Production Planning and Control_study Material

June 10, 2016 | Author: Mithun Ravichandran | Category: N/A
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UNIT – I PART – A 1. Define Production Planning and Control. Production planning and control can be defined as the “direction and coordination of firms resources towards attaining the prefixed goals”. Production planning and control helps to achieve uninterrupted flow of materials through production line by making available the materials at right time and required quantity. 2. What is the need for PPC? 1. Effective utilization of firms resources. 2. To achieve the production objectives with respect to quality, quantity, cost and timeliness of delivery. 3. To obtain the uninterrupted production flow in order to meet customers varied demand with respect to quality and committed delivery schedule. 4. To help the company to supply a good quality products to the customer on the continuous basis at competitive rates. 3. What are the objectives of PPC? 1. Systematic Planning of production activities to achieve the highest efficiency in production of goods / services. 2. To organize the production facilities like machines, men, etc., to achieve stated production objectives w.r.t. quantity and quality time and cost. 3. Optimum Scheduling of resources. 4. Coordinate with other departments relating to production to achieve regular balanced and uninterrupted production flow. 5. To conform to delivery commitments. 6. Materials planning and control. 7. To be able to make adjustments due to changes in demand and rush orders.

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4. What is Process Planning or Routing? Process Planning (Routing): It is concerned with selection of path or route which the raw material should follow to get transformed into finished product. The duties include, a) Fixation of path of travel giving due consideration to layout. b) Breaking down of operations to define each operation in detail. c) Deciding the set up time and process time for each operation. 5. What is Loading and Scheduling? Loading and Scheduling: Scheduling is concerned with preparation of machine loads and fixation of starting and completion dates for each of the operations. Machines have to be loaded according to their capability of performing the given task and according to their capacity. Thus the duties include: a) Loading the machines as per their capability and capacity. b) Determining the start and completion times for each operation. c) To coordinate with sales department regarding delivery schedules. 6. What is meant by dispatching? Dispatching: This is the execution phase of planning. It is the process of setting production activities in motion through release of orders and instructions. It authorizes the start of production activities by releasing materials, components, tools, fixtures and instruction sheets to the operator. 7. What is meant by Expediting? Expediting: This is the control tool that keeps a close observation on the progress of the work. It is a logical step after dispatching which is called “follow-up” or “progress”. It coordinates extensively to execute the production plan. Progressing function can be divided into three parts, i.e., follow up of materials, follow up of work-in-process and follow up of assembly. 8. What is meant by Evaluation? Evaluation: This stage though neglected is a crucial to the improvement of productive efficiency. A thorough analysis of all the factors influencing the production planning and control helps to identify the weak spots and the corrective action with respect to preplanning and planning will be VEL TECH

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effected by a feedback. The success of this step depends on the communication, data and information gathering and analysis. 9. What is meant by Centralized Planning? In centralized planning the functions of production planning are controlled by a staff specialist. Centralized planning is more effective in case of multi-product, multi-plant organizations and it takes away the burden of planning from line function to allow them to concentrate on manufacturing. 10. What is meant by Decentralized Planning? The decentralized planning involves the line staff in planning the production and this is going to take away the majority of their time in performing functions. 11. What is Job Shop Production? Job Shop Production / industries are characterized by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of job shop is low volume and high variety of products. 12. Mention any two characteristics of Batch Production. i. Shorter production runs. ii. Plant and machinery set up is used for the production of items in a batch and set up required to be changed for processing next batch of items. iii. More number of set ups and hence higher set up cost. 13. Mention any two characteristics of Mass Production. i. Standardization of product and process sequence and hence line layout (product layout) is recommended. ii. Dedicated, special purpose machines (SPM) having higher production capabilities and output rates. iii. Large volumes of products. 14. What are the advantages of mass production? i. Higher rate of production with reduced cycle time. ii. Higher capacity utilization due to line balancing. VEL TECH

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iii. Less skilled operator can man the process.

15. What is meant by Introduction stage in Product Life Cycle (PLC)? Introduction Stage: This stage marks the introduction of the product into the market. It may be an entirely new product in the market or old product to the new market. The demand is low as customers do not know much about the product. So the organizations have to invest heavily in advertisement to make the product familiar to the customer. The volume of sales will be low and if proper care is not taken, the chances of product failures are high. 16. What is meant by growth in Product Life Cycle? Growth: Once the product passes through the introduction stage, the sales starts increasing because of the acceptability of the product by the customer. The sales growth rate is high because of limited or no competition. 17. What is meant by saturation in PLC? Maturity (Saturation): The sales growth reaches a point above which it will not grow. This is due to the market share taken by the competitor’s products. Thus, the sales will be maintained for some period. 18. What is meant by Decline in PLC? Decline: The competitors will enter the market with better product features, advanced technology and reduced prices. This is a threat to the very existence of product and sales start declining. If proper care like addition of special features, design changes are not incorporated there comes a time when the products are to be taken back from the market. 19. What is PRE-PRODUCTION in product design process? PRE-PRODUCTION: In large scale production, it is recommended to carryout a pilot run under production conditions. This will consist of completely assembling quantity of production from parts or components made by normal production method and using the same degree of skill in the operatives which will be found in the final manufacture. The pre-production run will ensure the quality, reliability of product as per the specifications before the production will be started on commercial basis. Thus the pre-production stage will check:

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1. Drawings. 2. Final tools 3. Production techniques and estimates 4. Specifications. 20. What is translation in product design process? TRANSLATION: At this stage the production engineering department is involved in design work. The manufacturing feasibility is tested at this stage. The final manufacturing drawings are prepared. 21. What is the purpose of advertising? Advertising serves many purposes such as:   

Providing general information about the general existence of product. Technical information like its functional utility and characteristics. Drawing attentions of the customers to special features targeted at the customer.

22. Define Durability. Durability refers to the length of the active life of the product under given working conditions. 23. Define Dependability. Dependability refers to the reliability with which the product serves its intended function. 24. What is Aesthetic aspect of a product? Aesthetic aspect refers to the “external look good” aspect of the product and it is concerned with moulding the final shape around the basic skeleton. Aesthetic aspects help the sell function of the product by attracting the customers and creating the first impression about the product. 25. Define Standardization. Standardization is a tool for variety reduction – “Standardization is a process of defining and applying the conditions necessary to ensure that given range of requirements can normally be met with a minimum of variety and in a reproducible and economic manner on the basis of the best current techniques”. VEL TECH

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26. Define Simplification. Simplification – “a process of reducing types of products within a definite range”. 27. Define Specialization. Specialization – “a process where in particular firms concentrate on the manufacture of the limited number of product types”. 28. What are the objectives of Standardization? Objective of Standardization  Interchangeability of parts, components, etc.  Keeping the variety minimum.  Helps to achieve a better control due to reduced variety. 29. What are the advantages of Simplification? The advantages of simplification (minimum variety) are: 1. 2. 3. 4.

Reduce inventories of materials and component parts. Reduced investments in plant and machinery. Reduced space requirements of storage. Ease of planning and control.

30. What are the essential steps in control activity? The essential steps in control activity are:   

Initiating the production Progressing Corrective action based upon the feedback and reporting back to the Production Planning.

31. What is Production Control? Thus production control reviews the progress of the work, and takes corrective steps in order to ensure that programmed production takes place. VEL TECH

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32. Explain some functions of PPC in job production. Job Production – Functions of PPC (a) Materials are purchased on receipt of the order. (b) Standard tools are stocked and special tools are either made in house or purchased from outside. (c) Process planning activity normally does not exist. Based upon the drawings and specification supervisor decides the work methods, fixes up the machines and estimates time for completion of the operation. 33. Explain some functions of PPC in Batch Production. Batch Production-Functions of PPC Functions are more complex. (i) Materials control and tools control are more important and systematic stock replenishment system is essential. (ii) Detailed route sheets (Process sheets) are prepared. (iii) Loading and scheduling are to be worked out with greater details. (iv) Progressing function is crucial as the detailed data is to be collected on the progress of the work. 34. Explain some functions of PPC in continuous production. Continuous Production – PPC Functions (a) Materials function is critical. (b) No tools control because of nature of the plant. (c) No process planning activity. (d) Scheduling is restricted to final quantity required. (e) Progressing requires only recording of final production quantity. 35. Define Breakeven Analysis. Break – even analysis establishes the relationship among the factors affecting profit. It indicates at what level cost and revenue are in equilibrium. It is a simple method of presenting to management the effect of changes in volume on profit. The detailed analysis of break – even data will help the management to understand the effect alternative decisions that convert costs from variable to fixed, the costs which increase sales volume and revenue. It is a powerful tool in evaluating alternative course of action. VEL TECH

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36. Mentions some assumptions in break even analysis. 1. Selling prices will remain constant at all sales levels (Quantity discounts are not available) 2. There is a linear relationship between sales volume and costs. 3. The costs are divided into two categories – Fixed costs, those costs which does not vary with volume (quantity) and variable costs will be varying in direct proportion to quantity. 4. Production and sales quantities are equal. (There is no inventory) 5. No other factors will influence the cost except the quantity 37. Define Break – Even Point. Break – even point refers to the level of sales (sales volume) at which the sales income (revenues) equal the total costs. It is a point at which the profit is zero. The quantities produced (sold) above break – even point result in profits and quantity below break-even point result in losses. The break – even point is reached when then fixed costs are completely recovered. 38. Define margin of safety in break even point (BEP). Margin of safety is the difference between the existing level of output and the level of output at BEP. Sales at BEP Margin of safety = 100 Sales 39. Define angle of incidence in BEP. This is an angle at which the sales line cuts the total cost line. The management aims at large angle of incidence because large angle of incidence indicates a high profit rate. A narrow angle will show that even fixed overheads are absorbed and relatively low rate of return. 40. Define cost volume profit analysis (CVP). Cost – volume – profit analysis is concerned with the effect of change in costs, volume and selling price on profits. It is a useful technique for planning the profits (budgeting) pricing decisions, sales mix decisions and production capacity decisions. Based upon the concept of fixed and variable costs, it is possible to determine break-even sales volume to calculate the sales level necessary to generate desired profits and answer many questions that arise during management planning.

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41. A manufacturing firm incurs a fixed cost of Rs.18000. The variable costs accounts Rs.8 per unit and selling price is Rs.13. Find the number of pieces to be produced to break – even. Solution: Fixed Cost (F) Variable cost (a) Selling price (b) BEP 

= = =

18000 8 Rs./unit 13 Rs./unit

Fixed Cost F 18000   Contribution b  a 13  8

=3600 pieces 42. Define cost in PPC. Cost is the amount of resources sacrificed or given up to achieve a specific objective which may be the acquisition of goods or services. Costs are always expressed in money terms, e.g., a manufacturer incurs costs in buying materials and in hiring labour, etc. 43. Define cost centre. Cost centre is defined as “a location or item of equilibrium, (or group of these) for which costs may be ascertained and used for the purpose of cost control”. 44. Classify cost. Classifications of costs are based on the following: 1. 2. 3. 4.

Natural characteristics (material, labour and overhead) Changes in activity of volume (fixed, variable, mixed) Degree of traceability to the product (direct cost, indirect cost) Costs for analytical and decision-making (sunk costs, opportunity costs, controllable and non-controllable, differential, imputed costs) 5. Other classifications (product cost, period cost)

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45. Define opportunity costs. Opportunity cost is defined as the benefits lost by rejecting the best competing alternative to the one chosen. The benefit lost is usually the net earnings of profits that might have been earned from the rejected alternative. 46. Define sunk costs. It is an expenditure for equipment or productive resources which has no economic relevance to the present decision – making process. It is a cost that has either already been incurred or is yet be incurred but will be same no matter which alternative course of action is selected. Generally, it is known as unavoidable cost.

47. Define controllable and non controllable cost. A controllable cost is the cost over which a manager has direct and complete decision authority, ie., the manager has complete control over these costs, e.g., indirect labour, cutting tool, lubricants. A cost which cannot be influenced by the action of the specified member of an organization is referred to an uncontrollable cost. 48. Define imputed costs. Imputed costs are costs not actually incurred in some transaction but which are relevant to the decision as they pertain to a particular situation. These costs do not enter into traditional accounting systems, e.g., interest on internally generated funds, rental value of company owned property, etc.

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PART – B 1. Explain in detail the functions of PPC. The main Functions of PPC 1. Materials function: Raw materials, finished parts and bought out components should be made available in required quantities and at required time to ensure the correct start and end for each operation resulting in uninterrupted production. The function includes the specification of materials (quality and quantity) delivery dates, variety reduction (standardization) procurement and make or buy decisions. 2. Machines and equipment: This function is related with the detailed analysis of available production facilities, equipment down time, maintenance policy procedure and schedules. Concerned with economy of jigs and fixtures, equipment availability. Thus, the duties include the analysis of facilities and making their availability with minimum down time because of breakdowns. 3. Methods: This function is concerned with the analysis of alternatives and selection of the best method with due consideration to constraints imposed. Developing specifications for processes is an important aspect of PPC and determination of sequence of operations. 4. Process Planning (Routing): It is concerned with selection of path or route which the raw material should follow to get transformed into finished product. The duties include, a. Fixation of path of travel giving due consideration to layout. b. Breaking down of operations to define each operation in detail. c. Deciding the set up time and process time for each operation. 5. Estimating: Once the overall method and sequence of operations is fixed and process sheet for each operation is available, then the operations times are estimated. This function is carried out using extensive analysis of operations along with methods and routing and a standard time for operation are established using work measurement techniques. 6. Loading and scheduling: Scheduling is concerned with preparation of machine loads and fixation of starting and completion dates for each of the operations. Machines have to be loaded according to their capability of performing the given task and according to their capacity. Thus the duties include: VEL TECH

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a. Loading the machines as per their capability and capacity. b. Determining the start and completion times for each operation. c. To coordinate with sales department regarding delivery schedules. 7. Dispatching: This is the execution phase of planning. It is the process of setting production activities in motion through release of orders and instructions. It authorizes the start of production activities by releasing materials, components, tools, fixtures and instruction sheets to the operator. The activities involved are, (a) To assign definite work to definite machines, work centres and men. (b) To issue required materials from stores. (c) To issue jigs, fixtures and make them available at correct point of use. (d) Release necessary work orders, time tickets, etc., to authorize timely start of operations. (e) To record start and finish time of each job on each machine or by each man. 8. Expediting: This is the control tool that keeps a close observation on the progress of the work. It is a logical step after dispatching which is called “follow-up” or “progress”. It coordinates extensively to execute the production plan. Progressing function can be divided into three parts, i.e., follow up of materials, follow up of work-in-process and follow up of assembly. The duties include: (a) (b) (c)

Identification of bottlenecks and delays and interruptions because of which the production schedule may be disrupted. To devise action plans (remedies) for correcting the errors. To see that production rate is in line with schedule.

9. Inspection: It is a major control tool. Though the aspects of quality control are the separate function, this is of very much important to PPC both for the execution of the current plans and its scope for future planning. This forms the basis for knowing the limitations with respects to methods, processes, etc., which is very much useful for evaluation phase. 10. Evaluation: This stage though neglected is a crucial to the improvement of productive efficiency. A thorough analysis of all the factors influencing the production planning and control helps to identify the weak spots and the corrective action with respect to preplanning and planning will be effected by a feedback. The success of this step depends on the communication, data and information gathering and analysis.

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2. Describe Production Cycle. Production procedure (cycle) starts with the customer and ends up with satisfying the needs of the customer by delivering products. Production Procedure consists of: 1. Sales forecast: The marketing or sales department after a thorough analysis and market research comes out with details like acceptability of the product by customers, consumers reactions to new modifications and designs. Based upon the analysis of the data, sales department prepares a sales forecast with breakdown of products and models as a function of time periods. Detailed forecast is submitted to the management. 2. Preparation of production budget: The production budget is prepared by the finance department in consultation with production department. The management reviews the forecast and the budget to take decision regarding annual quantities to be produced. 3. Engineering department to prepare details: The engineering department is instructed to prepare drawing, B.O.M. (Bill of Materials) specifications or to check and modify the existing ones. 4. Production Planning activity: Production planning activity begins as soon as the technical information is received from the engineering department. The production planning activity results in a schedule or time table of production. The inventory levels are checked in order to initiate procurement activity of materials. Make or buy decision is made. The production planning section supplies the compete data on methods, process sheets, machine loading and production schedule to the dispatching section. 5. Dispatching: Detailed production orders are dispatched to the shop specifying what, how and when and where the operations are to be performed. 6. Progressing: Control action is exercised throughout the manufacturing period and progress is continuously compared with planned schedule so that suitable corrective steps are taken in case of difference between planned and actual production. 7. Inspection: Inspections are carried out and quality control ensures that the desired specifications are in conformance with the actual. 8. Evaluation: Evaluation is carried out after and before production so that corrective actions are devised to improve methods, down times and finally the management gets reports from both production and financial departments. VEL TECH

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9. The finished product is transferred to stock. 10. Finally, the product is delivered to the customer – Thus, the production procedure requires the coordinated effort of all the functional departments of the organization. The production procedure is shown in Figure.

SALES FORECAST Based on market research, the forecast is prepared with Break down of products as function of time

PREPARATION OF PRODUCTION BUDGET Prepared by Finance Dept. and send to Mgt. for review and decision –making

PREPARATION OF DETAILS BY ENGG. DEPTT. Drawings, part list (B.O.M.) specifications

PRODUCTION PLANNING. Supplies complete data to dispatching section Management

Customer

CONTROL FUNCTION Progress is compared with the plan on the continuous basis

Feedback

AUTHORISATION FOR PRODUCTION Despatch of production orders

INSPECTION, QUALITY CONTROL To ensure the production of items as per the specifications

EVALUATION OF PRODUCTION SYSTEM And Feedback on improvements

Finished Goods Stock

DISPATCH TO CUSTOMERS

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Figure – Production Procedure 3. Compare Production Planning and Production Control.

1. 2.

3.

4.

5.

Production Planning Production Planning is a preproduction activity. Planning involves the collection, maintenance and analysis of data with respect to time standards, materials and their specification, machines and their process capabilities. Planning is useful to anticipate the problems and devising remedial measure in case the problem arises. Planning is a centralized activity and includes functions like materials control, tool control, process planning and control. Planning sees that all the necessary resources are available to make the production at right quality and time.

Production Control Production control will be in action when production activity begins. Control is concerned with communication of their information and producing reports like output reports, productivity, rejection rate, etc. Control involves in taking corrective steps in case of error to match actual performance against the planned performance. Control is a widespread activity. Includes functions such as dispatching programming and inspection, etc. Control keeps track of the activities and sees whether everything is going as per schedule or not.

4. Explain with a graph various stages of Product Life Cycle. PRODUCT LIFE- CYCLE The product once introduced into the market will undergo definite phases. The various phases of life-cycle of a product are represented in figure.

Sales Volume

A

C

B

A – Introduction B – Growth C – Maturity D – Decline D

Stages

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Figure. Product Life – Cycle Characteristics of Phases in Product Life-cycle (PLC) The demand for a product generally tends to follow a predictable pattern called product life-cycle (PLC). Products go through a series of stages beginning with start-up or introduction of product followed by rapid growth, maturity or saturation and finally the decline of demand. The time spans of stages of these products vary considerably across industries. These time spans vary from few weeks or months (for novelty and fashion goods) to years. Introduction Stage: This stage marks the introduction of the product into the market. It may be an entirely new product in the market or old product to the new market. The demand is low as customers do not know much about the product. So the organizations have to invest heavily in advertisement to make the product familiar to the customer. The volume of sales will be low and if proper care is not taken, the chances of product failures are high. Growth: Once the product passes through the introduction stage, the sales starts increasing because of the acceptability of the product by the customer. The sales growth rate is high because of limited or no competition. Maturity (Saturation): The sales growth reaches a point above which it will not grow. This is due to the market share taken by the competitor’s products. Thus, the sales will be maintained for some period. Decline: The competitors will enter the market with better product features, advanced technology and reduced prices. This is a threat to the very existence of product and sales start declining. If proper care likes addition of special features, design changes are not incorporated there comes a time when the products are to be taken back from the market. Characteristics of Phases of PLC are shown in Table. Characteristics of Phases of PLC Particulars

Introduction

1. Product Variety

High Variety

2. Volume

Low Volume

3. Industry Structure

Small Competition

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Growth Increasing Standardization Increasing Volume Consolidation Beginning of Competition

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Maturity

Decline

Dominant Design feature of product

High standard commodity

High Volume

Decreasing Volume

Few large companies

Survivors

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Product Quality and availability

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Price.

5. Explain the steps in new product design. PRODUCT DESIGN (DEVELOPMENT) PROCESS The stages in the product design are shown in figure. Stage I: CONCEPTION The draft specifications for the product are laid down incorporating the user requirements at this stage. This stage provides the basis for all subsequent design activities. The specifications of the proposed product must be prepared by marketing department in as much details as possible. The following minimum information on design specifications should be furnished.     

The performance requirements The appearance or styling requirements. The estimated quantity which will be sold. The maximum price within which the product should be offered. The probable date of introduction of the product into the market.

CONCEPTION

ACCEPTANCE

EXECUTION

TRANSLATION

PRE-PRODUCTION

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Figure. Stages in product design

Stage II: ACCEPTANCE This is a stage where the design activity of the product begins after the feasibility analysis and model making and calculations of the product is accepted. Stage III: EXECUTION On general design considerations, a model is prepared as per the acceptance of specifications in stage II. The models should conform to specifications. The model is going to reveal the detailed feasibility aspects of proposed designs and special considerations. The cost of the product is built at this stage which the production engineers always try to stick to it. Now the advanced techniques like rapid prototyping technique (RPT) and experimental stress analysis techniques are available for prototype, modelling and testing. Stage IV: TRANSLATION At this stage the production engineering department is involved in design work. The manufacturing feasibility is tested at this stage. The final manufacturing drawings are prepared. Stage V: PRE-PRODUCTION In large scale production, it is recommended to carryout a pilot run under production conditions. This will consist of completely assembling quantity of production from parts or components made by normal production method and using the same degree of skill in the operatives which will be found in the final manufacture. The pre-production run will ensure the quality, reliability of product as per the specifications before the production will be started on commercial basis. Thus the pre-production stage will check: 1. 2. 3. 4.

Drawings. Final tools Production techniques and estimates Specifications.

6. Explain the functional and operational aspects of product design. VEL TECH

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FUNCTIONAL ASPECTS Once the marketing feasibility exists for the proposed product, i.e., a sufficient demand exists for the product, the functional scope of the product is to be carefully analyzed and the functions are to be defined properly. The functional objectives are to be fixed with respect to the product like:  What are the functions the product is expected to perform?  Whether we should give a single function or multiple functions are to be incorporated.  Cost considerations due to offering multiple functions. The functional analysis helps in analyzing the importance and worth of each function to be built into the product and, hence, affects the design of the product. Example: A tape recorder has a well defined objective, i.e., to play the cassettes and should give a good quality sound as output. But it this will not state all aspects. The functional analysis is to be done with respect to:     

Whether only tape recorder or should include the additional utilities like radio and/or clock. Whether should use single cassette or twin cassettes. Whether it should be provided with auto reverse facility. What should be the built in safety measures. Whether portable or stationary

and many of the other factors need to be analyzed. Now, the trend is towards offering a functional versatility of the product which aims at increasing the range of applications of product to the customer. For example, a kitchen mixer allows for large number of operations to be performed by additional attachments. Even functional versatility is offered to engineering equipment like machine tools, which are going to perform number of operations and with a minimum of investment and savings in space. The provision of multifunction will create a psychological satisfaction of owning more than one product. For example, a two-in-one tape recorder serves the twin objectives of tape recorder and radio. OPERATIONAL ASPECTS

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Once the functions expected to be serviced by the product are established then operational aspects of the products are to be determined. The product is not only expected to perform its functions satisfactorily but it should be easy to handle and operate at the customers end. The product is used at different operational conditions and the customers vary with respect to skill and knowledge and the designer’s problem becomes complicated with addition of more functions. The designer has to analyze the preparation time (set-up time), operation time and put away time with respect to the customer. Thus, the operational aspect becomes all the important as it is the customer who is going to operate at his place and care should be taken to see that the product should have ease of operation. 7. Explain in detail the production aspects of product design. PRODUCTION ASPECTS OF PRODUCT DESIGN The design will be converted into reality in the production shop where it will be transformed into a physical product to be offered to the customer. So successful transformation of design into a saleable product is a challenge to the organization. This needs a close coordination of production and design department at all stages of manufacturing the product. Thus, a designer cannot design the product in isolation and an increased interaction is need by production and other department the produce design that works and that can be manufactured without any problems. Thus the concept of “DESIGN FOR PRODUCTION” is the current trend. The following aspects of production should be evaluated: (A) Selection of Suitable Process 1. 2. 3. 4. 5.

Production quantity (volume of production). Information regarding utilization of equipment, capacity of equipment, accuracy, etc. Selection of tooling such as jigs and fixtures. Sequence of operations and methods of assembly. Possibility of applications of new techniques, processes.

(B) Utilization of Materials and Components with a View of (i) Selecting the materials conforming to specifications. VEL TECH

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(ii) Selection of method to reduce waste and scrap. (iii) Usage of standard components and parts. (iv) Interchangeability of components and assemblies within the product. (C) Selecting the proper tolerances and work method to achieve the specified quality standard through available processes and equipment. The specification of quality is going to influence the selection of a process. To achieve a successful transformation of the design, a designer engineer should work in close coordination with production and methods engineer to specify the best available process of transformation keeping in mind the limitations of the production. 8. Explain the Quality, Reliability and Aesthetic aspects of product design. DURABILITY AND DEPENDABILITY These two factors define the quality and reliability of the product. Durability refers to the length of the active life of the product under given working conditions. Dependability refers to the reliability with which the product serves its intended function. Thus, quality of the product is directly proportional to the quality f inputs (materials, men, etc.), the process of manufacture. Thus, it is a function of cost. Depending upon the management product policy, a compromise is to be struck between quality and cost. To be in competition the organizations have to give better quality products at reasonable price. Due consideration should be given to various aspects of quality measures, safety and maintenance aspects. AESTHETIC ASPECT Aesthetic aspect refers to the “external look good” aspect of the product and it is concerned with moulding the final shape around the basic skeleton. Aesthetic aspects help the sell function of the product by attracting the customers and creating the first impression about the product. For consumer goods aesthetics is the dominant factor in creating the demand for the product. Styling becomes all the important factor in product design in situations such as changes in fashion and taste, evolution of form and introduction of new ideas to quickly outdate the old ones. If the market is ready to accept creative product and eager to discard old ones in favour of new ones, the styling becomes the main aspect of saleability of product. Designers use variety of tools to build aesthetic characteristics into the products such as: VEL TECH

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1. Use of Special materials: For housing the components (body) or additional decorations. For example, use of chromium strips, plastics, wood, glass, fabric materials. 2. Use of Colour: Natural colour of the material concerned or by use of paints, plating, spraying. 3. Texture as a supplement to colour: Shape denoted by outer contours and similarity to familiar objects. 4. Use of lines. 5. Scaling the product. 6. Packaging. Aesthetics has been recognized as an integral part of design and the scope of aesthetics is not limited to only consumer goods but now it has been extended to engineering goods also like machinery and equipment. 9. What are the sources that help to identify a new product? Before selecting a product, organizations have to carryout SWOT analysis in order to know their strength areas, weaknesses or limitations, opportunities before the organisation and the perceived threat. The organizations have to explore the opportunities (products) which fall under their strength areas so that they are able to cash on the opportunities. Product selection is a team effort. IDENTIFICATION OF PROFITABLE PRODUCT 1. By chance: It is impossible to ignore the effects of chance. A meeting in a train with a stranger, sight of a new device, an attendance at a social gathering can create the idea which may lead to a successful product. 2. Desire to utilize idle resources: Many organizations have idle resources like excess cash, unused plant and equipment, unutilized management talent, surplus distribution channels and the management may conceive an idea of putting these resources to productive use which gives rise to new product. 3. Demand supply gap: If the gap between demand and supply is big, then the products are selected to bridge this gap. 4. Need to support existing range. 5. Forward and/or backward integration. 6. By spreading the risk. 7. To supplement a declining income. 8. To keep pace with changing fashion and customer preferences and tastes. VEL TECH

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9. To exploit special skills. ‘To attract prestige. 10. To exploit special assets. No project should be undertaken until it is viewed objectively from all aspects and a detailed feasibility study is carried out. The personal preference and immediate excitement should not be given any room.

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10. Write short notes on Product policy of an organization. Product policy is the top management (Strategic) decision. Every organization has its own product strategies or polities which form the basis of competing in the market. They become the unique selling proposition (USP) of the company. As per the requirements of the company, it may choose product policies. The same company can opt for different policies for the different products. The various product policies are: 1. Lowest price: The Company will be the price leader and the company is going to offer the product at the cheapest price than its competitors. Price becomes the criteria used to compete in the market. Though the profit per unit is less, the company is gong to make the substantial profit by the large volume. 2. Highest quality: Some organizations offer highest quality products irrespective of the cost. They are catering to the needs of special class of customers who value quality as the only criteria to purchase the product. 3. Compromise between cost and quality: Some organizations in order to capture the larger sections of the customers, offer products with the optimum blend of quality and cost. The products are reasonably of good quality in proportion to its price. These organizations try to give good value to the customers for his money. 4. Safety: Some organizations give maximum importance to safety. Safety is the criteria on which they compete in the market. For example all home appliances, electrical gadgets, etc. Thus, organizations have to choose the policies suitable for them. This policy is going to influence the design to the large extent. 11. Explain the marketing aspects of product design. MARKETING ASPECTS Once the product is selected, then it is very important to know the marketability of the product. All further steps are dependent upon the demand for the proposed product and customer acceptability to the product. If there is no potential market, then it is a wasteful exercise to design and manufacture the product. The marketing analysis for the proposed product seeks to give answers to the following questions:

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1. Whether the functions that are offered by the product are desirable and acceptable to the customers? 2. What will be the status of the product in the market? (i) Product is already existing? (ii) Entirely new product about which the customer is totally unaware? 3. What will be the expected demand for the product both short-term and long-term? 4. The factors that influence the demand for the proposed product? 5. What is the level of competition and basis of competition for product? 6. What are the distinguishing features offered by competitors? 7. The price prevailing in the market. 8. Distribution system, etc. The answers to the above question will furnish the designer with lot of information about the product. It is easy to estimate the demand for the existing product. But if the product is entirely new, it is offered to the market first time, a detailed market survey is to be carried out to estimate the demand for the product. The demand for the product depends on many factors. Some of which are related to local conditions and sometimes difficult to define. So, an organization has to be in close touch with the target market it wants to capture so that it is able to feel the trend of the market. A product that is offered to the customer should be of infinite variety if it is aimed at 100 per cent customer satisfaction. This is practicably impossible. Thus, in practice, product design is an outcome of some sort of compromise between infinite variety and designer’s concept of ideal design. In selling this compromise to customers, the management resorts to advertising. The advertisement campaign is dependent upon the compromised design. Advertising serves many purposes such as:     

Providing general information about the general existence of product. Technical information like its functional utility and characteristics. Drawing attentions of the customers to special features targeted at the customers. To create demand among passive population of customer. Educating the customer or telling him what he should want.

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12. Explain in detail the Job shop production. Job Shop Production / industries are characterized by manufacturing of one or few quantity of products designed and produced as per the specification of customer within prefixed time and cost. The distinguishing feature of job shop is low volume and high variety of products. Examples of products manufactured by job shop industry include space vehicles, aircraft, machine tools, special purpose machines, tooling and jigs and fixtures, custom clothing, prototypes, large turbo generators, material handling machines, construction equipments and the like. A job shop typically comprises of general-purpose machines arranged in to different departments. Each job demands an unique technological requirements, demands processing on machines in a certain sequence. Because of high variety, scheduling becomes complicated. Planning for job order involves deciding the order or priority for jobs for the jobs waiting to be processed in order to achieve the desired objectives. Job order type production applies to situations where products are to be manufactured against specific requirements of the customer. Characteristics of Job Order Production 1. High variety of products and low volume/ 2. Use of general purpose machines and facilities. 3. Highly skilled operators who can take up each job as a challenge because of its uniqueness. 4. Frequently changing set ups. 5. Process (or functional) type layouts for arrangements of facilities. 6. Large inventor of materials, tools and parts. 7. Movement of material is long and interrupted. 8. Relative imbalance of work loads of different departments and labour. 9. Functional departmentation exists. 10. Required numerous job instructions. 11. Detailed planning will evolve around sequencing requirements for each product, capacities for each work centre and order priorities, because of this, scheduling is relatively complicated in comparison to repetitive line manufacture. 12. Many products are run throughout the plant and material handling has to be modified and adjusted to suit different types of products.

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Advantages of Job Order Production    

Because of general-purpose facilities, variety of products can be processed. Operators will become more skilled and competent that each job gives them learning opportunity. Utilization of full potential of operators. Opportunity to use innovate ideas and creative methods.

Limitations 1. 2. 3. 4. 5. 6.

Higher set up and tooling up cost due to frequent set up changes. High inventory level of raw material and in process and hence higher inventory costs. Production planning is complicated. Highly competent and skilled manpower is demanded. Product cost comes to be high. High cost of material handling and larger space requirement.

13. Explain in detail about the Batch Production. Batch production is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales. Material tends to be more complex. The facilities can be used for producing another batch of product between two successive productions runs. Batch production is represented as shown in figure. Q u a n t y

Tp = Production period Tc = Consumption period

Tp

Tc

Tp

Tc

Figure – Batch Production

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Batch production is justified when the production rate exceeds the demand rate. The quantities in batch production are decided based on the balancing of two costs i.e. set up cost and inventory carrying cost. Batch production aims at satisfying the continuous customer demand for an item. However, the plant is capable of production rate that exceeds demand rate. The shop produces the products to build an inventory and it changes over to other products. When the stock of the first item becomes depleted, the production is repeated to build up the inventory again. The intermittent production caters to make to stock, assemble to order and also make to order manufacturing environments. Manufacturing equipment machines used in batch production is general-purpose machines, which are designed for higher production rate. For examples, Turret lathes capable of holding several cutting tools are used rather than engine lathes. The machine tools used in batch production are usually combined with specially designed jigs and fixtures. Which increase the production rate. Batch production plants include machine shops, foundries, plastic moulding units and press shops. This also includes some kinds of chemical and pharmaceutical units. Batch quantities may very from few units to many thousands of units. Characteristics of Batch Production i. ii.

Shorter production runs. Plant and machinery set up is used for the production of items in a batch and set up required to be changed for processing next batch of items. More number of set ups and hence higher set up cost. Amount of supervision required is less compared to job order. Plant and machinery are flexible. Manufacturing lead time and also cost are lower as compared to job order production. Higher level of work in process inventory.

iii. iv. v. vi. vii.

Advantages of Batch Production      

Better utilization of plant and machinery. Promotes functional specialization. Cost per unit is lower as compared to job order production. Lower investment in plant and machinery. Flexibility to accommodate and process number of products. Job satisfaction exists for operators.

Limitations of Batch Production 

Material handling is complex because of irregular and longer flows.

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 Production planning and control is complex.  Work in process inventory is higher compared to continuous production.  Longer production times.  Higher set up costs due to frequent changes in set up.  Lower utilization of production facilities compared to mass production. 14. Explain in detail about the mass production. Mass Production Manufacture of discrete parts or assemblies using a continuous process are call Mass production or Repetitive production. When the volumes are very large, a fixed assignment of resources, which otherwise would be risky, is justified. The machineries are arranged in a line or produced layout. Specialized departments will disappear and their place is taken by assembly lines. Material handling systems can automated, thus bringing down the cost of material handling per unit. Automobile assembly line is a typically example of mass production. Product and process standardization exists and typically, all outputs follow the same path. Standardization provides for known and fixed through put time, giving managers easier control of the system and more reliable delivery dates. Characteristics of Mass Production 1. Standardization of product and process sequence and hence line layout (product layout) is recommended. 2. Dedicated, special purpose machines (SPM) having higher production capabilities and output rates. 3. Large volumes of products. 4. Shorter cycle time of production. 5. Lower in process inventory. 6. Perfectly balanced production lines. 7. Flow of materials, components and parts is continuous and without any back tracking. 8. Production planning and control is easy. 9. Extent of supervision required is less. 10. Material handling can be fully automated. 11. Because of high volume, cost per unit is low. Advantages of Mass Production 1. Higher rate of production with reduced cycle time. 2. Higher capacity utilization due to line balancing. VEL TECH

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3. Less skilled operator can man the process. 4. Low in process inventory. 5. Production cost per unit will come down due to economics of scale.

Limitations of Mass Production 1. 2. 3. 4. 5. 6.

Breakdown of one machine will stop an entire production line. Line layout needs major adjustments/changes with the changes in the product design. High investment in production facilities. Supervision is general rather than specific. Work for operators is monotonous without much challenge. The cycle time is determined by the slowest operation.

15. Compare between various types of Production. Comparison between Various Types of Production Characteristics 1. Volume of production (quantity) 2. Product variety 3. Layout 4. Set up time 5. Manufacturing cycle time 6. Material flow 7. Equipment & machinery 8. Flexibility 9. Production Planning & Control 10. Work in Process inventory

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Job order Production

Batch Production Limited number of small lots

One or few jobs

Mass Production Large quantity One or few standard products

Process or functional layout High

Medium or few variety Process or functional layout High and frequency

Large

Medium

Low

Discontinuous, nonuniform, travel long distances.

Discontinuous

Uniform and uninterrupted flow

High

General purpose with high production rate High

Special purpose and dedicated Very low

Complex

Complex

Simple & routine

High

Medium

Low

Larger variety

General purpose

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Product or line layout Low

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11. Cost per Unit 12. Skill of labour 13. Investment

High Highly skilled Low

14. Material handling

Manual

15. Plant utilization & productivity

Low

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Medium Skilled Medium Manual or semi automatic

Low Semi skilled or unskilled Highly capital intensive

Medium

High

Automated

16. Explain about make to stock production. Make to Stock Production In this system, manufacture stocks the finished goods (products) in inventory for immediate shipment. This system ensures immediate delivery of good quality, reasonably priced, off the shelf standard products. For example, automobile bearings, ready to wear garments, nuts and bolts, motors, televisions etc. Normally, the customer does not accept delay in delivery and the management is required to maintain adequate stock of finished products. Thus system implies the manufacture of products based on a well-known and predictable demand pattern. Operations management focuses entirely on replenishment of inventory, actual customer orders cannot be identified in the production process. The production volume of each sales units tends to be high and customers delivery time is usually determined by the availability of finished goods inventory. The finished goods inventory acts as a buffer against uncertain demand and stock out situations. The main advantage of this system being the short delivery time and the limitations being high costs of inventory and inability to express customer for the design of the product Situations for Make to Stock production are: 1. 2. 3. 4.

Fairly constant and predictable demand. Products are few and they are standardized. Shorter delivery time expected by the customers. Products having higher shelf life.

Information needed to make a production plan is as follows: 1. 2. 3. 4.

Forecasted demand for the planning period. Starting inventory level. Desired ending inventory level. Any previous orders to be fulfilled (back orders).

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Make to stock items are generally mass consumed and pass through multiple channels before reaching the end user. Most of the data about customers is not known and hence, feed back from distribution channel will act as an important source of information. Demand is also calculated from these channel members and aggregated for production purpose. This system is characterized by less complex production, process and product standardization and fairly constant production rate. Distribution system is critical and integration of production and distribution is essential to keep a stable flow of products at the point of consumption and should be responsive to any change. As there is no one contact between producer and the customer, distribution system acts as eyes and ears of organization to support demand forecasting and demand analysis. 17. Explain the following: i. Make to order production System. ii. Assemble to order Production System. Make to Order Some companies make or manufacture products after the receipt of the firm order from the customer. Here the production activities will be initiated only after the confirmation of the orders and the products are not supplied from the stock and hence the lead time (the time between ordering the product and delivery) is long. Make to order production system describes a manufacturing facility in which the final product is usually made from parts/components already designed but may include some custom designed components also. If has many of the base components available along with the engineering designs but the product is not completely specified. The order processing cycle begins when the customer specifies his requirements of the product. The manufacturer also some times assists the customer to prepare product specifications. Made to order is a demand responsive strategy, and only the product and component designs and some standard raw material and components are held in stock. Examples are, custom tailored clothing, special purpose machinery and product made to customer specifications. Very expensive products are usually made to order. Situations for make to order productions are: VEL TECH

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1. 2. 3. 4.

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Products are manufactured to customer specifications. Customer can wait till the order is being processed (longer delivery schedule). Product is non standard and expensive to store. When there are several product options available to store.

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In make to order production system, there is a direct interaction with customers during all the stages of but it is extensive during engineering phase. Manufacturer quotes delivery schedule and price and there is a discussion among the customer and producer regarding alternatives to reduce cost, reduce time to deliver. In make to order situations, production schedule changes with changes in customer orders from one period to another. In this system, producers build large capacities in anticipation and capacity utilization is lower as compared to make to stock situation. Capacity requirements planning and shop floor control are critical and distribution is less complicated. Assemble-To-Order Production System When number of alternative combinations or options is available to customers as in automobiles, consumer electronics and computers and customer is not ready to wait until product is made, manufacturers produce and stock standard component parts. When the customer places the order, the customer does the assembly from the parts/components selected. Since the components are manufactured and stocked, the only the time to assemble is needed before delivering product to the customer. The modular parts approach strategy is normally used here. The assemble to order system aims to combine product customization/variety of make to order system with low cost and shorter lead-time. 18. Compare between Make to Stock, Make to Order and Make to Assemble Systems. Comparison between Make to Stock, Make to Order and Make to Assemble Systems

1. 2. 3. 4.

Particulars Product range Production volume Lead time Customer producer interface

Make to Stock

Make to Order High Low High High at sales & design level Planning of excess capacity & raw material stock Back logs & marketing intelligence reports

Assemble to Order Medium / high Medium Medium

High F.G. Inventory & associated inventory carrying costs

Low inventory level & associated carrying cost

Major modules / parts held in inventory

Standardized products with lower price/unit

Special products (high variety) & high cost/unit

Modular parts/sub assembly medium/ high

Low High Low Limited / Distant

5.

Handling of fluctuations in demand

Safety stock of product units

6.

Basis of planning

End item forecasts

7.

Inventory level

8.

Product category and cost

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High at sales level Planning of standard modules & Parts Backlogs and trend analysis

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19. List applications of BEP. 1. Safety margin: Break – even chart helps the management to know at a glance the profits at different levels of activity and the safety margin refers to the extent to which an organization can afford to loose its sales before it starts incurring losses. 2. It helps to plan the profit: It is useful to calculate the volume needed to attain the target profit. Sometimes the firm aims to generate a particular amount of profit in a specified period. For this purpose, with the help of contribution margin it is convenient to calculate volume of sales necessary to achieve targeted profit. 3. It helps to compute up to what level the sales price can be reduced in competition or to compute additional sales volume required to maintain a particular level of profit. 4. It helps to make the decisions with respect to selection of equipment amongst the alternatives, selection of a process, etc. 5. It helps to take decision regarding make or buy. 6. It helps to decide the product mix and promotion mix. 20. Classify cost based on Natural characteristics. Natural Classification of Costs This classification refers to the basic physical characteristics of the cost. In a manufacturing company, the total cost of a product includes the following four elements: (A) Direct material: Direct material refers to the cost of materials which become a major part of the finished product. They are the raw materials that become an integral part of the finished product and are traceable to specific units of output. Examples of direct materials are: Raw cotton in textiles, crude oil to make diesel, steel to make automobile parts. The following groups of materials come under direct material. (i) All materials purchased for a particular job, process or product (ii) All materials acquired from stores for production. (iii) Components or parts purchased or produced (iv) Materials passing from one process to another process. (B) Direct Labour: Direct labour is defined as the labour associated with workers who are engaged in the production process. It is the labour costs for specific work performed on products that is traceable to end products. VEL TECH

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Example: Labour of machine operators, assembly operators. (C) Direct Expenses: The expenditure incurred (other than direct material and direct labour) on a specific job or products are included in direct expenses. These are also called chargeable expenses. Examples: Cost of special layout, design or drawings, hiring special machines for specific product manufacture, etc., (D) Factory overheads: These are also called manufacturing costs. These include the costs of indirect materials, indirect labour and indirect expenses. (i) Indirect material refers to materials that are needed for the completion of the product but it is not possible to trace or identify it with end product, e.g., cutting oil, lubricants cannot be charged to specific product. (ii) Indirect labour refers to the labour hours expended which will not directly affect the composition or construction of the finished product. Examples: Foreman, shop clerks, material handlers, maintenance employees. Their labour is considered indirect because it is not economically possible to trace their with specific product. (iii) Indirect expenses are the expenditure incurred by the manufacturing company from the beginning (start) of production to its completion and transfer to finished goods store. Direct costs and factory overheads together are called conversion costs. (E) Distribution and administrative overheads: Distribution overheads are also called marketing or selling overheads. These costs include advertising, salesman salaries, and commission, packaging, storage, transportation and sales administrative costs. Administrative overhead includes costs of planning and controlling of general business operations. All costs which are not charged to production and sales are included in administrative overheads, e.g., Chairman’s salary, fees of board of directors, rent of administrative office. These costs are represented in the Table: Table: Costs of Manufacturing Company 1. 2. 3. 4.

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Direct Material + Direct Labour + Direct Expenses = Prime Cost Indirect Material + Indirect Labour + Indirect Expenses = Factory Overhead Prime Cost + Factory Overhead = Factory Cost Factory Cost + Distribution And Administrative Overhead = Total Cost

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21. Classify cost based on Activity or volume. Classification Based on Activity or Volume (A) Fixed Cost: The costs which do not change for a given period in spite of change in volume of production. This cost is independent of volume of production. Examples of fixed costs are rent, taxes, salaries of supervisors, depreciation, insurance, etc. Fixed costs are normally expressed in terms of time period. i.e., per day, per annum, etc. Fixed costs are represented as shown in figure Fixed cost 1000 Cost 

10

20

30 40 Volume 

50

60

Figure: Fixed Costs

Fixed cost does not mean that they never change. They are constant up to specific volume or range of volume. (B) Variable Costs: These vary directly and proportionately with output. There is a constant ratio between the change in the cost and change in the level of output. Direct material cost and direct labour costs are generally variable costs. Variable costs results from the utilisation of raw materials and direct labour in production departments. Variable cost is represented in figure:

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 Material Cost

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Variable Cost

1000

500

 Total Cost

(C) Mixed Costs: Mixed made up 5000 of fixed and variable costs. They are 1000 costs 2000 are3000 4000 Production  combination of semi-variable and semi-fixed costs. Because ofunits variable component, they fluctuate Figure: Variable Cost with volume, because of fixed component; they will not change in direct proportion to output. Semi fixed costs are those costs which remain constant up to a certain level of output after which they become variable as represented in figure. Semi – variable cost is the cost which is basically variable but whose slope may change abruptly when a certain output level is reached.

4000 3000 2000 1000

1000

2000 3000 Units Produced 

4000

Figure: Semi – fixed cost

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22. ABC company plans to ceel an article at a local market. The articules are purchased at Rs. 5 on the condition that all unsold articles shall be returned. The rent for the space is Rs. 2000. The articles will be sold at Rs. 9. Determine the number of articles which must be sold (a)To break – even,(b) To earn Rs. 400 as profit. (c) If the company sells 750 articles. Calculate margin of safety and profit. Solution: Fixed cost F 2000   contribution b  c 9  5 =500 units

(a) BEP=

(b) To earn to profit of Rs. 400. Fixed cost+Profit F  Pr ofit  contribution ba 2000  400  95 =600 units

No. of articles to be sold =

The company should sell 600 units to earn the profit of Rs. 400. Sales - Sales at BEP  100 Sales 750-500  100 = 750 =33.3 percent

(c)Margin of safety =

Profit at 750 units Profit = Total revenue – Total cost = Total contribution – Fixed cost = 3000-2000=1000 Rs.

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23. PQR Limited company has been offered a change to buy between Machine A and Machine B. You are required to compute. (i) (ii)

BEP of each machine. The level of sales at which both machines earn equal profits?

The following data is given

Annual output (in units) Fixed costs Profit at above level

Machine A 10,000 30,000 30,000

Machine B 10,000 16,000 24,000

The market price of the products is expected to be Rs. 10/unit. Solution: Particulars

Machine

Sales Rs. (10,000 10) Contribution (fixed cost + Profit Variable cost P/V Ratio (contribution / Sales ) BEP (Fixed cost /P/V Ratio) Contribution per unit Variable cost / unit

A 1,00,000 60,000 40,000 60%

B 1,00,000 40,000 60,000 40%

50,000 6 4

40,000 4 6

(b) Since selling prices of A and B are equal, the machines will earn equal profit when total cost of operations on both machines is equal. Let X be the output when the total costs on both are equal. Machine A Total Cost =4x+30,000 Machine B Total cost =6x+16,000 4x+30000=6x+16000 Solving the equation for x x=7000 units. At production level of 7000 units both machine give equal profits. VEL TECH

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24. An analysis of the company reveals the following information Cost element Direct material Direct labour Factory over heads Distribution overheads General administrative overheads Budgeted sales are

Variable cost 32.8 28.4 12.6 4.1 1.1

Fixed cost 1,89,900 58,400 66,700 18,50,000

Determine 1. Break-even sales volume. 2. The profit at the budgeted sales volume. 3. The profit if the actual sales (a) drop by 10 per cent, (b) increase by 5 per cent from budgeted sales. Solution: Total variable costs as percentage of sales=32.8+28.4+12.6+4.1+1.1 =79 percent contribution 100  79 P/V Ratio=   21 percent Sales 100 Total fixed costs = 3,15,000 1. Break – even Sales volume BEP=

Fixed cost 315000  P / V Ratio 0.2 =1,500,000

2. Profit at budgeted Sales volume Profit = Sales  P/V Ratio – Fixed cost =18,50,000 0.21-31,5000=3,88,500-3,15,000 =73,500 3. Profit when actual sales drop by 10 percent Actual sales = 18,50,000 – 1,85,000=16,65,000 VEL TECH

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Profit

= Sales  P/V Ratio – Fixed cost = 16,65,000  0.21 -3,15,000 = 34,650 4. Profit when actual sales are increased by 5 percent Actual Sales = Profit = = =

18,50,000+92,500 = 19,42,500 19,42,5000.21-3,15,000 4,07,925-3,15,000 92,925.

25. ASMIT corporation has given the following information on its capacity, sales and cost as follows: 1. 2. 3. 4. 5.

Current capacity = 1,00,000 units At current level of operations, its margin of safety is 5 percent of its break – even point Contribution Margin P/V Ratio = 2.5 percent The unutilized capacity at present is 10,000 units Sales price Rs. 40 per unit.

(a) Find (i) (ii) (iii) (iv)

Break – even point in sales volume. Fixed costs. Variable costs per unit. Margin of safety in units

(b) If the fixed costs are decreased by Rs. 1,80,000 to what extent can the price be reduced maintain the total profit at current level. Solution: (a) (i) Break- even point in sales volume Current Capacity 1,00,000 units Less unutilized capacity 10,000 units Utilized capacity 90,000 units Utilized capacity = BEP= Margin of safety Utilized capacity = BEP = 50 percent of BEP Utilized capacity = BEP + 50 percent BEP =1.1/2(BEP) VEL TECH VEL TECH MULTI TECH

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BEP (Value)

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=90,000/1.5 =60,000 units =4060,000 =2,40,000

(ii) Fixed costs Fixed cost Contribution per unit Fixed cost 60,000  Sales price  contribution margin Fixed costs 60,000 = 40  0.25

BEP 

Fixed cost = 6,00,000 (iii) Variable cost per unit Sales price Rs. 40 Contribution (based on contribution margin ratio of 25%) Rs. 40 Variable cost Rs. 30 (iv) Margin of safety

=50% of BEP = 50  60,000 =30,000 units.

(b) Currently the contribution is Rs. 9,00,000(90.000 10). After reducing the fixed costs the profit is Rs. 300000. If the fixed costs were to decline by Rs. 1,80,000 to maintain same profit level, the contribution can come down by the same amount and even the sales value. The reduction in sales price would, therefore, to be equal to reduction in sales value/sales quantity. 

1,80,000  Rs.2Per unit. 90,000

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26. For a particular product, the following information is given Selling price per unit Rs. 10 Variable cost per unit Rs. 6 Fixed costs Rs. 1,00,000 Due to inflation variable costs increase by 10% white fixed costs increase by 5%. If the break – even quantity is to remain constant by what percentage should the sales price to be raised. Solution: Selling price Rs. 10 Less: Variable cost per unit Rs.6 Contribution per unit 4 1,00,000 Break  even quantity=  25,000units 4 New variable cost

=

6.6 Rs./unit

New fixed cost

=

1,05,000Rs.

At, BEP Sales = Total costs As, BEP is to be unchanged at 25,000 units Total costs = 25000  6.6 + 1,05,000=2,70,000 Rs. Sales = Total cost = 2,70,000 at BEP Re vised Sales Price =

270000  10.8 Rs./unit. 25000

Increase in sales price to maintain same BEP. 10.8  10  8pecent 10

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UNIT – II PART – A 1. Define Method Study. “Method study is the systematic recording and critical examination of existing and proposed ways of doing work as a means of developing and applying easier and more effective methods and reducing cost.” 2. What are the objectives of method study techniques? The objective of method study techniques are: (i) (ii) (iii)

To present and analyze true facts concerning the situation. To examine those facts critically. To develop the best answer possible under given circumstances based on critical examination of facts.

3. What are the steps involved in method study? Steps in Method Study SELECT RECORD EXAMINE DEVELOP DEFINE INSTALL MAINTAIN

The job to be analyzed. All relevant facts about present method. The recorded facts critically. The most efficient, practical and economic method. The new method. The method as a standard practice. That standard practice.

4. What are the categories of recording techniques? Recording Techniques According to the nature of the job being studied and the purpose for which the record is required the techniques fall into following categories: 1. Charts 2. Diagrams VEL TECH

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3. Templates and models. 5. What is operation process chart? An operation process chart is also called as outline process chart. An operation process chart gives the bird’s – eye view of the whole process by recording only the major activities and inspections involved in the process. Operation process chart uses only two symbols, i.e., operation and inspection. 6. What is flow process chart? Flow process chart gives the sequence of flow of work of a product, or any part of it through the work centre or the department recording the events using appropriate symbols. It is the amplification of the operation process chart in which operations, inspection, storage, delay and transportation are represented. 7. What are the three types of flow process chart? Flow process charts are of three types:   

Material type – which shows the events that occur to the materials. Man type – Activities performed by the man. Equipment type – How equipment is used.

8. What is two handed process chart? A two handed process chart (operator process chart) is the most detailed type of flow chart in which the activities of the workers hands are recorded in relation to one another. The two handed process chart is normally confined to work carried out at a single work piece. This also gives synchronized and graphical representation of the sequence of manual activities of the worker. 9. What are the applications of two handed process chart? The application of this charts are:  

To visualize the complete sequence of activities in a repetitive task. To study the work station layout.

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10. What is multiple activity chart? Multiple Activity Chart It is chart where activities of more than subject (worker or equipment) are each recorded on a common time scale to show their inter- relationship. 11. What are the applications of multiple activity charts? Multiple activity charts is made to Study idle time of the man and machines Determine number of machines handled by one operator Determine number of operators required in team work to perform the given job. 12. What is flow diagram? Flow diagram is a drawing, substantially to scale, of the working area, showing the location of the various activities identified by their numbered symbols and are associated with particular flow process chart either man type or material type. 13. What is string diagram? The string diagram is a scale layout drawing on which length of a string is used to record the extent as well as the pattern of movement of a worker working within a limited area during a certain period of time. It is especially valuable where the journeys are so irregular in distance and frequency to seen exactly what is happening. 14. What is micro motion study? Micro-motion study provides a technique for recording and timing an activity. Micro – motion study is a set of techniques intended to divide the human activities in a groups of movement or Micro – motions ( called as therbligs) and the study of such movements helps to find for an operator one best pattern of movement that consumes less time and requires less effort to accomplish the task.

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15. What are the steps involved in micro motion study? Micro – motion study involves the following steps: 1. Filming the operation to be studied. 2. Analysis of the data from the films. 3. Making recording of the data. 16. What is Simo chart? Simultaneous motion cycle chart (SIMO chart) is a recording technique for micro- motion study. A simo chart is a chart, based on the film analysis, used to record simultaneously on a common time scale the therbligs or a group of therbligs performed by different parts of the body of one or more operations. 17. What is memo motion study? MEMO MOTION STUDY Memo motion photography is a form of time – lapse photography which records activity by the use of cine camera adapted to take picture at longer intervals than normal ( time interval normally lies between ½ sec to 4 sec). 18. What is cycle graph? A cycle graph is a record of path of movement usually traced by a continuous source of light on a photograph. A small electric bulb is attached to hand, finger or other part of the body of the operator performing the operation. A photograph is taken by still camera and the light source shows the path of the motion and the path of the photograph is called “cycle graph”. 19. What is Chronocycle graph? The chronocycle graph is a special form of cycle graph in which the light source is suitably interrupted so that the path appears as a series of pear- shaped dots, the pointed end indicating the direction of movement and the spacing indicating the speed of movement.

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20. What are the principles to be followed during critical examination? The principles to be followed during critical examination are: 1. 2. 3. 4. 5.

Facts should be examined as they are, not as they appear to be or they should be Pre- conceived ideas, which often colour the interpretation of facts, should be avoided. Hasty judgments should be avoided. All aspects of the problem must be approached with a challenging and sceptical attitude Every detail must be examined logically and no answer should be accepted until it has been proved correct.

21. How the principles of motion economy are grouped? The principles are grouped into three headings: (a) Use of the human body (b) Arrangement of workplace (c) Design of tools and equipment 22. What is work measurement? Work measurement is also called by the name “Time study”. Time study has been defined by British standard Institution as “The application of techniques designed to establish the time for a qualified worker to carry out a specified job at a defined level of performance.” 23. What are the objectives of work measurement? The objectives of work measurement are to provide a sound basis for: 1. 2. 3. 4. 5. 6.

Comparing alternative methods Assessing the correct initial manning (manpower requirement planning). Planning and control. Realistic costing Financial incentive schemes. Delivery date of goods

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7. Cost reduction and cost control 8. Identifying substandard workers 9. Training new employees

24. What are the techniques used in work measurement? Various techniques of work measurement are: 1. 2. 3. 4. 5.

Time study (stop watch techniques). Synthesis, Work sampling Analytical estimating Predetermined motion and time study.

25. Define Time Study. Time Study: A work measurement technique for recording the times rates of working for the elements of a specified job carried out under specified conditions and for analyzing the data so as to determine the time necessary for carrying out the job at the defined level of performance. 26. Define synthetic Data. Synthetic Data: A work measurement technique for building up the time for a job or parts of the job data defined level of performance by totaling element times obtained previously form time studies on other jobs containing the elements concerned or form synthetic data. 27. Define work sampling. Work sampling: A technique in which a large number of observations are made over a period of time of one or group of machines, processes or workers. Each observation records what is happening at that instant and the percentage of observations recorded for a particular activity, or delay, is a measure of the percentage of time during which that activities delay occurs. 28. Define pre determined motion time study. Pre determined motion time study (PMTS): A work measurement technique whereby times established for basic human motions (classified according to the nature of the motion and

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conditions under which it is made) are used to build up the time for a job at the defined level of performance. The most commonly used PMTS is known as Methods Time Measurement (MTM).

29. Define analytical estimating. Analytical estimating: A work measurement technique, being a development of estimating, whereby the time required to carry out elements of a job at a defined level of performance is estimated partly form knowledge and practical experience of the elements concerned and partly form synthetic data. 30. What are the general guidelines for selecting the job for time study? The general guidelines for selecting the job for time study: (a) Bottle – neck operations (b) Repetitive jobs (c) Jobs using a greater deal of manual labour (d) Jobs with longer cycle time (e) Sections / department frequently working over time. 31. What is an element? Element: An element is a distinct part of a specified job selected for convenience of observation, measurement and analysis. 32. What is a work cycle? Work cycle: A work cycle is a complete sequence of elements necessary to perform a specified activity or job to yield one unit of production. It may also include the elements which do not occur with every cycle. 33. Name the basic time study equipments.

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Basic time study equipment required to make the time study are: (1) Time study board, (2) Stop watch, and (3) Time study forms. 34. What is a qualified worker? A qualified worker is one who is accepted as having the necessary physical attributes, who possesses the required intelligence and education, and who has acquired necessarily skill and knowledge to carry out the work in hand to satisfactory standards of safety quantity and quality. 35. What is performance rating? Performance rating is the process of adjusting the actual pace of working of an operator by comparing it with the mental picture of space of an operator working at normal speed. 36. What is Relaxation Allowance? Relaxation allowances are calculated so as to allow the worker to recover from fatigue. Relaxation allowance is a addition to the basic time intended to provide the worker with the opportunity to recover from the physiological and psychological effects of carrying our specified work under specified conditions and to allow attention to personal needs. 37. What is variable Allowance? Variable allowance is allowed to an operator who is working under poor environmental conditions that cannot be improved, added stress and strain in performing the job. 38. What is contingency Allowance? A contingency allowance is a small allowance of time which may be included in a standard time to meet legitimate and expected items of work or delays, the precise measurement of which is uneconomical because of their in frequent or irregular occurrence. 39. What is policy Allowance? “A policy allowance is an increment, other than bonus increment applied to a standard time (or to some constituent part of it, e.g., work content) to provide a satisfactory level of earnings for a specified level of performance under exceptional circumstances. Policy allowance are sometimes made as imperfect functioning of a division or part of a plant.”

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40. What is standard time? Standard time is the time allowed to an operator to carry out the specified task under specified conditions and defined level of performance.

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41. What is work sampling? Work sampling is defined as: “A technique in which a statistically competent number of instantaneous observations are taken, over a period of time, of a group of machines, processes or workers. Each observations recorded for a particular activity or delay is a measure of the percentage of time observed by the occurrence.” 42. What are the advantages of work sampling over time study? Advantages of Work Sampling Compared to Time Study 1. Many operations or activities which are impractical or costly to measure by time study can be measured by work sampling. 2. A simultaneous work sampling study of several operators or machines may be made by a single observer. 3. It usually requires lesser man- hours and costs less to make a work sampling study instead of making a continuous time study. 4. Observations may be taken over a period of days or weeks thus reducing the chances of day-to-day variations affecting results. 43. What are the disadvantages of work sampling? Disadvantages of Work Sampling 1. Work sampling is uneconomical for short cycle jobs. 2. It is also uneconomical for studying a single workman or even small group of workmen or machines. 3. Time study permits a finer breakdown of activities and delays than is possible with work sampling study. 4. Workman may change their normal pattern of working on seeing the observer, making the sampling study of very little value.

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44. What is MTM? Methods Time Measurement procedure is defined as: “A procedure which analysis any manual operation or method into the basic motions required to perform it and assigns to each motion a predetermined time standard which is determined by the nature of the motion and the conditions under which it was made”. 45. What are the advantages of PMTS? Advantages of PMTS 1. 2. 3. 4.

Short cycle jobs can be timed accurately. Rating, the most difficult part of time study is not necessary. The results obtained are consistent. A reasonable estimate of work content can be obtained before the task is actually carried out.

46. Mention the Steps involved in synthetic data. The steps involved in synthetic data: 1. Collect all the details about the job (dimensions, tools, methods, conditions). 2. Analyze jobs into constituent elements (activity grouping to enable synthetic element to be applied if relevant). 3. Select appropriate basic times from synthetic data covering contingent factors. 4. Select and apply synthetic data covering contingent factors. 5. Verify details of elemental analysis for job method and condition. 6. Total the basic times, rating and allowances to compute standard time for the job. 47. Mention Advantages of synthesis. The main advantage of synthesis is the reduced cost of application. By means of synthesis it is possible to establish times, which are equally satisfactory for planning and production control purposes.

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48. What are the Factors to be considered, while using PMTS. Factors to be considered while using PMTS. Application of PMTS requires that an operation which is to be measured is divided into basic motions as per the system selected. Each system has its own specific rules and procedures which must be followed exactly. Most PMTS do not include allowances, so these are added as in stop watch study. At the time of application of PMTS for the first time in a company the adjustment should be made if necessary, in order to match company’s performance level which is one time activity PMTS can be classified as to accuracy level, time required for application and the extent of method description. 49. Define predetermined time. Predetermined times are the tabulated values of normal time required to perform individual movements such as moving an arm from one position to another, etc. 50. Define Method time measurements. “A procedure which analyses any manual operation or method into the basic motions required to perform it and assigns to each motion a predetermined time standard which is determined by the nature of the motion and the conditions under which it is made”. 51. State some uses of MTM. Uses of MTM 1. 2. 3. 4. 5. 6.

Developing effective methods and plans in advance of beginning production. Improving existing methods.] Establishing time standards. cost estimating Training supervisors to become method conscious. Research in the areas like operating methods, performance rating.

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PART – B 1. Explain the various steps involved in method study. STEPS INVOLVED IN METHOD STUDY The detailed procedure for conducting the method study is shown in figure. Steps in Method Study SELECT RECORD EXAMINE DEVELOP DEFINE INSTALL MAINTAIN

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The job to be analyzed All relevant facts about present method The recorded facts critically. The most efficient, practical and economic method. The new method The method as a standard practice That standard practice.

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WORK STUDY

METHOD STUDY To improve methods of production

SELECT Work which can be studied with economic advantage

RECORD All facts about the job / operation

EXAMINE The facts critically (purpose, place, sequence, person) seek alternatives, simplify, eliminate, combine or change

DEVELOP A record of an improved method under prevailing conditions Reexamine and select best method

DEFINE Method, procedure, layout equipment working conditions, materials and select best method

INSTALL The improved method, plans arrange and implement

MAINTAIN Verify at regular intervals that the improved method is in use

-Fig. Method study procedure To achieve the improved method, process, layout and working conditions

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2. Explain flow diagram and string diagram. Flow Diagram Flow diagram is a drawing, substantially to scale, of the working area, showing the location of the various activities identified by their numbered symbols and are associated with particular flow process chart either man type or material type. C

B

E

I

2

1

4

2

D 3 6

H

1 A

5

1/2

G

F

Figure: A simple flow diagram The routes followed in transport are shown by joining the symbols in sequence by a line which represents as nearly as possible the paths or movement of the subject concerned. The procedure to make the flow diagram: 1. The Layout of the workplace is drown to scale. 2. Relative positions of the machine tools, work benches, storage, inspection benches are marked on the scale. 3. Path followed by the subject under study is traced by drawing lines. VEL TECH

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4. Each movement is serially numbered and indicated by arrow for direction. 5. Different colours are used to denote different types of movements.

String Diagram The string diagram is a scale layout drawing on which length of a string is used to record the extent as well as the pattern of movement of a worker working within a limited area during a certain period of time. It is especially valuable where the journeys are so irregular in distance and frequency to see exactly what is happening. The primary function of a string diagram is to produce a record of an existing set of conditions so that the job of seeing what is actually taking place is made as simple as possible. One of the most valuable features of the string diagram is the way it enables the actual distance travelled during the period of study to be calculated by relating the length of the thread used to the scale of the drawing. Thus it helps to make a very effective comparison between different lay outs or methods of doing job in terms of the travelling involved.

A

B

H

E G

C

F

D

I

J

Fig. String Diagram VEL TECH

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The main advantage of string diagram compared to flow diagram is that repetitive movements between work stations which are difficult to be traced on the flow diagram can be conveniently shown on string diagram. Procedure to draw string diagram: 1. 2. 3. 4.

A layout of the workplace or factory is drawn to scale on a soft board. Pins are fixed into boards to mark the locations of work stations, pins are also driven at the turning points of routes. A measured length of thread is taken to trace the movement (path). The distance covered by the object is obtained by measuring the remaining part of the thread and subtracting it from the original length.

3. Explain the steps involved in micro motion study. MICRO-MOTION STUDY Micro-motion study provides a technique for recording and timing an activity. Micromotion study is a set of techniques intended to divide the human activities in a groups of movements or Micro-motions (called as therbligs) and the study of such movements helps to find for an operator one best pattern of movement that consumes less time and requires less effort to accomplish the task. Therbligs were suggested by Frank B. Gilbreth, the founder of motion study. Micro-motions study was originally employed for job analysis but new uses have been found for this tool. The applications of micro-motion study include the following: 1. Is an aid in studying the activities of two or more persons on a group work. 2. As an aid in studying the relationship of the activities of the operator and the machine as a means of timing operations. 3. As an aid in obtaining motion time data for time standards. 4. Acts as a permanent record of the method and time of activities of the operator and the machine. The micro-motion group of techniques is based on the idea of dividing human activity into divisions of movements or groups of movements (therbligs) according to purpose for which they are made. Gilbreth differentiated 17 fundamental hand or hand and eye motions to which an eighteenth has subsequently been added. Each therblig has a specific color, symbol and letter for recording purposes. The therbligs are shown in Table.

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Therbligs refer primarily to motions of human body at the workplace and to the mental activities associated with it. They permit a much more precise and detailed description of the work than any other recording techniques.

Micro-motion study involves the following steps: 1. Filming the operation to be studied. 2. Analysis of the data from the films. 3. Making recording of the data. 1. Filming the operation: Micro-motion study consists of taking motion pictures of the activity while being performed by an operator. The equipment required to make a film or video tape of the operation consists of 16 mm movie camera, 16 mm film, wink counter (micro-chronometer) and other usual photographic aids. Micro-chronometer (or wink counter) is a timing device placed in the field of view while filming. Time is recorded in winks. (1 wink = 1/2000 of a minute). 2. Analysis of data from films: Once the operation has been filmed and film is processed, then the film is viewed with help of projector for analysis of micro-motions. The film is analyzed in the following way:

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Film is run at normal speed so as to get familiar with the pattern of movement involved. Table: Therbligs SYMBOL

CODE SH

DESCRIPTION

COLOUR

SEARCH

Locate an article

BLACK

F

FIND

Mental reaction at end of search

GRAY

ST

SELECT

Selection from a number

LIGHT GRAY

G

GRASP

Taking hold

RED

H

HOLD

Prolonged grasp

GOLD OCHRE

TL

TRANSPORT LOADED

Moving an article

GREEN

P

POSITION

Placing in a definite location

BLUE

A

ASSEMBLE

Putting parts together

VIOLET

U

USE

Causing a device to perform its function

PURPLE

DISASSEMBLE

Separating parts

LIGHT VIOLET

INSPECT

Examine or test

BURNT OCHRE

PREPOSITION

Placing an article ready for use

PALE BLUE

DA

I

PP

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RL

RELEASE LOAD

Release an article

CARMINE RED

TE

TRANSPORT EMPTY

Movement of a body member

OLIVE GREEN

R

REST

Pause to overcome fatigue

ORANGE

UNVOIDABLE DELAY

Idle – outside person’s control

YELLOW

UD

 

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A typical work cycle is selected from amongst the filmed cycles. Film is run at a very low speed and is usually stopped or reversed frequently to identify the motions (therbligs).

Therbligs after identification are entered in analysis sheet. Recording of data is done using SIMO chart. 4. Explain the principles of motion economy. PRINCIPLES OF MOTION ECONOMY There are a number of principles concerning the economy of movements which have been developed as a result of experience and which forms the basis for the development of improved methods at the workplace. These are first used by Frank Gilbreth, the founder of motion study and further rearranged and amplified by Barnes, Maynard and others. The principles are grouped into three headings: (a) Use of the human body. (b) Arrangement of workplace. (c) Design of tools and equipment. A. Uses of Human Body When possible: 1. 2. 3. 4.

The two hands should begin and complete their movements at the same time. The two hands should not be idle at the same time except during periods of rest. Motions of the arms should be made simultaneously. Hand and body motions should be made at the lowest classification at which it is possible to do the work satisfactorily.

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5. Momentum should be employed to help the worker, but should be reduced to a minimum whenever it has to be overcome by muscular effort. 6. Continuous curved movements are to be preferred to straight line motions involving sudden and changes in directions. 7. “Ballastic” (i.e., free swinging) movements are faster, easier and more accurate than restricted or controlled movements. 8. Rhythm is essential to the smooth and automatic performance of a repetitive operation. The work should be arranged to permit easy and natural rhythm wherever possible. 9. Work should be arranged so that eye movements are confined to a comfortable area, without the need for frequent changes of focus. B. Arrangement of the Workplace 1. Definite and fixed stations should be provided for all tools and materials to permit habit formation. 2. Tools and materials should be pre-positioned to reduce searching. 3. Gravity fed, bins and containers should be used to deliver the materials as close to the point of use as possible. 4. Tools, materials and controls should be located within a maximum working area and as near to the worker as possible. 5. Materials and tools should be arranged to permit the best sequence of motions. 6. “Drop deliveries” or ejectors should be used wherever possible, so that the operative does not have to use his hands to dispose of finished parts. 7. Provision should be made for adequate lightning, and a chair of type and height to permit good posture should be provided. The height of the workplace and seat should be arranged to allow alternate standing and seating. C. Design of Tools and Equipments 1. The colour of the workplace should contrast with that of work and thus reduce eye fatigue. 2. The hands should be relieved of all work of “holding” the work piece where this can be done by a jig or fixture or foot operated device. 3. Two or more tools should be combined where possible. 4. Where each finger performs some specific movement, as in type writing, the load should be distributed in accordance with the inherent capacities of the fingers. 5. Handles such as those used on screw drivers and cranks should be designed to permit maximum surface of the hand to come in contact with the handle. 6. Levers, cross bars and wheel bars should be in such position that operator can manipulate them with least body change and with greatest mechanical advantage.

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5. Explain different types of elements. TYPES OF ELEMENTS 1. A repetitive element is an element which occurs in every work cycle of the job. Examples, Picking up part for assembly, element of locating a work piece in a holding device. 2. An occasional element is one that does not occur in every work cycle of the job or which may occur at regular intervals. Examples, tool changing after sometime, adjusting tension or machine setting, instruction from supervisor. Occasional element is useful work to be included in standard time. 3. A constant element is an element for which the basic time remains constant whenever it is performed. Examples, Switch on machine, measure diameter, insert cutting tools. 4. A variable element is an element for which the basic time varies in relation to some basic characteristics of the product, equipment or process. Examples, Dimensions, weight, quality, etc. 5. A manual element is an element performed by a worker. 6. A machine element is an element automatically performed by a power driven machine. Examples, Press working parts, annealing tubes. 7. Governing element is an element occupying a longer time than that of any other element which is being performed concurrently example Gauge dimensions while turning diameter (turning diameter will be a governing element). 8. A foreign element is one that is observed during study but do not form part of the given activity of the cycle. Example, Dropping work on the floor, operator talking to his colleague. 6. Explain the various time study equipments. TIME STUDY EQUIPMENTS Basic time study equipment required to make the time study are: (1) Time study board, (2) Stop watch, and (3) Time study forms. Time study board: Time study board is simply a flat board, usually of plywood or of any suitable plastic sheet and it should have fittings to hold a stop watch and time study forms. The use of board provides support and resting face while writing observations on the shop-floor and makes the hands free to write and operate stop watch. Stop watch: Stop is the measuring instrument to observe the elemental timings and usually a decimal watch is used.

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A decimal minute stop watch has two hands. The small hand represents minutes on dial and completes one revolution in 30 minutes. The large hand represents centi minutes (I/100 th minute) and completes one revolution in one minute and each division on large dial represents 0.01 minute. Two commonly used types of stop watches are: Cumulative stop watch: The watch is started by pressing the winding knob located on the head of the watch and is stopped by pressing the winding knob. Pressing winding knob third time snaps the hands back to zero. Once started it will run until required number of cycles have been timed. Fly back stop watch: This is most commonly used watch. In this type of watch the movement is started and stopped by a slide (A) at the side of the winding knob (B). Pressure on the top of the winding knob causes both the hands to fly back to zero without stopping the mechanism from which point they move forward immediately. This type of watch is used for either fly back or cumulative timing method. The stop watch is shown in figure(1). Electronic timers are most widely used timing devices for time study. The electronic timer which performs the same function as the stop watch is sometimes referred to as electronic stop watch. Electronic data collectors and computers and motion picture camera (with constant speed motor drive) are also used for the purpose. Time study forms: Time study forms are usually printed forms of standard size. The use of standard forms is desirable as the constant informations, such as part number and part name, operation description, observers name and other description are pre-printed on the top of the form which eliminates the possibility of any details being missed. As the size of the forms are standardized they can be easily filed for future referencing. Time study forms are shown in figures (2 and 3).

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Fig.(1) Decimal-minute stop watch

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7. Explain the various categories of Allowances to build standard time. ALLOWANCES The normal time for an operation does not contain any allowances for the worker. It is impossible to work throughout the day even though the most practicable, effective method has been developed. Even under the best working method situation, the job will still demand the expenditure of human effort and some allowance must therefore be made for recovery from fatigue and for relaxation. Allowances must also be made to enable the worker to attend to his personal needs. The allowances are categorized as: (1) Relaxation allowance, (2) Interference allowance, and (3) Contingency allowance. Relaxation Allowance Relaxation allowances are calculated so as to allow the worker to recover from fatigue. Relaxation allowance is a addition to the basic time intended to provide the worker with the opportunity to recover from the physiological and psychological effects of carrying out specified work under specified conditions and to allow attention to personal needs. The amount of allowance will depend on nature of the job. Relaxation allowances are of two types – fixed allowances and variable allowances. Fixed allowances constitute a. Personal needs allowance. It is intended to compensate the operator for the time necessary to leave, the workplace to attend to personal needs like drinking water, smoking, washing hands. Women require longer personal allowance than men. A fair personal allowance is 5% for men and 7% for women. b. Allowances for basic fatigue. This allowance is given to compensate for energy expended during working. A common figure considered as allowance is 4% of the basic time. Variable Allowance Variable allowance is allowed to an operator who is working under poor environmental conditions that cannot be improved, added stress and strain in performing the job. The variable fatigue allowance is added to the fixed allowance to an operator who is engaged on medium and heavy work and working under abnormal conditions. The amount of variable fatigue allowance varies from organization to organization. VEL TECH

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Relaxation Allowance

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Interference Allowance It is an allowance of time included into the work content of the job to compensate the operator for the unavoidable loss of production due to simultaneous stoppage of two or more machines being operated by him. This allowance is applicable for machine or process controlled jobs. Interference allowance varies in proportion to number of machines assigned to the operator. The interference of the machine increases the work content. Contingency Allowance A contingency allowance is a small allowance of time which may be included in a standard time to meet legitimate and expected items of work or delays, the precise measurement of which is uneconomical because of their in frequent or irregular occurrence. This allowance provides for small unavoidable delays as well as for occasional minor, extra work. Some of the examples calling for contingency allowance are:   

Tool breakage involving removal of tool from the holder and all other activities to insert new tool into the tool holder. Power failures of small duration. Obtaining the necessary tools and gauges from central tool store. Contingency allowance should not exceed 5%. Personal Allowance

Constant Fatigue Allowance

Relaxation Allowance

Fatigue Allowance

Policy Allowance if applicable

Variable Fatigue Allowance

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Contingency Allowance

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Normal Time

Total Allowance

Standard Time

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Figure: Various allowances to build standard time

Policy Allowance

Policy allowances are not the genuine part of the time study and should be used with utmost care and only in clearly defined circumstances. The usual reason for making the policy allowance is to line up standard times with requirements of wage agreement between employers and trade unions. The policy allowance as defined by ILO: “A policy allowance is an increment, other than bonus increment, applied to a standard time (or to some constituent part of it, e.g., work content) to provide a satisfactory level of earnings for a specified level of performance under exceptional circumstances. Policy allowances are sometimes made as imperfect functioning of a division or part of a plant”. Various allowances used to build the standard time is shown in figure. 8. Compare work sampling, pre-determined time standards and stop watch timing. Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Creteria

Work Sampling

Speed, time required to measure and establish standards. Training and skill required supervision. Cost employee time, equipment, etc. Assistance in methods improvement Accuracy, subject, objective, degree or distortion Acceptability: employee, supervisor Interruption of work operations Applicability: for physical, clerical, professional work. Savings: How quickly how much Usability: In Scheduling production, evaluating performance Reporting requirements

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Predetermined time Standards

Stop Watch Timing

Average to fast

Slow to average

Average

Low to moderate

High

Moderate to high

Average

Fairly high

Average

Low to moderate

High

Good

Fair to good

Very high

Good to high

Fair

Good

Fair to good

Moderate

Low

Fairly high

Very good

Average

Average

Average to high

High

Average to high

Average to high

High

High

Average

Average

Average

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difficulty of furnishing

9. Explain the procedure for conducting a work sampling study. Procedure for Conducting a Work Sampling Study The following steps are involved in making sampling study: 1. Decide on the objective of the study: It is very important to first set the objectives of study as the duration of the study, number of observations, the design study sheet and elemental breakdown depends upon the objective. 2. Obtain the approval of the supervisor of the department in which work study is to be conducted. Make sure that the operators to be studied and the other people in the department understand the purpose of the study. Obtain their cooperation. 3. Decide upon work and delay elements: Work and delay elements represent the headings under which the observations are to be recorded. The nature of the work and delay elements differ from company to company depending upon the objective of the study and the work. 4. Decide upon the duration of the study: The duration of study depends upon the objective, number of observers, the accuracy desired and the frequency of occurrence of the activity. 5. Determine the desired accuracy of results: This may be stated as the standard error of a percentage or desired accuracy. The confidence level is also to be stated. 6. Make a preliminary estimate of the percentage occurrence of the activity or delay to be measured. 7. Design the study: (a) Determine number of observations to be made. (b) Determine the number observers needed. (c) Determine the number of days or shifts needed for the study. (d) Make the detailed plans for taking observations. (e) Designs the observation form. 8. Make the observations according to the plan, analyze and summarize the data. 9. Check the accuracy or precision of the data at the end of the study 10. Prepare the report and state conclusions. 10. Explain the different types of PMTS. Types of PMTS 1. Methods Time Analysis (MTA): A. B. Segur of Oak Park Illinois was one of the first to establish the relationship between the time element and the motion itself. Segur stated that the VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH

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method must be well defined before an attempt is made to time-analyze the motions involved. He developed a table of improvement principles involving many of his basic motions such as hold, grasp, preposition, position, avoidable delay and balance delay. The improvement principle involved here is in the elimination of the left hand as a holding device. In MTA, motion values are given up to fifth decimal. 2. Work Factor System (WF): This is first system of PMTS to have a general use with the work factor system it is possible to determine the work factor time for manual tasks by the use of predetermined data. A detailed analysis of each of the task is made based upon the identification of major variables of work and the use of work factor as a unit of measure. Then the standard time from the table of motion values is applied to each motion. Four major variables of work factor system are: 1. 2. 3. 4.

Body member Distance Manual control Weight or resistance

This system is applicable to highly repetitive system. Methods Time Measurement (MTM) Methods Time Measurement procedure is defined as: “A procedure which analysis any manual operation or method into the basic motions required to perform it and assigns to each motion a predetermined time standard which is determined by the nature of the motion and the conditions under which it was made”. The primary objective of MTM is to improve methods of operation and it establishes methods accurately before production starts by determining correct times and operations. Basic Motion Time study (BMT) Basic motion time study was developed and is thought by J.P. Woods and Gordon Limited, Toronto, Canada. Like other predetermined motion time system, all manual activity has been divided into basic motions. A basic motion, according to Woods and Gordon, is defined as “Any motion which starts from rest, moves through space, and ends at rest”. VEL TECH

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(Type 1) Reach (Type 2) Move (Type 3) Turn The body motion and symbols are very similar to the body motions employed by MTM. The only difference lies in the step, where the distance measured is the distance the foot travels. Advantages of PMTS 1. 2. 3. 4.

Short cycle jobs can be timed accurately. Rating, the most difficult part of time study is not necessary. The results obtained are consistent. A reasonable estimate of work content can be obtained before the task is actually carried out.

11. The elemental times (in minutes) for 4 cycles of an operation using a stop watch are presented below: Elements

Cycle time in minutes 1 2 3 4

1 2 3 4 5

1.5 2.6 3.3 1.2 0.51

1.5 2.7 3.2 1.2 0.51

1.3 2.4 3.4 1.1 0.52

1.4 2.6 3.4 1.2 0.49

Calculate standard time for the operation if (i) (ii) (iii)

Elements 2 and 4 are machine elements For other elements, the operator is rated at 110% Total allowances are 15% of the normal time.

Solution: The normal times are shown in Table. Table: Computation of Normal Time Element No. 1

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1 1.5

Cycle Time (Min.) 2 3 1.5 1.3

Avg. Cycle Time (3) 4 1.4

1.425

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Rating (4) 110%

Normal time = Avg. Time  rating 1.425  1.1 = 1.568

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2.7 3.2 1.2 0.51

2.4 3.4 1.1 0.52

2.6 3.4 1.2 0.4

2.575 3.325 1.175 0.505

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m/c elem. 110% m/c elem. 110%

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Normal time for the cycle = 1.568 + 2.575 + 3.658 + 1.175 + 0.555 = 9.531 Standard time = (9.531 + (0.15  9.531)) = 10.484 minutes. 12. The following data refers to the study conducted for an operation. Table shown actual time for elements in minutes Cycle – Elements 1 2 3 4 (i) (ii) (iii) (iv)

1

2

3

4

5

2.5 6.2 2.3 2.4

2.1 6.00 2.0 2.1

2.2 6.1 2.1 2.8

5.4 5.9 2.1 3.0

2.5 5.9 2.2 2.3

Element 2 is a machine element. Consider the observations as abnormal and delete the same if they are more than 2% of average time of that element. Take performances rating as 120. Take following allowances personal allowance 30 minutes in a shift of 8 hours.

Fatigue allowance – 15%, contingency allowance – 2%. Estimate the standard time of operation and production per 8 hours shift. Solution: On observation, for element No.1, cycle No.4, the cycle time is 5.4 min, which is more than 25% of the average time for that element. The cycle time 5.4 is neglected. Element No. 1 2 3 4

1 2.5 6.2 2.3 2.4

Cycle 2 3 4 5 2.1 2.2 *5.4 2.5 6.00 6.1 5.9 5.9 2.0 2.1 2.1 2.2 2.1 2.8 3.0 2.3 Total observed cycle time

Avg. Time 2.325 6.02 2.14 2.52 13.005

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Total Allowance = Fatigue allowance + contingency allowance ( Personal allowance per shift is given) Standard time = 15.606 (1 + 0.15 + 0.2) = 18.259 minutes (ii) Production Rate Per Shift Total time per shift of 8 hrs = 8  60 = 480 min. Less personal allowance 30 min. Effective production time 450 min. Time available for production Production in 8 hrs shift = Std. Time 450  18.259 = 24.64 = 25 jobs. 13. The following table shows a time study data. The times shown are continuous watch readings in minutes. Initial setting of stop watch is at 0.00 S.No.

Element

1. 2. 3.

Get two cases Put parts into cases Clamp two parts in position

Cycle Time 1 2 3 0.5 4.2 8.6 1.5 5.7 9.9 3.8 8.1 12.6

Performance rating 1.05 1.15 0.95

Take relaxation allowance as 15% and find the standard time. Solution: This is a cumulative timing method the cycle times are tabulated as shown in table. S.No. 1. 2. 3.

Element Get two cases Put parts into cases Clamp two parts in position

Cycle Time 1 2 3 0.5 0.4 0.5 1.0 1.5 1.3 2.3 2.4 2.7

Avg. time

Rating

Normal Time

0.466 1.266 2.466

1.05 1.15 0.95

0.49 1.456 2.343

Standard time = Normal time (1 + 0.15) = (0.49 + 1.456 + 2.343) (1.15) = 4.932 min. VEL TECH

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14. The observed times and the performance ratings for the five elements are given compute the standard time assuming rest and personal allowance as 15% and contingency allowance as 2% of the basic time. Element Observed time (min) Performance rating

1 0.2

2 0.08 85

3 0.50 80

4 0.12 90

5 0.10 85

80

Solution: The normal time is computed from the observed time as shown in the table below: Element 1 2 3 4 5

Observed time (minute) 0.20 0.08 0.50 0.12 1.10

Rating 85 80 90 85 80 Total

Normal time (min) 0.2  85/100 = 0.170 0.8  0.8 = 0.064 0.50  0.9 = 0.450 0.12  0.85 = 0.102 1.10  0.8 = 0.080 0.866

Normal time per piece = 0.866 min. Rest and personal allowance = 0.15  0.866 = 0.01299 Contingency allowance = 0.02  0.866 = 0.0173 min. Standard time per piece = Normal time / piece + Rest and personal allowance + Contingency allowance = 0.866 + 0.1299 + 0.0173 = 1.0732 minutes. 15. A worker operating on a machine performs the following elements. The description of element, their observed time and ratings are given. Compute the standard time for the component. Elemen t

Description

Observed time

Rating

Relaxation Allowance

A B C D E

Position the job Switch ‘ON’ and lower drill Drill hole Raise drill and switch ‘OFF’ Remove job from jig.

0.25 0.09 2.8 0.05 0.15

80% 100 90 80 110

10% 11% 12% 10% 11%

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Solution: The relaxation allowance is given separately for each element so the element wise standard time is to be computed and then added to together to get the standard time for the job. The computation of standard time is shown the table. Element A B C D E

Observed time 0.25 0.09 2.80 0.05 0.15

Rating

Normal time

80 100 90 80 110

0.25  0.8 0.09  1 0.80  0.9 0.05  0.8 0.15  1.1

Relaxation allowance .10 0.11 0.9 0.8 1.1

Standard time (min.) 0.22 0.099 2.746 0.043 0.183

 Standard time for the job = 0.22 + 0.099 + 2.746 + 0.043 + 0.183 = 3.251 minutes. 16. The elemental timings are given below along with the respective ratings. Assuming rest and personal allowance as 12% and contingency allowance of 2%, calculate the standard time for the operation. Element A B C D E F G H I J

Observed time 0.2 0.05 0.03 0.78 0.06 0.05 0.02 0.06 0.10 0.04

Rating

Remark

90 80 100 100 100 100 85 80 90 90

Once in 5 pieces Once in 20 pieces

Solution: The normal time for each component is computed as shown in table.

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Table: Computation of Normal Time

Elemen t (1) A B C D E F G H I J

Observed time (2) 0.2 0.05 0.03 0.78 0.06 0.05 0.02 0.06 0.10 0.04

Ratin g (3) 90 80 100 100 100 100 85 80 90 90

Frequency (4) 1 1 1 1 1 1 1/5 1 1 1/20

Normal Time (5) 0.080 0.040 0.030 0.7800 0.0600 0.0500 0.0340 0.0480 0.0900 0.0180

Normal time for the operation = 1.330 Standard time = Normal time + allowance = 1.330 (1 + 0.14) = 1.5162 min. 17. Turning gear blanks on centre lathe involves the following elements. The stop watch data is given. Assuming the rest and the personal allowance as 13% and contingency allowance of 2%, calculate the standard time. Elemen t 1 2 3 4 5

Description

1

Pick and place ‘ON’ M/c and tool approach Turn diameter Withdraw tool and stop Machine Release part and place it aside

0.2 0.3 1.05 1.13 1.28

Observation 2 3 4 1.46 1.55 2.31 2.38 2.54*

5.22 5.30 6.05 6.14 6.29

6.49 13.10 13.84 13.92 14.06

5

Ratin g

14.25 14.35 15.10 15.17 15.32

90 110 110 110 95%

Note: Element No.1, Observation No.4, Foreign element 2.54 to 5.02 Element No.5, Observation No.2, Foreign element 6.29 to 12.98

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Solution: Calculate the individual element times considering the stop watch readings. The times for the foreign elements are excluded from the corresponding elemental times. The individual timing are shown in table: Elemental time value in min. Element No. 1 2 3 4 5

1

2

3

4

5

Average time (minutes)

0.20 0.10 0.75 0.08 0.15

0.18 0.09 0.76 0.07 0.16

0.20 0.08 0.75 0.09 0.15

0.2 0.12 0.74 0.08 0.14

0.19 0.10 0.75 0.07 0.016

0.1940 0.0980 0.7500 0.0780 0.1500

Normal times are computed by multiplying observed time by rating factor. Elemen t

Observed time (min)

Rating

Normal Time

1 2 3 4 5

0.1940 0.0980 0.7500 0.0780 0.1500

90 110 100 110 95

0.1746 0.1078 0.7500 0.0858 0.1425 Total

1.2607

Basic (Normal) time per job = 1.2607 min. Rest and allowance and contingency allowance = 15%  Standard time = 1.2607 (1 + 0.15) = 1.4498 min. 18. A time study was conducted on a job consisting of three elements. Stop watch readings in hundredth of a minute are given. Using cumulative timing method along with rating factors. Calculate the standard time if allowance is 12%. Elemen t A B C VEL TECH

1 10 25 64

Stop watch readings 2 3 4 5 73 139 203 266 88 155 218 280 128 193 257 320

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Rating 80 100 110 VEL TECH HIGH TECH

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Solution: This stop watch readings are cumulative. The individual timings for elements are computed by subtracting proceeding reading from successive figure as shown in table below:

Example 25 – 10 = 15 for element B, 1st observation. Elemen t A B C

Individual elemental timings 1 2 3 4 5 10 09 11 10 09 15 15 16 15 14 39 40 38 39 40

Average time (min) 0.098 0.150 0.392

Ratin g 80 100 110 Total

Normal Time 0.0784 0.1500 0.4312 0.6596

Standard time = 0.6596 (1 + 0.12) = 0.7387 minutes. 19. A work sampling study was conducted to establish the standard time for an operation. The observations of the study conducted is given below: Total number of observations Manual (hand controlled work) Machine controlled work Machine idle time Average performance rating No. of parts produced Allowance for personal needs and fatigue Study conducted for 3 days Available working hours/day Calculate the standard time per piece.

= 160 = 14 = 106 = 40 = 80% = 36 = 10% = 8 hrs.

Solution: Total number of observations (N) No. of observations of production activity (Np) Observations of machine controlled work (Nm) Observations of hand cont6rolled work (manual) Nh Average performance rating R Duration of study

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(Each day 8 hour) No. of parts produced/day

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= 36

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(i) Overall time per unit (To) Duration of study No. of pieces produced / days 1440 =  40 minutes 36

To 

(ii) Effective time per piece (Te) Te = Overall time / piece  % of time spent on productive activity.  To   To 

Np N N p  Nm

 40 

N  106  14  160

 30 min. (iii) Breakdown of effective time per piece into machine controlled portion and hand controlled portion. Tm = machine controlled portion of the effective time per piece N Tm  Te  m Np = Te 

Nm Nm  Nh

= 30 

106  26.5 min. 106 + 14

Hand controlled portion of effective time per piece (Th) Th  Te 

Nh Nm  N h

14 120  3.5 minutes.

= 30 

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Normal time per piece Normal time per piece = Machine controlled portion of effective time per piece + Normal time of hand controlled portion of effective time/piece = Tm + (Th  R) = 26.5 + 3.5  0.8 = 29.3 min. Standard time per piece = Normal time + allowances = 29.3 (1 + 0.1) = 32.23 min. 20. The following data refers to a sampling study of production of one component. 1. Duration of data collection 5 days @ 8 hours per day 2. Number of operators = 10 3. Allowances given for the process = 15% 4. Production quantity in 5 days = 6000 components 5. Sampling data collected Days No. of observations Occurrence of activity

1 230 200

2 240 190

3 200 170

4 180 150

5 225 210

Calculate standard time of production of the component if average performance rating of the operator is 120% and the entire operation is manual. Solution: No. of observations (N) = 1075 No. of observations (Np)= 920 (Working) Total time worked No. of units produced 5  8  10  60  min. 6000  40 min.

Overall time per piece = To 

Effective time per piece (Te) = To 

Np

N 920  40  1075  34.23

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Normal time = Observed time  Rating = 34.23  1.2 = 41.07 min. Standard time = Normal time (1 + allowances) = 41.07 (1 + 0.15) = 47.24 min. 21. Explain the procedure to develop performance standards. Procedure to develop performance standards are detailed below: 1. Taking the study: A work sampling study is carried out for the operation whose standard time is to be determined. Observations are made at random intervals of time and are noted. Whether subject under study is working or idle are noted. Reasons for delays and interruption are recorded. The observations of production activity (working) are divided into machine working and hand working. Operators pace of performance are noted down when manual working is observed. 2. Rating index: individual performance ratings are averaged out to obtain an over all rating index. 3. Production quantity: Number of pieces produced during the period of study are determined from production reports. 4. Overall time per unit (To): It is calculated by dividing production time (duration of study) by number of pieces produced. 5. Effective time per unit (Te): Overall time per piece includes even the time spent on unproductive activities. Over all time is multiplied by percentage of productive activities to get the effective time per piece. Let

To=Overall time per piece N= Total number of observations Np=Observations of Production activity =Nm+Nh Nm=Observations of machine controlled work. Nh = Observations of hand controlled work.

 Effective time per piece (Te)= Overall time/ unit  production activity %  To 

Np N

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Nm Machine controlled effective time (Tm)  Te  N p

 Te 

Nm Nm  Nh

and Manual (hand) controlled time (Th)  Te  or

Nh Nm  Nh

(Te- Tm)

Normal time per piece Let R be the performance rating index Th = Hand controlled portion of effective time Tm=Machine controlled effective time Th  R Tm 100 Rating is applied to only manual (hand controlled) elements Normal time =

Standard time per piece Standard time is calculated by adding relevant allowances to the normal time. 22. Define standard data and explain the types of standard data. Definition and Concept of Standard Data: Standard data is a catalogue of ‘normal time’ values for different elements of jobs or for minute movements involved in different jobs. This catalogue is prepared by compiling the timings of a number of standard elements. The necessity of preparing such a time catalogue or standard data arose because (in an industry), generally, similar elements or motions are involved in many jobs. (As an example, drilling holes is a common feature of many machine shop jobs). If time study is to be conducted for every new job, it is naturally wasteful to retime those elements of the new job which are in common with the previously timed jobs. In such cases it is always economical to use the previously timed and compiled data, called standard data. Once the standard data is ready, one requires to list the job elements or the minute motions of an operations, read their times from the standard data catalogue and add them up. The total time thus obtained is an estimate of normal time for a job which can be converted into standard time by adding proper allowances. VEL TECH

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Types of Standard Data. Two types of standard data are used and each is calculated by a different method. a.

Standard data (Macrodata) is based upon element of a job, is also known as ‘Element Standard Data’ and is compiled for a representative group of elements by macro scopic methods. It is for families of jobs and gives normal time for various elements of jobs. The time values are procured form the actual stop watch (or other) measurements of the tasks (within the job family) carried out previously. This type of data is restricted to particular operations are broken down into elements; which are the, timed to get a system of data showing normal element time for any and all jobs (completed on that lathe but) having different sizes. Materials, feed, speed, depths of cut, and method of holding the job, etc. Thus compiled large data helps considerably in timing a new job, without going into any more time study. This shortens considerably the amount of time and labour needed to find the standard time for a new job.

b.

Universal standard data (Microdata) is based upon minute movements (i.e., therbligs-reach or in oth er words, all jobs can be broken into therbligs. Micro data complies normal time for a work cycle or a task by analyzing the fundamental types of motions (therbligs). This analysis is carried out by frame to frame study of the film of the work cycle recorded by movie camera (Micromotion Analysis). M-T-M (method- Time – Measurement) and work factor system are examples of universal standard data.

Macrodata deals with (big) elements and microdata with (minute) motions. Macrodata is collected by time study (say stop watch study) whereas microdata is the result of micromotion study and analysis; but both lead to normal time for a work cycle.

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UNIT – III PART – A 1. Define Product Planning. Product planning may be defined as – Evaluation of the range, mix, specification and pricing of existing and new products in relation to present and future market requirements and competition; planning of product range, mix, specification and pricing to satisfy company objectives; and specifying the research, design and development support required. 2. What is Feasibility study? The Feasibility study includes (i) a detailed need analysis (i.e., definition of system operation and maintenance support requirements (ii) identification of alterative configurations, (iii) screening and evaluation f the available alternatives and (iv) selection of a preferred approach. 3. What is a product? A product is an article obtained by the transformation of raw material and is marketed/sold by the manufacturer, i.e., a product is a salable item. 4. What is the need for product development? Product development is essential in order to, (i) Meet changing consumer needs. (ii) Manufacture improved and low cost products. (iii) Maintain (one’s) sales position and profit margin. 5. Define Imitation. Imitation, i.e., marketing another product similar to one in the market, e.g., when one concern introduced a refrigerator with automatic defrosting unit, others imitated and marketed their own refrigerators having such a unit. 6. Define Adaptation.

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Adaptation, i.e., developing an improved product for an already existing one in the market, e.g., the introduction of electronic and atomic clocks (against mechanically spring wound clocks). 7. Define Value Analysis. Value analysis is the systematic application of recognized techniques which identify the function of a product or service, establish a monetary value for the function and provide the necessary function reliably at that lowest overall cost. 8. Define Value Engineering. Value Engineering is an organized creative approach to ensure that essential functions of a product or service are provided at minimum overall cost without sacrificing quality and reliability. 9. Mention the uses of Value Engineering. USES OF VALUE ENGINEERING 1. It is a cost prevention as well as cost elimination technique thus reducing cost of the product. 2. Helps employees for better understanding of their jobs and orients them towards creative thinking. 3. Balance the cost and performance. 4. Prevents over design of components. 10. What are the reasons for unnecessary cost? In any product, if one carefully analyses, approximately 20-30% of the product cost is unnecessary. The reasons are: 1. Lack of relevant information – leads to wrong decisions which increase costs. 2. Honest and wrong beliefs – These results from accepting opinions, beliefs and theories without justification and verification. 3. Temporary circumstances. 4. Habits and attitudes. 5. Lack of ideas. 11. What is Process Engineering? Process Engineering (process design) is concerned with successfully transforming the design into a physical product. VEL TECH

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Process engineering is concerned with determining the method of manufacture of a product, establishing the sequence and type of operations involved, tools and equipment’s required and analyzing how the manufacturing of a product will fit into the facilities. 12. Define Process Planning. It is defined as the systematic determination of methods by which a product is to be manufactured economically and competitively. It consists of selecting the proper machines, determining the sequence of operations, specifying the inspection stages, and tools, jigs and fixtures such that the product can be manufactured as per the required specification. 13. Mention the factors affecting Process Planning. The activities that are associated with process planning are: List of operations to be performed and their sequence. Specifications of the machines and equipment required. Necessary toolings jigs and fixtures. Gives the manufacturing details with respect to feed, speed, and depth of cut for each operation to be performed.  It gives the estimated or processing times of operations.    

14. Mention the informations required for process planning. 1. 2. 3. 4.

Assembly and component drawings and bill of materials. Machine details The standard times for operation and details of set-up time for each job. Availability of toolings.

15. What are the factors affecting the selection of Batch sizes? The main factors affecting the selection of batch size are, 1. 2. 3. 4. 5.

Setup and preparation costs of production (make ready cost) Production and consumption rates Interest charges per piece per unit time Average storage costs Unit sales price of the product.

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16. What are the Criteria for selection of Batch sizes? Criteria for Selection of Batch Sizes    

Minimum costs per piece Maximum profits per batch Maximum return batch (Maximum ratio of profit to cost of production) Maximum rate of return per unit time.

17. Define an Assembly Line. An assembly line can be considered as a “PRODUCTION SEQUENCE” where parts are assembled together to form an end product. The operations are carried out at different workstations situated along the line. 18. What are the advantages of Assembly Line? Advantages of Assembly Line (or flow line) 1. 2. 3. 4. 5. 6.

Uniform rate of production. Less material handling. Less work-in-process. Easy production control Effective use of facilities / labour. Less congestion.

19. What are the disadvantages of Assembly Line? Disadvantages   

More capital intensive (i.e., demands larger investments) Low flexibility Monotony of work for operators.

20. What are the factors due to which the problem of line balancing arises? The problem of Line Balancing arises due to the following factors 1. The finished product is the result of many sequential operations. 2. There is a difference in production capacities of different machines (The output from different machines is not identical). VEL TECH

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21. Define Work Station. Work Station: A work station is a location on assembly line where given amount of work is performed. 22. Define Cycle Time. Cycle Time: It is the amount of time for which a unit that is assembled is available to any operator on the line or it is the time the product spends at each work station.

Cycle Time (CT) =

Available time period AT  . Output units required / pereiod Output

23. Define Task. Task: The smallest grouping of work that can be assigned to a workstation. 24. Define Predecessor task. Predecessor task: A task that must be performed before performing another (successor) task. 25. Define Task time. Task Time (ti) : Standard time to perform element task. 26. Define Station time. Station time (sk): Total standard work content of specific workstation. 27. Define Balance Delay. Balance Delay (BD) : Percentage of total idle time on the line to total time spent by the product from beginning to end of line. n

B.D. =

n.CT- sk  100 k=1

n  CT

B.D. = Balance Delay n = number of work stations CT = Cycle time VEL TECH

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= Station time.

28. What are the steps in solving line balancing problem? Steps in Solving Line Balancing Problems 1. 2. 3. 4. 5. 6.

Define task. Identify precedence requirements. Calculate minimum number of workstations required to produce desired output. Apply heuristics to assign task to each station. Evaluate effectiveness and efficiency. Seek further improvement.

29. Define Line efficiency. Line efficiency (LE) =

Total station time  100 Cycle time  No. of work stations

30. Mention the constituents of product planning. Constituents The product planning function often includes: (1) Marketing and Marketing analysis. (2) The performance of feasibility studies, and (3) Advanced planning. 31. When value engineering should be implemented in company?      

V.E. should be applied in case of the following indications: Company’s products are losing in the market and there is a decline in sales. Company’s products are priced higher than the competitors. New design of products being undertaken. Symptoms of disproportionate increase in cost of production. Decreasing profitability and return on investment (ROI). Company failing to meet its delivery commitment.

32. Define Man Power planning. Definitions: “Manpower planning is a process by which management determines how the organization should move from its current manpower position to its desired manpower position.

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According to Geisler: “Manpower planning is the process including forecasting developing and controlling by which the firm ensures that it has the right kind of people of right number and at right place doing work for which they are economically most suitable.”

PART – B 1. Explain the various steps involved in man power planning. Process of Manpower Planning The various steps involved in manpower planning: i. Manpower demand forecasting: Manpower demand forecasting at the micro level (organizational level) can be done in two ways, - by ascertaining the total manpower requirements for the entire organization for a given period and then estimating requirements of each unit, division or department. OR - First determine the manpower requirement of each department and subsequently make a total projection. Many forecasting methods are available like simple and multiple regression models. It should be clearly mentioned as to up to what future period the forecasting is done. ii. Manpower supply forecast: The supply of manpower should include both, internal supply (affected by promotion and transfer), and external supply (study of labour market). There are many activities which give significant information on which manpower planner builds up his plan. 

 

Manpower inventory sets out what the firm has in stock or can expect to have in stock in future. Comparison of this data, against the requirements gives an immediate picture of the shortfall. Appraisal of the existing performance level tells us the present level of manpower utilization. Assessment of labour market situation tells us the availability of the required manpower from which planner may like to source the requirements.

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iii. Manpower Inventory: If the manpower planning to be realistic then it should be based on sound foundation of factual information. Thus, the planner must have as clear picture as possible of the existing staff. A manpower inventory provides the information about existing manpower. The manpower inventory gives the information about existing employees with regard to number, skill, age group and many other details. iv. Manpower audit: Manpower audit requires systematic analysis of data and it describes the collected data together with its analysis: Manpower Audit answers the following questions: (i) (ii) (iii) (iv) (v) (vi) (vii)

What is the position of starts and termination? What is the position of absenteeism? What type of labour is difficult to recruit? Salary and age distribution. Trends in labour market with respect to needed skills? Reasons for employee turnover? From where do our recruits come from?

v. Assessment of market supply situation. vi. Estimating manpower supply: Manpower supply can be from both internal sources and external sources. The manpower supply from internal sources depends on two factors they are – (a) The extent to which the present employees survive in the organization, and (b) The rate of internal turn over (i.e., transfers and promotion) in the organization. vii. Analyzing the internal movements 8. Manpower supply from external sources: Four determinants of final manpower plan are (i) (ii) (iii) (iv)

Manpower utilization Manpower supply Training and development Personnel policies.

Figure shows the manpower planning process. Advantages of Manpower Planning

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1. By anticipating the need for various types of skill requirements and levels of personnel, well in advance, a manpower planning will be able to give adequate lead time for recruitment, selection and training of such persons. 2. A manpower plan could give an overall picture for identification of surplus or shortage of personnel. 3. An effective labour cost control and manpower development. 4. In the absence of availability of required skills in the labour market, the steps are taken to promote the personnel from internal sources with training. 5. Manpower inventory can provide information to management for internal succession of managerial personnel if there is an unanticipated turnover. 6. Manpower planning will help managers to firm upon their long-term supply and demand expectations. CORPORATE OBJECTIVES

MARKET DEMAND

DEMAND FOR PERSONNEL

ASSESS PERSONNEL SUPPLY

EXISTING

LABOUR MARKET

POTENTIAL

PERSONNEL ESTIMATES

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TRAINING PLANS

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PERIODIC REVIEWS

PROMOTION PLANS

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Figure: Manpower Planning Process

2. The precedence diagram is shown below for six workstations. Assign the work elements to workstations. Calculate line efficiency and balance delay. I

II

4

2

1

III

2

3

2

5

4

5

Work elements 1 2 3 4 5 6

IV

3

No. of precedence 0 1 2 1 2 5

4 6

Ti 4 2 3 2 5 4

Solution: Let the cycle time be (CT) = 8 min. Assignment of work elements to work stations

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Station I

Element 1 2

II

4 5

III

3 6

Ti

 4    2  2    5  3    5

Stations sum 6

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100

7

8

Idle time 2

1

0

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Line efficiency

=

Total station time CT  No. of workstations

=

21  100  87.5% 38

Balance delay (BD) = =

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Idle time of all workstations  100 Available working time forall stations 03  100  14.29% 21

Heuristic method will not give optimal solution. 3. For the given precedence diagram, carry out the line balancing and improve the solution using heuristic method.

2

3

3

6

4

3

5

5

4 1 4

7

2

3

6

6

7

8

10

11

IV

V

3 9 I

II

III

Assignment of work elements to workstations The cycle time is 13 Work Station Time (min) Idle time = 2 + 5 + 35 + 7 = 19 6 3 2

I 11 4

II 13

III 8

3

IV 8

V 6 5

5

4 19  100  150% Idle time % = 1 13 Rearranging the4 workstations 3 7 with a cycle 2 time of 13 minutes. 6

7

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8

6 11

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101 I

II

III

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9 IV

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Work Station Time in (min)

I 11

II 13

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III 11

IV 11

Here the idle time is 6 min i.e., 46%. Step 3. Line balancing by rearranging the workstations,

2

3

6

3

4 1 4

7

6

7

4

3

5

3

6

10

11

5

2 8 3 9

I

II Work Station Time in (min)

IV

III I 11

II 12

III 12

IV 11

Idle time is 2 minutes cycle time is 12. Idle time % = 16.6% only. An alround improvement. VEL TECH

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4. Consider the problem 2

3

3

6

4

3

5

5

4 1 4 6

7 7

2

3

8

10

6 11

3 9 Solution: Rank positional weightage (RPW) = weight of the activity + weightage of all activities I following the same. RPW for the elements are, Element 1 2 3 4 6 7 8 9 10 11

RPW 4 + 3 + 6 + 3 + 5 + 4 + 7 + 2 + 3 + 6 + 3 46 3 + 6 + 3 + 5 = 17 6 + 3 + 5 = 14 3 + 5 = 08 4 + 7 + 2 + 3 + 3 + 6 = 25 7 + 2 + 3 + 3 + 6 = 21 2 + 3 + 6 = 11 3 3 + 6 = 09 6

Step 2. Arranging the elements in descending order of RPW. Element RPW

1 46

6 25

7 21

2 17

3 14

8 11

10 9

4 8

11 6

5 5

9 3

Step 3. Line balancing, on observation, the total time taken is 46 minutes assuming 4 workstations, the cycle time lies between 11 and 12 min. Taking cycle time as 12 min. fill each workstation starting with the element with highest RPW and proceed to other elements. Elements

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6

7

2

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3

8

10

4

11

5

9

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II III IV

I

4 -

4 -

7 -

Work Station Idle time

3 *

I 1

6 -

II 0

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III 0

3 -

3 -

6

5

3 -

IV 1

As the workstation I concerned, Element 1 has a time of 4 minutes. We are left with 12 – 4 = 8 minutes. Look for next element in the same order, i.e., element No.6 has the time of 4 minutes. Enter this in workstation I. Now there is a scope of accommodating elements for 4 minutes (as cycle time is 12 minutes). Element number 2 having time of 3 minutes is assigned which makes the time as 11 minutes. So idle time is 1minute. Similarly proceed further for all the remaining workstations Total idle time is 2 minutes % of idle time = 16.67%. 5. Explain Process Planning. PROCESS PLANNING Process Planning establishes the shortest route that is followed from raw material stage till it leaves as a finished part or product. The activities that are associated with process planning are:     

List of operations to be performed and their sequence. Specifications of the machines and equipment required. Necessary toolings jigs and fixtures. Gives the manufacturing details with respect to feed, speed, and depth of cut for each operation to be performed. It gives the estimated or processing times of operations.

All the above information is represented in the form of a document called process sheet or route sheet. The information given in the process sheet can be used for variety of activities. 

It becomes the important document for costing and provides the information on the various details like set-up and operation times for each job.

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The machine and manpower requirements can be computed from the set-up and operational times. Helps to carryout scheduling. The material movement can be traced. It helps in cost reduction and cost control. It helps to determine the efficiency of a work centre.

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The information required for process planning i. Assembly and component drawing and bill of materials (part list) These details give the information regarding the general description of part to be manufactured, raw material specification, dimensions and tolerances required, the surface finish and treatment required. ii. Machine or equipment details with respect to The various possible operations that can be performed. The dimensions (maximum and minimum) that can be machined on the machines. The accuracy of the dimensions that can be obtained. Available feeds and speeds on the machines. iii. The standard times for operation and details of set-up time for each job: This helps to compute the standard time of the operation and hence the production rate. iv. Availability of toolings (both standard and special purpose toolings): Factors affecting process planning (i) (ii) (iii) (iv) (v) (vi)

Volume (quantity) of production. Delivery dates for components or products. Accuracy and process capability of machines. The skill and expertise of manpower. Material specifications. Accuracy requirements of components or parts.

Steps in Process Planning 1. Detailed study of the component drawings to identify the salient features that influence process selection, machine selection, inspection stages and toolings required. 2. List the surfaces to be machined. 3. The surfaces to be machined are combined into basic operations. This step helps in selection of machines for operation. 4. Determine the work centre, tools, cutting tools, jigs and fixtures and inspection stages and equipment. 5. Determine the speed, feed and depth of cut for each operation. 6. Estimate the operation time. VEL TECH

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7. Find the total time to complete the job taking into account the loading and unloading times, handling times, and other allowances. 8. Represent the details on the process sheet. 6. A company wants to expand the solid propellant manufacturing plant by the addition of more 1 tonne capacity curing furnace. Each tonne of propellant must undergo 30 minutes of furnace time including loading and unloading operations. Furnace is used only 80 per cent of the time due to power restrictions. The required output for the new layout is to be 16 tonnes per shift (8 hours). Plant efficiency (system) is estimated at 50 per cent of system capacity. (a) Determine the number of furnaces required (b) Estimate the percentage of time the furnace will be idle Solution:-

Actual output System Efficiency 16 tonnes/shift = 0.5 = 32.0 tonnes/shift

Required system capacity =

Required system capacity (hrs) Individual furnace capacity

32 tonnes / shift 0.8  8 hrs / shift = 5.0 tonnes / hrs. 1 tonne  2 tonnes / hr per furnace = 0.5 hr =

Required furnace capacity Individual furnace capacity 5 tonnes/hr  2.5 furnaces (say 3) N= 2 tonnes/hr/per furnace

(i) Number of furnaces required (N) =

(ii) Total Hours available per shift

= 3 furnace @ 8 hours = 24 furnaces hrs

(iii) Total Hours of actual use per shift = 16 tonnes  0.5 hr/tonne = 8 furnace hr Idle hours = 24 – 8 = 16 hours. Percentage idle time = VEL TECH

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7. A lathe machine is used for turning operation and it takes 30 minutes to process the component. Efficiency of the lathe is 90 per cent and scrap is 20 per cent. The desired output is 600 pieces per week. Consider 48 hours per week. Determine the number of lathes required? Solution: Assuming 50 weeks in a year The output per annum = 600  50 = 30,000 units The scrap rate is 20%  The quantity to be produced (including scrap) Required output 30,000   (1 - Scrap rate) 1  0.2 = 37,500 units Total time required for turning 30  18,750 hours 60 Production time required with 90 per cent efficiency  37,500 



18,750  20833.3 hours. 0.9

Time available per lathe per annum = 48  50 = 2400 hrs. Time required (hrs)  Number of lathes required = Time available (hrs) 20833.3  2400  8.68 = 9  No. of lathes required

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8. An article is processed on three machines A, B and C as shown below. Machine A B C

Machine operation time Processing Total 2 2.5 4.5 3 10 13 2 5 5

Preparation time (min/day) 15 30 35

Cleaning (min/day) 10 10 10

A study revealed that if the jigs for machines B and C were to be redesigned, loading and unloading times could be reduced to 2 min and 1 minute respectively. (a) Find the number of pieces produced per day (single shift of 8 hrs). (b) Costing has shown that unless production is increased by 20 per cent the installation of new jigs would not be worthwhile. Would you recommend redesign of jigs? (c) If the number to be produced is large, suggest changes in present arrangement and estimate new production rate.

Solution: Machine A B C

Processing time (minutes) 2 + 2.5 = 4.5 3 + 10 = 13 2+5=7

Preparation and cleaning (min./day) 25 40 35

(a) Cycle time for the job is 13 minutes. Total production time available / day = 480 – Preparation and cleaning time / day For machine B (critical operation) = 480 – 40 = 440 min Output / day = 440/13 = 34 pieces (b) Redesigning the new jigs: The redesigning of new jigs will change the cycle time, i.e., the cycle time is reduced to 12 minutes (from 13 min as the unloading and loading time is reduced by 1 minute). Output/day = 440/12 = 36.4 = 37 pieces 37  34  9% Percentage increase in output = 34 So the redesign of jigs is not justified. VEL TECH

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(c) Suggestion if the number of pieces is large: The critical operation (bottleneck) is processing on machine B which requires 10 minutes. If we introduce one more machine of kind B, then the cycle time will be reduced to 8 min. B

A

C

B

The new output =

440  55 pieces. 8

9. A component is to be processed on two machines Lathe and milling machine. The sequence of operation is first turning and then milling. The machine times are given below: Turning Milling

12 minutes. 20 minutes.

1. Estimate the number of machines required to machine 2500 components per week if available machine hours per week are 48. 2. What are the steps that you propose to reduce number of machines. Solution: No. of components required to be machined = 2500/week The available time (in hr.) per week = 48 Assuming 50 weeks in a year, no. of components to be machined/annum = 2500  50 = 1, 25,000 annum. 12  25,000 hrs. The time required to machine 1, 25,000 components = 1,25,000  60 Time available per annum = 48  50 = 2400 hrs. No. of lathes required = VEL TECH

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= 11 No. of milling machines required =

1,25,000  2400

20 60  17.36

= 18 2. Steps to reduce the number of machines. Increase the number of shifts. Addition of second shift is going to reduce the number of machines by 50 per cent. 10. Explain the Value Analysis Procedure. Value Analysis Procedure. The basic steps are:  Identify the product (1) Blast -  - Collect relevant information (2)  Define different functions (3)

(a)

 Create different alternatives (4)

Create - 

(b)

 Critically evaluate the alternatives (5)

 Develop the best alternatives (6)

Refine - 

(c)

 Implement the alternative (7)

Step 1. The first step is to identify the Product for which Value Analysis is to be carried out. The product should be one which if redesigned can add to the sales income and would not become obsolete in near future. Value Analysis may be applied to the product as a whole or to only some of its component parts. Step 2. The information relevant to the product may be as follows: (i) (ii) (iii) (iv) (v)

Technical specifications with drawings, Manufacturing processes, machine layout and instruction sheets, Time study details and manufacturing capacity, Complete cost data and marketing details, and Latest developments in related products.

Step 3. Identify the primary, secondary, and tertiary functions of the product. Specify value content of each function and identify the high cost areas. VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH

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Step 4. Knowing the functions of each component part and its manufacturing details, generate the ideas and create different alternatives so as to increase the value of the product. The Value Analysis team can hold Brainstorming sessions. All suggestions feasible or non-feasible are recorded without any criticism; rather, persons are encouraged to express their views freely. Step 5. The different ideas recorded under step-4 are compared, evaluated and critically assessed for their virtues, validity and feasibility as regards their financial and technical requirements. Ideas technically sound and involving lower costs are further developed. Step 6. Detailed development plans are made for those ideas which, during step -5, appear most suitable and promising. Development plans comprise of, drawing the sketches, building of models, and conducting discussions with the purchase section, finance section, marketing division, etc. Step 7. The best found idea under step-6 is converted into a prototype manufacture which ultimately goes into operation and its results are recorded. The product cost and functional analysis is carried out to assess the net saving as the result of Value Analysis. Advantages: 1. Value Analysis is a much faster cost reduction technique. 2. It requires little expenditure because the Value Analysis team can be formulated out of the staff available in different sections like purchase, production, finance, etc. 3. Value analysis reduces production costs and adds to sales income of the product. Applications A few applications of Value Analysis / Value Engineering are listed below: 1. 2. 3. 4. 5.

Military equipments (T-55 tanks and many other equipments). Import substitutes Machine tool industry Industries making material handling equipments Auto industries, etc.

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11. Find the economic batch quantity using the data given below: Set-up cost = Rs.20 per set-up Annual requirements or yearly consumption of parts = 1000 Inventory carrying cost = 10% of value/year Cost per part= Rs.2 Solution: Given S R C I

= Rs.20 = 1000 = Rs.2 = 10% = 0.1

Using above derived equation (c)

E.B.Q 

2  1000  20  447 parts. 2  0.1

- Therefore the number of batches to be made for manufacturing the parts are

1000  2.24 447

which is not practical. - Nearest, 2 batches can be made and therefore the modified EQB =

1000  500. 2

12. A product is sold at a rate of 500 pieces a day and is manufactured at a rate of 2,500 pieces a day. The setup costs of the machines are $1,000 and the storage costs are found to be 1.5  10-3 dollars per piece per day. Labour charges are $3.20, materials $2.10, and overhead $4.10 per piece. If the interest charges are 8 percent, find the minimum cost batch size and the costs of the production run. Solution:In this case we have s = $1,000 B = $0.0015 per piece per day ac = 500 pieces per day VEL TECH

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ap = 2,500 pieces per day

 

Hence

ac 500   0.2 ap 2,500

As the time unit taken here is one day, it is necessary to calculate the interest charges per day. These are expressed in a decimal form. Assume 300 working days in a year; then i=

8 1  2.67  10 4 per day 100 300

and the constant costs per piece are c = 3.20 + 2.10 + 4.10 = $9.40 per piece  I = ic = 2.67  10-4  9.40 = $2.5 10-3 per piece per day The minimum cost batch size,

Qm 

2  500  1,000  13,000 pieces. 2.5  103  1.2  2  1.5  10 3

The total production costs per piece, Ym  c 

2s Qm

= 9.40 +

2,000  $9.55 per piece 13,000

The production run will involve the sum of QmYm = 13,000  9.55 = $124,000

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Special cases 1. When the production period is comparatively short and the storage charges small, a simplified version can be obtained for equation. These conditions may be expressed by B
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