NATURAL BLENDS

Group AB2 Ajith S Nath 13503 Komal Jalan 13523 Payal Singh 13533 Simran Malani 13545 Varun Chhabra - 13557

CASE OVERVIEW
Capacity Extraction: 20,000 pounds/hour Filtration: 20,000 pounds/hour Concentration: 18,000 pounds/hour

Cycle time Extraction: 20,000 pounds/hour + 10,000 pounds/30 minutes Filtration: 20,000 pounds/hour + 10,000 pounds/30 minutes Concentration: 18,000 pounds/hour + 9,000 pounds/30 minutes

Q1(A) HOW MUCH ORANGE JUICE CONCENTRATE CAN BE PRODUCED IN ONE 8-HOUR WORKDAY?
Cycle time: 2 hours Bottleneck at concentration: Extraction: 30,000 pounds/2 hours Filtration: 30,000 pounds/2 hours Concentration: 27,000 pounds/2 hours 13,500 pounds/hour So, 13500 pounds/ hours * 8 hours= 1,08,000 pounds

Q1(B) ASSUME EXTRACTION HAD PREVIOUSLY BEEN SETUP FOR THE SIZE ORANGES BEING PROCESSED. HOW MUCH IDLE TIME WILL THERE BE IN THE EXTRACTION OPERATION DURING ONE 8-HOUR WORKDAY?
Process 2 (extraction) should wait and follow the operation time of Process 3 since it should be shutting down for 30min for filter change after operate 90min. Then during 8hr, process 2 have 4 idle times (=8hrs/2hrs) Idle time =4 x 30min = 120min / 2hrs

Q2(A) IF YOU COULD ADD STORAGE CAPACITY SOMEWHERE BETWEEN STEPS TWO AND FOUR IN THIS PRODUCTION LINE IN ORDER TO INCREASE DAILY OUTPUT, WHERE WOULD YOU PLACE IT? HOW MUCH STORAGE WOULD YOU ADD?
We will put 1 storage between process 3 (filtration) and process 4 (concentration) with capacity 3000lbs to accommodate the output from process 3 since the production time and speed is not the same between process 3 and 4

Q2(B) WHY ?
Process 3 after operate for 90min, it can produce 30,000 lbs of orange juice (20,000 lbs/hr) But, the process 4 only have production capacity 18,000 lbs/hr and for 90min operation it only can proceed 27,000 lbs Meanwhile the total output from process 3 are 30,000 lbs So, in order to produce more output we can add storage capacity between process 3 & 4.

Q3 A IF THE COST OF ADDING STORAGE WAS 30$/POUND AND THE COST OF REDUCING SETUP TIME BY 50% USING ADDITIONAL FIXTURES WAS $20000 FOR THE FILTER PROCESS AND $ 10000 FOR THE EXTRACTION PROCESS , WHAT ACTION WOULD YOU RECOMMEND IN ORDER TO MAXIMISE THIS OUTPUT OF THE PRODUCTION LINE? Step 2: Extraction Operation: 6 hours Setup: 2 hours Total production: 20,000*6=1,20,000 pounds in 8 hours Average= 15,000 pounds/hour

Step 3: Filtration Operation: 6 hours Setup: 2 hours Total production: 20,000*6=1,20,000 pounds in 8 hours Average= 15,000 pounds/hour

Step 4: Concentration Operation: 8 hours Production: 8*18,000 pounds= 1,44,000 pounds Average: 18,000 pounds/hour

Q3(B)
Add storage capacity in step 2 & step 3 because they are bottleneck, So, we can add storage capacity of 1,44,000-1,20,000=24,000 pounds

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Reducing setup time means additional hour can be used for production. (50% of setup time (2 hours)= 1 hour) So, Increased production capacity for filtration and extraction: 20,000 pounds Cost of additional capacity (step 2): 20,000*30 + 10,000=6,10,000 $ Cost of additional capacity (step 3): 20,000*30 + 20,000=6,20,000 $

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So, 20,000 pounds more can be produced if setup time is decreased by 50% If we dont consider bottleneck, reducing setup time for step 2 should be recommended, because it processes same pounds at step 3 does but It costs less. Else we have to carry out both step 2 and step 3.

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Q4(A) HOW OFTEN DURING 8-HOUR WORKDAY WOULD YOU HAVE A SETUP CHANGE IN THE EXTRACTION PROCESS ?
Minimum: 2 times of switch Maximum: 6 times 1,20,000/20,000= 6 times 8-6=2 hours 2 hours/ 20 minutes setup time= 6 times

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AVERAGE CAPACITY FOR FILTRATION

Action
Filtering Shut down time Total Capacity

Time
90mins 30 120mins

Production
20000 x 1.5 0 30000 15000/hr
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AVERAGE CAPACITY FOR JUICE CONCENTRATION AND EXTRACTION

Average capacity for juice concentration is 18000 pounds per hour. Average capacity of extraction is a direct function of the number of setups per day done.

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SETTING UP EXTRACTION
To extract all three types of oranges, the minimum number of setup needed is two times a day. The maximum number of setups possible is 6 times a day.

The maximum number of setups is arrived with the assumption that the extraction process can run in cycles of one hour each.

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SETTING UP SIX TIMES A DAY

Particulars
Number of extraction runs per orange Production per orange Total extraction runs Total production

Per day
2 40,000 pounds 6 120,000 pounds

Per week
12 240000 pounds 36 720,000 pounds

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PROFIT CALCULATIONS PER CONTRACT

Contract Number of Quantity orders of orders 24 18 15 10 8000 16000 24000 18000 Contributi Time per on per order pound 0.03 0.028 0.026 0.024 61.6 83.8 105.4 89.2 Total time for contract 1478.4 1508.4 1581 892 Total volume in pounds 192000 288000 360000 180000 Total profit 5760 8064 9360 4320

A B C D

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PROFIT PER TIME FOR EACH CONTRACT

Contract

Total time in Total profit mins

Profit per time

A B C D

1478.4 1508.4 1581 892

5760 8064 9360 4320

3.896104 5.346062 5.920304 4.843049

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WHAT TO MANUFACTURE?
Why cant B and C be produced together.

Time required in minutes

Total time in hours

Total setup time required Total quantity Total hours per week required

(18+15)x 40 16000 x 18 + 24000 x 15 = 388800

22 30 52

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WHAT TO MANUFACTURE ?

Contracts C and D should be manufactured. The total profit from the two contracts will be 13680.

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TIME TAKEN FOR BLENDING CONTRACT A

Time consumed in blending operation is a function of set up time and production time.

Rate Set up Production Total 40 mins / set up 22000 pounds/ hr

Total time 40 mins 21.6 mins 61.6 mins

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