THIRD EDITION PRODUCTION AND OPERATIONS KopyKitab

THIRD . Panneerselvam

KopyKitabProduction and Operations Management

pyKitaKob

Production and OperationsManagementbThird EditionpyKitaR. PANNEERSELVAMKoProfessorDepartment of Management StudiesSchool of Management, Pondicherry UniversityPuducherryNew Delhi-1100012012

bpyKitaKoPRODUCTION AND OPERATIONS MANAGEMENT, Third EditionR. Panneerselvam 2012 by PHI Learning Private Limited, New Delhi. All rights reserved. No part of this book may bereproduced in any form, by mimeograph or any other means, without permission in writing from thepublisher.ISBN-978-81-203-4555-3The export rights of this book are vested solely with the publisher.Twenty-fourth Printing (Third Edition) February, 2012Published by Asoke K. Ghosh, PHI Learning Private Limited, M-97, Connaught Circus,New Delhi-110001 and Printed by Rajkamal Electric Press, Plot No. 2, Phase IV, HSIDC,Kundli-131028, Sonepat, Haryana.

ContentsxvPreface to the First Editionxix1. INTRODUCTION1.21.3Functional Subsystems of Organizations1.1.1Definition 2Systems Concept of Production 4Types of Production System 71.3.11.3.21.3.31.3.41.41.5Flow Shop 7Job Shop 8Batch Manufacturing 8The Project 8Productivity 8Strategic Management1.5.11.5.21.5.3110Corporate Strategies 11Generic Competitive (or Business Unit) StrategiesFunctional Strategies 13Ko1.6 Gross Domestic Product (GDP) and Its Impact1.7 World Class Manufacturing 17Objective Type Questions 18Questions 1820 – 592.12.2What is Product Design and Analysis 20New Product Development—Its Concepts 212.3Process Planning and Design2.3.12.3.22.3.32.3.42.3.52.3.62.4Steps of Product Design2.4.12.4.22224Selection of Process 24Process Selection Decisions 24Process Planning Design 25Responsibilities of Process Planning EngineerSteps in Process Planning 27Case Study 27Process Design13152. PRODUCT DESIGN AND ANALYSIS2.2.11–19pyKita1.1bPreface30Process Research 30Pilot Development 33v26

Contents2.4.32.4.42.4.5Value Analysis/Value History of Value Analysis/Value EngineeringWhen to Apply Value Analysis35Function 36Aims 37Value Engineering Procedure 38Advantages and Application Areas 40Standardization2.6.12.6.22.6.34143Possible Alternatives while Starting for New ProductsCriteria for Make or Buy 44Approaches for Make or Buy Decision 452.9 Ergonomic Considerations in Product Design2.10 Concurrent Engineering502.10.12.10.234Standardization Procedure42Advantages of Standardization42Application of Standardization42Simplification 43Make or Buy Decision2.8.12.8.22.8.3343443b2.5Capacity Consideration 33Commercial Plan Transfer 33Enhanced Capacity Using OptimizationpyKitavi 50Tools for Concurrent Engineering 51HRD in Concurrent Engineering 54Objective Type Questions 54Questions 56CASE STUDY 1: VALUE ANALYSIS—FIRE EXTINGUISHER 58CASE STUDY 2: BUSINESS PROCESS RE-ENGINEERING 583. CAPACITY PLANNING AND INVESTMENT DECISIONS3.1Capacity PlanningDetermination of Plant Capacity 60Capacity Planning Strategies 60Equipment Selection 61Ko3.1.13.1.23.1.33.260–9060Investment Decisions 633.2.13.2.2Interest Formulas 63Bases for Comparison of Alternatives71Objective Type Questions 84Questions 85CASE STUDY 1: CAPACITY PLANNING 89CASE STUDY 2: INVESTMENT DECISION 894. FORECASTING4.1Nature and Use of Forecast4.1.14.1.24.24.34.491–11491Factors Affecting Forecast (Demand) 92Types of Forecasting in Decision Making 92Sources of Data 93Demand Patterns 93Forecasting Models 954.4.14.4.2Selection of a Forecasting Technique 95Measures of Forecast Accuracy 96

Contents4.4.34.4.44.4.54.4.64.4.74.4.84.4.94.4.10 viiSimple Moving Average Method 98Weighted Moving Average Method 99Double Moving Average Method 100Simple (Single) Exponential Smoothing Method 101Adjusted Exponential Smoothing Method 102Linear Regression 104Semi-average Method 107Delphi Method 108Objective Type Questions 109Questions: 111CASE STUDY: BETA ATM MACHINES (FORECASTING) 1145. FACILITY LOCATIONIntroduction 1155.1.15.1.2Single Facility Location Problem 120Multifacility Location Problems 1245.3.15.3.25.3.35.3.45.45.55.65.75.8Model for Multifacility Location Problem 125Method of Transformation 125Model to Determine X-coordinates of New Facilities 126Model to Determine Y-coordinate 127Minimax Location Problem 134Gravity Location Problem 137Euclidean-distance Location ProblemCovering Problem 1445.7.15.7.25.7.3b5.25.3Factors Influencing Plant Location 115Break-even Analysis 116pyKita5.1115–158139Introduction 144Total Covering Problem 145Multiple Objective Partial Covering Problem 147Model for Warehouse Location Problem 148Problem Definition 149Descriptive Model 149Working Mathematical Model 150Ko5.8.15.8.25.8.3Objective Type Questions 151Questions 153CASE STUDY: PLANT LOCATION 1586. PLANT LAYOUT AND MATERIALS HANDLING6.16.2Introduction 159Classification of Layout6.2.16.2.26.2.36.3Layout Design vantages and Limitations of Process Layout 161Advantages and Limitations of Product Layout 161Advantages and Limitations of Group Technology Layout 161162Systematic Layout Design Procedure 163Computerized Relative Allocation of Facilities Technique (CRAFT) 163CRAFT Procedure 164Application of CRAFT 165Automated Layout Design Program (ALDEP) 174Computerized Relationship Layout Planning (CORELAP) 183Application of CORELAP 184159–218

viii Contents6.4Algorithms and Models for Group Technology 1916.4.16.4.26.4.36.5Rank Order Clustering Algorithm (ROC) 191Bond Energy Algorithm 196Mathematical Model for Machine-Component Cell Formation 200Materials Handling Systems6.5.16.5.26.5.3205Unit Load Concept 206Materials Handling Principles 206Classification of Materials Handling Equipments206Objective Type Questions 207Questions 210CASE STUDY: PLANT LAYOUT DESIGN 2177. LINE BALANCING219–240Concept of Mass Production System 219Objective of Assembly Line Balancing 2207.37.47.5Rank Positional Weight Method 221The COMSOAL Algorithm 224Model for Assembly Line Balancing 2267.5.1Generalized Algorithm 220pyKita7.2.1b7.17.2Zero-one Programming Model to Minimize the Number of Workstations 2277.6 Stochastic Assembly Line Balancing 2317.7 Case Study 231Objective Type Questions 234Questions 235CASE STUDY 1: TURBO-CHARGER (ASSEMBLY LINE BALANCING) 238CASE STUDY 2: HIGH VOLTAGE FUSE (ASSEMBLY LINE BALANCING) 2398. LINE OF BALANCE241–248Ko8.1 Introduction 2418.2 Application Areas of LOB 2418.3 Input to LOB 2428.4 Steps of LOB 242Objective Type Questions 247Questions 2359. MATERIALS MANAGEMENT AND INVENTORY CONTROL9.19.2Integrated Materials Management 249Components of Integrated Materials Management 2499.2.19.2.29.2.39.2.49.3Materials Planning 250Inventory Control 250Purchase Management 250Stores Management 250Inventory Control 2519.3.19.3.29.4249–321Inventory Decisions 251Costs Trade-off 251Models of Inventory9.4.19.4.29.4.39.4.4252Purchase Model with Instantaneous Replenishment and without Shortages 252Manufacturing Model without Shortages 254Purchase Model with Shortages (Instantaneous Supply) 256Manufacturing Model with Shortages 258

ContentsOperation of Inventory System 259Quantity Discount 261Implementation of Purchase Inventory Model9.7.19.7.2Purchasing Management9.8.19.8.29.8.39.8.49.8.59.9268Purchase Systems 268Special Purchase Systems 269Aspects of Purchase Management 270Vendor Evaluation 272Contract 290Stores Management g Materials Control 298Store Accounting 299Obsolete Surplus and Scrap Management 299ABC Analysis 300XYZ Analysis 305VED Analysis 310FSN Analysis 312SDE Analysis 312b9.8265Fixed Order Quantity System (Q System) 265Periodic Review System (P System) 265pyKita9.59.69.7 ixObjective Type Questions 313Questions 316CASE STUDY: INVENTORY CONTROL 32110. AGGREGATE PLANNING AND MASTER PRODUCTION SCHEDULING322–34910.1 Aggregate Planning 32210.1.110.1.210.1.3Nature of Aggregate Planning Decisions 322Aggregate Planning Strategies 323Aggregate Planning Methods 32410.2 Master Production Plan/Schedule10.2.1341Cut-and-Fit Methods 342KoObjective Type Questions 343Questions 345CASE STUDY 1: AGGREGATE PLANNING—LAXMI MOTORS LIMITED 348CASE STUDY 2: AGGREGATE PLANNING—ZIGMA AUTOMOBILE LIMITED 34911. MATERIAL REQUIREMENTS PLANNING350–37211.1 Introduction 35011.2 Product Structure/Bill of Materials (BOM) 35011.3 MRP Concept 35111.3.1MRP Calculations 35311.4 Lot Sizing in MRP 35511.4.1Illustration to Demonstrate Lot Sizing Methods in MRP 35511.5 Capacity Requirements Planning 36211.6 Manufacturing Resource Planning II (MRP II) 36311.6.1Implementation Design of MRP IIObjective Type Questions 367Questions 369CASE STUDY: MATERIAL REQUIREMENTS PLANNING365372

x Contents12. PRODUCTION PLANNING AND CONTROL373–37812.1 Introduction 37312.1.112.1.212.1.3Strategic Decisions 373Tactical Decisions 373Operational Decisions 37312.2 Scheduling—An Introduction 376Objective Type Questions 377Questions 37813. SINGLE MACHINE SCHEDULING379–41113.1 Introduction 37913.2 Concept of Single Machine Scheduling 37913.2.1Measures of Performance380bShortest Processing Time (SPT) Rule to Minimize Mean Flow Time 381Weighted Mean Flow Time 382Earliest Due Date (EDD) Rule to Minimize Maximum Lateness 383Model to Minimize Total Tardiness 384Introduction to Branch and Bound Technique to Minimize MeanTardiness 38613.7.1pyKita13.313.413.513.613.7Branch and Bound Algorithm38813.8 Simple Heuristic to Minimize Total Tardiness in Single MachineScheduling Problem 39513.9 Minimizing the Number of Tardy Jobs 39813.9.1Hodgson’s Algorithm to Minimize NT39813.10 Introduction to Parallel Processors under Single Machine Scheduling 400Ko13.10.1 Minimizing Makespan 40113.10.2 McNaughton’s Algorithm (to minimize M with m parallel,identical machines) 40113.10.3 A Heuristic Procedure for Minimizing Makespan (M) 40213.10.4 An Integer Programming Formulation 40313.10.5 Algorithm to Minimize Mean Flow Time with Parallel IdenticalMachines 40313.10.6 Heuristic for Scheduling n Jobs on Parallel Identical Processorsto Minimize Weighted Mean Flow Time 404Objective Type Questions 406Questions 408CASE STUDY: ALPHA PACKAGING LIMITED 41114. FLOW SHOP SCHEDULING14.1 Introduction 41214.2 Johnson’s Problem 41314.3 Extension of Johnson’s Rule 41614.4 Branch and Bound Technique 41714.5 CDS Heuristic 42714.6 Palmer’s Heuristic 430Objective Type Questions 431Questions 436CASE STUDY: LAKSHMI ENGINEERING LIMITED 436412–436

Contents15. JOB SHOP SCHEDULING15.1 Introduction15.1.1 xi437–455437Types of Schedules 43815.2 Schedule Generation 43915.3 Heuristic Procedures 44015.3.1Priority Dispatching Rules 44015.4 Two Jobs and M Machines Scheduling 448Objective Type Questions 449Question 451CASE STUDY: ESHWARI ENGINEERING LIMITED 45516. PROJECT MANAGEMENT16.3.1Critical Path Method (CPM) 459Gantt Chart/Time Chart 464Project Evaluation and Review Technique (PERT) 464Crashing of Project Network 46716.7.116.7.2pyKita16.416.516.616.7459Rules for Network Construction 459b16.1 Introduction 45616.2 Phases of Project Management 45816.3 Guidelines for Network Construction456–495General Guidelines for Network Crashing 468Crashing of Project Network with Costs Trade-off 46916.8 Project Scheduling with Constrained Resources 47416.8.116.8.2Resource Levelling Technique 474Resource Allocation Technique 47716.9 Graphical Evaluation and Review Technique (GERT) 47916.10 Project Management Softwares 48316.10.1 InstaPlan III 48316.10.2 Yojana 484485KoObjective Type QuestionsQuestions 48817. WORK STUDY496–52117.1 Introduction 49617.2 Method Study 49617.2.117.2.217.2.317.2.417.2.5Steps in Method Study 497Recording 497Selected Recording Techniques 499Examine Step 508Principles of Motion Economy (Ergonomic Considerations at Work) 50817.3 Time Study 50917.4 Work Sampling 514Objective Type Questions 518Questions 52018. QUALITY CONTROL18.1 Introduction 52218.2 Need for Controlling Quality 52218.3 Definition of a Quality System 523522–559