1. Chapter 3 An Introduction to Operations Management

2. How to Create a Process Flow Diagram
2nd Stage
FB Reactor
1st Stage
CFB Reactor
CFB
Preheater
Inclined
Bucket Elevator
~ 110 m
Briquetting
Plant
Process
Gas
Heat
Exchanger
Process Gas
Compressor
Electrical
Substation&
Control
Room
Iron
Ore
Fines
Fired Gas Heaters
HBI Product
~ 160 m

3. How to Create a Process Flow Diagram
Pile of Iron
ore fines
Pre-Heater
Briquet-
ting
Flash
heater
Dis-
charge
Finished
goods
Lock
Hoppers
1st
Reactor
2nd

4. Key-points in Process Analysis
Simplify a complex process using a process flow diagram
Bottleneck analysis: analyze the process by looking at the bottleneck
Bottleneck may depend on the product mix
Time to complete X units
Starting with a loaded system:
Starting with an empty system
- For continuous flow processes: (X-1) = X - If capacity constrained, flow rate is dictated by the bottleneck

5. Flow Rate R Demand vs. Capacity Constraints
Capacity constrained
Demand constrained
Demand constrained
Bottleneck
(Capacity)
Bottleneck
(Capacity)
Input
Input
Flow Rate
Flow Rate
Flow Rate
Flow Rate
Demand
Excess
Capacity
Excess
Capacity
Demand
Flow Rate=Min{Demand, Capacity}

6. Process Utilization and Capacity Utilization
Utilization: How much is produced relative to what could be produced
Can be computed for an entire process and for each resource in a process
Maximum values?

7. How To Conduct a Process Analysis
Use demand to compute the implied utilization levels
Compute the capacity for each of the resources
Identify the flow unit
Prepare a process flow diagram
Compute performance measures
Identify the bottleneck
Use different
colors to mark
flow units
Note that capacity
levels may differ
depending on
product type
Step with
highest implied
utilization
Compute workload across all product types
Extensions
Required
for working
With
multiple
flow units

8. A finance company receives 1,000 loan applications per 30 day working month and makes accept/reject decisions based upon a thorough review. On average, 20% of all applications receive approval. An internal audit revealed that the company has 500 applications in process at various stages.
In response to customer complaints, the company forms an initial review team to pre-process all applications. Each application will be categorized either A (excellent), B (needs more detailed review), or C (reject). On average 25% of the applications are type A, 25% are type B, and 50% are type C. 70% of type A and 10% of type B applications are approved on review. Internal audit checks show that 200 applications are with the initial review team, 25 with the type A team, and 150 with the type B team.
Has customer service improved? Why?

9. A hospital ER is currently organized so that all patients register through an initial check-in process. At his turn, each patient is seen by a doctor and then exits the process, either with a prescription or with admission to the hospital. Currently, 50 people per hour arrive at the ER, 10% of whom are admitted to the hospital. On average, 30 people are waiting to be registered and 40 are registered and waiting to see a doctor. The registration process takes, on average, 2 minutes per patient. Among patients who receive prescriptions, average time spent with a doctor is 5 minutes. Among those admitted to the hospital, average time is 30 minutes. On average,
how long does a patient stay in the ER?
how many patients are being examined by doctors?
how many patients are in the ER?