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Operations Management-104
Session 12
Constraint Management
Operations Management-104
Debabrata Ghosh
(Constant)
Process Time (B)
10
12
10
14
Item
Number
Start Time
Processing
Time
Finish
Time
Item
Number
Start Time
Processing
Time
Finish
Time
14
14
14
10
24
14
12
26
26
10
36
26
10
36
36
10
46
36
44
46
10
56
44
50
56
10
66
Source: Operations and Supply Management, Chase, Shankar, Jacobs and Aquilano, Mc-Graw Hill, 12thEd.,2010
Operations Management-104
(Variable)
Process Time (A)
10
10
12
14
Item
Number
Start Time
Processing
Time
Finish
Time
Item
Number
Start Time
Processing
Time
Finish
Time
10
10
10
16
10
10
20
20
28
20
10
30
30
10
40
30
10
40
40
12
52
40
10
50
52
14
66
When one process takes longer than the average, the time can not be made up
Rather than balancing capacities, the flow of product through the system should be balanced
Operations Management-104
What to Produce:
Autobot Gamma has decided to launch his own door production company. He
decided to focus on three types of doors according to the needs of the Gotham
city customers. The three door types are A,B,C with selling price per unit of Rs 80,45
and 60 respectively. The raw material costs to manufacture these doors are Rs 70, 30
and 40 respectively. And the production rate of these doors in his factory are
estimated to be 4 units/hour, 5 units/hour and 3 units/hour respectively. Which door
type should Autobot Gamma choose to produce and how much of these door types
should his factory produce, assuming there is enough demand for each type of door
in Gotham City?
Operations Management-104
A new approach
Approach 3
If Autobot Gamma is worried about the utilization of his factory, based on the
production capacities available to him, he would focus on the gross margin/hour
which are Rs 40/ hour for type A door, Rs 75/hour for type B door and Rs 60/hour for
type C door. Thus, Autobot Gamma may decide to choose B for his new production
plans.
Operations Management-104
Solution Approach:
Profit
40
30
35
M1 (time)
15
16
12
M2 (time)
14
11
Demand
70
80
60
Profit
40
30
35
M1 (time)
15
16
12
M2 (time)
14
11
Demand
70
80
60
Profit/min. of
bottleneck
utilization
40/15= 2.66
30/16 = 1.875
35/12 = 2.91
Produce C first. Production time on M1= 60*12 = 720 mins. Balance Production
time = 2400-720 =1680 mins. Profit from C = 60*35 = Rs 2100
Produce A next. Production time on M1 = 70*15 = 1050 mins. Balance Production
time = 1680 1050 = 630 mins. Profit from A = 70*40 = Rs 2800
Produce B last. 16x = 630 => x = 630/16 = 39.375 ~ 39 units. Profits from B = 39*30
= Rs. 1170
Operations Management-104
Max 40 x1 + 30 x2 + 35 x3
s.t.
15 x1 + 16 x2 + 12 x3 <= 2400
14 x1 + 11 x2 + 9 x3 <= 2400
x1 <= 70
x2 <= 80
x3 <=60
(x1, x2, x3) >= 0
Operations Management-104
Exercise
A company makes a single product whose weekly demand is 100. Identify the
constraint when
The plant works 8 hours shifts (5 days) and takes 20 minutes to make a
product.
The supplier can give 25 units per day but the organization takes two days
to place the order
Operations Management-104
10
Operations Management-104
11
Number of Units in
the Resource Pool (Ci)
Effective Capacity of a
resource pool (claims
per minute) (Ci/Ti)
Mailroom Clerk
1.6
Claims Processor
12
1.5
Claims Supervisor
2.50
Operations Management-104
12
Source: Operations and Supply Management, Chase,Shankar,Jacobs and Aquilano,McGraw-Hill(SIE), 12th Edition, 2010
Operations Management-104
13
A manufacturing system (A to C) has three machines and an assembly D. Product P has two
raw materials , R and S. R gets processed in A and the B, and goes to assembly. S goes to C
and then to assembly. A,B,C and D have processing rates of 40, 20, 30 and 35/hour
respectively. The demand for product P is estimated at 25units/hour. Schedule the
production of P using DBR approach.
145-175 mins
115-145 mins
40
R
Release
time for
R = 175
mins
55-115 mins
20
A
B
20-55 mins
30 mins
Drum
Buffer of
30 mins
35
60 mins
Market
Demand
Assembly
65-105 mins
55-65 mins
30
S
C
Release
time for
S = 105
mins
0-20 mins
40 mins
34.2 ~
35 mins
Shipping
Buffer of
20 mins
Assembly
Buffer of 10
mins
Operations Management-104
14
Communicate upstream as to
when and how much of
material to release
40
R
Release
time for
R = 175
mins
20
30 mins
Drum
Buffer of
30 mins
35
60 mins
Assembly
34.2 ~
35 mins
30
C
Release
time for
S = 105
mins
Balance the Flow and not the
capacity
Operations Management-104
Market
Demand
40 mins
Shipping
Buffer of
20 mins
Assembly
Buffer of 10
mins
15
A note on Batching
While the previous example has not taken set up time of the 3 machines into account,
in real life systems, set-up times play an important role in manufacturing systems
Set up times reduce effective process capacity.
Operations Managers often plan to increase the capacity of a resource by increasing
the batch size. However, batch sizes typically tend to increase WIP or Finished goods
inventory.
Using Littles Law, holding flow rate constant, higher inventory levels will mean
increased flow times.
How to then choose a batch size for a process flow?
If the set up occurs at the bottleneck step (process is capacity constrained), it is
desirable to increase the batch size as this results in a larger process capacity and
therefore, a higher flow rate
If the set up occurs at a non-bottleneck step, it is desirable to decrease the batch size, as
this decreases inventory as well as flow time.
Source: Matching Supply with Demand, Cachon and Terwiesch, McGraw-Hill, 2012
Operations Management-104
16