计算机代考 Operations Management

Operations Management
Lecture 2 Process Analysis

Housekeeping Issues

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Assignments and Group Cases
! Assignment 1 (Due Sunday, Jan 30, 11:59 pm – UTORMAT)
! Finalize Groups (Due Sunday, Jan 30, 11:59 pm – Quercus )
! Assignment 2 (Due Sunday, Feb 6, 11:59 pm UTORMAT)
! Assignment 3 (Due Sunday Feb 13, 11:59pm – UTORMAT)
! Case 1 (Due Sunday Feb 27, 11:59pm – Quercus) !
! Assignment 4 (Due Sunday March 20, 11:59pm – UTORMAT)
! Assignment 5 (Due Sunday March 27, 11:59pm – UTORMAT)
! Assignment 6 (Due Sunday, April 3, 11:59 pm – UTORMAT)
! Case 2 (Due April 8th, 11:59 pm – Quercus)

Mid-Term Exam
Feb. 18, 2022 7:00 PM – 9:00 PM Online

Administrative Issues
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! Review of lecture 1
! In class warm-up exercise ! Process Analysis

Sample questions for lecture 1
! Problem 1: Give an example for the downsides of efficiencies and an example of downsides of effectiveness in each of the following examples:
! Air Travel
– Downside of efficiency: overbooking/customer has to take a different flight
– Downside of effectiveness: Under-utilized planes due to empty seats
! Retail Industry
– Downside of efficiency: forgone opportunity and consumer dissatisfaction
– Downside of effectiveness: Higher inventory cost
! Emergency room
– Downside of efficiency: overcrowded and delays in ER
– Downside of effectiveness: Under-utilized personnel and facilities

Sample questions for lecture 1
! Problem 2: A company that makes candles, has 4 workers, one machine and the company produces 80 candles per hour on average. Labor cost is $10 per worker per hour, and machine cost is $15 per hour.
– Calculate labor productivity. Use candles per worker per hour as the measure of labor productivity.
– Calculate the multifactor productivity. Use candles per dollar cost (labor plus machine) as the measure.

Sample questions for lecture 1
! When calculating productivity, check the unit that you are asked to use.
! In the first part, the measure is candle per worker per hour. As stated in the problem for output of 80 candles, the input of 4 × 1 worker
hours are used. Therefore labor productivity is !” = 20 candle per
worker per hour.
! For the second part, the unit is candle per dollar cost. As stated in the problem, for the output of 80 candles, the input (in terms of dollars) of 4 × 10 + 15 × 1 = $55. Therefore, the multifactor
productivity is !” candles per dollar. $$

Operations Management Basics I
Review of Lecture 1
Operations Management
Operations: In short: The transformation of inputs to outputs.
More precisely: Operations refers to manufacturing, service and health care processes that are used to transform the resources employed by a firm to a product desired by customers.
Operations Management:The management (design, operation and improvement) of the transformation processes that create value (quality / price).
Process: A set of tasks that transform inputs into outputs.
Inputs Buy
Make/create

Process Performance Measures
Review of Lecture 1
Operations Management
eciency: doing something at lowest possible cost. Can be measured via productivity.
E↵ectiveness: doing the right things to create the most value for the company. Related to quality, responsiveness, etc. E↵ectiveness is defined based on performance objective/target: (price: low cost process, product quality and reliability: high quality process, delivery lead time: fast delivery process, etc).
Productivity: measures how well a business unit is using its resources. Productivity is a relative measure (can be compared either with other similar operations, or over time within the same operation).
Productivity = Outputs , Inputs

Learning Objectives
! Process Analysis: Understand the concepts » Utilization
» Capacity (rate)
» Flow time
» Throughput rate (output rate) » Cycle time
» Bottlenecks
! Toolbox: Process Analysis
– Process mapping
– Capacity analysis (also called bottleneck analysis)

In-class Exercise
! Your friend has a coffee shop serving espresso. He owns one espresso maker. He recorded the time each step takes as follows:
– The cashier takes the order (8s)
– Worker1 makes the drink in 10s (the espresso machine takes 10s).
! Answer the following questions:
– How long does it take to get your drink from the moment you are
in front of the cashier.
– At most, how many drink orders can be prepared in one hour?
– Assuming that there is enough demand, what fraction of his time, worker 1 is busy working? How about the Cashier?

In-class Exercise
! Your friend has a coffee shop serving espresso. He owns one espresso maker. He recorded the time each step takes as follows:
– The cashier takes the order (8s)
– Worker1 makes the drink in 10s (the espresso machine takes 10s).
! Q3: Assuming that there is enough demand, what fraction of his time, worker 1 is busy working? How about the Cashier?
Worker1: 100%
Cashier: 𝟖 * 100 = 80% 𝟏𝟎

Basic Process Measures: Utilization
Utilization (ρ)
Ratio of time a resource is used relative to the time it is available (dimensionless quantity).
⇢ = How often the resource is being used . total availability time
Commercial Call Center: 90%
Car Factory Robot: 80% Emergency Call Center:

Basic Process Measures
Capacity (rate)
Dictionary definition: “the maximum amount that something can contain”. General Business Definition
Ø The amount of output that a system is capable of achieving over a period of time.
Ø The maximum possible output or service rate.
Bank: 200 customers/day Car Factory: 10,000 cars/month

In SingleTeller bank, it takes the teller 15 minutes to serve a customer. Every 30 minutes a customer goes to the teller.
– What is the flow unit? » Customer
– What is the capacity? » Capacity = !” = 4
– At what rate the process generates output?
» If 2 customers per hour come to bank then those 2
customer leave the bank in that hour.
– What is the utilization of the teller? » Utilization =( %&)(100) = 50%

Capacity, Input Rate, Output Rate

Process Flows:
Single Stage, Single Machine/Server
Input rate
[units/hr]
Output rate
[units/hr]
Capacity = 1 / FlowTime [units/hr]
§ Assuming resources are available (all input except demand),
Only for single stage, single machine/server.
§ The maximum possible output rate that can be achieved.
Output rate = min{Input Rate, Capacity}
§ In the long run. Also called the throughput rate (flow rate).
Utilization = Throughput Rate / Capacity
= min{Input Rate, Capacity} / Capacity
Flow Time [hr]
= min{Input Rate / Capacity, 1}

Some Basics
! Is input rate always equal to output rate?
! What is the difference between the short-run and
the long-run ?
– In the short-run:
ØWhat happens if input rate is greater than output rate? ØWhat happens if input rate is less than output rate?
– In the long-run:
ØWhat happens if input rate is greater than output rate? ØWhat happens if input rate is less than output rate?

Short Run Analysis: Funnel Analogy
• In the short run, the input rate
can be larger than the capacity
rate for a period of time
§ A properly sized buffer is needed
to store units waiting to be processed (build-up inventory)

In the long run, the input rate must be no larger than the capacity rate (otherwise, we will have input lost)
What goes in the process, must come out of the process. Input rate must be less than or equal to the capacity rate; Otherwise the system will overflow (input lost).
Long Run Analysis

The physics of process flows
! Identify “flow units”: Unit of analysis. Flow through the process, starting as input and later leaving the process as output.
– What is my product? e.g. cars, noodle bowls, customers
! Identify Rates
– Input rate: Rate at which units are arriving to the system
– Output rate (throughput, flow rate): Rate at which units are leaving the system
– Capacity: Maximum rate at which units can leave the system
! Flow Times (Time spent in process)
– How long does it take me to produce one product?
! Stocks (Inventory build-up)
– What parts of the process units do spend more time at? e.g. parking lot full of finished cars, warehouse full of raw materials, queue of customers waiting.

Basic Process Measures in Production and Service Operations
Production process
Service process
Input rate
Raw material releasing rate (e.g., iron ore)
Customer arrival rate
Output rate
Finished goods output rate
Customers departure rate (service completion rate)
Time required to turn materials into a product
Time that a customer is being served
Amount of work-in-process
Number of customers being served
Capacity (rate)
Maximum output rate
Maximum service completion rate

Key Steps in Process Analysis
! Step 1: Determine the purpose of the analysis
! Step 2: Process Mapping (Define the process)
– Determinetheflowunits
– Determinethetasks(sub-processes),andthesequenceofthetasks – Determinethetimeforeachtask
– Determinewhichresourcesareusedineachtask
– Determinewhereinventoryiskeptintheprocess
– Recordthisthroughaprocessflowdiagram » Linear flow chart
» Swim-lane (deployment) flowchart
» Gantt chart
! Step 3: Capacity Analysis (also called Bottleneck Analysis) – Determinethecapacityofeachresourceandoftheprocess
Further analysis will be covered later during the course.

‘s / J Suppose we order a Hot Breakfast Sandwich (490
Cal, 31g Fat):
! Purpose of the analysis:
– To determine the capacity (rate) of the ’s
make-to-order (“Made-just-for-you”) system.
! Given this purpose, the process map does not need to consider the following:
– Queued customers (i.e., customers in line)
– The baked meat cooking processes (we assume cooked meat is always available when needed during the make-to-order process).

Hot Breakfast Sandwich Steps
Recall from process mapping:
We observed the following steps:
– Determine the flow units
– Determine the tasks (sub-processes),
– and the sequence of the tasks
– Determine the time for each task 2.
– Determine which resources are used in each task
– Determine where inventory is kept in the process 3.
– Record this through a process flow diagram
» Linear flow chart
» Swim-lane (deployment) flowchart » Gantt chart
1. Cashiers takes the order (8s)
Worker1 toasts buns (it takes the toaster 10s)
Worker2 adds dressing (8s)
4. Worker3 adds meat patties (6s)
5. Worker4 wraps it (2s)
6. Worker5 delivers (2s).

Linear Flow Chart
Activities
Material Flows
Inventory buffers
Work in Process

Linear Flow Chart
! Flow unit: an order
– Assume each order contains only one burger
! Tasks and sequences
! Flow time of each task
Cashier Worker 1 Worker 2 Worker 3 Worker 4
8s 10s 8s 6s 2s 2s
Determine which resources are used in each task – Could indicate resources along each task
– To do this, Swim-lane diagram or Gantt chart are better
Place an order
Toast buns
Add dressings
Add meat patties

Swim-lane (deployment) flowchart
Worker 1 Toaster
Place an order
Activities
Toast buns
Add dressings
Add meat patties

Swim-lane (deployment) flowchart
Worker 1 Toaster
Activities
Place an order
Toast buns
Add dressings
Add meat patties

Worker 1,Toaster Worker 2
Activities
Place an order Toast buns
Add dressings Add meat patties Package

Capacity Analysis: Single Stage Process
Add Patties
! Flow Time (time customers spend): we refer to this as activity time.
! Capacity Rate (assume sufficient demand rate)? 600 orders / hour

Pipes with Different Capacities

Capacity Analysis: Multiple Stage Process
Place an order
Toast buns
Add dressings
Cashier Toaster Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s 450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Flow time of the whole process: __________ s
Capacity rate of the whole process: __________ orders / hr Throughput rate of the whole process: __________ orders / hr Utilization (ρ) of each worker?
Add meat patties
Package Deliver

Capacity Analysis: Multiple Stage Process
! Flow Time = 8+10+8+6+2+2 = 36 seconds.

Capacity Analysis: Multiple Stage Process
! Flow Time = 8+10+8+6+2+2 = 36 seconds.
! Capacity rate of the whole process = $%&& = 360 orders/hour. ‘&

Capacity Analysis: Multiple Stage Process
Place an order
Toast buns
Add dressings
Cashier Toaster Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s 450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Flow time of the whole process: __________ s
≠ 1/FlowTime
Capacity rate of the whole process: __________ orders / hr Throughput rate of the whole process: __________ orders / hr Utilization (ρ) of each worker?
Add meat patties
Package Deliver

Capacity Analysis: Multiple Stage Process
! Flow Time = 8+10+8+6+2+2 = 36 seconds.
! Capacity rate of the whole process = $%&& = 360 orders/hour. ‘&
! Throughput rate of the whole process = 360.

Capacity Analysis: Multiple Stage Process
Place an order
Toast buns
Add dressings
Cashier Toaster Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s 450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Flow time of the whole process: __________ s
≠ 1/FlowTime
Capacity rate of the whole process: __________ orders / hr Throughput rate of the whole process: ___3_6_0_____ orders / hr Utilization (ρ) of each worker?
Add meat patties
Package Deliver

Capacity Analysis: Multiple Stage Process
! Flow Time = 8+10+8+6+2+2 = 36 seconds.
! Capacity rate of the whole process = $%&& = 360 orders/hour. ‘&
! Throughput rate of the whole process = 360.
! Utilization of each worker:
– ToasterWorker1=360/360=1 – Cashier = 360 / 450 = 0.8

Place an order
Toast buns
Toaster Worker 1
10s 360/hr
Add dressings
Add meat patties
The Bottleneck
Worker 2 Worker 3 Worker 4 Worker 5
8s 6s 2s 2s 450/hr 600/hr 1800/hr 1800/hr
! The slowest resource in a process is called the bottleneck (i.e., it is the slowest link).
! The bottleneck process determines the capacity rate of the entire system.

Cycle Time
! Cycle time is the time between completed units
! Flow time is the time to complete each unit
! For a multi-stage process, the cycle time and the flow time are not the same
! Cycle time=1/(output rate)
– Example:
» Output rate = 10 units / hr
» This means a unit is produced every 6 minutes » Cycletime=1/(10/60)=6

Multiple Stage Process Revisited
Package Deliver
Cashier Toaster Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s 450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Place an order
Toast buns
Flow time of the whole process: __________ s
Add dressings
Capacity rate of the whole process: __________ orders / hr Throughput rate of the whole process: ___3_6_0_____ orders / hr Cycle time of the whole process: __________ s
Add meat patties

What if we add a cashier?
Place an order
Toast buns
Add dressings
900/hr 360/hr 450/hr 600/hr 1800/hr (2 x 450/hr)
Flow time of the whole process: __________ sec
Capacity rate of the whole process: __________ orders / hr
Throughput rate of the whole process: __________ orders / hr Utilization of each worker?
Add meat patties
Package Deliver
Place an order
Cashier 1 Toaster Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s

Toast buns
Toaster Worker 1
10s 360/hr
Place an order
Add dressings
Add meat patties
Package Deliver
The Bottleneck Revisited
Worker 2 Worker 3 Worker 4 Worker 5
8s 6s 2s 2s 450/hr 600/hr 1800/hr 1800/hr
! The slowest resource in a process is called the bottleneck (i.e., it is the slowest link).
! The bottleneck process determines the capacity rate of the entire system.
! Capacity increase of non-bottleneck processes do not increase the capacity rate of the entire system

What if we add a toaster?
Toast buns
Place an order
Cashier Toaster 1 Worker 2 Worker 3 Worker 4 Worker 5 Worker 1
8s 10s 8s 6s 2s 2s
450/hr 720/hr 450/hr 600/hr (2 x 360/hr)
1800/hr 1800/hr
What if we add a third toaster?
Flow time of the whole process: _________ sec
Which task is now the bottleneck?
Capacity rate of the whole process: ________ orders / hr
Cycle time of the whole process : ________ s
Add dressings

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