Figure 5.1: Milling machine (left) and steer support parts (right)

Figure 5.4: The impact of batch sizes on inventory

Figure 5.5: The impact of Set-up times on Capacity Inventory [in units of xootrs] Time [minutes] Set-up from Ribs to Steer supportSet-up from steer support to ribs Produce ribsProduce steer supports Production cycle Idle time 133 Rib inventory Steer support inventory

Figure 5.6: Data from the scooter case about set-up times and batching Set-up time, S Milling MachineAssembly process 120 minutes - Per unit time, p2 minutes/unit3 minutes/unit Capacity (B=12) units/minute0.33 units/minute Capacity (B=300) units/minute0.33 units/minute

Figure 5.8: Different patterns of inventory levels Time Inventory Production cycle Peak Inventory ProductionDeplete inventory Time Order cycle Shipment arrives Inventory

Time Inventory T I max T1T1 T2T2 Slope: 1/p-R Slope: -R Figure 4.10: Inventory trajectory for the case of internal production

Figure 5.10: Data for the production of orange juice Set-up time, S ExtractionBottling Requires a 30 min. down-time following every 4h of production - Capacity (while operating) Filtering 80 barrels/h100 barrels/h120 barrels/h -

Reduce the need for batches Set-up time reduction, SMED Process lay-out Analyze Set-up times and Set-up costs Compute Capacity as function of batch size Compute cycle time (CT) of the rest of the process Solve for batch size: Cap(B)=1/CT Compute set-up costs and inventory costs Use EOQ model or one of its variants Set-up times dominate Set-up costs dominate Figure 5.11.: Summary of batching

Figure 5.12.: Choosing a batch size and reducing set-up costs / time Responsiveness Costs High Low High per unit costs Low per unit costs Now Set-up occurs at non-bottleneck => use smaller batches Set-up occurs At bottleneck => use larger batches Reduce set-up times Higher frontier