NATURAL BLENDS Group AB2 Aj it h S Nat h – 13503 Komal Jalan Jalan – 13 1352 5233 Payal Pa yal Singh – 13 1353 5333 Simran Malani Malani – 13 1354 5455 Varun Chhabra - 13 1355 5577
1
CASE OVERVIEW Capacity •
Extraction: 20,000 pounds/hour
•
Filtration: 20,000 pounds/hour
•
Concentration: 18,000 pounds/hour
Cycle time •
Extraction: 20,000 pounds/hour + 10,000 pounds/30 minutes
•
Filtration: 20,000 pounds/hour + 10,000 pounds/30 minutes
•
Concentrati Co ncentration: on: 18,000 pound pounds/hour s/hour + 9,000 poun pounds/30 ds/30 minut minutes es
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Q1(A) HOW MUCH ORANGE JUICE CONCENTRATE CAN BE PRODUCED IN ONE 8-HOUR WORKDAY? Cycle time: 2 hours Bottleneck at concentration: Extraction: 30,000 pounds/2 hours Filtration: 30,000 pounds/2 hours Concentration: 27,000 pounds/2 hours 13,500 pounds/hour So, 13500 pounds/ hours * 8 hours= 1,08,000 pounds
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Q1(B) ASSUME EXTRACTION HAD PREVIOUSLY BEEN SETUP FOR THE SIZE ORANGES BEING PROCESSED. HOW MUCH IDLE TIME WILL THERE BE IN THE EXTRACTION OPERATION DURING ONE 8-HOUR WORKDAY? Process 2 (extraction) should wait and follow the operation time of Process 3 since it should be shutting down for 30min for filter change after operate 90min.
Then during 8hr, process 2 have 4 idle times (=8hrs/2hrs)
Idle time =4 x 30min = 120min / 2hrs
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Q2(A) IF YOU COULD ADD STORAGE CAPACITY SOMEWHERE BETWEEN STEPS TWO AND FOUR IN THIS PRODUCTION LINE IN ORDER TO INCREASE DAILY OUTPUT, WHERE WOULD YOU PLACE IT? HOW MUCH STORAGE WOULD YOU ADD? We will put 1 storage between process 3 (filtration) and process 4 (concentration) with capacity 3000lbs to accommodate the output from process 3 since the production time and speed is not the same between process 3 and 4
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Q2(B) WHY ? Process 3 after operate for 90min, it can produce 30,000 lbs of orange juice (20,000 lbs/hr) But, the process 4 only have production capacity 18,000 lbs/hr and for 90min operation it only can proceed 27,000 lbs Meanwhile the total output from process 3 are 30,000 lbs So, in order to produce more output we can add storage capacity between process 3 & 4.
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Q3 A IF THE COST OF ADDING STORAGE WAS 30$/POUND AND THE COST OF REDUCING SETUP TIME BY 50% USING ADDITIONAL FIXTURES WAS $20000 FOR THE FILTER PROCESS AND $ 10000 FOR THE EXTRACTION PROCESS , WHAT ACTION WOULD YOU RECOMMEND IN ORDER TO MAXIMISE THIS OUTPUT OF THE PRODUCTION LINE? Step 2: Extraction Operation: 6 hours Setup: 2 hours Total production: 20,000*6=1,20,000 pounds in 8 hours Average= 15,000 pounds/hour
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Step 3: Filtration Operation: 6 hours Setup: 2 hours Total production: 20,000*6=1,20,000 pounds in 8 hours Average= 15,000 pounds/hour
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Step 4: Concentration Operation: 8 hours Production: 8*18,000 pounds= 1,44,000 pounds Average: 18,000 pounds/hour
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Q3(B) •
•
Add storage capacity in step 2 & step 3 because they are bottleneck, So, we can add storage capacity of 1,44,000-1,20,000=24,000 pounds
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Reducing setup time means additional hour can be used for production. (50% of setup time (2 hours)= 1 hour)
So, Increased production capacity for filtration and extraction: 20,000 pounds
Cost of additional capacity (step 2): 20,000*30 + 10,000=6,10,000 $
Cost of additional capacity (step 3): 20,000*30 + 20,000=6,20,000 $
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•
•
•
So, 20,000 pounds more can be produced if setup time is decreased by 50% If we don’t consider bottleneck, reducing setup time for step 2 should be recommended, because it processes same pounds at step 3 does but It costs less. Else we have to carry out both step 2 and step 3.
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Q4(A) HOW OFTEN DURING 8-HOUR WORKDAY WOULD YOU HAVEA SETUP CHANGE IN THE EXTRACTION PROCESS ?
Minimum: 2 times of switch Maximum: 6 times 1,20,000/20,000= 6 times 8-6=2 hours 2 hours/ 20 minutes setup time= 6 times
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AVERAGE CAPACITY FOR FILTRATION
Action
Time
Production
Filtering
90mins
20000 x 1.5
Shut down time
30
0
Total
120mins
30000
Capacity
15000/hr
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AVERAGE CAPACITY FOR JUICE CONCENTRATION AND EXTRACTION •
Average capacity for juice concentration is 18000 pounds per hour.
•
Average capacity of extraction is a direct function of the number of setups per day done.
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SETTING UP EXTRACTION •
To extract all three types of oranges, the minimum number of setup needed is two times a day.
•
The maximum number of setups possible is 6 times a day.
The maximum number of setups is arrived with the assumption that the extraction process can run in cycles of one hour each.
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SETTING UP SIX TIMES A DAY
Particulars
Per day
Per week
Number of extraction runs per orange
2
12
40,000 pounds
240000 pounds
Production per orange Total extraction runs
6
36
Total production
120,000 pounds
720,000 pounds
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PROFIT CALCULATIONS PER CONTRACT Contract
Number of Quantity orders of orders
Contributi on per pound
Time per order
Total time for contract
Total volume in pounds
Total profit
A
24
8000
0.03
61.6
1478.4
192000
5760
B
18
16000
0.028
83.8
1508.4
288000
8064
C
15
24000
0.026
105.4
1581
360000
9360
D
10
18000
0.024
89.2
892
180000
4320
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PROFIT PER TIME FOR EACH CONTRACT
Contract
Total time in Total profit mins
Profit per time
A
1478.4
5760
3.896104
B
1508.4
8064
5.346062
C
1581
9360
5.920304
D
892
4320
4.843049 19
WHAT TO MANUFACTURE? •
Why cant B and C be produced together. Time required in minutes
Total time in hou rs
Total setup time required
(18+15)x 40
22
Total quantity
16000 x 18 + 24000 x 15 = 388800
30
Total hours per week required
52
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WHAT TO MANUFACTURE ?
•
Contracts C and D should be manufactured.
•
The total profit from the two contracts will be 13680.
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TIME TAKEN FOR BLENDING CONTRACT A •
Time consumed in blending operation is a function of set up time and production time.
Rate
Total time
Set up
40 mins / set up
40 mins
Production
22000pounds/ hr
21.6 mins
Total
61.6 mins
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