Estimate the cost of producing, Basic Statistics

Consider the manufacturing system presented in the article by Yu and Bricker (1993).

The management would like to purchase new machine tools more reliable and more high accuracy. These would eliminate all inspection operations and the times (rework). However, some parts will be released and made recovery due to internal defects that occur at various stages of machining. The new process then include four (4) steps only (machines 1, 2 and 3, and the packaging), in addition to the recovery of rejected parts. The characteristics techno-economic of the new process are given in the following table.

Operation j

Time t(j) men-hours

Cust c(j) $/hour

Reject rate

1.Machine 1




2.Machine 2




3.Machine 3




4. packaging




The new machine tools are more expensive to operate but discard rates are much lower and inspections are no longer required. The cost of purchasing parts Crude remains at $ 50 and the salvage value of rejected parts is $ 12.

(A) What's the percentage of crude part completed successfully? On average, how much crude parts have to be fixed to make 100 pieces finished?

(B) On average, what is the cost of producing a finished piece?

Posted Date: 3/26/2013 8:06:15 AM | Location : United States

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