Heizer/Render, Operations Management 7th Edition and Principles of Operations Management 5th Edition
Internet Case Study for Chapter 3: Project Management
Shale Oil Company
Shale Oil Company’s Aston, Ohio, manufacturing complex comprises several operating
units. These units process the crude oil that is pumped through and transform it into a
multitude of hydrocarbon products. The units run 24 hours a day, 7 days a week, and
must be shut down for maintenance on a predetermined schedule. One such unit is
Distillation Unit No. 5, or DU5. Studies have shown that DU5 can operate only 3 years
without major equipment breakdowns, and excessive loss of efficiency. Therefore, DU5
is shut down every 3 years for cleaning, inspection, and repairs.
DU5 is the only distillation unit for crude oil in the Aston complex, and its shutdown
severely affects all other operating units. Some of the production can be compensated for
by Shale refineries in other locations, but the rest must be processed and stored before the
shutdown. Without proper planning, a nationwide shortage of Shale gasoline could occur.
The time of DU5’s shutdown is critical, and the length of time the unit is down must be
kept to a minimum to limit production loss. Shale uses PERT as a planning and
controlling tool to minimize shutdown time.
The first phase of a shutdown is to open and clean the equipment. Inspectors can then
enter the unit and examine the damage. Once damages are determined, the needed repairs
can be carried out. Repair times can vary considerably, depending on what damage the
inspection reveals. Based on previous inspection records, some repair work is known
ahead of time. Thorough cleaning of the equipment is also known to improve the unit’s
operating efficiency. The table below lists the many maintenance activities and their
estimated completion times.
DISCUSSION QUESTIONS
1. Determine the expected shutdown time and the probability that the shutdown can be
completed 1 week earlier.
2. What are the probabilities that Shale finishes the maintenance project 1, 2, 3, 4, 5, or 6
days earlier?
3. Shale Oil is considering increasing the budget to shorten the shutdown. How do you
suggest the company proceed?
Heizer/Render, Operations Management 7th Edition and Principles of Operations Management 5th Edition
Preventive Maintenance of DU5
Time Estimates (in Days)
1–2
2–3
3–4
3–5
3–6
3–7
3–8
4–9
5–10
5–11
6–12
6–17
7–13
7–18
8–19
9–14
10–16
11–15
12–17
13–18
14–20
15–16
16–20
17–20
18–20
19–20
20–21
21–22
22–23
ACTIVITIES
OPTIMISTIC
Circulate wash water throughout unit
Install blinds
Open and clean vessels and columns
Open and clean heat exchangers; remove tube bundles
Open and clean furnaces
Open and clean mechanical equipment
Inspect instrumentation
Inspect vessels and columns
Inspect heat-exchanger shells
Inspect tube bundles
Inspect furnaces
Retube furnaces
Inspect mechanical equipment
Install new pump mechanical seals
Repair instrumentation
Repair vessels and columns
Repair heat-exchanger shells
Repair tube bundles; retube
Repair furnaces
Repair mechanical equipment
Test and close vessels and columns
Install tube bundles into heat-exchanger shells
Test and close heat exchangers
Test and close furnaces
Test and close mechanical equipment
Test instrumentation
Pull blinds
Purge all equipment with steam
Start up unit
1
1.5
2
1
1
2
2
1
1
1
2
15
1
3
3
14
1
2
5
10
4
1
1
1
1
2
1.5
1
3
MOST LIKELY PESSIMISTIC
2
2
3
2
2
2.5
4
2
1.5
1.5
2.5
20
1.5
5
8
21
5
5
10
15
5
2
2
2
2
4
2
3
5
2.5
2.5
4
3
4
3
5
3
2
2
3
30
2
8
15
28
10
10
20
25
8
3
2.5
3
3
6
2.5
5
10