Process and Capacity Analysis Capacity Analysis Tutorial Problem Description Solution Developed by: Alex J. Ruiz-Torres, Ph.D.

Problem Description Cut Sew Final Prep out A highly specialized make to order clothing manufacturer is organized into three areas, cutting, sewing, and final prep. 65% of the products go to final prep. There is one type of resource per step of the process. Cut and final prep personnel work 150 hours per month. Sew staff work 137 hours per month (union rules). Sew 65% Final Prep out

Problem Description Current process information 14 11 4 7 8 12 5 10 6 Cut takes 6.8 min/unit Final Prep takes 15 min/unit The sew process has been recently changed due to new equipment. 24 observations (in minutes) of the new process have been collected – table below. An allowance of 20% is used to determine standard times. 14 11 4 7 8 12 5 10 6 16 13 15

Problem Description. What must be answered. How many resources are needed per step if the demand is 5,000 units per month? What is the utilization of each resource? What is the maximum output with the resulting resource plan?

Solving it. First step First step is to have the standard time for all the activities. In this case two are provided. Cut takes 6.8 min./unit Final Prep takes 15 min/unit Need to calculate the standard time for the sewing process.

Solving it. First step To do this we determine the average of the values in the table. The average = 10.625 mins, This is the normal time (nt). 14 11 4 7 8 12 5 10 6 16 13 15

Solving it. First step st (sew) = 13.3 mins. To determine the standard time we need to include the allowance. Standard time (st) = nt/(1 – allowance) allowance = 20% (from the problem description) st = 10.625 /( 1 – 20%) = 13.28125 We will round it to 13.3 minutes. st (sew) = 13.3 mins.

Equations needed dp = Demand per product tp = Time per product Rt = Total work time required to meet demand =  for all p (dp × tp) At = Time available per worker x = ceiling function. For example 2.5 = 3 Nw = Number of workers = Rt/At Op = Output if all available time is dedicated to product p = (Nw  At) / tp U = Utilization = Rt / (Nw  At) Nw  At = total available time

Solving it. Question 1. How many resources are needed per step if the demand is 5,000 units per month?

Solving it. Question 1 We calculate the number of workers per area. Step: cut There is only one product, therefore d1 (cut) = 5,000. We use the equations to calculate the Nw t1 (cut) = 6.8 min/unit Rt = 6.8 × 5,000 = 34,000min. At = 150 hours. But need to convert to minutes = 150 × 60 = 9,000 min. Nw = 34,000/9,000 = 3.778 = 4 workers

Solving it. Question 1 We calculate the number of workers per area. Step: sew There is only one product, therefore d1 (sew) = 5,000. We use the equations to calculate the Nw t1 (cut) = 13.3 min/unit Rt = 13.3 × 5,000 = 66,500min. At = 137 hours. But need to convert to minutes = 137 × 60 = 8,220 min. Nw = 66,500/8,220 = 8.09 = 9 workers

Solving it. Question 1 d1 (final prep) = 5,000  65% = 3,250. We calculate the number of workers per area. Step: final prep The problem description indicates 65% of the units need this step. d1 (final prep) = 5,000  65% = 3,250. We use the equations to calculate the Nw t1 (cut) = 15 min/unit Rt = 15 × 3,250 = 48,750min. At = 150 hours. But need to convert to minutes = 150 × 60 = 9,000 min. Nw = 48,750/9,000 = 5.41 = 6 workers

Solving it: Question 1 How many resources are needed per step if the demand is 5,000 units per month? Resource capacity plan: Step Nw (number of workers) Cut 4 Sew 9 Final prep 6

Solving it: Question 2 What is the utilization of each resource? Step U = Utilization = Rt / (Nw  At) Step Nw Rt At U Cut 4 34,000 9,000 94.4% Sew 9 66,500 8,220 89.9% Final Prep 6 48,750 90.3% U = 34,000 / (4  9,000) = 34,000/ 36,000 = 94.4% Results. All workers are busy, close to 90%. The cut step workers have the highest utilization, while the sew step workers have the lowest utilization.

Solving it: Question 3 What is the maximum output with the resulting resource plan? Op = Output if all available time is dedicated to product p = (Nw  At) / tp Step Nw tp At Op Cut 4 6.8 9,000 5,294 Sew 9 13.3 8,220 5,562 Final Prep 6 15 3,600 O = (4  9,000)/ 6.8 = 36,000/ 6.8 = 5,294

Solving it: Question 3 Given the final prep processes 65% of the units that come in, the 3,600 must be divided by this percent. 3,600/65% = 5,538. Maximum outputs Cut: 5,294 Sew: 5,562 Final Prep: 5,538 The step with the smallest output capacity (cut) determines the maximum overall output. Therefore it would 5,294. from prev. slide