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Unit III Capacity Planning Models; Process planning, Aggregate Planning, Scheduling, Work

Study, Method Study, Work Measurement, Work Sampling;

CAPACIT Planning

Capacity is defines as the ceiling on the maximum load a production unit can handle at a given point of

time. In other words, capacity is defined as an upper limit on the rate of output.

The capacity question does not arise alone. It comes in conjunction with:

New facility planning

easing or !uying the equipment required to maintain the output.

"xpansion of the existing facilities

#hile introducing new product or services

#hile finali$ing the fund and energy requirements

The a!ove mentioned situations, if come across alone, are easy to tac%le. It !ecomes complicated

when more than one situation is encountered at the same time.

& facility's Capacity is the rate of productive capa!ility of a facility. Capacity is usually expressed as

maximum productive volume of output per time period. (perations managers are concerned with capacity for

capa!ility, usually several reasons. )irst, they want sufficient capacity to meet customer demand in a

expressed as volume of out put per period of timely manner. *econd, capacity affects the cost efficiency of

operations, the case or time. +ifficulty of scheduling output, and the costs of maintaining the facility. )inally,

capacity requires an investment. *ince managers see% a good return on investment, !oth the costs and

revenues of a capacity planning decision must !e carefully evaluated.

!"#I$ITI%$ %# P&%!UCTI%$ CAPACIT

)acility planning includes determination of how much longrange production capacity is needed, when

additional capacity is needed, where production facilities should !e located and the layout and characteristics

of the facilities.

Capacity in general is the maximum production rate of a facility or a firm. It is usually expressed as

volume of output per period of time. Capacity indicates the a!ility of a firm to meant mar%et demand

(perations managers are concerned with capacity !ecause.

-a They want sufficient capacity to meet customer demand in time

-! Capacity affects cost efficiency of operations, the case or difficulty of scheduling output and the

costs of maintaining the facility.

-c Capacity requires an investment of capital.

Capacity planning

Capacity planning design is the first level planning for the inputs, conversion activities and outputs of a

production operation. +esign decisions are very important !ecause they re often associated with significant

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investment of funds. The initial outlay and operating expenses are esta!lished !ased on design decisions, and

these in turn affect productivity of the concern in future. *o they affect fixed cost and varia!le cost.

DESIGN CAPACITY: preliminary estimate of capacity is done !ased on longrange forecast extending / to 01

years into the future.

The design capacity of a system is the rate of output of goods or services under full scale operating

conditions. )or example, a cement factory may !e designed to produce 211 tons per day. The projected

demand for period anywhere from / to 01 years is ta%en as the estimate for the design capacity, sincefrequent expansion will lead to productivity loss.

SYSTEM CAPACITY: In practice, it may not !e possi!le to achieve production to the extent of design capacity

mainly !ecause of mismatch !etween required resources and availa!le resources. The maximum output of a

specific product or product mix that the system of wor%ers and equipments is capa!le of producing as an

integrated whole is called system capacity. This may !e less than that of the design capacity.

The actual output may !e even less than the system capcity since it is affected !y shortrange factors such as

actual demand, equipment !rea%downs, and personal a!senteeism or productivity.

$""! #%& CAPACIT P'A$$I$(

Capacity planning is necessary when an organi$ation decides to increase its production or introduce

new products into the mar%et. (nce capacity is evaluated and a need for new or expanded facilities is

determined, decisions regarding the facility location and process technology selection are ta%en.

Capacity planning is the first step when an organi$ation decides to produce more or a new product.

(nce capacity is evaluated and a need for new or expanded facilities is determined, facility location and

process technology activities occur. Too much capacity would require exploring ways to reduce capacity, such

as temporarily closing, selling, or consolidating facilities. Consolidation might involve relocation, a com!ining o

technologies, or a rearrangement of equipment and process.

IMP%&TA$C" %# CAPACIT P'A$$I$(

The importance of capacity planning lies in the fact that it is more fundamental. "very organi$ation

loo%s at the future with its' own focus and develop and adjusts 3its' strategies to reach the goal. Capacity

planning relates to the organi$ation potential impact on the a!ility of the organi$ation to meet the future

demands for it's product 4 service. This is !ecause of the fact that the possi!le rate of output is limited !y the

capacity.

a. There is also lin% !etween the capacity and the operating cost. "very managers wants to minimi$e the

operating cost of the final product. &lso they are interested in utili$ing the esta!lished capacity to the

fullest possi!le extent. This trade 5 off puts the whole process, into a vicious circle.

!. 6inimi$ing the operating cost is not possi!le always, as the demand is a varia!le factor. The demand

variation is due to:

Increased competition -through the entry of new players7 -or due to the change in the strategies of the

existing players.

Technological changes -through some inventions -or entry of 6NC's through joint ventures

8ser's perception -which changes from time to time

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Nature of the product -accordingly the demand will !e seasonal or cyclical

9ossi!le demand patterns are:

rowth

+ecline

Cyclical

*ta!le

c. The Initial Investment involved. This is due to the fact that, the capacity is a major determinant of the

cost of a product, which will decide a!out the organi$ation's position in the mar%et.

d. ong term commitment of resources. (nce a capacity is created, it is very difficult 5 not impossi!le 5 to

modify. In future, if modification is needed, it calls for heavy investment.

CAPACIT P'A$$I$( !"CISI%$S

Capacity planning involves activities such as:

-a &ssessing existing capacity

-! )orecasting future capacity needs

-c Identifying alternative ways to modify capacity

-d "valuating financial, economical and technological capacity alternatives

-e *electing a capacity alternative most suited to achieve the strategic mission of the firm. Capacity

planning involves capacity decisions that must merge consumer demands with human, material and

financial resources of the organi$ation.

(ften decisions a!out capacity are insepara!le from decisions a!out locations: Capacity depends upon

demand and demand often depends on location. Commercial !an%s, for example, simultaneously expand

capacity and demand !y !uilding !ranch !an%s. +ecisions a!out the si$e and location of the !ranch are made

according to projections a!out neigh!orhood population densities and growth, geographic locations of mar%et

segments, transportation -traffic flows, and the locations of competitors. &dding a new !ranch offers greater

convenience to some existing customers and, management hopes, attracts new customers as well. (!viously

this decision affects the revenues, operating costs and capital costs of the organisatoin.

In the pu!lic sector, the capacity decision involves similar considerations. 6unicipalities face ever

increasing demands for pu!lic services, strong pu!lic sentiment for tightening !udgets, and greate

performance accounta!ility. Consequently, officials have increased their efforts to rearrange pu!lic resources

so that service capacity is increased !ut the cost of operating is not. 6unicipal emergency services, for

example, are periodically expanded !y adding to show population growth and shifts. Next, municipal officials

plan where to locate new stations, ta%ing into consideration !oth areas of greatest need and costs of operation

and facilities. &lthough the capacity may not involve direct revenues, cost savings for citi$ens can !e

considered a form of indirect revenues. These cost savings can result in reduced tax !urdens of lowe

insurance rates in areas with improved emergency services.

6odeling techniques, are playing a central role in these planning processes. (ne study, for example,

explain how mathematical programming is used for greater am!ulance effectiveness considering timeto

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scene, timetohospital, an distancetohospital factors, there!y increasing effective service system capacity

&nother study shows how mathematical modeling can determine optimal fleet si$es and vehicle routes for a

commercial common carrier. ;et another study demonstrates the value of queuing models in a computer

!ased information system for the *t. ouis County 9olice +epartment. The system gives a way to allocate

police patrols, there!y using existing capacity more efficiently or reducing the si$e of operations withou

diminishing existing service levels. &ll these examples show how systematic analysis and planning can lead to

effective use and improvement of capacity.

CAPACIT P'A$$I$( ST&AT"(I"S

Capacity is a measure of the a!ility to produce goods or services or, it may !e called as the rate of

output. Capacity planning is the tas% of determining the long 5 and short 5 term capacity needs of an

organi$ation and then determining how these needs will !e satisfied.

ongterm capacity strategies: Top management may have the following strategies to cope up with major

changes in products and services that it can provide to customers in the long run which will have significant

impact on the capacity. The major changes will altogether revise the demand and resource requirements

There are:

develop new product lines

expand existing facilities

construct or phase out production plants

Technological o!solescence may force some industries to use phasein strategy for introducing the next model

of the same product or service to retain and4or improve its mar%et segment. The phase 5 in strategy is nothing

!ut het planning for the next model even when the present model is moving well. "specially, in electronics

industry, any company should do continuous research and development to improve the operational features of

the product through advanced technology so that the company will !e in a position to !ring out products into

the mar%et with the latest technology without any time lag.

&t the same time, all the products will not have continued demand for ever. 6oreover, continuing the

production of some products will !e uneconomical over a period of time. This will force a company to diversify

and4or phase out some of the existing products. 9hasing out of a product should !e done over a period of time

properly !y ta%ing the reemployment features into account.

*hort 5 term capacity strategies: In shortterm planning, hori$on, capacity decisions are ta%en !y considering

the fluctuations in demand caused !y seasonal and economic factors. The purpose of shortterm capacity

planning is to respond to variations in demand during the shortterm planning hori$on. *trategies li%e, overtime

su!contracting, hiring firing, etc. can !e used to cope up with the fluctuations in demand.

#ACT%&S A##"CTI$( CAPACIT P'A$$I$(

The capacity varia!les are:

-a C(NT

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WAS %# C)A$(I$( CAPACIT

(nce the longrange capacity needs are estimated through longrange forecasts, there are many ways

to provide for the needed capacity. )irms may have a capacity shortage situation where present capacity is

insufficient to meet the forecast demand for their products and services or have excess capacity i.e., capacity

in excess of the expected future needs. ongrange capacity planning hence may require either expansion or

reduction of present capacity levels.

TP"S %# CAPACIT

0. )I>"+ C&9&CIT;: The capital asset -!uildings and equipments the company will have at a particula

time is %nown as the fixed capacity. They cannot !e easily changed within the intermediate time range.

Capacity represents an upper limit to the internal capacity, that the company concentrates can use in its

efforts to meet demand

2. &+?8*T&=" C&9&CIT;: It is on and the si$e of the wor%force, the num!er of hours per wee% they

wor%, the num!er of shifts and the extent of su!contracting.

@. +"*IN C&9&CIT;: it is the planned rate of output of goods or services under normal fullscaleoperating conditions. It is also %nown as installed capacity. It sets the maximum limit to capacity and

serves to judge the actual utili$ation of capacity.

A. *;*T"6 C&9&CIT;: It is the maximum output of a specific product or productmix that the system of

wor%ers and machines i.e., the productive system is capa!le of producing as an integral whole. It is less

than or equal to the design capacity of the individual components !ecause the system may !e limited

!y:

-a The product mix

-! Buality specifications and

-c The current !alance of equipment and la!or

/. 9(T"NTI& C&9&CIT;: It is that, which can !e made availa!le within the decision hori$on of the top

management.

. I66"+I&T" C&9&CIT;: It is that, which can !e made availa!le within the current !udgeted period.

D. "))"CTIE" C&9&CIT;: is the capacity, which is used within the current !udget period. It is also %nown

as practical capacity or operating capacity. No plant can wor% upto the maximum or the theoretica

capacity -installed or design capacity !ecause of the loss of capacity due to scheduling delays

machine !rea%down and preventive maintenance. This result in the plant wor%ing at an efficiency ofloss than 011F. &lso, the actual output will !e less than the designed output due to rejections and

scrap.

G. N(

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H. &CT8& (< 8TII"+ C&9&CIT;: This is the actual output achieved during a particular time period

The actual output may !e less than the rated output !ecause of shortrange factors such as actua

demand, employed a!senteeism, la!our inefficiency and low productivity levels.

+esign capacity is

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lines are more diverse, it is difficult to find a common unit of output. 6ore appropriate measure of

capacity for such firms is to express the capacity in terms of money value of output per period of time

-day, wee% or month.

Capacity may !e measured in terms of inputs or outputs of the conversion process.

*ince, capacity is defined along with the constraints, the capacity measurements !ecomes

su!jective, as different interpretations of the terms are made !y different people in the organi$ation.)or

example, if the capacity is measured on the sale of products in rupees ro dollars, the forex fluctuationswill result in different results on capacity.

In situations where the organi$ation has more than one product in the product mix, a question

arises on which product the capacity should !e measuredJ If done on one product alone, it may not

cover the whole infrastructure created and may mislead.)or example, if a refrigeration company

produces +eep )ree$ers and

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ongterm or longrange capacity planning is concerned with accommodating major changes that affect

the overall level of output in the longer run. 6ajor changes could !e decisions to develop new product lines

expand existing facilities and construct or phase out production plants.

*hortterm or shortrange capacity planning is concerned with responding to relatively intermediate

variations in demand. In the shortterm planning hori$on, capacity concerns involve the fluctuations in demand

caused !y seasonal or economic factors.

#ays of adjusting the capacity to the varying demands in the shortterm time hori$on are:

-i 8se of overtime or idle time

-ii Increasing the num!er of shifts per day to meet a temporary strong demand.

-iii *u!contracting to other firms.

*ervice industries use flexi!le wor% hours, parttime employees and overtime wor% scheduling to meet pea%s in

demands.

#I$IT" A$! I$#I$IT" CAPACIT P'A$$I$(

In operations planning, two conflicting constraints are time and capacity. If time is fixed !y the

customer's required delivery date or processing cycle. It is possi!le to accept time as the primary constraint

and plan !ac%wards to accommodate these times. In such cases, planning !ac%wards to infinite capacity offers

a potential solution to the pro!lem. (n the other hand, if the processing time is not a constraint in cases where

products are produced to stoc% and sell, it is simpler to use a forward plan !ased on finite capacity i.e., !ased

on availa!le resources.

CAPACIT P'A$$I$( M%!"'S

*everal models are useful in capacity planning 9resent value analysis is helpful whenever the time

value of capital investments and fund flows must !e considered. &ggregate planning models are useful for

examining how !est to use existing capacity in the short term. =rea%even analysis can identify the minimum

!rea%even volumes when comparing projected costs and units produced per time period -output rate.

+C&P I$PUTS

The major inputs for C

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requirements for different products or services. Then they requirements with existing capacity and detect when

capacity adjustments are needed.

+C&P %UTPUTS

0.

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-c &vaila!ility of manpower7

-d &vaila!ility of cash7

-e )inancial policies7

-f 9urchasing policy7

-g *u!contracting policy7

-h The technical demands of the tas%s7

-i The num!er of different tas%s !eing underta%en.

)or example, the capacity of a restaurant is limited !y the si$e of the 3eating' area, or the num!er of

ta!les.

I$#'U"$C"S %$ "##"CTI-" CAPACIT

"ffective capacity can !e influenced !y:

-a Technical a!ilities in the preoperations stages7

-! (rgani$ational s%ills in the planning stages7

-c 9urchasing s%ills7

-d *u!contracting s%ills7

-e 6aintenance policies and a!ilities7

-f Eersatility of wor%force7

-g "fficiency of wor%force.

!I##"&"$C"S ."TW""$ "##"CTI-" A$! IMM"!IAT" CAPACITI"S

& great deal to wor% has !een carried out on the utili$ation of equipment, i.e. the differences !etween

effective and immediate capacity. )requently these studies have involved the use of activity sampling to

esta!lish the proportion of time the equipment was !eing used productively, and to identify the reasons for and

quantify the extent of nonproductive time. These reasons range across preparation time, planned

maintenance, emergency maintenance, idle -no planned wor%, idle -operator a!sent, and so on. The picture

that emerges is that effective capacity is frequently less than /1 percent of immediate capacity. #hile it is

unli%ely that these two capacities will ever coincide, it is clear that significant increases in capacity are possi!leoften !y improved production4operations control. It is also clear that to measure capacity solely on the !asis of

availa!le time is li%ely to give gross errors. &llowance must always !e made for current local performance.

CAPACIT C)A$("

#ithin a production 4 operations environment, it seems pro!a!le that:

0. The a!ility of an individual to chance capacity is directly related to that individual's position in the

organi$ation's hierarchy

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2. The time necessary to implement a capacity increase in proportional to the magnitude of the increase.

@. The num!er of accepta!le capacity changes which can !e handled at any one time is finite.

"very programme implies a certain level of capacity and, if the a!ove statements hold true, it is

important that the implicit capacity decisions are made !y an individual at the correct level in the organi$ation

To present he production4operations controller with a programme which requires a capacity change greater

than his hierarchical position will permit him to effect, can only result in frustration and the nonachievements of

the programme. *imilarly, if the need for a capacity change is recogni$ed too late, it will not !e achieved either,and failure must again result.

Capacity changes may !e achieved in a num!er of ways and stages, ranging from a num!er of smal

incremental changes to a large step changes depending on environmental constraints. If a university reached

the limit of its physical teaching capacity, it could increase the hours of availa!ility -from H.11/.11 to G.11D.11

or !y constructing further !uildings.

I$T"&&"'ATI%$S)IP ."TW""$ CAPACIT A$! %T)"& #U$CTI%$S

0. Relationship between capacity and locations decisions: +ecisions a!out capacity are often insepara!le

from location decisions. 8sually, capacity is expanded !y installing new units at new locations ta%ing

into consideration location factors such as mar%et segment, transportation costs, location o

competitors etc.

2. Relationship between capacity and plant layoutThe plant capacity determines the physical relation

!etween various processes used in the conversion process, which in turn determines the layout of the

plant. In productlayout or productfocused productive system, the capacities of various wor% centres o

machines have to !e !alanced to get approximately the same rate of output from various wor% centres

or machines. (nce the layout is installed, it is not possi!le to change the capacity in the short tern time

hori$on.

@. Relationship between capacity and process desin: In some cases, the rated capacity depends on the

type of conversion process selected. for eg., the conversion processes selected for manufacture ofsteel is different for the ministeel plants from that used for major steel plants.

A. Relationship between capacity and e!uip"ent selection: The installed capacity of plant determines the

standard la!our or equipment hours that can !e achieved and also determines the num!er of machines

or equipments that must !e installed to get the desired output capacity.

S"&-IC" CAPACIT

*ervice organi$ations, for the capacity measurement, can !e divided into the companies offering:

Komogenous *ervices

Keterogeneous *ervices

In the case of Insurance companies, the service offered is homogenous i.e. it is !ased on the num!er

of policies serviced per year.

=an%s and Transport companies offer heterogeneous services. Their offer is restricted !y the

availa!ility of limited resources under their possession. )or example, in !an%s, it is measured !y the man

hours availa!le per wee%7 and in case of transport companies, it is tonnage per %ilometer.

!I##ICU'T I$ CAPACIT P'A$$I$( I$ S"&-IC" %&(A$I/ATI%$S

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The nature of service itself, i.e. the output cannot !e stored.

&verage demand for the service will !e far less than the pea% demand. This will lead to lower capacity

utili$ation during the offpea% demands. This results in low productivity. -"xample: "lectricity 9roduction

and Consumption

+emand fluctuation during the course of time. -"xample: 9lacement of funds !y the )inancia

Institutions

CAPACIT P'A$$I$( P&%C"SS I$ S"&-IC" %&(A$I/ATI%$S

i 9redict future demands

ii +etermine the availa!le capacity

iii Translate prediction into physical capacity requirement.

iv +evelop alternate capacity plans for matching required and availa!le capacities.

v &nalyse the economic effects of alternate capacity plans.

vi &nalyse the ris% and other *trategic consequences of alternate plans

vii

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individual models, colors, or options. #hen units of aggregation are difficult to determine -for example, when

the variation in output is extreme equivalent units are usually determined. These equivalent units could !e

!ased on value, cost, wor%er hours, or some similar measure.

&ggregate planning is considered to !e intermediateterm -as opposed to long or shortterm in nature. Kence

most aggregate plans cover a period of three to 01 months. &ggregate plans serve as a foundation for future

shortrange type planning, such as production scheduling, sequencing, and loading. The master productionschedule -69* used in material requirements planning -6

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In8entory7)inishedgoods inventory can !e !uilt up in periods of slac% demand and then used to fill demand

during periods of high demand. In this way no new wor%ers have to !e hired, no temporary or casual la!or is

needed, and no overtime is incurred.

Su3contracting7)requently firms choose to allow another manufacturer or service provider to provide the

product or service to the su!contracting firmMs customers. =y su!contracting wor% to an alternative source

additional capacity is temporarily o!tained.

Cross*training. Crosstrained employees may !e a!le to perform tas%s in several operations, creating someflexi!ility when scheduling capacity.

%ther methods. #hile varying wor%force si$e and utili$ation, inventory !uildup4!ac%logging, and

su!contracting are well%nown alternatives, there are other, more novel ways that find use in industry. &mong

these options are sharing employees with countercyclical companies and attempting to find interesting and

meaningful projects for employees to do during slac% times.

A((&"(AT" P'A$$I$( ST&AT"(I"S

There are two pure planning strategies availa!le to the aggregate planner: a le8el strategy and a chasestrategy. )irms may choose to utili$e one of the pure strategies in isolation, or they may opt for a strategy that

com!ines the two.

'"-"' ST&AT"(.

& level strategy see%s to produce an aggregate plan that maintains a steady production rate and4or a steady

employment level. In order to satisfy changes in customer demand, the firm must raise or lower inventory

levels in anticipation of increased or decreased levels of forecast demand. The firm maintains a level wor%force

and a steady rate of output when demand is somewhat low. This allows the firm to esta!lish higher inventory

levels than are currently needed. &s demand increases, the firm is a!le to continue a steady production

rate4steady employment level, while allowing the inventory surplus to a!sor! the increased demand.

& second alternative would !e to use a !ac%log or !ac%order. & !ac%order is simply a promise to deliver the

product at a later date when it is more readily availa!le, usually when capacity !egins to catch up with

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diminishing demand. In essence, the !ac%order is a device for moving demand from one period to another,

prefera!ly one in which demand is lower, there!y smoothing demand requirements over time.

& level strategy allows a firm to maintain a constant level of output and still meet demand. This is desira!le

from an employee relations standpoint. Negative results of the level strategy would include the cost of excess

inventory, su!contracting or overtime costs, and !ac%order costs, which typically are the cost of expediting

orders and the loss of customer goodwill.

C)AS" ST&AT"(.

& chase strategy implies matching demand and capacity period !y period. This could result in a considera!le

amount of hiring, firing or laying off of employees7 insecure and unhappy employees7 increased inventory

carrying costs7 pro!lems with la!or unions7 and erratic utili$ation of plant and equipment. It also implies a great

deal of flexi!ility on the firmMs part. The major advantage of a chase strategy is that it allows inventory to !e

held to the lowest level possi!le, and for some firms this is a considera!le savings. 6ost firms em!racing the

justintime production concept utili$e a chase strategy approach to aggregate planning.

6ost firms find it advantageous to utili$e a com!ination of the level and chase strategy. & com!ination strategy

-sometimes called a hy!rid or mixed strategy can !e found to !etter meet organi$ational goals and policies

and achieve lower costs than either of the pure strategies used independently.

T"C)$I9U"S #%& A((&"(AT" P'A$$I$(

Techniques for aggregate planning range from informal trialanderror approaches, which usually utili$e simple

ta!les or graphs, to more formali$ed and advanced mathematical techniques. #illiam *tevensonMs text!oo%

9roduction4(perations 6anagement contains an informal !ut useful trialanderror process for aggregate

planning presented in outline form. This general procedure consists of the following steps:

S07 !etermine demand 4or each period.

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a maintain a level wor% force and meet demand variations in some other manner.

! maintain a steady rate of output, and use some com!ination of inventories and su!contracting to meet

demand variations.

c match demand period !y period with some com!ination of wor% force variations, su!contracting, and

inventories.

d use a com!ination of decision varia!les.

Note: It is unli%ely that planners would attempt to match demand period !y period !y varying employment

levels alone !ecause that would tend to !e costly, disruptive, and result in low employee morale.

G. Choosing a strategy usually depends on the cost entailed and company policy.

H. In order to effectively plan, in addition to %nowledge of company policy, estimates of the following items must!e availa!le to planners:

a +emand for each period

! Capacity for each period

c Costs -regular time, overtime, su!contracting, !ac%orders, etc.

01. In order to translate an aggregate plan into meaningful terms for production, it must !e disaggregated -i.e.,

!ro%en down into specific product requirements to determine la!or, material, and inventory requirements.

00. & master schedule indicates the desired quantity and timing of deliveries. & master production schedule

ta%es into account planned production, as well as onhand inventory.

02. There are three !asic inputs to the master schedule: =eginning inventory, forecasts for each period in the

schedule, and customer orders. (utputs of the scheduling process include projected inventory, production

requirements, and the amount of uncommitted inventory, which is referred to as availa!letopromise -&T9

inventory

W%&@ STU!

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#or% study is mainly concerned with the examination of human wor%. In fact planning cannot !e done

unless one %nows how long it will ta%e to do a particular jo!. It is important in modern time that our lives ta%e

cogni$ance of time. Time is very important to the manufacturer who must %eep to promise, to estimate

quantities, and to other industrial and !usiness arrangements. The need for this managerial tool arose in the

middle of nineteenth century, when the greater use of machinery and increasing si$e of manufacturing units

necessitated a more efficient means of control ling production schedules. It was ).#. Taylor who argued that

greater, attention should !e paid to !e an off timing tas%s, Taylor advocated the !rea%ing down of a tas% into

what the termed 5 elements of wor% and the timing of these elements separately with the aid of a stop watch.

Ke also emphasi$ed the use of a differential piece rate system. In this system a strong incentive was offered to

those who reached or surpassed the standard esta!lished !y Taylor's time study method.

& contemporary of ).#. Taylor was il!reth7 he and his wife, +r. ilian il!reth were sure that the in

which wor% was done was far more important than trying to devise timing systems of how long it too% to do a

set tas%. il!reths often found it necessary to ta%e motion pictures and examine them frame !y frame to

examine the smallest elements of movements.

Improving the 9roductivity is an important tool to increase the profita!ility and overall efficiency of an

organisatoin. Kigher productivity means increase in output with lesser expenditure. i.e. !y increasing

9roductivity, more quantity of goods are produced at cheaper cost. To improve the productivity, various wor%ing

methods applied in the organisatoin have to !e revised. 6ethod *tudy is a technique used to simplify the

method of doing wor%s. =y method study, efficient and economical methods are developed. Improved methods

will reduce tiredness of the wor%ers, and hence 9roductivity will certainly increase.

#or% *tudy investigates the wor% done in an organi$ation and it aims at finding the !est and most

efficient way of using availa!le resources, i.e. men, material, money and machinery. The main stress of wor%

study is to examine the human wor% in all its contexts and to motivate the human efforts at all levels to ma%e

the life productive.

!"#I$ITI%$

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IMP%&TA$C" A$! SC%P"

#or% study is not a theoretical concept !ut essentially a practical one dealing with human !eings who

have their own style and attitude. The success of wor% study depends upon the existence of good relations 5

!etween managements and wor%ers. #or% study involves lot of changes of various %inds of wor%ing methods

*ince people in general do not li%e changes !ut prefer to carry on as they are already doing. There will always

!e a tendency to resist any new methodssuggested !y wor% study officers. =ut if relations are good and the

wor%ers have confidence in the a!ility, integrity and fair mindedness of wor% study man, there is a good chance

that sound proposals will !e accepted willingly !y the wor%ers.

-A&I%US M%!"'S

The layout diagram: It is a floor plant upon which the arrangement of all equipment is mar%ed to scale. *uch a

diagram help an investigator record his findings in a form which is simple to visuali$e.

)(# +I&

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this !y no means that we should ignore all weather forecasts. In any area new concepts and %nowledge %eep

emerging similarly in wor% study new and more accurate technique will emerge.

.7 > W%&@ STU! A$! P&%!UCTI-IT

9roductivity increase is the %ey factor in raising the standard of living #or% *tudy indicates how

resources can !e effectively utili$ed and study would help in reali$ing this aim.

*electing the #or% to !e *tudied: #e could select for study the wor% that is li%ely to have the longest

production run, offers the greatest scope for improvement, and which promises the greatest financial saving for

a given outlay.

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-a Transportations

-! +elays

-c *torages

)low process charts can relate to material or individuals

68TI9" &CTIEIT; CK&

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T"C)$I9U"S %# W%&@ STU!

#or% *tudy consists of methods study -or motion study and wor% measurement -or Time *tudy

Techniques of #or% *tudy

6ethods *tudy -6otion *tudy

Time *tudy -#or% 6easurement

8*"*

)ollowing are the important uses of wor% study

-a +irect means of raising productivity

-! It is systematic7 to factor is overloo%ed

-c 6ost accurate method and yet provide production planning and control and incentives.

-d It is most important tool of analysis.

-e "very one concerned with industry !enefit from it such as customer, wor%er and management.

M"T)%!S STU!

6ethod *tudy is a technique which analyses each operation of a given piece of wor% very closely in

order to eliminate unnecessary operations and to approach the quic%est and easiest method of performing

each necessary operation7 it includes the standardi$ation of equipment, method and wor%ing conditions7 and

training of the operator to follow the standard method.

6ethod *tudy may also !e defined as the systematic investigation of the existing method of doing a jo!

in order to develop and install an easy, rapid, efficient and effective and less fatiguing procedure for doing the

same and at lower costs. this is generally achieved y eliminating unnecessary motions involved in a certain

procedure or !y charging the sequence of operations or the process itself.

)ran% il!reth defines method study as Othe science of eliminating wastefulness resulting from ill

directed and inefficient motionsP. The main purpose is to find the scheme of least wastage of la!our.

The modern concept of method study is a development of il!reth's. Technique of 6otion *tudy.

%."CTI-"S %# M"T)%! STU!

The following are the o!jectives of 6ethod *tudy:

a Improvement of manufacturing processes and methods. =etter product quality

! Improvement of wor%ing conditions

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c Improvement to plant layout and wor% place layout

d

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f 6aintain the new method

#e should ensure the proper functioning of the installed method !y periodic chec%s and verifications. If

there are any deviations, the reasons for deviation should !e explored and corrected. Eiews of the

wor%ers, supervisors and other person related with the authori$e method can !e of immense help in

exploring further improvements.

The a!ove mentioned are the procedures and steps in 6ethod *tudy.

& chapter on method study will !e incomplete without a mention a!out the Ther!ligs' motion study.

T)"&.'I(S

)ran% il!reth developed a set of 0D elementary motions commonly found in manual operations and

called them 3Ther!ligs' reversed spelling of his name. #e %now that motion study is used for deciding the !est

way of doing wor% for which preent and proposed methods are o!served !y experts !y recording on charts

)or the purpose of recording the motions, he split up different motion of process into 0D fundamental elements

made !y various mem!ers of human !ody and each event was allotted a sym!ol and letter a!!reviation.

These sym!ols and a!!reviations are used for preparing 6otion *tudy charts.

P&%C"SS C)A&T

& chart representing a process is called as a process chart. & process chart records graphically o

diagrammatically, in sequence the movements connected with a process. This chart portrays and process with

the help of a set of sym!ols and aids in !etter understanding and examining the process with a purpose to

improve the same.

The process charts are of three types:

a (utline 9rocess Chart

! )low 9rocess Chart and

c Two Kanded 9rocess Chart

a (8TIN" 9

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Two handed process chart records the activities of the left hand and right hand of an operator as

related to each other.

#'%W !IA(&AM

& flow diagram is a drawing or a diagram, which is drawn to scale. It shows the relative position of

production machinery, jigs, fixtures gangways etc. and mar%s the paths followed !y men and materials.

9rocess charts indicate the sequence of events, they do not illustrate the movements of men, materials

etc. while the wor% is !eing accomplished. To %now the path of movement of men and materials and to reduce

unwanted movements these flow diagrams are preferred.

ST&I$( !IA(&AM

& string diagram is preferred over a flow diagram, if paths and movements are congested and

repetitive. & string diagram is a layout drawing on which a length of string is used to record the extent as well

as the pattern of movement of a wor%er or piece of equipment wor%ing within a limited area during a certain

period of time. &s explained earlier, it is used to study where the journeys and irregular in distance and the

movements are repetitive and congested.

TIM" STU!

&s discussed earlier, method study aims at reducing unwanted and unnecessary motions while

performing a jo!. (nce the method study has developed, an improved procedure for doing a jo!, the wor%

measurement or time study will find the time allowed to complete the jo!.

Timely study or wor% measurement is the art of o!serving and recording the time required to do each

detailed element of an industrial operation. Industrial operation means manual, mental and machining

operations. 6anual time is divided into three types of operation i.e. handling of tools, handling of machines and

handling of materials. 6ental time includes time ta%en !y the wor%er for thin%ing over some operations

6achining time includes time ta%en !y the machines in doing its share of wor%.

*o, time study standardi$es the time ta%en !y an average wor%er to perform these operations. Timestudy or wor% measurements is also defined as follows Oit is the application of techniques designed to esta!lish

the time for a qualified wor%er to carryout a specified jo! at a defined level of performance.

%."CTI-"S %# TIM" STU!

9roduction cost of any commodity is made of three components

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a!our Cost.

& production manager can easily predict the cost of raw material and with some past experience and

judgment overheads can !e estimated pretty accurately. To estimate la!our cost, we need to %now the la!ou

time. The practical experience of production specialists helps them exercise considerate judgment in

estimating direct la!our time. Kowever, costly errors can occur if personal judgment is used exclusively. Time

studies are conducted to ma%e precise evaluation of direct la!our time.

These time standards, in addition to esta!lishing standard la!or costs, also esta!lish capacity ofproductive equipment. The standards are thus used for scheduling production orders.

&nother use of time study is that as a result of time study, a time study engineer inevita!ly discovers

constructive refinements in operation methods tooling, plant layout and materials handling. Thus he is in a

position to compare the various alternatives and recommend the !est possi!le method.

&lso time standards are used for setting pay incentives. &ny !ody who can do !etter than standards !y

his extra s%ill will earn more.

#or% 6easurement

a +etermines the time required to do a jo!. &lso, it compares various alternative methods and esta!lishedthe fastest method.

! +ecided the manpower required for a lo! and also determines the equipment requirements.

c 9rovides information for effective production planning and maintenance procedures.

d &ids in calculating exact delivery dates.

e +ecides realistic la!our !udgeting and provides a !asis for standard costing system

f 9rovides for a sound incentive schemes and

g

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-h If there are any contingent delays a !lan%et allowance -not exceeding /F may !e added since they

are not economical to measure.

MIC&% M%TI%$ #I'MS

In many cases the high speed movements made !y the operators cannot !e seen !y the eye or with

stop watch. The technique of micro motion is used to record rapid movements. It consists essentially of a cine

camera which ta%es a film of the operator's movements. 6icromotion study !esides giving a more accurate

recording of !oth movements, also provides a permanent record which can !e studied at a latter date also. Theequipment for micro motion study is a 0 mm cine camera, a tripod and exposure meter and a timing cloc%

%nown as microchronometer.

6icrochronometers is provided with a selfstarting motor with geared movement designed to read

042111thof a minute.

M"M%TI%$ T"C)$I9U"

It is technique name after its inventor 6arvin ". 6undel who developed this particular use of the cine

camera for recording industrial activities and su!sequent analysis of the film. It is mainly used to sgudy the

wor% of dentist, a pharmacist and a group of men in a foundry. This technique is mainly used for long and

irregular activities and wor% of a group of people. The equipment required for memotion is a cine camera

capa!le of carrying a film maga$ine or at least @1 meters. 6emotion is a %in to activity sampling activity.

It is the application of techniques designed to esta!lish the time for a qualified, wor%er to carry out a

specified jo! at a defined level of performance. #or% measurement or time study is the technique for

determining the standard time to perform a specific tas%. In other words motion study and time study is the

systematic study of wor% system with the purpose of.

-i +eveloping the desired system and method usually the one with the lowest cost.

-j *tandardi$e the system and methods

-% +etermining the time required !y a qualified and properly trained person wor%ing at a normal pace to do

a specific 3operation.

#or% measurement, as the name suggests, provides management, with a means of measuring the

time ta%en in the performance of an application for series of operation in such a way that ineffective time is

shown up and can !e separated from effective time. In this way, its existence, nature and extent !ecome

%nown where previously they were concealed within the total. (ne of the surprising thing a!out factories

where wor% measurement ahs never !een employed is the amount of ineffective time where very existence is

unsuspected or which is accepted as the Ousual thingP and something inevita!le that no one can do much

a!out !uilt into the process. (nce the existence of ineffective time has !een revealed, and the reasons for it

was traced down, steps can usually !e ta%en to deduce it.

Kere wor% measurement ahs another role to play. Not only 3Can it reveal the existence of ineffective

time7 it can also !e used to set standard time for carrying the wor%, so that if an ineffective time 3does creep in

later on it will immediately !e shown up as an excess over the standard time and will thus !e !rought to the

attention of the management. #or% measurement may start a chain reaction throughout the organisation.

US"#U'"$SS %# TIM" M"ASU&"M"$T

It is indeed useful to the management to %now how long it should ta%e to carry out various %inds of wor%

in a plant. et us discuss various uses:

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average time is to calculated. This average time multiplied !y a leaveling factor also called

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In a shop there may !e small delays due to

#aiting for the inspector

Consulting the supervisor

(!taining special tools etc.

These delay are of very short duration. The allowance given to compensate these delays is called contingency

allowance. enerally /F of !asic time is given as contingency allowance.

A. *pecial &llowance:

In a shop, some activities ta%e place occasionally. These activities will not !e part of he production cycle. =ut

these are necessary for production wor%. "xamples of these activities are:

Tool resting

Cleaning

Tool maintenance

*hut down

)or these activities and allowance %nown as special allowance is given

/. 9olicy &llowance

This is an allowance given according to the policy of the management. It is not includes for calculating the

standard time. This is an extra !enefit given !y the management to the wor%ers. This allowance is given to

increase the wor%er's earnings.

&s explained earlier, while time study is made under the stop watch method, due consideration is given for thea!ove allowances.

%. !"SI($

There are strategic decisions 5 involving the design of products and 4 or services and the location of the

system 5 which are an integral part of the overall productive system design. The core of that productive

system, however, is located in the complex of technology and people where the productive process is centered

5 in factories, hospitals, !an%s, offices etc. #e already noted that the entire design process contains

interdependent components, and that the products, services, and locations are partially influenced !y the core

productive process, and vice versa. *ince these productive systems involve the a!out !lending of technology

and people to form a core productive system, they often are called sociotechnical system.

The goal of the entire design process is to develop a rationale for the organi$ation of the wor% to !e done, and

to relate this rationale to machines and technology in tems of wor% sharing !etween wor%er and machines,

wor% flow, and physical facilities. The layout, which on the surface shows the spatial relationships, illustrates

the physical integration of these factors. #hether or not the layout permits an effective design from points of

view other than wor% flow and physical efficiency depends on the effectiveness of process planning and jo!

design, and how technology and people are molded into a system.

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Now we can consider the really fundamental alternative of division of la!or versus !road spectrum jo!s 5

grouping tas%s into jo!s at fairly homogenous s%ill levels versus vertically integrating tas%s into jo!s. It is at

these points that jo!s can !e created that either satisfies and fulfill wor%ers or dehumani$e them.

#e shall consider process planning, jo! design and layout as an integral whole in the attempt to avoid the

%nown effects that result when these elements are dealt with as separate independent concepts. The %nown

effects are that process planning -that is technology and layout has !een thought of as the independent

varia!le and that people and jo! designs have !een thought of as the dependent varia!les. In that %ind of

framewor%, jo! designs were viewed as the results of process or technology planning. Currently developingconcepts and practices consider the two components jointly to produce designs that satisfy the needs of !oth

%inds of varia!les.

T"C)$%'%(ICA' -I"W %# P&%C"SS P'A$$I$( A$! %. !"SI($

#hile the general methods we shall descri!e were developed in manufacturing systems, they have !een

adapted and widely used in many other situations -e.g. offices, !an%s, hospitals etc. Thus, although we will

ta%e our examples from manufacturing settings, the methods are not restricted to only such settings.

9rocess planning ta%es as its input the drawings or other specifications that might indicate what is to !e

made, and also the forecasts, orders, or contracts that indicate how many are to !e made. The drawings thenare analy$ed to determine the overall scope of the project. If it is a complex assem!led product, considera!le

effort may go into OexplodingP the product into its components of parts and su!assem!lies.

Then, for each part, a detailed routing through the system is developed. Technical %nowledge o

processes, machines, and their capa!ilities is required, as well as a %nowledge of costs and production

economics. (rdinarily, a range of processing alternatives is availa!le. The selection may !e influenced strongly

!y the overall volume and projected sta!ility of product design.

.7 0 P&%!UCT A$A'S"S

The product that is to !e manufactured is analy$ed from a technological point of views to determine

what processes are required.

&ssem!ly or Oo$intoP Charts: *chematic and graphic modelcommonly are developed to help visuali$e the

flow of material and the relationship of parts -e.g. where they flow into the assem!ly process, which parts ma%e

up su!assem!lies, and where the purchased parts are used in the assem!ly sequence. Thus, for the

capacitor, a first step might !e the preparation of an Oassem!ly chartP or, as it is often called, a Oo$intoP -goes

into chart.

(9"

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*torage It represents a stage when

material -raw or finished

awaits an action

+elay It represents a temporary of

an item

Transport It represents movement of an

item

Inspection It represents an act of

chec%ing

Com3ined Acti8ities

(peration cum

Transportation

)irst activity represents outer

part and second security the

inner part

Inspection cum (peration

39

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