Module 3

Question 1

What are the two categories of Metrics?

Answer 1

Production Performance & Manufacturing Costs

Question 2

What are the main components of manufacturing costs?

Answer 2

Labor, Material, Overhead, Equipment, and Unit Costs.

Question 3

Cycle Time (represented at Tc) is the summation of what variables?

Answer 3

Processing/Assembly Time (To), Handling Time (Th), Tool Handling (Tt)

Question 4

Production rate is ____________ tied to cycle time

Answer 4

Inversely

Question 5

The variable “Tp” represents…

Answer 5

Production time per work unit (Hr/pc)

Question 6

The variable “Tsu” represents…

Answer 6

Set-up Time to prepare the machine for the Job

Question 7

For Job-Shop Production, to solve for Tp (Production Time per Work Unit), it is the summation…

Answer 7

…of Setup Time & Cycle Time

Question 8

For Job-Shop Production, to calculate “Rp” (Production Rate, pc/Hr), given Production Time per Work Unit, the calculation is…

Answer 8

Rp = 60 / Tp

Question 9

For Batch Production, batch processing time (Tb) has two types, what are they?

Answer 9

Sequential: Processed one at a time
Simultaneous: All Together

Question 10

What is the formula for sequential batch processing time?

Answer 10

Tb = Tsu (Setup Time) + Qb (Batch Quantity) * Tc (Cycle Time)

Question 11

What is the formula for simultaneous batch processing time?

Answer 11

Tb = Tsu (Setup Time) + Tc (Cycle Time)

Question 12

What is the production time for batch production?

Answer 12

Tp = Tb (Batch Time) / Qb (Batch Quantity)

Question 13

What is the formula for production rate for mass production and the formula for operation cycle rate (Rc)?

Answer 13

Rp ~ Rc = 60 / Tc

Question 14

For Mass Production, what is the formula for Cycle Time (Tc)?

Answer 14

Tc = Max(To) + Tr

Tr = Transfer Between Machines Time

Question 15

What does the variable ‘MTBF’ represent?

Answer 15

Runtime Between Failures

Question 16

What does the variable ‘MTTR’ represent?

Answer 16

Repair Time

Question 17

How do you calculate equipment availability?

Answer 17

A (Availability) = (MTBF - MTTR) / MTBF

Question 18

How do you calculate actual production rate?

Answer 18

Actual Production Rate = A * Rp

Question 19

What is the definition of “Workload”?

Answer 19

Total hours required for a job/batch

Question 20

What is the formula for Workload (WL)?

Answer 20

WL = Q (Quantity of Units) * Tp (Production Time per work unit in hr/pc)

Question 21

Let’s say there are multiple work stations and part types. How do you calculate workload at a workstation?

Answer 21

Workstation -> i, part type -> j; WLi = summation(Qij * Tpij)

Question 22

How do you find the factory-wide workload?

Answer 22

WL = summation(WLi)

Question 23

In a Job-Shop/Batch Production site, how do you find workload?

Answer 23

You cannot find workload directly, only expressed in production time (Tp); Tp = Tsu + Tc

Question 24

In a Mass Production site, how do you find workload?

Answer 24

WLi = Qij * Tcij

Question 25

In a Flow-line, how do you find workload?

Answer 25

WL = Q * Tc

Question 26

How do you calculate Weekly Plant Capacity?

Answer 26

PCw = s (number of machines) * Hw (hours/week) * Rp (Production Rate)

Question 27

What is a bottleneck?

Answer 27

The one process in a chain of processes that has the capacity to reduce the processing time for the entire chain of processes.

Question 28

What is the result of a bottleneck?

Answer 28

Stalls in production, supply overstock, pressure from customers and low employee morale

Question 29

Are bottlenecks short-term or long-term?

Answer 29

Bottlenecks can be both.

Question 30

What are the two different types of manufacturing costs?

Answer 30

Fixed Costs, Variable Costs

Question 31

What is the difference between Fixed and Variable costs?

Answer 31

Fixed refers to costs that are constant regardless of the level of production output. Variable refers to costs that vary based on production output.

Question 32

Provide examples of fixed costs.

Answer 32

Factory building, land or equipment; Insurance; Property Taxes

Question 33

Provide examples of variable costs.

Answer 33

Direct labor; Raw Materials; Electric Power for equipment

Question 34

How do fixed costs compare between automated and manual production methods?

Answer 34

Automated methods have high fixed costs, while manual methods have low fixed costs.

Question 35

How do variable costs compare between automated and manual production methods?

Answer 35

Automated methods have low variable costs, while manual methods have high variable costs.

Question 36

Which production method is more cost-effective at low production quantities?

Answer 36

Manual Methods (lower fixed cost dominates)

Question 37

Which production method is more cost-effective at high production quantities?

Answer 37

Automated Methods (lower variable cost dominates)

Question 38

How do you calculate total annual cost represented by TC ($/yr)?

Answer 38

TC = FC (Fixed annual cost, $/yr) + Cv (Variable Cost, $/pc) * Q (Annual quantity produced, pc/yr)

Question 39

What are the three type of cost categories? (Alternatives to Fixed vs. Variable)

Answer 39

Direct Labor, Material, Overhead

Question 40

What do direct labor costs include?

Answer 40

Wages and benefits of workers who operate production equipment and perform processing/assembly tasks

Question 41

What do material costs include?

Answer 41

All raw materials of making the product, depending on the company and type of production

Question 42

Are direct labor and material cost considered variable or fixed cost?

Answer 42

Variable cost

Question 43

What do overhead costs include?

Answer 43

All other manufacturing-related expenses beyond direct labor and materials

Question 44

What are overhead costs divided into?

Answer 44

Factory Overhead (Costs of operating the factory, besides labor and materials) and Corporate Overhead (Non-Manufacturing Expenses)

Question 45

Describe the overhead allocation procedure.

Answer 45

1. Compile most recent year(s) costs in total 2. Classify into four categories (Direct labor, Material, Factory Overhead, Corporate Overhead) 3. Determine Overhead Rates for Factory Overhead and Corporate Overhead 4. Use rates to allocate overhead based on their direct labor costs

Question 46

What is the formula for the factory overhead rate?

Answer 46

FOHR (Factory Overhead Rate) = FOHC (Annual Factory Costs) / DLC (Annual Direct Labor Costs)

Question 47

What is the formula for the corporate overhead rate?

Answer 47

COHR (Corporate Overhead Rate) = COHC (Annual Corporate Costs) / DLC (Annual Direct Labor Costs)