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AMARENDRA SAHOO PGP2011533 BHAWNA GOKANI PGP2011595 CHATARKAR ANURAG MAHADE PGP2011600 C.LALRUATSANGA 2011FPM06 RUPSA CHAKRAVARTY PGP2011837 SAARANG K. MEHTA PGP2011841 UTKARSH SINGH PGP2011923
Summary: Mr. Dwight Collier, Gen. Manager of Executive Shirt Company (ESC) is planning to introduce customized shirts in his current production facility since they can fetch 75% more price as compared to regular shirts. Currently, ESC is manufacturing 16,000 shirts per month and they plan to manufacture 2,000 customized shirts per month without hampering the current production. The company has 5 departments, namely, Cutting: 1 Machine, 4 Workers Sewing: 48 Machines, 48 Workers Inspection: 4 workers Ironing: 4 Machines, 4 Workers Packaging: 4 workers Indirect Workers (material handlers) : 4 Workers
Mr. Collier introduced a change in the manufacturing process by introducing a Laser Cutting Machine for customized shirt. He requested two of his managers, Mike and Ike to devise a production plan to maximize the profit from both the products. The highlights of their plans are Mikes Plan: To go with one production line manufacturing both the products simultaneously (other than the cutting process) o Eight Batches of regular shirts with 5 shirts each o One batch of 5 custom shirts Ikes Plan: To go for a separate production line for regular and customized shirt o Eight Batches of regular shirts with 6o shirts each o One batch of 5 custom shirts
Operation
Regular Shirt Labour Content 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
Number of workers 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4
Time required for producing one unit (in min.) .4875 .5 .325 .41 .42 .33 .41 .39 .32 .45 .39 .42 .38 .49 .42
Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package
From the table it is clear that cuff making is the slowest process and hence the cycle time of Regular Shirt making is equal to the time of cuff making=0.5 min.
Table 1.2. Current Production Plan Quantity Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time Obtained Value Bottle Neck = 30 min per batch 0.5 per shirt
10800+960 =11760
Input to Output
11760/960 =12.25
83.33%
25.51+4(0.25)= 26.51
3072/800=$ 3.84/shirt
(800 * 26.51)/(8*60*64)
69.03%
Operation
Regular Shirt Labour Content 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
Number of workers 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4
Time required for producing one unit (in min.) .4875 .5 .325 .41 .42 .33 .41 .39 .32 .45 .39 .42 .38 .49 .42
Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package
From the table it is clear that cuff making is the slowest process and hence the cycle time of Mikes Shirt making process is equal to the time of cuff making=0.5 min.
Quantity
Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time
480/0.5=960 units
1800+180 =1980
Input to Output
1980/960=12.58
93.75%
25.51+0.5=26.01
3120/900=3.47
75.02%
Custom Shirt
B. Customized Shirt
Operation Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package CUSTOM Shirt Labour Content 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 Number of workers 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Time required/lbr/shrt (in min) 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
Table 3.3. Ikes Production Plan Quantity Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time Obtained Value(Custom Shirts) Bottle Neck = 3.9 min per shirt 3.9 per shirt
45+5 =50
Input to Output
50/123 =0.41
81.3%
25.51+0.5 =26.01
768/100=7.68
33.86%
12.25
2.06
12.58
0.41
11760
1980
9060
50
960
960
720
123
83.33%
93.75%
111.11%
81.3%
26.51
26.01
26.51
26.01
69.03%
75.02%
90.17%
33.8%
3.84
3.47
3.43
7.68
Table 5: Cost Comparison of Mikes and Ikes Plan A. For Normal Shirts Mikes plan Raw materials Direct labor Indirect labor Other Indirect Cost Total manufacturing Cost Retail price Profit/shirt $7.00 $3.46 $.66 $4.50 $15.62 $50 $34.38 Ikes plan $7 $3.32 $.66 $4.50 $15.48 $50 $34.52
B. For Customized Shirt Mikes plan Raw materials Direct labor Indirect labor Other Indirect Cost Total manufacturing Cost Retail price Profit/shirt $7.7 $3.46 $.66 $4.50 $16.32 $87.5 $71.18 Ikes plan $7.7 $7.68 $.66 $4.50 $20.54 $87.5 $66.96
Conclusion: From Table 5: Cost Comparison of Mikes and Ikes Plan, we can see that the total profit
per shirt from Mikes plan is greater $4.08. Thus, Mikes plan is better.