MarginalOverageCost

ProbabilityofSbeingover
Marginalcostofoverstocking

MarginalUnderageCost
ProbabilityofSbeingunder
Marginalcostofunderstocking

P{D
<
S}
P{D
<
S}*C.0
1P{D
<
S}
{1P{D
<
S}}*C.0

NonBottleneckResource

BottleneckResource

Increase
UnitLoad

Capacity
Rate

Decreases

Asanonbottleneckresource
becomesthenewbottleneck

Decreases

Staysthesame

Whenthenonbottleneckresource
staysanonbottleneck

Decrease
UnitLoad

FlowRate

Increases

Increases

Capacity
Rate

Staysthesame

Thenonbottleneckresourcesstays
anonbottleneck

Increases

Onlyifthereisonebottleneck
is
unique
Staysthesame

Ifthereismorethanone
resource

Increase
Resource
Pool

FlowRate

Decreases

Decreases

Capacity
Rate

Staysthesame

Increases

Staysthesame

FlowRate

Staysthesame

Flowratedoesnothaveanythingto
dowiththesizeoftheresourcepool

Flowrateonlydependson
unitload

Staysthesame

Shortrunmismatches

When?

Results

Utilization

InputRate
>CapacityRate

Inventory=increases

OutputRate
=CR

Utilization=100%

InputRate

<
CR,Inventory=0

Funnelanalogy

Initiallythereisnowater,butstart
pouringalittlewaterin

Inventory=0

Therewillstillbenowater
becauseallthewaterwillflowout

OutputRate
=InputRate

Utilization
<
100%

InputRate

<
CR,Inventory>0

Thereisalreadysomewater
runningthroughthefunnel

Inventory=decreases

OutputRate
=CR,untilInventory=0
**atcontinuoustimerate

Utilization=100%,
untilInventory=0

Definition

SingleStageProcess

Foraparticularactivity

MultipleStageProcess(Linear)

Therearenodecisionpointsall
homogeneous

FlowTime

Totaltimeeachunit
spendsintheentire
process

Unitloadofanactivity

Sumoftheloads=
Sumoftimeunitflow

CapacityRate

Max.numberofunits
youcanproducegiven
inaunittimeMax.,
possibleoutputrate

Capacityrateofa
processisthesame,
butanoutputrateis
variable

(1timeunit/
unitload)*
#ofresources

1unittime=FlowTime+(k1)*Cycle
Time

=k*(CycleTime)+
(FlowTimeCycleTime)

=k*(CycleTime)

k=1unittime/cycletime

Findoutthemostconstrained
resourcecomputeeachresources
capacity

Smallestcapacityrateamongall
activities=Capacityrateof
the
bottleneck
activity/resource

(1timeunit/
unitloadofbottleneckresource)*
#ofbottleneckresourceinthe
sameactivity

CycleTime

Averageadditional
timeusedtoproduce
anadditionalunit

*Onceyoufind
capacityrate,youcan
findcycletime

UnitLoad

1unittime/capacityrate
=unitload/#ofresources

1unittime/capacityrateofthe
process
=1unittime/capacityrateofthe
bottleneckresource
=unitloadofbottleneck/#of
bottleneckresources

*Onlytruewhenthereisone,unique
resource!

Lookatthecycletimeofthe
bottleneckactivity

Cycletimeofthebottleneck
resource=cycletimeofthe
process

UnitLoad=
timeyoutakeforeachresource

e.g.Ifyouhave2toasters,eachbuntakes10stotoast

Totoast...
1bun,ittakes10s

2buns,10s
3buns,20s
4buns,20s
5buns,30s
6buns,30s

e.g.
#ofJobs
1
2
3

Flowtime
Flowtime+Cycletime
Flowtime+Cycletime+Cycletime
Flowtime+(k1)*[sumofCycletime]