Industrial Engineering and

Management

Pravin Kumar

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Disclaimer: This is a promotional copy. Please ignore any errors that you may find in this copy as this is not final.

Copyright 2015 Pearson India Education Services Pvt. Ltd

This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, resold, hired out, or otherwise circulated without the publishers prior written consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser and without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book.

ISBN 978-93-325-4356-0

First Impression

Published by Pearson India Education Services Pvt. Ltd, CIN: U72200TN2005PTC057128, formerly known as TutorVista Global Pvt. Ltd, licensee of Pearson Education in South Asia.

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Compositor: SRS Technologies, Puducherry.Printed in India.

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Contents

Chapter 1 Industrial Engineering and Production Systems 1

1.1 Introduction 11.2 Historical Development of Concepts in

Industrial Engineering and Management 21.3 Production Systems 41.4 Selection of Production Systems 81.5 Productivity 9 Summary 19 Multiple Choice Questions 20 Review Questions 21 Exercise Problems 22 References and Further Readings 23

Chapter 2 24

2424

26263034363740434545474749

Chapter 3

Facility Location and Layout

2.1 Introduction 2.2 Facility Location 2.3 Transportation Method

2.4 Centroidal Method 2.5 Facility/Plant Layout 2.6 Systematic Layout Planning 2.7 Block Diagram 2.8 Assembly Line Balancing 2.9 Group Technology

2.10 Cellular Manufacturing Summary Multiple Choice Questions Review Questions Exercise Problems References and Further Readings

Forecasting 50

3.1 Introduction 503.2 Forecasting Methods 523.3 Time-series Forecasting 543.4 Forecasting Performance Measurement 69

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iv Contents

Summary 71 Multiple Choice Questions 71 Review Questions 73 Exercises 73 References and Further Readings 75

Chapter 4 Aggregate Planning 76

4.1 Introduction 764.2 Aggregate Planning Strategies 774.3 Mixed Strategy 82 Summary 86 Multiple Choice Questions 86 Review Questions 87 Exercise Problems 88 References and Further Readings 89

Chapter 5 Capacity Planning: MRP, MRP II and ERP 90

5.1 Introduction 905.2 Materials Requirement Planning 905.3 MRP II 995.4 Enterprise Resource Planning 101 Summary 103 Multiple Choice Questions 103 Review Questions 105 Exercise Problems 105 References and Further Readings 106

Chapter 6 Inventory Control 108

6.1 Introduction 1086.2 Classifications of Inventory 1096.3 Inventory Costs 1116.4 Continuous and Periodic Inventory Review Systems 1126.5 Economic Order Quantity 1126.6 Reorder Point 1236.7 Order Quantity for Variable Demand 125 Summary 126 Multiple Choice Questions 126 Review Questions 128 Exercise Problems 128 References and Further Readings 129

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Contents v

Chapter 7 Product Design and Development 131

7.1 Introduction to Engineering Design 131 7.2 Product Concept and Concept Selection 134 7.3 Product Life Cycle 136 7.4 Morphology of Design 138 7.5 Standardization, Simplification,

Differentiation and Diversification 139 7.6 Interchangeability and Modular Design 140 7.7 Concurrent Engineering 141 7.8 Economic Considerations in Product Design 144 7.9 Aesthetic Considerations in Design 1457.10 Ergonomic Considerations in Design 145 Summary 146 Multiple Choice Questions 146 Review Questions 148 References and Further Readings 148

Chapter 8 Manufacturing Systems 149

8.1 Introduction 1498.2 Flexible Manufacturing System 1508.3 CAD/CAM 1548.4 Lean Manufacturing 1608.5 Agile Manufacturing 166 Summary 168 Multiple Choice Questions 168 Review Questions 170 References and Further Readings 171

Chapter 9 Material Handling Systems 172

9.1 Introduction 1729.2 Relationship between Material Handling and Plant Layout 1729.3 Functions of Material Handling Systems 1739.4 Objectives of Material Handling Systems 1739.5 Principles of Material Handling Systems 1739.6 Types of Material Handling Equipments 174 Summary 185 Multiple Choice Questions 185 Review Questions 187 References and Further Readings 187

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vi Contents

Chapter 10 Production Planning and Control 189

10.1 Introduction 18910.2 Objectives of PPC 19010.3 Production Planning 19110.4 Factors Affecting PPC 196 Summary 197 Multiple Choice Questions 197 Review Questions 199 References and Further Readings 199

Chapter 11 Work Study and Ergonomics 200

11.1 Introduction 200 11.2 Method or Motion Study 201 11.3 Micromotion Study 211 11.4 Memo-motion Study 211 11.5 Time Study or Work Measurement 213 11.6 Work Measurement Techniques 214 11.7 Predetermined Motion Time System 220 11.8 Principle of Motion Economy 221 11.9 Work Sampling 22211.10 Job Design 22411.11 Job Rating or Evaluation 22511.12 Merit Rating 225 Summary 231 Multiple Choice Questions 231 Review Questions 233 Exercise Problems 234 References and Further Readings 234

Chapter 12 Reliability and Maintenance Engineering 236

12.1 Introduction 23612.2 Reliability Curves 23712.3 Failure Pattern 23912.4 Basic Reliability Models 24212.5 Evaluation of System Reliability (R

S) 248

12.6 Improvement in Reliability of a System 25512.7 Design Guidelines for Reliability 256

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Contents vii

12.8 Reliability Testing 256 12.9 Maintainability 25712.10 Design for Maintainability 26012.11 Maintenance Costs 26112.12 Availability 26112.13 Serviceability 26212.14 Housekeeping and 5S Concepts 264 Summary 265 Multiple Choice Questions 265 Review Questions 267 Exercise Problems 267 References and Further Readings 268

Chapter 13 Cost Accounting and Depreciation 269

13.1 Introduction 26913.2 Cost Elements 27113.3 Cost Accounting 27213.4 Computation of Material Variances 27313.5 Break-Even Analysis 27413.6 Depreciation 280 Summary 293 Multiple Choice Questions 293 Review Questions 295 Exercise Problems 295 References and Further Readings 297

Chapter 14 Replacement Analysis and Selection among Alternatives 298

14.1 Introduction 29814.2 Replacement of Items that Fail Completely 29914.3 Replacement of Items that Deteriorate 30714.4 Replacement of the Defender 321 Summary 332 Multiple Choice Questions 332 Review Questions 334 Exercise Problems 335 References and Further Readings 336

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viii Contents

Chapter 15 Value Engineering 337

15.1 Introduction 33715.2 Types of Value 33715.3 Seven Phases of Value Analysis 33815.4 Application of Value Analysis 33915.5 Advantages of Value Analysis 34015.6 Value Analysis of a Graphite Pencil by Matrix Method 34015.7 Function Analysis System Technique 342 Summary 342 Multiple Choice Questions 342 Review Questions 345 Exercise 345 References and Further Readings 345

Chapter 16 Linear Programming and Transportation Problem 346

16.1 Introduction to Linear Programming 34616.2 Simplex Technique 34816.3 Big-M Method 35116.4 Two-Phase Method 35516.5 Duality 35716.6 Graphical Method 36116.7 Introduction to Transportation Problem 36316.8 Tabular Method to find the Basic Feasible

Solution of Transportation Model 36316.9 Test of Optimality using MODI or U-V Method 374 Summary 385 Multiple Choice Questions 386 Review Questions 388 Exercise Problems 388 References and Further Readings 390

Chapter 17 Assignment and Sequencing Models 391

17.1 Introduction to Assignment Problem 39117.2 Sequencing Problem 396 Summary 402 Multiple Choice Questions 402 Review Questions 404 Exercise Problems 404 References and Further Readings 405

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Contents ix

Chapter 18 Waiting Line Theory 406

18.1 Introduction 40618.2 The Service Characteristics 40718.3 Mathematical Distributions 40918.4 Waiting Line Models 411 Summary 425 Multiple Choice Questions 425 Review Questions 427 Exercise Problems 427 References and Further Readings 428

Chapter 19 Principles of Management 429

19.1 Introduction 429 19.2 Classical School of Management 431 19.3 Systems Approach 435 19.4 Contingency Approach 435 19.5 Behavioural Approach 435 19.6 Quantitative Approach 436 19.7 Functions of Management 436 19.8 Levels of Management 438 19.9 Skills of Manager 44019.10 Managerial Roles 44119.11 Theory of Motivation 44219.12 Administration and Management 443 Summary 444 Multiple Choice Questions 444 Review Questions 446 References and Further Readings 446

Chapter 20 Firms Ownership, Organizational Design and Structure 447

20.1 Introduction 44720.2 Sole Proprietorship 44720.3 Cooperative Society 44820.4 Partnership 44820.5 Corporation 45020.6 Joint Hindu Family Business 45120.7 Joint Stock Company 45320.8 Multinational Corporation 457

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x Contents

20.9 Departmentalization 45820.10 Classification of Organizations 45920.11 Delegation of Authority 463 Summary 464 Multiple Choice Questions 464 Review Questions 466 References and Further Readings 467

Chapter 21 Project Management PERT and CPM 468

21.1 Introduction 46821.2 Project Life Cycle 47021.3 Project Appraisal 47121.4 Project Structure 47321.5 Terminology used in Project Scheduling 47621.6 Project Crashing (Optimization through CPM) 48321.7 Resource Levelling 491 Summary 492 Multiple Choice Questions 492 Review Questions 494 Exercise Problems 494 References and Further Readings 495

Chapter 22 Total Quality Management 496

22.1 Introduction 496 22.2 Definitions of Quality 496 22.3 Differences between Quality of Goods and Services 497 22.4 Dimensions of Quality 497 22.5 Quality Planning, Assurance and Control 498 22.6 Costs of Quality 499 22.7 Evolution of Quality Concepts 501 22.8 Quality Gurus and their Philosophies 502 22.9 Total Quality Management 50922.10 7-Basic Tools for Quality Control 51122.11 Quality Function Deployment 51622.12 Quality Awards 516 Summary 522 Multiple Choice Questions 523 Review Questions 524 References and Further Readings 525

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Contents xi

Chapter 23 Statistical Quality Control 526

23.1 Introduction 526 23.2 Sources of Variations 526 23.3 Chart Techniques 527 23.4 Control Charts for Variables 528 23.5 Control Chart for Trends 537 23.6 Process Under Control 538 23.7 Process Out of Control 538 23.8 Process Capability and Specification Limits 540 23.9 Process Capability 54123.10 Limitations of Chart for Variables 54223.11 Control Charts for Attributes 54223.12 Count of Defect Chart 54923.13 Demerits Classification and Control Chart 55423.14 Lot-by-Lot Acceptance Sampling 55523.15 Sampling Plan 55623.16 Properties of OC Curves 56223.17 ConsumerProducer Relationship 56423.18 Sampling Plan Design 56423.19 Average Outgoing Quality 56823.20 Average Sample Number 56923.21 Average Total Inspection 57123.22 Sequential Sampling Plan 572 Summary 574 Multiple Choice Questions 575 Review Questions 576 Exercise Problems 577 References and Further Readings 581

Chapter 24 Six-Sigma, ISO 9000 and 14000 582

24.1 Introduction 58224.2 6 Measurement 58224.3 DMAIC Methodology 58424.4 Six-Sigma Belts 58524.5 ISO 9000 58624.6 Eight Management Principles 58724.7 Major Changes between the 1994 and 2000 Versions

of the ISO 9001 Standard 58724.8 Implementing ISO 9000 QMS 588

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xii Contents

24.9 EMS: Introduction 59324.10 ISO 14000 594 Summary 596 Multiple Choice Questions 597 Review Questions 598 References and Further Readings 599

Chapter 25 Supply Chain Management 601

25.1 Introduction 60125.2 Four Fundamentals of Supply Chain (4Fs of SCM) 60225.3 Drivers of Supply Chain Performance 60325.4 Risk Pooling 60425.5 Bullwhip Effect 60425.6 Supply Chain Information Systems 606 Summary 610 Multiple Choice Questions 610 Review Questions 612 References and Further Readings 612

Chapter 26 Decision-Making 614

26.1 Introduction 61426.2 Decision-Making Environments 61526.3 Decision Tree Analysis 625 Summary 627 Multiple Choice Questions 628 Review Questions 630 Exercise Problems 630 References and Further Readings 631

Appendix 1 632

Appendix 2 635

Appendix 3 636

Appendix 4 637

Appendix 5 642

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Preface

Industrial Engineering & Management is a core subject for Mechanical and Production Engineering students. It is also taught to the students of other engineering branches as an open elective subject. This book is also very useful regarding Production and Operations Management, Statistical Quality Control, Total Quality Management for undergraduate students of engineering and post graduate students of management. It has been observed that very few good books are available in Industrial engineering, which fulfills the complete requirements of engineering students. Many books are available on the same title, but they are diverted from their focus; many contents of those books are not related to Industrial Engineering. The contents related to industrial engineering are not properly addressed and also there is a lack of flow among the contents.

To remove these discrepancies, I planned to compile a book focused on core knowledge of Industrial Engineering and Operations Management. The main purpose of the proposed book is to fulfill the requirements of engineering students. I taught the same for last 15 years. In this book, the views of many faculty as well as students have been incorporated. The topics have been explained in depth with the suitable examples. Presentation of the topics is the user friendliness. Simple language, proper sequence, useful contents, and aesthetic design are the strength of this book. These are very helpful for better understanding of the readers. At the end of the each chapter, some multiple choice questions, review questions and unsolved numerical problems are given. The solution of the unsolved problems and the power point presentation of each chapter are available online. The reader of this book can access the website easily.

The contents of this book are broadly divided into three parts: Industrial Engineering, Operations Research, and Operations Management. In Industrial Engineering, production systems, productivity, plant location and layout, forecasting, inventory control, manufacturing systems, material handling systems, value engineering, production planning and control, cost accounting and depreciation, work study have been discussed. In Operations Research, only those topics are covered, which are required for better understanding of Industrial Engineering such as linear programming, transportation problems, assignment problems, sequencing of jobs, replacement analysis, queuing theory, and decision Making. In Operations Management, those topics are covered that are required for shop floor/production management, e.g., aggregate planning, material requirement planning, enterprise resource planning, project management, principles of management, total quality management, statistical quality control, ISO 9000 & 14000, and supply chain management. I hope, this book will be very useful for the readers and fulfill their requirements.

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About the Author

Pravin Kumar obtained his Ph.D. degree from IIT Delhi; M.Tech. from IT BHU (Now IIT BHU), Varanasi; and B.Sc. Engg. (Mechanical) from B.C.E. Bhagalpur. Presently, he is working as an Assistant Professor in Department of Mechanical Engineering, Delhi Technological University (Formerly Delhi College of Engineering). He has more than 15 years of teaching and research experience. He has worked in various engineering colleges and business schools such as IIIT Allahabad, Asia-Pacific Institute of Management Delhi, Delhi School of Management, Career Institute of Technology and Management, Faridabad. His areas of expertise are

Industrial Engineering, Operations Management, Quality Management, Operations Research, Supply Chain Management, and Production Engineering. He has developed many curriculums related to Production and Operations Management at Delhi Technological University, IIIT Allahabad, Career Institute of Technology and Management. He is a life member of Indian Institution of Industrial Engineering, System Society of India, and Society of Operations Management, India. He has published more than 30 research papers in International Journals and Conferences and also authored some books on Engineering Economy and Mechanical Engineering.

Acknowledgment

I am grateful to the following people for their help and motivation in the completion of this book. Dr.Nao Kant Deo, Dr.Rajkumar Singh, Prof.D.S.Nagesh, Prof. Samsher, Dr.R.K.Singh, Prof.R.S.Mishra, Prof.Moinudddin, Prof.S.K.Garg, Prof. Pradeep Kumar for his moral support and motivation in research and publication work. My colleagues from DTU Mr.Nand Kumar, Mr.K.Srinivas, Mr.Girish Kumar, Mr.M.S.Niranjan, Mr.N.A.Ansari, Mr.M.S.Rangnath, Md. Zunaid, Mr. R. K.Yadav, Mr. Sanjay Kumar, Dr. Suresh Kumar, Mr. Rakesh Kumar, Mr.Saurabh Agrawal, Dr.A.K.Agrawal, Dr.Qasim Murtza, Dr. Amit Pal, Dr.K.Manjunath, Mr. D. K. Vishwakarma, Mr. Devanand, and Dr. Anil Haritas for their encouragement and moralsupport.

When I conceptualized the idea to write a book on Industrial Engineering and Management at that time I was working as an Associate Professor at Indian Institute of Information Technology, Allahabad (on lien). I am thankful to the faculty of IIITA, Prof. Anurika Vaish, Dr.Vrijendra, Dr.Abhishek Vaish, Dr. Ranjit Singh, Dr. Saurabh Mishra, Dr. Shashikant Roy, and Prof.M.D.Tiwari (Vice Chancellor, Barkatulla University, Bhopal) for their cooperation and valuable suggestions.

I specially thank to my Guru Prof. Ravi Shankar and Prof Surendra S. Yadav from IIT Delhi for their guidance and appreciation. I am also thankful to the Delhi Chapter of Indian Institution of Industrial Engineering (IIIE), Prof J. M. Mahajan, Prof. D. K. Banwet, Mr. R. Sampat,

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xvi About the Author

Mr. C. P. Gupta, Mr. A. K. Guha for their encouragement and support. I acknowledge the support of my friends Dr. Krishnendu, Mr. D. K. Agrawal, Dr. Vijay Kumar, Dr. Faisal Ahmad, Mr.S.K.Jha, Dr. Basant Bhuiyan, Prof. Tilak Raj, Mr. Vinit Jain, and Mr. Mahesh Chand.

I am grateful to my wife Dr. Prerna Sinha and Sons Harshit Anand and Arpit Anand for their patience and loving participation in accomplishing this work. I also express my gratitude to my parents, elder brothers and sister, father-in-law and mother-in-law, who remain a continuous source of inspiration for me. I acknowledge the appreciation of Ms. Kanchan Prabha, Asst. Legal Manager, Indian Overseas Bank, Barauda, Anand Vardhan, and Priyanka Rani. I am also grateful to all the well-wishers, whose names could not be mentioned here, for their direct and indirect support in accomplishing the work.

Last but not least, I am immensely grateful to the editorial team of Pearson Ms. Anita Yadav and Mr. Vipin Kumar for their continuous support during book writing and editing processes. This book could not have attained its present form both in content and presentation, without their active interest and direction. They devoted their valuable time to bring the book in present form.

Pravin Kumar New Delhi

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