CAR WASH OPERATION MANAGEMENT

SIMULATION
Trinath Ojha
Id: 18020347
Operations management: Operations management is the administration of business
practices to create the highest level of efficiency possible within an organization.

Operations management is concerned with converting materials and labour into goods and
services as efficiently as possible.

Any operations manager tries to balance costs with revenue to maximize net operating profit.
Capacity utilization: Capacity may be classified in many ways such as budgeted,
dedicated, productive, protective, rated, safety, standing, and demonstrated. Mainly, the
classification of capacity is talked in terms of:
 Designed or rated capacity
 Planned capacity
 Demonstrated capacity
Capacity utilization is the extent to which a car wash enterprise uses its installed
productive capacity. It is the relationship between output that is produced with the installed
equipment, and the potential output which could be produced with it, if capacity was fully
used.
It may be expressed as Actual output (demonstrated capacity) divided by the Maximum
possible output (designed or, rated capacity).
For example, if the capacity of car wash enterprise is 20 cars per day but it only achieved 15
cars per day, then the capacity utilization is .75(15/20) or, 75%.

Cycle time: Is the average time between completion of successive units; expressed
as time/unit (e.g., a vehicle exits the car wash every four minutes)
 When the amount of output units required per period (period may be hour, shift, day or week
etc.) is specified and the available time per period is given (i.e., the number of working hours
per shift, number of shifts per day, number of working days per week etc.) then,

𝐀𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐭𝐢𝐦𝐞 𝐩𝐞𝐫 𝐩𝐞𝐫𝐢𝐨𝐝

Cycle time =
𝐀𝐯𝐚𝐢𝐥𝐚𝐛𝐛𝐥𝐞 𝐭𝐢𝐦𝐞 𝐩𝐞𝐫𝐢𝐨𝐝
Cycle time is the time interval at which completed products leave the process line.
Throughput Rate: Is the average number of units processed per time unit; expressed
as units/time (e.g., the vacuum station can process 20 cars/hour)
Throughput rate is determined by the bottle neck in the system.
In a process, a bottleneck describes what happens when the demand being placed on a
resource exceeds its capacity. Operations in which capacity is greater than demand is
considered non-bottleneck.

Throughput Time: Is the average time a unit spends in the system (including all
waiting times); expressed as time (e.g., every car spends 15 minutes inside the
car wash)
Little’s Law: Little’s law was named after the American professor John Little (1950s). It
defines the relationship between the inventory, the flow rate and the flow time.
 Inventory: number of flow units in the process (units)
 Flow rate: rate at which flow units are being processed (units/time unit)
 Flow time: time a single flow unit spends in the process (time unit)

Little’s law: inventory (I) = flow rate (λ) X flow time (w)

Little’s law is important, because it can help us calculate one of the three variables. Once two
of the variables are known, the third one is set by the law. This also means that, form the
standpoint of an executive, two variables can be picked by management while the third one
then falls into place.
Car wash:

Receive Interior Apply Exterior Wipe Receive Deliver

the car cleaning prewash wash water money the car
Scenario 1:
let’s assume the arrival rate is fixed and of 8 car per hour and three major functions, i.e. interior
cleaning, exterior wash and wipe water and their respective activity time are 10 minutes, 16
minutes and 6 minutes and all jobs are done manually.

Table 1
Profit(=F
Number *(revenu
Resource Activity Capacity Utilisatio
of Flow rate e-
/Activity Time =(60/C)*D n %(=F/E)
workers expenses
)
1 10 2 12 8 66.67
2 16 4 15 8 53.33 1600
3 6 1 10 8 80.00

So, utilisation of resource/ activity 1, 2 and 3 are 66.67%, 53.33% and 80.00%.

The process capacity is constrained by the capacity of bottle neck. Since the capacity of bottle
neck is 10 units per hour, the capacity of process is also 10 units per hour and as the flow rate
is 8 units per hour so, there is no bottle neck in the system.

If the expense per car for washing is 100 and the manager charges 300 per car then the profit
will be 1600 per hour and taking 8 hours operation per day total profit per day will be Rs-
12800.

Scenario 2:

Variable flow rate: let cars arrive at variable rate of 5 to 15per hour, then both activity 1 and 3
will be bottle neck. If the bottle neck is not removed cars will be in que for washing and some
customers may go to the competitors. To eliminate the bottle neck let the manager employed a
new resource i.e. a vacuum cleaner at the cost of 50000 and an extra labour for wiping of water.
The cost of washing will increase to 150, due to extra capital investment and labour.

The four hors profit will be 5500 as attached sheet.

Receive Clean Apply Clean Polish Receive Deliver

car interior prewash exterior car cash car
 1 8 2 15 15 100.00
2 16 4 15 15 100.00 2250
3 6 2 20 15 75.00
Comparision

Hour-1 Hour-2 Hour-3 Hour-4 Total

Profit
without
extra
investme
nt 1000 1400 2000 2000 6400
Profit
with
extra
investme
nt 750 1050 1500 2250 5550

If we compare the Scenario-1 and 2 wil find the investment of vacuum cleaner and an extra
manual water wiper is not a wise decision as the total profit will decrease from 6400 to 5550.