UNIT- I PART A1. Classify the manufacturing systems? 1.Product based: Continuous production (e.g. chemicals, food processing etc.) Discrete part production. Further divided into: Assembly lines Transfer Lines 2.Process-based: these are facilities where machines of the same type are grouped together physically. Some examples may be seen in job shops, workshops, prototype makers, tool 3.Flexible Manufacturing systems may loosely be categorized as highly automated versions of process-based systems. 4.Cellular: Cells are formed using GT, and typical cells are small clusters of a mixed bunch of machines that can handle a particular family of products. Such layouts are used when the batch sizes of orders are not large, but throughput times required are lower. 5.Fixed position: For single units of a large item (e.g. construction project, MTR line, ship building etc.) 2. What are the factors affecting forecasting? Business cycle Random variables Customer’s plan Product’s life cycle Competition’s efforts and prices Customer’s confidence Quality Credit policy Design of goods or services Reputation for service Sales effort Advertising 3. List out the quantitative forecasting techniques? Simple moving average Single exponential smoothing Double moving average Double exponential smoothing Simple regression Semi-average method Multiple regression Box Jenkins 4. Define forecasting? It is an estimate of event which will happen in future. It may be the demand of product, population of a country, or growth of technology. 5. What are the three factors in selection of a forecasting technique? a) The characteristics of the decision making situation, which include: The time horizon Level of detail Number of items Control versus planning b) The characteristics of the forecasting methods: The time horizon The pattern of data Type of model Cost Accuracy Ease of application c) Present situation, which includes: The item that is being forecast Amount of historical data available Time allowed for preparing forecast 6. What is meant by regression? Regression means dependence. Here the independent variable (y) is calculated from independent variable (x). In simple regression only one independent variable is used. Y = a + bx 7. Define the term production management? The job of coordinating and controlling the activities required to make a product, typically involving effective control of scheduling, cost, performance, quality, and waste requirements. OR Product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle. 8. What is forecasting accuracy? Mention the types of errors. The forecast error is the difference between the actual value and the forecast value for the corresponding period. where E is the forecast error at period t, Y is the actual value at period t, and F is the forecast for period t. the types of errors are: Mean absolute deviation(MAD) Mean square error(MSE) Mean forecast error (MFE) Mean absolute percent error(MAPE) 9. What is qualitative forecasting technique? Qualitative techniques use subjective approaches. These are useful where no data is available and are useful for new products. 10. What are the types of demand pattern? Historical pattern (stationary pattern) Seasonal demand pattern Cyclical pattern Trend pattern PART-B 2.Discuss the classification of forecasting techniques with suitable comments. Forecasting: It is an estimate of an event which will happen in future. It may be the demand of product, population of a country, or growth of technology. Forecasting techniques are classified in to two groups 1.Qualitative techniques 2.Quantitative techniques Simple moving average It is the method of computing the average of a specified number of the most recent data values in a series mt =1/n(Dt-(n-1)+Dt-(n-2)+.....+Dt-2+Dt-1+Dt) mt - simple moving average at the end of period t dt - actual demand in period t n - no. of periods included in each average. Comments It is applied to forecast only one period into the future. The forecaster must wait to get demand entries. This is applicable for horizontal demand data patterns. This model requires n observed values. Weighted moving average Here we assign more weightage to some demand values weight Mat = ∑i=1n widi/∑i=1n wi Where I- most recent time period wt - weight for time period t. Double moving average method Let n- moving average period First single moving average . No need of historical data. Ft=Ft-1 +α(Dt-1-Ft-1) ft. of items Suitable for stationary data patterns.M1(n)= (D1+D2+. of period.+Dn)/n Subsequent moving average for any period M1(t-1)= (Dt-D(t-n))/n First double moving average Subsequent double moving average m2(t)=m2(t-1)+(m1(t)-m1(t-1))/n Comments This is applicable to trend data patterns This method can be used to forecast any no.previous period demand. Simple exponential smoothing This method keeps a running average of demand and adjust it for each period..previous forecast period Smoothing constant Dt-1 . Linear regression Regression means dependance here the valu of dependent variable y from independent variable Y=a+bX . Comments Smoothing methods are well suited for short or immediate term predictions of large no.smoothed avera forecast for period t ft-1 .. 3. Here the values are defined by the required accuracy. These major categories are 1. Metal forming processes 2.intercept b. Kalpakjian and Schmid (2003) provide a list of discrete manufacturing processes available under different categories of manufacturing.dependent variable X. Delphi method is an iterative process. Bulk deformation processes 3. which are used in actual production. The experts may provide several opinions then they are compared. Metal removal processes 5. Discuss all the types of manufacturing systems with its characteristics and examples. Metal joining processes . Sheet Metal forming processes 4. A large number of manufacturing equipment exist for the implementation of basic discrete manufacturing processes into production machinery.independent variable a.Y.slope Delphi method It is a forecasting technique here several knowledge persons are provide subjective demands. Tangibly. Moving part systems can be divided into stationary workplace systems. Processing of Metal Powders. in which parts are brought to stationery workplaces. Thermal Treatment of materials 9. Continuous Manufacturing System Continuous manufacturing systems produce liquid. energy. such as airplanes. It has higher flexibility in manufacturing that can produce diverse product ranges as in the case of a job shop. Assembly system can be categorized according to the motion of parts and workplaces. 2. Moving part systems are generally more expensive because complicated material handling equipment is required to move parts quickly from workplace to . Processing area. Other important elements of the manufacturing systems are methods of information. in which the workplaces move along with the parts. Glasses. these manufacturing systems have a physical layout while intangible production control operates on production philosophies. processes are arrayed in the processing sequence of the products. Assembly systems with stationery parts tend to have higher floor area requirements. They also tend to have more work at each workplace than moving part systems. Non conventional processes Discrete Manufacturing Systems A manufacturing system comprises manufacturing equipment arranged in certain fashion. or powders. Ceramics. gases. As in flow line. Stationary part systems are usually employed for large assemblies. Surface Treatment of materials 10. and moving workplace system. Composites and Super Conductors 8. can manufacture larger numbers of group of products as in the case in cellular manufacturing. Processing of Polymers and reinforced plastics 7. and material transfer. The continuous system is the least flexible of the types of manufacturing systems Flexible Manufacturing System A flexible manufacturing system (FMS) is manufacturing system that comprises the properties of a job shop and a cellular manufacturing system. and. Fabrication of Micro-mechanical and Microelectronic Devices 11.6. and conveyors physically such that a group of products can be produced efficiently in small-to-medium batches Assembly System Another substantial part of a manufacturing company’s production facilities is the assembly system. The physical layout of the discrete manufacturing systems is normally divided into two areas: 1. Assembly area The processing area is used for manufacturing the components. while the assembly area is meant for assembling the product. which are difficult to be moved around. The FMS arranges CNC machines tools through pick and place technology. largely because of the lack of appropriate methods. A need for forecasting arises only when there is uncertainty about the future and some aspects of the future can not be controlled (Armstrong 2002). The limits of deterministic approaches and the need for probabilistic models in engineering and management decision making have been repeatedly addressed over the last four decades (Ang and Tang 1975. any decisions about it can be made according to the decision maker’s preference for expected outcomes. Otherwise. and the . Hertz 1979. Moving partmoving workplace systems allow workers to work on each assembly for a longer period of time. The assembly systems are presented . The use of probabilistic methods.workplace. The various types of forecast in each of the five mentioned areas are as follows. Spooner 1974). decisions should be made based on forecasts which account for the uncertainty about the future. Barraza et al. making the assembly work less repetitive. 4. If everything relevant to an event is certain and the future of the event is deterministically predicted or controlled based on what is known at the point of forecasting. the assembly operations at each workplace are usually short in duration and are highly repetitive. Marketing Demand forecasting of products Forecast of market share Forecasting trends in prices Production Forecasting of material and labour costs Maitenance requirements Plant capacity Finance Forecast of each flow Rate of expenses Revenues Personnel Forecast of no. is often avoided among practitioners. of workers in each category Labour turnover Absenteeism Forecasting is an essential part of decision making under uncertainty. List and explain the types of forecast in decision making? Forecasting Methods for Decision Making Forecasting is used in different functional areas such as marketing production. In moving part-stationary workplace systems. finance and production. however. 2004. the lack of sufficient reliable data. dependent variable. Al-Tabtabai and Diekmann (1992) classified forecasting models as econometric models. b. while others suggest use of subjective information as a way of improving forecasting performance (Georgoff and Murdick 1986). Chambers et al.intercept. there is no clearcut distinction between the forecasting methods that rely on objective data and other methods based on subjective information. 5. while others rely on subjective information. extrapolative (time series) methods. which can be justified only when there are no objective data available (Chau 1995). For example. causal or explanatory methods. time-series models and judgmental models. Some forecasters believe that subjective information or the use of it is the second best alternative. Multiple regression. selecting the right method for a specific problem is itself a challenging decision. Y.independent variable. In multiple regression two or more independent variables are used the model for multiple regression is . Plenty of forecasting methods are available for engineering and management decision making and they can be characterized in several ways.additional difficulty in dealing with uncertainty in a quantitative way during the decision making process. (1982) classified forecasting methods into four groups: purely judgmental approaches. On the other hand. Makridakis et al. For many forecasting methods.What is linear regression ? and explain with suitable graph and example. Regression means dependance hers the dependent variable y is calculated from independent variable x in simple regression only one independent variable is used. Use of subjective information and judgment in forecasting is another important issue in forecasting literature. For example. 1971). a. With so many alternatives available. the Delphi method makes forecasts by deriving a consensus from a group of experts through a sequence of questionnaires. and any combination of the three. Georgoff and Murdick (1986) evaluated 20 forecasting techniques according to 16 criteria to provide a guide for how to choose the best technique or combination of techniques. Some comprehensive overviews of the management forecasting methods and selecting the right method can be found in the literature (Armstrong 2002. X.slope these are represented in the following graph. Some forecasting methods use objective data observed in a quantitative way. For example. Al-Tabtabai and Diekmann (1992) conducted a study of applying social judgment theory to cost forecasting of a construction work package and asserted that both historical data and competent judgments based on experience and knowledge need to be included in a forecasting technique. however. 7*14/4 =10.5s y=a+bx y=10.2 .7*11=62.Example: Year (X) 1 2 3 4 X =∑x/n y=∑y/n Expenceses for research(x) Annual Profit(y) xy x 2 2 20 40 4 3 25 75 9 5 34 170 25 4 30 120 16 b=∑xy-nxy/∑x2-nx2 (405-4*14/4*109/4)/(54-4*(14/4)2) =4.7 a = y-bx =(109/4)-4.5+4. It provides specific instructions for daily. What is the aim of linear decision rule? The linear decision rule aims to minimize the combined costs of regular payroll. 3. etc 4. Graphical method Heuristic method Explicit mathematical solutions simulations. The mixed strategy may be formed regular production time with constant work force and overtime.UNIT –II PART A 1. sequencing and dispatching . 5. What is mixed strategies in Aggregate planning? Here the combination of pure strategies may be used to meet the demand at minimum cost. The other three cost functions are quadratic in nature. Design capacity refers to the maximum designed service capacity or output rate and the . 2. overtime and inventory using four approximate cost functions. where capacity is increased to meet expected demand. The function of the regular payroll cost is linear. 7. Name the different capacities which are generally used to manufacture a product. hiring and firing. Following capacity. Leading capacity. What do you mean by Aggregate planning? It is the process that follows capacity planning and it uses the medium range forecast. What are the inputs required for linear decision rules? The forecast for each period of the planning horizon in aggregate terms. Name the various methods used to solve the aggregate planning problems. weekly operations such as loading. The ending size of work force of the last period. List out the various pure strategies? Building and utilizing inventory through constant work force Varying the size of work force Overtime utilization Sub contracting 6. etc. Ending inventory of the last period. where companies wait for demand increases before expanding capabilities Tracking capacity which adds incremental capacity over time to meet demand. These two functions of capacity can be used to find the efficiency 8. The demand is deterministic for future. also known as[multi-criteria decision making(MCDM). What is goal programming? Goal programming is a branch of multiobjective optimization. an underlying satisfying philosophy is assumed. which in turn is a branch of multi-criteria decision analysis (MCDA). Balance supply and demand by minimizing the production cost. PART-B 1. and back orders. Providing the best satisfying solution under a varying amount of resources and priorities of the goals. and subcontracting. Mention few assumptions while using linear programming model. Determine the degree of attainment of the goals with the available resources. 2. part-time workers. Discuss the significance of aggregate planning strategies? Capacity Options — change capacity A “big picture” approach to planning. Concerned with the quantity and the timing of both the supply and demand. It can be thought of as an extension or generalization of linear programming to handle multiple. Goal programming is used to perform three types of analysis: 1. Unwanted deviations from this set of target values are then minimized in an achievement function. Each of these measures is given a goal or target value to be achieved. Chase demand strategy with overtime. As satisfaction of the target is deemed to satisfy the decision maker(s). Effective capacity is the design capacity minus personal and other allowances. subcontracting. normally conflicting objective measures. . overtime. Use a combination of both strategies. adjustment cost. The cost of production during regular time are assumed to be piece-wise linear The cost of changes in production level are approximated by a piece-wise linear function 9. and opportunity cost of a system. Determine the required resources to achieve a desired set of objectives. This can be a vector or a weighted sum dependent on the goal programming variant used. This is an optimization programme. • • • Level capacity strategy with inventories. 3. part-time workers. organization requires more and more work force. Varying production capacity through overtime or idle time If frequent hiring/firing is not feasible. organizations should employ matching number of workers in “peak” as well as in “slack” Periods. the large pool of work force remains under-utilized in “slack” period. overcome the shortage in “peak” periods from the inventory. During “peak” period. some portion of the work force will be engaged in over time as well during “peak” period. . This implies that large work force should be employed (“hired”) in peak period and. In order to keep tight control over expenses. some of the work force will remain underutilized. there will be shortage during “peak” months. In “slack periods”. There are two types of time periods. However. Keep the excess production in stock (inventory).Changing inventory levels There are variations in demand over planning horizon. One planning-thumb-rule is. Slack months: The months when demand is low Peak months: The months when demand is high.” Varying work force size by hiring or layoffs The utility of work-force increases or decreases with an organization’s work load. Produce excess than demand during Slack months. This strategy is far better than frequent hiring and firing of the work force. excess work force should be laid-off (“fired”) in “slack period”. However. then organizations will have a constant pool of work force of adequate size. Since. Also. etc Level scheduling strategy Produce same amount of products every day Keep work force level constant Vary non-work force capacity or demand options Often results in lowest production cost . One product has high demand in winter . requires special expertise. get permission from customer to deliver the products at a later time. back order. Advantages.Subcontracting If some portion of the work order is technically complex and. e. and. meeting January demand by producing in March (Late delivery) Counter seasonal product mixing Some organizations are engaged in producing more than two products. Changes in human resources are gradual. Offer special discounts during low-demand periods so as to increase sales. some portion of work may be assigned to part-time workers. capacity change.. Demand Options — change demand: Influencing demand Demand rises and goes down because of buying trend of the consumer. this work is not of repetitive nature. work force change. Keeps capacity constant Less costly and More flexible than full-time workers (Using part-time workers) Mixed strategy Combines 2 or more aggregate scheduling options uses alternatives mixing inventory.g. not abrupt production changes Avoids use of other alternatives Back ordering during high demand periods. then organization can award the work to some 3rd party (subcontracting) Using part-time workers If organization’s regular work force is too much occupied with workloads. Backordering during high demand periods Since capacity is limited and all the demand cannot be met on time. the other product has demand in summer. May avoid overtime. back orders. Develop alternative plans and compute costs Select the best plan that satisfies ob 2. . step over either an empty or an occupied square. 3. What would happen to total shipping costs if one unit of the product (for example. The origin points and the capacity or supply per period at each. layoffs. Select any unused square to evaluate. one bathtub) was tentatively shipped on an unused route? We conduct the test as follows 1. 3. Origin points (or sources) can be factories. we need to know the following 1. You may. 2. Destinations are any points that receive goods. warehouses. overtime. subcontracting. holding inventories. The cost of shipping one unit from each origin to each destination THE STEPPING-STONE METHOD The stepping-stone method will help us move from an initial feasible solution to an optimal solution. trace a closed path back to the original square via squares that are currently being used (only horizontal and vertical moves are permissible). Beginning with a plus (+) sign at the unused square. 2.Aggregate Planning Procedures Determine demand for each period Determine capacities for each period Identify policies that are pertinent Determine units costs regular time. To use the transportation model. place alternating minus signs and plus Signs on each corner square of the closed path just traced. Explain the various methods at the basic feasible solution for transportation model? TRANSPORTATION MODEL Transportation modeling finds the least-cost means of shipping supplies from several origins to several destinations. The destination points and the demand per period at each. car rental agencies like Avis. and other relevant costs. It is used to evaluate the cost effectiveness of shipping goods via transportation routes not currently in the solution. Beginning at this square. how.ever. or any other points from which goods are shipped. overtime. . If all indices computed are greater than or equal to zero. and examine their total costs Say we want to expand and build either a new source or destination (or both) .4. and subcontracting. 5. Repeat steps 1 through 4 until you have calculated an improvement index for all unused squares. for each period Determine the labor costs. Aggregate Planning Methods Graphical & charting techniques Popular & easy-to-understand Trial & error approach Mathematical approaches Transportation method Linear decision rule Management coefficients model Simulation Forecast the demand for each period Determine the capacity for regular time. Say for now we want to expand a source. you have reached an optimal solution. hiring and firing costs. the current solution can be improved further to decrease total shipping costs. Calculate an improvement index by first adding the unit-cost figures found in each square containing a plus sign and then by subtracting the unit costs in each square containing a minus sign. If not. and inventory holding costs Consider company policies which may apply to the workers or to stock levels Develop alternative plans. or the total amount from sources adds up to the total demand at destinations – we change this later. ignore them. We have a balanced problem. shipping costs per unit are the same no matter the volume of shipping. The way to do this is include one new source in an analysis with existing sources and get the total costs throughout the system . Basic Problem The basic idea in a transportation problem is that there are sites or sources of product that need to be shipped to destinations. Describe the procedure steps to find optimum solution of given transportation model. Typically the routes and the amounts shipped on each route must be determined and the goal is to minimize the cost of shipping. Let’s do an example to highlight details of the work needed to arrive at the optimal solution. From a given site.Then do another analysis for the other new source (taking out the other proposed new source) and get the total cost. A set of units each of which takes a linear combination of values from either an input vector or the output of other units 3. and test with the other half From the point of view of distribution costs. If they are not the same include them in the analysis with the shipping cost. has the lowest total cost.Say we have two choices – Cincinnati or Seattle. Say the following amounts are made at the various sources: Des Moines Evansville 100 (units) 300 . the site to chose is the one. that when included in the overall analysis. An important way to characterize the performance of a decision rule Training data set: must be independent of testing data set Hold-out method: a common technique constructs the decision rule with half the data set. The constraints are that you can not ship more from a source than made at that source and you do not want to ship more to a place than needed. Some assumptions If production costs are the same at each source. Lauderdal e Demand Albuquerq ue 5 8 9 Boston 4 4 7 Clevelan d 3 3 5 Suppl y 100 300 300 300 200 200 Now. Lauderdale 300 Albuquerque 300 Boston Cleveland 200 and say the following sites demand the amounts shown. Source Des Moines Evansville Ft. 200 (note the balance of supply and demand). let’s combine the information into one table and I will explain more about the table on the next slide Dest. Source Des Moines Evansville Ft.Ft. Lauderdal e Demand Albuquerq ue 5 8 9 Bosto n 4 4 7 Clevelan d 3 3 5 Suppl y 100 300 300 300 200 200 . Say the costs of shipping a unit from each source to each destination is as in the following table: Dest. overtime. Ultimately we will have the computer do our work for us. The table sort of looks like a bowling score sheet now. But we want to get some of the logic of the solution process.) Second I added a demand row similar to the supply column. Evansville is done. Take all 100 to Albuquerque. Explain the concepts of linear decision rules and its applications. Drop 200 at Al’s.You will notice on the previous slide I added some information and changed how I presented the information from slide 5. take them to Boston. (I initially thought the info should be in a row. which specifies class membership based on a hierarchical sequence of (contingent) decisions. inventories. but Boston still needs 100. We will follow the Northwest Corner rule for now (in the context of our problem. With the other 100 from Evansville. The last thing I did was move over the unit shopping cost into a small boxed-off area in each cell. This is done for a reason. subcontracting. Limitations – – – linear relationships among variables inability to continuously adjust output rates single objective . Des Moines is done. Lauderdale has some left give the rest to Cleveland. First. since Boston needs 200. Lauderdale and since Ft. inventory holding costs. and costs associated with changing the size of the workforce. Goal: minimize the sum of costs related to regular labor time. 4. but is in a column that has information about the amount supplied in each row. It has 300 available and Albuquerque needs 200 more. so ship them from Ft. This is keeping track of how much is made at each source. We will get into that next. Constraints: capacities of the workforce. Note that Des Moines has 100 supplied and Albuquerque needs 300 units.) We want to take care of Des Moines and Albuquerque first – the Northwest corner of our table. note I added a supply column. Drop down to Evansville. Each rule in a set of decision rules therefore generally takes the form of a Horn clause wherein class membership is implied by a conjunction of contingent observations. and subcontracting. A set of decision rules is the verbal equivalent of a graphical decision tree. An important way to characterize the performance of a decision rule Training data set: must be independent of testing data set Hold-out method: a common technique construct the decision rule with half the data set. Examples: grocery checkouts. banking.– – – – – Thresholding the measurement component Fisher’s linear decision rule Bayes quadratic decision rule Bayes linear decision rule Linear decision rule from the first principal component • Simulation Models – – – – – – Develop and test computer models under different scenarios to identify acceptable solutions to problems. and test with the other half A set of units each of which takes a linear combination of values from either an input vector or the output of other units . Solutions may be unfeasible. Considerable effort needed to obtain relevant cost data and develop cost functions for each organization. . Limitations: • • • A specific type of cost function is assumed.– Chief difficulty: brute-force nearest neighbor algorithm computational complexity proportional to number of patterns in training set Linear Decision Rule – – Minimized combined costs using a set of cost-approximating functions to obtain a single quadratic equation. – • Inventory may not apply to services. • Labor flexibility can be an advantage in services. Demand for service can be difficult to predict.Indicate the quantity and timing of planned production. – Depend on skills details required. – Some customers request prompt service or go elsewhere. how much) • Services occur when they are rendered. when. • Capacity availability can be difficult to predict. . taking into account desired delivery quantity and timing as well as on-hand inventory. (what. if there is a waiting line. – Can handle wide variety of service requirements. (or) The associated price of storing inventory or assets that remain unsold. receipt of raw-materials. taxation. supply chain management and project management. Determination of various levels of materials 2.UNIT . lead time minimization is normally preferred. It shall be supported by a schedule which gives details regarding. What are the various inventory management techniques? 1. 3. ABC Analysis 4. within pre-determined limits set in accordance with the inventory policy established by the management. insurance. since businesses must determine how much of a . depreciation. Perpetual Inventory System 4." (or) "Inventory control is a method to identify those stocks of goods. Lead time is examined closely in manufacturing.III PART A 1. Expressed usually as a percentage of the inventory value and includes cost of capital." 2. opening stock.Q) inventory policy 5. What is meant by lead time? The amount of time that elapses between when a process starts and when it is completed. issue of materials. In business. as companies want to reduce the amount of time it takes to deliver products to the market. What is inventory holding cost? The cost of holding goods in stock. and scrap generated. What is inventory control? "Inventory control is the process where by the investment in materials and parts carried in stocks is regulated. What are the various models of inventory? Single period ordering Economic order quantity (EOQ) Replenishment models Deterministic inventory model Stochastic inventory model The (s. and shrinkage. warehousing. which can be used for the production of finished goods. Economic Order Quantity 3. obsolescence. Also called inventory cost. Holding costs are a major component of supply chain management. closing stock. product to keep in stock. The full equation is as follows: where : S = Setup costs D = Demand rate P = Production cost I = Interest rate (considered an opportunity cost. In addition. so the risk-free rate can be used) . demand rate and other variables. This is done to minimize variable inventory costs. (or) Incentive offered by a seller to a buyer for purchasing or ordering greater than usual or normal quantity of goods or materials. the company will offer a lower price to retain future business from the consumer. stock turn. such as space. 7. What are the costs associated with inventory? Holding or carrying cost Set up or production cost Ordering cost Shortage cost 8. What is economic order quantity? An inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production. stock turns. What is meant by quantity discount? If a consumer purchases a large amount of products from a company. to be delivered at one time or over a specified period. holding costs include the costs of goods being damaged or spoiled over time and the general costs. as the presence of the goods means that they are not being sold while that money could be deployed elsewhere. The equation for inventory turnover equals the Cost of goods sold divided by the average inventory. turns. Define the term Inventory turnover? The Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. Inventory turnover is also known as inventory turns. labor and other direct expenses. 6. and stock turnover. 9. This represents an opportunity cost. Fixed time period models(p models) These models provide answers to the questions: How much to order? When to order? Fixed order quantity models This model is also known as the economic order quantity (EOQ) Model. but the time of its placement is allowed to vary depending upon the fluctuation in demand. Also it may be noted that lead time L does not vary in this Q model. This order is received at the end of time period L. records must be updated to ensure that the reorder point has or has not been reached. Thus the fixed order quantity is a perpetual system. when the inventory position drops to point R. reorders point inventory system. and R=reorder point Below figure shows the sawtooth effect relating Q and R. Let Q=Quantity to ordered L=Lead time. . a reorder is placed.PART B INVENTORY CONTROL TECHNIQUES There are two general types of inventorysystems. the inventory remaining must be continually monitored. Under this system. This is the oldest and most common reordering system. and perpetual inventory system. The replenishment order is placed when the stocks reach the reorder level To use the fixed order model. They are: 1. This model requires that every time a withdrawal from inventory or an addition to inventory is made. the size of the order is predetermined and fixed.as shown in fig. Q model. Fixed order quantity models(q models) 2. IDLE STATE WAITING FOR DEMAND DEMAND OCCURS UNITS WITHDRAWN FROM INVENTORY OR BACK ORDERED COMPUTE INVENTORY POSITION POSITION=ON HAND+ON ORDERBACK ORDER IS POSITION ≤ REORDER POINT? ISSUE AN ORDER FOR EXACTLY Q UNITS . fixed order system and p models . when to order?) Reorder level=safety stock + lead time consumption =safety stock +(lead time*consumption rate) Inventory position=on hand quantity+ on order quantity-back ordered quantity Fixed time period models The fixed time period models are also referred to as the periodic system.e. Reorder quantity (i. how much to order?): In Q. Reorder level (i.model isfixed.Inventory decision parameters for Q-model 1. and it is usually equal to EOQ 2.e. periodic review system. Reorder quantity (i. periodicreview of inventories are made and an order is invariably placed in that period In other words model has a fixed ordering interval.e. Reorder level(i. order time period is fixed and hence the order is placed when the review period T arrives 2..at each review period. When lead time is more than review period: Reorder quantity= maximum stock-[stock on hand+stock on order] . how much to order?): Reorder quantity = maximum stock-stock actually held at the time of review Where maximum stock = safety stock + consumption during review period and lead time = safety stock+{lead time+review period}*consumption rate 3. This procedure is This model generally require a higher level of safety stock than a fixed order quantity system exhibited in below fig Inventory decision parameters for p model 1. but the size of the order quantity may vary with thefluctuation in demand The ordering procedure consists of reviewing of reviewing the inventory position after a fixed period of time.. known as review pwriod. when to order): In this model.e.an order is placed for an amount equal to the difference between a fixed replacement level. In a fixed-time period system. IDLE STATE WAITING FOR DEMAND DEMAND OCCURS UNITS WITHDRAWN FROM INVENTORY OR BACK ORDERED HAS REVIEW TIME ARRIVED? COMPUTE INVENTORY POSITION POSITION=ON HAND+ON ORDERBACK ORDER COMPUTE ORDER QUANTITY TO BRING INVENTORY UPTO REQUIRED LEVEL ISSUE AN ORDER FOR THE NUMBER OF UNITS NEEDED . Define the term dependent demand? The demand for an item that isn’t there until another item is there. The parent and child items need each other to profit. 6. Maintain the lowest possible material and product levels in store Plan manufacturing activities. Define the term JIT? Just in time is an operation management philosophy. What are the benefits of JIT? Productivity improvement Set-up time in reduced Inventory reduction Quality is improved Space savings Lead time reduction 5. It converts the master schedule for end product into detailed schedule for the raw materials and components used in the end product. delivery schedules and purchasing activities. JIT means that the right number of parts would be delivered to the right shop floor operation at the right time. What are the basic elements of JIT? Flow layout . 3. It is also defined as the methodology by which. the overall productivity of plant is increased by eliminating the waste. 2. 8. What are the inputs to MRP? Master production plan On-hand inventories Bill of material Purchased or manufactured order status by item Replenishment rules by item 4.Unit – IV PART A 1. List out the objectives of MRP? Ensure materials are available for production and products are available for delivery to customers. Define MRP? Material requirement planning is a computerized method for managing inventories and issuing orders for parts and materials. sales and distribution system leading to continuous flow through the whole supply chain.terms like zero inventory production. just in time for the next production process. using an information system called kanban cards. It is an effective management of all the activities in the route. Mixed model scheduling Small lots and minimum set up times Buffer stock control Quality Production and process simplification Preventive maintenance 9. at the right time and place . A production system to produce the kind of units needed.Discuss the silent characteristics of JIT? A narrow shop floor based technique concerned with making very small batches. often accompanied by a pull system of production scheduling. PART-B 1. In the manufacturing assembly which aims to improve overall productivity through the delivery of only the necessary parts. JIT APPROACH The secret of JIT success lines in the following factors Strict adherence to time schedule of various activities Workers co operation and devotion to work . What is kanban card? Kanban means “card” or “visible record” in Japanese & refers to cards used to control the flow of production through a factory. Define supply chain management? Supply chain is showing the route through which the raw material is converted into finished products into the hands of customers. inventory control production management function. low cost and high degree of flexibility. quick delivery. In the right quantity. 10. equipment. Thus JIT is a philosophy that aims simultaneous attainment of goals of perfect quality. KANBAN is a PULL System. materials and human resources JIT is based on the cardinal principles of continuous improvement and elimination of all waste. A highly integrated production. while using a minimum of facilities. at the time needed and in quantities needed A way to visualize the physical operations of the company from raw material to customer delivery A combination of purchasing . ZERO INVENTORIES Inventories include WIP and finished goods stores. the products. JIT view looks at inventories as an evidence of poor design. and seeks to achieve excellence at all stages in the manufacturing process. As stated earlier JIT seeks to produce only the required time and in the required quantities. inventories are considered as a buffer against uncertain suppliers. poor co ordination and poor operation of the manufacturing system. JIT philosophy takes a holistic approach and recognizes the interdependence of these activites Effects of JIT Production Productivity improvement Set up time improvement Inventory reduction Quality improvement Space saving Lead times reduction 2. once and for all. It means concentrate on preventing defective rather than detecting JIT approach aims to eliminate . To be more specific. Stringent quality control Competitive product cost Use of an information system called kanban. JIT seeks to archive the following goals Zero defects Zero set up time Zero inventories Zero handling Zero break downs Zero lead time Lot size of one ZERO DEFET It is a performance standard of the alertness of a workman performing the work assigned to him. the manufacturing system and the production processes must be so designed as to facilitate repaid throughput of orders. aims at do it once and do it right. JIT seeks to design a manufacturing system for efficient production of 100 % good units. ZERO LEAD TIME To approach zero lead time. the causes of defects.Discuss the important elements of JIT manufacturing system ? FLOW / LAYOUT . MODULES OR CELL ORGANISATION The factory should be organized in small autonomous modules or cells. JIT PURCHASING It emphasizes small lot purchasing. co operative transportation system etc. This enables the JIT system. long term buyer seller relationship. FLEXIBLE WORK FORCE Cross training of both shop floor and office staff and engineers is an effective way of doing this. Use of dedicated lines MIXED MODEL SCHEDULING JIT objective is to match the production rate to order demand as closely as possible. A major cause of uncertainly in breakdown. Rigorous preventive maintenance attempt to remove the uncertainly. vendor involvement in product design. Process data collection STANDARD CONTAINERS JIT emphasizes use of small standardized containers this way. vendor development. One method of doing this is to increase the flexibility of production lines to allow concurrent assembly of different models on the same line. The material flow between cells should be minimized. it is possible to greatly simplify the material movement and the use of material handling equipment. PERVENTIVE MAINTENANCE Effective JIT requires removal of causes of uncertainly and waste. frequent part delivery. high quality of purchased material. The production of queuing and non value adding time are minimized . GT is very helpful in this respect. Commonly used quality programs in support of JIT include zero defects. BUFFER STOCK REMOVEL Constant elimination of buffer stocks is emphasized to highlight production problems previously shielded by high inventory levels.The production facilities are arranged so that the process flow is as streamlined as possible. SPC. The layout is then configured so as to reduce or eliminate the stores and conveyors. This also release space KANBAN SYSTEM Minimize the total number of kanban QUALITY The achievement of high quality levels is pre requisite of successful JIT. SMALL LOTS AND MINIMUM SET UP TIMES This results in release of floor space and minimizing material handling. . the pok shows the quantity that the preceding process should produce to replace those which have been removed.Explain the working principle of kanban system? A Kanban is a card of two types a withdrawal kanban(WK) and a production ordering kanban (POK). the master schedule is leveled on a daily basis. Zero defects Zero inventories Zero break downs Lot size of one Zero setup time Zero handling Zero lead time JIT begins with a master schedule drawn for one to three months . Within a production month.3. EFFECTS OF JIT PRODUCTION Productivity improvement Set up time improvement Inventory reduction Quality improvement Space saving Lead times reduction JIT improves productivity Smaller lot size inventories Smaller buffer inventories Less scrap Less direct lab our wasted on rework Less space for inventories 4. JIT also know as lean production. Each card circulates between two work centers only the user for the part in question and the work centre which produces it . The worker the required number of .Discribe the major tools and techniques of JIT manufacturing system? Just in time JIT is a management philosophy that strives to eliminate sources of manufacturing waste by producing the right part place at the right time. The worker on the assembly line producing product A goes to the fabrication line to withdraw the necessary number of part a from the storage location.This is communicated to the production personal on the shop floor and to the suppliers who in turn are expected to schedule their work accordingly. The wk shows the quantity of the items that the subsequent process should with withdraw from the preceding work centre. which is also referred to as the logistics network.This definition leads to several observations. and stores. together with continuing advances in communications and transportation technologies (e. Detaches the pok and lves it in place of the parts. and decision support systems important for the effective management of the supply chain. But what exactly is supply chain management? We define it as follows: Supply chain management is a set of approaches utilized to efficiently integrate suppliers. and finished products that flow between the facilities In this book. to reduce cost and improve service levels. practical tools.Supply chain management Fierce competition in today’s global markets.g. raw materials are procured and items are produced at one or more factories.. RULE 4:The number of kanban should be minimized. RULE 3: Defective products should never be conveyed to subsequent process. by the . shipped to warehouses for intermediate storage. In a typical supply chain. and retail outlets. KANBAN RULES RULE 1: The subsequent process should withdraw the necessary products from the preceding process in the necessary quantities at the necessary point in time RULE 2: The preceding process should produce its products in the quantities withdrawn subsequent process. and focus attention on.warehouses. First. and at the right time. it is necessary to account for the suppliers’ suppliers and the customers’ customers because they have an impact on supply chain performance.parts. work-in-process inventory. This. to the right locations. The supply chain. warehouses. RULE 5: The kanban system should be used to adapt to only small fluctu 5. consists of suppliers. has motivated the continuous evolution of the supply chain and of the techniques to manage it effectively. in some supply chain analysis. insights. we present and explain concepts. and returns to the assembly line with a wk. the introduction of products with shorter life cycles. Indeed. The pok is picked up by a worker from from the fabrication line as a direction to produce the quantity of part a. and the heightened expectations of customers have forced business enterprises to invest in. and then shipped to retailers or customers. their supply chains. manufacturers. Consequently. in order to minimize systemwide costs while satisfying service level requirements. supply chain management takes into consideration every facility that has an impact on cost and plays a role in making the product conform to customer requirements: from supplier and manufacturing facilities through warehouses and distribution centers to retailers and stores. so that merchandise is produced and distributed at the rightquantities. as well as raw materials. mobile communication. Internet. effective supply chain strategies must take into account the interactions at the various levels in the supply chain. and overnight delivery). manufacturing centers. distribution centers. customer demand can never be forecast exactly. strategies. significantly increase the level of risk in the supply chain. from the strategic level through the tactical to the operational level. Similarly. At the same time. and academics have developed a variety of terms and concepts to stress what they believe are the salient issues in supply chain management. and lean manufacturing that focus on reducing supply chain costs. or demand chain management? Various companies. it is frequently difficult to operate a single facility so that costs are minimized and service level is maintained. Uncertainty and risk are inherent in every supply chain. Thus. work in process. Thus. travel times will never be certain. What about logistics management. 2. because supply chain management revolves around efficient integration of suppliers. approaches. rather. 3. and systemwide service levels are maintained. for the purposes of this text. and ideas that we are discussing. Although many of these concepts are useful and insightful. The process of finding the best systemwide strategy is known as global optimization. such as maximizing market share or increasing profit. the development chain that includes the set of activities associated with new product introduction. warehouses. offshoring. Finally. supply chains need to be designed and managed to eliminate as much uncertainty and risk as possible as well as deal effectively with the uncertainty and risk that remain. . Indeed. on taking a systems approach to supply chain management. They are directly affected by another chain that most organizations have. it encompasses the firm’s activities at many levels. or value chain management. are to be minimized. What makes supply chain management difficult? Although we will discuss a variety of reasons throughout this text. we will use supply chain management as the generic name for the set of concepts. and finished goods. including outsourcing. manufacturers. supply chain strategies also should be aligned with the specific goals of the organization. consultants. Supply chain strategies cannot be determined in isolation.Second. total systemwide costs. and stores. from transportation and distribution to inventories of raw materials. the objective of supply chain management is to be efficient and cost-effective across the entire system. and machines and vehicles will break down. The difficulty increases exponentially when an entire Suppliers Manufacturers Customers Warehouses and distribution centers Material costs Transportation costs Manufacturing costs Transportation costs Inventory costs system is being considered. the emphasis is not on simply minimizing transportation cost or reducing inventories but. recent industry trends. they can all be related to some or all of the following observations: 1. It is challenging to design and operate a supply chain so that total systemwide costs are minimized. depending on its (1) duration.Unit . Mention the principles of scheduling? Eliminate Dead Hours Use daylight hours Study before recitation-type classes Study after lecture-type classes List according to priorities Avoid too much detail. What is backward scheduling? Backward scheduling is planning the tasks from the due date or required-by date to determine the start date and/or any changes in capacity required. 2. Classify the scheduling strategies? Chase strategy Level production Make-to-stock Make-to-order Assemble-to-order 3. Determining when an activity should start or end. What is Index method of Assignment problem? It is a technique that can be effectively utilized for the purpose of loading and the allocation of different jobs to different machines. . Know your sleep pattern Discover how long to study 6. What are the inputs to scheduling? Performance standards U nit of measurement Unit of loading and scheduling Effective capacity per work centre 5. (4) resource availability. 7. Define Scheduling? Assigning an appropriate number of workers to the jobs during each day of work.V 1. (3) predecessor relationships. Write down the priority sequencing rules? Finish to Start (FS) Start to Start (SS) Finish to Finish (FF) Start to Finish (SF) 4. and (5) target completion date of the project. (2) predecessor activity (or activities). 8. To execute quickly and efficiently: was trusted to expedite the directives of the board. The chart is normally drawn on a printed or ruled sheet. What is critical ratio scheduling? It is a technique for establishing and maintaining priorities among the jobs in a factory. To issue officially. 10. Henry L. dispatching and progressing. 9. What is expediting? To speed up the progress of. Gantt. The technique utilizes the concepts of ratios called critical ratios – which set the time relationship between when a product is required and when it can be made available. .Itwas developed by an American engineer. dispatch. What is Gantt chart? It is a very useful aid in loading and scheduling. accelerate. START SETUP COST TABLE FOR PROBLEM IS IT A MAXIMISATION PROBLEM ? CONVERT IT IN TO MINIMISATION PROBLEM BY MINIMISATIONBY SUBRATING ALL THE ELEMENTS FROM LARGEST ELEMENT OF COST TABLE IS IT A BALANCED PROBLEM ? ADD DUMMY ROWS OR COLUMNS OBTAIN REDUCED COST TABLES 1.PART B Write the procedure steps of hugarian method for to solving assignment problems. OF LINES < NO. . OF LINES SUBRACT SMALLER NUMBER NOT COVERED BY A LINE FROM ITSELF AND EVERY OTHER UNCOVERED NUMBER ADD THIS NUMBER AT EVERY INTERSECTION OF ANY TWO LINES.SUBTRACT SMALLEST NUMBER IN EACH ROW FROM EVERY ELEMENT 2.SUBTRACT SMALLEST NUMBER IN EACH COLUMN FROM EVERY ELEMENT CAN ALLZEROS BE COVERED NY NO. which have assignments in the marked column. ELIMINATE THAT ROW AND COLUMN AND SEARCH FOR ANOTHER UNIQUE ZERO MAKE THAT ASSIGNMENT AND PROCEED IN A LIKE MANNER STOP Identify the least element in each row and subtract that element from all the elements of that row. Consider row by row identify any single zero in any two encircle it . If the the number of assignments is equal to the order of the matrix.this is called an allocation. After making an allocation. . deduct this element from all the uncovered elements and leave the rest as it is.yes CHECK EACH ROW AND COLUMN FOR A UNIQUE ZERO AND MAKE THE FIRST CHECK ASSIGNMENT AT THAT INTERSECTION.optimum solution is obtained. the number of assignment made should be equal to the order of the matrix. Mark the row for that no assignment could be made Mark the columns .that have zeros in the marked row Mark the rows. Now verify whether each row and each column have an assignment.identify the least element in each column and deduct that element from all the prepare anew transformation matrix. Identify least element from uncovered elements .add this elements at the points of intersection. In the matrix from step 2 start making allocations.e. Repeat (i) and (ii) till no more marking are possible. cancel all the other zeros in the column in which the allocation is made. Prepare the transformed matrix From the transformed matrix . i. Draw lines that passes through all unmarked row and columns.