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Review before Midterm 1

Review before Midterm 1. Announcements. Bring calculator, pencil, eraser (these cannot be shared) No open cell phones allowed. Last names Akcay-Kelder in SCI 103 Last names Kilic-Yilmaz in SCI 129 Check your seat number from the list posted on the door before entering the room.

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Review before Midterm 1

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  1. Review before Midterm 1

  2. Announcements • Bring calculator, pencil, eraser (these cannot be shared) • No open cell phones allowed. • Last names Akcay-Kelder in SCI 103 • Last names Kilic-Yilmaz in SCI 129 • Check your seat number from the list posted on the door before entering the room.

  3. Problems at the end of chapters 3,4,5 • E:\COURSES\UGRADS\OPSM301\SHARE • File containing answers • Can get in touch with me or Damla if you cannot find the answer • If there is no answer for a problem in the file I shares, that means you can skip that problem.

  4. Overview • Hand-in assignments: Universal Pulp and Paper part 2 • Process flow and analysis • What to study for qualitative portions

  5. Process Flow Wood processing capacity = 6.395 M tons / year Wood logs Wood chips Pulp production: 8M tons / yearchips becomes4M tons / yearpulp Paper production capacity: 4.5M tons / year Pulp Paper Delivery to customer

  6. Process Flow • Wood processing • Capacity 730 tons/hr x 24hr/day x 365 days/yr = 6,395 tons/yr • Weighing and sorting • Debarking and chipper • Pulp production • Kraft process • Dissolving Lignin (ungluing) • Chemical additives • Paper production • Wet end • Dry end • 75 technical measurements/30 minutes

  7. Analysis • Bottleneck: Wood processing • Existing capacity: 6.395/2=3.1975 tons/year • Enough capacity for now • To produce 3.68 tons/yearnewsprint, requires 3.68x2=7.36 tons/year wood processingcapacity • 7.36-6.395 = 0.965 tons/yearcapacity need

  8. Analysis • If firm continues to accept special paper orders then total demand potential becomes 3.68/0.95=3.87 ton/yr • Capacity need becomes (3.87 x 2) – 6.395=1.345M tons/year • Additional capacity cost (1.345.000/100.000) x $830.000= $11.16M • Revenue increase: (1.345.000/2) x $80 = $53.8M • Net increase: $53.8M – $11.16 = $42.64M

  9. Quality control software • Cost: $450,000 • Benefits: • Improved precision, savings from labor cost • Labor savings: $22.65/hrx 8 hrs/day/shift x 3 shifts/day x 365 days/yr x 8 workers= 1,587,312 $/yr • Net savings=1,137,312 $/yr • Labor union relationship

  10. Recommendations • Need strategic fit between products and processes • Convince upper management to transfer special paper production to another plant • If not, special papers should be grouped to reduce variety and customers convinced for longer lead times • Wood processing capacity should be increased • If labor union relations can be maintained, buy quality software

  11. Consider the following warehouse process. A new shipment arrives, waits for warehouse staff, staff inspects the shipment and decides whether it should go in the front of the warehouse or in the rear. Depending on this decision the item is stored in the appropriate space. Assume this process is stable. On average 20 new shipments arrive per hour. There are on average two shipments waiting for the warehouse staff. It takes the warehouse staff 10 minutes to inspect the shipment. The decision is taken instantaneously (i.e. decision takes zero time). 10% of all shipments are stored in the front while the rest are stored in the rear. Both shipments stored in the front and rear of the warehouse spend on average two hours in the warehouse. a) How many shipments on average are stored in the front and rear warehouse? b) What is the total flow time between shipment arrival and end of storage? c) What is the total number of shipments within process boundaries?

  12. Widget production process Step 1=6 min Step 2 2 min Step 4 1 min (scissors) Step 3 4 min Step 5 5 min

  13. Questions • What is the theoretical flow time? • How long will a rush order take? • Name 2 improvements to reduce the theoretical flow time. • Assume you have one worker for each step-how many widgets can you produce in an hour? • Assume you have 2 workers. Worker 1 performs steps 1, 4, and 5, Worker 2 performs steps 2 and 3- how many widgets can you produce in an hour?

  14. Questions continued • What are the utilizations of W1 and W2 • Suppose you had one more worker. Which worker would you ask her to help, W1 or W2? • Now suppose that step 5 is a quality control step. 50% of the widgets need reprocessing at step 5 after the first pass (assume there is never a second pass)-reconsider the same questions

  15. For qualitative portions • Operations strategy • Strategic fit, product and process attributes, product-process matrix, process selection, make-to-stock/order • Flow measurement • Little’s Law, flow unit, process boundary, flow chart • Flow time • Theoretical flow time, flow time efficiency, levers for improving, critical path, critical activity • Flow capacity • Bottleneck, utilization, process capacity, levers for improving

  16. For qualitative portions • In-class cases and activities • Shouldice hospital case, Universal Pulp and Paper, Kristen’s Cookie, House Game

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