# Production & Operation Management Essay

1205 Words Mar 9th, 2016 5 Pages
Production & Operations
Management
Session 3-2
More on Processes

1

Outline
 Multi-product, multi-flow process analysis
– So far: 1 product, 1 flow
– Differing process times, yield issues, machine breakdown

 Big Takeaway:
– Product-mix becomes critical in multiple flows
– Implications in capital investment, scaling business, and risk management  Calculating capacity when you have
– Multiple flows
• With the same processing time at each resource
• With different processing times at a single resource

– Yield issues
– Machine Breakdown
2

Measure: Implied Utilization
 Implied Utilization captures the mismatch between the capacity requested from a resource by demand and the capacity currently available at
• Factory cannot meet all the demand (capacity constrained) • How many can it serve (supposing product mix is constant)?  Factory capacity
• Let F be the factory capacity in units/hr
• The Table Assembly Line accounts for (5+6)=11 units out of a total of 30 units of demand, i.e., (11/30) of demand
• Its capacity is 10 units/hr and is the bottleneck
• So, (11/30)*F=10 units/hr
• F=27.27 units/hr
6

Calculating capacity
 Step 1. Find the bottleneck.

Need to know demand!!!

Single Flow

Multiple Flows

Bottleneck is resource with lowest capacity

Bottleneck is resource with highest utilization

For a single flow, the lowest capacity resource is the same as highest utilization resource

 Step 2. Bottleneck governs the process capacity.
Single Flow

Multiple Flows

Process capacity equals the bottleneck resource capacity

Depends on the bottleneck resource AND the demand mix 7

Your Turn: Change in Demand Mix
 Suppose overall demand remains the same, but the demand-mix changes
Product

Demand (units/hr)

% of Demand

PC

11

36.67%

SC

10

33.33%

PT

7

23.33%

ST

2

6.67%

 Which resource is the bottleneck?
 What is the capacity of the factory in units/hr?

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