Friday, June 24, 2016

Brexit Vote and what you need to do now in this volatile market

United Kingdom voted on June 23 to exit  European Union that sent tremors and shock waves to the world.US economy is also impacted by this , stocks are down , currency exchanges rates are swinging . How do you play this market volatility. All the bank stocks are down, do you think this is the right time and fill your buckets?. Maybe when everyone fears you be smart but at lows..I am sure these stocks will stabilize and go high. The real unknown is what is the future of the other countries in the European Union , what will you do now if you have an equity in those countries ?. My analysis will follow soon stay tuned

Thursday, June 23, 2016

Executive case study solutions with answers explained continued

Page 3 of 3
IIITheoretical cycle time for process =0.50min./shirt          <<  MAX. CT of all the processes above
Daily Capacity =480/0.50960.00shirts/day
Actual Daly prod.=16000/20800shirts/day
Actual Cycle time ==20*8*60/160000.6min/shirt
Type of OperationNumber of WorkersNumber of MachinesAverage WIP (batches of 60)Avg. WIP, # of shirts
Cutting4116.00960Average Flow Time / Manuf. Lead time for process?
Inspect4-12.00720MLT = WIP (# of shirts) x Actual CT (in minutes)
11760MLT =14.7days
Direct Labor required (actual Prod.)
Total Labor content / unit26.51minutes/unit
Daily labor content21208.00minutes
Labor time / day30720.00minutes
DL Utilization0.69
Does the machine have enough capacity if we cut regular shirts with L = 60 & 8 shirts per layer, Custom shirts with L = 5 and 1 shirt per layer?
Daily requirementCustom = 100 shirts,   Regular =  800 shirts
Regular shirt800Custom Shirt100
Cutting time120minutes37.5minutes
Cycle time0.25minutes/shirt7.5minutes
Time required =950minutes/day  (Existing machine does not have capacity as 8 hr. day = 480 minutes)
CMike's Plan
Type of OperationNumber of WorkersNumber of MachinesAverage WIP (batches of 5)Avg. WIP # of ShirtsActivity TimeWorkersCycle timeLabor Content
Cutting5236.00180Cut (Custom)10.500.50
Sewing4848288.001440Cut (regular)40.93753.75
Inspect4-24.00120Make Collar3.980.493.90
Iron4424.00120Make Cuffs240.502.00
Pack4-24.00120Make Sleeves0.6520.330.65
1980Make Front2.560.422.50
Make Back1.740.431.70
TotalCustomRegularJoin Shoulders0.6620.330.66
WIPWIPWIPAttach Collar1.6540.411.65
19802201760Attach Sleeves1.5540.391.55
Stitch Sleeves0.6520.330.65
Sew Seam1.840.451.80
Attach cuffs1.5540.391.55
Hem button1.740.431.70
Daily capacity of new cutting machine
Cutting time2.5minutes
Theoretical CT0.5minutes
1)Daily capacity (cutting) =960shirts/day (new machine)
2)Production = 900 shirts per day,   Regular = 800,  Custom = 100
Actual CT (Regular) =0.6min./shirt
Actual CT (Custom) =4.8min./shirt
MLT (Regular) =1056<<  MLT (regular) = WIP (regular) X Actual CT(regular)
MLT (Custom) =1056<<  MLT (Custom) = WIP (Custom) X Actual CT(Custom)
Average MLT =2.2day
3)Total Labor Content (custom) per unit =26.01minutes/unit
Daily Labor content (custom) =2601minutes
Total Labor content (regular)=29.26minutes/unit
Daily Labor content (regular) =23408minutes
Total daily labor content (regular + custom) =26009minutes
Labor /day =31200minutes
DL Utilization =0.83
DIke's Plan
Activity TimeWorkersCycle timeLabor ContentProcess CapacityActivity TimeWorkersCycle timeLabor ContentProcess Capacity
Cut (regular)12040.251.001920Cut (Custom)0.510.50.50960
Make Collar3.970.563.90862Make Collar3.913.903.90123
Make Cuffs230.672.00720Make Cuffs212.002.00240
Make Sleeves0.6510.650.65738Make Sleeves0.6510.650.65738
Make Front2.550.502.50960Make Front2.512.502.50192
Make Back1.730.571.70847Make Back1.711.701.70282
Join Shoulders0.6610.660.66727Join Shoulders0.6610.660.66727
Attach Collar1.6530.551.65873Attach Collar1.6511.651.65291
Attach Sleeves1.5530.521.55929Attach Sleeves1.5511.551.55310
Stitch Sleeves0.6510.650.65738Stitch Sleeves0.6510.650.65738
Sew Seam1.830.601.80800Sew Seam1.811.801.80267
Attach cuffs1.5530.521.55929Attach cuffs1.5511.551.55310
Hem button1.730.571.70847Hem button1.711.701.70282
Type of Operation# of Workers# of MachinesAverage WIP (number of 60 shirt batches)Avg. WIP (# of shirts)Type of Operation# of Workers# of MachinesAverage WIP (number of 5 shirt batches)Avg. WIP (# of shirts)
Cutting4116960Cutting113<< assumed
1) Daily process capacity of the regular shirt line:2)Daily process capacity of the custom shirt line:
Theoretical Line CT = 0.67Theoretical Line CT = 3.90
Daily (8 hrs) production capacity = 720shirts/dayDaily (8 hrs) production capacity = 123shirts/day
3) MLT for custom line (based on actual production of 100 shirts/day)
Actual CT for custom line = 4.80minutes/shirt
WIP =48.00shirts
MLT (actual production of custom) =230.40minutes
4)Direct labor utilization for custom line
Total Labor Content (custom) per unit =26.01minutes/unit
Daily Labor content (custom) =2601minutes (based on actual production of 100 custom shirts per day)
Total labor content daily =7680
Direct Labor utilization =0.34

Solution continued down


Executive Shirts case solution continued with answers

Page 2 of 3

 (Theoretical) CT for the cutting operation with Llayers


                        =   (Write the algebraicexpression with L in it)    
        See Down

         (Theoretical)CT (for L= 60) = (Use the expression above tocalculate your answer for L = 60)

         Laborcontent per shirt in the cutting operation:

                       4 workers working as ateam
                       4 x (1.5L + 30) min. for8 L shirts
                       480 min. for L = 60
                       1 min. per shirt for L = 60
Or, you could saythat the labor content per shirt is 4 x 0.25 = 1 min, because the team of 4persons can cut one shirt every 0.25 minutes.

         2.   Effectof reduced L

               Ex: L = 10

               (Theoretical) CT (for L=10) = (Showcalculations and answer for L=10)

               Labor content per shirt (L = 10) =  4 x CT (for L = 10)
                                                                               = (showcalculations and answer)

Theoretical cycle time for cutting =
 Theoretical cycle time for cutting =
(L = 60)
Effect of reduced L (# of layers)
Theoretical cycle time for cutting =
Labor content per shirt =
Activity TimeWorkersCycle timeLabor Content
Make Collar3.980.493.90
Make Cuffs240.502.00
Make Sleeves0.6520.330.65
Make Front2.560.422.50
Make Back1.740.431.70
Join Shoulders0.6620.330.66
Attach Collar1.6540.411.65
Attach Sleeves1.5540.391.55
Stitch Sleeves0.6520.330.65
Sew Seam1.840.451.80
Attach cuffs1.5540.391.55
Hem button1.740.431.70


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