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Flashcards in Past Papers Deck (25):

Explain what is meant by a job shop. Under what circumstances is such an approach appropriate? Illustrate your answer using several examples [10%] (2015 Q2)

- A job shop is an operation that is capable of producing a wide variety of products, but in small batch sizes
- Examples: machine shops, bakeries, printers, aerospace companies


How and why does the management of a job shop differ from that of other types of operations? [20%] (2015 Q2)

Different operational configurations vary on the basis of volume, variety, workers' skills, equipment flexibility, layout etc.

Volume and variety are normally the key differentiators (see graph)

Job shops are low vol, high variety -> significantly more effort for sequencing and scheduling jobs than e.g. mass production

Assignment of labour depends on the workload, and there will be a significant need for load balancing of both labour and equipment


4 non-manufacturing examples of job-shop scheduling [10%] (2015 Q2)

- Repair crew scheduling
- Elective surgery scheduling
- CPU processor scheduling
- Airport gate scheduling


*Algorithm/heuristic used to schedule jobs when there is a penalty for each day of lateness (2015 Q2)

Modified Due Date (MDD):
1. Make a table of job, processing time (p), current time plus processing time (t+p), due date (DD)
2. Calculate the MDD = max{ t+p, DD}
3. Select the job with the smallest MDD and add it to the schedule
4. Recalculate t+p and MDD, excluding the job(s) already chosen
5. Select the job with the new smallest MDD
6. Repeat steps 4 and 5 until all jobs have been scheduled


*Algorithm/heuristic used to schedule jobs when there is no penalty for lateness + why is this used? (2015 Q2)

Shortest Processing Time (SPT):
- Allocate jobs in order of increasing processing time
(- if two jobs have the same processing time, either can be chosen)

2 reasons:
- Increases revenue/speeds up collection
- Reduces WIP inventory -> reduced inventory costs


*Algorithm/heuristic used to schedule jobs when there is a fixed penalty for lateness (2015 Q2)

Want to minimise the no. of tardy jobs -> Moore's Algorithm:
1. Put the jobs in order of increasing due date
2. Schedule the jobs in order of increasing DD, up until the first job which is tardy (the kth job)
3. Out of those up to and including the kth job, choose the one with the longest processing time and remove it from the schedule
4. Repeat steps 2 and 3 until no jobs are tardy
5. Add the previously removed jobs onto the end of the schedule, in any order


Describe what is meant by "production capacity" and "capacity planning" for a factory [10%] (2015 Q1)

Production capacity of an operation is the maximum level of value-added activity over a period of time that the process can achieve under normal operating conditions.

Examples: litres of beer per week for a brewery, tonnes per hour for a steel mill, MW of electricity generated for an electricity company, units per week for a mobile phone manufacturer etc.

Capacity planning is the process of determining the production capacity needed by an organisation to meet changing demands for its products.

Often, there are 3 types of capacity planning: long, medium and short term


*Calculating the batch time for multi-machine operations: assumptions (2015 Q1)

Assume there is only one setup operator for each type of machine, so that machines of the same type operating in parallel must be set up in turn (add up setup times, divide processing time)


Machine utilisation rate calculation + why do the results differ for different batch sizes?

(2015 Q1)

Utilisation rate is the % of time the machine is running per batch cycle

Results vary with batch size, because process time per batch changes while setup time per batch stays the same

NB although high utilisation is generally good, need to consider alongside productivity: high utilisation can still give low productivity


Advantages and disadvantages of holding finished goods in a centralised vs. localised warehouse [15%]

(2012 Q1)

+ Risk pooling leads to lower safety stock
+ Economies of scale in terms of overheads
+ Reduced transportation costs to warehouse
- Increased risk e.g. if warehouse burnt down/flooded

- Reduced lead time to market
- Reduced transportation costs to customer


Describe the centre of gravity method and outline how it is used for determining the best location of a warehouse or distribution centre. What are its limitations? [15%]

(2012 Q1)

The CoG method performs a production volume weighted distance calculation:
- Used to find the location that minimises transport costs
- Based on the idea that all possible locations have a "value", which is the sum of all transportation costs to and from that location
- The best location, i.e. the one that minimises costs, is represented by the weighted CoG of all points to and from which goods are transported
(give CoG formulae)

(i) Depends on the actual transportation distance
(ii) Also on local infrastructure and incentives
- Access to ports
- Location relative to transportation networks
(iii) Financial/regulatory considerations:
- Financial: exchange tariffs, taxes, shipping costs
- Regulatory: employment, environmental, safety/construction
(iv) Also depends on social factors:
- Availability, cost and skill of local labour force,
- Culture e.g. ethics and language,
- Proximity to markets
(v) Location of supplier base/ availability of alternative suppliers
(vi) Assumes transportation costs are a function of distance and number of units transported only


How will a warehouse being close to capacity (and no alternative storage space being available) affect intermediate capacity planning for production which has traditionally been based on achieving level capacity throughout the year despite seasonal demand? [15%]

(2012 Q1)

If capacity is limited and no further warehouse space is available, the company will need to reduce the volumes the finished goods stocks it holds in its warehouses

It may thus need to reconsider its approach to level capacity planning and consider:
(a) Chase demand planning (e.g. using overtime)
(b) Using demand management to change the demand pattern


State the basic principles of the North West corner approach for allocating supply to demand. What are the limitations of this approach? [10%]

(2014 Q2)

(1) Create a martix of sources and destinations

(2) Set initial allocation from the NW corner

(3) Calculate the change in cost of supplying one unit from each currently empty cell, while preserving demand/supply rim conditions (i.e. the opportunity cost)

(4) Re-allocate the max. possible quantity (subject to rim conditions) to the lowest-cost cell, following the path evaluated

(5) Solution is optimal if all the opportunity costs are zero or positive

- A heuristic: solution is feasible, but not necessarily optimal
- Results sensitive to the starting point selected
- Complex for multiple item types
- No transport variations
- Fixed supply/demand


How to deal with excess supply in the NW corner heuristic

Add an extra "demand" point, with zero cost, to absorb excess supply


9 factors that reduce the production capacity of a factory + how the impact can be minimised [20%]

(2015 Q1)

(1) Setup/switchover delays
- Larger batch sizes
- Implement SMED practices: externalise as many parts of setup as possible + simplify the remaining steps

(2) Unplanned lost time, e.g. breakdowns
- Introduce regular maintenance, e.g. TPM

(3) Bottlenecks (or more general imbalances in task time)
- Line-balancing

(4) Line/machine idle time
- Re-balance the line
- Find other products that can use idle resources

(5) Quality problems
- Root cause analysis

(6) Unplanned downtime
- Address causes of downtime
- Develop procedures to make the operation more robust to these causes

(7) Variability in process times, causing a build up of inventory
- Systematise production practices, including manual handling operations

(8) Variability in order arrivals
- Improve forecasting techniques
- Work with customers to balance order profile

(9) Variability in supply of RM
- Tighten the supply chain, e.g. by imposing financial penalties
- Increase RM stock levels

NB the impact on production capacity will always be downward
- Some of these factors are predictable/unpredictable, frequent/infrequent, significant/insignificant, controllable/uncontrollable
- The approach to managing will depend on the type of these factors
- [good answers will discuss these factors]


Discuss the effects of variations in processing times and machine breakdowns on batch time and machine utilisation [20%]

(2015 Q1)

- Generally, variation in processing time → higher levels of WIP, longer average cycle times & reduced capacity and utilisation
- This is because a shorter than expected process time may lead to a period of waiting for the next job to arrive - this time can't be recovered later
- Systems with predictable degrees of variability can have compensation designed into them, through managed levels of inventory
- For the similar levels of variability, the more machines operating in parallel an operation has, the less vulnerable it is
- Across multiple machines, random variability will average out → less overall variability


What are the main inputs to an MRP system? [10%]
(2013 Q2)

(1) Master Production Schedule - a complete list of the volume and due dates of all expected product sales

(2) Inventory record file - a record of current stocks

(3) BoM file - design information relating products to components, usually expressed in hierarchical form

(4) Lead times - prediction of how long it will take to complete each task

(5) Lot sizing rules - to determine the size of batch to be ordered


How is a BoM used in MRP calculations? [10%]
(2013 Q2)

The knowledge of MPS (Master Production Schedule) and the BoM allows "explosion of requirements" for each components and each raw material item. The BoM enables a structure for the MRP calculation to be put into place.


Describe the limitations of MRP [~20%]

(2013 Q2)

(1) Takes no account of available machine/production capacity

(2) No feedback: having issued the plan, it is assumed that it will work (this can be guaranteed by re-calculating the schedule often to account for the current position)

(3) The accuracy of the data provided, including sales forecasting data, cannot be
guaranteed. Keeping accurate records of inventory - both stock and in-process is
notoriously difficult.

(4) Any delay in any component prior to an assembly operation will prevent completion of assembly - so shortages always deny the master production schedule.

(5) MRP pushes production – production is not triggered by specific orders


Describe what is meant by closed-loop MRP ( ?not in lectures)

Closed-loop MRP attempts to apply corrections to the standard MRP calculation to enable checks against long, medium and short-term capacity plans (see diagram in crib)


State Little's Law and describe its relevance to inventory and production planning. [20%]

(2012 Q2)

Little's Law gives a simple relation between inventory and lead-time. Assuming steady state:

I = rT

I = number of items of inventory in a system (units)
r = production rate at which items arrive/leave (units/ unit time)
T = lead time a job spends in the system (unit time)

I determines the minimum pipeline stock needed to keep the factory operating at the required production rate for a particular job. Littles Law thus directly sets min. inventory and is implicitly critical in planning capacity of a factory.

(NB inventory is a cause, not an effect. To cut WIP inventory down, processing lead-time should be reduced.)


Outline the key differences between "push" and "pull" scheduling [20%]

(2012 Q2)

"Pull" system:
Uses the customer demand to trigger replenishment.
- An autonomous system that purely works by replenishing goods that have been consumed by the preceding process.
- The demand signal is the only trigger for production, not forecasts or centrally planned work orders.
- This signal is conveyed by a "kanban", e.g. an empty bin, card or electronic signal

"Push" system:
- Production is planned centrally using a Master Production Schedule (MPS)
- This generally comprises a combination of actual customer orders and forecases
- Based on the MPS and standard routing and lead-time data, work orders are centrally issued that "push" the material towards the customer end

The key differences are thus:
(1) What triggers the replenishment
(2) What information the "schedule" is based on


What is the role of inventory in a pull-scheduled production system? [10%]

(2012 Q2)

In a "pull" system inventory buffers are needed to convey the pull signal from a downstream process to an upstream process.

Essentially the process needs some small buffers "to pull from", in order to convey the replenishment signal upstream

A kanban supermarket is a
typical example of inventory in a pull system.


What is the role of inventory in a push-scheduled production system? [10%]

(2012 Q2)

In a "push" system, production is scheduled according to a Master Production Schedule

The MPS generally is a combination of actual orders and forecast orders, thus the
main function of inventory in a push system is to buffer against any forecast errors.

Also, as production orders are based on fixed lead-times, WIP inventory between processes
exists as actual lead-times will vary from those set in the planning system.


What are the financial implications of holding inventory? [20%]

(2012 Q2)

(1) Inventory leads to a working capital requirement (since inventory is WC)

(2) Inventory increases operating expenses due to holding and handling costs

(3) Obsolescence, decay/quality degradation and depreciation are further inventory-related

(4) Returned products incur further handling costs

(5) Inventory can be used to alter price, e.g. "flooding" the market with product to drive competitors out of the market (dumping), or inventory can be held back in order
to restrict supply and keep prices high (De Beers).