Earning Power Modelling for Manufacturing Operation

DASCHIEVICI LUIZA, GHELASE DANIELA

Faculty of Engineering and Agronomy, Braila,

“Dunarea de Jos” University of Galati,

ROMANIA

Abstract: - One of the most important criteria to consider while analysing the MTO company’s ability to make

a profit in a competitive market is earning power. Specifically, this is defined by the Earning Power criterion.

This means that the Earning Power modelling is a solid strategy for selecting and assessing which orders will

1 Introduction

The criterion considered the most important when

analysing the profit capacity of an MTO company,

i.e., to be competitive in one segment of the market,

this criterion it is called earning power, EP.

EP modelling is a solid strategy when selecting

orders that bring profit to companies. Based on an

EP determined for each order, one order can be

accepted or rejected, [1].

other processing companies, [2].

Regarding operations, optimal parameters for the

processing system are determined depending on the

maximum EP value. In this way, it can be achieved

an integrated control of the manufacturing process.

By “Method for control of the make-to-order

manufacturing system on the base of earning power

assessment” the manager has the opportunity to

organize all received orders in order to increase

company competitiveness.

2 Scheme of the Job Shop

Manufacturing

In order to make feasible decisions on the arriving

orders, all affected parties of the supply chain,

which their decisions and performances have

significant effects on prices and delivery times of

the new arriving orders are considered in the

structure. These parties consist of customers, the

MTO company, suppliers, and subcontractors.

and commercial point of view forming a family,

they will be manufactured simultaneously to several

workstations, M. As a result, the number of copies

that are released into production will increase and

workstation adjustment suffers only minor changes

when moving from one product to another in the

same family. Each family is launched as a job in

manufacturing. The operation is an operation cycle

of a workstation when having a job.

For the 15 hydraulic cylinders, by the job we

Fig. 1: Scheme of the job shop manufacturing

Each order has a manufacturing system specific,

including all the workstations covered by the order.

Figure 1 presents the MTO manufacturing system

configuration. Out of order entry pool, the i order is

1)). Supposed that ij job includes ij1, ij2, and ij3

operations. For an ij1 operation, the ij job will wait

for its workstation M. After processing this M

workstation goes ij2 operation to another M

workstation. ij3 operation is a ij, i(j-1) parts

assembling operation and i(j+1) non-

manufacturing part on A workstation. The i(j-1) job

is made from the i(j-1)1 operation performed on the

result. We supposed that a non-manufacturing jobs

the number of samples.

At the operation level by EP, we understand the

relation between the difference of price operation

and cost of operation and product from product asset

and operation time (relation 1). By operation asset,

it is understood the capital invested in workstations

necessary to process orders (machine tools, tools,

devices, workers, buildings, land, etc).

At job level EP we understand the relation between

price difference and cost for job processing and the

At the order level, EP is the ratio between price

difference and order cost and product from order

asset and order time. Necessary costs to achieve the

order are the sum of costs for carrying out jobs that

form orders. Thus, the cost for order i from Figure 1

is the sum of costs ij jobs, j=1…J.

Operation, job, and order are characterized by the

following parameters: part parameters (part length,

part width, etc), process parameters (cutting speed v,

advance s, cutting depth t), tooling parameters (tool

occupied with production planning for the

implementation of orders accepted. The sales

department will tend to accept all orders in whatever

capacity is available for the department because this

department’s target is turnover. The production

department will try to maximize the use of

workstations and minimize the number of late

deliveries. Order acceptance decisions are often

made without involving the production department

or incomplete information based on available

- Method implementation consists of either the

application of an algorithm or the development of a

knowledge-based estimation system.

- Algorithm or knowledge-based systems are

designed so that the field in which they can be used

can have a case when none of the models take into

consideration the specific behaviour of that

workstation. On the other hand, this field is

extended to the level of processing operations of one

part or of any stage of that operation, but never the

entire batch processing. Therefore, the total

manufacturing cost is estimated by adding the

machining cost, material cost, set-up, and

changeover costs, calculated for one part.

- The databases on which to build models or

based systems are not updated, not even

periodically. Therefore, the evolution of workstation

behaviour is not considered and recent experience is

not used.

a) Model variables

The criterion that we consider to be the most

important in analysing the MTO company ability to

make a profit, that is, to be competitive in a market

is the earning power, EP criterion. EP modelling is a

solid strategy when selecting those orders that bring

Following this reason, the only parameter that can

control the workstation is the cutting speed v.

Therefore, operation modelling has as input: price,

process parameters, part features, tooling, job

features, and workstation features, and as output, all

model for job or order.

Modelling technique used to evaluate earning power

is the analytical technique.

We consider that we have to manufacture the part

from Figure 2 and the manager must decide whether

to accept this order. The technological process

needed to process the part consists of the following

operations: turning, drilling, and welding.

[Euro/cm2], (5)

where: cτ is the cost for one minute to use the job

place; 0.45 Euro/min

min

processes; 20 Euro

CM – the cost of machine tool [Euro]; 100000 Euro

t – cutting depth[mm]; 3mm

α= β= γ=0.5;

T – tool durability

For the cutting process, loading time modelling for a

workstation to perform operation k of job j of order i

is:

(7)

where: tpijk – time to prepare the operation; 60 min

[min/cm2] (9)

Figure 3 presents the variation of the Earning Power

depending on cutting speed. It can be noted that

depending on the number of pieces of processed

product N, choosing the optimal cutting speed can

be obtained a maximum EP, i.e. can realize optimal

control of the turning operation.

Fig. 3: The variation of the Earning Power

we showcase that there is a maximum value for EP

for a specific optimal value of cutting speed (Figure

2). For example, for a number of pieces N=2, a

maximum value of EP is -0.0002898 %/hour when

v=40 m/min; N = 5, a maximum value of

EP=0.0496663 %/hour for a cutting speed v=50

m/min; for N=10, a maximum value of EP =

0.079419 %/hour for v=50 m/min and when N=50,

v= 50m/min.

References:

[1] S. Hemmati, M. Rabbani, “Make-to-

order/make-to-stock partitioning decision using

the analytic network process”,in Int J Adv

Manuf Technol, DOI 10.1007/s00170-009-

[3] Α. Niazi, J. Dai, S. Balabani, L. Seneviratne,

“Product cost estimation: Technique

classification and methodology review”,

Journal of Manufacturing Science

Engineering,128(2), 563–575, 2006.

[4] D. Ghelase, L. Daschievici, “Adaptive Control

of the manufacturing system” in International

Journal of scientific Research and Innovative

Technology, vol.6, no.5, 2019.

Contribution of Individual Authors to the