whether there is sufficient production volume to justify an automation investment, it is important to consider the current and proposed methods’ fixed and variable manufacturing costs. Fixed costs are independent of production quantity; variable costs, on the other hand, are dependent on the quantity. A production volume breakeven point analysis calculates the volume that justifies automation. The quantity breakeven point of two methods is found by setting the total annual cost equations equal and solving for quantity (Q), at which the manual and automated methods cost the same. In general, when product volumes are low, manual methods are more cost effective. As production volumes increase the advantage goes to automated methods.
The USA automation strategy directs us to understand an existing process, to simplify it, and if it is called for, to automate it. Using USA in conjunction with productivity analysis greatly enhances the probability of a successful automation project.
actual processing time
availability
average production time
batch processing time
bottleneck station
capital expenditure
combined productivity
fixed costs
manufacturing lead-time
operational cycle time
partial productivity
production capacity
production rate
productivity
productivity index
quantify
quantity breakeven point
tool handling time
USA principle
utilization
variable costs
workpiece handling time
1. How can productivity calculations aid in identifying, evaluating, and justifying automation?
2. Explain the difference between partial and combined productivity.
3. A manufacturing process can produce 640 parts/hr. The process requires three laborers each earning $26/hr. What is the labor partial productivity of the process?
4. The manufacturing process described in review question 3 uses a machine that has a capital cost of $95/hr. The machine operates on 150 kW of power. Cost of electricity energy is $0.057/kWh. The machine processes 215 lb material/hr. The material costs $0.85/lb. Using the labor input costs determined in Example 2.1, calculate the combined productivity of the process.
5. The following table lists the steps for a machining process. The listed times are required to load, unload, and process one part. Calculate the operational cycle time (tc) and production rate (Rp).
6) An injection molding machine processes a 24-cavity mold in 1.3 min/cycle. The parts are automatically ejected from the mold and travel by conveyor to the next process. After every 500 cycles the mold is cleaned and sprayed with mold release. This takes 8 min to complete. Calculate the operational cycle time (tc) and production rate (Rpq).
7) Calculate the cycle rate (Rc) of the flow-line manufacturing system shown in Figure 2-11, assuming the transfer rate is 5 sec/part and the processing time for each work station is as shown in table below.
Figure 2-11 Flow-line manufacturing system
8) Calculate the monthly production capacity (Pc) of a product made by the injection molding process described in review question 6. Assume the plant uses 8 injection molding machines and molds to produce the part. Also, assume the plant operates in three 8-hour shifts per day, 5 days per week. How could the plant increase production capacity in the short term? In the long term?
9) A manufacturing system has a theoretical production capacity of 500,000 parts/ month. Typical use of the system is 97% and availability is 99%. What is the anticipated actual monthly production of the system?
10) A part is routed through 6 machines in lot sizes of 300 parts/batch. Average non-operation time is 5 hr. Setup and operational cycle times are shown in the table below. Calculate the manufacturing lead-time for the part.
11) An automated work cell is being considered to replace an existing process. The cell will cost $350,000 to purchase and is anticipated to have a 7-year service life. The machine will operate for 2080 hr/yr. Also, consider that the company spent $4,600,000 on factory overhead and $8,250,000 on direct labor costs the preceding year. If the manufacturing firm desires a 10% return on its investment, estimate the hourly capital cost to operate the new automated work cell.
12) A manufacturing firm utilizes a manual machine to make a product. The production rate is 125 parts/hr. This current method uses three operators at a labor wage rate of $18/hr. The manual machine’s capital operation cost (including cost of electricity) is $34/hr. The firm is considering replacing the manual machine with a programmable automation work cell. The new cell only requires one operator, but it has a capital cost (including cost of electricity) of $95/hr. The production rate of the machine is 225 parts/hr. Perform a combined productivity analysis to determine if the firm should purchase the automated work cell.
13) Referring to the manual manufacturing method information given in review question 12, calculate the total annual cost to produce 100,000 parts per year. Note that the annual cost of maintenance for the machine is $16,000. Additionally, the raw material cost is $2.50 per part.
14) A new automated method is being developed to replace the manual method described in review questions 12 and 13. The new method has a production rate of 245 parts/hr, requires only one operator, and has a capital cost of $65.50/hour. Additionally, the new method decreases material waste, thereby reducing raw material costs to $1.00/ part. Because of machine sophistication, yearly maintenance costs will increase to $26,000 per year. Perform a productivity analysis to compare the two alternatives if annual production is 100,000 parts/yr. Is the proposed method more productive? Calculate the quantity breakeven point. What is total annual cost savings if the proposed method is used?
1. Groover, M.P. (2001). Automation, Production Systems and Computer-Integrated Manufacturing, 2nd ed. Prentice Hall, Upper Saddle
