FIU MAN4504 final exam questions

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In

CambodiaCambodia?,

sixsix

?laborers, each making the equivalent of

$ 3.00$3.00

per? day, can produce

4040

units per day. In

ChinaChina?,

eleveneleven

?laborers, each making the equivalent of

$ 2.00$2.00

per?day, can produce

4848

units. In

Billings comma MontanaBillings, Montana?,

threethree

?laborers, each making

$ 63.00$63.00

per? day, can make

102102

units.

Shipping cost from

CambodiaCambodia

to? Denver, Colorado, the final? destination, is

$ 2.00$2.00

per unit. Shipping cost from

ChinaChina

to Denver is

$ 1.25$1.25

per? unit, while the shipping cost from

Billings comma MontanaBillings, Montana

to Denver is

$ 0.25$0.25

per unit.

Based on total costs? (labor and? transportation) per? unit, the most economical location to produce the item is

China

Billings, Montana

Cambodia

China

?,

with a total cost? (labor and?transportation) per unit of

?$1.701.70.

?(Enter your response rounded to two decimal? places.)

Enter your answer in the answer box.

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Zan Azlett and Angela Zesiger have joined forces to start? A&Z Lettuce? Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing? experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then? sorting, washing,? slicing, preserving, and finally packaging the prepared lettuce.? Together, with help from? vendors, they think they can adequately estimate? demand, fixed? costs, revenues, and variable cost per bag of lettuce. They think a largely manual process will have monthly fixed costs of

$ 37 comma 500$37,500

and variable costs of

$ 1.75$1.75

per bag. A more mechanized process will have fixed costs of

$ 75 comma 000$75,000

per month with variable costs of

$ 1.25$1.25

per bag. They expect to sell the shredded lettuce for

$ 2.50$2.50

per bag.

?a) The? break-even quantity in units for the manual process? =

5000050000

bags ?(round your response to the nearest whole? number).

?b) The revenue for the manual process at the? break-even quantity? =

?$125000125000

?(round your response to the nearest whole? number).

?c) The? break-even quantity in units for the mechanized process? =

6000060000

bags ?(round your response to the nearest whole? number).

?d) The revenue for the mechanized process at the? break-even quantity? =

?$150000150000

?(round your response to the nearest whole? number).

?e) For monthly sales of

55 comma 00055,000

?bags, for the option with manual? processing, A&Z Lettuce Products will have a profit of

?$37503750

?(round your response to the nearest whole number and include a minus sign if the profit is? negative).

?f) For monthly sales of

55 comma 00055,000

?bags, for the option with mechanized? processing, A&Z Lettuce Products will have a profit of

?$negative 6250?6250

?(round your response to the nearest whole number and include a minus sign if the profit is? negative).

?g) The quantity at which Zan and Angela are going to be indifferent between the manual and mechanized process? =

7500075000

bags ?(round your response to the nearest whole? number).

?h) If the demand exceeds the point of? indifference, then Zan and Angela should prefer the option with

mechanized

mechanized

manual

processing.

If the demand stays below the point of? indifference, then Zan and Angela should prefer the option with

manual

mechanized

manual

process

Question 3

Creative? Cabinets, Inc., needs to choose a production method for its new office? shelf, the Maxistand. To help accomplish? this, the firm has gathered the following production cost? data:

??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

	Annualized Fixed Cost of Plant? & Equipment	Variable Costs? (per unit)? ($)
Process Type	Labor	Material	Energy
Mass CustomizationMass Customization	$ 1 comma 260 comma 000$1,260,000	3030	1818	1212
IntermittentIntermittent	$ 1 comma 000 comma 000$1,000,000	2424	2626	2020
RepetitiveRepetitive	$ 1 comma 720 comma 000$1,720,000	2828	1515	1212
ContinuousContinuous	$ 2 comma 100 comma 000$2,100,000	2525	1515	1010

Creative Cabinets projects an annual demand of

24 comma 00024,000

units for the Maxistand. The selling price for the Maxistand is

$ 120$120

per unit.

?a) Based on the projected annual? demand, the best alternative available is to use the

Intermittent

Continuous

Intermittent

Repetitive

Mass Customization

process.

?b) The value of annual profit using this method is

?$200000200000.

?(Enter your response as an? integer.)

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Eric Johnson makes billiard balls in his New England plant. With recent increases in his? costs, he has a newfound interest in efficiency. Eric is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a? 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this? year:

???????????????????????????????????????????????????????????????????????????????????????????????????????

	Last Year	Now	Cost Per Input Unit
Units Produced	1 comma 0001,000	1 comma 0001,000
Labor? (hours)	300300	275275	?$1010 per hour
Resin? (pounds)	4848	4343	?$66 per pound
Capital Invested? ($)	10 comma 00010,000	11 comma 00011,000	22?% per month
Energy? (BTU)	3 comma 0003,000	2 comma 8502,850	?$0.500.50 per BTU

The percent change in productivity for one month last year versus one month this year on a multifactor basis with dollars as the common denominator? =

9.39.3?%

?(enter your response as a percentage rounded to two decimal? places).

Enter your answer in the answer box.

Top of Form Susan? Meyer, owner/manager of? Meyer's Motor Court in Key? West, is considering outsourcing the daily room cleanup for her motel to? Duffy's Maid Service. Susan rents an average of 50 rooms for each of 365 nights? (365 × 50 equals the total rooms rented for the? year). Susan's cost to clean a room is $ 13.50$13.50. The? Duffy's Maid Service quote is $ 18.00$18.00 per room plus a fixed cost of $ 26 comma 000$26,000 for sundry items such as uniforms with the? motel's name.? Susan's annual fixed cost for? space, equipment, and supplies is $ 65 comma 000$65,000. Based on the given information related to costs for each of the? options, the crossover point for Susan? = 86678667 room nights ?(round your response to the nearest whole ?number). If the number of room nights is less than the crossover? point, then outsourcing not outsourcing outsourcing is the best option available to Susan. Based on the given room nights that Susan expects to rent ?(18 comma 25018,250?), the best option is outsourcing not outsourcing outsourcing . Enter your answer in the answer box. Bottom of Form

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A gourmet coffee shop in downtown San Francisco is open

200200

days a year and sells an average of

7676

pounds of Kona coffee beans a day.? (Demand can be assumed to be distributed normally with a standard deviation of

1212

pounds per? day). After ordering? (fixed cost? =

?$1919

per? order), beans are always delivered from Hawaii in exactly

44

days.? Per-pound annual holding costs for the beans are

?$33.

Refer to the

standard normal table

LOADING...

for? z-values.

?a) What is the economic order quantity? (EOQ) for Kona coffee? beans?

439439

pounds ?(round your response to the nearest whole? number).

?b) What are the total annual holding costs of stock for Kona coffee? beans?

?$658.18658.18

?(round your response to two decimal? places).

?c) What are the total annual ordering costs for Kona coffee? beans?

?$657.86657.86

?(round your response to two decimal? places).

?d) Assume that management has specified that no more than a

11?%

risk of stockout during lead time is acceptable. What should the reorder point? (ROP) be?

359.92359.92

pounds ?(round your response to two decimal? places).

?e) What is the safety stock needed to attain a

11?%

risk of stockout during lead? time?

55.9255.92

pounds ?(round your response to two decimal? places).

?f) What is the annual holding cost of maintaining the level of safety stock needed to support a

11?%

?risk?

?$167.76167.76

?(round your response to two decimal? places).

?g) If management specified that a? 2% risk of stockout during lead time would be? acceptable, the safety stock holding costs will

decrease

not change

increase

decrease

.

Enter your answer in each of the answer boxes.

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The following table shows the actual demand observed over the last 11? years:

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Year	1	2	3	4	5	6	7	8	9	10	11
Demand	77	88	66	1010	1212	88	1313	1212	88	99	66

This exercise contains only parts? b, c, and d.

?b) Using the? 3-year moving? average, provide the forecast from periods 4 through 12 ?(round your responses to one decimal? place).

Year	4	5	6	7	8	9	10	11	12
Forecast	nothing	nothing	nothing	nothing	nothing	nothing	nothing	nothing	nothing

?c) Using the? 3-year weighted moving average with weights

0.200.20?,

0.350.35?,

and

0.450.45?,

using

0.450.45

for the most recent? period, provide the forecast from periods 4 through 12?(round your responses to two decimal? places).

Year	4	5	6	7	8	9	10	11	12
Forecast	nothing	nothing	nothing	nothing	nothing	nothing	nothing	nothing	nothing

?d) Mean absolute deviation for the forecast developed using the? 3-year moving average is

2.632.63

and for the? 3-year weighted moving average is

2.672.67.

Based on this?information, the better forecast is achieved using the

3-year moving average

approach.

Enter your answer in each of the answer boxes.

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Under ideal? conditions, a service bay at a Fast Lube can serve

88

cars per hour. The effective capacity of a Fast Lube service bay is

5.75.7

cars per? hour, with efficiency known to be

0.850.85.

The minimum number of service bays Fast Lube needs to achieve an anticipated production of

150150

cars per

88?-hour

day? =

44

service bays ?(enter your response rounded up to the next whole? number).

Enter your answer in the answer box.

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The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as? follows:

???????????????????????????????????????????????????????????????????????????????????????????????????????????????

Year	1	2	3	4	5
Mileage	3 comma 1003,100	4 comma 0504,050	3 comma 4503,450	3 comma 8503,850	3 comma 7503,750

?a) Using a? 2-year moving? average, the forecast for year 6? =

38003800

miles ?(round your response to the nearest whole? number).

?b) If a? 2-year moving average is used to make the? forecast, the MAD based on this? =

125125

miles ?(round your response to one decimal? place). ? (Hint: You will have only 3 years of matched? data.)

?c) The forecast for year 6 using a weighted? 2-year moving average with weights of

0.450.45

and

0.550.55

?(the weight of

0.550.55

is for the most recent? period) =

117117

miles ?(round your response to the nearest whole? number).

The MAD for the forecast developed using a weighted? 2-year moving average with weights of

0.450.45

and

0.550.55

?=

89.289.2

miles ?(round your response to one decimal? place).???(Hint: You will have only 3 years of matched? data.)

?d) Using exponential smoothing with

alpha?

?=

0.300.30

and the forecast for year 1 being

3 comma 1003,100?,

the forecast for year 6? =

37153715

miles ?(round your response to the nearest whole?number).

Enter your answer in each of the answer boxes.

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A location analysis for Temponi? Controls, a small manufacturer of parts for? high-technology cable? systems, has been narrowed down to four locations. Temponi will need to train? assemblers, testers, and robotics maintainers in local training centers. Cecilia? Temponi, the? president, has asked each potential site to offer training? programs, tax?breaks, and other industrial incentives. The critical? factors, their? weights, and the ratings for each location are shown in the following table. High scores represent favorable values.

????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Factor	Factor Description	Weight	Akron comma OHAkron, OH	Biloxi comma MSBiloxi, MS	Carthage comma NYCarthage, NY	Denver comma CODenver, CO
1	Labor availability	0.150.15	9595	8080	9595	8585
2	Technical school quality	0.100.10	8585	8080	6565	8080
3	Operating cost	0.300.30	8080	8585	9595	8585
4	Land and construction cost	0.150.15	6565	7575	8585	6565
5	Industrial incentives	0.200.20	9090	7070	8080	5555
6	Labor cost	0.100.10	8080	8080	8080	8080

?a) The composite? (weighted average) rating for

Akron comma OHAkron, OH

?=

82.582.5

?(round your response to two decimal? places).

The composite? (weighted average) rating for

Biloxi comma MSBiloxi, MS

?=

78.7578.75

?(round your response to two decimal? places).

The composite? (weighted average) rating for

Carthage comma NYCarthage, NY

?=

8686

?(round your response to two decimal? places).

The composite? (weighted average) rating for

Denver comma CODenver, CO

?=

7575

?(round your response to two decimal? places).

?b) Based on the given? information, the best location for Temponi Controls is to choose

Carthage, NY

Denver, CO

Carthage, NY

Akron, OH

Biloxi, MS

.

?c) If the weights for Factor 6? (Labor Cost) and Factor 3? (Operating Cost) were? reversed, then using the given? information, the best location for Temponi Controls is to choose

Akron, OH

Biloxi, MS

Akron, OH

Carthage, NY

Denver, CO

.

Enter your answer in each of the answer boxes.

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Boxes of Organic Flakes are produced to contain

15.015.0

?ounces, with a standard deviation of

0.200.20

ounce. For a sample size of

4949?,

the ?3-sigma

x overbarx

chart control limits? are:

Upper Control Limit

?(UCL Subscript x overbarUCLx?)

?=

15.615.6

ounces ?(round your response to two decimal? places).

Lower Control Limit

?(LCL Subscript x overbarLCLx?)

?=

14.414.4

ounces ?(round your response to two decimal? places).

Enter your answer in each of the answer boxes.

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