Product and Equipment Analysis

2.1 INTRODUCTION

Even when companies realize the importance of developing efficient layouts and designing effi-cient
departments, many of them, especially the smaller ones, find that it is too time consumingand difficult
to collect and generate data in the format required for problem solving. This raisestwo questions: What
are the required pieces of information? Why is it difficult to obtain them?We answer the first question
in detail in this and in the next chapters. The second question isanswered in less detail, but from the
answer to the first question, the reader will be able to answerthe second.

Two kinds of analysis—product analysis and process analysis—are important for developingthe data
required to solve the facility design and layout problems. Product analysis is determiningthe sequence of
machines visited by a part and production volume. It is discussed in this chapter.Equipment and
personnel requirement analysis (which covers make-or-buy decisions), productioncapacity decisions,
production space analysis, and employee requirement analysis are also discussed

in this chapter. In Chapter 3, we discuss process analysis by focusing on material flow analysis.

2.2 PRODUCT ANALYSIS

The products manufactured by a company provide important information about processes or equip-
ment required, material handling methods and systems needed, and the arrangement of
production,auxiliary equipment, and service departments. Before beginning the facility design process,
wemust know not only thetypesof products manufactured but also their productionvolume. Both
havean impact on the final layout of departments. As we discuss in Chapter 3, the production volume

(along with other factors) determines the type of layout selected. We now describe how information

about products is used to generate data that are essential in developing layouts.

2.2.1BILLOFMATERIALS

As an illustration, we consider a single product manufactured by a medical equipment company—the

3.5 volt halogen pneumatic otoscope, a product used by physicians to examine a patient’s ears.The
multilevel exploded bill of materials for this product is shown in Figure 2.1. Notice that thetop-level
assemblies are indicated by the digit 1 in the first column of the figure, the second-levelsubassemblies
by 0.2, third level by ..3, and so on. Also shown are the part numbers, their descrip-tion, and quantity
used per unit of the final product—the 3.5 volt halogen otoscope. Purchased parts

have a part number with M or 9 as the first character.

2.2.2ASSEMBLYCHARTS

To understand the flow of material in a factory, layout analysts use a variety of charts and diagrams.The
assembly chart is a companion chart to the indented bill of materials. It tells us how subassembliesand
components manufactured separately at various places and stages of manufacturing are assembledto
make the end product. An assembly chart for a valve actuator is shown in Figure 2.2 and its bill
ofmaterials in Figure 2.3.
Assembly charts are useful in scheduling production activities. If the due date for an end productand the
time required to procure or manufacture a component or subassembly are known, analystscan work
backward from the due date to determine when orders for procurement or production areto be
released for each component. The time required to procure or manufacture a component is theelapsed
time from when the purchase or production order is released until the component is received.

2.2.3ENGINEERINGDRAWING

In this section, we examine some details of the body assembly of the 3.5 volt halogen
otoscopeintroduced in Section 2.3.1. The engineering drawing of one of the otoscope’s assemblies
(thelight pipe assembly with a part code of 217024-1) is shown in Figure 2.4. This engineeringdrawing
assists the manufacturing or process engineer in determining the processes necessaryfor manufacturing
the product. The drawing also provides some additional notes (not shown)for various operations that
are indicated by circled numbers. These are notes on special toler-ances, material used, minimum
functional capabilities of the finished product (e.g., the light pipeassembly must transmit at least 80% of
usable light output); filling material to be used, if any;minimum dimensions before certain operations
such as bending; and what to do in the event ofdeformation or cracks (e.g., reject, rework, correct
process, but allow current batch to proceed).The drawing also gives information on where, when, and
by whom the part was done, as wellas its number.

In addition to the engineering drawing and bill of materials, a layout analyst may have anexploded view
of the drawing of the end product. This diagram provides the same information asthe bill of materials
but presented pictorially. Such a drawing is most useful for parts with fewersubassemblies. As the
number of subassemblies and assemblies increases, the exploded diagram

showing all the individual component drawings may be difficult to read.

2.2.4ROUTESHEET

A route sheet specifies the operations required for a part and the sequence of the machines visited
bythe part for these operations. It may also provide the setup time for each operation at each
machine,processing times, and labor time. A route sheet for the body assembly mentioned in Section
2.2.3 isshown in Figure 2.5. The information contained in a route sheet may vary slightly from
companyto company, but it includes two key pieces of information: the machines visited and the
sequence

2.2.5OPERATIONPROCESSCHART

The operation process chart is like an assembly chart except that it is more detailed. It
providesinformation on the processes and time required for each component. This chart uses symbols
fromthe American Society of Mechanical Engineers (ASME) standards to represent each
productionactivity. The five basic activities in manufacturing are listed with their symbols in Figure 2.6.

Anoperationis defined as an activity in which one of the characteristics of an item is changed.Examples

are drilling a hole in a part and filling out an order form.Inspection, as the name indi-cates, is an activity
in which the characteristics of an item are compared with an established stan-dard. Checking the
diameter of a hole in a part to see whether it is within the allowed tolerance andverifying an order form
are examples of inspection activities.Transportationinvolves movementof material from one location to
another.Storagerefers to an activity in which an item is kept ata designated place until authorization is
received for it to be moved. For example, tools are storedin a tool crib and raw materials are stored in
the receiving area until authorization for their releaseto the shop floor is received.Delayis an activity in
which the item is waiting for its next plannedaction to take place. Items received from a supplier may be
waiting at the staging area for someone toinspect the packing slip to ensure that they were received in
the right quantities and without damage.A suitcase at an airport baggage claim area circling on a
conveyor waiting to be picked up by itsowner is another example of a delay activity.

An operation process chart for the 3.5 volt halogen pneumatic otoscope (its bill of materi-als appears in
Figure 2.1) is shown in Figure 2.7. Some of the purchased parts and assemblies inFigure 2.1 are not
included in the operation process chart in Figure 2.7. Though not shown, otherinformation—such as
time for each operation, number of drilling, turning, or other operations—may be included in the
operation process chart.

2.3EQUIPMENT SELECTION*

The key to success of automated manufacturing systems is proper selection and effective use
ofproduction, service, and auxiliary equipment. The proper use of these resources has
significantlyincreased productivity. In recent years, the manufacturing industry has witnessed significant
devel-opments. The increase in the number and types of automated systems in the industry is a
testamentto the developments taking place. However, these developments have taken place at the
expenseof system design problems. Design problems have become even more complex, and designers
andusers of automated manufacturing systems have developed new tools to cope with these
problems.Manufacturing system design, a hierarchical combination of these problems, is therefore a
com-plex activity. It involves solving a number of problems arranged in a hierarchy. At times, it may
benecessary to backtrack to higher level problems. The two-level hierarchical approach, illustratedin
Figure 2.8, involves solution of the following two problems: production and material handlingequipment
selection and facility layout (Kusiak and Heragu, 1988). For cellular manufacturing sys-tems (discussed
further in Chapter 6), another approach is suggested (Figure 2.9). Group technology

(GT) provides the basis for the four-level hierarchical approach to design cellular manufacturingsystems.
It should be emphasized that the four-level hierarchical approach is generally suitable foronly
manufacturing systems that produce a large number of components and for which manufactur-ing
activities can be decomposed into almost mutually independent cells. For mass production orcontinuous
production systems, such an approach may be unsuitable.

Before making layout decisions, analysts must know the requiredtypesandquantitiesof produc-tion and
support equipment. This problem is sometimes referred to as the machine requirementsproblem or
equipment selection problem as illustrated in Figures 2.8 and 2.9. To determine therequired types of
equipment, one must first know what types of basic production processes arerequired (e.g., forging,
casting, forming, metal removal, fabricating, drilling holes, planing sur-faces, finishing surfaces, and so
on) and then match the available equipment with these processes.For example, a forge is used for
forging operations; cold rolling or extruding machines are used forforming processes; hobbing machines
are suitable for gear cutting operations; mechanical shearsand numerically controlled punch presses are
useful for metal forming operations; radial drillpresses or boring machines are suitable for drilling and
enlarging holes; a planer is required for
planing surfaces; a sanding machine, honer, centerless grinder, and rotary surface grinder are usedfor
surface finishing; and milling machines are required for certain types of metal removal suchas facing and
slotting. Production equipment is typically classified into various types based on itsfunction. Some
equipment types are lathes, horizontal milling machines, vertical milling machines,planers, shaping
machines, and vertical turret lathes.

By quantity of production equipment, we mean the number of pieces of each type of

equipmentavailable for production purposes. A company may have available three lathes, four
horizontal mill-ing machines, two vertical milling machines, one planer, one shaping machine, and two
vertical tur-ret lathes. Each type of equipment may require some support facilities as well. For instance,
forgingequipment will require heat treatment stations and painting stations will require drying
equipment.The type and quantity of support and auxiliary equipment are determined by the type of
produc-tion equipment. In fact, some types of production equipment are sold with the auxiliary
equipment.

While exact numbers are not necessary, design analysts must at least have a rough idea of whattypes of
machines are capable of meeting processing needs, what support facilities are required,
andapproximately how many of these are needed. Automated production equipment, though capable
of performing a variety of operations, is typically expensive. Thus, the production equipment
selectionproblem is critical in the design of a system. By determining the right quantities and type of
equip-ment, one can achieve the following benefits (Heragu and Kusiak, 1987):

•Make efficient use of capital equipment purchase budget.

•Make efficient use of maintenance and operating budgets.

•Increase machine utilization.

•Make efficient use of available space, as fewer equipment sufficient to meet production

now and in the future are purchased.

2.3.1TRADITIONALMODEL

There are several models for determining the type and quantity of required production equipment.In
this section, we discuss traditional and queuing-based approaches.

Traditional approaches are very simple. Based on the number of products, desired productionrate,
production efficiency of the equipment required to process the products, standard processingtimes for
the operations required on the products, and time for which machines are available, wecan develop a
simple formula to determine the number of production equipment required. One such

formula originally from Shubin and Madeheim (1951) is presented below. It uses this notation:

P Desired production rate in units per day

he preceding analysis can be easily extended when we have more than one stage of production

(Miller and Schmidt, 1984). A backward analysis is used to determine the desired production rateat each
stage. Based on the number of good units required at the output of the last production stage,we can
determine the number of units that must enter this last stage. This depends on the percent-
age of scrap at the last stage of operation. For example, ifSlis the scrap rate at stagel, expressed asa
fraction,Nolis the number of good units required at the output of stagel, andNilis the number of

units required at the input of stagel, then the number of good units required at the output of stagel

is equal to the number of input units minus scrap; that is,Nol=Nil−SlNil. Therefore,

Performing a backward analysis for each stage of operation, we can determine the number ofunits of
raw material required to produce the desired number of good finished units. Formula (2.2)assumes that
an item not processed within allowed tolerances cannot be used further and must bescrapped. In many
situations, units that do not conform to product specifications may be reworked.In that case, formula
(2.2) can be modified to account for rework. This is left as Exercise 12 to thereader at the end of the
chapter.

Although traditional approaches are simple, they have certain drawbacks. For example, it is dif-ficult to
handle the case when more than one product is processed at a given machine or workstation.Also,
traditional approaches do not take into consideration budget, overtime, floor space, and
otherconstraints. When such constraints are imposed, mathematical programming approaches are
useful.

Another traditional approach uses time standards to determine the quantities of machines of

each type. This approach is illustrated using Example 2.1.

Example 2.1

Consider a simple job shop manufacturing system that makes threeclass Aproducts requiringthree types
of machines. The three products include seven parts shown in Table 2.1. Table 2.1 alsoshows the time
standards in units per hour. Assuming an hour has only 55 minutes of productivetime (5 minutes is lost
due to operator or machine unavailability and machine downtime), 12,000units of each part are to be
made per day, and the job shop operates only one 8-hour shift per day,determine the number of units
of machine types A, B, and C that would be required to achieve

the desired production rate.

Solution

Dividing the values in Table 2.1 by 55, we get the time standards expressed in minutes per unit inTable
2.2. Ignoring the setup time, we add up the time taken by all the seven parts on each machinetype as
shown in the last column of Table 2.2. Multiplying these values by 12,000 and dividing by 440,we find
that we need 4.9 units of machine A, 5.85 units of machine B, and 4.3 units of machine C.

Rounding up these numbers gives us 5, 6, and 5 units of machine types A, B, and C, respectively.

2.3.2QUEUINGMODEL

The traditional approach is a static model in the sense that it assumes all parameters are known
with100% certainty. It assumes that each part takes the same amount of time to produce, unit after
unit.Machine breakdowns are taken into consideration rather crudely by reducing the time available on
amachine by a certain percentage. A better method to take into consideration the problem dynamics
isto use queuing models to determine the number of units of each machine type required. In
Example2.2, we see how a myopic approach such as the traditional approach provides erroneous results
espe-cially when there is significant variability in one or more of the parameters.

Example 2.2

Manufacturing engineers at the Widget Manufacturing Company recently convinced their man-ager to
purchase a more expensive but flexible machine that can do multiple operations simulta-neously. The
rate at which parts arrived at the machine that was replaced by the flexible machinesfollows a Poisson
process with a mean of 10 parts per hour. The service rate of the flexiblemachine is 15 units per hour
compared with the 11 units per hour service rate of the machine itreplaced. (All service times follow an
exponential distribution.) The engineers and manager wereconvinced that the company would have
sufficient capacity to meet higher levels of demand, butjust after 2 months of purchasing the machines
it turned out that the input queue to the flexiblemachine was excessively long. Part flow times at this
station were so long that the flexible machinebecame a severe bottleneck. The engineers noticed that
more parts were routed through thismachine, and that the parts’ arrival rate to the flexible machines
had increased from 10 units perhour to about 14 units per hour, but were puzzled why the part flow
time at this station doubledfrom 30 minutes to 1 hour and the work-in-process (WIP) inventory
increased nearly threefoldfrom 5 to 14 when the arrival rate only increased 40%. Use a queuing model
to justify the results

observed at Widget Manufacturing Company.

Solution

The problem can be modeled as an M/M/1 queuing model. Using results from the M/M/1 model

in Chapter 13, we get the results shown in Table 2.3.

The queuing model explains very well why the flow time has doubled and the WIP hasincreased
threefold. The traditional approach neglects to consider variability, and if the variability

in the part interarrival or service times is high, as is the case when these random variables follow

an exponential distribution, it has a dramatic impact on the WIP and flow times.

2.4PERSONNEL REQUIREMENT ANALYSIS

Along with the production and material handling equipment selection problem, another problemneeds
to be addressed: employee requirements. Simple models provide a basis for determining theactual
number of employees needed by considering factors such as whether the labor force is union-ized or
nonunionized, level of automation, production rate, management policies on subcontractingand
overtimes, salary rates in the area, health insurance rates, and rules set by the OSHA.

The number of employees required in a new facility is typically proportional to the volume and

variety of production. For example, if

n Number of types of operations

OiAggregate number of operations of typeirequired on all the pseudo (or real) products
manufactured per day

The factorηin Equation 2.3 adjusts the available production time to account for time lost to

maintenance, machine failure or repair, and worker/material/machine/material handling

systemunavailability. Many assumptions made in Equation 2.3 may not hold in practice. For example,
themodel implicitly assumes that the same operations are performed day after day and that
machinesetup times are dependent on the volume of production. Furthermore, the model determines
onlythe required number of manufacturing employees and ignores the number of
nonmanufacturingworkers. Generally, as production activity increases, the number of
nonmanufacturing workersrequired also increases because companies that have a large workforce must
provide additionalservices—security, janitorial, food, physical recreation, secretarial, and so on. To
provide theseservices, separate departments such as security department, visitor information center,
cafeteria,and janitorial department must be formed and adequately staffed. Simple rules of thumb are
used todetermine the number of support personnel, such as 1 secretary for every 20 production
employeesand 1 secretary for each executive.

Personnel decisions impact design of support departments such as parking lot, restrooms, lockerrooms,
and cafeteria. Governmental regulations and company policy specify these support depart-ments. For
example, local, state, and federal government regulations may dictate the location ofparking lots, fire
exits, location, and number of restrooms. Productivity and cost considerations maydictate whether or
not cafeteria service is provided. Although a company may incur more fixed costsas a result of providing
cafeteria service due to increased heating and maintenance, it may increaseproductivity because
workers dine at the same place and have a chance to talk about work-relatedproblems. A company
cafeteria may reduce lunch break times and minimize the problem of workersreturning late.

As in the equipment selection problem, let us now use a stochastic (queuing) model to capture the

impact of variability and thus help in determining the number of employees required.

Example 2.3

The American Automobile Drivers’ Association (AADA) is the only office serving customers inNew York’s
greater capital district area. Ahead of the busy summer season, the office managerwants to hire
additional staff members to help provide these services to members effectively—summer travel
planning, membership renewal, airline, hotel, cruise booking, and other travel-related services. It is
anticipated that each customer typically requires 10 minutes of service timeand customers arrive at the
rate of one customer every 3 minutes. The arrival process is Poissonand the service times are
exponentially distributed. Determine how many staff members arerequired if the average wages and
benefits per staff member are $20 per hour and thecostto

AADA for every hour that a customer waits to be served is $40.

Solution

We use an M/M/m model to formulate the problem. Using the shortcut formula due to Sakasegawa
(1977) for determining the time spent in queue, we find the results shown in Table 2.4 with four, five,
and six staff members. Based on the hourly costs (calculated and shown in Table 2.4), it isclear that
AADA must employ five staff members. Values in the hourly cost row were obtained

by adding the labor cost and the waiting cost per hour. For example, with five staff members, the

labor cost is 5*$20 = $100 and the waiting cost is 0.0261*20*$40 = $20.85.

2.5SPACE REQUIREMENT AND AVAILABILITY

Other factors that need to be considered in developing a layout are the requirement and availabilityof
space. By understanding the flow between machines or the interaction between departments,a designer
can determine the space necessary to locate machines. Generally, the shape, size, andspace
requirement for each department are found by actually measuring the dimensions of theequipment
within the department and obtaining space requirement information from experiencedpersonnel on the
shop floor. To obtain machine footprint dimensions, one could also use a layoutgenerated using
computer-aided design (CAD) software, if one is available.

When determining the space required for laying out departments, the analyst must allow roomfor
operator movement, loading and unloading of parts, a buffer storage area for incoming materialand
WIP, and shelves for storage of machine accessories and tools. Again, simple rules of thumbare used to
determine the extra space that is required. In some companies, 3 or 4 feet is added to thelength and
width of each machine or workstation. In others, the additional space is calculated as apercentage of the
actual area occupied by a workstation, typically 200%–300%.

The preferred method of determining extra space is to calculate the space required for the work-station,
auxiliary equipment, operator space, incoming material and WIP space, and other addi-tional space
(e.g., load and unload access, material handling carrier clearance) and add the separatequantities to
determine the total space required. This method is illustrated for a manufacturing cellin Figure 2.10.
Basically, for each department (department names are listed in column 1), we enterthe production
equipment name and code in columns 2 and 3.* We also enter the length and widthof each production
equipment (columns 4 and 5) and use this information to calculate the arearequired by the equipment
(column 6). We then determine the space required for the correspondingauxiliary equipment,
operators, and material (columns 7–9) and add these quantities in column 10.The space for auxiliary
equipment is usually determined by calculating actual space required or byestimating it as a percentage
of space required by production equipment. We then multiply the totalspace by a factor (entered in
column 11), typically 150%, to allow for material handling equipmenttracks and aisles, storage of WIP
during peak operating periods, space required for maintenanceoperations, and anticipated increase in
production volumes in the near future. The result is the totalarea required for each machine type
(column 12). Multiplying this value by the number of units ofmachines of the corresponding type
(entered in column 13) provides the space required for eachmachine type.

Designers must also allow space for future expansion and growth. In general, gauging whetherand when
expansion and growth will take place is rather difficult. In fact, in the present industrialclimate, many
manufacturing companies in the United States are downsizing production activities,facilities, and
personnel. Not providing room for expansion while designing departments may provecostly, however, if
future growth in the production activity calls for employing more equipment andpeople. Of course,
providing too much room for expansion also has its disadvantages such as higherinvestment and leasing
costs as well as heating and cooling costs. Thus, a facility designer has tofind the right balance between
providing too much and too little space for future expansion.

Although much of the discussion in this section has focused on horizontal space, determining thevertical
space requirement is also important, especially if overhead material handling devices are to

be used or commodities are to be stored, as in a warehouse.

2.6SUMMARY

In this chapter, we discussed the importance of product analysis and its use in developing some ofthe
basic data required for facility design. (The remaining data are discussed in the next chapter.)Although
some of the discussion may not be applicable to office layout or other service organizationdesign, the
discussion nevertheless points out the factors that need to be considered before a com-plete design is
developed. Engineering drawings and bill of materials of the products manufacturedtell us what
processes are needed. Using analysis tools such as the assembly chart, operation processchart, and
route sheets, we get a rough idea of how the material flow takes place. Knowing whatgeneral
manufacturing processes are required helps us determine the types and quantities of pro-duction
equipment. Mathematical models are used for this purpose. We also discussed methods ofdetermining
space required for production and auxiliary equipment. Simple models for determiningthe number of
employees were also provided.

In addition to the traditional approach to determine the required number of employees andequipment,
queuing models may also be used. For example, a queuing model may be used todetermine the number
of employees to hire in a shipping department to fill out orders. Sometimesdata required for queuing
models may be too time consuming to collect or facility designers maybe unaware of analytical models.
For these reasons, simple formulae such as the one in Section 2.6or rules of thumb tend to be used in
practice. More and more companies are recognizing the value

of analytical models, however. They are gradually gaining acceptance in industry.

2.7REVIEW QUESTIONS AND EXERCISES

1.Get the engineering drawing and bill of materials for a single product from a local manufactur-

ing company. Using the engineering drawing and bill of materials, prepare a list of assembliesand
subassemblies that are

(a)Manufactured within the plant

(b)Purchased from an outside vendor or obtained from a supplier company

For each assembly and subassembly manufactured within the plant, obtain a route sheet. Deleteall the
information not relevant for layout planning purposes. In other words, retain only themachines visited
(and the sequence) for each assembly/subassembly.

2.Draw the assembly chart for the following products:

(a)Pedestal fan
(b)Garden hose hanger

(c)Bicycle

(d)Stereo rack

(e)Computer desk

(f)Pedestal lamp

3.Show the indented bill of materials for the products in Exercise 2.

Consult additional sources in your library (for example, Groover, 1996) and list the various

production processes and the type of available equipment for each. (Examples: gear cuttingprocess,
hobbing machine; hole drilling, drill press; and so on.)

5.In what ways are the equipment selection and facility layout problems related? Explain.

6.Hosreel, Inc., a manufacturer of a plastic garden hose reel, is contemplating the purchase of a

new type of injection molding equipment that can produce the end product by itself. In otherwords, no
additional operations or equipment is needed. The company wants to produce 1000units per day and
the machine efficiency is 99%. Assuming that each reel can be manufacturedin 57 seconds, determine
how many pieces of the new injection molding equipment Hosreelmust purchase if it operates on only
one 8-hour shift per day.

7.If the injection molding equipment in Exercise 6 has a scrap rate of 10%, would the answer to

Exercise 6 change? Why or why not? Show calculations to support your answer.

8.Assume that 30% of thescrapcoming from the injection molding equipment in Exercise 6 can

be reworked to yield usable end products, i.e., hose reel. Appropriately modify formula (2.1) anduse it to
determine how many pieces of the injection molding equipment are needed. Is the newanswer different
from that obtained in Exercise 7? Explain.

9.The route sheet for a handle used in medical diagnostic equipment is given in Table 2.5. Also

given are the desired hourly output and scrap rate for each machine. Assuming that each machinehas
90% manufacturing efficiency, determine (1) the required input and (2) how many machinesof each type
Mediquip Company, Inc., must purchase if the production rate at the lathe, drill,knurl, and buff is 6, 10,
15, and 18 units per hour respectively.

10.A manufacturer is contemplating the purchase of a punch press. Approximately 10,000 units are

processed on the press each day and the machine efficiency is 95%. Assuming that each punch-ing
operation takes 10 seconds, determine how many pieces of the press must be purchased ifthe company
operates two 8-hour shifts per day.

11.If the press in Exercise 10 has a scrap rate of 10%, would the answer to Exercise 10 change?

Why or why not? Show calculations to support your answer.

12.Assume that 70% of thescrapcoming from the press in Exercise 10 can be reworked.

Appropriately modify formula (2.1) and use it to determine the quantities of punch pressesneeded. Is
the new answer different from that obtained in Exercise 11? Explain.

13.Parries Confectionery Company is considering the introduction of a new toffee. It requires four

processes: A, B, C, and D in sequence. The equipment required for each process is available inthe
company now and is dedicated to the production of another type of candy. Although somecapacity is
available on all the equipment types, management is not sure whether they need tobuy additional
pieces. To aid management in decision making, the following information isavailable:

(a)The four pieces of equipment—one for each type—are available 50% of the time.

(b)The company operates one shift per day (8 hours) and 250 days per year.

(c)If the company decides to produce toffee, then it must allocate half a day for candy produc-

tion and the remaining half day for toffee.

(d)The time required for equipment setup, cleaning, and maintenance andscrap rate(i.e.,

spillage, production items that do not meet shape and other quality standards and hencemust be
discarded, etc.) for each process is given in Table 2.6.

(e)The demand for toffee is expected to be 1,000,000 per year. If 1,000,000 toffees are required

to be made per year, determine how many input and output units are required for eachprocess.

(f)Determine whether the company can produce the new toffee with the available equipment.

If not, how many pieces of each equipment must Parries purchase? Show your calculations.

(g)The company can operate half a second shift by using 15 employees who must be paid an

overtime salary of $20 per hour. The overhead expenses are estimated to be $10,000. It isknown that
equipment for processes A, B, C, and D cost $50,000, $200,000, $100,000, and$100,000, respectively. Is
it better to operate the (half) second shift or purchase necessaryadditional equipment. Explain your
answer.

14.Repeat Exercise 13 assuming the four types of equipment are available 70% of the time.

15.Hosreel, Inc., a manufacturer of a plastic garden hose reel, is contemplating the purchase of a

new type of injection molding equipment that can produce the end product by itself. In otherwords, no
additional operations or equipment is needed. The parts arrive at the injection mold-ing machine at the
rate of 125 units per hour. Assuming that each reel can be manufacturedin 57 seconds, determine how
many pieces of the new injection molding equipment Hosreelmust purchase if it operates on only one 8-
hour shift per day. Assume that the arrival process isPoisson and that the service times are exponentially
distributed.

16.How would your answer to Exercise 15 change if the service times followed some known but
general distribution with a mean of 57 seconds and standard deviation equal to 5 seconds.Explain.

17.An employee working for a state office processes incorporation applications from individual

companies. Until last year, the employee used to receive an average of 2.5 forms per weekand she could
process these at the rate of 5 forms per week. This year, the average numberof forms received nearly
doubled to 4.9 forms a week. The employee’s manager noticed thatthe number of applications at the
employee’s desk increased from about one (on average dur-ing the last year) to about 25 (this year). He
was puzzled why the backlog increased 25 timeswhen the workload had only doubled. Use queuing
theory to show that the employee wasdiligently performing her duties. What should be done to bring
back the backlog to an averageof one form?*

18.CellMan, Inc., has three manufacturing cells, each of which houses a variety of manufacturing

equipment. One of the cells has six machines. Data pertaining to these six machines are pro-vided in
Table 2.7.

(a)Add 10 feet to each side of the first two machine types and 8 feet to the remaining to

allow for operator access, material handling carrier access, in-process material storage, etc.Determine
the total space required.

(b)Prepare a table similar to the one shown in Table 2.5, assuming that for each equipment type

(i)Auxiliary equipment dimensions are 10% of those of the primary equipment.

(ii)Operator area is 8% of that required for auxiliary and primary equipment.

(iii)Material storage area is 20% of the actual area required for the primary equipment.

(iv)Additional allowance is 80% of the areas determined in (i), (ii), and (iii).