ECO Test Yourself

In synchronous scheduling we try to get everything working at the same pace. As the bottleneck dictates the pace, the answer is 1

Total planned input = 725; planned output = 720. Therefore the queue is planned to increase by 5. If the planned ending queue is 150, then the planned opening queue is 145.

As plans have to be based on reality – we can only start from where we are – then the planned queue at the beginning and the actual queue at the beginning are identical. The Actual opening queue therefore is 145

The best answer in this case is 2. In a job shop, up to 80% of the lead-time is inter-operation time, of which queue time accounts for the greatest amount. Prioritizing the job through the queues in the various work centers will probably enable the job to finish on time even if started late. If that does not work, we still have the overtime option to add on to try to get it finished on time

Option 1 is untrue because not only they are used in setting the budget, they are also used as a standard against which to review actual performance.

2 is untrue; they are updated at predefined times, and differences between standard and actual are reported as variances – a measure of operational performance.

3 is untrue – they can be used in all environments.

4 is true – in setting the standard we will use the BOM and purchase costs to identify the material content of the standard cost, and the routing to identify the amount of work required to make a product so that labour costs can be calculated

Backflushing depletes stock, using the information contained in the bill of material, when a works order is complete. Reporting the completion of the job also demands that scrap is reported – e.g. if 49 units are reported complete on a job for 50 in which 1 unit was scrapped, we must report both the completion of the 49 and the scrapping of the 1. As this is done at the completion of the job, reporting of job progress (option 4) does not affect the backflushing. The answer is 4

WIP inventory is a function of manufacturing lead time. To reduce WIP inventory therefore we must reduce lead-time. The major element of lead-time is queue time, so the most effective way to reduce the inventory is to reduce the queue. Each of the others will also reduce lead time, but typically not by as much as reducing the queue. The answer is 4

While supplier partnering may reduce prices through lowering costs, the primary benefit is in the use of he supplier’s expertise and involvement in new product introduction thus reducing time to market. The answer is 3

All of these contribute to quality, so the best answer is 4. While I and IV are obvious, investing time in increasing quality awareness and building quality skills in employees will result in improved quality and BOM accuracy contributes to information quality and a reduction in problems arising from poor quality information

As inventory is a financial asset, increasing its value will impact on the balance sheet. The increased value will also be reported as a profit, so I and II are true. Unless the increased value results in higher prices for purchases or sales, it will not directly impact on cash flow, so IV is false. Regardless of how we value the inventory, the inventory levels will not be affected, we will still have the same levels as before,so III is false

Assuming lot for lot, then all material movement will be dictated by the pace of the bottleneck process, which in this case is frame manufacture and assembly that can only produce 400 per day. So, even though we have the capacity to assemble 450 bicycles per day, we can do only 400 as that is all of the frames that we will have. Therefore we will need only 400 sets of wheels. The answer is 2

An increase in labour productivity means that more output per hour at work is being produced.  This means that here will be a corresponding reduction in the labour cost per unit, so 1 is false and 3 is true. 2 is false because the increase can arise from increased utilization as well as increased efficiency. 4 is false because productivity increases are not necessarily limited to direct employees – indirect employees can also increase their productivity. The best answer is 3

This is an example of 4 – the workcenter is taking responsibility for the quality of its own output

Shutting down a process on detection of a problem so that the problem does not result in further defects is called Autonomation

Work cells imitate repetitive manufacturing. In this regard setup times are reduced, quality is improved and the simpler planning and control reduce overhead costs. Machine downtime is not not necessarily reduced, as machines will only be used as they are needed for the products to which they have been dedicated in the cell

In three of the above scenarios input is received from only one “feeder” source, the ability to plan input is less difficult than in the fourth. These three are:

1 and 3: The gateway work centres – the workstation where production commences.

4: Mass production downstream – on a production line all material flows in a standard route.

In mass production, also, output is much more easy to plan as output is usually measured in units per time period, whereas in a job shop environment output has to be converted into some common unit of measure – usually standard hours.

The answer therefore is 2, where work will arrive from a multitude of workcenters depending on the routing of the products being manufactured, and input and output has to be converted into the standard unit of measure

Rescheduling the start of an order does not necessarily mean that the completion also has to be rescheduled. We should be attempting to maintaining customer service by achieving on-time completion. A late start therefore can be compensated for by reducing the lead-time. This can be achieved by splitting the batch – thus reducing the run-time – or by overlapping operations – having different elements of the work being done in parallel rather than sequentially. The answer therefore is 2

If the leadtime is extending it invariably means that queues are extending. The surest way to reduce queues is to delay the entry new work to the queues and to speed up the completion of work towards the end of the queue.

To delay the entry of new work we would decrease the MPR planned lead-time. This will delay the planned order release dates, so the answer must be 3 or 4.

To speed up the completion of work, it is best to start by clearing out the queues at the ending workcenters so that work can be pulled through more quickly. (Just as in a busy supermarket queues are reduced by opening more checkout stations.) In addition, the reduction of the workload in the gateway work centres will be achieved by delaying the issuing of new work. The best answer therefore is 4

Since nothing happens “always” (and nothing happens “never”) options 2 and 4 must be false – and anyway schedules can be generated from either the start date (forward) or end date (backward).

Scheduling techniques primarily PLAN the work – and as planning is part of managing statement 3 is partially true.

Analysis of performance must be against some yardstick or objective. The scheduling techniques give us a plan against which performance can be measured – so statement 1 is true and is the best answer

Flow production operates on the basis of FIFO – what is started is processed, and the process follows an unchangeable sequence of operations. Consequently dispatching does not come into play except at the very start of the process.

It does require immediate attention to problems, as a problem may bring the entire process to a halt; scheduling only is required at the start of the process because of the reasons above, and conformance to plan is by relating actual input and output rates (gallons, litres, tons,) to the planned rates.

The best answer is 1

Total Load = open orders + planned orders = 90 + 20 = 110

Total capacity = hours per week x no. of weeks = 20 x 4 = 80.

Queue = Load – capacity = 110 – 80 = 30.

The answer is 3

Labour productivity relates to output, efficiency and utilisation.

2 is output; 3 affects utilisation and 4 is used to calculate efficiency. Pieces input, in a job shop, refers to the rate at which work merely arrives to be processed, therefore it is not a measure of labour productivity. In repetitive manufacturing, the difference between pieces input and pieces output is scrap, which is a measure of process or material productivity, not necessarily labour productivity.

The answer is 1

Statement I is true; with a steady predictable flow of work the less work will be needed in the queue.

Statement II is false; load is based on the accumulation of planned and open orders. Extending leadtime merely transfers data from planned to open.

Statement III is false; when lead times are growing queues grow. To reduce queues, delaying the issuing of extra work into the queue is accomplished by reducing the planned lead time and consequently delaying the planned release dates. With the shorter queues, work will flow more quickly.

Therefore the answer is 1, as both II and III are not correct statements

A good planning and control system consists of 4 steps:

1.Create a plan (PLAN)

2.Execute the plan (DO)

3.Monitor performance against the plan (CHECK)

4.Apply the appropriate corrective actions (CORRECT).

In any normal environment, step 4 will be required as a result of the other steps. The best answer therefore is 4, which is the corrective action.

Dispatch lists are means of communicating priorities, including changes.

No plan, however good, can guarantee material availability.

3 is a contradiction of 4, and reschedules can be needed for a whole series of different reasons – including changes in customer needs

In a JIT or TQM environment – where quality and service is defined as meeting or exceeding the customer needs – we need employees who can create improvements without increasing costs. For this, the ability to identify and resolve problems is a key attribute. The answer therefore is 4. (Each of the others will merely create a performance level in relation to production costs, but ignore the other two major objectives of increasing customer service and reducing inventory investment)

Each of the above options I, II, III and IV are elements that may be contained in long-term supplier agreements, so the answer is 4

Four –wall inventory control does not recognize specific locations for material within the plant, so the number of transactions to be processed will reduce and material usage – and consequently available inventory status – will be recorded by backflushing. ABC analysis is based upon annual usage, regardless of whether or not we are using a four-wall process, and likewise cycle counting will increase accuracy again regardless of whether or not we are using the four-wall process. The best answer therefore is 4

High levels of material accuracy would reduce the need for safety stock, reduce the incidence of surprise material shortages and increase output by eliminating the disruptions caused by shortages on the factory floor. Batch quantities, however, can only be reduced by reducing the fixed cost of ordering – set-up cost for manufactured parts

Option I is a good choice, as it gives each work-cell the opportunity to operate on the products that it needs to produce regardless of the actions in each other cell. Option II is a good choice as it will enable set-up reduction, those reducing inventory and increasing flexibility. Option III is not a good choice as tooling may be unavailable when needed – through non-return or in use elsewhere – and it adds time and movement to the process as the tooling will need to be requisitioned, issued and returned. The best answer therefore is 2

If the release of an order is delayed for any reason, that order can still be completed on schedule through either job splitting – expediting through making less than the originally planned quantity – or operations overlapping – an expediting technique that allows time to be saved by moving part of the order forward to the next work-center while the remainder is still being processed.

Changing the due date is an acknowledgement that nothing can be done to get the order back on schedule, which may result in the need to inform the customer. However, the best answer is II and III because the rescheduling involved in these steps will minimize the effect on the customer through getting the order finished on time

CRP and MRP both use backward scheduling. Operation by operation scheduling for normal scheduling of work through a factory backdates all activity from the scheduled completion date, again backwards scheduling. However, for delivery date estimations scheduling commences from “today” and looks forward at the activities that have to be carried out before the delivery can be made. Therefore option II is forward scheduling, each of the other three is backward scheduling. The answer is 3