing process
Continuous
short
bottom-up
Narrow
Moderate
Statistical control
b
Type of change
cultural
b
b
b
b
b
b
b
BUS PROCESS REENG
Radical
Clean slate
One-time
long
top-down
Broad
High
Information
technology
cultural/structural
Disadvantages of handoffs
b
b
b
b
b
allow for inventory buildup between
workers, stations
add delays--transit times, wait times
require more people
make work too simple and boring
require supervision
What are byproducts of
shortened cycle times?
b
b
b
b
b
Faster to market
Larger market share as a result
More responsive to the customer
More flexible
In some cases even lower cost
Process Plans
b
b
b
b
b
b
b
Blueprints
Bill of material
Operations sheet
Assembly diagram
Assembly chart / product
structure diagram
Process flow chart
Routing sheet
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 6 - 15
What is this?
No.Part
1
2
3
4
5
6
No.
51292
51284
52043
51576
51265
51268
Part name
Outlet end
Handle
Switch
Electric cord
Rear housing
Motor mounting plate
BILL OF MATERIAL
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 6 - 16
What is this?
Packaged
Hand-vac
Upholstery
tool
Crevice
tool
Forward
housing
assembly
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Hand-vac
Dusting
tool
Screw &
lock washer
assembly
Product Structure Tree
Package
Rear
housing
assembly
Ch 6 - 17
What is this?
Part name
Part no.
Usage Table
Assembly No.
Oper No.
10
20
30
40
50
Table leg
2410
437
Description
Saw to rough length
Plane to size
Saw to finished length
Measure dimensions
Sand
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Dept.
041
043
041
051
052
Operations sheet
Machine Time
Tools
Ch 6 - 18
Symbols for what kind of chart?
Operations
Inspection
Transportation
D
Delay
Storage
Process Flowchart
© 2000 by Prentice-Hall Inc
Russell/Taylor Oper Mgt 3/e
Ch 6 - 20