Page 211 - DCOM303_DMGT504_OPERATION_RESEARCH

Operations Research

Notes

Task Determine the optimal sequence of jobs that minimize the total elapsed time based
on the following information (see Table). Processing time on machines is given in hours,
and passing is not allowed.

Sequence Problem

Job A B C D E F G
Machine M1 3 8 7 4 9 8 7
Machine M2 4 3 2 5 1 4 3
Machine M3 6 7 5 11 5 6 12

10.4 Replacement Theory

Men, materials and machines get deteriorated as the time passes. Hence, they require replacement.
Replacement is necessary because they may not be in a position to generate the same level or
degree of efficiency which they show throughout the life and before replacement. The exact age
or time for replacement is needed to be calculated and sometimes it becomes a critical issue,
especially in case of machines and equipments, because the resale value decreases as the decision
to replace gets postponed.
Replacement Model helps in determining the optimum time of replacement by considering the
running costs and the capital cost of purchasing the equipment. These associated costs can be
expressed as the average costs and this average cost goes on decreasing with the postponement
of replacement decision. But a time will come when the average cost starts increasing calling the
owner to replace the machine or equipment.

10.4.1 Need for Replacement

1. The existing materials or machines might have out lived their effective lives and it may
not be economically feasible to allow them to continue in the organization.
2. The existing materials or equipments might have been destroyed by accident.
Total Cost p.a. = Maintenance cost + Loss in purchase price

Average cost =

Running cost = R
n
SR = Total running cost [cumulative Rn]
n
C – S = Capital cost of acquisition – Scrap/resale price
P = Total cost
(n)
=

Justification

An inference is to be arrived at to replace the machine or equipment when the cost of maintaining
a particular machine during a particular year is more than the average cost of equipment for the
year concerned.

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