A production analyst and an industrial engineer are investigating potential setu
ID: 378502 • Letter: A
Question
A production analyst and an industrial engineer are investigating potential setup time reductions at their plant to help make the production proces A hydraulic stamping machine currently requires about 25 minutes for the ma- chine operator to complete a changeover between different part types. Each part requires 2.75 minutes for the stamping process. Parts are currently produced in batches of 30 units. The labor rate is $15.75 per hour a. What is the current average labor cost per part, including changeovers? b. If the changeover time could be reduced to 10 minutes, how much labor cost ses more efficient. per part would be saved using the current batch size of 30 units?Explanation / Answer
Given,
Batch size = 30 units
Total time ( Changeover set up + stamping operation ) required for producing 30 units
= 25 minutes + 2.75 minute/ unit x 30 units
= 25 minutes + 82.5 minutes
= 107.5 minutes
Thus total labor cost ( @ $15.75/hour ) required for producing 30units = $15.75 / 60 x 107.5 = $28.28
Hence, current average labor cost per part = $28.28/30 = $ 0.94 ( rounded upto 2 decimal places )
CURRENT AVERAGE LABOR COST PER PART INCLUDING CHANGEOVER = $0.94
When changeover time = 10 minutes
Total time ( Changeover set up + stamping operation ) required for producing 30 units
= 10 minutes + 2.75 minute/ unit x 30 units
= 10 minutes + 82.5 minutes
= 92.5 minutes
Thus total labor cost ( @ $15.75/hour ) required for producing 30units = ( $15.75 / 60) x 92.5 = $24.28
Thus savings in labor cost for 30 parts = $28.28 - $24.28 = $4
Hence, saving in labor cost per part = $4/30 = $ 0.13 ( rounded upto 2 decimal places)
SAVINGS IN LABOR COST = $0.13 PER PART
CURRENT AVERAGE LABOR COST PER PART INCLUDING CHANGEOVER = $0.94
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