Penulis: Kejuruteraan Mekanikal MANUFACTURING CONTROL Izyan Dayana Jonid Mohd Halim Yakop
WRITER IZYAN DAYANA BINTI JONID MOHD HALIM BIN YAKOP EDITOR MOHD HALIM BIN YAKOP All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Publisher. © Politeknik Muadzam Shah Publisher Politeknik Muadzam Shah, Lebuhraya Tun Razak, 26700 Muadzam Shah, Pahang. 2021 a
PREFACE This book presents a concept of Manufacturing Control in a production system and helps students to understand the operation and production life. It is intended to provide a comprehensive view of issues related to this area, with a specific focus on manufacturing control concept. The first edition of Manufacturing Control is focus for Polytechnic Student’s as a reference and to enhancement knowledge. The contents of this book are based on the Polytechnic syllabus and total of six chapter are included. Hopefully the content of this book will help the students as a guidance. i | P a g e
ACKNOWLEDGEMENT I am really grateful for the completion of this Manufacturing Control book. This book could not have been accomplished without the support of my family and friends. Finally, I would like to express my sincere gratitude to Allah for letting me through all the difficulties. ii | P a g e
TABLE OF CONTENTS PREFACE ACKNOWLEDGEMENT TABLE OF CONTENT CHAPTER 1 - MANAGEMENT & FORECASTING 1.1 MANAGEMENT IN MANUFACTURING ………………………………………. 1 1.2 ORGANIZATION & PLANNING……………………………………………………. 3 1.3 MANUFACTURING PLANNING & CONTROL………………………………. 5 1.4 FORECASTING……………………………………………………………………………. 6 EXERCISE CHAPTER 1.……………………………………………………………………………. 12 CHAPTER 2 - SUPPLY CHAIN MANAGEMENT & JUST IN TIME 2.1 SUPPLY CHAIN MANAGEMENT …………………………………………………. 13 2.2 JUST IN TIME ……………………….…………………………………………………... 16 EXERCISE CHAPTER 2.…………………………………………………………………………….. 20 CHAPTER 3 - MASTER PRODUCTION SCHEDULE 3.1 PRODUCTION SCHEDULING………………………………………………………. 21 EXERCISE CHAPTER 3.………………………………………………………………………….…. 24 CHAPTER 4 - INVENTORY 4.1 INVENTORY CONTROL……………………. .…………………………………..…. 25 EXERCISE CHAPTER 4.……………………………………………………………………………. 31 CHAPTER 5 - PRODUCTIVITY AND CAPACITY PLANNING 5.1 PRODUCTIVITY ……………………………………………………………………….…. 32 5.2 CAPACITY PLANNING ………….………………………………………………….…. 34 EXERCISE CHAPTER 5.……………………………………………………………………….……. 37 CHAPTER 6 - MATERIAL REQUIREMENT PLANNING 6.1 MATERIAL REQUIREMENT PLANNING ………………………………………. 38 EXERCISE CHAPTER 6.……………………………………………………………………….……. 46 REFERENCES…………………………………………………………………………………………… 47 iii | P a g e
MANUFACTURING CONTROL 1 | P a g e CHAPTER 1 MANAGEMENT & FORECAST 1.1 MANAGEMENT IN MANUFACTURING 1.1.1 Definition of Management For any kind of organization to run smoothly in achieving its set goals and objectives, it needs to implement core management concepts. This necessitates that the four management functions - planning, organizing, staffing, directing and controlling be precisely understood. 1.1.2 Function of Management Figure 1: Basic functions of management 1) Planning Planning is deciding in advance what is to be done in the future Defines planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen.
MANUFACTURING CONTROL 2 | P a g e 2) Organizing To organize a business involves determining & providing human and non-human resources to the organizational structure. Directing, motivating, and communication with employees, individually & in groups. It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. 3) Staffing It is concerned with acquiring, developing, utilizing, and maintaining human resources. It is the function of manning the organization structure and keeping it manned. It is a process of matching jobs with individuals to ensure right man for the right job. 4) Directing Attracting people to the organization. Specifying job responsibilities. Grouping jobs into work units Creating good working conditions. Creating a vision for the company Communicating company goals to employees Providing guidance Resolving conflict among employees Helps in assisting the staff, to achieve the company's goals which can be powered by motivation, communication, department dynamics, and department leadership 5) Controlling Monitoring performance of people & units. Provision of feedback or information about progress. Identification of performance problems & actions to correct problems. To ensure everything occurs in conformities with the standards.
MANUFACTURING CONTROL 3 | P a g e 1.2 ORGANIZATION & PLANNING 1.2.1 Definition of Organization An organization is a collection of people working together in a coordinated and structured fashion to achieve one or more goals. 1.2.2 Organization Role: - 1) Organization role in society Organizations exist to allow accomplishment of work that could not be achieved by people alone. Organizations exist to allow accomplishment of work that could not be achieved by people alone. Organizations use management to accomplish the work that is required to achieve the goals. 2) Organization role and people Organizations are strongly influenced by the people that form part of them. Organizations can take in part of the personality of the people within them and their attitudes, perceptions and behaviors affect how an organization will operate. 1.2.3 Basic Principles of an organization The organization follows the principle of hierarchy; each lower office is under the control and supervision of a higher one. Specialization or division of labor exists whereby individuals are assigned a limited number of job tasks and responsibilities. Official policies and procedures guide the activities of the organization. Administrative acts, decisions, and rules are recorded in writing. Authority within the organization is associated with one’s position. Candidates are appointed based on their qualifications, and training is a necessary part of the selection process. Organizations exist in an environment - social, cultural, technological Organizations are complex sets of “units” that must be coordinated, maintained, and controlled
MANUFACTURING CONTROL 4 | P a g e 1.2.4 Terms of an organization 1) Authority It is the rights inherent in a managerial position to give orders what to do and expect people to be obeyed. 2) Responsibility It is an obligation to perform assigned activities. 3) Duties It is an individual’s capacity to influence decisions. 4) Accountability Ability, based on the personal qualities of the “leader”, to elicit the follower’s voluntary compliance in a broad range of matters. Tracking a task performance to a participant.
MANUFACTURING CONTROL 5 | P a g e 1.3 MANUFACTURING PLANNING & CONTROL (MPC) 1.3.1 Definition of Production Planning and Control Production Planning and Control System consist of planning, routing, scheduling, dispatching and progressing the production process. 1.3.2 Production plan Figure 2: Strategic Production Plan
MANUFACTURING CONTROL 6 | P a g e 1.4 FORECASTING 1.4.1 Definition of Forecast Forecasting is a tool used for predicting future demand based on past demand information. 1.4.2 Forecast time horizons 1) Short range forecast Up to 1 year, generally less than 3 months Purchasing, job scheduling, workforce levels, job assignments, production levels 2) Medium range forecast 3 months to 3 years Sales and production planning, budgeting 2) Long range forecast 3 + years New product planning, facility location, research and development 1.4.3 Overview of Quantitative Approach 1) Naïve approach Assumes demand in next period is the same as demand in most recent period (If May sales were 48, then June sales will be 48).
MANUFACTURING CONTROL 7 | P a g e Figure 3: Example for Naïve approach 2) Moving Average Moving average method is depends on the forecast horizons either using 3 months moving average, 6 months or 12 months. It is depending on the problem given
MANUFACTURING CONTROL 8 | P a g e Example of 3 months moving average method 3) Weighted moving average Weights based on experience and intuition Weighted value and average is always given.
MANUFACTURING CONTROL 9 | P a g e Example of weighted moving average 3) Exponential smoothing Form of weighted moving average but requires smoothing value
MANUFACTURING CONTROL 10 | P a g e Example of exponential smoothing 1.4.4 Forecasting performance 1) Mean Absolute Deviation (MAD) Measures average absolute deviation of forecast from actuals.
MANUFACTURING CONTROL 11 | P a g e 2) Mean Absolute Percentage Error (MAPE) Measures absolute error as a percentage of the forecast. 3) Standard Squared Error (MSE) Measures variance of forecast error Key issue in forecasting
MANUFACTURING CONTROL 12 | P a g e EXERCISE CHAPTER 1: 1. Explain the definition of management in manufacturing 2. Explain the definition of organization 2. Define the functions of management 4. Elaborate the terms in organization 5. The data in the Table 1 shows the previous months demand for A4 paper by a stationary store: Month 1 2 3 4 5 6 7 8 9 Demand for A4 Paper (x100 units) 1.2 2.5 0.7 0.4 2.6 1.6 3 1.8 2.7 Based on the data, calculate; i. The sales in the eight to tenth months by using 2 month moving average method, weighted moving average with value given (0.7 most recent period, 0.2 second recent period, 0.1 third period) ii. The demand in the tenth month using exponential smoothing method with α=0.25 6. Based on Table 2, calculate the forecast error by using Mean Absolute Deviation (MAD) and Mean Squared Error (MSE) methods.: Month Jan Feb Mar Apr May June Actual Demand 80 83 81 86 86 89 Forecast Demand 78 81 81 85 88 90
MANUFACTURING CONTROL 13 | P a g e CHAPTER 2 SUPPLY CHAIN MANAGEMENT & JUST IN TIME (JIT) 2.1 SUPPLY CHAIN MANAGEMENT 2.1.1 Definition of Supply Chain Management Supply chain management (SCM) is a process used by companies to ensure that their supply chain is efficient and cost-effective. 2.1.2 Five basic components of Supply Chain Management (SCM) 1) Planning 2) Develop (source) 3) Make 4) Deliver 5) Return Figure 4: Explanation of five basic SCM
MANUFACTURING CONTROL 14 | P a g e 2.1.3 Elements of Supply Chain Management (SCM) 1) Demand Management Demand management is an essential element in supply chain management, focusing companies and their partners on meeting the needs of customers, rather than the production process. 2) Communication Effective communication helps the entire supply chain improve the efficiency and productivity of its operations by enabling all members to share the same demand and operational information. 3) Integration Integrating supply chain processes helps each member reduce its inventory costs Develop single information networks that enable all members to access and share supply and demand data securely. The networks are based on open standards, such as Internet Protocol, so all members can communicate, even if they have different internal networks. 4) Collaboration Collaboration in the supply chain strengthens relationships between members, improving teamwork and helping all members increase their business. Lead companies run business development and training programs to improve supply chain partners’ market and product knowledge.
MANUFACTURING CONTROL 15 | P a g e 2.1.4 Benefits of Supply Chain Management (SCM) 1) Quality Assurance Many manufacturers in the U.S. have relocated their operations to countries such as China, India and Russia in an effort to cut production costs. This has caused experienced domestic personnel to opt for other job assignments. As a result, product quality within the supply chain has become a pressing issue. Defects and rework attributable to poor systems are raising the costs of doing business. 2) Inventory Buffers In almost every type of business, there is variability in customer spending. This requires companies to manage their inventories in a way that minimizes holding costs while providing enough flexibility to meet customer demands. If inventory levels fall too low, businesses may have to pay overtime to produce products or lose out on revenue by making customers wait or shop somewhere else. Supply chain management systems typically include inventory buffer levels that are pre-determined with careful analysis of historical trends. 3) Shipping Option Shipping options need to keep pace with the demands of the marketplace, which requires companies to readjust their supply chains to meet customers’ preferences.
MANUFACTURING CONTROL 16 | P a g e 2.2 JUST IN TIME (JIT) 2.2.1 Definition of Just in time Term of “JIT” is used to an operation system which materials are moved through the system and services are delivered with precise timing so that they are delivered at each step of the process just as they are needed. 2.2.2 Supporting goals of Just in time (JIT) 1) Eliminate disruption Negative influence on the system. Such as equipment breakdown, schedule change and late delivery. 2) Make system flexible System is flexible to changes of output 3) Eliminate waste, especially excess inventory Lead to increasing of cost 2.2.3 Types/ source of waste Figure 5: 7 types of waste
MANUFACTURING CONTROL 17 | P a g e 2.2.4 Elimination of waste 1) Kaizen Philosophy Waste is the enemy Improvement should be done gradually and continuously Everyone should be involved Built on a cheap strategy Can be applied anywhere Supported by a visual system 2) Production flexibility Reduce downtime by reducing changeover time Use preventive maintenance to reduce breakdowns Cross-train workers to help clear bottlenecks Balance system: Distributing the workload evenly among workstations Work assigned to each workstation must be less than or equal to the cycle time Cycle time is set equal to the takt time Takt time is the cycle time needed to match customer demand for final product 3) Kanban Kanban: Card or other device that communicates demand for work or materials from the preceding station Kanban is the Japanese word meaning “signal” or “visible record” Paperless production control system Authority to pull, or produce comes from a downstream process 4) Pull/Push system Pull system: System for moving work where a workstation pulls output from the preceding station as needed. Push system: System for moving work where output is pushed to the next station as it is completed
MANUFACTURING CONTROL 18 | P a g e 5) Cellular layout The goal of cellular manufacturing is to move as quickly as possible, make a wide variety of similar products, while making as little waste as possible. Figure 6: Cellular layout (C shape) Figure 7: Cellular layout (U shape)
MANUFACTURING CONTROL 19 | P a g e 2.2.5 Benefits of Just in time (JIT) Reduced inventory levels High quality Flexibility Reduced lead times Increased productivity Increased equipment utilization Reduced scrap and rework Reduced space requirements Pressure for good vendor relationships Reduced need for indirect labor
MANUFACTURING CONTROL 20 | P a g e EXERCISE CHAPTER 2: 1. Define the term Just in time. 2. Briefly explain the meaning of Supply Chain Management (SCM) 2. Explain Five (5) benefits of using “Just in Time” system. 4. List 7 types of waste 5. Explain the different between push and pull system 6. Give two example to eliminate waste in production. 7. List and elaborate the supporting goals of Just in time (JIT) 8. List element of supply chain management. 9. Explain benefits of using Supply chain management (SCM)
MANUFACTURING CONTROL 21 | P a g e CHAPTER 3 MASTER PRODUCTION SCHEDULE 3.1 PRODUCTION SCHEDULING 3.1.1 Definition of Production Scheduling Production scheduling is the timetable for the use of resources and processes required by a business to produce goods or provide services. The production schedule is an organization’s statement of what it plans to produce. Scheduling is used to allocate human resources, plant and machinery, plan production or manufacturing system. Figure 8: Structure of MPS 3.1.2 The objectives of Master Production Schedule (MPS) To maintain production cost and time. To maximize the efficiency of the operation and reduce cost. 3.1.3 The function of Master Production Schedule (MPS) Translating aggregate plans Generating material and capacity requirements Maintaining priorities Utilizing the capacity effectively
MANUFACTURING CONTROL 22 | P a g e 3.1.4 Steps to prepare Master Production Schedule (MPS) 1) A listing of the materials required to be produced 2) A complete manufacturing routing for each product and each subpart 3) Time standard for each of the productions on the routing sheets 4) Material and machine time availability 5) Total order received. 3.1.5. Example Master Production Schedule (MPS) Apple to issue a new product of 2000 units. This product is processed in five levels of operation as shown in the table below. Prepare the master production schedule for this company. Table 1: Example question 1) Calculate capacity and the duration of production plan Table 2: Step 1
MANUFACTURING CONTROL 23 | P a g e 2) Construct the MPS Table 3: Step 2 3) Analyse the answer at step 2 Operation 1 finished at month 4, operation 2 finished at month 6, operation 3 finished at month 7, operation 4 finished at month 8 and operation 5 finished at month 12. The 2000 units Apple product released at month 12.
MANUFACTURING CONTROL 24 | P a g e EXERCISE CHAPTER 3: 1. Samsung to issue a new product of 1500 units. This product is processed in five levels of operation as shown in the Table below. Prepare the master production schedule for this company. Prepare Material Production Schedule. 2. The TCR Company wants to produce 2000 units of coconut machines for the local market. The product will be produced in 5 levels of operations. Table below shows the operating level for each product. Prepare Master production schedule. 3. A manufacturing company plans to produce 3000 units of a new product which will be marketed next year. Production of this product include four stages of activities which are shown in Table below. Prepare Master production schedule.
MANUFACTURING CONTROL 25 | P a g e CHAPTER 4 INVENTORY 4.1 INVENTORY CONTROL 4.1.1 Definition of Inventory Control Inventory control refers to stock or store of goods. Inventory control is divided by two categories which is dependent demand and independent demand. Dependent demand is certain and independent demand is uncertain. The dependent demand refers to components of finished products such as parts that make up the computer while the independent demand refers to finished goods, items that are ready to be sold such as a computer. 4.1.2 Objectives of Inventory Control To achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds To ensure availability of the supply of stock at all time To allow flexibility in production scheduling To reduce surplus stock 4.1.3 Functions of Inventory Control To meet anticipated demand To smooth production requirements To decouple operations To protect against stock outs 4.1.4 Types of Inventory Control Raw material Maintenance, repair, and operating supplies Purchased component or part items Work in process (WIP) Finished goods
MANUFACTURING CONTROL 26 | P a g e 4.1.5 Types of Inventory Control System ABC analysis Record accuracy Two bin system Universal product code (UPC) Economic quantity order model Discount order model Production order model Figure 9: Example of UPC 4.1.6 ABC Classification system ABC analysis is classifying inventory according to some measure of importance and allocating control efforts accordingly which consists in dividing items into three categories (A, B, C). A being the most valuable items and C being the least valuable ones. This method aims to draw manager’s attention on the critical few (A-items) not on the trivial many (C-items). Figure 10: ABC classification
MANUFACTURING CONTROL 27 | P a g e 4.1.7 Record accuracy Record accuracy for each method or product of interest, evaluator measure accuracy of logistic data by comparing the physical stock to the record count of that stock. Two methods for checking record accuracy are periodic counting and cycle counting. Periodic counting is a physical inventory taken periodically, usually annually. The step for periodic are count, verify, collect and reconcile. While cycle counting based on daily counting of pre specified items provides the advantages. 4.1.5 Key Inventory Cost Terms Lead time: time interval between ordering and receiving the order Holding (carrying) costs: cost to carry an item in inventory for a length of time, usually a year Ordering costs: costs of ordering and receiving inventory Shortage costs: costs when demand exceeds supply Figure 11: Inventory cost related
MANUFACTURING CONTROL 28 | P a g e 4.1.6 Economic Order Quantity Model (EOQ) The order size that minimizes total annual cost. It is based on the following assumptions: - Only one product is involved Annual demand requirements known Demand is even throughout the year Lead time does not vary Each order is received in a single delivery There are no quantity discounts Below is the formula related to EOQ 1) 2) 3) 4) 5) 6)
MANUFACTURING CONTROL 29 | P a g e Figure 12: Inventory cycle 4.1.7 Quantity Discount Model Quantity discount are price reduction for large order This is to encourage customer to buy in large quantity.
MANUFACTURING CONTROL 30 | P a g e 4.1.8 Example of Economic Order Quantity Model (EOQ) A local distributor for tire expects to sell 9600 radial tire next year. Annual carrying cost is RM16 per tire and ordering cost is RM75. The distributor operates 288 days a year. The tire supply will arrive within 8 days after ordering a) Find EOQ b) Calculate Total Cost for the order c) Calculate Re-Order Point (ROP) d) Expected no order per year e) Expected time between order Solution: D = 9600, H = 16, S = 75 a) Q = √([2/]) = √ ([2(9600)75/16]) = 300 b) TC = Carrying Cost + ordering Cost = (Q/2) H + (D/Q) S = (300/2)16 + (9600/300)75 = 2400 + 2400 = 4800 c) ROP = (Demand/no of working day a year) X Arriving Time = (9600/288) X 8 = 274.28 unit d) N = D/Q = 9600/300 = 32 times per year e) T= no of working day / N = 288/32 = 9 days
MANUFACTURING CONTROL 31 | P a g e EXERCISE CHAPTER 4: 1. MK curtains sells 1,350 of its special curtains per year. The ordering cost for these is RM100 per order and the carrying cost is assumed to be 10% of the unit cost. The product cost is RM50 per unit. Delivery item is taken 5 days in working day and the company operation working at 50 weeks for 6 days per week. Calculate: a) Economic order quantity, EOQ. b) Optimum order per year c) Optimum time between orders d) Reorder point, ROP. e) Total yearly inventory cost 2. Items purchased from a vendor cost RM20 each, and the forecast for next year’s demand is 1,000 units. If it costs RM5 every time an order is placed for more units and the storage cost is RM4 per unit per year. Delivery item is taken 3 days in working day. The company operation at 300 per year. Calculate: a) Economic Order Quantity b) Re-Order Point (ROP). c) Expected number of orders per year. d) Expected time between order. e) What are the total costs of holding and ordering? 3. Based on Table 1, arrange the stock units to groups by using ABC analysis with 80%, 15% and 5% for class A, B and C, respectively. 4. Explain the definition of ABC analysis and Record accuracy.
MANUFACTURING CONTROL 32 | P a g e CHAPTER 5 PRODUCTIVITY & CAPACITY PLANNING 5.1 PRODUCTIVITY 5.1.1 Definition of Productivity A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.it is usually expressed as the ratio of output to input Productivity = Output /input Input in term of; labour, machine, capital 5.1.2 Example productivity Example 1 A machine produces 68 of cupcakes in two (2) hours. Determine the productivity Productivity = Output /input = 68 cupcakes / 2 hours = 34 cupcakes/hour Example 2 Determine the multifactor for combined input for the following data Output: 7040 unit Input; labour: RM1000 Material: RM520 Overtime: RM2000 Multifactor Productivity = Output /input = 7040 units / RM1000 + RM520 + RM2000 = 2 Unit per Ringgit Malaysia
MANUFACTURING CONTROL 33 | P a g e 5.1.3 Factors to Improve Productivity 1) Proactive Employees Productive workforce is one that understands their jobs and is given the freedom to reach their goals. 2) Positive Management A positive attitude breeds increased productivity. According to the American Management Association, a management team that maintains a positive approach and reinforces positive behaviour will get positive results 3) Encourage Communication One of the things that can slow productivity is when a mistake is made, but that mistake is not communicated to the responsible parties. Encourage open communication within the company to help increase productivity. 5.1.4 Terms Related to Productivity 1) Yield It refers to the percentage of non-defective items of all produced items and is usually indicated by the ratio of the number of non-defective items against the number of manufactured items. *Yield = the number of non-defective items / the number of manufactured items 2) Workers Productivity Worker productivity refers to the amount of output produced per work hour. In other words, the calculation is: *Productivity = output / work hours 3) Throughput In general, throughput is the maximum rate of production or the maximum rate at which something can be processed.
MANUFACTURING CONTROL 34 | P a g e 5.2 CAPACITY PLANNING 5.2.1 Definition of Capacity Capacity: Refers to an upper limit on the rate of output. Design Capacity: The maximum output rate of service capacity an operation is design for. Effective Capacity: Design capacity minus allowances such as personal time, maintenance and scrap. Capacity Utilization: is the ration of actual output the design capacity. Efficiency = (Actual Output/Effective Capacity) X 100% Utilization = (Actual Output / Design Capacity) X 100% 5.2.2 Example capacity Example 1 Given the following information, compute efficiency and utilization of vehicle repair workshop. Design Capacity = 50 vehicle per day Effective Capacity = 40 vehicle per day Actual Output = 36 vehicle per day Solution: Efficiency = (Actual Output/Effective Capacity) X 100% = (36 vehicle/40 vehicle) X 100% = 90% Utilization = (Actual Output / Design Capacity) X 100% = (36 vehicle / 50 vehicle) X 100% = 72 %
MANUFACTURING CONTROL 35 | P a g e 5.2.3 Capacity Planning 1) Long Range Capacity 1 year or longer Build a new facility, expand existing facility or move to new facility due to forecasted changes in demand. 2) Medium Range Capacity 1 month to 6 months Level of planning, decision or activities include acquisition of a major piece of machinery and subcontracting. 3) Short Range Capacity Short range covers capacity planning activities on a daily or a weekly basis. Including machine loading and detailed production scheduling. 5.2.4 Analysing Capacity Planning Decision Decision Tree Analysis Structures complex, multiphase decisions Allows objective evaluation of alternatives Incorporates uncertainty Develops expected values 5.2.5 Example Decision Tree Analysis Example 1 Pak Man Café is about to build a new restaurant. An architect has developed three building designs, each with a different seating capacity. Pak Man estimates that the average number of customers per hour will be 80, 100, or 120 with respective probabilities of 0.4, 0.2, and 0.4. The payoff table showing the profits for the three designs. The table below show the payoff table.
MANUFACTURING CONTROL 36 | P a g e Table 4: Payoff Table Solution: Decision tree:
MANUFACTURING CONTROL 37 | P a g e EXERCISE CHAPTER 5: 1. Explain the definition of production. 2. Break down 3 (Three) Factors to improve productivity in manufacturing. 3. List the terms related to productivity and explain. 4. Define what is the different between design capacity and effective capacity. 5. Altel company plans to produce 10,000 unit of hand phones in June 2017 with 50 employees. They will be working for 8 hours per day and the number of working days is 20 days. In July 2017, productivity increases to 15,000unit hand phones whereby 10 contract employees were employed. They worked for 8 hours per day for 20 days in that month. a) Calculate employee’s productivity for June 2017 and July 2017 b) Calculate the increase of rate productivity 6. A company that processes fruits are can produce 2500 units of canned peaches in five hours with 10 workers for January 2019. The company decided to hire 5 more workers in February and they successfully increase their production to 4000 units for that month. a) Calculate the labour productivity for January b) Calculate the labour productivity for February c) Calculate the multifactor productivity for January based on the d) combined inputs as follow; Labour: RM 1,000 Materials: RM 520 Overheads: RM 2,000
MANUFACTURING CONTROL 38 | P a g e CHAPTER 6 MATERIAL REQUIREMENT PLAN (MRP) 6.1 MATERIAL REQUIREMENT PLAN 6.1.1 Definition of MRP MRP is a production planning, scheduling, and inventory control system used to manage manufacturing processes. 6.1.2 Benefits of MRP Better response to customer orders Faster response to market changes Improved utilization of facilities and labour Reduced inventory levels Figure 12: The planning process
MANUFACTURING CONTROL 39 | P a g e 6.1.3 Bill of Material List of components, ingredients, and materials needed to make product Provides product structure: - Items above given level are called parents - Items below given level are called children 6.1.4 Lead Times The time required to purchase, produce, or assemble an item - For purchased items – the time between the recognition of a need and the availability of the item for production - For production – the sum of the order, wait, move, setup, store, and run times 6.1.5 Example Calculate Bill of Material, Develop Product Structure & Construct MRP Example 1 Components for the “Awesome” (A) speaker kit, consist 2 standards 12” speaker kits (B) and 3 speaker kits with amp-booster (C). Each B consists of 2 speaker (D) and 2 box of installation kit (E). Each of C has 2 speaker (F) and 2 installation kits (E). Each F includes 2 speaker D and 1 amp-booster (G). Construct the bills of material product structure and calculate the number of components required to produce 50 units of Awesome (A) speaker, construct product structure and MRP.
MANUFACTURING CONTROL 40 | P a g e Solution: Figure 13: Step 1 (Construct BOM product structure) Table 5: Step 2 (Total component required)
MANUFACTURING CONTROL 41 | P a g e Table 6: Lead time given Figure14: Step 3 (Develop time phase product structure based on lead time) Develop a MRP based on example given
MANUFACTURING CONTROL 42 | P a g e Table 6: Step 4 (Construct MRP)
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