The Process I Would Like You to Model Has Three Steps: Drill, Weld, and Paint

HW1SimExercise

The process I would like you to model has three steps: drill, weld, and paint. Sam operates the drill and earns $10/hour, Adam operates the welder and earns $12/hour, and Jane operates the paint booth and earns $15/hour. You have verified the following completion/duration/cycle times by watching each operation over a week and recording the time it took to complete each unit.

Data gathered from drill completion/duration/cycle times per unit indicate that those times are normally distributed with a mean of two hours and a standard deviation (SD) of 15 minutes.

Data gathered from weld completion/duration/cycle times per unit indicate that those times are normally distributed with a mean of one hour and a standard deviation (SD) of 25 minutes.

Data gathered from paint completion/duration/cycle times per unit indicate that those times are normally distributed with a mean of four hours SD of 20 minutes.

The inter-arrival time between jobs is exponentially distributed with a mean of two hours.

Let your manager know (to the best of your ability), with the current system, how long it will take to finish 30 items, how much it will cost in total (WIP cost and wages) , and utilization of each resource.

It would cost $1500.00 to buy a new drill press, $2500.00 to buy a new welder, and $50,000.00 to install a new paint booth that has a completion/duration/cycle time that is normally distributed with a mean of three hours and a SD of 15 minutes. Set up time for each paint booth is 5 minutes and then the operator only monitors them from a booth. An operator is needed for each drill press and welder, but they can rotate between machines if there is no product in front of them. The painter can operate two booths at the same time. The net per unit produced is $100.00. Accrue monthly with a discount rate of 15% APR. Current demand is expected to stay at least at the current level for three years unless total time in system drops to 20 hours. At that point demand will increase enough to keep the time in system at 20 hours. This operation is a pull organization, units are not produced unless there is an order for them. Thus, the price of each unit is used to determine WIP cost. The average price is $200.00 per unit. Use a confidence interval (CI) of 95%. If you can get more product through the process, there is unlimited demand as long as the entity is not in the process longer than an average of 1200 minutes.

What do you think about this process? What/why would you recommend to your manager?