FAU MAN3506 Operations Management Final Exam

MAN 3506 Operations Management

Final Exam

 

(This is a close-book, close-notes exam. Total 60 problems, 2 hr. 15 min. A Formula sheet and z-table are attached.)

 

Name: _____________________________________________

 

1. A steel company has categorized its customers as standard steel customers, special bar-quality steel customers, and mixed-steel customers. This is an example of:
   1. a needs assessment.
   2. a mission statement.
   3. market segmentation.
   4. a joint venture with its customers.
2. Activity slack is defined as:
   1. latest start time minus earliest start time.  = LS - ES
   2. earliest start time minus latest start time.
   3. earliest finish time minus latest finish time.
   4. latest finish time minus earliest start time.

 

 

Figure to accompany Table 1.1

 

 

D 7

B 1

A 2

         

 

 

C 3

E 3

G 4

F 6

 

 

 

 

 

 

 

 

 

 

 

 

 

         

      Table 1.1

ACTIVITY	ACTIVITY TIME	EARLIEST START	EARLIEST FINISH	LATEST START	LATEST FINISH	SLACK
A	2	0		0	2	0
B	1	2	3	3	4	1
C	3	2	5	2	5	0
D	7	3	10	4	11
E	3	5	8		11	3
F		5	11	5	11	0
G	4	11	15	11	15	0

 

1. Using the information shown in Table 1.1, what is the slack time for activity D?
   1. 1        S= LS – ES = 4 – 3 = 1
   2. 4
   3. 6                
   4. 7

 

1. Using the information shown in Table 1.1, what is the earliest finish time for activity A?
   1. 0
   2. 2
   3. 3
   4. 4

 

1. Using the information shown in Table 1.1, what is the latest start time for activity E?
   1. 2
   2. 3
   3. 5
   4. 8

 

1. Using the information shown in Table 1.1, what is the activity time for activity F?
   1. 5
   2. 11
   3. 6
   4. 1
2. Wh

ich one of the following is the critical path?

1. 1. ABDG
   2. ABEG
   3. ACEG
   4. ACFG

 

1. Using the information shown in Table 1.1, what is the project duration?
   1. 15
   2. 14
   3. 12
   4. 10

 

1. A restaurant manager tracks complaints from the diner satisfaction cards that are turned in at each table. The data collected from the past week’s diners have been plotted and appear in the following graph. The number of complaints for each category is with each bar.

 

 

How was the value for the point represented by the triangle calculated?

1. 1.  
   2.  
   3.  
   4.  
2. A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be:

                a.         an chart.

                b.         a p-chart.

                c.         a c-chart.

                d.         an R-chart.

 

 

 

Table 2               The figure above shows the process for paying tuition at a major university. Students are provided their bill for the next term for review, then routed to different tables for questions to be answered before finally paying their tuition at E. The numbers in parentheses are the time in minutes for each step of the process.

A (2)

C (6)

D (10)

E (4)

B (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Use the information in Table 2. What is the throughput time for the A-B-C-E process route?
   1. 17 minutes
   2. 27 minutes
   3. 21 minutes
   4. 19 minutes

 

1. Use the information in Table 2. What is the throughput time for the A-B-D-E process route?
   1. 17 minutes
   2. 27 minutes
   3. 21 minutes
   4. 19 minutes

 

1. Use the information in Table 2. What is the capacity for the A-B-C-E process route?
   1. 10 students per hour
   2. 6 student per hour
   3. 3.5 students per hour
   4. 2.9 students per hour

 

1. Use the information in Table 2. What is the capacity for the A-B-D-E process route?
   1. 10 students per hour
   2. 6 student per hour
   3. 3.5 students per hour
   4. 2.9 students per hour

 

1. Use the information in Table 2. If 60% of the students are routed to C and 40% are routed to D, what is the average capacity per hour for the process?
   1. 10 students per hour
   2. 6.5 student per hour
   3. 8 students per hour
   4. 8.4 students per hour

 

1. Use the information in Table 2. Where would you expect student wait times to occur?
   1. D only
   2. B, C and D
   3. A only
   4. E only

 

 

Table 3 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table.   Processing Time (min/unit) Work Center A B C D W 6 1 3 12 X 9 10 4 8 Y 4 3 12 9 Z 10 0 7 11   Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Use the information in Table 3. Which work center is of greatest concern to the operations manager?
   1. Work center W
   2. Work center X
   3. Work center Y
   4. Work center Z

 

1. Use the information in Table 3. Using the traditional method, which product should be scheduled first?
   1. Product A
   2. Product B
   3. Product C
   4. Product D

 

1. Use the information in Table 3. Using the traditional method, in what sequence should products be scheduled for production?
   1. D, C, B, A
   2. D, B, A, C
   3. C, D, A, B
   4. C, D, B, A

 

1. Use the information in Table 3. Using the traditional method, what is the optimal product mix (consider variable costs only—overhead is not included in this profit calculation)?
   1. 71 A, 80B, 80C, 80 D
   2. 80A, 72B, 80C, 80D
   3. 80A, 80B, 60C, 80D
   4. 80A, 80B, 80C, 70D

 

1. Use the information in Table 3. Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only—overhead is not included in this profit calculation)?
   1. Less than or equal to $8,100
   2. Greater than $8,100 but less than or equal to $8,300
   3. Greater than $8,300 but less than or equal to $8,500
   4. Greater than $8,500

 

1. Use the information in Table 3. Using the bottleneck method, which product should be scheduled first?
   1. Product A
   2. Product B
   3. Product C
   4. Product D

 

1. Use the information in Table 3. Using the bottleneck method, in what sequence should products be scheduled for production?
   1. D. C. B. A
   2. D, C, A, B
   3. C, D, A, B
   4. C, D, B, A

 

1. Use the information in Table 3. Using the bottleneck method, what is the optimal product mix (consider variable costs only—overhead is not included in this profit calculation)?
   1. 71 A, 80B, 80C, 80 D
   2. 80A, 72B, 80C, 80D
   3. 80A, 80B, 60C, 80D
   4. 80A, 80B, 80C, 70D

 

1. Use the information in Table 3. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix (consider variable costs only—overhead is not included in this profit calculation)?
   1. Less than or equal to $8,100
   2. Greater than $8,100 but less than or equal to $8,300
   3. Greater than $8,300 but less than or equal to $8,500
   4. Greater than $8,500

 

1. Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is:
   1. less than 2.0.
   2. greater than 2.0 but less than 2.5.
   3. greater than 2.5 but less than 3.0.
   4. greater than 3.0.

 

• • •  = 24/7 = 3.4

 

 

Use the following to answer questions 9 -11.

 

A company is considering making versus buying a part needed for manufacturing. Particulars are as follows:

                  Make:         Fixed Costs = $9,000 / year                   Variable Cost / Unit = $2

      Buy:           Fixed Costs = $3,000 / year                   Variable Cost / Unit = $5

 

1. What is the annual break-even quantity for choosing between making and buying in this situation?
   1. 1,000 units
   2. 2,000 units
   3. 6,000 units
   4. 3,000 units
2. For an annual volume of 3,000 units, which supplier should be chosen?
   1. Make
   2. Buy
   3. Either Make or Buy; costs are the same for either option at 3,000 units
   4. Can’t be determined with information given

 

1. What does the company save for the year by selecting this low-cost option (for annual requirements of 3,000 units)?
   1. $5,000
   2. $1,000
   3. $3,000
   4. Can’t be determined with information given

Use the following to answer questions 19 - 28.

 

The Steele Bike Company assembles bicycles for a major retail toy outlet. The main purchase is bicycle frames for making these bicycles. Dan Steele, the owner, wants to locate a low-cost supplier for the frames used in this assembly operation. The supplier will be selected based on total annual cost to supply Steele’s needs. Annual requirements are for 100,000 frames, and the company operates 200 days a year. Two suppliers, Acme and State, have quoted the same price for the frames, but quantities, lead times and shipping costs are considerably different. The following data are available for the two suppliers.

 

SUPPLIER	SHIPPING QUANTITY PER  SHIPMENT	ANNUAL SHIPPING COSTS	PRICE / FRAME (p)	INVENTORY HOLD COSTS (H)	LEAD TIME (DAYS)	ADMIN. COSTS
ACME	7,500	$35,000	$39	$7.80	7	$20,000
STATE	2,500	$60,000	$39	$7.80	3	$45,000

 

 

1. What are the annual material costs for Acme?
   1. $550,000
   2. $750,000
   3. $3,900,000
   4. $35,000

 

 

1. What are the annual material savings available when comparing the two suppliers?
   1. $7,800
   2. $390,000
   3. $750,000
   4. The materials are the same cost from either supplier

 

1. How many shipments per year are required if State is the supplier selected?
   1. 13.3
   2. 40
   3. 200
   4. 10

 

1. What are the annual shipping savings available when comparing the two suppliers?
   1. $25,000
   2. $10,000
   3. $7,500
   4. Shipping costs are the same from either supplier
2. What are the annual inventory costs if the lower inventory cost supplier is selected?
   1. $56,550
   2. $96,500
   3. $21,450
   4. $7,800

 

1. What are the total annual costs if Acme is the supplier selected?
   1. $4,010,450
   2. $113,550
   3. $4,001,050
   4. $4,011,550

 

1. What are the total annual costs if State is the supplier selected?
   1. $4,026,450
   2. $110,450
   3. $4,001,050
   4. $4,016,550

 

1. Based on your Total Cost Analysis, which supplier should be selected if the lower cost supplier is chosen?
   1. Acme
   2. State
   3. Since the costs are the same, either supplier could be selected
   4. More information is needed to answer this question

 

1. What are the total annual savings if the lower cost supplier is selected?
   1. $1,000
   2. $12,500
   3. $9,400
   4. $14,900
2. The high-cost supplier has indicated that if Steele will select them as the supplier of choice, they will not charge for shipping. How does this change the decision on bicycle frame suppliers?
   1. The high-cost supplier is now the low-cost supplier, and becomes the frame supplier for Steele
   2. The suppliers are now equal cost, and Steele can select either supplier
   3. It doesn’t change the decision—they are still the high-cost supplier
   4. More information is required to make this decision

 

 

 

 

 

1. The practice of selecting suppliers and giving them significant responsibility for the design of certain components or systems of the product is called
   1. value analysis.
   2. locus of control.
   3. presourcing.
   4. vendor-managed inventories.