The document discusses different methods for establishing labor standards, including historical experience, time studies, predetermined time standards, and work sampling. It provides details on how to conduct time studies, including timing tasks, calculating normal and standard times, and applying allowances. Examples are given to demonstrate how to perform time studies for single and multi-element jobs and set standard times. The goal of work measurement techniques is to set meaningful and objective performance standards.

1. © 2008 Prentice Hall, Inc. S10 – 1
Operations
Management
Supplement 10 –Supplement 10 –
Work MeasurementWork Measurement
PowerPoint presentation to accompanyPowerPoint presentation to accompany
Heizer/RenderHeizer/Render
Principles of Operations Management, 7ePrinciples of Operations Management, 7e
Operations Management, 9eOperations Management, 9e

2. © 2008 Prentice Hall, Inc. S10 – 2
OutlineOutline
 Labor Standards and WorkLabor Standards and Work
MeasurementMeasurement
 Historical ExperienceHistorical Experience
 Time StudiesTime Studies
 Predetermined TimePredetermined Time
StandardsStandards
 Work SamplingWork Sampling

3. © 2008 Prentice Hall, Inc. S10 – 3
Learning ObjectivesLearning Objectives
When you complete this supplementWhen you complete this supplement
you should be able to:you should be able to:
 Identify four ways of establishing laborIdentify four ways of establishing labor
standardsstandards
 Compute the normal and standardCompute the normal and standard
times in a time studytimes in a time study
 Find the proper sample size for a timeFind the proper sample size for a time
studystudy

4. © 2008 Prentice Hall, Inc. S10 – 4
Learning ObjectivesLearning Objectives
When you complete this supplementWhen you complete this supplement
you should be able to:you should be able to:
 Explain how predetermined timeExplain how predetermined time
standards and TMUs are used in workstandards and TMUs are used in work
measurementmeasurement
 Apply the five steps of work samplingApply the five steps of work sampling

5. © 2008 Prentice Hall, Inc. S10 – 5
Labor Standards and WorkLabor Standards and Work
MeasurementMeasurement
 Started early in the 20th centuryStarted early in the 20th century
 Important to both manufacturingImportant to both manufacturing
and service organizationsand service organizations
 Necessary for determining staffingNecessary for determining staffing
requirementsrequirements
 Important to labor incentiveImportant to labor incentive
systemssystems

6. © 2008 Prentice Hall, Inc. S10 – 6
Meaningful Standards HelpMeaningful Standards Help
DetermineDetermine
1.1. Labor content of items producedLabor content of items produced
2.2. Staffing needsStaffing needs
3.3. Cost and time estimatesCost and time estimates
4.4. Crew size and work balanceCrew size and work balance
5.5. Expected productionExpected production
6.6. Basis of wage incentive plansBasis of wage incentive plans
7.7. Efficiency of employeesEfficiency of employees

7. © 2008 Prentice Hall, Inc. S10 – 7
Labor StandardsLabor Standards
May be set in four ways:May be set in four ways:
1.1. Historical experienceHistorical experience
2.2. Time studiesTime studies
3.3. Predetermined time standardsPredetermined time standards
4.4. Work samplingWork sampling

8. © 2008 Prentice Hall, Inc. S10 – 8
Historical ExperienceHistorical Experience
 How the task was performed lastHow the task was performed last
timetime
 Easy and inexpensiveEasy and inexpensive
 Data available from productionData available from production
records or time cardsrecords or time cards
 Data is not objective and may beData is not objective and may be
inaccurateinaccurate
 Not recommendedNot recommended

9. © 2008 Prentice Hall, Inc. S10 – 9
Time StudiesTime Studies
 Involves timing a sample of aInvolves timing a sample of a
worker’s performance and using itworker’s performance and using it
to set a standardto set a standard
 Requires trained and experiencedRequires trained and experienced
observersobservers
 Cannot be set before the work isCannot be set before the work is
performedperformed

10. © 2008 Prentice Hall, Inc. S10 – 10
Time StudiesTime Studies
1.1. Define the task to be studiedDefine the task to be studied
2.2. Divide the task into preciseDivide the task into precise
elementselements
3.3. Decide how many times to measureDecide how many times to measure
the taskthe task
4.4. Time and record element times andTime and record element times and
rating of performancerating of performance

11. © 2008 Prentice Hall, Inc. S10 – 11
Time StudiesTime Studies
5.5. Compute average observed timeCompute average observed time
AverageAverage
observedobserved
timetime
Sum of the times recordedSum of the times recorded
to perform each elementto perform each element
Number of observationsNumber of observations==
6.6. Determine performance ratingDetermine performance rating
and normal timeand normal time
Normal time = xNormal time = x
AverageAverage
observedobserved
timetime
PerformancePerformance
rating factorrating factor

12. © 2008 Prentice Hall, Inc. S10 – 12
Time StudiesTime Studies
7.7. Add the normal times for eachAdd the normal times for each
element to develop the total normalelement to develop the total normal
time for the tasktime for the task
8.8. Compute the standard timeCompute the standard time
Standard time =Standard time =
Total normal timeTotal normal time
1 -1 - Allowance factorAllowance factor

13. © 2008 Prentice Hall, Inc. S10 – 13
Rest AllowancesRest Allowances
 Personal time allowancePersonal time allowance
 4% - 7% of total time for use of4% - 7% of total time for use of
restroom, water fountain, etc.restroom, water fountain, etc.
 Delay allowanceDelay allowance
 Based upon actual delays that occurBased upon actual delays that occur
 Fatigue allowanceFatigue allowance
 Based on our knowledge of humanBased on our knowledge of human
energy expenditureenergy expenditure

14. © 2008 Prentice Hall, Inc. S10 – 14
Rest AllowancesRest Allowances
1.1. Constant allowanceConstant allowance
(A)(A) Personal allowance ……………...Personal allowance ……………... 55
(B)(B) Basic fatigue allowance …………Basic fatigue allowance ………… 44
2.2. Variable allowances:Variable allowances:
(A)(A) Standing allowance ………………Standing allowance ……………… 22
(B)(B) Abnormal positionAbnormal position
(i)(i) Awkward (bending) …………Awkward (bending) ………… 22
(ii)(ii) Very awkward (lying,Very awkward (lying,
stretching) ……………………stretching) …………………… 77
Figure S10.1Figure S10.1

15. © 2008 Prentice Hall, Inc. S10 – 15
Rest AllowancesRest Allowances
(C)(C) Use of force or muscular energy inUse of force or muscular energy in
lifting, pulling, pushinglifting, pulling, pushing
Weight lifted (pounds)Weight lifted (pounds)
20 ……………………………………20 …………………………………… 33
40…………………………………….40……………………………………. 99
60…………………………………….60……………………………………. 1717
(D)(D) Bad light:Bad light:
(i)(i) Well below recommended….Well below recommended…. 22
(ii)(ii) Quite inadequate…………….Quite inadequate……………. 55
Figure S10.1Figure S10.1

16. © 2008 Prentice Hall, Inc. S10 – 16
Rest AllowancesRest Allowances
(E)(E) Atmospheric conditionsAtmospheric conditions
(heat and humidity) ……………(heat and humidity) …………… 0-100-10
(F)(F) Close attention:Close attention:
(i) Fine or exacting………………..(i) Fine or exacting……………….. 22
(ii) Very fine or very exacting……(ii) Very fine or very exacting…… 55
(G)(G) Noise level:Noise level:
(i) Intermittent—loud……………..(i) Intermittent—loud…………….. 22
(ii) Intermittent—very loud(ii) Intermittent—very loud
or high-pitched………………...or high-pitched………………... 55
Figure S10.1Figure S10.1

17. © 2008 Prentice Hall, Inc. S10 – 17
Rest AllowancesRest Allowances
(H)(H) Mental strain:Mental strain:
(i) Complex or wide span(i) Complex or wide span
of attention.……………………..of attention.…………………….. 44
(ii) Very complex…………………..(ii) Very complex………………….. 88
(I)(I) Tediousness:Tediousness:
(i) Tedious…………..………………(i) Tedious…………..……………… 22
(ii) Very tedious.……………………(ii) Very tedious.…………………… 55
Figure S10.1Figure S10.1

18. © 2008 Prentice Hall, Inc. S10 – 18
Time Study Example S1Time Study Example S1
Average observed timeAverage observed time = 4.0= 4.0 minutesminutes
Worker ratingWorker rating = 85%= 85%
Allowance factorAllowance factor = 13%= 13%
Normal time = (Average observed time) x (Rating factor)Normal time = (Average observed time) x (Rating factor)
= (4.0)(.85)= (4.0)(.85)
= 3.4= 3.4 minutesminutes
Standard time = = =Standard time = = =
Normal timeNormal time
1 -1 - Allowance factorAllowance factor
3.43.4
1 - .131 - .13
3.43.4
.87.87
= 3.9= 3.9 minutesminutes

19. © 2008 Prentice Hall, Inc. S10 – 19
Time Study Example S2Time Study Example S2
Allowance factorAllowance factor = 15%= 15%
PerformancePerformance
Job ElementJob Element 11 22 33 44 55 RatingRating
(A)(A) Compose and type letterCompose and type letter 88 1010 99 21*21* 1111 120%120%
(B)(B) Type envelope addressType envelope address 22 33 22 11 33 105%105%
(C)(C) Stuff, stamp, seal, andStuff, stamp, seal, and 22 11 5*5* 22 11 110%110%
sort envelopessort envelopes
Cycle Observed (in minutes)Cycle Observed (in minutes)
1.1. Delete unusual or nonrecurring observations (marked with *)Delete unusual or nonrecurring observations (marked with *)
2.2. Compute average times for each elementCompute average times for each element
Average time for AAverage time for A = (8 + 10 + 9 + 11)/4 = 9.5= (8 + 10 + 9 + 11)/4 = 9.5 minutesminutes
Average time for BAverage time for B = (2 + 3 + 2 + 1 + 3)/5 = 2.2= (2 + 3 + 2 + 1 + 3)/5 = 2.2 minutesminutes
Average time for CAverage time for C = (2 + 1 + 2 + 1)/4 = 1.5= (2 + 1 + 2 + 1)/4 = 1.5 minutesminutes

20. © 2008 Prentice Hall, Inc. S10 – 20
Time Study Example S2Time Study Example S2
3.3. Compute the normal time for each elementCompute the normal time for each element
Normal time for ANormal time for A = (9.5)(1.2) = 11.4= (9.5)(1.2) = 11.4 minutesminutes
Normal time for BNormal time for B = (2.2)(1.05) = 2.31= (2.2)(1.05) = 2.31 minutesminutes
Normal time for CNormal time for C = (1.5)(1.10) = 1.65= (1.5)(1.10) = 1.65 minutesminutes
Normal time = (Average observed time) x (Rating)Normal time = (Average observed time) x (Rating)
4.4. Add the normal times to find the total normal timeAdd the normal times to find the total normal time
Total normal timeTotal normal time = 11.40 + 2.31 + 1.65 = 15.36= 11.40 + 2.31 + 1.65 = 15.36 minutesminutes

21. © 2008 Prentice Hall, Inc. S10 – 21
Time Study Example S2Time Study Example S2
5.5. Compute the standard time for the jobCompute the standard time for the job
Standard time =Standard time =
Total normal timeTotal normal time
1 -1 - Allowance factorAllowance factor
= = 18.07= = 18.07 minutesminutes
15.3615.36
1 - .151 - .15

22. © 2008 Prentice Hall, Inc. S10 – 22
Determine Sample SizeDetermine Sample Size
 How accurate we want to beHow accurate we want to be
 The desired level of confidenceThe desired level of confidence
 How much variation exists withinHow much variation exists within
the job elementsthe job elements

23. © 2008 Prentice Hall, Inc. S10 – 23
Determine Sample SizeDetermine Sample Size
Required sample size = n =Required sample size = n =
22
zszs
hxhx
wherewhere hh == accuracy level desired inaccuracy level desired in
percent of the job element expressed aspercent of the job element expressed as
a decimala decimal
zz == number of standardnumber of standard
deviations required for the desired leveldeviations required for the desired level
of confidenceof confidence
ss == standard deviation of thestandard deviation of the
initial sampleinitial sample
xx == mean of the initial samplemean of the initial sample

24. © 2008 Prentice Hall, Inc. S10 – 24
Determine Sample SizeDetermine Sample Size
Required sample size = n =Required sample size = n =
22
zszs
hxhx
wherewhere hh == accuracy level desired inaccuracy level desired in
percent of the job element expressed aspercent of the job element expressed as
a decimala decimal
zz == number of standardnumber of standard
deviations required for the desired leveldeviations required for the desired level
of confidenceof confidence
ss == standard deviation of thestandard deviation of the
initial sampleinitial sample
xx == mean of the initial samplemean of the initial sample
Desired
Confidence
(%)
z Value
(standard deviation required for
desired level of confidence)
90.0 1.65
95.0 1.96
95.45 2.00
99.0 2.58
99.73 3.00
Common z Values
Table S10.1

25. © 2008 Prentice Hall, Inc. S10 – 25
Time Study Example S3Time Study Example S3
Desired accuracy withDesired accuracy with 5%5%
Confidence levelConfidence level = 95%= 95%
Sample standard deviationSample standard deviation = 1.0= 1.0
Sample meanSample mean = 3.00= 3.00
n =n =
22
zszs
hxhx
nn = = 170.74 ≈ 171= = 170.74 ≈ 171
22
1.96 x 1.01.96 x 1.0
.05 x 3.05 x 3
hh = .05= .05 xx = 3.00= 3.00 ss = 1.0= 1.0
zz = 1.96 (= 1.96 (fromfrom Table S10.1Table S10.1 or Appendix Ior Appendix I))

26. © 2008 Prentice Hall, Inc. S10 – 26
Time Study Example S3Time Study Example S3
n =n =
22
zszs
ee
If desired accuracy h is expressed as an absoluteIf desired accuracy h is expressed as an absolute
amount, substitute e for hx, where e is theamount, substitute e for hx, where e is the
absolute amount of acceptable errorabsolute amount of acceptable error
VariationsVariations
When the standard deviation s is not provided,When the standard deviation s is not provided,
it must be computedit must be computed
s = =s = =
∑∑(x(xii - x)- x)22
∑∑(Each sample observation - x)(Each sample observation - x)22
nn - 1- 1 Number in sampleNumber in sample - 1- 1

27. © 2008 Prentice Hall, Inc. S10 – 27
New ToolsNew Tools
 With PDA software, you can studyWith PDA software, you can study
elements, time, performance rate, andelements, time, performance rate, and
statistical confidence intervals can bestatistical confidence intervals can be
created,created,
edited,edited,
managed,managed,
and loggedand logged
 Reduces orReduces or
eliminateseliminates
the needthe need
for data entryfor data entry

28. © 2008 Prentice Hall, Inc. S10 – 28
Predetermined TimePredetermined Time
StandardsStandards
 Divide manual work into small basicDivide manual work into small basic
elements that have established timeselements that have established times
 Can be done in a laboratory away fromCan be done in a laboratory away from
the actual production operationthe actual production operation
 Can be set beforeCan be set before
the work is actuallythe work is actually
performedperformed
 No performanceNo performance
ratings are necessaryratings are necessary

29. © 2008 Prentice Hall, Inc. S10 – 29
MTM TableMTM Table
Figure S10.2Figure S10.2

30. © 2008 Prentice Hall, Inc. S10 – 30
MTM ExampleMTM Example
Weight - less than 2 poundsWeight - less than 2 pounds
Conditions of GET - easyConditions of GET - easy
Place accuracy - approximatePlace accuracy - approximate
Distance range - 8 to 20 inchesDistance range - 8 to 20 inches
Element DescriptionElement Description ElementElement TimeTime
Get tube from rackGet tube from rack AA2AA2 3535
Get stopper, place on counterGet stopper, place on counter AA2AA2 3535
Get centrifuge tube, place at sample tableGet centrifuge tube, place at sample table AD2AD2 4545
Pour (3 seconds)Pour (3 seconds) PTPT 8383
Place tubes in rack (simo)Place tubes in rack (simo) PC2PC2 4040
Total TMUTotal TMU 238238
.0006 x 238 =.0006 x 238 = Total standard minutesTotal standard minutes = .14= .14
Table S10.2Table S10.2

31. © 2008 Prentice Hall, Inc. S10 – 31
Work SamplingWork Sampling
 Estimates percent of time a workerEstimates percent of time a worker
spends on various tasksspends on various tasks
 Requires random observations toRequires random observations to
record worker activityrecord worker activity
 Determines how employees allocateDetermines how employees allocate
their timetheir time
 Can be used to set staffing levels,Can be used to set staffing levels,
reassign duties, estimate costs, andreassign duties, estimate costs, and
set delay allowancesset delay allowances

32. © 2008 Prentice Hall, Inc. S10 – 32
Work SamplingWork Sampling
 Advantages of work samplingAdvantages of work sampling
 Less expensive than time studyLess expensive than time study
 Observers need little trainingObservers need little training
 Studies can be delayed or interruptedStudies can be delayed or interrupted
with little impact on resultswith little impact on results
 Worker has littleWorker has little
chance to affectchance to affect
resultsresults
 Less intrusiveLess intrusive

33. © 2008 Prentice Hall, Inc. S10 – 33
 Disadvantages of work samplingDisadvantages of work sampling
 Does not divide work elements asDoes not divide work elements as
completely as time studycompletely as time study
 Can yield biased results if observerCan yield biased results if observer
does not follow random patterndoes not follow random pattern
 Less accurate, especially whenLess accurate, especially when
job element times are shortjob element times are short
Work SamplingWork Sampling

34. © 2008 Prentice Hall, Inc. S10 – 34
Work SamplingWork Sampling
1.1. Take a preliminary sample to obtainTake a preliminary sample to obtain
estimates of parameter valuesestimates of parameter values
2.2. Compute the sample size requiredCompute the sample size required
3.3. Prepare a schedule for randomPrepare a schedule for random
observations at appropriate timesobservations at appropriate times
4.4. Observe and record worker activitiesObserve and record worker activities
5.5. Determine how workers spend theirDetermine how workers spend their
timetime

35. © 2008 Prentice Hall, Inc. S10 – 35
Work SamplingWork Sampling
Determining the sample sizeDetermining the sample size
n =n =
zz22
pp(1 -(1 - pp))
hh22
wherewhere nn == required sample sizerequired sample size
zz == standard normal deviatestandard normal deviate
for desired confidence levelfor desired confidence level
pp == estimated value ofestimated value of
sample proportionsample proportion
hh == acceptable error level inacceptable error level in
percentpercent

36. © 2008 Prentice Hall, Inc. S10 – 36
Work Sampling ExampleWork Sampling Example
Wants employees idle 25% of the timeWants employees idle 25% of the time
Sample should be accurate within 3%Sample should be accurate within 3%
Wants to have 95.45% confidence in the resultsWants to have 95.45% confidence in the results
n =n =
zz22
pp(1 -(1 - pp))
hh22
wherewhere nn == required sample sizerequired sample size
zz == 22 for afor a 95.45%95.45% confidenceconfidence
levellevel
pp == estimate of idle proportionestimate of idle proportion
= 25% = .25= 25% = .25
hh == acceptable error ofacceptable error of 3% = .3% = .
0303nn = = 833= = 833 observationsobservations
(2)(2)22
(.25)(.75)(.25)(.75)
(.03)(.03)22

37. © 2008 Prentice Hall, Inc. S10 – 37
Work Sampling ExampleWork Sampling Example
No. ofNo. of
ObservationsObservations ActivityActivity
485485 On the phone or meeting with a welfare clientOn the phone or meeting with a welfare client
126126 IdleIdle
6262 Personal timePersonal time
2323 Discussions with supervisorDiscussions with supervisor
137137 Filing, meeting, and computer data entryFiling, meeting, and computer data entry
833833
All but idle and personal time are work related.All but idle and personal time are work related.
Percentage idle timePercentage idle time = (126 + 62)/833 = 22.6%.= (126 + 62)/833 = 22.6%.
Since this is less than the target value ofSince this is less than the target value of 25%,25%,
the workload needs to be adjusted.the workload needs to be adjusted.

38. © 2008 Prentice Hall, Inc. S10 – 38
Work Sampling TimeWork Sampling Time
StudiesStudies
SalespeopleSalespeople
Figure S10.3Figure S10.3
TelephoneTelephone
salessales
12%12%
TelephoneTelephone
within firmwithin firm
13%13%
Lunch andLunch and
personalpersonal
10%10%
MeetingsMeetings
and otherand other
8%8%
Paperwork
17%
Travel
20%
Sales in
person
20%

39. © 2008 Prentice Hall, Inc. S10 – 39
Work Sampling TimeWork Sampling Time
StudiesStudies
Figure S10.3Figure S10.3
Productive
work
67%
Startup/pep talkStartup/pep talk
3%3%
Breaks and lunchBreaks and lunch
10%10%
Dead timeDead time
between tasksbetween tasks
13%13%
CleanupCleanup
3%3%
Unscheduled tasksUnscheduled tasks
and downtimeand downtime
4%4%
Assembly-LineAssembly-Line
EmployeesEmployees