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Tutorial Chapter 8: Aggregate

Planning, Scheduling, MRP and


ERP
Prepared by

Dr Noor Ajian Mohd Lair


Senior Lecturer
Mechaincal Engineering Program
Faculty of Engineering
Universiti Malaysia Sabah

Office No 43, 2nd floor


Ext: 3422
email: nrajian72@gmail.com
Aggregate Planning Example 1:
Graphical Method
• A Juarez, Mexico, TABLE
13.2 Monthly Forecasts
manufacturer of DEMAN
roofing supplies has PROD D PER
developed monthly MO
EXPECT UCTIO
ED N
DAY
(COMPU
forecasts for a family NTH DEMAND DAYS TED)
of products. Data for Jan 900 22 41
the 6-month period Feb 700 18 39
January to June are
presented in the table Mar 800 21 38
below. The firm would Apr 1,200 21 57
like to begin May 1,500 22 68
development of an
June 1,100 20 55
aggregate plan.
6,200 124
Roofing Supplier Example 1
TABLE 13.2 Monthly Forecasts

EXPECTED PRODUCTION DEMAND PER


MONTH DEMAND DAYS DAY (COMPUTED)
Jan 900 22 41
Feb 700 18 39
Mar 800 21 38
Apr 1,200 21 57
May 1,500 22 68
June 1,100 20 55
6,200 124

Step 1: Compute demand per day


Average Total expected demand
requirement =
Number of production days
6,200
© 2014 Pearson Education, Inc. = = 50 units per day 13 - 3
124
Roofing Supplier Example 1
Step 2: plot daily and average demand to illustrate the nature of agg plan
Forecast demand Figure 13.3
Production rate per working day

70 –
Level production using average
monthly forecast demand
60 –

50 –

40 –

30 –

0 –
Jan Feb Mar Apr May June = Month
     
22 18 21 21
= Number of 22 20
working days
Conclusion: Produced 50 units per day. Note that in the first three months,
expected demand
© 2014 Pearson isInc.
Education, lower than production, while the expected demand in April,
13 - 4
May and June is above the average production.
Aggregate Planning Example 2
Plan 1: A Constant Workforce
TABLE
• Using data from 13.2 Monthly Forecasts
Example 1 developed DEMAN
PROD D PER
Plan 1: A constant EXPECT UCTIO DAY
MO ED N (COMPU
workforce for the NTH DEMAND DAYS TED)
company. The cost Jan 900 22 41
information is given in Feb 700 18 39
Table 13.3 Mar 800 21 38
Apr 1,200 21 57
May 1,500 22 68
June 1,100 20 55
6,200 124
Roofing Supplier Example 2
TABLE 13.3 Cost Information
Inventory carrying cost $ 5 per unit per month
Subcontracting cost per unit $20 per unit
Average pay rate $10 per hour ($80 per day)
$17 per hour
Overtime pay rate
(above 8 hours per day)
Labor-hours to produce a unit 1.6 hours per unit
Cost of increasing daily production rate $300 per unit
(hiring and training)
Cost of decreasing daily production rate $600 per unit
(layoffs)

© 2014 Pearson Education, Inc. 13 - 6


Roofing Supplier Example 2
PRODUCTION MONTHLY
PRODUCTION AT 50 UNITS DEMAND INVENTORY ENDING
MONTH DAYS PER DAY FORECAST CHANGE INVENTORY
Jan 22 1,100 900 +200 200
Feb 18 900 700 +200 400
Mar 21 1,050 800 +250 650
Apr 21 1,050 1,200 –150 500
May 22 1,100 1,500 –400 100
June 20 1,000 1,100 –100 0
1,850

Total units of inventory carried over from one


month to the next = 1,850 units
Workforce required to produce 50 units per day = 10 workers
(Notes: each unit require 1.6 labour hours, each worker can make
5 units in 8 hour day)
© 2014 Pearson Education, Inc. 13 - 7
Roofing Supplier Example 2
COST PRODUCTION MONTHLY
CALCULATIONS
PRODUCTION AT 50 UNITS DEMAND INVENTORY ENDING
MONTH
Inventory DAYS
carrying PER$9,250
DAY FORECAST CHANGE
(= 1,850 units carried xINVENTORY
$5 per
Jan 22 1,100 unit)
900 +200 200
Feb 18 900 700
Regular-time labor 99,200 (= 10 workers+200 400
x $80 per day x
Mar 21 1,050 124800
days) +250 650
Apr 21 1,050 1,200 –150 500
Other costs (overtime,
May layoffs,22
hiring, 1,100 1,500 –400 100
subcontracting)
June 20 1,000 0 1,100 –100 0
Total cost $108,450 1,850

Total units of inventory carried over from one


month to the next = 1,850 units
Workforce required to produce 50 units per day = 10 workers

Therefore, the total cost for Plan 1 is $108,450


© 2014 Pearson Education, Inc. 13 - 8
Aggregate Planning Example 3
Plan 2:Use of Subcontrators within A Constant Workforce
• In house production is set at low
TABLE 13.3 Cost Information
enough to meet the minimum
monthly demand (March = 38
$ 5 per unit per
units/day). All other demand is met Inventory carrying cost
month
by subcontrating. Subcontrating cost
is $20 per unit. Note: no inventory Subcontracting cost $20 per unit
holding cost incurred in Plan 2 per unit
$10 per hour ($80
TABLE Average pay rate
per day)
13.2 Monthly Forecasts
DEMAND $17 per hour (above
Overtime pay rate
PRODUC PER DAY 8 hours per day)
MON EXPECTED TION (COMPUT
TH DEMAND DAYS ED) Labor-hours to 1.6 hours per unit
Jan 900 22 41 produce a unit
Feb 700 18 39 Cost of increasing $300 per unit
Mar 800 21 38 daily production rate
Apr 1,200 21 57 (hiring and training)
May 1,500 22 68 Cost of decreasing $600 per unit
daily production rate
Roofing Supplier Example 3
Forecast demand
Production rate per working day

70 –
Level production
60 – using lowest
monthly forecast
50 – demand

40 –

30 –

0 –
Jan Feb Mar Apr May June = Month
     
22 18 21 21 22 20 = Number of
working days
*Maintain production at the minimum demand and subcontract all
other demands.
© 2014 Pearson Education, Inc. 13 - 10
Roofing Supplier Example 3
In-house production = 38 units per day
x 124 days
= 4,712 units
Subcontract units = 6,200 – 4,712
= 1,488 units

COST CALCULATIONS
Regular-time labor $75,392 (= 7.6 workers x $80 per day x
124 days)
Subcontracting 29,760 (= 1,488 units x $20 per unit)
Total cost $105,152

Therefore, the total cost for Plan 2 is $105,152


© 2014 Pearson Education, Inc. 13 - 11
Aggregate Planning Example 4
Plan 3: Varying the workforce by hiring and layoffs
• In Plan 3 the production TABLE 13.3 Cost Information
rate will equal to the
demand and there is no Inventory carrying cost $ 5 per unit per
change in production month
from the previous month, Subcontracting cost $20 per unit
December. per unit
$10 per hour ($80
TABLE Average pay rate
per day)
13.2 Monthly Forecasts
DEMAND $17 per hour (above
Overtime pay rate
PRODUC PER DAY 8 hours per day)
MON EXPECTED TION (COMPUT
TH DEMAND DAYS ED) Labor-hours to 1.6 hours per unit
Jan 900 22 41 produce a unit
Feb 700 18 39 Cost of increasing $300 per unit
Mar 800 21 38 daily production rate
Apr 1,200 21 57 (hiring and training)
May 1,500 22 68 Cost of decreasing $600 per unit
daily production rate
Roofing Supplier Example 4
Forecast demand and
monthly production
Production rate per working day

70 –

60 –

50 –

40 –

30 –

0 –
Jan Feb Mar Apr May June = Month
     
22 18 21 21 22 20 = Number of
working days
Notes: production follows monthly demands. No holding cost
© 2014as
incured Pearson Education, Inc.
production just enough for demands. 13 - 13
Roofing Supplier Example 4
TABLE 13.4 Cost Computations for Plan 3
BASIC
PRODUCTION
COST EXTRA COST OF EXTRA COST OF
DAILY (DEMAND X INCREASING DECREASING
FORECAST PROD 1.6 HRS/UNIT PRODUCTION PRODUCTION TOTAL
MONTH (UNITS) RATE X $10/HR) (HIRING COST) (LAYOFF COST) COST
Jan 900 41 $ 14,400 — — $ 14,400

$1,200
Feb 700 39 11,200 — 12,400
(= 2 x $600)

$600
Mar 800 38 12,800 — 13,400
(= 1 x $600)
$5,700
Apr 1,200 57 19,200 (= 19 x — 24,900
$300)
$3,300
May 1,500 68 24,000 (= 11 x — 24,300
$300)
$7,800
June 1,100 55 17,600 — (= 13 x 25,400
$600)
$99,200 $9,000 $9,600 $117,800

Therefore,
© 2014 the total
Pearson Education, Inc. cost for Plan 3 is $117,800 13 - 14
Comparison of Three Plans
• Remember this is an heuristics method (it
cannot guranttee optimum solution) but
can give a good result.
• The good result can be identified by
comparing such as the developed Plan 1,
Plan 2 and Plan 3.
• The plan with the cheapest cost will be
selected as the good result to be
implemented.
Comparison of Three Plans

TABLE 13.5 Comparison of the Three Plans


COST PLAN 1 PLAN 2 PLAN 3
Inventory carrying $ 9,250 $ 0 $ 0
Regular labor 99,200 75,392 99,200
Overtime labor 0 0 0
Hiring 0 0 9,000
Layoffs 0 0 9,600
Subcontracting 0 29,760 0
Total cost $108,450 $105,152 $117,800

Therefore, Plan 2 is the lowest cost option and the best to


be implemented.
© 2014 Pearson Education, Inc. 13 - 16
Material Requirement Planning (MRP):
Example 5
▶ Speakers Kits, Inc., packages high-fidelity components for
mail order. Components for the top-of-the-line speaker kit,
"Awesome" (A), include 2 Bs and 3 Cs.
▶ Each B consists of 2 Ds and 2 Es. Each of the Cs has 2 Fs
and 2 Fs. Each F includes 2 Ds and 1 G. As we can see,
the demand for B, C, D, E, F and G is completely
dependent on the master production schedule for A- the
Awesome speaker kits.
▶ Develop product structure or the bill of material (BoM) for
the Awesome Speaker Kits and determine the number of
units each item required to satisfy a new order of 50 units.

© 2014 Pearson Education, Inc. 13 - 17


Material Requirement Planning (MRP):
Example 5
▶ The Bill of Materials (BoM).

© 2014 Pearson Education, Inc. 13 - 18


BOM Example
For an order of 50 Awesome speaker kits

Level Product structure for “Awesome” (A)


Part B: 2 x number of As = (2)(50) = 100
0 C:
Part 3 x number of As = A (3)(50) = 150
Part D: 2 x number of Bs
1 B(2) + 2 x number of Fs = (2)(100) + (2)(300)
C(3) = 800
Part E: 2 x number of Bs
+ 2 x number of Cs = (2)(100) + (2)(150) = 500
Part
2 F: 2 x number
E(2) of Cs = (2)(150) =
E(2) F(2)300
Part G: 1 x number of Fs = (1)(300) = 300

3 D(2) G(1) D(2)


Therefore, for an order of 50 units required 100 units B, 150 units C, 800
units
© 2014 D, 500Education,
Pearson units Inc.
E, 300 units F and 300 units G. 14 - 19
Material Requirement Planning (MRP):
Example 6
▶ Speakers Kits, Inc., packages high-fidelity components for
mail order. Components for the top-of-the-line speaker kit,
"Awesome" (A). The bill of materials (BoM) and component
leadtimes are as given below.
▶ Develop the gross requirements plan for making 50 units of
the awesome speaker kits at week 8.

TABLE 14.2
Lead Times for Awesome Speaker Kits
(As)
COMPONENT LEAD TIME
A 1 week
B 2 weeks
C 1 week
D 1 week
E 2 week
F 3 weeks
© 2014 Pearson Education, Inc. 13 - 20
G 2 weeks
Determining Gross
Requirements
▶ Starts with a production schedule for the end
item – 50 units of Item A in week 8
▶ Using the lead time for the item, determine the
week in which the order should be released –
a 1 week lead time means the order for 50
units should be released in week 7
▶ This step is often called “lead time offset” or
“time phasing”

© 2014 Pearson Education, Inc. 14 - 21


Gross Requirements Schedule
Figure 14.5
A S

B C B C
Master schedule
Lead time = 4 for A Lead time = 6 for S for B
Master schedule for A Master schedule for S sold directly

Periods 5 6 7 8 9 10 11 8 9 10 11 12 13 1 2 3
40 50 15 40 20 30 10 10

Periods 1 2 3 4 5 6 7 8
Therefore, these are
40+10 15+30
Gross requirements: B 10 40 50 20 the gross
=50 =45
requirements for B
© 2014 Pearson Education, Inc. 14 - 22
Determining Gross
Requirements
▶ From the BOM, every Item A requires 2 Item Bs – 100
Item Bs are required in week 7 to satisfy the order
release for Item A
▶ The lead time for the Item B is 2 weeks – release an
order for 100 units of Item B in week 5
▶ The timing and quantity for component requirements
are determined by the order release of the parent(s)

© 2014 Pearson Education, Inc. 14 - 23


Determining Gross
Requirements
▶ The process continues through the entire
BOM one level at a time – often called
“explosion”
▶ By processing the BOM by level, items with
multiple parents are only processed once,
saving time and resources and reducing
confusion
▶ Low-level coding ensures that each item
appears at only one level in the BOM

© 2014 Pearson Education, Inc. 14 - 24


Gross Requirements Plan
Gross Material Requirements Plan for 50 Awesome Speaker Kits (As)
TABLE 14.3
with Order Release Dates Also Shown
WEEK
LEAD
1 2 3 4 5 6 7 8 TIME
A. Required date 50

Order release date 50 1 week


B. Required date 100

Order release date 100 2 weeks


C. Required date 150

Order release date 150 1 week


E. Required date 200 300

Order release date 200 300 2 weeks


F. Required date 300

Order release date 300 3 weeks


D. Required date 600 200

Order release date 600 200 1 week


G. Required date 300
© 2014 Pearson Education, Inc. 14 - 25
Order release date 300
Material Requirement
Planning (MRP): Example 7
▶ The Speaker Kits Inc. product ITEM ON HAND ITEM ON HAND
structure for nhis famous
A 10 E 10
product the Awesome speaker
kits as shown below: B 15 F 5
C 20 G 0
▶ Given the following on hand
inventory, construct the net D 10
requirement plan. Lead Times for Awesome Speaker Kits
(As)
COMPONENT LEAD TIME
A 1 week
B 2 weeks
C 1 week
D 1 week
E 2 week
F 3 weeks
© 2014 Pearson Education, Inc. G 2 weeks
14 - 26
Determining Net Requirements

▶ Starts with a production schedule for the end


item – 50 units of Item A in week 8
▶ Because there are 10 Item As on hand, only
40 are actually required – (net requirement) =
(gross requirement – on-hand inventory)
▶ The planned order receipt for Item A in week
8 is 40 units – 40 = 50 – 10

© 2014 Pearson Education, Inc. 14 - 27


Determining Net Requirements
▶ Following the lead time offset procedure, the
planned order release for Item A is now 40 units
in week 7
▶ The gross requirement for Item B is now 80 units
in week 7
▶ There are 15 units of Item B on hand, so the net
requirement is 65 units in week 7

© 2014 Pearson Education, Inc. 14 - 28


ITEM Lead ON ITEM Lead ON
Time HAND Time HAND

Net Requirements PlanA


B
1 wk
2 wks
10
15
E
F
2 wks
3 wks
10
5
C 1 wk 20 G 2 wks 0
D 1 wk 10

© 2014 Pearson Education, Inc. 14 - 29


Determining Net Requirements
▶ A planned order receipt of 65 units in week 7
generates a planned order release of 65 units in week
5
▶ The on-hand inventory record for Item B is updated to
reflect the use of the 15 items in inventory and shows
no on-hand inventory in week 8
▶ This is referred to as the Gross-to-Net calculation and
is the third basic function of the MRP process

© 2014 Pearson Education, Inc. 14 - 30


Net Requirements Plan

© 2014 Pearson Education, Inc. 14 - 31


Assignment Method: Example 8
▶ The First Printing wants to assign 3 jobs to 3 typesetters
such that the minimum total cost for assigning 3 jobs to
its 3 typesetters can be achieved.
▶ The table of costs or time associated with particular
assignments is shown below:

TYPESETTER
JOB A B C
R-34 $11 $14 $ 6
S-66 $ 8 $10 $11
T-50 $ 9 $12 $ 7

© 2014 Pearson Education, Inc. 15 - 32


Assignment Method: Example
1. Create zero opportunity costs by repeatedly
subtracting the lowest costs from each row and
column
2. Draw the minimum number of vertical and
horizontal lines necessary to cover all the zeros in
the table. If the number of lines equals either the
number of rows or the number of columns,
proceed to step 4. Otherwise proceed to step 3.
3. Subtract the smallest number not covered by a
line from all other uncovered numbers. Add the
same number to any number at the intersection of
two lines. Return to step 2.
4. Optimal assignments are at zero locations in the
table. Select one, draw lines through the row and
column involved, and continue to the next
assignment.
© 2014 Pearson Education, Inc. 15 - 33
Assignment Method: Example
Typesetter
A B C
Job
R-34 $11 $14 $ 6
S-66 $ 8 $10 $11
T-50 $ 9 $12 $ 7
Step 1a - subtracting the lowest costs from each row Step 1b - subtracting the lowest costs from each column

Typesetter Typesetter
A B C A B C
Job Job
R-34 $ 5 $ 8 $ 0 R-34 $ 5 $ 6 $ 0
S-66 $ 0 $ 2 $ 3 S-66 $ 0 $ 0 $ 3
T-50 $ 2 $ 5 $ 0 T-50 $ 2 $ 3 $ 0
© 2014 Pearson Education, Inc. 15 - 34
Assignment Method: Example
The smallest uncovered number is 2
Step 2 - Lines so this is subtracted from all other
uncovered numbers and added to
Typesetter numbers at the intersection of lines
A B C
Job
R-34 $ 5 $ 6 $ 0 Step 3 - Subtraction
S-66 $ 0 $ 0 $ 3 Typesetter
T-50 $ 2 $ 3 $ 0 A B C
Job
Smallest uncovered number R-34 $ 3 $ 4 $ 0
Because only two lines are S-66 $ 0 $ 0 $ 5
needed to cover all the zeros, the T-50 $ 0 $ 1 $ 0
solution is not optimal
Subtract the smallest number not covered
by a line from all other uncovered numbers.
Add the same number to any number at the
© 2014 Pearson Education, Inc. 15 - 35
intersection of two lines
Assignment Method: Example
Step 2 - Lines Start by assigning R-34 to worker C as
this is the only possible assignment for
worker C.
Typesetter
A B C Job T-50 must go to
Job worker A as worker C is already
assigned. This leaves S-66 for worker
R-34 $ 3 $ 4 $ 0 B.
S-66 $ 0 $ 0 $ 5
T-50 $ 0 $ 1 $ 0 Step 4 - Assignments

Typesetter
Because three lines are needed,
the solution is optimal and A B C
assignments can be made Job
R-34 $ 3 $ 4 $ 0
S-66 $ 0 $ 0 $ 5
T-50 $ 0 $ 1 $ 0
© 2014 Pearson Education, Inc. 15 - 36
Assignment Method: Example

Typesetter Typesetter
A B C A B C
Job Job
R-34 $11 $14 $ 6 R-34 $ 3 $ 4 $ 0
S-66 $ 8 $10 $11 S-66 $ 0 $ 0 $ 5
T-50 $ 9 $12 $ 7 T-50 $ 0 $ 1 $ 0

Therefore, assign Job R-34 to Typesetter C, Job S-66 to Typesetter B, and Job T-
50 to Pearson
© 2014 Typesetter A with
Education, Inc. expected total cost of $25 15 - 37
Sequencing: Example 9
Five architectural rendering jobs are waiting to be assigned
at Avanti Sethi Architects. Their work (processing) times
and due dates are given in the following table. The firm
wants to determine the sequence of processing according
to (1) FCFS, (2) SPT, (3) EDD, and (4) LPT rules. Apply the
four popular sequencing rules to these five jobs

Job Work (Processing) Job Due


Time Date
Job (Days) (Days)
A 6 8
B 2 6
C 8 18
D 3 15
E
© 2014 Pearson Education, Inc.
9 23 15 - 38
Sequencing Example
(1)FCFS: Sequence A-B-C-D-E
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Tardiness
A 6 6 8 0
B 2 8 6 2
C 8 16 18 0
D 3 19 15 4
E 9 28 23 5
28 77 11

© 2014 Pearson Education, Inc. 15 - 39


Sequencing Example
(1)FCFS: Sequence A-B-C-D-E

Sum of total flow time


Average completion time = Number of jobs
= 77/5 = 15.4 days

Total job work time


Utilization metric = Sum of total flow time = 28/77 = 36.4%

Average number of Sum of total flow time


jobs in the system = Total job work time = 77/28 = 2.75 jobs

Total Tardy days


Average job Tardiness = Number of jobs = 11/5 = 2.2 days

© 2014 Pearson Education, Inc. 15 - 40


Sequencing Example
(2)SPT: Sequence B-D-A-C-E
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Tardiness
B 2 2 6 0
D 3 5 15 0
A 6 11 8 3
C 8 19 18 1
E 9 28 23 5
28 65 9

© 2014 Pearson Education, Inc. 15 - 41


Sequencing Example
(2) SPT: Sequence B-D-A-C-E

Sum of total flow time


Average completion time = Number of jobs
= 65/5 = 13 days

Total job work time


Utilization metric = Sum of total flow time = 28/65 = 43.1%

Average number of Sum of total flow time


jobs in the system = = 65/28 = 2.32 jobs
Total job work time

Total Tardy days


Average job Tardiness = Number of jobs = 9/5 = 1.8 days

© 2014 Pearson Education, Inc. 15 - 42


Sequencing Example
(3) EDD: Sequence B-A-D-C-E
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Tardiness
B 2 2 6 0
A 6 8 8 0
D 3 11 15 0
C 8 19 18 1
E 9 28 23 5
28 68 6

© 2014 Pearson Education, Inc. 15 - 43


Sequencing Example
(3) EDD: Sequence B-A-D-C-E

Sum of total flow time


Average completion time = Number of jobs
= 68/5 = 13.6 days

Total job work time


Utilization metric = Sum of total flow time = 28/68 = 41.2%

Average number of Sum of total flow time


jobs in the system = = 68/28 = 2.43 jobs
Total job work time

Total Tardy days


Average job Tardiness = Number of jobs = 6/5 = 1.2 days

© 2014 Pearson Education, Inc. 15 - 44


Sequencing Example
(4) LPT: Sequence E-C-A-D-B
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Tardiness
E 9 9 23 0
C 8 17 18 0
A 6 23 8 15
D 3 26 15 11
B 2 28 6 22
28 103 48

© 2014 Pearson Education, Inc. 15 - 45


Sequencing Example
(4) LPT: Sequence E-C-A-D-B

Sum of total flow time


Average completion time = Number of jobs
= 103/5 = 20.6 days

Total job work time


Utilization metric = Sum of total flow time = 28/103 = 27.2%

Average number of Sum of total flow time


jobs in the system = = 103/28 = 3.68 jobs
Total job work time

Total Tardy days


Average job Tardiness = Number of jobs = 48/5 = 9.6 days

© 2014 Pearson Education, Inc. 15 - 46


Sequencing Example

Summary of Rules
Average
Average Number of Average
Completion Utilization Jobs in Tardiness
Rule Time (Days) Metric (%) System (Days)
FCFS 15.4 36.4 2.75 2.2

SPT 13.0 43.1 2.32 1.8

EDD 13.6 41.2 2.43 1.2

LPT 20.6 27.2 3.68 9.6

Therefore, LPT is the least effective measurement for sequencing the


Avanthi Sethi firm. SPT is superior in 3 measures, and EDD is superior in
© 2014 Pearson Education, Inc. 15 - 47
the fourth (average Tardiness) measure.
Critical Ratio: Example 10
Today is day 25 on Zyco Medical Testing laboratories' production
schedule. Three job are on order as indicated below

JOB DUE DATE WORKDAYS REMAINING


A 30 4
B 28 5
C 27 2

Zyco wants tp compute the critical ratios of each jobs.

© 2014 Pearson Education, Inc. 15 - 48


Critical Ratio: Example 10
Time remaining Due date – Today’s date
CR = =
Workdays remaining Work (lead) time remaining
Currently Day 25
JOB DUE DATE WORKDAYS REMAINING
A 30 4
B 28 5
C 27 2

JOB CRITICAL RATIO PRIORITY ORDER


A (30 - 25)/4 = 1.25 3
B (28 - 25)/5 = .60 1
C (27 - 25)/2 = 1.00 2

With CR < 1, Job B is late. Job C is just on schedule and


Job A has some slack time.
© 2014 Pearson Education, Inc. 13 - 49
Johnson’s Rule: Example 11
 Five speciality jobs at a La Crosse, Wisconsin, tool
and die shop must be processed through two work
centers (drill press and lathe). The time for
processing each job follows:
WORK CENTER 1 WORK CENTER
JOB (DRILL PRESS) 2 (LATHE)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12

 The owner wants to set the sequence to minimise


the total time for the five jobs

© 2014 Pearson Education, Inc. 15 - 50


Johnson’s Rule Example
WORK CENTER 1 WORK CENTER
JOB (DRILL PRESS) 2 (LATHE)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12

1. List all jobs and times for each work center

© 2014 Pearson Education, Inc. 15 - 51


Johnson’s Rule Example
WORK CENTER 1 WORK CENTER
JOB (DRILL PRESS) 2 (LATHE)
A 5 2
B 3 6
C 8 4 B E D C A
D 10 7
E 7 12
1. L
2. Choose the job with the shortest activity time. If that
time is in the first work center, schedule the job first.
If it is in the second work center, schedule the job
last.
3. Once a job is scheduled, it is eliminated from the list
4. Repeat steps 2 and 3 working toward the center of 15 - 52
© 2014 Pearson Education, Inc.
the sequence
Johnson’s Rule Example
WORK CENTER 1 WORK CENTER
JOB (DRILL PRESS) 2 (LATHE)
A 5 2
B 3 6
C 8 4 B E D C A
D 10 7
E 7 12

Time 0 3 10 20 28 33

WC
1 B E D C A
Idle
WC
2
Job
completed

Using the sequences found before developed the time phased flow of the
job sequences at both machines.
© 2014 Pearson Education, Inc. 15 - 53
Johnson’s Rule Example
WORK CENTER 1 WORK CENTER
JOB (DRILL PRESS) 2 (LATHE)
A 5 2
B 3 6
C 8 4 B E D C A
D 10 7
E 7 12

Time 0 3 10 20 28 33

WC
1 B E D C A
Idle
WC
2 B E D C A
Job
Time 0 1 3 5 7 9 10 11 12 13 17 19 21 22 2325 27 29 31 33 35 completed

B E D C A
© 2014 Pearson Education, Inc. 15 - 54
Therefore, using the schedule the five jobs are completed within 35 hours
The End

© 2014 Pearson Education, Inc. 9 - 55


MRP Planning Sheet

Figure 14.6

© 2014 Pearson Education, Inc. 14 - 56

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