A press operation for machine part production line has a setup of 12 hour for th

Question

A press operation for machine part production line has a setup of 12 hour for the form die, which costs $6,000. The operation time is estimated to 15 min for loading, drawing to size and trim, and unloading to the conveyor, which completes the cycle. The run (lot) for this product (model) per year is 20,000 units. Material cost for the corrosion-resistant steel sheet-metal blank (including all losses) included is $15 (per item). The productive hour cost for the press is $175.65. (i) Find the operation lot hours. (ii) Each press is expected to operate 4000 annual hours. How many presses are necessary? (iii) There are 2 form die sets necessary for each item. Find the modified operation lot hours (iiii) Find the unit cost including (set up cost + material cost + production cost) Production cost = (modified lot hour/20000)*$175.65 Problem 3: Describe your view of contemporary practice of Operation Estimating in industry.

Explanation / Answer

(i) Operation lot hours : no. of Units Per Year * operation time Per Unit

= 20000*15 Minutes = 300000 minutes i.e. 5000Hours+12 hours = 5012 Hours

(ii) presses needed : 5012hours/4000hours = 1.253 i.e. 2 press

(iii) 5012 * 2 = 10024 hours

(iiii) unit Cost = (a) setup cost = 2*6000=12000/20000=0.60

(b) Material Cost = 15

(c) hour Cost = (10024/20000)*175.65 = 88.04

total = $103.70

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