Revision BUSI 2301 B

Averaging methods

b). Moving average - sample problem Compute a three-period moving average forecast for period 6, given the demand below. 6 ?

b). Moving average - sample problem Compute a three-period moving average forecast for period 6, given the demand below. 6 ? } The 3 most recent demands F6F6 = ( )/3 = 41.33

b). Weighted moving average - problem Compute a four-period weighted moving average forecast for period 6 using a weight of 0.4 for the most recent period, 0.3 for the next most recent, 0.2 for the next, and 0.1 for the next. 6 ?

b). Weighted moving average - problem Compute a four-period weighted moving average forecast for period 6 using a weight of 0.4 for the most recent period, 0.3 for the next most recent, 0.2 for the next, and 0.1 for the next. 6 ? F 6 =.1(40)+.2(43)+.3(40)+.4(41)= 41 Note: Weights must be = 1

b). Exponential smoothing - problem Given the following data prepare a forecast using exponential smoothing with a smoothing constant of Forecast for period 1 is 60.

b). Exponential smoothing - problem Given the following data prepare a forecast using exponential smoothing with a smoothing constant of Forecast for period 1 is 60. F 2 = (65-60)=60+2= 62 F 3 = (55-62)=62-2.8= 59.2 F 4 = ( )= =58.72

I. Accuracy and Control of Forecasts Error - difference between actual value and forecasted value Three measures of errors in forecasts are used: Mean absolute deviation (MAD) The average of absolute value of forecast errors Mean squared error (MSE) The average of square of forecast errors Mean absolute percent error (MAPE) The average of absolute value of forecast error relative to actual Tracking signal Ratio of cumulative error and MAD

B. Measuring capacity Design capacity –maximum obtainable output Effective capacity –Maximum capacity given product mix, scheduling difficulties, and other doses of reality. Actual output –rate of output actually achieved--cannot exceed effective capacity.

Chapter 5 Efficiency and Utilization Calculate Efficiency for rewarding our workers Calculate Utilization for designing better systems in future Or say Efficiency of workers & Utilization of Designed capacity

Design capacity = 50 trucks/day Effective capacity = 40 trucks/day Actual output = 36 units/day Efficiency/Utilization

Make or Buy

MakeBuy Fixed Cost$150,0000 Variable Cost / Unit$60$80 Annual Demand12,000 Find annual cost of each alternative: Total Cost TC = Fixed Cost FC + (Quantity Q x Variable Cost VC Per Unit) TC = FC + (Q x VC) Annual Costs to Make = 150,000 + ( 12,000 x 60 ) = 870,000 Annual Costs to Buy = 0 + ( 12,000 x 80 ) = 960,000 Therefore, Cheaper to make

Break Even Analysis

Break Even Chart Fixed cost Variable cost Total cost line Total revenue line Profit Breakeven point Total cost = Total revenue Volume (units/period) Cost in Dollars Loss

CHAPTER 6: Process Design and Facility Layout

Line Balancing assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit (it can be one task, or more)

Cycle time is the maximum time allowed at each workstation to complete its set of tasks on a unit (it can be one task, or more) e.g. if cycle time is two minutes, one unit will come out at the end of assembly line every two minutes. So if the assembly line works for 8 hours (480 minutes) and we need a desired output rate of 240 per day, we will have a cycle time of 480/240 = 2 minutes

E. Precedence Network Precedence network: A diagram that shows elemental tasks and their precedence requirements A Simple Precedence Diagram a 0.1 min. 0.7 min. 1.0 min. 0.5 min.0.2 min. edc b

E. Sample Problem Arrange tasks shown in the previous slide into workstations. Use a cycle time of 1.0 minute. Assign tasks in order of the most number of followers. Work station Time leftEligibleWill fitAssign task (time) Idle time a,c b,c b a, c c - a (0.1) c (0.7) bdbd b-b- b (1.0) de-de- dede d (0.5) e (0.2)

E. Line Balancing Rules Assign the task with longest time Assign the task with the most followers Some Heuristic (intuitive) Rules:

Efficiency

CHAPTER 8: Location Planning and Analysis

E. Locational Break Even Analysis Fixed and variable costs for four potential locations are given in the table below. LocationFixed Costs ($)Variable Costs ($) A250,00011 B100,00030 C150,00020 D200, Plot the total cost lines on a single graph 2.Identify the range of output over which each alternative is superior 3.If expected output is 10,000 units per year, which location would provide the lowest cost?

E. Solution Annual Output (000) $(000) A B C B Superior C Superior A Superior D

E. Solution

A New Car Washing Facility

A New Coffee Shop Using Composite Score

A New Delivery Point Using Centre of Gravity