Business Process

OPIM 201 – Practice Problem Set 1

1. Suppose a process flow diagram is as follows. In step 1, there are two sets of machines ({M1, M2} & {M3, M4}) in parallel; both sets process identical tasks but each set has different task times. Assume the process is in steady state and there is no buffer between each step.

(a) What is the system cycle time?
(b) The average WIP turns out to be 4.6 units. What is the average time a unit spent in the system?

2. The department of tax regulations of the IRS is in charge of writing tax regulations in accordance with tax laws passed by the congress. The department completes 300 projects per year, on average. It was reported by the WSJ (Wall Street Journal) that the average number of projects “on their plate” is 588. The department head claims that in most cases, the time to complete a project is less than six months. Do you have any reason to disagree? Explain why. (Hint. Use Little’s Law)

Solution

1.
(a) 1/(1/10+1/12) = 5.45
(b) The average WIP turns out to be 4.6 units. What is the average time a unit spent in the system? FT = WIP/FR = 4.6/(1/5.45) = 4.6*5.45 = 25

2.
Work in Progress = Number of projects currently “on their plate” = 588
Flow Rate = 300 projects per year = 25 per month MLT = WIP * CT
= WIP * 1/FR
= 588 * 1/25
= 23.52 months

With the MLT result of 23.52 months, I would definitely disagree with the department’s claim of less than 6 months. The actual MLT is almost 4 times as high as the claim and this discrepancy is too high for the claim to be