ESPO/IAG/POMS 1(6) Per J. AGRELL

Transcription

1 ESPO/IAG/POMS 1(6) PROD2800 PRODUCTION AND OPERATIONS MANAGEMENT GESTION DE LA PRODUCTION ET DES OPÉRATIONS SOLUTION GUIDE QUESTION 1 a) Analyze the operation strategy of ORBEL in terms of order winners and qualifiers for their product range. (8 p) The ale has 50% lower markup than the other two, sold through supermarkets at grand scale. Dubious synergy with other beers in terms of branding + 6 Ale Double/Triple OW Price, taste Taste, brand OQ Volume flex, delivery reliability Quality, delivery reliability b) Derive a coherent manufacturing strategy (process, infrastructure) from the identified market situation. State clearly your assumptions. (8p) A brewery is a continuous process by default, but the two specialty beers are produced in smaller lots and smaller volume. One solution not to disrupt flows is to install two tap lines for the ale and double/triple beers, with different scheduling. Ale is likely sold at long orders from retailers, where inventory can be kept low. The double/triple beers are likely to be stocked on site and delivered to the restaurants etc on order. Distribution can be centralized, but due to the quality and exclusivity of the double/triple, the restaurant and site outlets are important. Focus is capacity utilization in line Ale (long series) and conformance to quality in line Double/Triple (shorter series due to demand). c) Analyze critically, briefly and concisely how the recent changes of production and distribution policy may affect the market position of ORBEL? In particular, assess the product choice, process choice and distribution policy. (4p) The close association with MegaaBrew endangers the exclusivity and the margin of the beers due to (i) non-trappist organization, (ii) mass-market retail pricing and (iii) possible further volume expansion. The weakened restaurant network may further accelerate this process. Distribution coordination will need to change the bottle, perhaps to MegaBrew standard. Dubious whether the investments will be profitable, given the previous high margin on a smaller volume. A more interesting policy would have been to use the MegaBrew channels to distribute the exclusive beers to other markets (restaurants, specialty stores etc(, perhaps to France, where the willingness to pay could offer a more balanced product mix. In any case, the joint venture should for credibility be limited to the distribution channel and not involve the production.

2 ESPO/IAG/POMS 2(6) QUESTION 2 The aggregate demand for ORBEL beers during the following six months is estimated as in the table below. Month Demand (m 3 ) The initial inventory at the beginning of the period is 100 m 3. Production and deliveries can be assumed to be continuously distributed in time. The production capacity per operator is around 100 m 3 /month. Currently, there are 8 operators on the line. Monthly salary for an operator is about The monthly inventory holding cost is 50 /m 3. MegaBrew can handle the production under license a price of 100 /m 3. a) Describe shortly three principal production planning strategies for aggregate planning. See Chase et al, pp b) Find the minimal constant production rate to fully satisfy demand in all periods. Calculate average and ending inventory levels. How many operators are needed to perform the plan? Dt - I 0 t = 1 Calculate constant production rate mt = t for all t, max m t = 900, handled with 9 operators, ending inventory levels (300, 200, 300, 100, 0, 200), average 200. t å c) Find the relevant cost for the plan that uses the maximal production rate with current capacity and outsourcing to MegaBrew whenever necessary. Compare the cost with the cost in b) and derive a recommendation. Cost in (b) , plan with capacity 800 gives outsourcing plan (0, 0, 0, 300, 200, 0), inventory levels (200, 0, 0, 0, 0, 100) and cost 8x6x x x100 = Outsourcing option too expensive, go for flexible workforce if it can be retained in the long run.

3 ESPO/IAG/POMS 3(6) QUESTION 3 The annual demand for ORBEL triple beer corresponds to 1,352,000 bottles. The weekly demand is 26,000 bottles with a standard deviation of 15,000 bottles. The fixed cost to run a batch is 900 and the lead time from ordering to receipt is six weeks. The annual holding, stocking and obsolescence cost is 0.4 per bottle. ORBEL operates currently a continuous review reorder point system and maintains a 98% service level. TC a) Calculate the optimal order quantity for the ORBEL triple beer. AD Q 2AD * ( Q ) = + h, Q = = Q 2 h b) Calculate the reorder point and the safety stock level for ORBEL. ( L ) = DL + k L = r s, safety stock bottles. C c) MegaBrew suggests that the reorder point system should be replaced by a periodic review system with bi-weekly inspections. The fixed ordering cost is expected to drop to 25 in the new system. Calculate the relevant costs to derive a policy recommendation along with the expected order and average number of outstanding orders. C * ( A, L ) = TC Q ( A) C ( A = 900, L = 6) = ( A = 25, L = ) = = ( ) + hss( L ) 2ADh + hss ( L ) Expected order = bottles, 12 outstanding orders at any given time..

4 ESPO/IAG/POMS 4(6) QUESTION 4 The brewer master at ORBEL faces six jobs A-F to be processed with process times given. All beers pass through the processes in the same order and each process can only handle one job at a time. Once started, the processing of a job cannot be interrupted. Process Order Processtime (h) A B C D E F I Empâtage II Filtration du moût III Ébullition IV Clarification V Fermentation VI Centrifugation VII Garde et clarification VIII Préparation pour lembouteillage IX Embouteillage a) Calculate the optimal schedule through the processes I IX to minimize mean flow time. State flow times for all jobs and the mean flow time. Processes I V and VIII IX are identical for all jobs and do not change the sequence, thus Johnson may be used on processes VI and VII (summation of times do not change the solution). Optimal sequence {A, D, C, F, E,B} flow times {118.5, 192.5, 256.5, 292.5, 325.5, 347.5} h, mean flow time h b) Assume that MegaBrew offers ORBEL five extra tanks for the maturation. Determine the new optimal schedule to minimize flow time and calculate the individual and mean flow times. Process VII no longer limiting, use SPT on VI to obtain {A, D, C, F, E, B}, flow times {118.5, 139.5, 161.5, 167.5, 208.5, 234.5} mean flow time h. c) In this process, would the brewer master be interested in order splitting using smaller transfer batches to improve the flow? Justify your answer. No, a brewery is a continuous process and the flow is regulated by the process. Some process times are volume independent, like boiling and maturation (which is faster, boiling one or three eggs?)

5 ESPO/IAG/POMS 5(6) QUESTION 5 Currently, ORBEL offers retailers delivery from stock of the special beers double and triple and delivery against firm weekly orders for the ale. Due to the variability of the demand for the double and triple fermented beers, the inventory levels are proportionally higher than for the ale. The new company ORBEER has proposed a just-in-time based solution to improve the performance of the process with respect to the double and triple beers. From now, the double- and triple fermented beers will be produced only on order from the succeeding processes and only in demanded quantities. The final inventory level will be equal to one weeks demand. The operators will be actively involved to continuously find solutions as to lower the inventory levels and to improve the quality. In order to ensure the effectiveness of the new JIT approach, the suppliers of hops, malt and bottles will be affected. Since the demand is highly variable, it has been decided to place buffer inventories of malt, hops and bottles to assure that the JIT production on the main line is not disturbed. The distribution function will also adapt its shipping to the JIT policy, which may necessitate smaller and more agile transporters for these beers. A principal flow chart of the affected processes is given as Figure 1. a) Discuss briefly the prerequisites for a successful JIT implementation. See Chase et al. pp b) Based on your general assessment in (a), critically analyze how the proposed JIT process would affect (i) inventory levels, (ii) utilization of process equipment and (iii) operating cost. (i) generally lowered if buffers are decreased, (ii) lowered due to non-optimal process batches, (iii) much higher per item, since processes are run with lower load. Very poor solution, likely to cause serious delays and cost problems. c) For the ORBEL case above, briefly and concisely outline an alternative implementation of JIT to improve the responsiveness of the process that is consistent with your analyses in (a) and (b). Justify all proposals. Reverse the idea, run JIT on e.g. bottling were processes are discrete and the buffer depends on the brewing process. Good information from the brewing, since demand can be exactly planned (we know what to bottle in two weeks), inventories can be completely avoided. Optimize the process and control the suppliers with JIT, gives economies of scale and minimal inventories.

6 ESPO/IAG/POMS 6(6) Lempâtage Leau Le malt Lamidon de grain La filtration Lébullition Les bouteilles La clarification La dépalettisation La fermentation La décaisseuse ZONE JIT La centrifugation La garde La trieuse de bouteilles La laveuse de bouteilles Lembouteillage Linspection de bouteilles La soutireuse, capsuleuse, étiquetteuse Lencaisseuse La palettisation La refermentation La distribution