TRADITIONAL ASSEMBLY LINE CAPACITY ANALYSIS

Assumption 1

No. Of lines=4
Since,
Total no of machines available = 135
Machines required per line = 30
Hence, (4 x 30) +15 =135
Where,
We are using a total of 120 machines with 15 machines left for back up.

No of working days in a month =30
Division of lines per shift:
2 shifts for 3 lines
3 shifts for 1 line
Total operating lines per day= 3 x 2 + 3 x 1 =9

Given:

Production capacity per shift = 182 units per line per shift
Hence,
Total production in a month = 182 x 9 x 30
= 49140
Labor cost analysis:

Direct labor =28/line
Indirect labor =9/line

Direct labor cost = $15/worker
Total direct labor cost in a day = 15 x 28 x 9
=$3780
Indirect labor cost =$9/worker
Total indirect labor cost in a day = 9 x 9 x 15
=$1215

Total labor cost = direct labor cost + indirect labor cost
=3780 + 1215
=$4995

Total no of workers= 28 x 9(direct labor) + 9 x 9(indirect labor)
=333

Overhead cost (due to machines) = $6.94/machine/shift
Total no of machines = 30/line
Total overhead cost = 9 x 30 x 6.94
=$1873.8/day


Where,
No of operating lines =9/day and 30 machines are used per line per day
Hence,
Total cost/day = total labor cost + total overhead cost
=$(4995+1873.8)/day
=$6868.8/day

Assumption 2:

No of lines= 4 (conventional line) + 1(different line)

Total no of machines Direct labor Indirect labor
Conventional line 30 28 9
Different line 15 14 6

No of shifts =2/line/day (conventional) + 1(different line)
Total no of operating lines = (4 x 2) +1
= 9
Total no of working days in a month = 30

Total production capacity = 182/line/shift
Production for a month =182 x 30 x 9
=49140 units
Since demand is more than the capacity
Production = capacity
Total no of shifts in a day=2

Labor cost analysis:

Direct labor = (28 x 14) +4
=112/shift
Indirect labor= (9 x 4) +6
=42/shift

Total no of workers in a day= (112 x 2) + (42 x 2)
=336

Direct labor cost= $(252 x 15)/day
=$3780/day
Indirect labor cost=$(84 x 15)/day
=$1260/day

Total labor cost= direct labor cost+ indirect labor cost
=$(3780+1260)/day
=$5040/day

Overhead cost = $6.94/machine/shift
Total no of machines used = (30 x 4) +15
=135

Total overhead cost/day= 6.94 *2*135
=$1873.8/day

Total cost= total labor cost + total overhead cost
= $(5040 + 1873.8)/day
=$6913.8/day

MODULAR (CELLULAR) ASSEMBLY LINE CAPACITY ANALYSIS


Given:

Total no. of machines = 135
No. of Machines in one cell =14

Hence, no. of cells/shift = 135/14 = 9.64
we are considering 9 cells with backup of 135 126
= 9 Machines
Production/Cell/Shift = 100
Production/shift = 100 x 9 = 900

No. of Shifts = 2 (Assumption)

Hence, total production per day = 900 x 2 = 1800
Production capacity / day = 1800 x 30 = 54000

So we can see that the production capacity improves by 54000 50000
= 4000

No. of Direct Labors required = 8 Workers x 9 Cells x 2 Shifts
= 144 Workers
No. of Indirect Labors required = 5 Workers x 9 Cells x 2 Shifts
= 90 Workers

Direct Labor cost/day = $18.1 x 144 = $2606.4
Indirect Labor cost/day = $18.1 x 90 = $1629

Total Labor cost = $2606.4 + $1629 = $4235.4/day

Over head cost = 14 Machines x 9 Cells x 2 Shifts x $6.94/Machine/Cell/Shift
= $1748.88

Hence the Total cost/Day = $5984.28

Now according to the Traditional Line Analysis, Total cost/day = $6868.8/day
So, the savings the Modular Line is making = $6868.8 5984.28 = 884.52/day

The training cost for direct labors = 144 x $140 = $5760

Days Recovery of training cost = $5760/$884.52 = 23 Days
Hence, after 23 days, the savings/day will be = $884.52