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Chapter 3 An Introduction to Operations Management How to Create a Process Flow Diagram 2nd Stage FB Reactor CFB Preheater 1st Stage CFB Reactor ~ 110 m Inclined Bucket Elevator Briquetting Plant Process Gas Heat Exchanger Iron Ore Fines Electrical Substation& Control Room Process Gas Compressor Fired Gas Heaters ~ 160 m HBI Product How to Create a Process Flow Diagram Pre-Heater Lock Hoppers 1st Reactor Discharge 2nd Reactor Flash heater Pile of Iron ore fines Briquetting Finished goods Key-points in Process Analysis • Simplify a complex process using a process flow diagram • Bottleneck analysis: analyze the process by looking at the bottleneck • Bottleneck may depend on the product mix • Time to complete X units •Starting with a loaded system: X T im e to fulfill X units F low R ate •Starting with an empty system T im e to fulfill X units T im e through em pty proce ss X 1 F low R ate - For continuous flow processes: (X-1) = X - If capacity constrained, flow rate is dictated by the bottleneck Input Flow Rate R Demand vs. Capacity Constraints Capacity constrained Demand constrained Bottleneck (Capacity) Input Bottleneck (Capacity) Flow Rate Flow Rate Flow Rate Flow Rate Demand Excess Capacity Demand Flow Rate=Min{Demand, Capacity} Excess Capacity Process Utilization and Capacity Utilization • Utilization: How much is produced relative to what could be produced Process U tilization = Flow Rate Process C apacity • Can be computed for an entire process and for each resource in a process Resource U tilization = Flow Rate Resource C apacity Im plied U tilization = Maximum values? C apacity Requested by D em and Available C apacity How To Conduct a Process Analysis Prepare a process flow diagram Extensions Required for working With multiple flow units Identify the flow unit Use different colors to mark flow units Compute the capacity for each of the resources Use demand to compute the implied utilization levels Identify the bottleneck Compute Note that capacity workload across levels may differ all product depending on types product type Compute performance measures Step with highest implied utilization A finance company receives 1,000 loan applications per 30 day working month and makes accept/reject decisions based upon a thorough review. On average, 20% of all applications receive approval. An internal audit revealed that the company has 500 applications in process at various stages. In response to customer complaints, the company forms an initial review team to pre-process all applications. Each application will be categorized either A (excellent), B (needs more detailed review), or C (reject). On average 25% of the applications are type A, 25% are type B, and 50% are type C. 70% of type A and 10% of type B applications are approved on review. Internal audit checks show that 200 applications are with the initial review team, 25 with the type A team, and 150 with the type B team. Has customer service improved? Why? 1. 2. 3. A hospital ER is currently organized so that all patients register through an initial check-in process. At his turn, each patient is seen by a doctor and then exits the process, either with a prescription or with admission to the hospital. Currently, 50 people per hour arrive at the ER, 10% of whom are admitted to the hospital. On average, 30 people are waiting to be registered and 40 are registered and waiting to see a doctor. The registration process takes, on average, 2 minutes per patient. Among patients who receive prescriptions, average time spent with a doctor is 5 minutes. Among those admitted to the hospital, average time is 30 minutes. On average, how long does a patient stay in the ER? how many patients are being examined by doctors? how many patients are in the ER?