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© 2007 Pearson Education Measuring Output Rates Supplement H

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© 2007 Pearson Education Work Standards A work standard is the time required for a trained worker to perform a task following a prescribed method with normal effort and skill. Used in the following ways: Establishing prices and costs. Motivating workers. Comparing alternative process designs. Scheduling. Capacity planning. Performance appraisal.

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© 2007 Pearson Education Methods of Work Measurement The time study method. The elemental standard data approach. The predetermined data approach. The work sampling method.

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© 2007 Pearson Education The Time Study Method Time study is the method used most often. Step 1: Selecting the work elements. Step 2: Timing the elements. Step 3: Determining sample size. Step 4: Setting the standard.

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© 2007 Pearson Education Time Study Method Example H.1 Packaging Coffee Cups

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© 2007 Pearson Education Step 1: Selecting Work Elements Work Element Work Element 1.Get two cartons 2.Put liner in carton 3.Place cups in carton 4.Seal carton and set aside Time Study Method Example H.1

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© 2007 Pearson Education Step 2: Timing the Elements (10 observations) (10 observations) StandardSelect Deviation, Time, t Work Element(minutes)(minutes) Work Element(minutes)(minutes) 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Work element 1 was observed only 5 times because it occurs once every two work cycles. Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size n = [( )( )] z p t 2 StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside n = [( )( )] z p t 2 Desired Confidence (%)z p = 0.04 z = 1.96 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside n = [( )( )] Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside 0.04 t n = [( )( )] 2 Time Study Method Example H.1

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© 2007 Pearson Education Step 3: Determining the Sample Size StandardSelectRequired Deviation, Time, tSample Work Element(minutes)(minutes)Size Work Element(minutes)(minutes)Size 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Use largest n, 58. Time Study Method Example H.1

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© 2007 Pearson Education Step 4: Setting the Standard Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons 2.Put liner in carton 3.Place cups in carton 4.Seal carton and set aside Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Performance rating factor (RF) describes how much above or below the average. Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = t (F )(RF) Determining normal time Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = t (F )(RF) Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = 0.53(0.50)(1.05) = 0.28 minute Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = t (F )(RF) Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = t (F )(RF) Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside NT = t (F )(RF) Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Total2.18 NT = t (F )(RF) NTC = NT Time Study Method Example H.2

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Total2.18 ST = NTC (1 + A ) A = allowance time added to adjust for certain factors adjust for certain factors Determining the standard time Time Study Method Example H.3

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Allowance ( A ) = 15%Total2.18 ST = 2.18 ( ) = 2.51 minutes/carton Time Study Method Example H.3

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Allowance ( A ) = 15%Total2.18 Standard Time2.51 Time Study Method Example H.3

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© 2007 Pearson Education Step 4: Setting the Standard (after 48 additional observations) (after 48 additional observations) Work ElementtFRFNT Work ElementtFRFNT 1.Get two cartons Put liner in carton Place cups in carton Seal carton and set aside Allowance ( A ) = 15%Total2.18 Standard Time minutes/day 2.51 minutes/carton = 191 cartons/day Time Study Method Example H.3

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© 2007 Pearson Education Calculating Select Time Application H.1 Lucy and Ethel have repetitive jobs at the candy factory. Management desires to establish a time standard for this work for which they can be 95% confident to be within ± 6% of the true mean. There are three work elements involved. Step 1: Selecting work elements. #1: Pick up wrapper paper and wrap one piece of candy. #2: Put candy in a box, one at a time. #3: When the box is full (4 pieces), close it and place on conveyor. Step 2: Timing the elements. Select an average trained worker: Lucy will suffice. * Lucy had some rare and unusual difficulties; don't use this observation.

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© 2007 Pearson Education Determining Sample Size Application H.1 p = 0.06 z = 1.96

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© 2007 Pearson Education Setting the Standard Application H.1 Determining Normal Time NTC = NT = = 0.27 minutes A = 18.5% ST = NTC(1 + A) = 0.27( ) = 0.32 minutes

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© 2007 Pearson Education Data Approaches The elemental data approach is a type of data used by analysts to derive standards when a high degree of similarity exists in the work elements. The predetermined data approach eliminates the need for time studies. Step 1: Break each work element into its basic micromotions: reach, move, disengage, apply pressure, grasp, position, release, and turn. Step 2: Find the tabular value accounting for factors such as weight, distance, size of object, degree of difficulty, for each micromotion. Step 3: Add the NT for each motion to get the NT for the job. Step 4: Adjust the normal time for allowances to give ST. Methods time measurement (MTM) is the most commonly used system.

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© 2007 Pearson Education MTM Predetermined Data Time TMU Wt. Allowance DistanceHand inStatic MovedMotionWt. (lb)DynamicConstant (in.)ABCBUp toFactor(TMU) 3/4 or less

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© 2007 Pearson Education MTM Predetermined Data Time TMU Wt. Allowance DistanceHand inStatic MovedMotionWt. (lb)DynamicConstant (in.)ABCBUp toFactor(TMU) 3/4 or less Case and Description AMove object to other hand or against stop. BMove object to approximate or indefinite location. CMove object to exact location.

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© 2007 Pearson Education The Work Sampling Method Work sampling is the process of estimating the proportions of the time spent by people and machines on activities, based on a large number of observations. Step 1: Define the activities. Step 2: Design the observation form. Step 3: Determine the length of the study. Step 4: Determine the initial sample size. Step 5: Select random observation times. Step 6: Determine the observer schedule. Step 7: Observe the activities and record the data. Step 8: Decide whether additional sampling is required.

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© 2007 Pearson Education Work Sampling Example H.4 Nurses Accessing Records

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© 2007 Pearson Education Determining the Sample Size Confidence interval Probability that true proportion will fall within confidence interval p – e ^ p + e ^ p ^ e = z p (1 – p ) n ^ ^ Work Sampling Example H.4

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© 2007 Pearson Education Determining the Sample Size Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% n = p (1 – p ) ^ ^ z 2 e Work Sampling Example H.4

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© 2007 Pearson Education Determining the Sample Size Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% n = (0.20)(0.80) Work Sampling Example H.4

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© 2007 Pearson Education Determining the Sample Size Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% n = 683 observations of RNs Work Sampling Example H.4

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© 2007 Pearson Education Determining the Sample Size Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% n = 683 observations of RNs n = 203 observations of LVNs Work Sampling Example H.4

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© 2007 Pearson Education Recording the Observations Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Recording the Observations Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN |||||||| |||| Work Sampling Example H.4

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© 2007 Pearson Education Recording the Observations Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Determining Actual Proportions Determining Actual Proportions Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = Actual proportion for LVNs = Work Sampling Example H.4

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© 2007 Pearson Education Determining Actual Proportions Determining Actual Proportions Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 124 / 688 Actual proportion for LVNs = Work Sampling Example H.4

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© 2007 Pearson Education Determining Actual Proportions Determining Actual Proportions Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 124 / 688 Actual proportion for LVNs = 28 / 344 Work Sampling Example H.4

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© 2007 Pearson Education Determining Actual Proportions Determining Actual Proportions Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 0.18 Actual proportion for LVNs = 0.08 Work Sampling Example H.4

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© 2007 Pearson Education Verifying Sample Sizes Verifying Sample Sizes Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 0.18 Actual proportion for LVNs = 0.08 Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Work Sampling Example H.4

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© 2007 Pearson Education Verifying Sample Sizes Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 0.18 Actual proportion for LVNs = 0.08 Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Work Sampling Example H.4

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© 2007 Pearson Education Verifying Sample Sizes Verifying Sample Sizes Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Actual proportion for RNs = 0.18 Actual proportion for LVNs = 0.08 Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Use the Results—Automate? Use the Results—Automate? Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Use the Results—Automate? Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Net savings = 0.25[($3,628,000)(0.18) + ($2,375,000)(0.08)] – $150,000 WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Use the Results—Automate? Use the Results—Automate? Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Net savings = $60,760 WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Use the Results - Automate? Use the Results - Automate? Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Net savings = $60,760 Net savings = 0.25[($3,628,000)(0.15) + ($2,375,000)(0.05)] – $150,000 WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Use the Results—Automate? Use the Results—Automate? Activity AccessingAttending toOther supportIdle orTotal recordspatientsactivitiesbreakobservations RN LVN Time spent accessing records RN0.20 LVN0.05 Maximum error±0.03 Confidence level95% Net savings = $60,760 Net savings = $15,737 WORKTOTALACTIVITYPROPORTION CONFIDENCE INTERVALREQUIRED GROUPOBS.OBS.OF TOTALLOWERUPPERSAMPLE SIZE RN LVN Work Sampling Example H.4

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© 2007 Pearson Education Work Sampling Method Application H.2 Major League Baseball (MLB) is concerned about excessive game duration. Batters now spend a lot of time between pitches when they leave the box to check signals with coaches, and then go through a lengthy routine including stretching and a variety of other actions. Pitching routines are similarly elaborate. In order to speed up the game, it has been proposed to prohibit batters from leaving the box and prohibit pitchers from leaving the mound after called balls and strikes. MLB estimates the proportion of time spent in these delays to be 20% of the total game time. Before they institute a rules change, MLB would like to be 95% confident that the result of a study will show a proportion of time wasted that is accurate within ±4% of the true proportion.

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© 2007 Pearson Education Observation Form for MLB Application H.2

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© 2007 Pearson Education Recorded Data for MLB Application H

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© 2007 Pearson Education Sample Size for MLB Application H.2 (0.12)(1 – 0.12)

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© 2007 Pearson Education Managerial Considerations Total quality management These techniques can be used in the spirit of continuous improvement (provided management earns cooperation of labor). Increased automation There is less need to observe and rate worker performance, because work is machine paced. Work sampling may be electronically monitored.

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© 2007 Pearson Education Solved Problem 1 Health Insurance Claims Selecting Work Elements Selecting Work Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t r t r t r

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t r t r t r Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t r t r t r t = 0.50 – 0.00 Finding the observed time Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t0.50 r t r t r t r t = 0.50 Finding the observed time Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t0.50 r t r t r t r t = 0.70 – 0.50 Finding the observed time Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t0.50 r t0.20 r t0.75 r t1.30 r Finding the observed time Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Timing the Elements Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t0.50 r t0.20 r t0.75 r t1.30 r t = 3.30 – 2.75 Finding the observed time Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t0.20 r t0.75 r t1.30 r Timing the Elements Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t r t r t r Timing the Elements Solved Problem 1 Health Insurance Claims

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© 2007 Pearson Education Operation: Insurance claim processing Date: 10/07 Observer: Jennifer Johnson Work Element 1.Check form completion and signatures 2.Enter claim amounts, check math 3.Determine proportion of claim to be disallowed 4.Generate form letter, enter data for check Observations 12345tRF t r t r t r t r Timing the Elements Solved Problem 1 Health Insurance Claims

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