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# EXERCISE

Process Analysis and Line Balancing Task A B C D E F G H I Preceding Task Estimated process time Seconds 21 A 29 A 16 B 13 C 26 C 16 D 29 EF 19 GH 29 TOTAL WORK CONTENT 198 s (198 / 60 = 3.3 mins)

The requirement for this operation is 2500 units per 38 hour shift per week. Draw the precedence diagram for the tasks listed above.

29s

13s

29s

B
21s

D
26s

G
29s

A C
16s

I
19s

F
16s

What is the actual and required cycle time of the line? Cycle time: The average time between units of output emerging from a process. The maximum amount of time a product is allowed to spend at each workstation. Actual Cycle time (Ca) The maximum workstation time on the line. 29 secs. Required or Desired Cycle time (Cd) Is calculated by dividing the time available for production by the number of units scheduled to be produced. Production time available Desired units of output 38 hrs/wk x 60 mins/hr 2,500 units/wk 2,280 mins/wk 2,500 units/wk 0.912 min or (0.912 x 60 = 54.72 secs)

Cd

Cd

Cd Cd

= =

What is the minimum number of workstations necessary to achieve the required cycle time? N= minimum number of workstations N = Total Work Content Required (Desired) Cycle Time

N N

= =

## 198 / 60 = 3.3 mins

0.912 min 3.62 workstations

Cannot have part of a workstation, therefore , rounding up to next highest number of workstations, N= 4 workstations.

Indicate the groupings of the workstations on the precedence diagram to maximise efficiency. Must try to have N= 4 workstations (or groups) to get greatest efficiency Grouping must be done so that the sum of the task time at each workstation is less than or equal to the required (desired) cycle time of 0.912 mins (54.72 secs) Some trial and error is required but must follow the above rule.

W2 = 42s 21s

29s

13s

29s

W4 = 29s

B A C
16s

D
26s

G
29s

I
19s

H
W3 = 45s

W5 = 29s

F
W1 = 53s 16s

Possibility (A) above, but cannot have 4 workstations because of precedence relationships OR Possibility (B), again 4 stations not possible because of precedence relationship
W4 = 42s 29s

29s

13s

B
21s

D
26s

G
29s

A
W1 = 50s

I
19s

E C
16s W2 = 42s

H
W3 = 35s

W5 = 29s

F
16s

HINT: In some cases, the number of groups in the diagram will match the theoretically number of workstations using the formula given.

Explain the concept of line balancing? Line balancing is the activity of attempting to equalize the load or amount of work on each workstation or part of a line layout or mass process. Line balancing is restricted by precedence requirements and cycle time. Precedence requirements are the physical restrictions on the order in which operations (work) is done. Cycle time is the maximum amount of time a product is allowed to spend at each workstation. In reality, it is difficult to balance the operations line so that workload is equal at all stations because of the order of work done and maximum time at a workstation. Such imbalances will result in balancing loss which is the time wasted through the unequal allocation of work as a percentage of the total time invested in processing the product. Such losses will result in delays of the overall processing time and reduce efficiency. The aim for line balancing is therefore to minimise delays or losses and to maximise efficiency.

Efficiency

## Total Work Content (Number of Workstations) x Desired Cycle Time

Efficiency

198 218.88

Efficiency

0.9046 = 90.5%

EOQ (Economic Order Quantity) A building materials supplier obtains its bagged cement from a single supplier. Demand is reasonably constant throughout the year and last year the company sold 2000 tonnes of this product. (assume the same amount for next year). The supplier operates for 334 days of the year. It estimates the costs of placing an order at around 25 each time an order is placed and calculates that the annual cost of holding inventory is 20% of purchase cost. The company purchases the cement at 60 per tonne. How much should the company order at a time? Explain the concept of economic order quantity (EOQ)
The Economic Order Quantity (EOQ) refers to the amount of a particular item to order when stock needs replenishing. This approach is suppose to minimise the total cost of inventory management. This method of determining the amount to order tries to balance the advantages and disadvantages of holding stock.

EO Q =

2 x CO x D Ch

## Where: CO = Ordering Costs Ch = Holding Costs D = Demand EO Q =

2 x 25 x 2,000 0.2 x 60

EO Q

100,000 12

EO Q

8,333.33

## EOQ = 91.287 tonnes (this is the theoretical optimal order size)

Based on the above, how often (frequently) should the order for this item be placed?
Order Frequency = D EOQ 2,000 91.287

Order Frequency

Order Frequency

## Calculate the total storage/holding cost per year?

Annual holding cost = Ch X EOQ 2 (0.2 x 60) X (91.287) 2 (12) X (91.287) 2 1095.444 2

\$ 547.722

## Calculate the total ordering cost for a year?

Annual ordering cost = (Co ) X (D) EOQ (25) x (2,000) 91.287 50,000 91.287

## Annual ordering cost

\$ 547.723

If required, Total Annual Cost is calculated as follows. Total Annual Cost = Annual Ordering Cost + Annual Holding Cost = \$ 547.723 + \$ 547.722 = \$1,095.445

~ End of Exercise ~