Production and

Operations Management

R.B. KHANNAFormerly Professor

Indian Institute of Planning and Management (IIPM)Jaipur

Delhi-1100922015

SECOND EDITION

PRODUCTION AND OPERATIONS MANAGEMENT, Second EditionR.B. Khanna

© 2015 by PHI Learning Private Limited, Delhi. All rights reserved. No part of this book may be reproduced in any form, by mimeograph or any other means, without permission in writing from the publisher.

ISBN-978-81-203-5121-9

The export rights of this book are vested solely with the publisher.

Fifth Printing (Second Edition) May, 2015

Published by Asoke K. Ghosh, PHI Learning Private Limited, Rimjhim House, 111, Patparganj Industrial Estate, Delhi-110092 and Printed by Rajkamal Electric Press, B-35/9, G.T. Karnal Road Industrial Area, Delhi-110033.

To

my dear wife SAROJwho stood by patiently when the demands of this book

took priority over her demands for my time

v

Contents

Preface xiiiPreface to the First Edition xv

Part I: The Why of Production and Operations Management

1. Operations Management—An Introduction 3–14 Learning Objectives 3 1.1 Introduction 3 1.2 Difference between Products and Services 5 1.3 What is Operations Management? 6 1.4 Brief History of Operations Management 7 1.5 Impact of Information Technology and Globalisation 10 1.6 Organisation of This Book 11 Concept Quiz 11 Questions 14

2. Operations Strategy and Competitiveness 15–27 Learning Objectives 15 2.1 Introduction 15 2.2 Business Strategy 16 2.3 Competitive Priorities 16 2.4 OrderQualifiers andOrderWinners 19 2.5 Developing an Operations Strategy 20 2.6 Productivity and Competitiveness 21 2.7 Latest Trends 23 2.8 Summary 24 Concept Quiz 25 Questions 27

Part II: The What of Production and Operations Management

3. Product and Service Design 31–43 Learning Objectives 31 3.1 Introduction 31

vi Contents

3.2 Traditional Approach 32 3.3 Concurrent Design 33 3.4 Steps in The Design Process 33 3.5 Design for Manufacture and Assembly (DFMA) 37 3.6 Design of Services 37 3.7 Classificationof Services 39 3.8 Technology and Design 40 3.9 Summary 40 Concept Quiz 41 Questions 43

4. Reliability, Maintainability, Availability and Value Analysis 44–57 Learning Objectives 44 4.1 Introduction 44 4.2 Failures 45 4.3 Reliability 46 4.4 Maintainability 47 4.5 Availability 48 4.6 Maintenance 49 4.7 Value Analysis 51 4.8 Summary 53 Concept Quiz 54 Questions 56

Supplement 1: Dynamic Programming 58–67 Introduction 58 Definitions 58 Summary 65 Questions 65

Supplement 2: Replacement Models 68–76 Introduction 68 Replacement of an Equipment which Deteriorates Over Time 68 Replacement of Items that Fail Completely 71 Summary 73 Questions 73

5. Product Quality 77–95 Learning Objectives 77 5.1 Introduction 77 5.2 Quality of Design 78 5.3 Quality of Conformance to Design 79 5.4 Costs of Quality 80 5.5 Total Quality Management 82 5.6 Quality Improvement and Employees 85 5.7 Tools for Identifying Quality Problems and Causes 86 5.8 ISO 9000:2000 89 5.9 Summary 92 Concept Quiz 92 Questions 95

Contents vii

Part III: The How of Production and Operations Management

6. Process Design and Selection 99–118 Learning Objectives 99 6.1 Introduction 99 6.2 Factors Affecting Process Design 100 6.3 Processes Flow Structures 101 6.4 Process Selection 105 6.5 Group Approach 107 6.6 Other Manufacturing Technologies 108 6.7 Process Design and Selection for Services 109 6.8 Summary 113 Concept Quiz 114 Questions 116

7. Work Study 119–147 Learning Objectives 119 7.1 Introduction 119 7.2 Behavioural Impact of Work Study 120 7.3 Method Study 120 7.4 Select 121 7.5 Record 121 7.6 Critical Examination 124 7.7 Develop 125 7.8 Install 125 7.9 Maintain 125 7.10 Ergonomics 127 7.11 Methods Improvement and Materials Handling 132 7.12 Work Measurement 132 7.13 Time Study 133 7.14 Activity Sampling 137 7.15 Predetermined Motion Time Systems 139 7.16 Synthetic Timings 140 7.17 Analytical Estimating 141 7.18 Summary 141 Concept Quiz 143 Questions 145

8. Process Quality—Statistical Quality Control 148–182 Learning Objectives 148 8.1 Introduction 148 8.2 Process Capability 150 8.3 Six Sigma Quality 151 8.4 Process Control 151 8.5 Process Control for Attributes—p Charts 152 8.6 Process Control for Attributes—c Charts 154 8.7 Process Control for Variables —X and R Charts 155 8.8 Using Control Charts 160 8.9 Acceptance Sampling 162 8.10 Operating Characteristics Curve 163

viii Contents

8.11 Average Outgoing Quality Limit (AOQL) 166 8.12 Sampling Plans 167 8.13 Solution by Computer Package 168 8.14 Summary 175 Concept Quiz 177 Questions 179

Part IV: The Where of Production and Operations Management

9. Facility Location 185–209 Learning Objectives 185 9.1 Introduction 185 9.2 The Why of Location Decision Problems 186 9.3 Factors Affecting Facility Location 186 9.4 Factor Rating Analysis and Forced Decision Matrix 189 9.5 Economic Analysis 192 9.6 Load Distance Methods 199 9.7 Locating Service Facilities 203 9.8 Summary 203 Concept Quiz 204 Questions 206

10. Facility Layout 210–238 Learning Objectives 210 10.1 Introduction 210 10.2 Factors Affecting Layout 211 10.3 Basic Production Layout Formats 212 10.4 Process Layout 213 10.5 Systematic Layout Planning 217 10.6 Product Layout 219 10.7 Line Balancing 219 10.8 Machine Balancing in Group Technology 226 10.9 Service Layout 229 10.10 Summary 230 Concept Quiz 232 Questions 234

11. Capacity and Equipment Selection 239–256 Learning Objectives 239 11.1 Introduction 239 11.2 Capacity 240 11.3 Decision Tree Analysis 240 11.4 Allocation of Capacities Through Linear Programming 244 11.5 Simulation 247 11.6 Economic Analysis for Equipment Selection 247 11.7 Equipment Balancing 248 11.8 Summary 250 Concept Quiz 252 Questions 253

Contents ix

Supplement 3: Simulation 257–283 Introduction 257 Steps Involved in Monte Carlo Simulation 258 Summary 278 Questions 278

Part V: The When of Production and Operations Management

12. Forecasting 287–314 Learning Objectives 287 12.1 Introduction 287 12.2 Types of Forecasts 288 12.3 Qualitative Methods of Forecasting 288 12.4 Time Series Analysis 289 12.5 Simple Moving Average 290 12.6 Weighted Moving Average 291 12.7 Exponential Smoothing 292 12.8 Causal Methods 295 12.9 Linear Regression 295 12.10 Multiple Regression 298 12.11 Decomposition of Time Series 301 12.12 Measures of Forecasting Accuracy 304 12.13 Selecting A Forecasting Method 306 12.14 Summary 309 Concept Quiz 310 Questions 312

13. Aggregate Production Planning 315–337 Learning Objectives 315 13.1 Introduction 315 13.2 Production Planning System 315 13.3 Aggregate Production Planning 317 13.4 Production Planning Strategies 318 13.5 Aggregate Planning Techniques 319 13.6 Linear Programming Approach 324 13.7 Transportation Model Approach 327 13.8 Other Methods 330 13.9 Aggregate Planning for Services 330 13.10 Yield Management 331 13.11 Summary 333 Concept Quiz 333 Questions 335

14. Material Management and Inventory Control 338–366 Learning Objectives 338 14.1 Introduction 338 14.2 Material Management 339 14.3 Objectives of Materials Management Department 339 14.4 Centralisation Versus Decentralisation 341 14.5 Inventory Management 341 14.6 Costs Associated with Inventory 342

Production And Operations Management

Publisher : PHI Learning ISBN : 9788120351219 Author : R B Khanna

Type the URL : http://www.kopykitab.com/product/6777

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