1
Chapter 6
Production Processes
2
Types of Processes
 C_____________ (ex. Iron to steel)
 F_____________ (ex. Cloth to clothes)
 A_____________ (ex. Parts to components)
 T_____________ (ex. For quality of products)
3
Process Flow Structures
 J____ shop

Copy center making a single copy of a student term paper
 B_______ shop

Copy center making 10,000 copies of an ad piece
 A_____________ Line

Automobile manufacturer
 C_____________ Flow

Petroleum manufacturer
4
5
Product-Process Matrix
Low
Volume,
One of a
Kind
I.
Job
Shop
II.
Batch
III.
Assembly
Line
IV.
Continuous
Flow
Multiple
Products,
Low
Volume
Few
Major
Products,
Higher
Volume
High
Volume,
High
Standardization
Flexibility (High)
Unit Cost (High)
Commercial
Printer
French Restaurant
These are the
major stages
of product
and process
life cycles
Heavy
Equipment
Automobile
Assembly
Burger King
Sugar
Refinery
Flexibility (Low)
Unit Cost (Low)
6
Break-Even Analysis
 A standard approach to choosing among ________________
processes or equipment
 Model seeks to determine the point in units produced (and sold)
where we will start making ___________ on the process or equipment
 Model seeks to determine the point in units produced (and sold)
where total ____________ and total ___________ are equal
 However, business should operate where marginal cost equals
marginal cost
 Also, this model can determine the point in units to switch to a
different process or equipment.
7
Break-Even Analysis
This formula can be used to find any of its components algebraically
if the other parameters are known
Break - even Demand 

Total fixed costs of process or equipment
Unit Price to cutomer - Variable costs
Purchase cost of process or equipment
Price per unit - cost per unit
8
400
“Buy” at $200/unit
Revenue at $300/unit
350
$ Thousands
300
250
200
Make on “Machine Center”
at $15/unit with
Fixed Cost = $200,000
150
100
Make on “Semiautomatic Lathe”
at $75 /unit with
Fixed Cost = $80,000
50
0
0
250
500
750
1,000
1,250
1,500
Number of Units
1,750
2,000
2,250
2,500
9
Break-Even Analysis (Continued)
Example: Suppose you want to purchase a new computer that will
cost $5,000. It will be used to process written orders from
customers who will pay $25 each for the service. The cost of labor,
material (paper, disk space) and the form used to place the order is
$5 per customer. How many customers will we need to serve to
permit the total revenue to break-even with our costs?
10
Manufacturing Process Flow Design
 A process flow design can be defined as a
______________ of the specific processes that
raw materials, parts, and subassemblies follow
as they move through a plant
 The most common tools to conduct a _________
________________ include assembly drawings,
assembly charts, and operation and route sheets
11
Example: Assembly Chart (Gozinto)
From exhibit 6.5
4
5
6
7
Lockring
Spacer, detent spring
SA-2
Rivets (2)
A-2
Spring-detent
A-5
Component/Assy Operation
Inspection
12
Example: Process Flowchart
Material
Received from
Supplier
Inspect Material
for Defects
No, Continue…
Defects
found?
Yes
Return to
Supplier for
Credit