Fall2011Final

MGMT 334 – OPERATIONS MANAGEMENT
Final Exam

Name:______Circle one: 9:30 or 11:00

Part 1. Multiple Choice. Circle the one alternative that “best” answers the question or completes the sentence. Each question is worth 4 points.

  1. Which of the following are related to lean production?

A. A philosophy of waste elimination

B. Lean consumption

C. Never running out of inventory

D. One time inspection at the end

E. Full use of capacity

  1. What transportation mode has very high initial investment costs but gives a very low cost per mile for products that are highly specialized and require no packaging?
    A.Highway
    B.Rail
    C.Water
    D.Pipeline
    E.Air
  1. Which one of the following statements about forecasting is False?
  1. You should use the simple moving-average method to estimate the mean demand of a time series that has a pronounced trend and seasonal influences.
  2. The weighted moving-average method allows forecasters to emphasize recent demand over earlier demand. The forecast will be more responsive to change in the underlying average of the demand series.
  3. The most frequently used time-series forecasting method is exponential smoothing because of its simplicity and the small amount of data needed to support it.
  4. The naïve method is what you had yesterday or the same time in the previous week.
  5. Tracking signal is used as a means for adjusting the smoothing constant.
  1. Which of the following is not a function performed in scheduling and controlling an operation?
    A.Allocating orders and equipment
    B.Setting priorities and sequencing jobs
    C.Allocating personnel to work centers
    D.Expediting late orders
    E.Reporting bottleneck operations

Part 2.Problems. Each problem is worth different points. Points for the problem or problem part is indicated in ( ). Show all your work. Circle or underline your answer.

1. A potentially large customer offered to subcontract assembly work that is profitable only if you can perform the operations at an average time of less than 20 hours each. The contract is for 1000 units. You run a test and the first one in 50 hours and the second one in 40 hours.

a. How long would you expect the third one to take? (10)

b. Would you take the contract? Explain (10)

2. If you have four jobs (A, B, C, and D) that need to be sequenced in your production schedule whose remaining times necessary for completion of Job A is 3 days, B will take 2 days, C will take 6 days, and D will take 9 days, respectively.

a. Which job should be scheduled first if you plan on using the SOT priority rule? (5)

b. Which job should be schedule first if you plan on using the FCFS priority rule? (5)

3. Given the following jobs must go through these 2 different work stations:

Job Time (in hours)
Job / Work Station A / Work Station B
A / 16 / 5
B / 3 / 13
C / 9 / 6
D / 8 / 7
E / 2 / 14
F / 12 / 4
G / 18 / 14
H / 20 / 11
  1. Use the scheduling technique that obtains the optimal sequence for processing jobs through Work Stations A and B. (10)
  1. Construct a chart of resulting sequence, and find Work Station B’s idle time.(15)

4. Neefe Family Dental (NFD) offers a complete array of dental services for its patients. These services include a recommended semi-annual oral examination and cleaning (i.e., periodontal evaluation and maintenance) as part of a preventive care program. Patients receiving the oral examination and cleaning are provided with a complimentary toothbrush, small tube of toothpaste and packet of dental floss at the completion of the service. The receptionist, who is responsible for managing general office and dental supplies, wants to determine how much and when these items are to be replenished so as to minimize the total inventory costs.

Since the three items are handled as a matched set, the receptionist orders equal amounts of each item from a dental supplies distributor. The items are purchased from the distributor at prices of $0.35 per toothbrush, $0.30 per tube of toothpaste, and $0.15 for a packet of dental floss, or $0.80 for the group of items. The lead time to receive an order is a fairly constant 2 days, and NFD schedules appointments for 8 hours per day, Monday thru Friday. It costs approximately $30 for the receptionist to order and receive a shipment of the dental supplies from the distributor, and the monthly holding cost is estimated to be 2.5% of the item purchase price, or an annual rate of 30%. The dental hygienists give away an average of 10 sets of items per day with a standard deviation of 2 sets per day. NFD is open for 256 days per year.

The receptionist wants to determine the following information:

(a)Each time an order is placed, how many sets of the three complimentary items should be ordered so as to minimize the total inventory costs? (10)

(b)If a 98.3% service level is desired, replenishment orders should be placed with the distributor when there are how many sets of items still left in inventory? (10)

Problem 4 continued.

(c)Using the order quantity determined in part (a), what is the total annual cost of purchasing, ordering and carrying these items in inventory? (10)

(d)If the receptionist is notified by the distributor that the cost for each item will be increased by 10%, what should the receptionist do next time she places an order? Be specific. (10)

5. Consider the MPS, BOM, and Inventory Data Shown. (20)

MPS / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Finished Item A start / 20 / 40 / 30 / 20 / 40

Bill of material:

Inventory Data:
Item / Lot Size / Lead Time / Scheduled Rec. / On-Hand
A / L4L / 0 / 0
B / L4L / 1 / 40 in period 1 / 0
C / POQ=3 / 2 / 200
D / FOQ=250 / 1 / 100
E / L4L / 2 / 160 in period 2 / 0

Construct the MRP schedule using the preceding information. (20)

ITEM: / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Gross Requirements
Scheduled Receipts
Projected on-hand balance
Net Requirements
Planned Receipts
Planned order releases
ITEM: / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Gross Requirements
Scheduled Receipts
Projected on-hand balance
Net Requirement
Planned Receipts
Planned order releases
ITEM: / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Gross Requirements
Scheduled Receipts
Projected on-hand balance
Net Requirement
Planned Receipts
Planned order releases
ITEM: / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Gross Requirements
Scheduled Receipts
Projected on-hand balance
Net Requirement
Planned Receipts
Planned order releases
ITEM: / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8
Gross Requirements
Scheduled Receipts
Projected on-hand balance
Net Requirements
Planned Receipts
Planned order releases

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