Operations

Management
Chapter 7 – Production
Planning and Control
UiTM Shah Alam
Lecturer: Dr. Noor Azlina Mohd. Salleh
T1-A14-8C

6/11/2019 1
 LEARNING OBJECTIVES
At the end of this lesson students should be able to :

7.1 Understand Organizational strategy and production planning

7.2 Understand Long range, Medium range and Short range planning
7.3 Compute, Apply and Analyze Aggregate planning
7.4 Compute, Apply and Analyze Master Production Schedule
7.5 Compute, Apply and Analyze Materials Requirement Planning
7.6 Compute, Apply and Analyze Manufacturing Resource Planning
7.7 Compute, Apply and AnalyzeJob shop scheduling

6/11/2019 2
 Organizational Strategy and
Production Planning
Decision Level Decision Process Forecast Needed
Production
Corporate Annual Demand by
Planning and
(Top Management) Item and Region
Allocation

Determines Monthly Demand

Plant Manager seasonal plan by for 12 mths by
product type product types

Determines
Shop monthly item Monthly Demand
Supervisor production for 6 mths by items
schedules
• It explains the relationship between planning structure and organizational structure
• It also tells who are responsible for the for the decision making.
6/11/2019 NY - KJP 585 2009 3
 The Planning Process
Long Range Planning
● Covers a period of 5 years and made up of :
□ Product & Market Planning
□ Financial Planning
□ Resource Planning
Medium Range Planning
● Covers 6 – 8 months and made up of :
□ Aggregate Planning
□ Item Forecasting
□ Master Production Schedule (MPS)
□ Capacity Planning
6/11/2019 NY - KJP 585 2009 4
 The Planning Process
Short Range Planning
● Covers from 1 day to a few weeks and consists of :
 Material Requirement Planning (MRP)
(Specify when production and purchase orders must be made)
 Capacity Requirement Planning
(Provide detailed schedule when each operation is to be run on each
work center and how long it will take to process).
 Final Assembly Scheduling
(Operations required to put product in its final form).
 Production Planning and Control
(Scheduling and shop-floor control activities).
 Purchase Planning and Control
(Acquisition and control of purchased items).
6/11/2019 NY - KJP 585 2009 5
 Aggregate Planning

Definitions
 An AP means combining the
appropriate resources into general, or
overall terms.
 It is concerned with determining the
quantity and timing of production for
immediate future.

6/11/2019 NY - KJP 585 2009 6

 Aggregate Planning
Objectives
 To minimize costs over the planning
period.
 To minimize fluctuations in the work
force or inventory levels.
 To obtain a certain standard of
service performance.

6/11/2019 NY - KJP 585 2009 7

 Aggregate Planning Strategies
 Changing inventory levels
 Varying work force size by hiring or layoffs.
 Varying production rates through overtime
or idle time.
 Subcontracting.
 Using part-time workers.
 Influencing demand.
 Back ordering during high demand periods.
 Counter-seasonal product mixing.
Mixed strategies (combination of two or more
controllable variables) often works best.
6/11/2019 NY - KJP 585 2009 8
 Phases of Aggregate Planning
1. Prepare an aggregate demand forecast.
2. Specify organization policies for smoothing
capacity utilization.
3. Determine feasible production alternatives :
 Changing production rate (same work force)
 Changing production rate (changing the size of work force).
 Absorbing demand through inventories.
 Absorbing demand through back ordering.
 Absorbing demand through subcontract.
 Using part-time workers.
4. Determination of optimal production
strategy.
6/11/2019 NY - KJP 585 2009 9
 Aggregate Planning
Graphical or Charting Methods
1. Popular – they are easy to understand and use.
2. They are trial-and-error approaches that do not
guarantee an optimal plan.
3. The five steps involved are:
 Determine the demand in each period.
 Determine the capacity for regular, OT, hired
workers and subcontracting for each period.
 Find production costs, hiring and layoff costs,
and inventory holding costs.
 Consider company policy on workers and stock
levels.
 Develop alternative plans, examine their total
costs and select the best plan (lowest total cost).
6/11/2019 NY - KJP 585 2009 10
 Roofing Supplier Example 1
Demand Per Day
Month Expected Demand Production Days (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
Table 13.2
Average Total expected demand
requirement = Number of production days

6,200
= = 50 units per day
124
6/11/2019 NY - KJP 585 2009 11
 Roofing Supplier Example 1
Forecast demand
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 22 20 = Number of
Figure 13.3 working days
6/11/2019 NY - KJP 585 2009 12
 Roofing Supplier Example 3
Demand Per Day
Month Expected Demand Production Days (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
Table 13.2

Minimum requirement = 38 units per day

6/11/2019 NY - KJP 585 2009 13
 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
6/11/2019 NY - KJP 585 2009 14
 Roofing Supplier Example 4
Demand Per Day
Month Expected Demand Production Days (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
Table 13.2

Production = Expected Demand

6/11/2019 NY - KJP 585 2009 15
 Roofing Supplier Example 4
Production rate per working day

Forecast demand and

monthly production
70 –

60 –

50 –

40 –

30 –

0 –
Jan Feb Mar Apr May June = Month
     
22 18 21 21 22 20 = Number of
working days
6/11/2019 NY - KJP 585 2009 16
 Aggregate Planning
Period 1 2 3 4 5 6 Total
Example 1:
Forecast 200 200 300 400 500 200 1800

Planners for a company that makes several models of skateboards have gathered
the following information:
Associated data and costs:
Current work force = 15 people
Regular time labour = RM0.25 per hour
Overtime labour = RM3.00 per unit
Inventory = RM1.00 per unit per period on average inventory.
Back orders = RM5.00 per unit per period
Hire workers = RM50 per worker.
(A temporary worker can produce 15 units per period).
Layoff workers = RM50 per worker.
Labour hours = 8 hour per unit
Workdays = 20 days per period
Subcontract = RM6.00 /unit
6/11/2019 NY - KJP 585 2009 17
 Aggregate Planning
Prepare an aggregate plan and determine its cost using a steady
rate of regular-time output. Use inventory to absorb the uneven
demand but allowing some backlog. Start with zero inventory on
hand in the first period. Note that the planned ending inventory is
zero. Assume 8 hour of work per day.
Example 2 & 3
Planners have learned that one person is about to retire from the
company. Rather than replace him, they would like to :
• stay with smaller work force and use overtime to make
up for the lost output.
• Use temporary workers to fill in during month of higher
demand.
Develop alternative plans and compare their costs to the
previous one.

Solutions
6/11/2019 NY - KJP 585 2009 18
 Example 1
Example 1

Period 1 2 3 4 5 6 Total
Forecasted
Demand (D) 200 200 300 400 500 200 1800
Regular
nORiaH:
Output (O) 300 300 300 300 300 300 1800 Steady rate = 1800 units/6 periods
Overtime = 300 units/period

Subcontract
Hire/Layoff
(O) - (D) 100 100 0 -100 -200 100
Inventory
Begin 0 100 200 200 100 0
End 100 200 200 100 0 0
Average 50 150 200 150 50 0
Backlog 100 nORiaH:
Reg. prodn labour=
Costs (RM0.25/hr x 8hrs/unit)
Reg prodn = Rm2/unit

(RM 2/unit) 600 600 600 600 600 600 3600

OT
(RM 3/unit)
Backorders
(RM 5/unit) 500 500
Subcontract
Hire
nORiaH:
(RM50/wkr) RM 1/unit for every
Layoff average unit inventory

(RM50/wkr)
Inventory
(RM 1/unit) 50 150 200 150 50 0 600
TOTAL 4700
Using inventory inventory to absorb uneven demand and allowing some backlog

6/11/2019 19
 Example 2
Period 1 2 3 4 5 6 Total
Forecasted
Demand (D) 200 200 300 400 500 200 1800
Regular nORiaH:
Output (O) 280 280 280 280 280 280 1680 Option2: 1 optr retire left with 14 optrs
Overtime(Max 40) (14 wkrs x 20days x 8hrs/day divide by
40 40 40
8wkrshrs/unit )= 280 units/period
Subcontract
Hire/Layoff
(O) - (D) 80 80 20 -80 -180 80
Inventory
Begin 0 80 160 180 100 0
End 80 160 180 100 0 0
Average 40 120 170 140 50 0 520
Backlog 80 80
nORiaH:
Costs Reg. prodn labour=
Reg prodn (RM0.25/hr x 8hrs/unit)
= Rm2/unit
(RM 2/unit) 560 560 560 560 560 560 3360
OT
(RM 3/unit) 120 120 120 360
Backorders
(RM 5/unit) 400 400
Subcontract
Hire
(RM50/wkr)
nORiaH:
Layoff RM 1/unit for every
(RM50/wkr) average unit inventory

Inventory
(RM 1/unit) 40 120 170 140 50 0 520
TOTAL 4640
6/11/2019 Using maximum OT per period which is 50% of the regular prodn time i.e 140units 20
 Example 3
Period 1 2 3 4 5 6 Total
Forecasted
Demand (D) 200 200 300 400 500 200 1800
Regular Output nORiaH:
Option2: 1 optr retire left with 14 optrs
(O) - Current 280 280 280 280 280 280 1680 (14 wkrs x 20days x 8hrs/day)/
(O) - Hire 60 60 120 (8manhrs/unit )= 280 units/period
Overtime
Subcontracted nORiaH:
Hire worker can produce 15 units/ period/wkr
Hire (workers) Number of hire wkrs reqrd =
Layoff (workers) (60units/15units/wkr)= 4 wkrs
(O) - (D) 80 80 -20 -60 -160 80
Inventory
Begin 0 80 160 140 80 0
End 80 160 140 80 0 0
Average 40 120 150 110 40 0 460
Backlog 80 80
Costs nORiaH:
Production Reg. prodn labour=
(RM0.25/hr x 8hrs/unit)
Current (RM 2/unit) 560 560 560 560 560 560 3360 = Rm2/unit
Hire - (RM 2/unit) 0
OT (RM 3/unit)
Backorders
(RM 5/unit) 400 400
Subcontract (RM 6/unit) 360 360 720
Hire (RM50/wkr) 0
Layoff (RM50/wkr) 0
Inventory nORiaH:
(RM 1/unit) 40 120 150 110 40 0 460 RM 1/unit for every
average unit inventory
TOTAL 4940
Each hired workers can produce the same output as the current workers.
Additional of RM50 was incurred to hire and train a new worker and the same
amount of RM50 for laying off a worker. 21
6/11/2019
 Aggregate Planning
Example 4:
Month Jul Aug Sept Oct Nov Dec
Forecast 400 500 550 800 700 700

Cost:
• Holding Cost = RM6 per DVD per mth
• Normal time labour = RM8 per hr
• Overtime = RM12 per hr • Begin inventory = 100
• Hiring = RM 400 per worker DVDs
• Layoff = RM 800 per worker • No backlog is allowed
• Current work force = 8 workers • Labour hr per day = 8hrs
• Labour hrs per DVD = 4 hrs • Max hrs for OT are 50% of
• Work days per mth = 20 days the normal working hrs

6/11/2019 NY - KJP 585 2009 22

Solutions
 Master Production Schedule
(MPS)
 Specifies what is to be made and when
 Must be in accordance with the aggregate
production plan
 Inputs from financial plans, customer
demand, engineering, supplier performance
 As the process moves from planning to
execution, each step must be tested for
feasibility
 The MPS is the result of the production
planning process
6/11/2019 NY - KJP 585 2009 23
 Master Production Schedule
(MPS)
 MPS is established in terms of specific
products
 Schedule must be followed for a
reasonable length of time
 The MPS is quite often fixed or frozen in
the near term part of the plan
 The MPS is a rolling schedule
 The MPS is a statement of what is to be
produced, not a forecast of demand
6/11/2019 NY - KJP 585 2009 24
 The Planning Process
Master production
schedule Change
master
Change production
requirements? Material schedule?
requirements plan
Change
capacity? Capacity
requirements plan

No Is capacity Is execution
Realistic? plan being meeting the
met? plan?
Yes
Execute capacity
plans

Execute
material plans

6/11/2019 NY - KJP 585 2009 Figure 14.1 25

 MPS Examples
For Nancy’s Specialty Foods

Gross Requirements for Crabmeat Quiche

Day 6 7 8 9 10 11 12 13 14 and so on
Amount 50 100 47 60 110 75

Gross Requirements for Spinach Quiche

Day 7 8 9 10 11 12 13 14 15 16 and so on
Amount 100 200 150 60 75 100

Table 14.1

6/11/2019 NY - KJP 585 2009 26

 MRP
 Material Requirement Planning is a
tool geared specifically to assembled
operations
 MRP provides answers for several
questions for the suppliers:
 What items are required?
 How many are required?
 When are required ?
6/11/2019 NY - KJP 585 2009 27
 Dependent Demand
 The demand for one item is related
to the demand for another item
 Given a quantity for the end item,
the demand for all parts and
components can be calculated
 In general, used whenever a
schedule can be established for an
item
 MRP is the common technique
6/11/2019 NY - KJP 585 2009 28
 Dependent Demand
Effective use of dependent demand
inventory models requires the
following
1. Master production schedule
2. Specifications or bill of material
3. Inventory availability
4. Purchase orders outstanding
5. Lead times
6/11/2019 NY - KJP 585 2009 29
 Benefits of MRP

1. Better response to customer

orders
2. Faster response to market
changes
3. Improved utilization of facilities
and labor
4. Reduced inventory levels

6/11/2019 NY - KJP 585 2009 30

 Bills of Material

 List of components, ingredients,

and materials needed to make
product
 Provides product structure
 Items above given level are called
parents
 Items below given level are called
children

6/11/2019 NY - KJP 585 2009 31

 BOM Example
Independent Demand
Level Product structure for “Awesome” (A)
Dependent Demand
0 A

1 B(2) Std. 12” Speaker kit C(3) Std. 12” Speaker kit w/
amp-booster

2 E(2) E(2) F(2) Std. 12” Speaker

booster assembly

Packing box and

3 D(2) installation kit of wire, G(1) D(2)
bolts, and screws

Amp-booster

12” Speaker 12” Speaker

6/11/2019 NY - KJP 585 2009 32
 BOM Example
Level Product structure for “Awesome” (A)
0 A
Part B: 2 x number of As = (2)(50) = 100
Std. 12” Speaker150
kit w/
1 BPart
(2)
C:
Std. 12” 3 x number
Speaker kit of As = (3)(50)
C =
(3) amp-booster
Part D: 2 x number of Bs
+ 2 x number of Fs = (2)(100) + (2)(300) = 800
2 Part E: E(2) 2 x number of Bs E(2) F(2) Std. 12” Speaker
+ 2 x number of Cs = (2)(100) + (2)(150) booster
= assembly
500
Part F: 2 x Packing
numberbox
ofandCs = (2)(150) = 300
3 D(2) Part G: 1installation
x numberkitofofFs =
wire, (1)(300)
G(1) = D(2) 300
bolts, and screws

Amp-booster

12” Speaker 12” Speaker

6/11/2019 NY - KJP 585 2009 33
 Time-Phased Product Structure

Must have D and E

Start production of D completed here so
production can
begin on B
1 week
2 weeks to
D produce
B
2 weeks
E
A
2 weeks 1 week
E
2 weeks 1 week
G C
3 weeks
F
1 week
D
| | | | | | | |
Figure 14.4
1
6/11/2019 2 3 4NY - KJP 585
5 2009 6 7 8 34
Time in weeks
 MRP Structure
Data Files Output Reports

MRP by
BOM Master period report
production schedule
MRP by
date report

Lead times
(Item master file) Planned order
report

Inventory data
Purchase advice
Material
requirement
planning
programs
(computer and Exception reports
Purchasing data software)
Order early or late
or not needed

Order quantity too

small or too large
Figure 14.5
6/11/2019 NY - KJP 585 2009 35
 Material Resource
MRP II Planning II
(MRP II)
• Expanded MRP with emphasis
placed on integration
 Financial planning
 Marketing

 Engineering

 Purchasing

 Manufacturing

6/11/2019 NY - KJP 585 2009 36

 Material Resource Planning II
(MRP II)
 Once an MRP system is in place, inventory
data can be augmented by other useful
information
 Labor hours
 Material costs
 Capital costs
 Virtually any
resource
 System is generally called MRP II or
Material Resource Planning
6/11/2019 NY - KJP 585 2009 37
 Material Requirements Planning
Draw up a production schedule for 2000 units of product A.
Assume the units are required on week 20

Item LT Batch On
Qty Hand
B C D
A 4 - 0

B 4 100 200
C D E E E
C 3 500 750

D 4 200 400
E E
E 3 400 2000

6/11/2019 NY - KJP 585 2009 Solution 38

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 39

 Material Requirements Planning

Week Item Gross On Net LT Order Order Remain

Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

6/11/2019 NY - KJP 585 2009 40

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 41

 Material Requirements Planning

Week Item Gross On Net LT Order Order Remain

Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

16 B 2000 200 1800 4 12 18(100) 0

16 C 2000 750 1250 3 13 3(500) 250

16 D 2000 400 1600 4 12 8(200) 0

6/11/2019 NY - KJP 585 2009 42

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 43

 Material Requirements Planning

Week Item Gross On Net LT Order Order Remain

Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

16 B 2000 200 1800 4 12 18(100) 0

16 C 2000 750 1250 3 13 3(500) 250

16 D 2000 400 1600 4 12 8(200) 0

12 C 1800 0 1800 3 9 4(500) 200

12 D 1800 0 1800 4 8 9(200) 0

6/11/2019 NY - KJP 585 2009 44

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 45

 Material Requirements Planning
Week Item Gross On Net LT Order Order Remain
Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

16 B 2000 200 1800 4 12 18(100) 0

16 C 2000 750 1250 3 13 3(500) 250

16 D 2000 400 1600 4 12 8(200) 0

12 C 1800 0 1800 3 9 4(500) 200

12 D 1800 0 1800 4 8 9(200) 0

13 E 1250 1250 0 3 - - 0

6/11/2019 NY - KJP 585 2009 46

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 47

 Material Requirements Planning
Week Item Gross On Net LT Order Order Remain
Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

16 B 2000 200 1800 4 12 18(100) 0

16 C 2000 750 1250 3 13 3(500) 250

16 D 2000 400 1600 4 12 8(200) 0

12 C 1800 0 1800 3 9 4(500) 200

12 D 1800 0 1800 4 8 9(200) 0

13 E 1250 1250 0 3 - - 0

12 E 2(1600) 750 2450 3 9 7(400) 350

6/11/2019 NY - KJP 585 2009 48

 Material Requirements Planning

B C D

C D E E E

E E

6/11/2019 NY - KJP 585 2009 49

 Material Requirements Planning
Week Item Gross On Net LT Order Order Remain
Reqmt Hand Reqmt Week Qty
20 A 2000 0 2000 4 16 2000 0

16 B 2000 200 1800 4 12 18(100) 0

16 C 2000 750 1250 3 13 3(500) 250

16 D 2000 400 1600 4 12 8(200) 0

12 C 1800 0 1800 3 9 4(400) 200

12 D 1800 0 1800 4 8 9(200) 0

13 E 1250 1250 0 3 - - 0

12 E 2(1600) 750 2450 3 9 7(400) 350

8 E 2(1800) 0 3600 3 5 9(400) 0

6/11/2019 NY - KJP 585 2009 50

 Scheduling

 Scheduling: Establishing the timing of

the use of equipment, facilities and
human activities in an organization

 Effective scheduling can yield

Cost savings
Increases in productivity

6/11/2019 NY - KJP 585 2009 51

 Sequencing

Sequencing: Determine the order in

which jobs at a work center will be
processed.

Workstation: An area where one

person works, usually with special
equipment, on a specialized job.

6/11/2019 NY - KJP 585 2009 52

 Sequencing Jobs
 Specifies the order in which jobs
should be performed at work centers
 Priority rules are used to dispatch or
sequence jobs
 FCFS: First come, first served
 SPT: Shortest processing time
 EDD: Earliest due date
 LPT: Longest processing time
6/11/2019 NY - KJP 585 2009 53
 Total flow time
Average completion time =
Number of jobs

Total job work time

Utilization =
Total flow time

Average = Total flow time

number of jobs Total job work time
in the system

Total late days

Average job lateness =
Number of jobs
6/11/2019 NY - KJP 585 2009 54
 Sequencing Example
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 9 23
6/11/2019 NY - KJP 585 2009 55
 Sequencing Example
FCFS: Sequence A-B-C-D-E

Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Lateness
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

6/11/2019 NY - KJP 585 2009 56

 Sequencing Example
FCFS: Sequence A-B-C-D-E

Job Work
Jobcompletion Sum of Flow
(Processing) total flowJob
timeDue Job days
Average time = Number
= 77/5 = 15.4
Sequence Time Timeof jobs Date Lateness
A Total
6 job work time
6 8 0
Utilization = Sum of total flow time = 28/77 = 36.4%
B 2 8 6 2
Average Sum of total flow time
C number of =8 16 =18 0
77/28 = 2.75 jobs
jobs in the system Total job work time
D 3 19 15 4
Total late days
E
Average 9 = Number28of jobs = 23
job lateness 5
11/5 = 2.2 days
28 77 11

6/11/2019 NY - KJP 585 2009 57

 Sequencing Example
SPT: Sequence B-D-A-C-E
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Lateness
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
 Sequencing Example
SPT: Sequence B-D-A-C-E
Job Work
Job (Processing)Sum ofFlow
total flowJob
timeDue Job
Average completion time = = 65/5 = 13 days
Sequence Time Time Date Lateness
Number of jobs
B 2Total job work time
2 6 0
Utilization = = 28/65 = 43.1%
D 3 of total flow 5
Sum time 15 0
A number of 6 Sum of total 11
Average flow time 8 3
jobs in the system = = 65/28 = 2.32 jobs
C 8 Total job work
19 time 18 1
E 9 Total late
28 days 23 5
Average job lateness = = 9/5 = 1.8 days
28 Number
65of jobs 9
 Sequencing Example
EDD: Sequence B-A-D-C-E
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Lateness
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
 Sequencing Example
EDD: Sequence B-A-D-C-E
Job Work
Job Sum ofFlow
(Processing) total flow Job
time Due Job
Average completion time = = 68/5 = 13.6 days
Sequence Time Time Date Lateness
Number of jobs
B 2Total job work time
2 6 0
Utilization = = 28/68 = 41.2%
A 6 of total flow 8
Sum time 8 0
D number of 3 Sum of total 11
Average flow time 15 0
jobs in the system = = 68/28 = 2.43 jobs
C 8 Total job work
19 time 18 1
E 9 Total late
28 days 23 5
Average job lateness = = 6/5 = 1.2 days
28 Number
68of jobs 6
 Sequencing Example
LPT: Sequence E-C-A-D-B
Job Work
Job (Processing) Flow Job Due Job
Sequence Time Time Date Lateness
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
 Sequencing Example
LPT: Sequence E-C-A-D-B
Job Work
Job Sum of Flow
(Processing) total flow time
Job Due Job
Average completion time = = 103/5 = 20.6 days
Sequence Time Time Date Lateness
Number of jobs
E 9 job work time
Total 9 23 0
Utilization = = 28/103 = 27.2%
C 8 of total flow17
Sum time 18 0
A number of
Average 6 Sum of total flow
23 time 8 15
jobs in the system = = 103/28 = 3.68 jobs
D 3 Total job work
26 time 15 11
B 2 Total late
28 days 6 22
Average job lateness = = 48/5 = 9.6 days
28 Number
103of jobs 48
 Sequencing Example
Summary of Rules

Average Average Number Average

Completion Utilization of Jobs in Lateness
Rule Time (Days) (%) 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

 Comparison of
Sequencing Rules
 No one sequencing rule excels on all criteria
 SPT does well on minimizing flow time and number of jobs in the
system
 But SPT moves long jobs to
the end which may result
in dissatisfied customers
 FCFS does not do especially
well (or poorly) on any
criteria but is perceived
as fair by customers
 EDD minimizes lateness
 Critical Ratio (CR)
 An index number found by dividing the time
remaining until the due date by the work
time remaining on the job
 Jobs with low critical ratios are scheduled
ahead of jobs with higher critical ratios
 Performs well on average job lateness
criteria

Time remaining Due date - Today’s date

CR = =
Workdays remaining Work (lead) time remaining
 Critical Ratio Example
Currently Day 25

Due Workdays Priority

Job Date Remaining Critical Ratio Order

A 30 4 (30 - 25)/4 = 1.25 3

B 28 5 (28 - 25)/5 = .60 1

C 27 2 (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.
 Critical Ratio Technique
1. Helps determine the status of specific jobs
2. Establishes relative priorities among jobs
on a common basis
3. Relates both stock and make-to-order jobs
on a common basis
4. Adjusts priorities automatically for changes
in both demand and job progress
5. Dynamically tracks job progress
 Sequencing N Jobs on Two
Machines: Johnson’s Rule
Johnson’s Rule N ≥ 2 (N jobs; more
than 2 jobs)

Min processing time for sequencing a

group of jobs through 2 work centers
while min total idle time in the work
centers
6/11/2019 NY - KJP 585 2009 69
 Johnson’s Rule
1. List all jobs and times for each work
center
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 the sequence
6/11/2019 NY - KJP 585 2009 70
 Johnson’s Rule Example
Work Center 1 Work Center 2
Job (Drill Press) (Lathe)
A 5 2
B 3 6
C 8 4
D 10 7
E 7 12

6/11/2019 NY - KJP 585 2009 71

 Johnson’s Rule Example
Work Center 1 Work Center 2
Job (Drill Press) (Lathe)
A 5 2
B 3 6
C 8 4 B E D C A
D 10 7
E 7 12

6/11/2019 NY - KJP 585 2009 72

 WORK CENTER 1 WORK CENTER 2

Job Time In Time Out Time In Time Out

B 0 3 3 9

E 3 10 10 22

D 10 20 22 29

C 20 28 29 33

A 28 33 33 35
6/11/2019 NY - KJP 585 2009 73
Idle Time M1 = 2 Idle Time M2 = 3 + 1 = 4
 Johnson’s Rule Example
Work Center 1 Work Center 2
Job (Drill Press) (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

WC
2

6/11/2019 NY - KJP 585 2009 74

 Johnson’s Rule Example
Work Center 1 Work Center 2
Job (Drill Press) (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

WC
2 B E D C A

Time 0 1 3 5 7 9 10 11 12 13 17 19 21 22 2325 27 29 31 33 35

6/11/2019 NY - KJP 585 2009 A 75

B E D C
 Johnson’s Rule Example
Idle Time WC 1 = 2
Idle Time WC 2 = 3 + 1 = 4
The five jobs are completed in 35
hours. The WC 2 will have to wait 3
hours before first job at WC 1 is
completed and will also wait for
another 1 hour after completing job B.

6/11/2019 NY - KJP 585 2009 76

 Limitations
Rules do not look beyond due dates.
May be two work centers at the
same due date. Which one is
important

Rules do not look upstream or

downstream. Idle resources &
bottleneck resources may be not
recognized.
6/11/2019 NY - KJP 585 2009 77
 Johnson’s Rule Example
Work Work Scheduled
Center 1 Center 2 delivery
Job (Drill Press) (Lathe) hours
A 5 2 30
B 3 6 10
B E D C A
C 8 4 35
D 10 7 30

E 7 12 20
Time 0 3 10 20 28 33

WC
1 B E D C A

WC
2 B E D C A

Time 0 1 3 5 7 9 10 11 12 13 17 19 21 22 2325 27 29 31 33 35

6/11/2019 NY - KJP 585 2009 A 78

B E D C
 Finite Capacity Scheduling
Interactive Finite Capacity Scheduling
MRP Data • Routing files
• Master • Work center
schedule information
• BOM
• Inventory
Tooling
Priority and other
rules resources

• Expert
systems Setups and
run time
• Simulation
models

Figure 15.5
6/11/2019 NY - KJP 585 2009 79
6/11/2019 NY - KJP 585 2009 80
 Bottlenecks
 Bottleneck work centers are constraints
that limit output
 Common occurrence due to frequent changes

 Management techniques include:

 Increasing the capacity of the constraint
 Cross-trained employees and maintenance
 Alternative routings
 Moving inspection and test
 Scheduling throughput to match bottleneck
capacity
6/11/2019 NY - KJP 585 2009 81
 Service Systems Differ From
Manufacturing
Manufacturing Services
Schedules machines Schedule staff
and materials
Inventories used to Seldom maintain inventories
smooth demand
Machine-intensive and Labor-intensive and demand
demand may be smooth may be variable
Scheduling may be bound by Legal issues may constrain
union contracts flexible scheduling

Few social or behavioral Social and behavioral issues

issues may be quite important
6/11/2019 NY - KJP 585 2009 82
 Let’s Recap

7.1 Understand Organizational strategy and production planning

7.2 Understand Long range, Medium range and Short range planning
7.3 Compute, Apply and Analyze Aggregate planning
7.4 Compute, Apply and Analyze Master Production Schedule
7.5 Compute, Apply and Analyze Materials Requirement Planning
7.6 Compute, Apply and Analyze Manufacturing Resource Planning
7.7 Compute, Apply and AnalyzeJob shop scheduling

6/11/2019 83