The critical ratio scheduling approach has been around for over 50 years. Determining the order to schedule work is essential to a successful manufacturing operation.
In 1960, Arnold O. Putnam wrote the first article about Critical Ratio in an APICS published article. This is the earliest reference to the term I could find (Plossl). If you are aware of a documented usage before that year, please let me know and site the reference.
The 3rd edition of the APICS Operations Management Body of Knowledge Framework (OMBOK) describes it as:
“A special type of priority rule that uses current status information and calculates a priority index number by dividing the time to a job’s due date by the expected elapsed time to finish the job.”
The formula for critical ratio in mathematical format is shown below:
Critical ratio = Time to Due Date / Elapsed Tim to Finish the Job
Items with a critical ratio of 1.0 are exactly on time. Ratios less than 1.0 are running late and those above 1.0 are ahead of schedule.
Let us now use a case example of the Rocket Car Manufacturing Company. This fictitious company makes a variety of go-carts products. Using the information in the table below, we will calculate critical ratios for each product then determine the sequence we will follow using critical ratio.
Review the table that contains the case information now.
For this case example, let us assume today’s date is Monday, March 3rd, 2014. The critical ratio calculation for job number 402 is shown in the formula below:
Critical ratio for job 402 = 2 days / 3 days = 1.0
Calculations for jobs 245 and 117 are below
Critical ratio for job 245 = 4 days / 8 days = 0.8
Critical ratio for job 117 = 3 days / 2 days = 1.5
The correct critical ratio order to schedule the jobs is job 245, job 402 and finally job 117.
My experience with critical ratio is mixed. While the ratio is useful in creating a clear order to run the parts, I do have one concern. The rate the ratio changes from day-to-day may cause items to change in priority as well. Those items with less work remaining will change at a faster rate than those with more work remaining. In addition, sorting work by critical ratio will not solve an overloaded schedule. A different article best addresses that topic.
More by Garrison
Five Manufacturing Environments
The Story of EOQ
APICS Operations Management Body of Knowledge Framework, 3rd edition.
How Much Inventory is Enough, George W. Plossl, as published in The Journal of the American Production and Inventory Management Control Society, Second Quarter, 1971, Volume Twelve, Number Two.