Faculty of Engineering and the

Built Environment
Department of Chemical Engineering
Durban University of Technology

S4 Level 1 Steve Biko Campus, Mansfield

Road, Durban, 4001,

P O Box 1334, Durban, 4000, South Africa

Tel (+27)31-373 2218

Email: khanyisilen@dut.ac.za
Website: www.dut.ac.za

PRODUCTION ENGINEERING ASSIGNMENT

INSTRUCTIONS

1. This assignment must be submitted on or before 18 October 2018 at 12h00.

2. The assignment must be done in groups of minimum of 3 but not exceeding 5 members.
3. The assignment must contain a cover page with the names and student numbers.
QUESTION ONE (20 marks)
i. The Hair Care company manufactures a range of hair care products, including a range
of hair styling gels. A competitor has recently introduced a new hair gel, which in the
last six months, has taken a significant share of the market, with adverse effects on
Hair Care’s sales. The management at Hair Care has decided that a competitive
product must be introduced as quickly as possible and has asked Walter Buthelezi, the
management accountant, to draw up a plan for developing and marketing the new
product. As the first step in planning the project, Walter has identified the following
major tasks which will be involved in the new product launch. He has also estimated
how long each task will take and what other tasks must precede each one.

Activity Description Precedence Estimated Duration

(Weeks)
A Design New Product - 8
B Design Packaging - 4
C Organise Production Facilities A 4
D Obtain Production Materials A 2
E Manufacture Trial Batch C,D 3
F Obtain Packaging B 2
G Decide on Test Market Area - 1
H Package Trial Batch E, F 2
I Distribute Product in Test Area H, G 3
J Conduct Test Market I 4
K Assess Test Market J 3
L Plan National Launch K 4

a. Draw a critical path diagram for this project and determine how long it will be
before the new product can be launched and calculate the slack time available for
all the activities. (12 )
b. The time taken to complete tasks A, B, D, K and L is somewhat uncertain and so
the following optimistic and pessimistic estimates have also been made to
supplement the most likely figure given above. The additional estimates are:

Activity Optimistic Time (weeks) Pessimistic Time (weeks)

A 5 13
B 2 6
D 1 4
K 2 6
L 2 8

What now is the expected time until the product can be launched and what is the
probability of this time exceeding 35 weeks? (8)
QUESTION TWO (20 marks)
a) The following table gives the number of defectives in successive samples of 100 final
assemblies removed at random from that day’s production.
Day Number of defectives Day Number of defectives
1 6 11 11
2 8 12 8
3 7 13 13
4 10 14 14
5 11 15 15
6 5 16 12
7 13 17 7
8 9 18 34
9 9 19 29
10 10 20 8

i. Establish a single set of control limits for the daily fraction of rejects based on
these figures and develop a p-chart with 3-sigma control limits. (12 )
ii. Comment on the stability of the manufacturing process. (2)
b) Briefly describe the following terms as used in process analysis
i. Blocking (1)
ii. Starving (1)
iii. Make-to-order (2)
iv. Make-to-stock (2)

QUESTION THREE (20 marks)

E-Education is a new start-up that develops and markets MBA courses offered over internet.
The company is currently located in Umlazi and employs 150 people. Due to strong growth
the company needs additional office space. The company has the option of leasing additional
space at its current location (building) in Umlazi for the next 2 years, but after that will need
to move to a new building. Another option the company is considering is moving the entire
operation to Durban immediately. A third option is for the company to lease a new building
in Umlazi immediately. If the company chooses the first option and leases new space at its
current location, it can, at the end of 2 years, either lease a new building in Umlazi or move to
Durban.
The following are additional facts about the alternatives and the current situation:
1. The company has 75% chance of surviving the next two years
2. Leasing the new space two years at the current location in Umlazi would cost ZAR
750000 per year
3. Moving the entire operation to Durban would cost ZAR 1 million, and leasing space
after moving would cost ZAR 500000 per year.
4. Moving to a the new building in Umlazi would cost ZAR 200000, and leasing space
in the new building would cost ZAR 650000 per year
 5. The company can cancel the lease at any time
6. The company will build its own building in five years, if it survives
7. Assume all other costs and revenues are the same no matter where the company is
located.
8. If this business fails after 2 years, E-education MUST wind up business.

With help of a decision tree starting with the decision of staying or moving, then the
probability of surviving or failing and the costs involved advise the E-eduation on what to do.
The analysis is for 5 year span if the business survives and 2 years if it fails.

QUESTION FOUR (20 marks)

i. A manufacturer of thermostats uses a kanban system to control the flow of materials. The
packaging center processes 10 thermostats an hour and receives completed thermostats
every 30 minutes. Containers hold 5 thermostats each.
a) How many kanbans are needed for the packaging center? (3)
b) If management decides to keep two thermostats as safety stock, how many kanbans
will be needed? (3)
ii. Hospitality Hotels forecasts monthly labor needs.
a) Given the following monthly labor figures, make a forecast for June using a three-
period moving average and a five-period moving average. (4)

Month Actual Values

January 32
February 41
March 38
April 39
May 43

b) If the actual labor figure for June turns out to be 41, what would be the forecast for
July using each of these models? (4)

iii. A manufacturer of printed circuit boards uses exponential smoothing with trend to
forecast monthly demand of its product. At the end of December, the company wishes
to forecast sales for January. The estimate of trend through November has been 200
additional boards sold per month. Average sales have been around 1000 units per
month. The demand for December was 1100 units. The company uses α = 0.20 and β
= 0.10. Make a forecast including trend for the month of January. (6)
QUESTION FIVE (20 marks)
a) A company makes a product with a product code S40. Each S40 consists of two
subassemblies A10 and B5. Subassembly A10 consists of part 1765 (two required) and
part 1867 (one required). Part 1867 is in turn made from part 8644 (one required) and part
2888 (5 required). Subassembly B5 consists of part 2887 (two required) and part 2888
(four required).
i. Draw a tree diagram showing the product structure of product S40. (9)
ii. Show an indented bill of materials for product S40. (3)

b) In process selection a factory organizes material flow in structures compare the four
Process Flow Structures giving examples of each. (8)