1

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Chapter 6
Manufacturing and
Process Selection
Design
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 3

Types of Processes
 Conversion (ex. Iron to steel)

 Fabrication (ex. Cloth to clothes)

 Assembly (ex. Parts to

components)

 Testing (ex. For quality of

products)

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 4

Process Flow Structures

 Job shop (ex. Copy center making a single

copy of a student term paper)

 Batch shop (ex. Copy center making 10,000

copies of an ad piece for a business)

 Assembly Line (ex. Automobile manufacturer)

 Continuous Flow (ex. Petroleum

manufacturer)

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 5

Exhibit
Few High
Exhibit Low Multiple Major Volume,
6.10
6.10 Volume, Products, Products, High
One of a Low Higher Standard-
Kind Volume Volume ization
I. Commercial Flexibility (High)
Job Printer Unit Cost (High)
Shop French These
Restaurant
Theseare
are
the
themajor
major
II. Heavy stages
stagesof
of
Batch Equipment product
product
III. and
and
Automobile process
process
Assembly Assembly
Line life
lifecycles
cycles
Burger King
IV.
Sugar
Continuous Refinery Flexibility (Low)
Flow Unit Cost (Low)

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 6

Break-Even Analysis
 A standard approach to choosing among
alternative processes or equipment
 Model seeks to determine the point in
units produced (and sold) where we will
start making profit on the process or
equipment
 Model seeks to determine the point in
units produced (and sold) where total
revenue and total cost are equal

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 7

Break-Even Analysis (Continued)

Break-even
Break-evenDemand=
Demand=

Purchase
Purchasecost
costof
ofprocess
processororequipment
equipment
Price
Priceper
perunit
unit --Cost
Costper
perunit
unit
or
or
Total
Totalfixed
fixedcosts
costsofofprocess
processor
orequipment
equipment
Unit
Unitprice
priceto
tocustomer
customer --Variable
Variablecosts
costsper
perunit
unit

This formula can be used to find any of its

components algebraically if the other
parameters are known

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 8

Break-Even Analysis (Continued)


 Example:
Example: Suppose
Supposeyou youwant
want to
to purchase
purchaseaanew new
computer
computer that
thatwill
willcost
cost $5,000.
$5,000. ItItwill
willbebeused
usedto to
process
processwritten
writtenorders
ordersfrom
fromcustomers
customerswho whowill
willpay
pay
$25
$25each
each for
for the
the service.
service. TheThecost
costofof labor,
labor, electricity
electricity
and
andthe
the form
form used
usedto toplace
placethe
the order
order isis$5
$5per
per
customer.
customer. How Howmany
manycustomers
customerswill willweweneed
needto toserve
serve
to
topermit
permit the
thetotal
total revenue
revenuetotobreak-even
break-evenwith withour
our
costs?
costs?
 Break-even

Break-even Demand:
Demand:
== Total
Total fixed
fixed costs
costs of
of process
process or
or equip.
equip.
Unit
Unit price
price to
to customer
customer –– Variable
Variable costs
costs
=5,000/(25-5)
=5,000/(25-5)
=250
=250 customers
customers
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 9

Manufacturing Process Flow Design

 A process flow design can be defined as

a mapping of the specific processes that
raw materials, parts, and subassemblies
follow as they move through a plant

 The most common tools to conduct a

process flow design include assembly
drawings, assembly charts, and operation
and route sheets

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 10

Example: Assembly Chart (Gozinto)

From
FromExhibit
Exhibit5.14
5.14
Lockring
4
Spacer, detent spring
5
SA-2 A-2
Rivets (2)
6
Spring-detent
7
A-5
Component/Assy Operation

Inspection

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 11

Example: Process Flow Chart

No,
Material Inspect Continue…
Received
Material for
from
Supplier Defects Defects
found?

Yes

Return to
Supplier for
Credit

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 12

End of Chapter 6

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.