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Integral Logistics Management: Operations and Supply Chain Management Within and Across Companies,

Paul Schönsleben, Steven R. Schmid, Bo O. Jacobson

Chapter 13

Capacity Management - all with Video Answers

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Chapter Questions

Problem 1

Capacity Determination

The following exercise was developed on the basis of a communication from Barry Firth, CPIM, Melbourne, to whom we extend many thanks.

A plant runs $10 * 8$ hour shifts per normal week. A work center in the plant has 5 identical machines, each requiring one operator to run it. This is a machine-paced work center (a machine capacity). Operators get a total of 1 hour for breaks, and they usually take their breaks at the same time. Each machine requires one episode of planned maintenance per week of 3 hours, scheduled by the planner. During the last 6 weeks, the performance data in Figure 13.7.1.1 were recorded:
$$
\begin{array}{|l|c|c|c|c|c|c|}
\hline \text { Week No. } & 1 & 2 & 3 & 4 & 5 & 6 \\
\hline \begin{array}{l}
\text { Number of working } \\
\text { days }
\end{array} & 5 & 4 & 5 & 5 & 5 & 5 \\
\hline \begin{array}{l}
\text { Actual machine } \\
\text { hours (setup+run) }
\end{array} & 260 & 200 & 280 & 320 & 260 & 280 \\
\begin{array}{l}
\text { Maintenance time } \\
\text { in machine hours }
\end{array} & 15 & 12 & 18 & 15 & 15 & 15 \\
\hline \begin{array}{l}
\text { Standard machine } \\
\text { hours produced }
\end{array} & 220 & 160 & 240 & 280 & 220 & 220 \\
\hline
\end{array}
$$
Questions:
a. What is the theoretical capacity in machine hours per normal week (5 days)?
b. Taking into account scheduled nonproduction events, what is the availability (as a percentage) of machine time per normal week, without considering operator constraints?
c. What is the availability (as a percentage) of machine time per normal shift, taking into account the normal working conditions for operators?
d. If the tactical utilization is targeted to be $90 \%$, what value should be used for the utilization factor of machine time for capacity rating purposes?
e. What is the demonstrated capacity per normal week of this work center? (Adjust the data for week 2 to correct for the short week.)
f. What was the actual utilization (as a percentage) through the 6 weeks in review?
g. What was the actual work center efficiency through the 6 weeks in review?
h. If planned efficiency is targeted to be $85 \%$, and taking into account your answer to question (d), what was the rated capacity per normal week?
i. Compare your answers to questions (a), (e), and (h). What should we do now?

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Problem 2

Algorithms for Load Profile Calculation

One of the problems associated with the use of simple algorithms is that an operation can extend across several load periods (see Figure 13.2.2.2). This exercise will examine how manul or computer algorithms establish capacity and load in a load profile.

Use Figure 13.7.2.1 to enter the capacity or load curve (continuous or rectangular distribution within a time period) for a work center, given the problem outlined below.
(COLUMN CANT COPY)
Fig. 13.7.2.1 Load profile calculation.
a. Determine the start date of each period and enter it into the figure above, given 2 weekly periods of 3.5 days each ( $1 / 2$ calendar week): Sunday morning to Wednesday noon and Wednesday noon to Saturday evening. The load profile starts with Sunday morning, May 9 (as indicated in the figure). The load profile covers 6 periods (3 weeks).
b. Allocate theoretical capacity to each of the 6 time periods, respecting the following data: At the work center, the plant runs one 8-hour shift per normal workday ( 8 a.m. to 12 p.m., 1 p.m. to 5 p.m.). The work center has 5 identical machines. Saturdays and Sundays are off. Furthermore, May 13 and May 24 are public holidays (in practice, these dates would change each year). Note that "today," or the moment of the inquiry, is 7 a.m. on Wednesday, May 12.
c. Assume no existing load on the work center. For the following operation, allocate its standard load to the work center: Operation start date is Friday morning, May 14. Standard load (including setup) is 81 hours. The operation can be split on 2 machines, maximum.

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Problem 3

Rough-Cut Capacity Planning

Figure 13.7.3.1 shows the network plan for a production order.
(GRAPH CANT COPY)
Fig. 13.7.3.1 Rough-cut network plan with two rough-cut work centers.
a. Complete the network plan: Calculate the earliest start date and the latest start date for each operation. What is the lead-time margin (the slack time), and what is the critical path? Determine the slack of all operations not on the critical path.
b. Following the technique introduced in Section 13.4.1, determine the resource profiles for rough-cut work centers 1 and 2, as well as the resource profile for the combination of rough-cut work centers 1 and 2 .
c. Figure 13.7.3.2 shows the preload of rough-cut work center 2. Load the resource profile for rough-cut work center 2 with infinite loading. Determine the earliest completion date for the operations of rough-cut work center 2 . Further, determine the load and the deferred earliest completion date for the operations of rough-cut work center 2 without overloading the capacities.
(COLUMN CANT COPY)

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