1. 14 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Operations Planning and Scheduling 14 For Operations Management, 9e by Krajewski/Ritzman/Malhotra © 2010 Pearson Education Homework: 2ab, 5abc, 16, 17 For 5a use a level workforce of 149

2. 14 – 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Across the Organization Operations planning and scheduling is the process of making sure that demand and supply plans are in balance at all levels Sales and operations planning and scheduling Requires managerial inputs from all of the firm’s functions Each function is affected by the plan

3. 14 – 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Level Workforce Plan Level Strategy Basic idea: It is expensive and disruptive to hire and layoff employees. Try to maintain a consistent rate of output with the regular workforce. We may supplement this workforce with OT, Sub, and/or Backlogs. Use a combination of regular output, overtime, subcontracting, inventories and backorders while maintaining a steady rate of output. Aim for a constant regular output. Typically, we have higher inventory costs and higher regular output costs.

4. 14 – 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Chase Workforce Plan Chase Strategy Basic idea: Match output to forecasted demand by reducing regular output when possible. We may use OT and Sub. Typically, we have lower inventory costs. We often have higher OT and sub costs. But there is disruption and costs associated with hiring and laying off employees.

5. 14 – 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Example Planners for a company that makes several models of skateboards are about to prepare the aggregate plan that will cover 6 periods. They want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb uneven demand. Assume a level output rate of 300 units (skateboards) per period with regular time as there are 15 workers and each can produce 20 boards per period. The current workforce level is 15 workers. The following information has also been assembled: Forecast / Demandeach period: 200, 200, 300, 400, 500, 200 (boards) Regular wages per worker per period $4000 for 160 hours Inventory Costs (charged per unit based on ending period amounts) $10 per unit Overtime wages are $35/hour Costs to hire and layoff employees are $2,000 and $500 respectively A)Prepare a Level resource plan B)Prepare a Chase resource plan

6. 14 – 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Level Workforce Plan

7. 14 – 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Chase Workforce Plan

8. 14 – 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Using Chase and Level Strategies EXAMPLE 14.1 A large distribution center must develop a staffing plan that minimizes total costs using part-time stockpickers First level strategy that meets demand with the minimum use of undertime and not consider vacation scheduling Each part-time employee can work a maximum of 20 hours per week on regular time Instead of paying undertime, each worker’s day is shortened during slack periods and overtime can be used during peak periods 123456Total Forecasted demand6121815131478

9. 14 – 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Using Chase and Level Strategies Currently, 10 part-time clerks are employed. They have not been subtracted from the forecasted demand shown. Constraints and cost information are as follows: a.The size of training facilities limits the number of new hires in any period to no more than 10. b.No backorders are permitted. c.Overtime cannot exceed 20 percent of the regular-time capacity in any period. The most that any part-time employee can work is 1.20(20) = 24 hours per week. d.The following costs can be assigned: Regular-time wage rate$2,000/time period at 20 hrs/week Overtime wages150% of the regular-time rate Hires$1,000 per person Layoffs$500 per person

10. 14 – 10 Example 14.1 Level

11. 14 – 11 Example 14.1 Chase

12. 14 – 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Scheduling Takes operations and scheduling process from planning to execution and requires gathering data from sources such as demand forecasts, resource availability from the sales and operations plan, and specific constraints from employees and customers. Generates a work schedule for employees or sequences of jobs or customers at workstations.

13. 14 – 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Scheduling Scheduling has to do with establishing the timing of the use of equipment, workstations, facilities, and personnel. Sequencing is the determination of of order in which jobs waiting at a workstation are to be processed. Simple Scenario: Workstation A3 B10 C20 D2 E5

14. 14 – 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Terms / Performance Measures Job flow time - length of time a job is at a particular work center, actual processing time and any waiting time. Job lateness/tardiness Makespan - total time needed to complete a group of jobs Average flow time Average days past due or tardiness

15. 14 – 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Possible Priority Rules First come, first served (FCFS): Jobs are processed in the order in which they arrive. Dominant in service, mainly because of fairness and inability to estimate processing times. Shortest processing time (SPT): Jobs are processed shortest job first. Low average number of jobs at a workstation. Low average tardiness. Lower inventories. Earliest due date (EDD): Jobs are processed earliest due date first. Addresses lateness and minimizes lateness. Minimizes job tardiness.

16. 14 – 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Using the FCFS Rule EXAMPLE 14.3 Currently a consulting company has five jobs in its backlog. The time since the order was placed, processing time, and promised due dates are given in the following table. Determine the schedule by using the FCFS rule, and calculate the average days past due and flow time. How can the schedule be improved, if average flow time is the most critical? Customer Time Since Order Arrived (days ago) Processing Time (days) Due Date (days from now) A152529 B121627 C51468 D10 48 E01280

17. 14 – 17 Example 14.3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.

18. 14 – 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Example Jobs (in order of arrival) Day Arrived Processing Time (days) Due Date (days hence) A853105 B904104 C922107 D956117 E961106 Use FCFS and EDD Sequence Determine average flow time Determine average days past due Today is day 100.

19. 14 – 19 FCFS Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. SeqArriveStartProcessingFinishFlow TimeDue DateTardy

20. 14 – 20 EDD Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. SeqArriveStartProcessingFinishFlow TimeDue DateTardy

21. 14 – 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Solved Problem 1 The Cranston Telephone Company employs workers who lay telephone cables and perform various other construction tasks. The company prides itself on good service and strives to complete all service orders within the planning period in which they are received. Each worker puts in 600 hours of regular time per planning period and can work as many as an additional 100 hours of overtime. The operations department has estimated the following workforce requirements for such services over the next four planning periods: Planning Period1234 Demand (hours)21,00018,00030,00012,000

22. 14 – 22 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Solved Problem 1 Cranston pays regular-time wages of $6,000 per employee per period for any time worked up to 600 hours (including undertime). The overtime pay rate is $15 per hour over 600 hours. Hiring, training, and outfitting a new employee costs $8,000. Layoff costs are $2,000 per employee. Currently, 40 employees work for Cranston in this capacity. No delays in service, or backorders, are allowed. Use the spreadsheet approach to answer the following questions: a.Prepare a chase strategy using only hiring and layoffs. What are the total numbers of employees hired and laid off? b.Develop a workforce plan that uses the level strategy, relaying only on overtime and undertime. Maximize the use of overtime during the peak period so as to minimize the workforce level and amount of undertime. c.Compare the total costs of the plans.

23. 14 – 23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Solved Problem 1 Level Plan

24. 14 – 24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Solved Problem 1 Chase Plan