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					Chapter 9: Proposed Method

  ME 5211 HUMF 5211 IE 5511
        Human Factors
     Cost Benefit Analysis
Chapters 7 - 9, in “The Complete Problem
Chapter 9, in our text, “Niebel’s Methods”
       Uses and Importance
      of Cost Benefit Analysis
Choose the most appropriate alternative to
present to your management
Sell the idea to your management!!
– If you can’t sell the idea – no change will
– Many people new to the job market view
  “selling” ideas as outside their scope of
  responsibility and expertise, but it is an
  essential part of most jobs!
            Selling an idea
Describe situation:
– What change do you propose?
– What alternatives were considered?
– What was the rationale behind the choice? (e.g. why
  is A better than B or C?)
What are the predicted improvements?
(Quality? Reliability? Performance? Cost?)
How much capital will be required? (e.g. Start-up
and maintenance costs).
How long till capital is recovered? (Cross-over
What is the expected lifetime of the change and
what is the expected Return On Investment
(ROI) over that lifetime?
      Implementing a change
Choose the most appropriate alternative.
Methods for to deciding between alternative solutions
 – Value Engineering
 – Cost-benefit Analysis
 – Economic Analysis
Sell method
Identify a process for change. Where and when will the
method be piloted? Who will use it? How will they be
trained? When will everyone use it?
Establish base rates using reliable job evaluations
Accommodate workers of all abilities
 Choosing the most appropriate
Can use all of the methods from
J. R. Hayes, Chapter 7, 8 and 9:
 – Dominance, Lexicographic, Additive Weighting,
 - Optimistic, pessimistic and Hurwitz,
 - Expected Value
And from Neibel and Freivalds, Ch. 9:
 – Decision and Hazard Action tables,
 – Value Engineering (same as Additive Weighting)
 – Cost Benefit Analyses under uncertainty (CPS
   Chapter 9, and Multi-criteria decision making in
   “Neibel’s Methods Chapter 9)
 – Cross-over charts
   Examples of Methods for
 comparing several alternatives
Value engineering: computes a “value score” for
each alternative, thus facilitating their
Cost-benefit analysis: allows comparison of
alternatives based on a cost/benefit ration.
(Small cost/benefit is desirable).
Cross-over charts: allows visualization of the
total cost of several alternatives under multiple
Expected return (value): allows comparison of
alternatives based on a weighted average of the
likely returns under various conditions.
Decision Tables & Hazard Action Tables

Hazard action tables used in safety programs,
Can be used to recommend actions in
emergency and disaster situations, (fire, Katrina,
hospital emergency procedures)
Have form:
– “If condition x, y, z, etc,
– Then do action A
Can unambiguously recommend what to do in
complex situations,
Help by encouraging people to think of
appropriate actions before an emergency arises.
   Decision tables can be used to
   choose between alternatives:
Assembly task example:
  If the assembly is perfect, then put in “completed
  If two or fewer parts are defective, then put in
  “rework” bin,
  If three or more parts are defective, then put in
  “scrap” bin.

Can apply to many areas:
 Medical room emergency procedures,
 sorting job applicants, etc.
 Decision Table vs Decision Matrix
A decision table               A decision matrix
  Just includes simple “yes”    has multi-valued results
  “no” answers. Binary.         Example: a table created
  Other names: “gates.”         using the weighted sums
  Each condition is a “gate”    method in
  like that a horse would       “The Complete Problem
  leap over.                    Solver.”
  Making it through the         Also known as “value
  gate is a “go/no go”          engineering.”
  Good for rapidly              Good for comparing a
  winnowing acceptable          few “good” options to find
  and unacceptable              the “best.”
     Decision Table Example
Foot operated press for making blades (for a
 hand-held knife with plastic handle):
  – Cut blade with press using foot operated
  – Pick up rubber nib with tweezers,
  – Place nib on blade,
  – Position blade on plate using stereoscope
Operators complain of pain in:
–   Wrist
–   Neck
–   Back
–   Ankle

Come up with alternative process changes
– Use CTD Risk index (Fig 5-25) to calculate risk of
  injury from new alternatives.
– Calculate increases in productivity
     Costs and Benefits of each option
Work design and methods           ∆         ∆ CTD   Cost ($)
       changes               Productivity    Risk
                                 (%)         (%)
1.Foot operated electric          0          -1       175
2. Adjust stereoscope             0          -2       10
3. Video projection system       +1          -2      2,000
4. Gravity feed bin              +7          -10      40
5. Vacuum stylus                 +1          -40      200
                  A Decision1, Table OR 3 are met:
Company Policy says “Proceed if condition and either 2
   Condition 1: implementation cost is $200 or less,
   Condition 2: productivity increase greater than 5%
   Condition 3: injury risks reduced by more than 33%
                         Conditions       OR                     Action
   Method Changes           #1       #2        #3       Policy
1. Electric switch                                                ---

2. Adjust stereoscope                                             ---

3. Video projection                                                ---
4. Gravity feed bin                                           Proceed

5. Vacuum stylus                                              Proceed
        Value Engineering
Value Engineering is any technique in
which you use numbers and weights to
create a “value score” for each alternative
(same as Additive Weighting from J. R.
Hayes chapter 7).
Each alternative is given a “value score”
so that all alternatives can be compared.
Both costs and benefits are considered.
                 Cost-Benefit Analysis
   Table 9.5 Cost Benefit Analysis for Cutoff Operation
                                        Benefit ($)
                              Productivit Injury                        Cost
   Method Changes             y             rates     Total   Cost ($) benefit
   1. Electric switch                    0        60       60       175          3
   2. Adjust stereoscope                 0      120       120        10          0
   3. Video projection system         645       120       765    2,000           3
   4. Gravity feed bin              4,515       600     5,115        40          0
   5. Vacuum stylus                   645     2,400     3,045       100          0
   6. Methods changes 2, 4, 5       5,160     3,120     8,280       150          0

  Small cost/benefit is good!
  For any C/B less than 1, benefits exceed costs – its worth doing.

Each 1% increase in productivity = $645 per year,
For each 1% decrease in Cumulative Trauma Disorder (CTD) risk, benefit = $60/year
         Cross-over Charts
The value of an alternative may also depend on:
– How long is it used?
– How long is it in production?
– How many are you going to sell or purchase?
Cross-over charts are good for graphically
showing after how much time/production/etc.
one alternative becomes better than others.
Very useful tool for quickly showing your team,
or your management the economic pros and
cons of several options.
Many factors must be considered
 when implementing changes
Hawthorne Effect: the positive impact of
involvement of workers in change (to get
“buy-in,” similar to “participatory design.”)
Resistance to change,
Job evaluation: who will perform new or
changed operations: A job evaluation
allows company to identify importance of
job to the company, and the qualifications
required to perform it.
        Hawthorne Effect
Worker involvement in change, and
motivation can have a large impact on
Initial study done at Western Electric,
Co.’s Hawthorne plant near Chicago (1924
– 1927).
    Hawthorn Effect (cont.)
Workers responded to change as they felt
they were expected to act.
Three experiments at Hawthorne plant:
– Illumination increased; productivity increased.
– Illumination decreased; productivity decreased.
– Illumination same, but light bulbs changed and
  workers allowed to believe it illumination was
  increaced; productivity increased.
      Hawthorne Effect (cont.)
Another set of experiments (1927 – 1932), explored
impact of mental attitudes on effectiveness

6 operators were studied under various conditions:
–   Group incentives,
–   More rest breaks,
–   Shorter work days,
–   Shorter work weeks,
–   Lunches or beverages at company expense,

All changes discussed in advance with 6 workers, effects
of changes discussed.

Regardless of the condition, workers:
– Took fewer sick days than co-workers
– Increase in social satisfaction.
           Job Evaluation
First need a job description detailing:
– Job Title,
– Job responsibilities (unambiguous as possible),
– List of machines and tools used in the job, (e.g.
  forklift, microscope)
– Mental and physical requirements, (e.g. must
  have valid drivers license, certified fork-lift
  operator, 20/40 vision, etc.)
Why are Job Evaluation Systems
Explains why one job is “worth” more than
another (i.e. more pay).
Provides explanation of why a change to a
method results in a change in pay,
Basis for matching personnel with specific
qualifications to specific jobs,
Determines criteria for hiring and
Identify opportunities for methods
     Job Evaluation Systems
 Classification method
 Point system: each job is given a value
 “score” based on a weighted average.
 Factor comparison method
 Ranking method

For this exam only need to go up to pg 355
 in Ch. 8 – but you will need to know the
 whole chapter for the final exam.

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