2 - Manufacturing Models and Metrics-S

INE 439
FUNDAMENTALS OF MANUFACTURING SYSTEMS
Lecture 2: Manufacturing Models and

Metrics
PRODUCT/PRODUCTION
RELATIONSHIPS
 Let
Q = production quantity i.e. number of units of a given
part or product that is produced annually by a plant.
P = product variety i.e. total number of different parts /
part styles.
Total number of product units = Qf = P; where j refers
to each part/ product style Q j

j 1
2
©2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This material is protected under all copyright laws as they currently exist.
No portion of this material may be reproduced, in any form or by any means, without permission in writing from the publisher. For the exclusive use of adopters of the book
Automation, Production Systems, and Computer-Integrated Manufacturing, Third Edition, by Mikell P. Groover.
PRODUCT/PRODUCTION
RELATIONSHIPS
 Product variety
 Hard product variety = differences between products
 Soft product variety = differences between models of
products
 Product and part complexity
 Product complexity np = number of parts in product
 Part complexity no = number of operations/ processing steps
to make a part
3
FACTORY OPERATIONS MODEL
Simplified for purposes of conceptualization:

 Total number of product units Qf = PQ
 Total number of parts produced npf = PQnp

 Total number of operations nof = PQnpno
4
IN CLASS ACTIVITY 1
5
OPERATION CYCLE TIME
Typical cycle time for a production operation:
Tc = To + Th + Tth
where Tc = cycle time, To = processing time for the
operation, Th = handling time (e.g., loading and unloading
the production machine), and Tth = tool handling time (e.g.,
time to change tools)
6
PRODUCTION RATE RP
Usually expressed as an hourly rate i.e. work units completed per hour (pc/hr).
 Batch production: batch time Tb = Tsu + QTc (min)
Average production time per work unit Tp = Tb/Q (min)

Production rate Rp = 60/Tp (pc/hr)
 Job shop production:
For Q = 1, Tp = Tsu + Tc
 For quantity high production:
Rp = Rc = 60/Tp since Tsu/Q  0
 For flow line production
Tc = Tr + Max To and Rc = 60/Tc
Tr == time to transfer the work units between stations each cycle.
To == operation time at the bottleneck station. 7
EXAMPLE
 A certain part is routed through six machines in a batch production
plant. The setup and operation times for each machine are given in
the table below. The batch size is 100 and the average nonoperation
time per machine is 12 hours. Determine production rate for
operation 3.
Machine Setup time Operation time

(hr.) (min.)
1 4 5.0
2 2 3.5
3 8 10.0
4 3 1.9
5 3 4.1
6 4 2.5
8
 Answer: Rp = 4.05 pc/hr
PRODUCTION CAPACITY PC
Production capacity is the maximum rate of output that a production facility is

able to produce under a given set of assumed operating conditions.
 Plant capacity for facility in which parts are made in one operation (no = 1):
PCw = Sw Hs nRp
where PCw = weekly plant capacity, units/wk, n = number of work centers
Rpph
working in parallel, Sw= number fo shifts per period (shifts/wk), Hsh = hr/shift
(hr), Rp = hourly production rate of each work center (output units/hr).
Plant capacity for facility in which parts require multiple operations (no > 1):
PCw =
where no = number of operations in the routing
S w H s nR p
Rpph
no
9
 In cases in which different machines produce different production rates,
following equation applies for quantity type mass production:
 where Rpi is the hourly production rate of machine i and all machines are
operating full time during full time period Hpc.
 In case of batch production, each machine is used to produce more than one
batch. Let fij is the fraction of time during the period that machine i is
processing part style j. The resulting hourly production output of the plant
 Weekly plant production rate , pc/wk = Hpw Rpph

10
©2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This material is protected under all copyright laws as they currently exist. No portion of this material may be reproduced, in
any form or by any means, without permission in writing from the publisher. For the exclusive use of adopters of the book Automation, Production Systems, and Computer-Integrated Manufacturing,
Third Edition, by Mikell P. Groover.
 A small machine shop has two machines and works 40 hr/wk.
During a week of interest, four batches of parts were processed
through these machines. Batch quantities, batch times and operation
sequences for the parts are given in table below. Determine
a) weekly production output of the shop and
b) whether this represents the weekly plant capacity.
11
©2008 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This material is protected under all copyright laws as they currently exist. No portion of this
material may be reproduced, in any form or by any means, without permission in writing from the publisher. For the exclusive use of adopters of the book Automation,
Production Systems, and Computer-Integrated Manufacturing, Third Edition, by Mikell P. Groover.
UTILIZATION (U) AND AVAILABILITY
(A)
Utilization of a machine can be given by:
Utilization is the amount of output of a production facility relative to its capacity,

Utilization: U = Q
PC
where Q = quantity actually produced, and PC = plant capacity
MTBF  MTTR
Availability: A = MTBF
where MTBF = mean time between failures, and MTTR = mean

time to repair 12
AVAILABILITY -
MTBF AND MTTR DEFINED
13
EXAMPLE
The mean time between failure for a certain production
machine is 250 hours, and the mean time to repair is 6
hours. Determine the availability of the machine.
Answer: Availability A = (250 ‑ 6)/250 = 0.976 = 97.6%
14
MANUFACTURING LEAD TIME
(MLT)
MLT is the total time required to process a given part or product through the plant,
including any lost time due to delays, time spent in storage, reliability problems,
etc…
For batch production:
simplified MLT = no (Tsu + QTc + Tno)

where MLT = manufacturing lead time, no = number of operations, Tsu = setup time,
Q = batch quantity, Tc cycle time per part, and Tno = non-operation time
For flow line mass production:
Where Tno is the time parts spends in queues before and after processing on the line15
EXAMPLE
 A certain part is routed through six machines in a batch
production plant. The setup and operation times for each
machine are given in the table below. The batch size is
100 and the average nonoperation time per machine is 12
hours. Determine manufacturing lead time.
Machine Setup time (hr.) Operation time
(min.)
1 4 5.0
2 2 3.5
3 8 10.0
4 3 1.9
5 3 4.1
6 4 2.5
 Answer: MLT = 6(4.0 + 100(4.5/60) + 12) = 6(23.5) = 16
141 hr
WORK-IN-PROCESS (WIP)
WIP is the quantity of parts or products currently located in the

factory that are either being processed or are between processing
operations.
WIP = Rpph (MLT)
where WIP = work-in-process, pc; Rpph = hourly plant production rate,

pc/hr; MLT = manufacturing lead time, hr
17
IN CLASS ACTIVITY 2
18
COSTS OF MANUFACTURING
OPERATIONS
 Two major categories of manufacturing costs:

1. Fixed costs - remain constant for any output level. Cost of
factory building, production equipment, insurance and property
taxes.
2. Variable costs - vary in proportion to production output level.
Direct labor, raw materials, electric power.
 Adding fixed and variable costs
TC = FC + VC(Q)
where TC = total costs, FC = fixed costs (e.g., building,
equipment, taxes), VC = variable costs (e.g., labor,
materials, utilities), Q = output level.
19
FIXED AND VARIABLE COSTS
20
MANUFACTURING COSTS
 Alternative classification of manufacturing costs:

1. Direct labor - wages and benefits paid to workers
2. Materials - costs of raw materials
3. Overhead - all of the other expenses associated with running the
manufacturing firm
 Factory overhead
 Corporate overhead
21
TYPICAL MANUFACTURING COSTS
22
OVERHEAD RATES
Factory overhead rate:
FOHC
FOHR =
DLC
Corporate overhead rate:
COHC
COHR =
DLC
where DLC = direct labor costs
23
EXAMPLE
 Costs have been compiled for a certain manufacturing
company for the most recent year. The summary is
shown in the table below. The company operates two
different manufacturing plants, plus a corporate
headquarters. Determine (a) the factory overhead rate for
each plant, and (b) the corporate overhead rate. The firm
will use these rates in the following year.
Expense category Plant 1 Plant 2 Corporate headquarters
Direct labor $1,000,000 $1,750,000

Materials $3,500,000 $4,000,000
Factory expense $1,300,000 $2,300,000
Corporate expense $5,000,000 24
 (a) Plant 1: Factory overhead rate FOHR1 = 1.30 =
130%
 Plant 2: Factory overhead rate FOHR2 = 1.3143 =
131.43%
 (b) Corporate overhead rate COHR = 1.8182 = 181.82%
25
COST OF EQUIPMENT USAGE
Hourly cost of worker-machine system:
Co = CL(1 + FOHRL) + Cm(1 + FOHRm)
where Co = hourly rate, $/hr; CL = labor rate, $/hr; FOHRL =

labor factory overhead rate, Cm = machine rate, $/hr; FOHRm =
machine factory overhead rate
26
EXAMPLE
 In the operation of a certain production machine, one
worker is required at a direct labor rate = $10/hr.
Applicable labor factory overhead rate = 50%. Capital
investment in the system = $250,000, expected service
life = 10 years, no salvage value at the end of that period,
and the applicable machine factory overhead rate = 30%.
The work cell will operate 2000 hr/yr. Use a rate of
return of 25% to determine the appropriate hourly rate
for this work cell.
27
COST OF A MANUFACTURED
PART
Defined as the sum of the production cost, material cost,
and tooling cost
Cost for each unit operation = CoiTpi + Cti
where Coi = cost rate to perform unit operation i, Tpi =
production time for operation i, Cti = tooling cost for operation i
Total unit cost is the sum of the unit costs plus material
cost
Cpc = Cm + (CoiTpi + Cti)
where Cpc = cost per piece, Cm = cost of starting material
© 2016 Pearson Education, Ltd. All rights reserved. This material is protected under all copyright laws as they currently exist. No portion of this material may be reproduced, in
any form or by any means, without permission in writing from the publisher. For the exclusive use of adopters of the book Automation, Production Systems, and Computer-
Integrated Manufacturing, Fourth Edition, by Mikell P. Groover.

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INE 439

FUNDAMENTALS OF MANUFACTURING SYSTEMS

Lecture 2: Manufacturing Models and

to each part/ product style Q j

Simplified for purposes of conceptualization:

 Total number of parts produced npf = PQnp

Average production time per work unit Tp = Tb/Q (min)

Machine Setup time Operation time

Production capacity is the maximum rate of output that a production facility is

 Weekly plant production rate , pc/wk = Hpw Rpph

Utilization of a machine can be given by:

Utilization is the amount of output of a production facility relative to its capacity,

where MTBF = mean time between failures, and MTTR = mean

Answer: Availability A = (250 ‑ 6)/250 = 0.976 = 97.6%

simplified MLT = no (Tsu + QTc + Tno)

 Answer: MLT = 6(4.0 + 100(4.5/60) + 12) = 6(23.5) = 16

WIP is the quantity of parts or products currently located in the

where WIP = work-in-process, pc; Rpph = hourly plant production rate,

 Two major categories of manufacturing costs:

 Alternative classification of manufacturing costs:

Factory overhead rate:

Corporate overhead rate:

where DLC = direct labor costs

Expense category Plant 1 Plant 2 Corporate headquarters

Direct labor $1,000,000 $1,750,000

Hourly cost of worker-machine system:

Co = CL(1 + FOHRL) + Cm(1 + FOHRm)

where Co = hourly rate, $/hr; CL = labor rate, $/hr; FOHRL =

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