Updated BES 323 - WK 6-8

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TECHNOLOGICAL UNIVERSITY OF THE PHILIPPINES VISAYAS

Capt. Sabi St., City of Talisay, Negros Occidental
College of Engineering
Office of the Program Coordinator
LEARNING MODULE
BES 323
PRODUCTION
MANAGEMENT
AND
QUALITY CONTROL
DEPARTMENT: MECHANICAL ENGINEERING
COMPILED BY:
.ENGR. ERLYN H. MALIGAYA
2020
This module is a property of Technological University of the Philippines Visayas and intended
for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
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VISION
The Technological University of the Philippines shall be the premier state university
with recognized excellence in engineering and technology at par with leading universities in
the ASEAN region.
MISSION
The University shall provide higher and advanced vocational, technical, industrial,
technological and professional education and training in industries and technology, and in
practical arts leading to certificates, diplomas and degrees.
It shall provide progressive leadership in applied research, developmental studies in
technical, industrial, and technological fields and production using indigenous materials;
effect technology transfer in the countryside; and assist in the development of small-and-
medium scale industries in identified growth center. (Reference: P.D. No. 1518, Section 2)
QUALITY POLICY
The Technological University of the Philippines shall commit to provide quality

higher and advanced technological education; conduct relevant research and extension
projects; continually improve its value to customers through enhancement of personnel
competence and effective quality management system compliant to statutory and regulatory
requirements; and adhere to its core values.
CORE VALUES
T - Transparent and participatory governance

U - Unity in the pursuit of TUP mission, goals, and objectives
P - Professionalism in the discharge of quality service
I - Integrity and commitment to maintain the good name of the University
A - Accountability for individual and organizational quality performance
N - Nationalism through tangible contribution to the rapid economic growth of the
country
S - Shared responsibility, hard work, and resourcefulness in compliance to the
mandates of the university
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TABLE OF CONTENTS
Page Numbers
TUP Vision, Mission, Quality Policy, and Core Values…..……………….…… i
Table of Contents…………………………………………….………………..…..ii
Course Description……………………………………..……………….… iii
Learning Outcomes……………………………………………………...…iii
General Guidelines/Class Rules…………………………………………...iii
Grading System…………………………………………………………....iv
Learning Guide (Week No. 6) ………………………………………….…1
Topic/s……………………………………………………………..1
Expected Competencies……………………………………………1
Content/Technical Information…………………………………….2-14
Progress Check…… ………………………………………………15
References…………………………………………………………16
Learning Guide (Week No. 7) …………………………………….……...17
Topic/s……………………………………………………….……17
Expected Competencies………………………………………..….17
Content/Technical Information …………………………………..18-32
Progress Check…… ……………………………………………...33
References…………………………………………………..…….34
Learning Guide (Week No. 8)……………………………………………35
Topic/s……………………………………………………….……35
Expected Competencies…………………………………………..35
Content/Technical Information…………………………………..36-46
Progress Check…… ………………………………………….….47
References…………………………………………………….….48
List of References………………………………………………………………49
About the Author/s……………………………………………………………..50
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COURSE DESCRIPTION
The subject deals with two major topic: Production Management and Quality
Control. It includes basic principles of production management and their effective application
geared toward producing optimum output as per required quality, the different methods and
techniques used to control quality of products. Topics such as forecasting, inventory control,
schedule routing and dispatching are given emphasis for effective control of production. Also,
this subject presents statistical tools that will equip students on the fundamentals of quality
control and background of the management systems abide and complied by the industry.
LEARNING OUTCOMES
By the end of the course, the students will be able to do the following:
1. explain the basic concept of production management and quality control as applied
to operation and manufacturing set up;
2. exhibit ability to present data and and analysis through the use of statistical tools
for proper control of quality products; and
3. solve practical problems based on industry setting using production management

techniques
GENERAL GUIDELINES/CLASS RULES
1. Make-up exams and quizzes will only be given with prior approval of the professor and
under exceptional circumstances. For excused absences during the exam, the university
policy will be followed.
2. Students are not allowed to leave the classroom once the class has started, unless extremely
necessary. Students who leave the classroom without any valid reason will be marked absent.
3. Students are expected to comply strictly with the university’s rule on dress code, class
tardiness and attendance.
4. Cell phones or any e-gadgets must be turned off or put in a silent mode during class hours.
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5. Late homework or projects will not be accepted. Students are expected to maintain
complete honesty and integrity in their academic work. Acts of academic dishonesty, such as
cheating, plagiarism, or inappropriately using the work of others to satisfy course
requirements, will not be tolerated and may result in failure of the affected assignments
and/or failure of this class.
Students with Special Needs:

A student with special medical needs, is advised to inform the instructor as to how he/she can
best assist him/her. All information will be considered confidential.
GRADING SYSTEM
The student will be graded according to the following:
Average of examinations - 50%

Average of assessments - 50%
Prelim Grade : [(Prelim Exam x 0.50) + (Assessment x 0.50)]

Midterm Grade : [(Midterm Exam x 0.50) + (Assessment x 0.50)]
End term Grade : [(Final Exam x 0.50) + (Assessment x 0.50)]
Final Grade : (Prelim Grade x 0.30) + (Mid-term Grade x 0.30) + (End term
Grade x 0.40)]
The passing grade for this course is 5.0.
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LEARNING GUIDE
Week No.: __6__
TOPIC/S
 TRANSPORTATION MODEL
1. Concept of transportation model
2. Development of Initial Solution for solving problems using:

A. North-West Method
B. Intuitive Method
3. Testing and evaluation for optimality using:

A. Stepping Stone Method
B. MODI (Modified Distribution) Method
4. Special Case of Transportation Problems
EXPECTED COMPETENCIES
Upon completing this Learning Module, student will be able to:
1. describe, identify and balance transportation problems;

2. solve transportation problems by obtaining initial solution;
3. determine the optimal solution by using 2 different methods; and
4. solve special case problems with unequal demand and supply.
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CONTENT/TECHNICAL INFORMATION
In actual operation there are instances that the manufacturing or distribution of

products or services can initiate from different supplier to a certain consumer or a certain
manufacturer to various consumer. Sometimes, the distribution may take place from a
supplier with multiple branch to different users.
Figure 1: Sample manufacturer and consumer set -up product transportation
Transportation model is used to determine how the available supplies from the
different factories can be allocated to the warehouses that store or demand those goods, so
that the overall cost of shipping is reduced. Typically, the problem analysis would create a
shipping plan that applies only to a certain period of time, but once the parameters or
constraints are changed the plan for allocation also changes.
Basic information needed for transportation model:
1. Point of origin and the capacity or available supply for a certain period from each
source
2. Point of destination and the demand per location for a certain period
3. The cost of shipping one unit from each source to individual destination
These data are then arranged in a table for the analysis and computation.
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Figure 2: Transportation model table example
The following should be assumed in a transportation model:
1. The products to be delivered shall be homogeneous (i.e., they are the same
regardless of their source or destination).
2. Shipping costs per unit shall be the same, regardless of the amount of units
delivered.
3. There is only one path or mode of transport between each origin and destination.
Obtaining Initial Solution:
 North-West Method:
Below are the steps on finding initial solution using the north-west method:
1. Construct a table that contains a row for each source and a column for each
destination. A path from a source to a destination is represented by each cell.
The demand of each destination is given at the base of each column and at the
end of each row the stock of each source is specified. Enter quantities to
indicate how many units are to be sent along that route in each cell.
2. Start with the left-hand top corner (the north-west corner). Allocate the maximum
quantity available at this destination to satisfy the requirement (whilst not
exceeding the stock at this source).
3. Upon emptying each stock, shift one square down and assign as many items as
possible from the next source until the destination requirement is met. Shift
one square to the right as each demand is met, and allocating as many units as
possible again.
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4. If all the stock is allocated and all the demands are met, stop
Example:
Given the data indicated in the table below, compute for the initial solution using
the north-west method.
Solution:
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 Intuitive / Lowest Cost Method:
This process is normally used to determine the initial solution of the problem by
identifying the transportation with the lowest cost. This is a trial and error process, the
answer generated from this method is considered to be the the nearest of the optimal
solution.
Intuitive or lowest cost process:
1. Assess the cost of transportation and identify the lowest-cost square (in case of
tie make an arbitrary selection ).
2. Allocate the maximum possible units to the lowest cost square, depending on
the inventory setting.
3. Delete the row or column whose allocation are satisfied (or both)
4. Repeat steps 1 and 3 after you have allocated all the units.
Sample Problem:
Solve for the initial solution given the data on the below using intuitive method
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Solution: Using intuitive method process:
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Final allocation of products using intuitive or lowest cost method.
Testing for Optimality:
When there is no alternative option to reduce the cost , then the solution is optimum.
Methods for Optimality Test:
1. Select a water square (a square without any allocation) to assess, row by row.
2. Tracing/forming a closed loop back to the original square through squares that are
currently being used, starting at this square.
3. At the unused corner (water square), beginning with a plus (+) sign, position
alternate minus and plus signs at each corner of the path just traced.
4. By first adding the unit cost values contained in each square containing a plus sign
and subtracting the unit cost in each square containing a minus sign,
calculate an improvement index (the net cost change for the path).
5. Repeat steps 1 through 4 until an improvement index for all unused squares has
been determined.
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Evaluation of cost from optimality test by observing the sign of the net cost change
 The negative sign (-) means that by making the shift, a decrease on cost can be made.
 The result of 0 means that the cost will not change.
 If the shift would be made, the positive sign (+) indicates an increase in cost.
 It means that the optimum solution has been obtained if all the signs are positive.
 If more than one square has a negative symbol, then in the case of tie, the water
squared with the largest negative net cost shift is chosen for a faster solution; select
one of them randomly.
 Choose the route (unused square) with the highest negative shift index if an
enhancement is feasible.
 Select the smallest number contained in the squares containing minus signs on the
closed path for that direction, apply this number to all squares with plus signs on the
closed path and deduct it from all squares with a minus sign. Repeat this procedure
until all unused squares have been evaluated.
 Prepare and verify the optimality of the current transport table.
Sample Test for Optimality Stepping Stone:
1. Evaluation of water square or cell 1-A
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2. Evaluate water square or cell 2-A
3. Evaluate water square or cell 3-B
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4. Evaluate water square or cell 2-D
5. Evaluate water square or cell 1-B
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6. Evaluate water square or cell 1-C
 Modified Distribution (MODI) Method
1. Make an initial allocation.

2. Obtain an index number for each row and column. Do this using only completed
cells. Note that there will always be at least one completed cell in each row
and in each column.
a. Begin by assigning a zero to the first row
b. Determine the column index for any completed cells in row 1 using the
relationship:
Column index = Cell Cost – Row Index.
Example, if cell cost is 6 per unit the column index will be: 6 - 0 = 6
c. Each new column value will permit the calculation of at least one new row
value, and vice versa. Continue until all rows and columns have index
numbers using only completed cells
3. Obtain cell evaluations for empty using the relationship:
Cell Evaluation = Cell Cost – (Row Index + Column Index)
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Sample MODI index number and cell evaluation from previous problem
Obtaining Improved Solution:
An improved solution is feasible when there is a presence of negative cell/s in the

evaluation.
In the given problem, two cells appear to have negative evaluation; the cell 3-B and 1-
C with a value of -1 and of -5 respectively. Select the value that implies a bigger
improvement and ignore the other cell. In this case select 1-C and shift quantity as many as
possible to maximize the reduction.
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Cost Computation:
Special Case of Transportation Model
* Demand not equal to supply
 This is also called an unbalanced problem

 This situation is common in the real world
 Resolved by introducing dummy sources or dummy destinations as necessary
with cost coefficients of zero, to balance the units from source and destination
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PROGRESS CHECK
Problem Solving: Solve the following problems (10 points each)
1. A company has factories at A, B and C which supply warehouses at D, E and F. Weekly

factory capacities are 200, 160 and 90 units respectively. Weekly warehouse requirements
(demands) are 180, 120 and 150 units respectively. Unit shipping costs are as follows:
Determine the optimum distribution for this company to minimize shipping costs through
north-west and stepping stone method.
2. A Timber company ships pine flooring to three building supply houses from its mills in
Bhunya, Mondi and Pigg’s Peak. Determine the best transportation schedule for the data
given below using the Northwest corner rule and the Stepping Stone method.
3. A trucking company has a contract to move 115 truckloads of sand per week between three
sand-washing plants W,X and Y, and three destinations, A,B and C. Cost and volume
information is given below. Compute the optimal transportation cost using intuitive method
and MODI.
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REFERENCES
Textbook/s:
William J. Stevenson, Production or Operations Management Fifth Edition, Busy

Book Distributors, 1999
S. Anil Kumar and N. Suresh, Production and Operation Management, 2nd Edition,
New Age International Publisher, 2008
Online:
https://www.scribd.com/presentation/461044209/Transportation-Model
https://www.youtube.com/watch?v=ItOuvM2KmD4
https://www.youtube.com/watch?v=KVGEXbmvsfk
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LEARNING GUIDE
Week No.: _7__
TOPIC/S
 Introduction to Waiting Lines
 Queuing Theories
 Queuing Models
1. identify the goal of queuing analysis (waiting-line);
2. describe queuing system parts and configuration;
3. illustrate the measures of system performance that are used in queuing; and
4. analyze and solve problems on queuing or waiting-lines.
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Introduction to Waiting Line
In any operation, you can always see a queuing process. In our daily activities we
encounter waiting lines in the fast food chains, supermarket, banks, and agencies. In the end
of the supplier this can result to lost of income, adds up to the operating cost of the business
and unsatisfied customers.
Waiting lines can be found whenever customers randomly arrive for service. They
occur when there is an unbalanced supply and demand, meaning the ability of the operation
to cater the customers are not equal to the available service providers. In lean manufacturing,
this is considered as a waste and a non-value occurrence.
For clients, waiting for service can vary from reasonable (usually short waits), to
irritating (longer waits), to being a matter of life and death (e.g., in emergencies). The cost of
waiting for companies comes from reduced efficiency and a competitive disadvantage. For
economy, cost of waiting is equivalent to wasted resources and reduction of the standard of
living.
But why do we wait?
In the actual scenario of operation, customers and provision of service is not ideal.
The operation may at times be very busy but at some point it is idle. Customers arrived at
random intervals and giving of service is not always the same. And when this happens the
system gets overloaded and waiting lines occurs.
Management focus is to find the ideal level of service to provide and minimization of
cost through analysis of models of waiting lines.
 Capacity Cost are the costs of maintaining the ability to provide service
 Customer Waiting Cost includes salaries paid to employees while they wait for the
service, cost of the space for waiting and any loss of business due to customers
refusing to wait and possibly going to others in the future
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QUEUING COST AND SERVICE
Figure 1: Service and Cost Relationship
 as the capacity increases, its cost increases (upward slope)

 as capacity increases, the number of customers waiting and the time they wait tend
to decrease, thus decreasing waiting cost (downward slope)
 total cost can be represented as a u-shape curve
QUEUING SYSTEM
How does it work?
Customers enter a waiting line of a service facility, receive service when their turn
comes, and then leave the system
Figure 2: Queuing system
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PARTS AND CHARACTERISTICS OF QUEUING SYSTEM
Parts of Queuing System:
1. Arrivals or inputs to the system (sometimes referred to as the calling

population).
Characteristics:
 The size of the calling population can be either unlimited (essentially
infinite) or limited (finite).
 The pattern of arrivals can arrive according to a known pattern or can
arrive randomly. Random arrivals generally follow a Poisson
distribution.
 Behavior of arrivals
Most queuing models assume customers are patient and will wait in
the queue until they are served and do not switch lines. But
there are other behaviors that are being argued in queuing
theory such as:
 Balking refers to customers who refuse to join the queue.
 Reneging customers enter the queue but become impatient
and leave without receiving their service.
2. The queue or waiting line itself.
Characteristics:
 Waiting lines can be either limited or unlimited.
 Queue discipline refers to the rule by which customers in the line
receive service.
The most common rule is first-in, first-out (FIFO).
Other rules are possible and may be based on other important
characteristics.
Other rules can be applied to select which customers enter which
queue, but may apply FIFO once they are in the queue.
3. The service facility.
Characteristics:
 Service systems are classified in terms of the number of channels, or
servers, and the number of phases, or service stops.
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Queuing System Configuration

1. Single-channel system is the one with single server.
2. Multichannel system exist when multiple servers are fed by one common
waiting line.
3. Single-phase system, the customer receives service form just one server.
4. Multiphase system, the customer has to go through more than one server.
Figure 3: Queuing System Configuration
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 Service time distribution

Service patterns can be either constant or random.
Constant service times are often machine controlled. More often,
service times are randomly distributed according to a negative
exponential probability distribution.
Analysts should observe, collect, and plot service time data to ensure
that the observations fit the assumed distributions when
applying these models
 Identifying Models Using Kendall Notation
A notation which was developed by D. G. Kendall that is used for queuing models
specifies the pattern of arrival, the service time distribution, and the number of channels.
Notation takes the form:
Arrival distribution / Service time distribution / Number of service channels open
Specific letters are used to represent probability distributions.
M = Poisson distribution for number of occurrences

D = constant (deterministic) rate
G = general distribution with known mean and variance
a. A single-channel model with Poisson arrivals and exponential service times would be
represented by:
M/M/1
b. If a second channel is added the notation would read:
M/M/2
c. A three-channel system with Poisson arrivals and constant service time would be
M/D/3
d. A four-channel system with Poisson arrivals and normally distributed service times
would be
M/G/4
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 Single-Channel Model, Poisson Arrivals, Exponential Service Times (M/M/1)

Assumptions of the model:
 Arrivals are served on a FIFO basis.
 There is no balking or reneging.
 Arrivals are independent of each other but the arrival rate is constant over
time
 Arrivals follow a Poisson distribution.
 Service times are variable and independent but the average is known.
 Service times follow a negative exponential distribution.
 Average service rate is greater than the average arrival rate
When these assumptions are met, a series of equations can be developed that
define the queue’s operating characteristics.
Let:
λ = mean number of arrivals per time period
μ = mean number of customers or units served per time period
The arrival rate and the service rate must be defined for the same time period
1. The average number of customers or units in the system:
λ
L =
μ−λ
2. The average time a customer spends in the system:
1
W=
μ−λ
3. The average number of customers in the queue:
�2
�� =
�(� − �)
4. The average time a customer spends waiting in the queue:
�
�� =
�(� − �)
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5. The utilization factor for the system, the probability the service facility is being
used:
λ
ρ=
μ
6. The percent idle time, or the probability no one is in the system:
�
�0 = 1 −
�
7. The probability that the number of customers in the system is greater than k:
�
��>� = ( )�+1
�
Cost Consideration in Computation:
8. Total Service Cost = (Number of channels) * (Cost per channel)
Total Service Cost = mCs
9. Waiting cost when the cost is based on time in the system
Total Waiting Cost = (Total time spent waiting by all arrivals) * (Cost of waiting)
Total Waiting Cost = (Number of Arrivals) * (Average wait per arrival)
Total Waiting Cost = (λW)Cw
If the waiting cost is based on time in the queue
Total waiting cost = (λWq )Cw
10. Total cost = Total service cost + Total waiting cost
Total Cost = mCs + λWCw
If based on time in queue:
Total Cost = mCs + λWq Cw
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Sample Problem:
A car mechanic can render 3 repair service per hour. Customers arrive at a rate of 2
per hour. Estimated cost for customer’s waiting is Php50 per hour, wage of mechanic is
Php100 per hour and the operation is 8 hours per day.
Given:
μ = 3 repair service per hour
λ = 2 customers arrived per hour
Solution:
λ 2 2
1. L = μ−λ = 3−2 = 1 = 2 L = 2 average repair services in the system
1 1 1
2. W = μ−λ = 3−2 = 1 = 1 W = 1 hour, average time customer spends in a system
�2 22
3. �� = �(�−�) = 3(3−2) = 1.33 �� = 1.33 customers, average queue in the system
� 2 2
4. �� = �(�−�) = 3(3−2) = 3 �� = 40 minutes average waiting time per customer
λ 2
5. ρ = μ = 3 = 0.67 ρ = 67 % of the time the car mechanic is busy
� 2
6. �0 = 1 − � = 1 − 3 = 0.33 �0 = 33% probability that 0 cars are in the system
7. Total Service Cost (Daily) = mCs *(8 hours/ day)

Total Service Cost (Daily) = (1*Php100/hour) *(8 hours/ day)
Total Service Cost (Daily) = Php800 per day
8. Total Waiting Cost (Daily) = (λWq )Cw ∗ (8 hours/day)

2
Total Waiting Cost (Daily) = (2 ∗ hours)(Php50/hour) ∗ (8 hours/day)
3
Total Waiting Cost (Daily) = Php533.33 per day
9. Total cost (Daily) = Total service cost + Total waiting cost

Total cost (Daily) = Php800 + Php533.33
Total cost (Daily) = Php1333.33
10. Total waiting time spent for 16 customers per day

2
Total time spent = (16 customers per day) (3 ℎ��/��) =10.67 hours
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The shop owner would want to hire a new mechanic, whose rate is Php125 per hour
but can process 4 customers per hour.
New Characteristics of waiting line:
λ 2 2
1. L = μ−λ = 4−2 = 2 =1 L = 1 average repair services in the system
1 1 1
2. W = μ−λ = 4−2 = 2 =0.50 W = 0.50 hour, ave. time customer spends in a system
�2 22 1
3. �� = �(�−�) = 4(4−2) = 2 �� = 0.50 customers, average queue in the system
� 2 1
4. �� = �(�−�) = 4(4−2) = 4 �� = 15 minutes average waiting time per customer
λ 2
5. ρ = μ = 4 = 0.50 ρ = 50 % of the time the car mechanic is busy
� 2
6. �0 = 1 − � = 1 − 4 = 0.50 �0 = 50% probability that 0 cars are in the system

Total Service Cost (Daily) = Php1000.00 per day

1
4

Total cost (Daily) = Php1000.00 + Php200.00
10. Total waiting time spent for 16 customers per day

1
Total time spent = (16 customers per day) (4 ℎ��/��) =4 hours
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 Multichannel Queuing Model with Poisson Arrivals and Exponential Service Times
(M/M/m)
Assumptions of the model:

 Arrivals are served on a FIFO basis.
 There is no balking or reneging.
 Arrivals are independent of each other but the arrival rate is constant over time.
 Arrivals follow a Poisson distribution.(
 Service times are variable and independent but the average is known.
 Service times follow a negative exponential distribution.
 The average service rate is greater than the average arrival rate.
Equations for the multichannel queuing model:
Let:
m = number of channels open
λ = average arrival rate
μ = average service rate at each channel
1. The probability that there are zero customers in the system
1
�0 = 1 � � 1 � �� for mμ>λ
[ �=�−1
�=0 ( ) ]+ ( )�
�! � �! � ��−�
2. The average number of customers or units in the system
λ
λμ( )m λ
μ
L= P 0 +
(m − 1)! (mμ − λ)2 μ
3. The average time a unit spends in the waiting line or being served, in the system
λ
μ( )m 1 L
μ
W= 2 P0 + =
(m − 1)! (mμ − λ) μ λ
4. The average number of customers or units in line waiting for service
�
�� = � −
�
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1 ��
�� = � − =
� �
λ
ρ=
mμ
SAMPLE PROBLEM:
In the problem stated above, the owner is considering to open a new shop where he
would hire a mechanic with the same rate as his first one and the rate of arrival of customers
is the same.
Solution:
1. Probability that 0 customer in the system

1
�0 =
�=�−1 1 � � 1 � ��
[ �=0
( ) ] + ( )�
�! � �! � ��−�
1
�0 = 1 2 1 2 2(3)
= 0.50
1
[ ( )0 ] + ( )2
�=0 0! 3 2! 3 (2)(3)−2
2. The average number of customers or units in the system
λ
λμ( )m λ
μ
L= 2
P0 +
(m − 1)! (mμ − λ) μ
2
2(3)( )2 1 2
3
L= 2 (2) +
= 0.75
(2 − 1)! [(2)(3) − 2) 3
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3. The average time a unit spends in the waiting line or being served, in the system
L
W=
λ
3
4 3
W= = hours = 22.5 minutes
2 8
4. Average number of customers in the queue
�
�� = � −
�
3 2 1
�� = − = = 0.083
4 3 12
5. Average time a car spends in the queue
1 ��
�� = � − =
� �
�� 0.083
�� = = = 0.0417 ℎ�� = 2.5 ��
� 2

Total Service Cost (Daily) = Php1600.00 per day

1
24

Total cost (Daily) = Php1600.00 + Php33.33
Conclusion: The option with the least total cost is hiring a new mechanic with faster rate of
service.
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 Constant Service Time Model (M/D/1)
1. Average length of the queue
�2
�� =
2�(� − �)
2. Average waiting time in the queue
�
�� =
2�(� − �)
3. Average number of customers in the system
λ
L = Lq +
μ
4. Average time in the system
1
W = Wq +
μ
SAMPLE PROBLEM:
The company collects and compacts aluminum cans and glass bottles. Trucks arrive at
an average rate of 8 per hour (Poisson distribution). Truck drivers wait about 15 minutes
before they empty their load. Drivers and trucks cost $60 per hour.A new automated machine
can process truckloads at a constant rate of 12 per hour. A new compactor would be
amortized at $3 per truck unloaded.
Given:
Waiting time (current) = 15 minutes = 0.25 hour
Waiting Cost (current) = $60
λ (new) = 8 trucks / hour
μ (new) = 12 trucks / hour
Solution:
Waiting Cost per trip (current) = waiting time * waiting cost

Waiting Cost per trip (current) = 0.25 hour * $60/ hour
Waiting Cost per trip (current) = $15 / trip
31
1. Average waiting time in the queue
�
�� =
2�(� − �)
8 1
�� = = ℎ�� = 0.083 ℎ��
2(12)(12 − 8) 12
2. Waiting Cost per trip (new)
Waiting Cost per trip = waiting time ∗ waiting cost

1
Waiting Cost per trip = ( hours) ($60/hour)
12
Waiting Cost per trip = $5/trip
 Finite Population Model (M/M/1 with Finite Source)
When the population of potential customers is limited, the models are different.
There is now a dependent relationship between the length of the queue and the arrival
rate.
The model has the following assumptions:

1. There is only one server.
2. The population of units seeking service is finite.
3. Arrivals follow a Poisson distribution and service times are exponentially
distributed.
4. Customers are served on a first-come, first served basis.
Equations for the finite population model:

λ = mean arrival rate
μ = mean service rate
N = size of the population
1. Probability that the system is empty:
1
�0 = �! �
�
( )�
�=0 (�−�)! ��
32
2. Average length of the queue:
�+�
�� = � − ( )(1 − �0 )
�
3. Average number of customers (units) in the system:
L = Lq + (1 − P0)
4. Average waiting time in the queue:
��
�� =
(� − �)�
5. Average time in the system:
1
W = Wq +
μ
6. Probability of n units in the system:
�! �
�� = (�−�)! (� )� (�0 ) for n=0,1,…, N
 CONSTRAINT MANAGEMENT
 Use of temporary workers

Using temporary or part time workers during busy periods may be possible
 Shift demand
Variable pricing strategies can be effective in smoothing demand more evenly on the
system
 Standardized the service

The more the service can be standardized, the greater the impact on waiting line
 Look for a bottleneck

One aspect of process may be largely responsible for a slow service rate
33
PROGRESS CHECK
Problem Solving: Read, analyze and answer the following problems (10 points each)
1. Many of a bank’s customers use its automatic teller machine to transact business after
normal banking hours. During the early evening hours in the summer months, customers
arrive at a certain location at the rate of one every other minute. This can be modeled using a
Poisson distribution. Each customer spends an average of 90 seconds completing his or her
transactions. Transaction time is exponentially distributed. Determine:
a. The average time customers spend at the machine, including waiting in line and
completing transactions.
b.The probability that a customer will not have to wait upon arriving at the automatic
teller machine.
c.The average number waiting to use the machine.
2. A small town with one hospital has two ambulances to supply ambulance service. Requests
for ambulances during non-holiday weekends average .45 per hour and tend to be Poisson-
distributed. Travel and assistance time averages two hours per call and follows an exponential
distribution. Find:
a. System utilization.
b. The average number of customers waiting.
c. The average time customers wait for an ambulance.
d. The probability that both ambulances will be busy when a call comes in.
3. A milling department has 10 machines. Each operates an average of eight hours before
requiring adjustment, which takes an average of two hours. While running, each machine can
produce 40 pieces an hour.
a. With one adjuster, what is the net average hourly output per machine?
b. If machine downtime cost is $80 per hour and adjuster cost is $30 per hour, how
many adjusters would be optimal?
4. Trucks arrive at the loading dock of a wholesale grocer at the rate of 1.2 per hour. A single
crew consisting of two workers can load a truck in about 30 minutes. Crew members receive
$10 per hour in wages and fringe benefits, and trucks and drivers reflect an hourly cost of $60.
The manager is thinking of adding another member to the crew. The service rate would then
be 2.4 trucks per hour. Assume rates are Poisson.
a.Would the third crew member be economical?
b.Would a fourth member be justifiable if the resulting service capacity were 2.6
trucks per hour?
34
REFERENCE
Textbook/s:

35
LEARNING GUIDE
Week No.: __8__
TOPIC/S
 Introduction to Quality
 Quality Fundamentals
 Dimensions of Quality
 Cost of Quality
 Benefits and Consequences
 Problem Solving
 Quality Tools
1. define the fundamentals of quality;

2. discuss the benefits and consequences associated with quality;
3. determine the cost related to quality;
4. demonstrate a PDCA cycle in solving sample problem; and
5. illustrate the different types of quality tools
36
Operation nowadays does not only focus on product costs but most especially they
focus on the quality of products or service they give. If the product or service surpass the
customers expectation then the product is considered to be of good quality. But according to
ANSI (American National Standard Institute) and ASQ (American Society of Quality),
quality is the entirety of a product or service's features and characteristics that help its ability
to meet implied or specified needs.
Implied needs are those that are specifically written and agreed upon by the customer
Specified Needs are needs identified in functions of market such as safety, availability,
maintainability, reliability, usability, impact to environment and economics (price). These
needs are then translated to product specification which are identifiable and measurable. But
these are also reviewed periodically due to the changing needs of the end-user.
Figure 1: Evolution of Quality
37
Dimensions of Quality:
Product Quality
 Product performance is the main characteristics of the product

 Aesthetics pertains to the appearance, feel, smell, taste
 Special features are other characteristics added to the product
 Conformance refers to the capability of the product to conform to design
specifications
 Reliability means the consistency of product’s performance
 Durability is the endurance or useful life of the product
 Perceived quality refers to the indirect rating of the product’s quality
 Serviceability pertains to the ability of handling of product’s complaints
and repairs
Service Quality
 Convenience refers to the ease to access and availability of the service.

 Reliability pertains to the quality of performing the service dependably,
consistently, and accurately.
 Responsiveness is the ability of the service providers to help customers willingly
in unusual situations or problems.
 Time refers to the rate of service delivery
 Assurance is a skill demonstrated by employees who communicate with a
customer and their ability to express confidence and trust.
 Courtesy refers to the way clients are handled by workers who interacted with
them.
 Tangibles are the physical characteristics of materials for facilities, machinery,
employees, and communications.
 Consistence is the ability to provide the service of the same level of quality
(outstanding) repeatedly.
38
Quality Determinants
The level to which a product or service satisfy its intended function effectively
has four primary determinants:
1. Quality of Design.
Designers' aim to incorporate or remove characteristics in a product or
service. The variety of products or services reflects the quality of the design
developed by the designers. Customer expectations, manufacturing or service
capacities, protection and liability (both during production and after delivery),
costs, and other related components must be taken into account in design
decisions.
2. Quality of Conformance.
The degree to which products and services adhere to (i.e. attain) the
designers' purpose. This is influenced by factors such as the capacity of the
equipment used; the abilities, training and encouragement of employees; the
degree to which the design lends itself to production; the conformity
evaluation monitoring process; and, where appropriate, the taking of
corrective measures
3. Ease of use.
These refers to the ease of usage of the product or services for the
customers. The term “ease of use” refers to user instructions. Designing a
product with “ease of use” increases the chances that the product will be used
in its intended design and it will continue to function properly and safely.
4. Service after delivery.
There will be times when products may fail or problems with usage
may occur. This is when “Service after delivery” is important through recall
and repairs of the product, adjustment, replacement or buys back, or
reevaluation of a service.
Areas with impact to quality:

1. Top Management
The sole responsibility for quality is exercised by top management. Top
management must develop programs to increase quality when establishing quality
strategies; guide, direct, and inspire managers and employees; and set an example by
becoming active in quality initiatives.
39
2. Design
Quality of products and services begins with design. This includes not just the
product or service features but also includes attention to the processes necessary to
manufacture the goods and/or services that will be needed to provide consumers with
the service.
3. Procurement
It is the responsibility of the procurement department to acquire products and
services that would not affect the quality of the goods and services of the company.
4. Operation / Production
Production/operations are responsible for ensuring that processes of goods and
services comply with the requirements created of the design. Management system and
the identification and correction of root causes of problems are essential elements of
this function.
5. Quality Assurance
Quality assurance is responsible for data collection, analysis and evaluation of
problems then collaborating with other areas for activities to solve problems.
6. Packaging and Shipping

This division must ensure that items are not damaged during shipment, that
shipments are clearly marked, that directions are provided, that all parts are included
and that delivery takes place in a timely manner.
7. Marketing and Sales

This section is responsible in determining customer’s expectations and convey
them to the appropriate areas of the organization. They are also responsible for
reporting product or service issues.
8. Customer Care
The first unit to learn about customer concerns is always the customer service.
They are responsible for distributing this information to the appropriate agencies,
engaging with customers in a sensible manner, working on solving issues, and
keeping track to ensure that the situation has been effectively addressed.
40
Advantages of Good Quality:

 Raise Company's Reputation
 Rationalize Premium Prices
 Decrease Liability Costs
 Increase Productivity
 Increase Customer Loyalty
 Increase Customer Satisfaction
Consequence's of Bad Quality

 Loss of business and existing market share
 Legal liability
 Lack of productivity
 Increased operational costs
Costs associated with quality:

1. Appraisal costs are costs related to measuring, evaluating, and auditing materials,
parts, products, and services to assess conformance. Examples are testing
equipment, testing laboratories and inspectors.
2. Prevention costs are costs of related to prevent potential quality problems from
occurring such as quality improvement activities and training.
3. Failure costs are costs derived from defective parts or products or by faulty services
4. Internal failures cost are costs of failures discovered during production such as
rework, scrap and downtime.
5. External failures cost are costs of failures discovered after delivery to the customer
due to delivering substandard products or service. Examples are warranty
costs, customer complaints, liabilities and penalties.
6. Return on quality (ROQ) is an approach that evaluates the financial return of
investments in quality
41
Quality Control
Refers to use of different techniques to achieve, maintain and improve the quality of a
product or service.
This involves integration of methods and activities such as product design and
specifications, manufacturing and installation to meet the required specifications, inspection
of products to determine conformance, and review of usage for needed revision of the
product
Statistical Quality Control (SQC)

It is a branch of quality control (QC) where the compilation, review, and evaluation of
data are done which will be use for activities of quality control.
Two major parts of SQC:
 Statistical process control SPC
 Acceptance Sampling
Quality Assurance
Quality assurance are planned or systematic activities and mechanisms necessary to
ensure adequate confidence that a product or service will meet specified quality requirements..
These includes:
 quality parameters for continuous evaluation for adequacy & effectiveness.
 corrective measures
 feedback initiated where necessary
Difference between quality assurance and quality control:

Quality control emphasizes testing of products to detect defects and reporting to
management who decide to allow or deny release, while quality assurance attempts to
improve and stabilize production and associated processes to avoid, or at least minimize,
problems that have resulted to defects.
Several QA methodologies are used to prevent errors from occurring. However, QA
does not preclude the need for QC: some of the product parameters are quite important that
testing is still necessary. QC operations are known to be one of the overall QA systems.
42
Seven Quality Tools:

1. Cause-and-effect diagram (also called Ishikawa or fishbone diagrams).
This diagram identifies many possible causes for an effect or problem and sorts ideas
into useful categories.
Figure 2: Sample of Cause and Effect (Fishbone/ Ishikawa) Diagram
2. Check sheet:
An organized form that helps in preparing, collecting and analyzing data; a generic
tool that can be adapted for a wide variety of purposes.
Figure 3: Sample Check sheet Format
43
3. Control chart:
Graph used to study how a process changes over time. Comparing current data to
historical control limits leads to conclusions about whether the process variation is consistent
(in control) or is unpredictable (out of control, affected by special causes of variation).
Figure 4: Control Chart Sample (Moving Range)
4. Histogram:
The most common used graph for showing the distribution of frequency, or how often
the value occurs in a set of data
Figure 5: Sample Histogram
44
5. Pareto chart
A graph (bar) that shows which factors or cause are more significant.
Figure 6: Pareto Chart Example
6. Scatter diagram:
Pairs of numerical data that are presented in a graph with one variable on each axis, to
look for a relationship.
Figure 7: Scatter Diagram Sample
45
7. Stratification:
A technique that separates data gathered from a variety of sources so that patterns can
be seen
Figure 8: Sample of Stratification
New Seven Quality Tools (also Management Tools)
1. Affinity diagram. Organizes the natural relationships of broad or large number of ideas.
2. Interrelationship diagram. It illustrates relationships of cause and effect and helps to

examine the inherent interactions between various elements of such a complex situation.
3. Tree diagram. It divides large categories into detail to help carry out a step-by-step
thinking from generalities to particulars.
4. Matrix diagram. Illustrates the correlation between two, three, or four groups of data
such as its impact, the responsibilities performed and other factors
46
5. Matrix data analysis. A complex mathematical technique, often replaced by a similar

prioritization matrix, for the study of matrices. A prioritization matrix is an L-shaped
matrix that compares a list of options pairwise to a set of criteria to choose the best
option (s).
6. Arrow diagram. Demonstrates the appropriate order of tasks in a project or process, the
best timetable for the project as a whole, possible issues and solution with resources and
their coordination.
7. Process decision program chart. Systematically defines what may be wrong with a
proposal under construction.
Figure 9: New seven Quality Tools Samples
47
PROGRESS CHECK:
I. Enumeration: Answer the following questions (1 point each)

1. Cost associated with quality
2. Consequences of poor quality
3. New seven quality tools
II. Discussion. Read the following statements and explain briefly. (5 points each)
1. Use the dimensions of quality to describe typical characteristics of these products
and services:
A. Mobile phone
B. School Canteen Service
2. A computer repair shop had received a number of complaints on the length of time
it took to make repairs. The manager responded by increasing the repair staff
by 10 percent. Complaints on repair time quickly decreased, but then
complaints on the cost of repairs suddenly increased. Oddly enough, when
repair costs were analyzed, the manager found that the average cost of repair
had actually decreased relative to what it was before the increase in staff.
What are some possible explanations for the complaints, and what actions
might the manager contemplate? As a manager, how would you deal with the
possibility that customer satisfaction does not always lead to customer
retention?
III. Problem Solving:

1. Make a check sheet and then a Pareto diagram for the following car repair shop
data:
2.
Ticket No. Work Ticket No. Work Ticket No. Work
1 Tires 11 Brakes 21 Lube & oil
2 Lube & oil 12 Lube & oil 22 Brakes
3 Tires 13 Battery 23 Transmission
4 Battery 14 Lube & oil 24 Brakes
5 Lube & oil 15 Lube & oil 25 Lube & oil
6 Lube & oil 16 Tires 26 Battery
7 Lube & oil 17 Lube & oil 27 Lube & oil
8 Brakes 18 Brakes 28 Battery
9 Lube & oil 19 Tires 29 Brakes
10 Tires 20 Brakes 30 Tires
48
REFERENCES
Textbook/s:

Online:
https://asq.org/quality-resources/seven-basic-quality-tools
49
LIST OF REFERENCES

https://www.scribd.com/presentation
https://asq.org/quality-resources
50
ABOUT THE AUTHOR/S
This module's author is a licensed mechanical engineer who graduated in 2002 with her
course at TUP-Visayas. Her preceding industry experience for approximately 10 years covers
maintenance and operation. She works as a specialist, officer, and supervisor that allows her
to apply and practice various management functions. She is currently a TUP-Visayas faculty.

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i

TECHNOLOGICAL UNIVERSITY OF THE PHILIPPINES VISAYAS

DEPARTMENT: MECHANICAL ENGINEERING

.ENGR. ERLYN H. MALIGAYA

The Technological University of the Philippines shall commit to provide quality

T - Transparent and participatory governance

3. solve practical problems based on industry setting using production management

GENERAL GUIDELINES/CLASS RULES

Students with Special Needs:

The student will be graded according to the following:

Average of examinations - 50%

Prelim Grade : [(Prelim Exam x 0.50) + (Assessment x 0.50)]

The passing grade for this course is 5.0.

Week No.: __6__

1. Concept of transportation model

2. Development of Initial Solution for solving problems using:

3. Testing and evaluation for optimality using:

4. Special Case of Transportation Problems

Upon completing this Learning Module, student will be able to:

1. describe, identify and balance transportation problems;

In actual operation there are instances that the manufacturing or distribution of

Figure 1: Sample manufacturer and consumer set -up product transportation

Basic information needed for transportation model:

Figure 2: Transportation model table example

The following should be assumed in a transportation model:

Obtaining Initial Solution:

 Intuitive / Lowest Cost Method:

Intuitive or lowest cost process:

Solution: Using intuitive method process:

Final allocation of products using intuitive or lowest cost method.

Testing for Optimality:

Methods for Optimality Test:

 The result of 0 means that the cost will not change.

 Prepare and verify the optimality of the current transport table.

Sample Test for Optimality Stepping Stone:

1. Evaluation of water square or cell 1-A

2. Evaluate water square or cell 2-A

3. Evaluate water square or cell 3-B

4. Evaluate water square or cell 2-D

5. Evaluate water square or cell 1-B

6. Evaluate water square or cell 1-C

 Modified Distribution (MODI) Method

1. Make an initial allocation.

Obtaining Improved Solution:

An improved solution is feasible when there is a presence of negative cell/s in the

Special Case of Transportation Model

* Demand not equal to supply

 This is also called an unbalanced problem

Problem Solving: Solve the following problems (10 points each)

1. A company has factories at A, B and C which supply warehouses at D, E and F. Weekly

William J. Stevenson, Production or Operations Management Fifth Edition, Busy

Week No.: _7__

 Introduction to Waiting Lines

Upon completing this Learning Module, student will be able to:

1. identify the goal of queuing analysis (waiting-line);

2. describe queuing system parts and configuration;

4. analyze and solve problems on queuing or waiting-lines.

Introduction to Waiting Line

But why do we wait?

QUEUING COST AND SERVICE

Figure 1: Service and Cost Relationship

 as the capacity increases, its cost increases (upward slope)

Week No.: 6