Question

5. Changeover of fixtures on a machine takes 35 minutes. Following the changeover, an aver- ed before the correct setting is achieved. For ch part the processing time is two minutes and the material cost is $1.50. The labor cost for a skilled setup person to do the changeover and adjustment is $15.50 per hour. The labor cost of the machine operator is $10.50 per hour. Currently, the part is produced in batches of 50 units. Suppose the setup procedure could be simplified so that the operator would be able to do it and not have to make any adjustment in the setting. What must the fixture changeover time be reduced to such that a batch size of 20 units could be produced for the same average per-unit cost as the present cost? Assume the per-unit cost includes labor and material costs of setup and production; also, assume the machine's excess capacity is ample age of four parts must be produced and discard and is not a consideration.

Answer 1

Solution::--

Current scenario : Adjustment in setting required

Changeover set up time = 35 minutes

Time required for trial operation of 4 parts = 2 x 4 = 8 minutes

Thus total set up time = 35 + 8 = 43 minutes

Therefore , Labour cost for changeover ( $15.50 per hour ) time of 35 minutes = 35/60 x 15.50 = $9.04

Labour cost for machine operator ( @ $10.50 per hour ) time of 8 minutes = 8/60 x 10.50 = $1.40

Thus total labour cost associated with set up = $9.04 + $1.40 = $10.44

Total material cost associated with set up operation = $1.50 per part wasted x 4 parts = $6

Therefore , total labour and material cost associated with set up = $10.44 + $6 = $16.44

Current batch size = 50

Thus, total Set up (labour and material cost ) cost of $16.44 is apportioned on 50 items

Hence set up cost per unit of item produced = $16.44/50 = $0.3288

Future scenario : Adjustment in setting note required

Let, Changeover set up time = N minutes

NO TRIAL OPERATION OF 4 PARTS REQUIRED

Labour cost of changeover ( $15.50 per hour ) time for N minutes = $15.50.N/60

Revised batch size of production = 20 units

Hence set up cost per unit of item produced = $15.50.N / ( 60 X 20 ) = $0.0129.N

Since average per unit cost should be same under both scenario , set up cost per unit of item produced also will be same .

Therefore , 0.0129.N = 0.3288

Or, N = 0.3288/0.0129

Or, N = 25.49 ( ROUNDED TO 2 DECIMAL PLACES )

NEW FIXTURE CHANGEOVER TIME = 25.49 MINUTES