Transcript KRM Supplement E - Linear Programming

Measuring
Output Rates
Supplement H
© 2007 Pearson Education
Work Standards
 A work standard is the time required for a trained
worker to perform a task following a prescribed
method with normal effort and skill.
Used in the following ways:
 Establishing prices and costs.
 Motivating workers.
 Comparing alternative process designs.
 Scheduling.
 Capacity planning.
 Performance appraisal.
© 2007 Pearson Education
Methods of
Work Measurement
The time study method.
The elemental standard data approach.
The predetermined data approach.
The work sampling method.
© 2007 Pearson Education
The Time Study Method
 Time study is the method used most often.
 Step 1: Selecting the work elements.
 Step 2: Timing the elements.
 Step 3: Determining sample size.
 Step 4: Setting the standard.
© 2007 Pearson Education
Time Study Method
Example H.1
Packaging Coffee Cups
© 2007 Pearson Education
Time Study Method
Example H.1
Step 1: Selecting Work Elements
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
© 2007 Pearson Education
Time Study Method
Example H.1
Step 2: Timing the Elements
(10 observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Standard
Deviation, 
(minutes)
Select
Time, t
(minutes)
0.0305
0.0171
0.0226
0.0241
0.50
0.11
0.71
1.10
Work element 1 was observed only 5 times
because it occurs once every two work cycles.
© 2007 Pearson Education
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
z
p

t
[( )( )]
0.0305
0.0171
0.0226
0.0241
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
Time Study Method
Desired
Confidence (%)
1.
2.
3.
4.
Example H.1
z
90
1.65
Step
the Sample Size
95 3: Determining
1.96
96
2.05
Standard
Select
Required
97
2.17
Deviation, 
Time, t
Sample
98
2.33
Work Element
(minutes)
(minutes)
Size
99
2.58
Get two cartons
0.0305
0.50
Put liner in carton
0.0171
0.11
Place cups in carton
0.0226
0.71
Seal carton and set aside
0.0241
1.10
n=
© 2007 Pearson Education
z
p

t
[( )( )]
2
p = 0.04 z = 1.96
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
)(
Select
Required
Time, t
Sample
(minutes)
Size
0.0305
0.0171
0.0226
0.0241
0.0305
0.500
0.50
0.11
0.71
1.10
)]
2
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
9
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
9
58
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
9
58
3
Time Study Method
Example H.1
Step 3: Determining the Sample
Size
Standard
Deviation, 
(minutes)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
n=
© 2007 Pearson Education
[(
1.96
0.04
0.0305
0.0171
0.0226
0.0241

t
)( )]
2
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
9
58
3
2
Time Study Method
Example H.1
Step 3: Determining the Sample Size
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Use largest n, 58.
© 2007 Pearson Education
Standard
Deviation, 
(minutes)
0.0305
0.0171
0.0226
0.0241
Select
Required
Time, t
Sample
(minutes)
Size
0.50
0.11
0.71
1.10
9
58
3
2
Time Study Method
Example H.2
Step 4: Setting the Standard
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
© 2007 Pearson Education
t
F
RF
NT
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Performance rating factor (RF) describes how much above or below the average.
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Determining normal time
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
NT
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
NT
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
NT = 0.53(0.50)(1.05) = 0.28 minute
© 2007 Pearson Education
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Time Study Method
Example H.2
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
NT = t (F )(RF)
© 2007 Pearson Education
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Total
2.18
NTC = NT
Time Study Method
Example H.3
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Total
2.18
Determining the standard time
ST = NTC (1 + A)
© 2007 Pearson Education
A = allowance time added to
adjust for certain factors
Time Study Method
Example H.3
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Allowance (A) = 15%
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Total
2.18
ST = 2.18 (1 + 0.15) = 2.51 minutes/carton
© 2007 Pearson Education
Time Study Method
Example H.3
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Allowance (A) = 15%
© 2007 Pearson Education
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Total
Standard Time
2.18
2.51
Time Study Method
Example H.3
Step 4: Setting the Standard
(after 48 additional observations)
Work Element
1.
2.
3.
4.
Get two cartons
Put liner in carton
Place cups in carton
Seal carton and set aside
Allowance (A) = 15%
t
F
RF
NT
0.53
0.10
0.75
1.08
0.50
1.00
1.00
1.00
1.05
0.95
1.10
0.90
0.28
0.10
0.83
0.97
Total
Standard Time
2.18
2.51
480 minutes/day
= 191 cartons/day
2.51 minutes/carton
© 2007 Pearson Education
Calculating Select Time
Application H.1
Lucy and Ethel have repetitive jobs at the candy factory. Management desires to
establish a time standard for this work for which they can be 95% confident to be
within ± 6% of the true mean. There are three work elements involved.
Step 1: Selecting work elements.
#1: Pick up wrapper paper and wrap one piece of candy.
#2: Put candy in a box, one at a time.
#3: When the box is full (4 pieces), close it and place on conveyor.
Step 2: Timing the elements. Select an average trained worker: Lucy will suffice.
* Lucy had some rare and unusual difficulties; don't use this observation.
© 2007 Pearson Education
Determining Sample Size
Application H.1
p = 0.06
© 2007 Pearson Education
z = 1.96
Setting the Standard
Application H.1
Determining Normal Time
NTC = NT = 0.12 + 0.09 + 0.06 = 0.27 minutes
A = 18.5%
ST = NTC(1 + A) = 0.27(1 + 0.185) = 0.32 minutes
© 2007 Pearson Education
Data Approaches
 The elemental data approach is a type of data used by
analysts to derive standards when a high degree of similarity
exists in the work elements.
 The predetermined data approach eliminates the need for
time studies.
 Step 1: Break each work element into its basic micromotions:
reach, move, disengage, apply pressure, grasp, position, release,
and turn.
 Step 2: Find the tabular value accounting for factors such as
weight, distance, size of object, degree of difficulty, for each
micromotion.
 Step 3: Add the NT for each motion to get the NT for the job.
 Step 4: Adjust the normal time for allowances to give ST.
 Methods time measurement (MTM) is the most commonly
used system.
© 2007 Pearson Education
MTM Predetermined Data
Time TMU
Distance
Moved
(in.)
A
3/4 or less 2.0
1
2.5
2
3.6
3
4.9
4
6.1
5
7.3
6
8.1
7
8.9
8
9.7
9
10.5
© 2007 Pearson Education
B
C
2.0
2.9
4.6
5.7
6.9
8.0
8.9
9.7
10.6
11.5
2.0
3.4
5.2
6.7
8.0
9.2
10.3
11.1
11.8
12.7
Wt. Allowance
Hand in
Static
Motion Wt. (lb) Dynamic Constant
B
Up to
Factor
(TMU)
1.7
2.3
2.9
3.6
4.3
5.0
5.7
6.5
7.2
7.9
2.5
1.00
0
7.5
1.06
2.2
12.5
1.11
3.9
17.5
1.17
5.6
22.5
1.22
7.4
MTM Predetermined Data
Time TMU
Distance
Moved
(in.)
A
3/4 or less 2.0
1
2.5
2
3.6
3
4.9
4
6.1
5
7.3
6
8.1
7
8.9
8
9.7
9
10.5
© 2007 Pearson Education
B
C
2.0
2.9
4.6
5.7
6.9
8.0
8.9
9.7
10.6
11.5
2.0
3.4
5.2
6.7
8.0
9.2
10.3
11.1
11.8
12.7
Wt. Allowance
Hand in
Static
Motion Wt. (lb) Dynamic Constant
B
Up to
Factor
(TMU)
1.7
and Description
2.3Case 2.5
1.00
0
2.9
A3.6Move7.5
object1.06
to other2.2
4.3hand or against stop.
12.5
3.9
B5.0Move
object1.11
to
5.7
or
6.5approximate
17.5
1.17
5.6
7.2indefinite location.
22.5
C7.9Move
object1.22
to exact7.4
location.
The Work Sampling
Method
 Work sampling is the process of estimating the
proportions of the time spent by people and machines
on activities, based on a large number of
observations.








Step 1: Define the activities.
Step 2: Design the observation form.
Step 3: Determine the length of the study.
Step 4: Determine the initial sample size.
Step 5: Select random observation times.
Step 6: Determine the observer schedule.
Step 7: Observe the activities and record the data.
Step 8: Decide whether additional sampling is required.
© 2007 Pearson Education
Work Sampling
Example H.4
Nurses Accessing Records
© 2007 Pearson Education
Work Sampling
Example H.4
Determining the Sample Size
e=z
Probability that true
proportion will fall
within confidence interval
^
p–e
^
p
Confidence interval
© 2007 Pearson Education
^
p+e
^ – ^p)
p(1
n
Work Sampling
Example H.4
Determining the Sample Size
Time spent accessing records
RN
LVN
Maximum error
Confidence level
n=
© 2007 Pearson Education
0.20
0.05
±0.03
95%
^ – ^p)
 p(1
z
e
2
Work Sampling
Example H.4
Determining the Sample Size
Time spent accessing records
RN
LVN
Maximum error
Confidence level
n=
© 2007 Pearson Education
0.20
0.05
±0.03
95%
 (0.20)(0.80)
1.96
0.03
2
Work Sampling
Example H.4
Determining the Sample Size
Time spent accessing records
RN
LVN
Maximum error
Confidence level
n=
© 2007 Pearson Education
0.20
0.05
±0.03
95%
683 observations of RNs
Work Sampling
Example H.4
Determining the Sample Size
Time spent accessing records
RN
LVN
Maximum error
Confidence level
n=
n=
© 2007 Pearson Education
0.20
0.05
±0.03
95%
683 observations of RNs
203 observations of LVNs
Work Sampling
Example H.4
Recording the Observations
Activity
Accessing
records
RN
LVN
© 2007 Pearson Education
Attending to
patients
Other support
activities
Idle or
break
Total
observations
Work Sampling
Example H.4
Recording the Observations
Activity
RN
Accessing
records
Attending to
patients
Other support
activities
||
||
|||
|||
|
LVN
© 2007 Pearson Education
Idle or
break
|
Total
observations
Work Sampling
Example H.4
Recording the Observations
Activity
Accessing
records
Attending to
patients
Other support
activities
Idle or
break
Total
observations
RN
124
258
223
83
688
LVN
28
251
46
19
344
© 2007 Pearson Education
Work Sampling
Example H.4
Determining Actual Proportions
Activity
Accessing
records
Attending to
patients
Other support
activities
Idle or
break
Total
observations
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs =
Actual proportion for LVNs =
© 2007 Pearson Education
Work Sampling
Example H.4
Determining Actual Proportions
Activity
Accessing
records
Attending to
patients
Other support
activities
Idle or
break
Total
observations
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs = 124 / 688
Actual proportion for LVNs =
© 2007 Pearson Education
Work Sampling
Example H.4
Determining Actual Proportions
Activity
Accessing
records
Attending to
patients
Other support
activities
Idle or
break
Total
observations
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs = 124 / 688
Actual proportion for LVNs = 28 / 344
© 2007 Pearson Education
Work Sampling
Example H.4
Determining Actual Proportions
Activity
Accessing
records
Attending to
patients
Other support
activities
Idle or
break
Total
observations
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs = 0.18
Actual proportion for LVNs = 0.08
© 2007 Pearson Education
Work Sampling
Example H.4
Verifying Sample Sizes
Time spent accessing records
RN
0.20
LVN
0.05
Activity
Maximum error
±0.03
Accessinglevel
Attending95%
to
Other support
Confidence
records
patients
activities
Idle or
break
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs = 0.18
Actual proportion for LVNs = 0.08
© 2007 Pearson Education
Total
observations
Work Sampling
Example H.4
Verifying Sample Sizes
Time spent accessing records
RN
0.20
LVN
0.05
Activity
Maximum error
±0.03
Accessinglevel
Attending95%
to
Other support
Confidence
records
patients
activities
Idle or
break
RN
124
258
223
83
688
LVN
28
251
46
19
344
Actual proportion for RNs = 0.18
Actual proportion for LVNs = 0.08
© 2007 Pearson Education
Total
observations
Work Sampling
Example H.4
Verifying Sample Sizes
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
46
Actual proportion for RNs = 0.18
Actual proportion for LVNs = 0.08
© 2007 Pearson Education
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Work Sampling
Example H.4
Use the Results—Automate?
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
© 2007 Pearson Education
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
46
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Work Sampling
Example H.4
Use the Results—Automate?
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
46
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Net savings = 0.25[($3,628,000)(0.18) + ($2,375,000)(0.08)] – $150,000
© 2007 Pearson Education
Work Sampling
Example H.4
Use the Results—Automate?
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
Net savings = $60,760
© 2007 Pearson Education
46
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Work Sampling
Example H.4
Use the Results - Automate?
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
46
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Net savings = $60,760
Net savings = 0.25[($3,628,000)(0.15) + ($2,375,000)(0.05)] – $150,000
© 2007 Pearson Education
Work Sampling
Example H.4
Use the Results—Automate?
Time spent accessing records
RN
0.20
LVN
0.05
Activity
WORK
TOTALerror
ACTIVITY PROPORTION
CONFIDENCE INTERVAL
Maximum
±0.03
GROUP Accessing
OBS.
OBS.
LOWER
UPPER
AttendingOF
toTOTAL
Other support
Idle
or
Confidence level
95%
RN
RN
LVN
LVN
records
688
124
344
28
patients
activities
124
0.1802
0.15151
223
28 258 0.0814
0.05250
251
Net savings = $60,760
Net savings = $15,737
© 2007 Pearson Education
46
REQUIRED
SAMPLE
Total SIZE
break
observations
0.2090
631
83
688320
0.1103
19
344
Work Sampling Method
Application H.2
Major League Baseball (MLB) is concerned about excessive
game duration.
Batters now spend a lot of time between pitches when
they leave the box to check signals with coaches,
and then go through a lengthy routine including
stretching and a variety of other actions.
Pitching routines are similarly elaborate.
In order to speed up the game, it has been proposed to
prohibit batters from leaving the box and
prohibit pitchers from leaving the mound after called
balls and strikes.
MLB estimates the proportion of time spent in these delays to
be 20% of the total game time.
Before they institute a rules change, MLB would like to be 95%
confident that the result of a study will show a proportion of time
wasted that is accurate within ±4% of the true proportion.
© 2007 Pearson Education
Observation Form for MLB
Application H.2
© 2007 Pearson Education
Recorded Data for MLB
Application H.2
0.12
© 2007 Pearson Education
Sample Size for MLB
Application H.2
(0.12)(1 – 0.12)
© 2007 Pearson Education
Managerial
Considerations
 Total quality management
 These techniques can be used in the spirit
of continuous improvement (provided
management earns cooperation of labor).
 Increased automation
 There is less need to observe and rate
worker performance, because work is
machine paced.
 Work sampling may be electronically
monitored.
© 2007 Pearson Education
Solved Problem 1
Health Insurance Claims
Selecting Work Elements
Operation: Insurance claim processing
Work Element
1. Check form completion
and signatures
2. Enter claim amounts,
check math
1
t
r
t
r
t
3. Determine proportion of
claim to be disallowed
r
4. Generate form letter,
enter data for check
© 2007 Pearson Education
t
r
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
t
RF

Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1. Check form completion
and signatures
1
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
t
0.50
3.30
5.70
8.20
10.85
r
0.70
3.45
5.95
8.55
11.10
t
3. Determine proportion of
claim to be disallowed
r
1.45
4.05
6.50
9.25
11.75
2.75
5.25
7.60 10.35
13.05
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education
r
t
t
r
t
RF

Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1. Check form completion
and signatures
2. Enter claim amounts,
check math
1
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
r
0.50
3.30
5.70
8.20

t
10.85
Finding the
11.10
observed time
0.70
3.45
5.95
8.55
t
3. Determine proportion of
claim to be disallowed
r
1.45
4.05
6.50
9.25
11.75
2.75
5.25
7.60 10.35
13.05
© 2007 Pearson Education
RF
t
r
4. Generate form letter,
enter data for check
t
t = 0.50 – 0.00
t
r
Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1. Check form completion
and signatures
2. Enter claim amounts,
check math
1
t
0.50
r
0.50
Date: 10/07
Observations
2
3
4
3.30
5.70
8.20
t
Observer: Jennifer Johnson
5
3.45
5.95
8.55
t
3. Determine proportion of
claim to be disallowed
r
1.45
4.05
6.50
9.25
11.75
2.75
5.25
7.60 10.35
13.05
© 2007 Pearson Education

Finding the
11.10
observed time
0.70
t = 0.50
t
r
RF
10.85
r
4. Generate form letter,
enter data for check
t
Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1. Check form completion
and signatures
2. Enter claim amounts,
check math
1
t
0.50
r
0.50
Date: 10/07
Observations
2
3
4
3.30
5.70
8.20
t
Observer: Jennifer Johnson
5
3.45
5.95
8.55
t
3. Determine proportion of
claim to be disallowed
r
1.45
4.05
6.50
9.25
11.75
2.75
5.25
7.60 10.35
13.05
© 2007 Pearson Education

Finding the
11.10
observed time
0.70
t = 0.70 – 0.50
t
r
RF
10.85
r
4. Generate form letter,
enter data for check
t
Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1
t
0.50
r
0.50
t
0.20
r
0.70
t
3. Determine proportion of
claim to be disallowed
r
0.75
t
1.30
r
2.75
1. Check form completion
and signatures
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education
1.45
Date: 10/07
Observations
2
3
4
3.30
5.70
8.20
Observer: Jennifer Johnson
5
t
RF

10.85
Finding the
11.10
observed time
3.45
5.95
8.55
4.05
6.50
9.25
11.75
5.25
7.60 10.35
13.05
Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1
t
0.50
r
0.50
t
0.20
r
0.70
t
3. Determine proportion of
claim to be disallowed
r
0.75
t
1.30
r
2.75
1. Check form completion
and signatures
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education
1.45
Date: 10/07
Observations
2
3
4
3.30
5.70
8.20
Observer: Jennifer Johnson
5
t
RF

10.85
Finding the
11.10
observed time
3.45
5.95
8.55
4.05
6.50
9.25
11.75
5.25
7.60 10.35
13.05
t = 3.30 – 2.75
Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
t
0.50
0.55
r
0.50
3.30
5.70
8.20
10.85
t
0.20
r
0.70
3.45
5.95
8.55
11.10
t
3. Determine proportion of
claim to be disallowed
r
0.75
4.05
6.50
9.25
11.75
t
1.30
r
2.75
5.25
7.60 10.35
13.05
1. Check form completion
and signatures
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education
1.45
t
RF

Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
t
0.50
0.55
0.45
0.60
0.50
r
0.50
3.30
5.70
8.20
10.85
t
0.20
0.15
0.25
0.35
0.25
r
0.70
3.45
5.95
8.55
11.10
t
3. Determine proportion of
claim to be disallowed
r
0.75
0.60
0.55
0.70
0.65
1.45
4.05
6.50
9.25
11.75
t
1.30
1.20
1.10
1.10
1.30
r
2.75
5.25
7.60 10.35
13.05
1. Check form completion
and signatures
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education
t
RF

Solved Problem 1
Health Insurance Claims
Timing the Elements
Operation: Insurance claim processing
Work Element
1
Date: 10/07
Observations
2
3
4
Observer: Jennifer Johnson
5
t
RF

0.52
1.1
0.0570
0.24
1.2
0.0742
0.65
1.2
0.0791
1.20
0.9
0.1000
t
0.50
0.55
0.45
0.60
0.50
r
0.50
3.30
5.70
8.20
10.85
t
0.20
0.15
0.25
0.35
0.25
r
0.70
3.45
5.95
8.55
11.10
t
3. Determine proportion of
claim to be disallowed
r
0.75
0.60
0.55
0.70
0.65
1.45
4.05
6.50
9.25
11.75
t
1.30
1.20
1.10
1.10
1.30
r
2.75
5.25
7.60 10.35
13.05
1. Check form completion
and signatures
2. Enter claim amounts,
check math
4. Generate form letter,
enter data for check
© 2007 Pearson Education