Camiseta ejecutivo de la compaa de anlisis de cas

Pregunta 1. Calcular las siguientes cantidades para el proceso de produccin actual, as como de Mike y los planes de

El procesamiento por lotes actual Las ventas para el Shirt Company Ejecutivo estn constituidos por slo unos pocos est

Slo tiene una mquina de corte, que es controlado por ordenador y puede reducir hasta 60 capas de tela al mismo tiem tiempo de puesta a punto es muy importante. Se tarda 1,5 minutos para desplegar una capa de tela y as por 60 capas, lo tanto, Nmero total de camisas de corte en una carrera = 60 * 8 = 480. Contenido de trabajo (minutos por camiseta) para el corte = 120/480 = 0.25 min por camiseta

Question # 1
Actual Cycle Time (min/shirt) Manufacturing Lead Time (days) WIP inventory (shirts) Production Capacity (Shirts/day) Current Production(Shirts/day) Capacity utilization Direct Labor Content (min/shirt) Actual Labor Time (min) Tiempo de Ciclo Real (min/camisa) Tiempo de Manufactura ( dias ): WIP inventario ( camisas ) Cap. De produccion Teorica (camisas/dia) Cap. De Producin Actual ( camisas/dia) % Utilizacin de la Capacidad Contenido de MOD (min/camisa) Horas de Trabajo MOD Totales (min)

Available Labor Time (min) Direct Labor Utilization Direct Labor Cost ($/Shirt) Camisas en sobretiempo Total Overtime (hrs dia necesarias) Total $/Overtim Total Labor ($)

Tiempo Disponible para labores (min) % Ut. MOD Costo MOD ( $/camisa) Camisas en sobretiempo / dia Total Hrs Extras (hrs/dia) Total labor ($) * Supone dia de 8 hrs de trabajo, u 8 horas adicionales de sobretiempo si fuera necesario 16000 14400 1600 80

de la compaa de anlisis de casos

des para el proceso de produccin actual, as como de Mike y los planes de Ike, asumiendo los planes se implementan como se describe en el caso.

as para el Shirt Company Ejecutivo estn constituidos por slo unos pocos estilos y colores bsicos. De ah que la compaa tiene un nmero limitado de variedades para producir. Por lo tant

ntrolado por ordenador y puede reducir hasta 60 capas de tela al mismo tiempo. Tambin hasta 8 patrones se pueden cortar simultneamente. El proceso de corte de la mquina en 30 min nte. Se tarda 1,5 minutos para desplegar una capa de tela y as por 60 capas, sino que toma 90 minutos el tiempo de instalacin. La mquina est siendo operada por 4 operarios y la empresa en una carrera = 60 * 8 = 480. Tiempo total / carrera = tiempo de instalacin + ejecucin = 90 + 30 = 120 minutos camisas Regulares.

a) para el corte = 120/480 = 0.25 min por camiseta Nmero de trabajadores = 4

Katia tamayo Calculo cuello de botella WIP / Capacidad de Produccin Corte + Otras Operaciones (minutos laborables) / cuello botella Prod. Mes / dias laborales mes Cap. actual/Cap. Teorica de min incurridos por act. / camiseta (Prod. Actual mes) x (Contenido MOD) Proceso Actual Camisas Regulares 0.50 12.25 11,760 960 800 83.33% 26.51 21,208 30,720 (Hrs lab / dia) x ( 60 min) x Total personas Horas laborables Actuales / Horas dispon (min) Costo Total MOD / Prod actual dia 69% 3.84 0.00 3.84 14.7 80 Plan de Mike Camisas Regulares y a la Medida 0.5 2.06 1,980 960 900 93.75% 26.01 23,409 31,200 75.03% 3.47 0 3.47

ras adicionales de sobretiempo si fuera necesario

ribe en el caso.

mero limitado de variedades para producir. Por lo tanto, tiene grandes cantidades de cada tipo de camisa (tamao y color).

eamente. El proceso de corte de la mquina en 30 minutos, independientemente del nmero de patrones y el nmero de capas. Sin embargo, el quina est siendo operada por 4 operarios y la empresa est utilizando su capacidad mxima, es decir, 60 niveles y los patrones de ocho a la vez. Por

Shirts Regular 0.667 8.96 8,604 960 800 83.33% 26.51 21,208 23,520 90.17% 2.94 80 0.888888889

Plan Ike`s Shirts Customs 3.9 0.41 50 123 100 81.30% 26.34 2,634 7,680 34.30% 7.68 0 8 10.94 7.68

Plan Ike`s Shirts Regular Shirts Customs 0.666666667 3.9 12.58 0.41 9060 50 720 123 800 100 111.11% 81.30% 25.76 26.01 20608 2601

23520 87.62% 3.33 5.15 9.14

7680 33.87% 7.68 0 8.34 Otras Operaciones MOD

ACTUALIDAD DATOS Maquina corte manual Camisas / corrida

Procesos CORTE COSTURA INSPECCION PLANCHADO EMPAQUE

120 480
# Trab. 4 48 4 4 4

min / corrida

# Maq. 1 48 4

WIP ( # Lotes de 60 camisas) 16 144 12 12 12

WIP (Camisas) 960 8640 720 720 720 11760

Capacidad actual / mes Dias laborables / mes Capacidad actual / dia

16000 20 800

camisas dias camisas/dia

Operacin Corte Hacer Cuello Hacer puos Hacer Mangas Hacer frente Hacer espalda Unir hombros Pegar Cuello Pegar managas Puntear mangas Coser costura lateral Puegar Puos Hacer dobladillo Inspeccionar Planchar Doblar y empacar Contenido de MOD

Contenido para Camisas regulares (minutos / camisa) 0.25 3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75

# Trabajadores 4 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4 64

El tiempo empleado por camisa (minutos) 0.06 0.49 0.50 0.33 0.42 0.43 0.33 0.41 0.39 0.33 0.45 0.39 0.43 0.38 0.49 0.44 Cuello de Botella

El tiempo empleado por lote 3.75 29.25 30.00 19.50 25.00 25.50 19.80 24.75 23.25 19.50 27.00 23.25 25.50 22.50 29.25 26.25

Corte convencional
Otras Operaciones

1.00 25.51 26.51 0.25

30.00 0.50

PROPUESTA MIKE ( Camisas regulares y a la medida ) Maquina corte manual Camisas / corrida
Procesos CORTE COSTURA INSPECCION PLANCHADO EMPAQUE

120 480
# Trab. 5 48 4 4 4

min / corrida

# Maq. 2 48 4

Cap. Camisas Reg/mes Cap. Camisas medida/mes Total cap prod/mes Dias laborables / mes Capacidad actual / dia

16000 2000 18000 20 900

camisas camisas Camisas dias camisas/dia

Costo MOD $/hr 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

Costo Total MOD $/dia

Operacin Corte convencional Corte a medida Hacer Cuello Hacer puos Hacer Mangas Hacer frente Hacer espalda Unir hombros Pegar Cuello Pegar managas Puntear mangas Coser costura lateral Puegar Puos Hacer dobladillo Inspeccionar Planchar Doblar y empacar Contenido de MOD

Contenido para Camisas regulares (minutos / camisa) 0.25 0.50 3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75

# Trabajadores 4 1 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4 65

192 384 192 96 288 192 96 192 192 96 192 192 192 192 192 192
3072

Otras Operaciones

Corte convencional Corte automatico Otras Operaciones

1.00 -0.50

25.51
26.01

PROPUESTA IKE ( Camisas regulares y a la medid Maq. Autom Camisas / corrida

WIP ( # Lotes de 5 camisas) 36 288 24 24 24 WIP (Camisas) 180 1440 120 120 120 1980

2.5 5

min / corrida

Maquina corte manual Camisas / corrida

Procesos CORTE COSTURA INSPECCION PLANCHADO EMPAQUE

Cap. Camisas Reg/mes Cap. Camisas medida/mes Total cap prod/mes Dias laborables / mes Cap. Regular actual / dia Cap. A Medida actual / dia

CAMISAS REGULAR
El tiempo empleado por camisa (minutos) 0.06 0.50 0.49 0.50 0.33 0.42 0.43 0.33 0.41 0.39 0.33 0.45 0.39 0.43 0.38 0.49 0.44 Cuello de Botella El tiempo empleado por lote 3.75 30 29.25 30.00 19.50 25.00 25.50 19.80 24.75 23.25 19.50 27.00 23.25 25.50 22.50 29.25 26.25 Costo MOD $/hr 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 Costo Total MOD $/dia Operacin Corte convencional Hacer Cuello Hacer puos Hacer Mangas Hacer frente Hacer espalda Unir hombros Pegar Cuello Pegar managas Puntear mangas Coser costura lateral Puegar Puos Hacer dobladillo Inspeccionar Planchar Doblar y empacar Contenido de MOD

192 48 384 192 96 288 192 96 192 192 96 192 192 192 192 192 192
3120

30.00 0.50

Otras Operaciones

Corte convencional Corte automatico Otras Operaciones

CAMISAS A MEDIDA
Operacin Corte a medida

Hacer Cuello Hacer puos Hacer Mangas Hacer frente Hacer espalda Unir hombros Pegar Cuello Pegar managas Puntear mangas Coser costura lateral Puegar Puos Hacer dobladillo Inspeccionar Planchar Doblar y empacar Contenido de MOD

Otras Operaciones

Corte convencional Corte automatico Otras Operaciones

E ( Camisas regulares y a la medida ) 120 480

# Trab. 4 36 3 3 3 # Maq. 1 36 3 WIP ( # Lotes de 60 camisas) 16 108 9 9 9

min / corrida

Maq. Autom Camisas / corrida

WIP (Tradic.) 960 6480 540 540 540 9060

2.5 3
WIP ( Medida)

5 36 3 3 3
50

16000 2000 18000 20 800 100

camisas camisas Camisas dias camisas/dia camisas/dia

11%

Contenido para Camisas regulares (minutos / camisa) 0.25 3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75

# Trabajadores 4 7 3 1 5 3 1 3 3 1 3 3 3 3 3 3 49

El tiempo empleado por camisa (minutos) 0.06 0.56 0.67 0.65 0.50 0.57 0.66 0.55 0.52 0.65 0.60 0.52 0.57 0.50 0.65 0.58 Cuello de Botella

El tiempo empleado por lote 3.75 33.43 40.00 39.00 30.00 34.00 39.60 33.00 31.00 39.00 36.00 31.00 34.00 30.00 39.00 35.00

Costo MOD $/hr 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

1.00 0.00

40.00 0.67

25.51
26.51

Contenido para Camisas regulares (minutos / camisa) 0.83

# Trabajadores 1

El tiempo empleado por camisa (minutos) 0.83 0.00

El tiempo empleado por lote 2.5 0

Costo MOD $/hr 6 6

3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 16

3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75 Cuello de Botella

11.70 6.00 1.95 7.50 5.10 1.98 4.95 4.65 1.95 5.40 4.65 5.10 4.50 5.85 5.25

6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

0.83 0.00

11.70 3.90

25.51
26.34

min / corrida

Costo Total MOD $/dia

192 0 336 144 48 240 144 48 144 144 48 144 144 144 144 144 144
2352

0.16666667

Costo Total MOD $/dia

48 0

48 48 48 48 48 48 48 48 48 48 48 48 48 48 48
768

MATERIA PRIMA DISPOSICION DE CAPAS TELAS Tiempo Actividad: Cap. Proceso : Cap. Proceso : Inputs + Outputs Inputs WIP2 (Telas) (Telas/hra) (Telas) 40 40 40 40 40 40 40 40 40 40 40 40 0 0 40 40 40 40 40 40 40 40 40 40 40 40 0 0 40 40 40 40 40 40 40 40 40 40 40 0 0 1.5 min/Tela 40 Telas/hra 320 Camisas/hra

CORTE CORTE Tiempo Actividad: Cap. Proceso :

Inputs + Inputs Hora WIP (Telas) (Telas) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 60 60 60 60 60 60 60 60 0 0 0 0 0 0 80 100 120 140 160 180 200 160 120 80 40 0 0

WIP 1 20 40 60 80 100 120 140 160 120 80 40 0 0 0

Cap. Proceso : Inputs + Output Inputs WIP3 WIP 2 (Telas/hra) (Telas/hra) (Telas) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40 40 40 40 40 40 40 40 40 40 40 40 0 0 40 40 40 40 40 40 40 40 40 40 40 40 0 0 40 40 40 40 40 40 40 40 40 40 40 0 0

CORTE 0.5 min/ Tela 120 Telas/hra 960 Camisas/hra WIP 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Output (Telas/hra) 40 40 40 40 40 40 40 40 40 40 40 40 0 0 320 320 320 320 320 320 320 320 320 320 320 320 0 0 TOTAL Camisetas/ho ra

TRASLADO # Recursos Cap. Proceso : Cap. Proceso Total: Inputs + Inputs WIP3 (Camisas/hra) (Telas) 320 320 320 320 320 320 320 320 320 320 320 320 0 0 400 400 400 400 400 400 400 400 400 400 400 80 0 4 60 Camisas/Coche 240 Camisas/ 4 pers WIP 4 80 80 80 80 80 80 80 80 80 80 80 80 0 0 Output (Camisas/hra) 240 240 240 240 240 240 240 240 240 240 240 240 80 0

Case Analysis-The Executive Shirt Company (Gr

(2011-05-01 21:03:10) Harvard Business School 9-696-071 Rev. March 11, 1996 Executive Shirt Company Case Analysis-The Executive Shirt Company (Group Project) Part A Calculations Current Process Regular Shirts

Mike's Plan Regular & Custom Shirts

Ike's Plan Regular Shirts All labor content / one less worker for each category while cutting is still 0.25: Cuffs is still the bottleneck at 2 labor content / 3 workers = 0.67 mins/shirt Custom Shirts

2 minutes A) Actual per cuff / 4 Cycle Time workers = (Min/shirt) 0.5 B) Manufacturi ng Lead Time (days)

120 minutes for cutting / 480 shirts worth = 0.25 < labor content of cuffs at 0.5 CT

2.5 / 5 = 0.5 labor content for cutting. With everything divided by 1, collar is new bottleneck at 3.90 CT

(WIP * Cycle 11,760 * 0.5 Time) / / 480 0.5 * 1980 / Minutes in a minutes = 480 = 2.06 working day 12.25 days

(9060 * 0.66) / 480 = 12.58 days

(50 * 3.9) / 480 = 0.41 30 days at units

C) WIP Inventory (shirts) Average WIP * Batch size 196 * 60 = 11,760

sewing + 5 units being cut + 15 60 * 151 sum of avg. units being finished = 396 * 5 = WIP = 50 WIP (given in 1980 shirts 9,060 shirts case)

D) Production Capacity 8 hours * 60 (shirts/day minutes / 480 / 0.666 8 hours * 60 ) 0.5 = = Minutes mins / 0.5 = available / 960 shirts / 720 960 CT day shirts/day shirts/day

8 * 60 / 3.9 = 123 shirts/day 123 * 20 days = 2460 monthly production capacity

E) Capacity Utilization Actual Produced / What could be produced 10,000 / (960 * 20 days) = 83%

(16,000 + 2000) / (960 16,000 / * 20) = (720 * 20) = 2000 / 2460 = 81.25% 93.75% 111.11% (16,000 / 18,000) * 0.25 = 0.2777 + (2,000 / 18,000 * 0.5) = 0.2777 = weighted F) Direct avg. cutting (90 + 30 (120 minutes 0.5 direct Labor time for minutes /8hr / 480 total labor for Content regular and * 60 mins) + minutes) + cutting + 3.9 (min/shirt) custom 3.9 + 2 + 3.9 + 2 + + 2 + 0.65 + 0.65 + 2.5 + 0.65 + 2.5 + 2.5 + 1.7 + 1.7 + 0.66 + 25.76 - 0.25 1.7 + 0.66 + 0.66 + 1.65 Time spent 1.65 + 1.55 = 25.51 sum 1.65 + 1.55 + 1.55 + cutting + Direct labor + 0.65 + 1.8 of standard + 0.65 + 1.8 0.65 + 1.8 + for one shirt + 1.55 + 1.7 station time + 1.55 + 1.7 1.55 + 1.7 + 25.51 + + 1.5 + 1.95 + 1.5 + 1.95 1.5 + 1.95 + 0.2777 = + 1.75 = + 1.75 = 1.75 = 25.79 25.76 25.76 25.01 G) Direct Labor (900 * Utilization 25.79) / (65 (Shirts per direct (800 per day day * Direct (800 shirts * workers * * 25.76) / labor 25.76 Direct 480 minutes (64 - 15) * content / labor available)= 480) = (Direct labor content) / 23,211 / 20,608 / 100 * 26.01 * minutes 64*480 = 31,200 = 23,520 = / (16 * 480) available) 67.08% 74.39% 87.62% = 33.87% 720 shirts / day on normal salary: 49 * H) Direct 6*8= Labor Cost $2,352

($/shirt) Direct labor (Salary * hours worked) / shirts produced

80 remaining shirts * 0.67 = 53.6 minutes

53.6 / 60 * 9 = 8.04 49 * 8.04 = 65 ( $6 * 393.96 Total: 8hours) / 900 = 31200 (393.96 + 16 ($6 * 8 2352) / 800 hours) / 100 64 (6 * 8) / / 900 = = 3.43 800 = $3.84 $3.47 = 7.68

Explanation 1. Regular shirt production process without custom shirt fabrication. a. i. ii. b. i. ii. iii. c. i. d. i. ii. e. i. ii. iii. f. i. ii. iii. iv. v. g. i. ii. iii. iv. h. Cycle time for each station = total station time / # of workers at station Cycle time for system = longest station cycle time Cuffs station = System CT = 2.0 minutes / 4 workers = 0.5 minutes Manufacturing Lead Time (MLT) = Cycle Time (CT) * Works in Progress (WIP) CT = 0.5 minutes WIP individual shirts = (196 batches * 60 shirts / batch) = 11,760 MLT in days = (0.5 * 11,760) / 480 minutes per day = 12.25 days Total individual shirts as WIP = Sum of average batches * 60 shirts per batch WIP shirts = 196 batches * 60 shirts per batch = 11,760 shirts as WIP Production capacity of system at continuous 100% utilization (minutes) Production capacity = minutes per day / CT of system Production capacity = 480 / 0.5 = 960 units per day @ continuous 100% utilization Production capacity utilization = monthly production / monthly production capacity Current monthly production is 16,000 (given in case) Total monthly capacity = 19,200 (920 per day * 20 days per month) Production utilization = 16,000 / 19,200 = 83% Direct Labor content = sum of time at all stations + time per shirt for cutting Sum of time at all stations = 25.51 minutes per shirt A single cutting of 8 patterns on 60 layers of cloth produces (60 * 8) = 480 shirts Total cutting time = (1.5 minutes * 60 layers) + (30 minutes cutting) = 120 minutes Cutting time per shirt = 120 minutes / 480 shirts = 0.25 minutes per shirt Total labor content (time) per shirt = 25.51 + 0.25 = 25.76 minutes per shirt Direct Labor Utilization = Total used labor time / Total labor time available Total labor time available = 64 workers * 480 minutes per day = 30,720 minutes Total time used = time per shirt * daily production (16,000 per month / 20 days) Total time used = 25.76 minutes * 800 shirts per day = 20,608 minutes Direct Labor Utilization = 20,608 minutes used / 30,720 minutes available = 67.08% Total Direct Labor Cost per shirt = (# workers * 8 hours per day * $6 per hour) / 800

i. ii. 2. a. b. i. ii. iii. c. i. d. i. ii. e. i. ii. iii. f. i. ii. iii.

Total Direct labor cost = (64 * 8 * 6) / 800 (total daily production = 16,000 / 20 days) Total Direct Labor Cost = $3.84 / shirt

Mikes plan for production of regular and custom shirts using existing facilities with the add System CT remains unchanged = 0.5 (the cuffs station still has the longest station CT) Manufacturing Lead Time (MLT) = Cycle Time (CT) * Works in Progress (WIP) CT = 0.5 minutes WIP individual shirts = (396 batches * 5 shirts / batch) = 1,980 MLT in days = (0.5 * 1,980) / 480 minutes per day = 2.06 days Total individual shirts as WIP = Sum of average batches * 5 shirts per batch WIP shirts = 396 batches * 5 shirts per batch = 1,980 shirts as WIP Production capacity of system at continuous 100% utilization (minutes) Production capacity = minutes per day / CT of system Production capacity = 480 / 0.5 = 960 units per day @ continuous 100% utilization Production capacity utilization = monthly production / monthly production capacity Current monthly production is 16,000 regular + 2000 custom shirts (given in case) Total monthly capacity = 18,000 (900 per day * 20 days per month) Production utilization = 18,000 / 19,200 = 93.8% Direct Labor content = sum of time at all stations + time per shirt for cutting Sum of time at all stations = 25.51 minutes per shirt New machine can cut 1 pattern on five layers in 2.5 minutes Total cutting time = Weighted average of old & new machine cutting times

ii.Custom cutting time = 5 shirts / 2.5 minutes = 0.5 minutes per custom shirt iii.(16,000 reg / 18000 total) * 0.25 + (2000 / 18000) * 0.5 = 0.278 min/shirt iv. Total labor content (time) per shirt = 25.51 +0.28 = 25.79 minutes per shirt g. i. ii. iii. iv. h. i. ii. 3. a. b. i. ii. iii. c. i. d. i. ii. e. Direct Labor Utilization = Total used labor time / Total labor time available Total labor time available = 65 workers * 480 minutes per day = 31,200 minutes Total time used = time per shirt * daily production (18000 per month / 20 days) Total time used = 25.79 minutes * 900 shirts per day = 23,211 minutes Direct Labor Utilization = 23,211 minutes used / 31,200 minutes available = 74.39% Total Direct Labor Cost per shirt = (# workers * 8 hours per day * $6 per hour) / 900 Total Direct labor cost = (65 * 8 * 6) / 900 (total daily production = 18,000 / 20 days) Total Direct Labor Cost = $3.47 / shirt

Ikes plan for shifting labor from the regular assembly floor to create a separate assembly l System CT = 0.67 (the cuffs station still has the longest station CT @ 2.0 min / 3 workers ) Manufacturing Lead Time (MLT) = Cycle Time (CT) * Works in Progress (WIP) CT = 0.67 minutes WIP individual shirts = (151 batches * 60 shirts / batch) = 9,060 MLT in days = (0.67 * 9,060) / 480 minutes per day = 12.58 days (for regular shirts) Total individual shirts as WIP = Sum of average batches * 60 shirts per batch WIP shirts = 151 batches * 60 shirts per batch = 9,060 shirts as WIP Production capacity of system at continuous 100% utilization (minutes) Production capacity = minutes per day / CT of system Production capacity = 480 / 0.67 = 720 units per day @ continuous 100% utilization Production capacity utilization = monthly production / monthly production capacity

(A) Regular Shirt Production:

i. ii. iii. f. i. ii. iii. iv. v. g. ii. iii. iv. v. h. i.

Current monthly production is 16,000 regular shirts (given in case) Total monthly capacity = 14,400 (720 per day * 20 days per month) Production utilization = 16,000 / 14,400 = 111% Direct Labor content = sum of time at all stations + time per shirt for cutting Sum of time at all stations = 25.51 minutes per shirt A single cutting of 8 patterns on 60 layers of cloth produces (60 * 8) = 480 shirts Total cutting time = (1.5 minutes * 60 layers) + (30 minutes cutting) = 120 minutes Cutting time per shirt = 120 minutes / 480shirts = 0.25 minutes per shirt Total labor content (time) per shirt = 25.51 + 0.25 = 25.76 minutes per shirt Direct Labor Utilization = Total used labor time / Total labor time available Total labor time available = 49 workers * 480 minutes per day = 20,608 minutes Total time used = time per shirt * daily production (16000 per month / 20 days) Total time used = 25.76 minutes * 800 shirts per day = 23,211 minutes Direct Labor Utilization = 20,608 minutes used / 23,520 minutes available = 87.62% Total Direct Labor Cost per shirt = (# workers * 8 hours per day * $6 per hour) / 800

i.Newdirectlaboravailable=6415=49

Overtime is incurred for all employees in order to reach excess of normal hour production levels (calcu

ii.Overtimeproduction=dailyproductiondailycapacity=800720=80shirts ii.OT (minutes) = 80 * CT = 80 * 0.67 = 53.60 extra minutes per worker ii.OT cost = (53.60 / 60) *$6 / hour * number of workers = (53.60 / 60) * 6 * 49 ii.OT cost = $393.96 iii. iv. (B) a. i. ii. b. i. ii. iii. c. i. d. i. ii. e. i. ii. iii. f. i. ii. iii. iv. v. g. Total Direct labor cost = (49 * 8 * 6) + 393.96 / 800 (total daily production = 18,000 / 20 days) Total Direct Labor Cost = $3.43 / regular shirt Custom shirt production on separate assembly line (15 workers + 1 new hire): Cycle time for each station = total station time / # of workers at station Cycle time for system = longest station cycle time Cuffs station = System CT = 3.90 minutes / 1 worker = 3.90 minutes (collar station) Manufacturing Lead Time (MLT) = Cycle Time (CT) * Works in Progress (WIP) CT = 0.5 minutes WIP individual shirts = (10 batches * 5 shirts / batch) = 50 shirts MLT in days = (3.90 * 50) / 480 minutes per day = 0.41 days

Total individual shirts as WIP = Sum of average batches * 5 shirts per batch WIP shirts = 30 shirts in sewing + 5 shirts in cutting + 15 shirts in finishing = 50 shirts as WIP (giv Production capacity of system at continuous 100% utilization (minutes) Production capacity = minutes per day / CT of system Production capacity = 480 / 3.90 = 123 units per day @ continuous 100% utilization Production capacity utilization = monthly production / monthly production capacity Current monthly production is 2,000 (given in case) Total monthly capacity = 2460 (123 per day * 20 days per month) Production utilization = 2000 / 2460 = 81.25% Direct Labor content = sum of time at all stations + time per shirt for cutting Sum of time at all stations = 25.51 minutes per shirt A single cutting of 1 pattern on 5 layers of cloth produces 5 shirts Total cutting time = 2.5 minutes Cutting time per shirt = 2.5 minutes / 5 shirts = 0.50 minutes per shirt Total labor content (time) per shirt = 25.51 + 0.50 = 26.01 minutes per shirt Direct Labor Utilization = Total used labor time / Total labor time available

i. ii. iii. iv. v. h. i. ii.

Total labor = 12 sewers + 3 finishers + 1 cutter = 16 Total labor time available = 16 workers * 480 minutes per day = 7680 minutes Total time used = time per shirt * daily production (2000 per month / 20 days) Total time used = 26.01 minutes * 100 shirts per day = 2601 minutes Direct Labor Utilization = 2601 minutes used / 7680 minutes available = 33.87% Total Direct Labor Cost per shirt = (# workers * 8 hours per day * $6 per hour) / 200 Total Direct labor cost = (16 * 8 * 6) / 200 (total daily production = 2000 / 20 days) Total Direct Labor Cost = $7.68 / custom shirt

Part B

Recommendation to Management Using the calculations in Part A itispossibletoevaluateeachofthetwoproposalsintermsoftheircostand

The great disparity in cost between the two is mainly due to the efficiency of each proposal. Whilst Mike incre

Furthermore,whenconsideringthelogisticsofeachproductionlinelayout,Mikesproposalisfavourableover

Baseduponouranalysis,althoughbothprocessesdoessentiallysatisfyDwightColliersproductionleadmana

hirt Company (Group Project)

gress (WIP)

ts per batch

us 100% utilization

oduction capacity

t for cutting

8) = 480 shirts

g) = 120 minutes

tes per shirt

30,720 minutes

onth / 20 days)

vailable = 67.08%

* $6 per hour) / 800

n = 16,000 / 20 days)

ng existing facilities with the addition of a new cutting machine and one worker.

e longest station CT)

gress (WIP)

100% utilization

oduction capacity

ts (given in case)

t for cutting

es per shirt

31,200 minutes

nth / 20 days)

vailable = 74.39%

* $6 per hour) / 900

n = 18,000 / 20 days)

r to create a separate assembly line dedicated to custom shirts, thus separating the two streams of production.

T @ 2.0 min / 3 workers )

gress (WIP)

(for regular shirts)

ts per batch

ous 100% utilization

oduction capacity

t for cutting

8) = 480 shirts

g) = 120 minutes

tes per shirt

20,608 minutes

th / 20 days)

vailable = 87.62% normal hour production levels (calculated above @ 11% above capacity)

* $6 per hour) / 800

20=80shirts

oduction = 18,000 / 20 days)

ers + 1 new hire):

utes (collar station)

gress (WIP)

n finishing = 50 shirts as WIP (given in case)

ous 100% utilization

oduction capacity

t for cutting

tes per shirt

7680 minutes

h / 20 days)

able = 33.87%

* $6 per hour) / 200

n = 2000 / 20 days)

proposalsintermsoftheircostandefficiency.Firstly,todeducethetotalcostforthecustomshirtseachmonth,theDirectLabourCost

y of each proposal. Whilst Mike increases the efficiency of both capacity and labour utilization in the factory (absorbing excess capacity

t,MikesproposalisfavourableoverIkesbecauseitallowsformoreflexibility.WhilstMikeretainstheexistingprocesslayoutintheb

DwightColliersproductionleadmanagementtimeconditions,wewouldrecommendthatheshouldtrialMikesplan.Iftheredoesindee

treams of production.

eachmonth,theDirectLabourCostfromeachplancanbemultipliedby2000(thedesiredquantityproduced).Bydoingthiswelearn

factory (absorbing excess capacity and increasing efficiency from 83% to 93.75% as well as improving labour efficiency by 7.31%), Ik

theexistingprocesslayoutinthebatchshopprocess,wheresimilaroperationsareperformedincommonfunctionalareas,Ikeinstead

trialMikesplan.Iftheredoesindeedprovetobeamarketformidpricerangecustomshirts,thenimplementingMikesproposalisthe

yproduced).BydoingthiswelearnthatIkestotalcostforcustomshirtsis$7.68x2000=$15,360,comparedtoMikes$3.47x2000

ving labour efficiency by 7.31%), Ike over-utilizes capacity in his regular shirt production line and severely under-utilizes capacity in his

ommonfunctionalareas,Ikeinsteadadoptsaproductlayoutstructure,wheretheoperationsarelocatedaccordingtotheprogressive

implementingMikesproposalisthecompanysbestshotatmakingalucrativeprofitfromthisinitiative.

0,comparedtoMikes$3.47x2000=$6,940.Thisresultsinan$8,420costdifferenceinfavourofMikesplan.Productionofregulars

everely under-utilizes capacity in his custom shirts production line. The result of this is that he has to pay the workers on the regular sh

ocatedaccordingtotheprogressivestepsinvolvedinmakingashirt.Havingonlyoneworkercompletingeachproductiontask,asisthe

fMikesplan.ProductionofregularshirtsontheotherhandarecheaperusingIkesprocess,thatisIkeslabourcostsare$3.43x16,00

to pay the workers on the regular shirt line overtime whilst the workers on the custom shirt line are frequently starved and sitting idle.

letingeachproductiontask,asisthecaseinIkesplan,meansthatifoneworkerissloweddownforanyreasonorneedstotakeabrea

Ikeslabourcostsare$3.43x16,000(desiredquantityofregularshirts)=$54,880comparedwithMikeslabourcostsof$3.47x16,0

e frequently starved and sitting idle.

ranyreasonorneedstotakeabreak,thenthereisnoonetopickuptheslack.Asaresult,thewholeprocessisnegativelyaffected.A

hMikeslabourcostsof$3.47x16,000=$55,520.Thedifferencebetweenthetwoisonly$640,whichisfairlyinsignificant,andleaves

holeprocessisnegativelyaffected.Anidealassemblylineshouldallowworkerstotradeelementsofworkanditshouldbeunproblemat

hichisfairlyinsignificant,andleavesthetotalcostdifferencebetweenthetwoplansat$7,780infavourofMike.

fworkanditshouldbeunproblematictoaddworkerstothelinetoincreaseefficiency,howeverthestraight-linelayoutofIkesplando

vourofMike.

straight-linelayoutofIkesplandoesnotsatisfytheserequirements.