Production Planning & Control

Assignment - A

Question 1a: Explain the forecasting process? What are the techniques for
monitoring forecasts?
Answer: A Forecasting process provides a mechanism for soliciting participation from
individuals who have knowledge of future events and compiling it into a consistent
format to develop a forecast. The forecasting process concentrates defining how
information will be gathered and reconciled into a consistent picture of the future. In
cases where a statistical forecast is used the process will also define how much weight
should be given to the mathematical models versus input from participants to develop
the final consensus forecast.
There are two basic approaches to forecasting:

Qualitative

Quantitative
Qualitative Approaches to Forecasting
Delphi Approach

A panel of experts, each of whom is physically separated from the others

and is anonymous, is asked to respond to a sequential series of
questionnaires.
After each questionnaire, the responses are tabulated and the
information and opinions of the entire group are made known to each of
the other panel members so that they may revise their previous forecast
response.
The process continues until some degree of consensus is achieved

Scenario Writing

Scenario writing consists of developing a conceptual scenario of the

future based on a well defined set of assumptions.
After several different scenarios have been developed, the decision
maker determines which is most likely to occur in the future and makes
decisions accordingly.

Subjective or Interactive Approaches

These techniques are often used by committees or panels seeking to

develop new ideas or solve complex problems.
They often involve "brainstorming sessions".
It is important in such sessions that any ideas or opinions be permitted to
be presented without regard to its relevancy and without fear of criticism.

Quantitative Approaches to Forecasting

Quantitative methods are based on an analysis of historical data

concerning one or more time series.

A time series is a set of observations measured at successive points in

time or over successive periods of time.
If the historical data used are restricted to past values of the series that
we are trying to forecast, the procedure is called a time series method.
If the historical data used involve other time series that are believed to be
related to the time series that we are trying to forecast, the procedure is
called a causal method.

Measures of Forecast Accuracy

Mean Squared Error (MSE)
The average of the squared forecast errors for the historical data is calculated.The
forecasting method or parameter(s) which minimize this mean squared error is then
selected.
Mean Absolute Deviation (MAD)
The mean of the absolute values of all forecast errors is calculated, and the forecasting
method or parameter(s) which minimize this measure is selected.The mean absolute
deviation measure is less sensitive to individual large forecast errors than the mean
squared error measure.
Question 1b: Explain various forecasting models.
Answer:
Managers should always keep themselves abreast of forecasting methods, whether
they already have a forecasting package, have built models themselves or plan to
invest in one. Most forecasting packages boast of having a variety of models built into
them, but then ask the user to choose the model he or she thinks would be most
relevant. There are plenty of forecasting models available and "choosing the right one"
is not an easy task. A common, erroneous perception is that complex forecasting
models always give better results than simple ones.
Different forecasting models work best for different situations- the nature of the
business, the nature of data, forecast granularity, forecast horizon, shelf life of the
model and the expected accuracy of the forecasts. Forecast granularity is the unit of
time of each forecast. Forecast horizon is the number of time units into the future for
which forecasts are required. For example, weekly forecasts for the next 2 months
have a granularity of a week and a horizon of 8 weeks. Shelf life is the time after which
a model becomes useless and there is a need to switch to another model.
Model Type

Most Suited Data Types

Forecast
Horizon

Shelf Life of
Model

Exponential
Smoothing

No Trend, Varying Levels

Short

Short

Short

Short

Holt's Method
Winter's Method
ARIMA

Varying Trends, Varying Levels, No

Seasonality
Varying Trends, Varying Levels and
Seasonality
Varying Trends, Varying Levels,
Seasonality

Short
to Medium
Short
to Medium

Medium
Long

Question 2a: What is aggregate production plan? What are the pure strategies
for APP?
Answer: Aggregate production planning is concerned with the determination of
production, inventory, and work force levels to meet fluctuating demand requirements
over a planning horizon that ranges from six months to one year. Typically the planning
horizon incorporates the next seasonal peak in demand. The planning horizon is often
divided into periods. For example, a one year planning horizon may be composed of
six one-month periods plus two three-month periods. Normally, the physical resources
of the firm are assumed to be fixed during the planning horizon of interest and the
planning effort is oriented toward the best utilization of those resources, given the
external demand requirements.
Since it is usually impossible to consider every fine detail associated with the
production process while maintaining such a long planning horizon, it is mandatory to
aggregate the information being processed. The aggregate production approach is
predicated on the existence of an aggregate unit of production, such as the "average"
item, or in terms of weight, volume, production time, or dollar value. Plans are then
based on aggregate demand for one or more aggregate items. Once the aggregate
production plan is generated, constraints are imposed on the detailed production
scheduling process which decides the specific quantities to be produced of each
individual item.
There are two pure planning strategies available to the aggregate planner: a level
strategy and a chase strategy. Firms may choose to utilize one of the pure strategies in
isolation, or they may opt for a strategy that combines the two.
LEVEL STRATEGY
A level strategy seeks to produce an aggregate plan that maintains a steady production
rate and/or a steady employment level. In order to satisfy changes in customer
demand, the firm must raise or lower inventory levels in anticipation of increased or
decreased levels of forecast demand. The firm maintains a level workforce and a
steady rate of output when demand is somewhat low. This allows the firm to establish
higher inventory levels than are currently needed. As demand increases, the firm is
able to continue a steady production rate/steady employment level, while allowing the
inventory surplus to absorb the increased demand.
A level strategy allows a firm to maintain a constant level of output and still meet
demand. This is desirable from an employee relations standpoint. Negative results of
the level strategy would include the cost of excess inventory, subcontracting or
overtime costs, and backorder costs, which typically are the cost of expediting orders
and the loss of customer goodwill.
CHASE STRATEGY.
A chase strategy implies matching demand and capacity period by period. This could
result in a considerable amount of hiring, firing or laying off of employees; insecure and
unhappy employees; increased inventory carrying costs; problems with labor unions;
and erratic utilization of plant and equipment. It also implies a great deal of flexibility on
the firm's part. The major advantage of a chase strategy is that it allows inventory to be
held to the lowest level possible, and for some firms this is a considerable savings.
Most firms embracing the just-in-time production concept utilize a chase strategy
approach to aggregate planning.

Question 2b: The demand and capacities for production of company is given
below. Demand for January, February and March are 900, 300 and 700
respectively. The production capacities for each of the month are given below.

January

February

March

Regular Time

600

300

200

Over Time

300

300

300

Sub Contracted

500

500

500

The production cost per unit during regular time is Rs 60, during over time
is Rs 70, and the sub contracted cost is Rs 72. The cost of carrying
inventory is Rs 5 per unit per month. The cost of unused regular time
capacity is Rs 15. Find the optimum production plan using transportation
model.
Answer:

The Optimal Solution is the one shown on the following table:

Supply

Period
Feb

Jan

Indian Inventory
Regular Time

Unused
Capacity

Mar

Total
Available
Capacity
(Offer)

10

15

60

65

70

15

600

70

75

80

300

72

79

82
150
65

0
350
15

500

75
50
79

0
250
0
350
15
150
0
250
0

300

600

Over Time
300

Sub Contracting
Regular Time

60
X

300

Over Time

70
X

Sub Contracting

72

150

Regular Time

50
X

X
900

X
300

50

One Time

70
50
72

Sub-Contracting
Total Demand

300

250
700

250
1600

500
200
300
500
3500

With this, the Total Cost could be calculated as follows:

Period

Cost

Period 1: (January): 600 x (Rs 60) + 300 x (Rs 70)

Rs 57,000

Period 2: (February): 300 x (Rs 70)

Rs 21,000

Period 3 (March): 150 x (Rs 82) + 50 x (Rs 75) + 150 x (Rs 79) + 50
x (Rs 60) + 50 x (Rs 70) + 250 x (Rs 72)

Rs 52,400

Unused Regular Time Capacity: 150 x (Rs 15)

Rs 2,250

TOTAL COST:

Rs 132,650

Question 3a: What is Master Production Scheduling? Explain various

types of Bill of Materials.
Answer: A master production schedule (MPS) is a plan for production, staffing,
inventory, etc. It is usually linked to manufacturing where the plan indicates
when and how much of each product will be demanded. This plan quantifies
significant processes, parts, and other resources in order to optimize
production, to identify bottlenecks, and to anticipate needs and completed
goods. Since an MPS drives much factory activity, its accuracy and viability
dramatically affect profitability. Typical MPS's are created by software with user
tweaking.
Due to software limitations, but especially the intense work required by the
"master production schedulers", schedules do not include every aspect of
production, but only key elements that have proven their control affectivity, such
as forecast demand, production costs, inventory costs, lead time, working
hours, capacity, inventory levels, available storage, and parts supply. The
choice of what to model varies among companies and factories. The MPS is a
statement of what the company expects to produce and purchase (i.e. quantity
to be produced, staffing levels, dates, available to promise, and projected
balance).
The MPS translates the business plan, including forecast demand, into a
production plan using planned orders in a true multi-level optional component
scheduling environment. Using MPS helps avoid shortages, costly expediting,
last minute scheduling, and inefficient allocation of resources. Working with
MPS allows businesses to consolidate planned parts, produce master
schedules and forecasts for any level of the Bill of Material (BOM) for any type
of part.
A bill of materials (BOM) is a list of the raw materials, sub-assemblies,
intermediate assemblies, sub-components, components, parts and the
quantities of each needed to manufacture an end product. No physical
dimension is described in BOM.
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It may be used for communication between manufacturing partners, or confined

to a single manufacturing plant.
A BOM can define products as they are designed (engineering bill of materials),
as they are ordered (sales bill of materials), as they are built (manufacturing bill
of materials), or as they are maintained (service bill of materials). The different
types of BOMs depend on the business need and use for which they are
intended. In process industries, the BOM is also known as the formula, recipe,
or ingredients list. In electronics, the BOM represents the list of components
used on the printed wiring board or printed circuit board. Once the design of the
circuit is completed, the BOM list is passed on to the PCB layout engineer as
well as component engineer who will procure the components required for the
design.
BOMs are hierarchical in nature with the top level representing the finished
product which may be a sub-assembly or a completed item. BOMs that describe
the sub-assemblies are referred to as modular BOMs. An example of this is the
NAAMS BOM that is used in the automative industry to list all the components
in an assembly line. The structure of the NAAMS BOM is System, Line, Tool,
Unit and Detail.
The first hierarchical databases were developed for automating bills of materials
for manufacturing organizations in the early 1960s. At present this BOM is used
as a data base to identify the many parts and their codes in automobile
manufacturing companies.
A bill of materials "implosion" links component pieces to a major assembly,
while a bill of materials "explosion" breaks apart each assembly or subassembly into its component parts.
Question 3b: What are the various disaggregation methods in use?
Answer: One framework for resource planning is divided into three levels:

Aggregate planning (Level 1),

Disaggregation (Level 2), and

Execution (Level 3).
Resource management for service-producing organizations generally does not
require as many intermediate levels of planning (Level 2) as it does for goodsproducing firms.
Aggregate planning is the development of a long-term output and resource
plan in aggregate units of measure.
These typically define output levels over a planning horizon of 1 to 2 years,
focusing on product families or total capacity requirements.

Aggregate planning later translates into monthly or quarterly production plans,

taking into account capacity limitations such as supply availability, equipment,
and labor.
Level 2 planning, or disaggregation, is the process of translating aggregate
plans into short-term operational plans that provide the basis for weekly and
daily schedules and detailed resource requirements.
Level 3 focuses on execution, moving work from one workstation to another,
assigning people to tasks, setting priorities for jobs, scheduling equipment, and
controlling processes.
Disaggregating Service Plans

Most service organizations do not require as many levels of intermediate

planning (Level 2) as goods-producing firms.

Level 1 and 2 planning are often combined in service businesses.

Two Levels of Disaggregation for Many Service Organizations

Disaggregating Service Plans

One way to think of disaggregation in services is to go from aggregate

planning (Levels 1 and 2) to front line resource (staff) capacity and
scheduling decisions (Level 3). Manufacturers use and need an
intermediate level of planning (Level 2), where work-in-process and
subassemblies reside.

Disaggregation in Manufacturing

Disaggregation (Level 2) provides the link between aggregate plans

developed at Level 1 and detailed execution at Level 3 (see Exhibit
13.6).

This provides the basis for detailed purchasing and production schedules
for all of the components that comprise the finished good or support
service delivery.

There are three major components for disaggregating aggregate plans

into Level 2 plans.

Master production scheduling (MPS)

Materials requirements planning (MRP)

Capacity requirements planning (CRP)

Master Production Schedule (MPS)

A master production schedule (MPS) is a statement of how many finished items

are to be produced and when they are to be produced.

Typically developed for weekly time periods over a 6- to 12-month horizon.

Materials Requirements Planning (MRP)

Materials Requirements Planning (MRP) is a forward-looking, demand-based

approach for planning the production of manufactured goods and ordering
materials and components to minimize unnecessary inventories and reduce
costs.

Capacity Requirements Planning (CRP) is the process of determining the amount of

labor and machine resources required to accomplish the tasks of production on a more
detailed level, taking into account all component parts and end items in the materials
plan.

Question 4a: Explain Materials Requirement Planning. What are the inputs
and outputs of MRP?
Answer: Material requirements planning (MRP) is a computer-based inventory
management system designed to assist production managers in scheduling and
placing orders for dependent demand items. Dependent demand items are
components of finished goodssuch as raw materials, component parts, and
subassembliesfor which the amount of inventory needed depends on the
level of production of the final product.
The first MRP systems of inventory management evolved in the 1940s and
1950s. They used mainframe computers to explode information from a bill of
materials for a certain finished product into a production and purchasing plan for
components. Before long, MRP was expanded to include information feedback
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loops so that production personnel could change and update the inputs into the
system as needed. The next generation of MRP, known as manufacturing
resources planning or MRP II, also incorporated marketing, finance, accounting,
engineering, and human resources aspects into the planning process. A related
concept that expands on MRP is enterprise resources planning (ERP), which
uses computer technology to link the various functional areas across an entire
business enterprise.
MRP works backward from a production plan for finished goods to develop
requirements for components and raw materials. "MRP begins with a schedule
for finished goods that is converted into a schedule of requirements for the
subassemblies, component parts, and raw materials needed to produce the
finished items in the specified time frame," William J. Stevenson wrote in his
book Production/Operations Management. "Thus, MRP is designed to answer
three questions: what is needed? how much is needed? and when is it
needed?"
MRP INPUTS
According to Stevenson, the information input into MRP systems comes from
three main sources: a bill of materials, a master schedule, and an inventory
records file. The bill of materials is a listing of all the raw materials, component
parts, subassemblies, and assemblies required to produce one unit of a specific
finished product. Each different product made by a given manufacturer will have
its own separate bill of materials. The bill of materials is arranged in a hierarchy,
so that managers can see what materials are needed to complete each level of
production. MRP uses the bill of materials to determine the quantity of each
component that is needed to produce a certain number of finished products.
From this quantity, the system subtracts the quantity of that item already in
inventory to determine order requirements.
MRP OUTPUT
As Stevenson explained, the main outputs from MRP include three primary
reports and three secondary reports. The primary reports consist of: planned
order schedules, which outline the quantity and timing of future material orders;
order releases, which authorize orders to be made; and changes to planned
orders, which might include cancellations or revisions of the quantity or time
frame. The secondary reports generated by MRP include: performance control
reports, which are used to track problems like missed delivery dates and stock
outs in order to evaluate system performance; planning reports, which can be
used in forecasting future inventory requirements; and exception reports, which
call managers' attention to major problems like late orders or excessive scrap
rates.

Question 4b: Explain the various Lot sizing techniques.

Answer: There are a number of lot-sizing techniques available in addition to
EOQ. These include the fixed-order quantity, fixed-order-interval model and the
single-period model.

FIXED-ORDER-QUANTITY MODEL
EOQ is an example of the fixed-order-quantity model since the same quantity is
ordered every time an order is placed. A firm might also use a fixed-order
quantity when it is captive to packaging situations. If you were to walk into an
office supply store and ask to buy 22 paper clips, chances are you would walk
out with 100 paper clips. You were captive to the packaging requirements of
paper clips, i.e., they come 100 to a box and you cannot purchase a partial box.
It works the same way for other purchasing situations. A supplier may package
their goods in certain quantities so that their customers must buy that quantity
or a multiple of that quantity.
FIXED-ORDER-INTERVAL MODEL
The fixed-order-interval model is used when orders have to be placed at fixed
time intervals such as weekly, biweekly, or monthly. The lot size is dependent
upon how much inventory is needed from the time of order until the next order
must be placed (order cycle). This system requires periodic checks of inventory
levels and is used by many retail firms such as drug stores and small grocery
stores.
SINGLE-PERIOD MODEL.
The single-period model is used in ordering perishables, such as food and
flowers, and items with a limited life, such as newspapers. Unsold or unused
goods are not typically carried over from one period to another and there may
even be some disposal costs involved. This model tries to balance the cost of
lost customer goodwill and opportunity cost that is incurred from not having
enough inventories, with the cost of having excess inventory left at the end of a
period.
Question 5a: Explain assembly line balancing clearly defining various
terminologies like cycle time, precedence diagram, work stations,
efficiency, utilization, balance delay, etc.
Answer: Consider the assembly of a car: assume that certain steps in the
assembly line are to install the engine, install the hood, and install the wheels
(in that order, with arbitrary interstitial steps); only one of these steps can be
done at a time. In traditional production, only one car would be assembled at a
time. If engine installation takes 20 minutes, hood installation takes 5 minutes,
and wheel installation takes 10 minutes, then a car can be produced every 35
minutes.

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In an assembly line, car assembly is split between several stations, all working
simultaneously. When one station is finished with a car, it passes it on to the
next. By having three stations, a total of three different cars can be operated on
at the same time, each one at a different stage of its assembly.
After finishing its work on the first car, the engine installation crew can begin
working on the second car. While the engine installation crew works on the
second car, the first car can be moved to the hood station and fitted with a
hood, then to the wheels station and be fitted with wheels. After the engine has
been installed on the second car, the second car moves to the hood assembly.
At the same time, the third car moves to the engine assembly. When the third
cars engine has been mounted, it then can be moved to the hood station;
meanwhile, subsequent cars (if any) can be moved to the engine installation
station.
Assuming no loss of time when moving a car from one station to another, the
longest stage on the assembly line determines the throughput (20 minutes for
the engine installation) so a car can be produced every 20 minutes, once the
first car taking 35 minutes has been produced.
Question 5b: Explain the key elements to successful JIT.
Answer: The following five steps must be followed to successfully implement a
JIT system
Step One: Awareness Revolution
This step includes redesigning old management techniques and implementing
new techniques and styles. Furthermore, management should review all new
concepts with all interacting employees to build confidence and a belief that the
new method will work. It is important that employees are fully engaged in the
implementation process and assist in identifying and correcting all noticeable
mistakes immediately.
Employees should also be informed about new
developments and changes within the system and an emphasis should be
made on continuous improvements. Continuous improvements can also be
defined as improvements with no limits.
Step Two: Concepts for Workplace Improvement
This step requires an evaluation and prioritization of corporate requirements
and a disregard for corporate needs that do not promote efficiency. Employees
must maintain a clean and orderly work environment by placing inventory or raw
materials, supplies and tools in a logical, orderly manner. For example, items
that are used most frequently should be located in a convenient location.
Employees can further ensure production efficiency by maintaining all
equipment on an ongoing basis. Additionally, rules and employee codes of
conduct should be established, practiced and monitored to ensure compliance.
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Employee compliance can be monitored through one on one meetings,

observation of employees while at work and check-listed inspections.
Step Three: Flow Manufacturing
Step three is the production of a single piece of product at a given time. This
can be achieved by hiring and training multi skilled workers. In addition the
production manager should follow a strict cycle time to ensure production
deadlines are achieved. Furthermore compact machinery should be used in the
production facilities to ensure the facilities space is being used most efficiently.
Step Four: Standard Operations
Step four of the implementation phase includes following efficiency rules to
ensure that quality products are produced as economically as possible. These
efficiency rules may suggest arranging people, products and machines in a way
that maximizes production efficiency. Furthermore operations charts, work
sequence, and maintaining a standard stock of high volume production
components have been identified as tools and methods that can be used to
improve efficiency.
Step Five: Multiprocessor Handling
Step five suggests that one worker is responsible for several processes in a
work cell. This can be facilitated by hiring multi skilled workers. These
employees should be properly trained so that they are able to perform on
several different machines and be capable of handling various production
processes.

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Assignment B
Question 1: Explain, long-range, medium-range and short-term capacity
planning methods?
Answer: Plans can be long range, medium range, or short range depending on
the time required to complete the action. The time spans of these different
ranges depend on the operational environment of the organization. The longrange planning horizon should exceed the time required to acquire new facilities
and equipment. This may require 10 years or longer for organizations involved
in the extraction process where new mines must be developed. It may be as
short as 18 months for the machine shop where facilities and equipment are
catalog items,
Medium-range planning is the development of the aggregate production rates
and aggregate levels of inventory for product groups within the constraints of a
given facility. Expansion of capacity within the medium-range planning period is
limited to increasing personnel or shifts, scheduling overtime, acquiring more
efficient tooling, subcontracting, and perhaps adding some types of equipment
that can be obtained on short notice.
Medium-range planning usually covers a period beginning 1 to 2 months in the
future and ending 12 to 18 months in the future. Its exact boundaries depend on
the time constraints for changing levels of production in a particular situation.
The planning horizon for medium-range planning is usually at least as long as
the longest product lead time. In this context, we define lead time as the time
from recognizing that an order for material must be placed until that material is
present in a finished good. If medium-term planning uses a horizon shorter than
this, material planning cannot properly be performed.
There is no precise definition for the length of the short-term planning horizon.
Although detailed schedules and assignments of people and machines to tasks
usually do not occur until well within the short-range period, the development of
the production schedule frequently bridges the medium- and short-range
planning periods. Planning is a continuous activity, and refinement of mediumrange forecasts and plans to the detail required in preparing the first draft of a
short-range version of the production schedule may take place gradually over a
number of weeks.
Some interactions of PIM activities frequently take place in more than one time
frame. For example, resource requirements planning for facilities may be
performed years in advance of production, while some equipment purchases
can be initiated a few months before needed. In addition, the master production
schedule frequently covers both the medium-range and short-range planning
periods.

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Question 2a: What are various batch processing techniques?

Answer: Batch processing is execution of a series of programs ("jobs") on a
computer without manual intervention.
Batch jobs are set up so they can be run to completion without manual
intervention, so all input data is preselected through scripts or command-line
parameters. This is in contrast to "online" or interactive programs which prompt
the user for such input. A program takes a set of data files as input, process the
data, and produces a set of output data files. This operating environment is
termed as "batch processing" because the input data are collected into batches
on files and are processed in batches by the program.
Data processing
A typical batch processing procedure is End of day-reporting (EOD), especially
on mainframes. Historically systems were designed to have a batch window
where online subsystems were turned off and system capacity was used to run
jobs common to all data (accounts, users or customers) on a system. In a bank,
for example, EOD jobs include interest calculation, generation of reports and
data sets to other systems, print (statements) and payment processing.
Printing
A popular computerized batch processing procedure is printing. This normally
involves the operator selecting the documents they need printed and indicating
to the batch printing software when, where they should be output and priority of
the print job. Then the job is sent to the print queue from where printing daemon
sends them to the printer.
Databases
Batch processing is also used for efficient bulk database updates and
automated transaction processing, as contrasted to interactive online
transaction processing (OLTP) applications.
Images
Batch processing is often used to perform various operations with digital
images. There exist computer programs that let one resize, convert, watermark,
or otherwise edit image files.
Converting
Batch processing is also used for converting a number of computer files from
one format to another. This is to make files portable and versatile especially for
proprietary and legacy files where viewers are not easy to come by.

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Question 2b: Explain the concept of theory of constraints and

synchronous manufacturing.
Answer: Theory of Constraints (TOC) is an overall management philosophy
introduced by Dr. Eliyahu M. Goldratt in his 1984 book titled The Goal, that is
geared to help organizations continually achieve their goal. The title comes from
the contention that any manageable system is limited in achieving more of its
goal by a very small number of constraints, and that there is always at least one
constraint. The TOC process seeks to identify the constraint and restructure the
rest of the organization around it, through the use of the Five Focusing Steps.
Synchronous Manufacturing is the most popular application of the Theory of
Constraints.
While the Theory of Constraint is certainly best known for its application to
production scheduling, Synchronous Manufacturing is a broader concept that
implies ALL the elements of a business not just production working in sync
to achieve the strategic goals of the business.
Still, the heart of a Synchronous Manufacturing implementation is a shop
schedule that actually works.
What we mean by "works" is, a schedule that remains valid and keeps the plant
pumping out the right products on time to meet delivery schedules, despite
"Murphy" despite inaccurate data, absenteeism, machine breakdowns,
unreliable vendors, unexpected scrap, etc.
And yes we can develop these schedules just as easily in job shops where no
two products or routings are ever the same, as in a plant with a standard
product line.
One of the beauties of this technique is that schedules developed and managed
using the Drum-Buffer-Rope (DBR) technique of Synchronous Manufacturing
produce short lead times, fast flow, and low inventory ... yet these schedules
are extremely robust, they remain valid while all sorts of things can go wrong in
the plant.
Question 2b: Explain the concept of theory of constraints and
synchronous manufacturing.
Answer:
(a) Kanban: Kanban is a signaling system to trigger action. As its name
suggests, kanban historically uses cards to signal the need for an item. However, other
devices such as plastic markers (kanban squares) or balls (often golf balls) or an empty
part-transport trolley or floor location can also be used to trigger the movement,
production, or supply of a unit in a factory.

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It was out of a need to maintain the level of improvements that the

kanban system was devised by Toyota. Kanban became an effective tool to
support the running of the production system as a whole. In addition, it proved
to be an excellent way for promoting improvements because reducing the
number of kanban in circulation highlighted problem areas
b)
Scheduling and sequencing
Scheduling is the process of deciding how to commit resources between
varieties of possible tasks. Time can be specified (scheduling a flight to leave at
8:00) or floating as part of a sequence of events.
In mathematics, a sequence is an ordered list of objects (or events).
Like a set, it contains members (also called elements or terms), and the number
of terms (possibly infinite) is called the length of the sequence. Unlike a set,
order matters, and the exact same elements can appear multiple times at
different positions in the sequence.
c)
System nervousness
The nervous system is an organ system containing a network of specialized
cells called neurons that coordinate the actions of an animal and transmit
signals between different parts of its body. In most animals the nervous system
consists of two parts, central and peripheral. The central nervous system of
vertebrates (such as humans) contains the brain, spinal cord, and retina. The
peripheral nervous system consists of sensory neurons, clusters of neurons
called ganglia, and nerves connecting them to each other and to the central
nervous system. These regions are all interconnected by means of complex
neural pathways. The enteric nervous system, a subsystem of the peripheral
nervous system, has the capacity, even when severed from the rest of the
nervous system through its primary connection by the vagus nerve, to function
independently in controlling the gastrointestinal system.

16

Case Study
2.- A company is setting up an assembly line to produce 192 units per
eight-hour shift. The following table identifies the work elements,
items, and immediate predecessors.
Work element

Time (seconds)

A
B
C
D
E
F
G
H
I
J
Total
Questions:

40
80
30
25
20
15
120
145
130
115
720

Immediate
predecessor(s)
None
A
D, E, F
B
B
B
A
G
H
C, I

a) What is the desired cycle time?

b) What is the theoretical minimum number of work stations?
c) Use the largest work element time rule to work out a solution.
d) What are the idle time, efficiency and balance delay for the
solution?
Answer.-

On this one, I used a WinQSB Program to solve all needed.

Here are the results:

17

18

Question 3.- A laundry has three operations washing drying and ironing
for the linen it receives from various customers. The laundry has 7 jobs at
hand to be sequenced for the three activities. The activity times for the
various jobs on hand is given in the following table.

Job
A
B
C
D
E
F
G

Washing
1
3
7
9
4
5
2

Drying
7
3
8
2
8
6
1

Ironing
8
10
9
11
9
14
12

a) Sequence these jobs using Johnsons method and find

the overall processing time.
b) Find out the waiting time for the jobs.
c) Find out the idling times for the machines.
d) What are the conditions for using Johnsons rule?
Aswer.- First, Find these data:
min Machine 1 M1 (Washing)
max Machine 2 M2 (Drying)
min Machine 3 M3 (Ironing)
If min M1 max M2 or min M3 max M2, the sequence can be solved as a
2-machine type.
min M1 = 1
max M2 = 8
min M3 = 8
Criteria
min M1 max M2
min M3 max M2
One of conditions apply.
Now, M1 and M2 are created.
M1i = M1i + M2i
M2I = M2i + M3i
New Matrix is created.
19

Result




Job
A
B
C
D
E
F
G

M1
8
6
15
11
12
11
3

M2
15
13
17
13
17
20
13

a.- Lets get started.

Min time registered is 3 in Job G on Column M1. As it is on M1, List first. Job G
done.
G
Next Min time is 6 in Job B on column M1. List first cause it is on M1. Job B
done.
G

Next is 8 in Job A on column M1. Listed First. Job A done.

G

Next min time is a tie on 11, registered by Job D and F. Arbitrarily, Job F
selected. Listed First. Job F and also Job D done.
G

Next is Job E with 12 on M1. Job E done.

G

And finally, Job C is placed on the missing spot.

So, Sequence is:

G

20

Times for Machine 1:

14

11

Times for Machine 2:

1

Times for Machine 3:

12

10

To Find the Overall Processing Time, Its important to make a Gantt Diagram as
follows:

M1

M2

M3

76. To get to this number, focus

As marked, The Overall Processing Time is = 76.
on M3 process and sum every time amount:
3 (idle) + 12 (G) + 10 (B) + 8 (A) + 14 (F) + 11 (D) + 9 (E) + 9 (C) = 76
21

b.- To find waiting time for jobs, calculate as follows:

JOB G
0 (From M1 to M2) + 0 (From M2 to M3) = 0
JOB B
0 (From M1 to M2) + 9 (From M2 to M3) = 9
JOB A
0 (From M1 to M2) + 12 (From M2 to M3) = 12
JOB F
3 (From M1 to M2) + 14 (From M2 to M3) = 17
JOB D
0 (From M1 to M2) + 25 (From M2 to M3) = 25
JOB E
0 (From M1 to M2) + 26 (From M2 to M3) = 26
JOB C
1 (From M1 to M2) + 27 (From M2 to M3) = 28

Job

Waiting
Time

12

17

25

26

28

c.- The Idle time for each Machine is as follows:

M1 = 76 31 = 45
M2 = 2 + 1 + 2 + (76 40) = 41
M3 = 3
Machine

Washing

Drying

Ironing

IdlingTime

45

41

d.- The conditions are as described on all the problem solution:

Must be valid one of these criteria: (min M1 max M2) or (min M3 max
M2) to solve easily as a 2-machine model.
Finding a tie assigning Machines and process is to the solver subjective
criteria.
Finally, graph a Gantt Diagram to accomplish all jobs, duration times and
Machines as well.

22

AD-65 SOLUTION: Objective Type

1. Which of the following is not a characteristic of a production system
a) It is a universally applicable model
b) Varies from enterprise to enterprise
c) It is a framework within which production activities take place
d) Ensures coordination of various production operations
2. Which of the following is not a type of production system
a) Continuous production
b) Job or unit production
c) Intermittent production
d) Flexible manufacturing
3. All of the following are production functions except
a) Aggregate planning
b) Pricing of products
c) Capacity assessment
d) Scheduling of operations
4. Order winner means
a) The sales person who gets the order
b) The factor of the product that wins the order for the firm
c) Order that results in high profits
d) Repeat order
5. All of the following are functions of forecasting except
a) An estimation tool
b) A tool for predicting events related to operations planning and control
c) An input for the JIT system
d) A vital prerequisite for the planning process
6. Degree of uncertainty in short term forecasting is
a) High
b) Low
c) Nil
d) Significant
7. All of the following are key areas of forecasting except
a) Better materials management
b) Rationalized manpower decisions
c) Basis for planning and scheduling
d) Routine decisions
8. Which of the following is a dependent demand for an organization
manufacturing refrigerators

AD-65 SOLUTION: Objective Type

a) Compressor
b) Requirement for a DG set
c) Refrigerators
d) Tea coffee vending machine
9. If a forecast repeatedly overestimates actual demand, bias will have
a) Positive value
b) Negative value
c) Zero value
d) Infinity
10. Which of the following is not a qualitative method of forecasting
a) Delphi method
b) Historical data
c) Econometric models
d) Nominal group technique
11. The most suitable method for forecasting the demand for a brand
new product is
a) Moving averages
b) Historical data
c) Exponential smoothening
d) Delphi method
12. The planning that addresses the supply side of a firms ability to
meet the demand is known as
a) Business plan
b) Aggregate production planning
c) Aggregate capacity planning
d) Master production scheduling
13. Which of the following is not a considerations in developing an
aggregate production plan
a) Concept of aggregation
b) Goal for aggregate planning
c) Forecast of aggregate demand
d) Supplier lead time

24

AD-65 SOLUTION: Objective Type

14. The aggregate production planning strategy that cannot be
employed in a strong union environment is
a) Changing inventory levels
b) Changing workforce levels
c) Subcontracting
d) Influencing demand
15. Which of the following is not an alternative for managing supply
a) Inventory based alternatives
b) Promotional schemes
c) Capacity adjustment
d) Capacity augmentation
16. All of the following are capacity adjustment alternatives except
a) Hiring/ Firing of workers
b) Varying shifts
c) Varying working hours
d) Subcontracting
17. Which of the following is not an aggregate production planning
method
a) Trial-and-error method
b) Transportation method
c) Linear programming method
d) Assignment method
18. All of the following are characteristics of Master Production
Scheduling except
a) MPS makes use of actual customer orders
b) Product varieties are taken care of in MPS
c) MPS is a critical linkage between planning and execution of operations
d) It is same as rough cut capacity planning
19. Which is not a characteristic of a Bill Of Materials
a) List all parts required for one unit of a product
b) Shows dependency relationships
c) Gives total number of a part used in a product
d) Indicates multi levels of a product
20. All of the following are time phasing requirement of an MRP logic
except
a) Gross requirement will occur at the middle of a period
b) On hand inventory will be measured at the end of a period
c) Planned order release will occur at the beginning of a period
d) Lead time considerations are not taken for time phasing
25

AD-65 SOLUTION: Objective Type

21. Which of the following is not an input to the MRP system

a) The Master Production Schedule
b) Bill of materials
c) Engineering drawing
d) Inventory status file
22. Which of the following is not a Lot sizing technique
a) The lot-for lot technique
b) The EOQ approach
c) Mini-Max approach
d) Period order quantity approach
23. The process of tracing the effect of one component in another is
called
a) Pegging
b) Cycle counting
c) Lot sizing
d) Time fencing
24. Stability in an MRP is achieved by
a) Updating
b) Cycle counting
c) Lot Sizing
d) Time fencing
25. Time fence means
a) The shortest lead-time from raw material to finished production of an
item
b) Ensuring accuracy of inventory records
c) Method used to update MRP at regular intervals
d) Calculating net requirements of components
26. All of the following are characteristics of capacity except
a) It is the maximum rate at which a system can accomplish work
b) Capacity depends on the bottleneck
c) Capacity is the productive capability of a facility
d) Capacity is measured in monetary terms

26

AD-65 SOLUTION: Objective Type

27. Operations managers are concerned with capacity for several
reasons. Which of the following is not a concern
a) Enough capacity to meet customer demands
b) Capacity affects cost efficiency of operations
c) Investment required in capacity
d) Machine locations in a facility
28. Which of the following is not a short term strategy for modifying
capacity
a) Inventories
b) Employment levels
c) Subcontracting
d) Expansion
29. All of the following are steps in capacity control except
a) Monitoring of output
b) Comparing with capacity plan
c) Assessing demand
d) Taking corrective actions
30. Multi-skilling of work force doesnt results in
a) Increasing capacity
b) Increasing flexibility
c) Improving productivity
d) Waste elimination
31. Activity not associated with Dispatching is
a) Issue of instructions concerning movement of materials between work
centers
b) Issue of instructions to operators
c) Loading work centers with jobs
d) Issue instructions concerning the issue and return of special tools
32. Routing doesnt include
a) Sequence of processes, operations for a product
b) Machines, tools, work stations used in producing the product
c) Standard time applicable for each operation
d) Detailed skills of the operator for each operation
33. Three planning premises are used in production management.
Which of the following is not one among them
a) Make to stock
b) Make to order
c) Assemble to order
d) Make subassemblies
27

AD-65 SOLUTION: Objective Type

34. A strategy that is not used for altering lead time is
a) Overlapping
b) Lot sizing
c) Operations splitting
d) Lot splitting
35. Backlogs can be reduced by all of the following except
a) Increasing work center capacity
b) Reducing order release rate
c) Increasing lead time
d) Subcontracting
36. Priority index in scheduling is also known as
a) Critical ratio
b) Critical Path
c) Random number
d) Earliest due date
37. All of the following are characteristics of flow shop production
except
a) Special purpose equipment
b) Many number of end items
c) Low skilled workers
d) Low in process inventories
38. Which of the following is not a characteristic of job shop production
a) Multipurpose equipment
b) Highly skilled workers
c) High investment
d) Low raw material inventory
39. Bottleneck operation in line balancing means
a) Having high operation time
b) Having high cycle time
c) Having low operation time
d) Having more no. of follower operations
40. Which of the following is not associated with line balancing
a) Precedence diagrams
b) Cycle time
c) Closeness matrix
d) Minimum number of workstations

28