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charts & higher possibility of false alarm (2) For a 3-sigma chart,
1. Process Analysis definitions: (1) capacity of resource: 한 resource probability of false alarm is less than 0.3% (3) 2-sigma chart has 0.5%
당 이론적으로 도달할 수 있는 생산성 (written in units per time) (2) capacity of 16. Process Capability Index: CL 들이 항상 SL 안에 들어와야함
process: 어떤 process 가 이론적으로 도달할 수 있는 생산성 = min (cor 1, cor2,
Min {0.889,1.333}: this
cor3, …) (3) flow rate / throughput rate: 프로세스의 실제 생산성; actual suggests that the UCL
exceeded USL
productivity = min (capacity of process, input rate) (4) flow time /
throughput time: 평균적으로 상품 한개가 프로세스를 통과하는데 총 걸리는 시 How to improve from 2-
간 = combination of each resource’s process time = inventory * arrival rate sigma to 3-sigma: (1)
change the specification
(5) cycle time: time between consecutive units leaving the process; how limits with your customer
long it takes to process each unit = 1 / flow rate (6) takt time: 수요를 맞추 (2) reduce sigma of the
기 위해 유지해야하는 최소한의 생산성 = available work hours / customer
demand (6) utilization = cycle time / takt time (7) number of workers At least 99.73% within specification limits
17. Service
needed = flow time / takt time (8) bottleneck: unit with the lowest capacity Operation: (1)
or longest process time; 2. Little’s Law: (1) Average throughput time = capacity of service
inventory / arrival rate (units per time) = inventory / flow rate; (2) days of cannot be stored or
inventory (period of time an inventory stays in the system until it is sold) = carried over (2)
inventory / costs of goods sold ($/year); (3) inventory turnover (number of what is the root cause of waiting: variation (3) variation of arrival:
times an inventory replenishes in a year) = costs of goods sold / inventory; Peak (rush) and non-peak time, advance booking, fast pass, price
3. Inventory buildup diagram: discount for off-peak hours (4) variation of service times: express check-
out line, toll tags, etc. 18. Queuing Model: (1) exponential arrival time
= l (customers/hour); (2) exponential service time: service rate at each
server = µ (customers/hour) (3) number of servers = s; (4) server
utilization = l / µ (*mind the units)
Input – capacity

19. formulae for M/M/1: (1) condition: l < µ; (2) utilization = r = l / µ;

(3) probability of exactly n customers in the system = rn * (1-r); (3)
mean number of customers in the system: Ls = l / (µ-l) = r /(1-r); (4)
l1 r1
mean number of customers in the queue: Lq = = (5) mean
µ (µ(l) '(r
time in system: Ws = Ls / l = ; (6) mean time in the queue: Wq =
4. Steps to improve the process: (1) focus on improving bottleneck (2) r
Lq / l = 20. Applying the Little’s Law: Ws = Ls / l; Wq = Lq / l;
balance the process by letting non-bottleneck resource sharing the µ(l
workload of others (3) further balance the process by slowing down non-
bottleneck resource 5. Break-even Analysis: FC+VC * BEQ = P * BEQ; 21. How are Wq and Ws related to each other? (1) Ws * r = Wq; (2)
BEQ = FC/(P-VC) 6. Decision Tree: (1) expected value = sum of (revenue Ws should be always greater than Wq because Ws is the sum of Wq and
– cost)*(probability) for each decision (2) value of perfect information = other waitings; (3) Additional amount of time spent on other areas: 1/µ;
possibility A 의 최대 profit * 확률 + possibility B 의 최대 profit * 확률 (and so hence, Ws = Wq + (1/µ);
on) ­ 최적의 선택의 profit * 확률 7. Product Mix: (1) Optimal solution 구하는
법: 먼저 각 부등식을 등식으로 바꾸고 각 factor 을 0 으로 설정해 x 와 y axis 에 plot 해 일직선 22. Formulae for M/M/S queuing model: (1) finding Lq: 테이블에서 (a)
을 긋는다. 그런 다음 overlapped area 중 제일 바깥쪽의 꼭짓점이 optimal solution; 이 솔루션 number of service channels & (b) l / µ 에 상응하는 숫자를 찾으면 됨. (2)
은 intersect 하는 두 function 을 이차방정식으로 풀면 됨. (2) binding constraints: 2µ
condition: l < sµ; (3) probability of waiting in line: Pw = Lq ( − 1); (4)
used all resources available; slack = 0; result might change if capacity is
mean number of customers in the system: Ls = Lq + l / µ; (5) mean
added here (3) non-binding constraints: slack exists, optimal solution
time in system: Ws = Ls / l; (6) mean time in queue: Wq = Lq / l;
does not change; (4) shadow price: marginal benefit resulted from
increasing capacity on the resource; (5) sensitivity analysis: if the RHS
23. Queuing system cost tradeoff: Let:
increases by D (=< allowable increase) ten the optimal objective value
– Cw = cost of waiting per customer per hour
increases by shadow price * D 8. Quality Control: (1) root cause of – Lq = mean number of waiting customers
quality issue: variability; (2) common cause variation: acceptable, due – Cs = cost of service per server per hour
to randomness à in control (3) assignable variation: problems exist due – S = number of servers
to systemic deviation in the results à out of control 9. Quality Total cost / hour = service cost + customer waiting cost = Cs*s + Cw*Lq
Management: is the process in control? à acceptance sampling and
statistical process control; does the product meet quality standards? à
24. Queue Pooling: (1) common queue (pooling): l1 = l; µ1 = µ; s1 = s
specification and process capability index 10. acceptance sampling and
(2) separate queues: l2 = l/s; µ2 = µ; s2 = 1; (3) Key takeaways: pooling
process control: (1) Terms: sample size (n); acceptance number (c); the
resource is more efficient (faster) because no worker is left idle; though its
number of defectives in sample (d); if d <= c, accept the lot; if reject, you
line looks longer
either (a) return lot to the supplier or (b) do 100% inspection (2) types of
errors: (a) consumer’s risk: accepting a lot that is defective; type II (b)
(b) producer’s risk: rejecting a good lot; type I (a) (3) acceptance quality 1. This is the flowchart of an underwriting process in an insurance
level (AQL): acceptable fraction defective in a lot – quality is considered company. A clerk takes 30 minutes to review and distribute a request. An
high if the percentage of defective is no more than a specified level (4) Lot underwriter takes 40 minutes to evaluate and a rater takes 48 minutes to
tolerance percent defective (LTPD): maximum fraction defective rate the request. Finally, a writer needs 50 minutes to finalize the policy
accepted in a lot – quality is considered low if the percentage of defective with the customer. Can this process have a bottleneck? If so, which activity
is higher than LTPD; (5) Finding x/n using above index: (a) LTPD/AQL could be the bottleneck? What if only 50% of the applications are rejected
= number #; (b) find, in the table (where it indicates LTPD/AQL), find a
by the customers (instead of the current 80%)?
number is equal to or just above the number #, to identify c; (c) from
n(AQL), find n; 11. P-chart: (1) p-bar: average sample defect rate; (2)
!"#$ ('(!"#$)
standard deviation of sample defect rate = root [ ]; (3)
*(+#,!-. +/0.)
control limits: UCL = pbar + 3stv; LCL = pbar – 3stv * used to describe
discrete data; 3-sigma; 12. X-bar chart: (1) xbar: sample average among
all measurements (2) x-double bar: average of the averages (3) R: the
difference between the largest and smallest in the sample (4) Rbar:
average of ranges across samples (= same role as the sigma) (5) A2 =
use the number of observation (sample groups) to find A2 in the table; (6)
control limits: UCL = x-double bar + A2 * R-bar; LCL = x-double bar - A2
* R-bar 13. Determining control limits: (1) control limits are determined
by sigma (and Z); small Z values mean: lower control limit, more sensitive