Lean System
What trade-offs are involved in shifting from a traditional operations system to a lean system for:
a. A manufacturing firm?
A lean system is basically quality vs. quantity. Producing quality in the lean system eliminates waste. For instance, a lean system can reduce inventory, waiting time, excessive transportation, as well as defects in products and services. “The key considerations are the time and cost requirements for successful conversion, which can be substantial” (Stevenson, 2010, p. 719).
b. A service firm
There are trade-offs involved with shifting from a traditional operations system to a lean system in a service firm. I have been in the service industry for most of my life. In the beginning as a less experienced worker the operations were more of a traditional system. It was mostly about volume. We scheduled 4 haircut 3-4 haircuts an hour. The price was low. However, as my experience, training and knowledge increased the service shifted to a lean system. The trade-off for the client is a higher priced service, but also a more personalized one. Personally, I would rather not pay a low price for just a haircut. I would rather have something designed for me. Quality definitely beats quantity.
Stevenson, W. J. (2010). Operating Management (10th ed.), New York, NY: McGraw-Hill Irwin
Determine the optimum preventive maintenance frequency for each of the pieces of equipment if: breakdown time is normally distributed:
Equipment Average Time (days) between Breakdowns Equipment Preventive
Maintenance Cost Breakdown
Cost
A201 20 2 A201 $300.00 $2,300
B400 30 3 B400 $200.00 $3,500
C850 40 4 C850 $530.00 $4,800
Each price of equipment is broken down with the optimum preventative maintenance frequency in bold.
Preventative maintenance cost/(Breakdown cost + Preventative maintenance cost)
$300/($2,300 + $300) = 0.115
0.50 – 0.115 = 0.385 z = -1.19
20 – 1.19*2 = 17.62
A201 = 18 days
$200/($3,500 + $200) = 0.054
0.50 – 0.054
a. A manufacturing firm?
A lean system is basically quality vs. quantity. Producing quality in the lean system eliminates waste. For instance, a lean system can reduce inventory, waiting time, excessive transportation, as well as defects in products and services. “The key considerations are the time and cost requirements for successful conversion, which can be substantial” (Stevenson, 2010, p. 719).
b. A service firm
There are trade-offs involved with shifting from a traditional operations system to a lean system in a service firm. I have been in the service industry for most of my life. In the beginning as a less experienced worker the operations were more of a traditional system. It was mostly about volume. We scheduled 4 haircut 3-4 haircuts an hour. The price was low. However, as my experience, training and knowledge increased the service shifted to a lean system. The trade-off for the client is a higher priced service, but also a more personalized one. Personally, I would rather not pay a low price for just a haircut. I would rather have something designed for me. Quality definitely beats quantity.
Stevenson, W. J. (2010). Operating Management (10th ed.), New York, NY: McGraw-Hill Irwin
Determine the optimum preventive maintenance frequency for each of the pieces of equipment if: breakdown time is normally distributed:
Equipment Average Time (days) between Breakdowns Equipment Preventive
Maintenance Cost Breakdown
Cost
A201 20 2 A201 $300.00 $2,300
B400 30 3 B400 $200.00 $3,500
C850 40 4 C850 $530.00 $4,800
Each price of equipment is broken down with the optimum preventative maintenance frequency in bold.
Preventative maintenance cost/(Breakdown cost + Preventative maintenance cost)
$300/($2,300 + $300) = 0.115
0.50 – 0.115 = 0.385 z = -1.19
20 – 1.19*2 = 17.62
A201 = 18 days
$200/($3,500 + $200) = 0.054
0.50 – 0.054