Old Cutitng Machine

No of Layers No of workers Pattern

60 4 8 parameters

Time
per /layer cutting & R
1.5 30 data

Total Run time No of Shirts

120 480 calculation

Cycle time
0.25 min calcuation

Cutitng Capacity
1920 shirt/day calcuation

Direct Labor Content for cutting

1 min /shirt calcuation
 New Cutitng Machine

No of Layers No of workers
5 1 parameters

Time
Cutting & R
2.5 data

Total Run time No of Shirts

2.5 5 calculation

Cycle time
0.5 min calcuation

Cutitng Capacity
960 shirt/day calcuation

Direct Labor Content for cutting

0.5 min /shirt calcuation
 Exhibit 3 :Current production of Regular Shirts at ESC,Inc.

Average WIP
Number of (number of 60-
Type of Operation Number of workers Machines shirt batches Actual Production/day
Cutting 4 1 16 Demand Cycle time (in mins/shirt)
Sewing 48 48 144
Inspection 4 12
Ironing 4 4 12
Packaging 4 12

Regular Shirts
Laber Content Number of cycle time (CT) Capacity
Operation (Minutes per shirt) Workers Min/shirt (=480/CT) Cap Uti

0. Cutting 1.00 4.00 0.25 1920 0.42

1. Make Collar 3.90 8 0.49 985 0.81

2. Make cuffs 2.00 4 0.50 960 0.83
3. Make sleeves 0.65 2 0.33 1477 0.54
4. Make front 2.50 6 0.42 1152 0.69
5. Make back 1.70 4 0.43 1129 0.71
6. Join shoulders 0.66 2 0.33 1455 0.55
7. Attach collar 1.65 4 0.41 1164 0.69
8. Attach sleeves 1.55 4 0.39 1239 0.65
9. Stitch down sleeves 0.65 2 0.33 1477 0.54
10. Sew side seam 1.80 4 0.45 1067 0.75
11. Attach cuffs 1.55 4 0.39 1239 0.65
12. Hem bottom 1.70 4 0.43 1129 0.71
13. Inspect 1.50 4 0.38 1280 0.63
14.Iron 1.95 4 0.49 985 0.81
15. Fold, Package 1.75 4 0.44 1097 0.73
 Actual Production/day 800
Demand Cycle time (in mins/shirt) 0.6

1 day 8 hr 480 min

Bottleneck
Few calcuations remarks
Plant Cycle time 0.50 min per unit a =max
Demand 800 per day b = given
Plant capacity 960 per day c =480/a
Plant Utilization 0.83 d=b/c

Actual cycle time 0.6 min per unit e=480/b

WIP 11760 no f=196*60
MLT 14.7 days g=e*f
Labor content 26.51 min h=25.51+1
Labor utilization 0.69 i=(h*b)/(64*8*60)
Direct labor cost 3.84 $ /shirt j=(64*8*6)/b
 Exhibit 3 :Current production of Regular Shirts at ESC,Inc.

Average WIP
Number of (number of 60-
Type of Operation Number of workers Machines shirt batches
Cutting 4 1 16
Sewing 48 48 144
Inspection 4 12
Ironing 4 4 12
Packaging 4 12

Regular Shirts
Laber Content Number of
Operation (Minutes per shirt) Workers
1. Make Collar 3.90 8
2. Make cuffs 2.00 4
3. Make sleeves 0.65 2
4. Make front 2.50 6
5. Make back 1.70 4
6. Join shoulders 0.66 2
7. Attach collar 1.65 4
8. Attach sleeves 1.55 4
9. Stitch down sleeves 0.65 2
10. Sew side seam 1.80 4
11. Attach cuffs 1.55 4
12. Hem bottom 1.70 4
13. Inspect 1.50 4
14.Iron 1.95 4
15. Fold, Package 1.75 4
Exhibit 4 : Cost Structure for a Standard-Sized Shirt (current production process)

cost in $
Raw Materials 7.00
Total Labor(Direct + Indirect*) 4.50
Other Indirect Costs 4.50
Total Manufacturing Cost 16.00
Wholesale Price 25.00
Retail Price 50.00

* Indirect labor costs include costs of material handling and supervisory labor.
Exhibit 5 Mike's plan for Regular and Custom Shirts

Average
WIP (in
Number of Number of batches of 5
Type of Operation Workers machines shirts each)
Cutting 5 2 36
Sewing 48 48 288
Inspection 4 24
Ironing 4 4 24
Packaging 4 24
 Batch Size in layers (regular shirt)
Batch Size in layers custom shirt)

Direct Laber
Content (Minutes
Operation per shirt) Number of Workers
0. Cutting (Regular Shirts) 2.25 4
0. Cutting (Custom Shirts) 0.5 1
1. Make Collar 3.90 8
2. Make cuffs 2.00 4
3. Make sleeves 0.65 2
4. Make front 2.50 6
5. Make back 1.70 4
6. Join shoulders 0.66 2
7. Attach collar 1.65 4
8. Attach sleeves 1.55 4
9. Stitch down sleeves 0.65 2
10. Sew side seam 1.80 4
11. Attach cuffs 1.55 4
12. Hem bottom 1.70 4
13. Inspect 1.50 4
14.Iron 1.95 4
15. Fold, Package 1.75 4
65
Direct Labor content (Regular 27.76 =25.51+2.25 (assuming 10 layers are cut) for difffrent combinatio
Direct Labor content (Custom 26.01 =25.51+0.5

WIP 1980
Cycle Time 0.53333333333333
MLT (mins) 1056
MLT (days) 2.2
 10 Actual Production (Regular) 800
5 Actual Production (Custom) 100
Actual Production (Combined 900

Cycle time Capacity

Min/shirt /day Utilization
0.5625 853.3333 94%
0.5 960 83%
0.49 985 81%
0.50 960 83%
0.33 1477 54%
0.42 1152 69%
0.43 1129 71%
0.33 1455 55%
0.41 1164 69%
0.39 1239 65%
0.33 1477 54%
0.45 1067 75%
0.39 1239 65%
0.43 1129 71%
0.38 1280 63%
0.49 985 81%
0.44 1097 73%

0 layers are cut) for difffrent combination of layers, it changes

Actual Cycle Time (Regular) 0.6
Actual Cycle Time (Custom) 4.8
Actual Cycle Time (Combined 0.533333
 Batch Size in layers (regular shirt)
Batch Size in layers custom shirt)

Regular Shirts
Regular Shirts
Laber Content
Operation (Minutes per shirt) Number of Workers
0. Cutting (Regular Shirts) 1 4
1. Make Collar 3.90 7
2. Make cuffs 2.00 3
3. Make sleeves 0.65 1
4. Make front 2.50 5
5. Make back 1.70 3
6. Join shoulders 0.66 1
7. Attach collar 1.65 3
8. Attach sleeves 1.55 3
9. Stitch down sleeves 0.65 1
10. Sew side seam 1.80 3
11. Attach cuffs 1.55 3
12. Hem bottom 1.70 3
13. Inspect 1.50 3
14.Iron 1.95 3
15. Fold, Package 1.75 3

Direct Labor content (Regular) 26.51 =25.51+1.0

Custom Shirts
Direct Laber
Content (Minutes
Operation per shirt) Number of Workers
0. Cutting (Custom Shirts) 0.5 1
1. Make Collar 3.90 1
2. Make cuffs 2.00 1
3. Make sleeves 0.65 1
4. Make front 2.50 1
5. Make back 1.70 1
6. Join shoulders 0.66 1
7. Attach collar 1.65 1
8. Attach sleeves 1.55 1
9. Stitch down sleeves 0.65 1
10. Sew side seam 1.80 1
11. Attach cuffs 1.55 1
12. Hem bottom 1.70 1
13. Inspect 1.50 1
14.Iron 1.95 1
15. Fold, Package 1.75 1

Direct Labor content (Custom) 26.01 =25.51+0.5

Regular Shirts
WIP 9060
Cycle Time 0.67
MLT (mins) 6040
MLT (days) 12.5833333333333
Production Capacity 720
Overtime Required (in mins) 53.3333333333333
 60 Actual Production (Regular) 720 +80 by OT
5 Actual Production (Custom) 100

Capacity
Cycle time Min/shirt /day Utilization
0.25 1920 38%
0.56 862 84%
0.67 720 100%
0.65 738 98%
0.50 960 75%
0.57 847 85%
0.66 727 99%
0.55 873 83%
0.52 929 78%
0.65 738 98%
0.60 800 90%
0.52 929 78%
0.57 847 85%
0.50 960 75%
0.65 738 98%
0.58 823 88%

Capacity
Cycle time Min/shirt /day Utilization
0.5 960 10%
3.90 123 81%
2.00 240 42%
0.65 738 14%
2.50 192 52%
1.70 282 35%
0.66 727 14%
1.65 291 34%
1.55 310 32%
0.65 738 14%
1.80 267 38%
1.55 310 32%
1.70 282 35%
1.50 320 31%
1.95 246 41%
1.75 274 36%
Custom Shirts
WIP 50
Cycle Time 4.8
MLT (mins) 240
MLT (days) 0.5
Production Capacity 123.0769
Actual Cycle Time (Regular) 0.666667
Actual Cycle Time (Custom) 4.8
Exhibit 6 Ike's Plan for Regular and Custom Shirts

Regular Shirts

Average WIP
Number of Number of (number of 60-
Type of Operation workers machines shirt batches)
Cutting 4 1 16
Sewing 36 36 108
Inspection 3 9
Ironing 3 3 9
Packaging 3 9