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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-1 Operations Management Work Measurement Supplement 10

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-2 Outline Labor Standards and Work Measurement Historical Experience Time-Studies Predetermined Time Standards Work Sampling

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-3 Learning Objectives When you complete this supplement, you should be able to : Identify or Define : Four ways of establishing labor standards Describe or Explain : Requirements for good labor standards Time study Predetermined time standards Work sampling

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-4 Costing labor content of products Planning staffing needs Estimating time and cost for bids Planning production (crew size and work balance) Basing wage-incentive plans Determining employee efficiency Uses of Labor Standards

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-5 Historical experience Time studies Predetermined time standards (MTM) Work sampling © 1995 Corel Corp. Sources of Labor Standards

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-6 Labor standards are based on observing worker doing task Observe only a sample of work Use average time & pace to set standard Disadvantages Requires a trained & experienced analyst Standard cannot be set before task is performed Time Studies

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-7 The Eight Steps to Conducting a Time Study Define the task to be studied (after a methods analysis) Break down the task into precise elements Decide how many times each element of the task must be measured Record the times and ratings of performance for the task elements Compute the average observed cycle time (element times adjusted for unusual influences)

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-8 Compute the normal time for each task element: Normal time = (Average actual cycle time) x (Rating factor) Sum the normal times for each element to develop a total normal time for the task Compute the standard time: The Eight Steps to Conducting a Time Study - continued Standard time = Total normal time 1- Allowance factor

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-9 Allowances Personal time allowance - 4% - 7% of total time - use of restroom, water fountain, etc. Delay allowance - based upon actual delays that occur Fatigue allowance - to compensate for physical or mental strain, noise level, tediousness, heat and humidity, assumption of an abnormal position, etc.

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-10 Time Studies - Sample Size h = accuracy level desired as percent of job element, expressed as a decimal (5% = 0.05) z = number of standard deviations required for the desired level of confidence s = standard deviation of the initial sample x = mean of the initial sample

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-11 Considerations in Determining Sample Size How accurate do you want to be? What level of confidence do you want your measurements to have? How much variation exists within the job elements?

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-12 Common z values

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-13 Allowance factor Nonwork time Total time Average element time Element times Number of cycles Normal timeAverage element time * Perf. Rating Standard time Total normal time 1 - Allowance factor = = = = Time Study Equations

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-14 Labor standards are set from times in published tables (e.g., MTM Table) Procedure Divide manual work into basic elements Look up basic element times in table; sum Advantages Times established in laboratory setting Useful for planning tasks Widely accepted by unions Predetermined Time Standards

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-15 Time TMU Hand in Motion Distance Moved (in) ABCAB 3/4 or less 2.0 1.6 12.5 3.62.3 24.0 5.93.52.7 A Reach to object in fixed location. B Reach to object in variable locations. C Reach to object jumbled with others. 1 TMU =.0006 minutes MTM Table for Reach Motion

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-16 Sample MTM Table for GET and PLACE Motions

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-17 Labor standard is set using output and % of time worker spends on tasks Involves observing worker at random times over a long period Advantages Less expensive than time studies Observer requires little training Disadvantages Ineffective with short cycles Work Sampling

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-18 Used for Ratio delay studies Setting labor standards Measuring worker performance Work Sampling

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-19 The Seven Step Work Sampling Procedure Take a preliminary sample to obtain an estimate of the parameter value Compute the sample size required Prepare a schedule for observing the worker at appropriate times Observe and record worker activities; rate worker performance

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-20 The Seven Step Work Sampling Procedure - continued Work Sampling Procedure - continued Record the number of units produced during the applicable portion of the study Compute the normal time per part Compute the standard time per part

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-21 Work Sampling - Sample Size p = estimated value of sample proportion (of time worker is observed busy or idle) h = accuracy level desired in percent, expressed as a decimal

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-22 Normal Time = (Total Time) (% of time working) (Rating) Number of units Produced Standard Time = Normal Time 1 - Allowance Work Sampling Equations

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PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 S10-23 Figure S10.3

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