Model Questions to be used for exam preparations

Part I: Discussion Questions:- Answer the following questions

accordingly
1. Explain the fundamental reasons why organizations involved in product or
service design
2. Briefy explain the importance of each of the following multiple plant strategies
in making location decisions:
a. Market plant strategy
b. Product plant strategy
c. Process plant strategy
3. If a firm accepts quality as te strate!ic "ariable for impro"in! operations# $at results
mi!t te firm expect% &o$ $ould te firm !o about impro"in! its competiti"e position in tat
manner%
'. (y does some countries acie"e te i!est producti"ity and oters not% )ritically
e"aluate tis issue from operations mana!ement perspecti"e.
*. +r!ani,ations may be "ie$ed as systems. -e systems "ie$ is important to operations
mana!ers since .a/ te production0operations system is a part of te firm or or!ani,ation and .b/
$itin te production0operations function tere are subsystems. 1xplain
2. )ontro"ersial issues of 3P4: is 3P4 a re-animation of -aylorism% )ritically e"aluate tis issue.
5. -ese days te ma6or callen!es for operations are seen to be )orporate 7ocial 4esponsibility#
8lobali,ation and 1n"ironmental responsibility. 1xplain o$ tese factors impact on te operations
function%
9. Discuss te Main Dri"in! :orces for te Paradi!m 7ift to Mass )ustomi,ation%
;. (at comes after leanness and a!ility%
1<. 3riefly explain $y some quality impro"ement efforts fail%
11. &o$ does a!!re!ate plannin! in ser"ices differ from a!!re!ate plannin! in manufacturin!%
12. Is tere any interaction amon! )apacity mana!ement# Quality mana!ement and efficiency
mana!ement% 1xplain in brief
13. 1xplain briefly o$ te proper application of te belo$ mentioned structural decision
areas a"e a tan!ible impact on te competiti"e position of a business firm%
- Process 7election
- Product and ser"ice Desi!n#
- )apacity mana!ement #
- =ob Desi!n#
- >ocation and >ayout Decision
1'. (y te application of operations mana!ement muc more callen!in! in te public
en"ironment as compared to te business% ?
Part II: 1ssay (ritin! Questions:- (rite a sort note on te
follo$in! concepts
1*. @ai,en As 3i! 3an! Bpproac
12. )ase As >e"el strate!y options.
15. 3P4 As. 3PI
19. M4P As. =I-
1;. +rder (innin! As +rder Qualifyin! :actors
2<. +perational effecti"eness As. operations strate!y
21. Mass customi,ations As. Mass productions
22. =ob sop operations As. Pro6ect operations system
23. 7ix 7i!ma Model As. @ia,en
2'. Quality Bssurance As. Quality plannin!
Part III: (+4@+C- QC17-I+Ds:- Bns$er te follo$in!
questions accordin!ly
2*. 3yronEs Manufacturin! maFes tables. Demand for te next four monts and capacities of
te plant are so$n in te table belo$. Cnit cost on re!ular time is G'<. +"ertime cost is 1*<H
of re!ular time cost. 7ubcontractin! is a"ailable in substantial quantity at G5* per unit. &oldin!
costs are G* per table per montI bacF orders cost te firm G1< per unit per mont. 3yronEs
mana!ement belie"es tat te transportation al!oritm can be used to optimi,e tis scedulin!
problem. -e firm as *< units of be!innin! in"entory and anticipates no endin! in"entory.
Marc Bpril May =une
Demand '<< 2<< 2<< 5<<
4e!ular capacity '<< '<< '<< '<<
+"ertime capacity 1<< 1<< 1<< 1<<
7ubcontract cap. 1*< *< *< *<
a. &o$ many units $ill be produced on re!ular time in =une%
b. &o$ many units $ill be produced by subcontractin! o"er te four-mont period%
c. (at $ill be te in"entory at te end of Bpril%
d. (at $ill be total production from all sources in Bpril%
e. (at $ill be te total cost of te optimum solution%
f. Does te firm utili,e te expensi"e options of subcontractin! and bacF orderin!% (enI $y%
22. :ollo$in! data are re!ardin! te processin! time of some 6obs on tree macines m1# m2
and m3. -e order of processin! is m1m2m3. Determine te sequence tat minimi,es te total
elapsed time required to complete te follo$in! 6obs. Blso e"aluate elapsed and idle time of M2
and M3 in minutes
=+37 Processin! time in minutes
MB)&ID1 +D1 MB)&ID1 -(+ MB)&ID1 -&411
B 3< '< 2<
3 9< 3< 5<
) 5< 2< *<
D '< *< 11<
1 ;< 1< *<
: 9< '< 2<
8 5< 3< 12<
25. Bn 1tiopian based company as conducted a compreensi"e study of fi"e cities# one of
$ic $ill be selected as te site for a ne$ facility usin! cost- "olume output analysis tecnique.
-e operatin! "ariable cost per unit are !i"en in te table belo$ :
)ity >abor
cost
-ransportation
cost
>ocal
taxes
Po$er oter
3air Dar 1.2 <.22 <.15 <.21 <.12
Bddis Bbaba 1.1 <.29 <.2< <.5; <.13
&a$asa 1.2 <.59 1.2* <.2* <.12
Bdama <.9* 1.12 1.1; <.29 <.*
MeFelle <.5* <.2* 1.2 1.3 <.*
:ixed costs:
3air Dar 9<<<<
Bddis Bbaba 5*#<<<
&a$asa 2<#<<<
Bdama 1<<#<<<
MeFelle 99#<<<
a. Bt $at output ran!e does &a$asa be te best and profitable location for te establisment of te
ne$ facilities. int re"enue per unit is 9birr/
b. Bt $at output ran!e does MeFelle be te best and profitable location for te establisment of
te ne$ facilities . int re"enue per unit is 9birr/
c. Bt $at output ran!e does Bddis Bbaba be te best and profitable location for te establisment
of te ne$ facilities . int re"enue per unit is 9birr/
29. 7uppose Messebo )ement :actory is searcin! for a site for a temporary plant to supply
cement to tree existin! construction sites: -ana 3elese Pro6ect# 8il!el 8ebie and an oter
pro6ect at Dire De$a city. -e location of te existin! sites and te loads to be deli"ered to eac
are as follo$s:
)oordinate location
.xi# yi/
>oads >i to ne$ plant )ost )i to mo"e one
load one Filometer
-ana 3elese pro6ect .2<# 1</ 22 1<
8il!el 8ibie Pro6ect .1<# '</ '3 1<
Dirie De$a .'<# 2</ 32 1<
i. :ind te best site for te cement plant
ii. (at total sippin! cost $ill result%
2;. B local business firm in =imma to$n orders boxes of floppy disFs from a store $ic as
been located in Bddis Bbaba. -e per box price car!ed by te store and te cost of placin! an
order is assumed to be birr *< and birr 1<< respecti"ely. -e business firm uses 1<#<<< disFs per
year. -e only oldin! cost is te opportunity cost of capital $ic is assumed to be 2<H per
year.
3ased on te data !i"en abo"e:
i. :ind te "alue of 1+Q tat minimi,e total cost
ii. (at $ill be te optimal number of orders made by te business firm
iii. :ind te reorder point if te lead time is 1< days
3<. A tire manufacturer plans to produce 40000 units of a special type of tire next year. The
production rate is 200 tires per day, and there are 250 working days available. The setup cost is
Birr 200 per run; the unit production cost is Birr 15; holding costs are Birr 11.50 per unit per
year.
a. What is the economic production quantity?
b. What is the total annual inventory cost?
c. How many production runs should be made each year?
d. What will be the maximum number of tires in inventory at one time?
e. If production lead time is 2 days, what is the reorder point?
31. B 6e$elry company buys semiprecious stones to maFe bracelets and rin!s. -e supplier quotes a price of G*
per stone for quantities of 2<< stones or more# G; for orders of '<< to *;;# and G1< per stone for lesser quantities.
-e 6e$elry firm operates 2<< days per year. Csa!e is 2* stones per day# and orderin! costs are G'9.
a. If carryin! costs are G2 per year for eac stone# ans$er te follo$in! questions.
i. (at is te optimal orderin! quantity%
ii. (at is te common 1+Q%
iii. &o$ many orders per year $ill te company maFe%
i". (at is te total orderin! cost for te optimal solution%
b. If carryin! costs are 3< percent of te purcase price per year for eac stone# ans$er te
follo$in! questions.
i. (at is te carryin! cost per unit $en '<< to *;; stones are ordered%
ii. (at is te optimal orderin! quantity%
iii. (at is te common 1+Q%
i". &o$ many orders per year $ill te company maFe%
c. If te lead time is 2 $orFin! days# at $at point sould te company reorder%
32. A small producer of machine tools wants to move to a large building and has identified
two alternatives. Location A has annual fixed costs of $800,000 and variable cost of 14,000 per
unit: location B has annual fixed cost of $920,000 and variable costs of $ 13,000 per unit. The
finished items sell for $17,000 each.
Questions:
a. at what volume of output would the two locations have the same total cost?
b. for what range of output would location A be superior?
c. For what range of output would location B be best and profitable
33. Suppose a book binder in Bole Sub city has one printing press, one binding machine and a
manuscript of five different books. The times required for performing printing and binding
operations for different books are shown below:
Book 1 2 3 4 5
Printing time
in hours
30 45 28 50 28
Binding time
in hours
40 35 37 30 17
Questions:
a. find the sequence that minimizes the total elapsed time to complete both printing
and binding activities
b. compute the minimum flow time and the idle time of the operation system
3'. B manufacturin! firm is tryin! to scedule production for te comin! tree monts.
Product demand for eac of te next tree monts is forecasted as 3<<# 2*< and 22* units
respecti"ely. )urrently# ;* units are a"ailable in finised !oods in"entory at te factory. Bt te
end of te tree monts scedulin! period# te company $ants to a"e 12< finised units
a"ailable and to a"e supplied all units demanded .bacForders are not allo$ed/. 4e!ular sift
operations can supply up to 1<< units0mont at a cost of G1<0unit. +"ertime operations can
supply up to 1<<units0mont at G1* cost0unit. In"entory costs are G2 unit0 mont for finised
!oods.
Questions:
a. 7tructure tis scedulin! problem in a transportation pro!rammin! format
b. )reate and interpret an initial feasible solution for te abo"e !i"en
problem
Part IA:- )B71 QC17-I+D7- !o trou! all te cases tat I a"e !i"en to you pre"iously.
)ase study 1 - 3oein! brin!s its customers on board
Br!uably te most inno"ati"e ne$ passen!er aircraft to enter ser"ice o"er te last fe$ years $as
te 3oein! 555# a ne$ t$in-en!ined aircraft# in te 3<<-plus seats cate!ory# to compete $it
establised models from McDonnell and Birbus. -e existence of establised competitor
products is important. (en 3oein! de"eloped te 5'5 J=umboK 6et aircraft# it ad no direct
competitors. -e companyKs customers eiter $anted te product or tey didnKt. Dot so for te
555I 3oein! Fne$ tat it must consider its customersK requirements. -e company ad to taFe a
ne$ course L to understand its customersK needs and ten to transform tat Fno$led!e into an
aircraft tat could best meet tose needs.
3oein! as al$ays maintained close in"ol"ement $it its customers# but tis pro6ect called for a
ne$ dept of listenin! and understandin!. Initially# ei!t lar!e potential customers .includin!
3ritis Bir$ays# =apan Birlines and Qantas/ $ere in"ited to participate in creatin! te desi!n
concepts. It soon became clear tat te customers did a"e important requirements# te most "ital
of $ic $as tat te aircraft sould be around 2* per cent $ider tan te 525. In fact 3oein!
ad ori!inally oped to len!ten te 525 fusela!e to !i"e te extra capacity# so a"oidin! some of
te costs in"ol"ed in a completely ne$ fusela!e. -e customers also $anted muc more
flexibility in te confi!uration of te passen!er space. )on"entionally# cabin space ad been
di"ided up into sections# separated by fixed !alleys and toilets at predetermined positions# fixin!
te ratio of passen!er capacities of eac class. &o$e"er# te airlines all indicated tat tey
$anted to be able to confi!ure te cabin to teir o$n requirements. :inally# te airlines insisted
tat te ne$ desi!n sould be free of te usual le"el of minor# but irritatin!# faults $ic ad
bu!!ed te early operations of some of te oter aircraft.
3oein! did meet its customersK requirements and e"en impro"ed upon tem in some $ays. -ey
acie"ed tis by usin! desi!n0build teams# and by a particularly po$erful computer-aided desi!n
.)BD/ system. )ustomers $ere closely in"ol"ed ri!t from te start of te desi!n. -ey e"en
came up $it some !ood su!!estions. :or example# one airline su!!ested a ne$ layout for te
rear !alley $ic allo$ed an extra 12 seats to be included in te aircraft.
3ased on te abo"e !i"en small case study about te process desi!n of 3oein!Ks 555 aircraft# ans$er
te follo$in! questions:
a/ (at problems do you tinF mi!t be associated $it brin!in! customers to!eter in te
$ay tat 3oein! did%
.b/(y do you tinF tat 3oein!Ks customers $anted te flexibility to confi!ure passen!er
space%
)ase 7tudy 2 - )adbury 7c$eppes Production Metod
)adbury 7c$eppes is a multinational soft drinFs .be"era!es/ and confectionery business tat is
based in te C@. -e business is a public limited company. It is in"ol"ed in te manufacture#
marFetin! and distribution of its many branded products. )adbury 7c$eppes no$ employs o"er
'<<<< people and its products are a"ailable in almost 2<< countries. -e companyKs products can be
di"ided into:
M 3e"era!es .carbonated soft drinFs and non carbonated soft drinFs .$aters and fruit 6uices/
M )onfectionery .cocolate products# su!ar products# ce$in! !um/
Muc of )adbury 7c$eppesK manufacturin! still taFes place in te C@# Bustralia and Dort Bfrica.
&o$e"er# in te 1;;<s te company mo"ed some of its production to 4ussia# Poland# Br!entina and
)ina# countries $it emer!in! economies.
-o satisfy most of its sareolders# )adbury 7c$eppesK as set out a strate!y to elp acie"e its
ob6ecti"e. -is strate!y consists of:
M )reatin! stron! re!ional positions trou! or!anic !ro$t# acquisitions and disposals
M De"elopin! stron! brands trou! marFetin!
M 1xpandin! its marFetin! sare trou! inno"ation in products and pacFa!in!
M 4e!ularly updatin! its product portfolio
Production
Despite manufacturin! its !oods in lar!e quantities# )adbury 7c$eppes uses batc rater tan flo$
production metods.
-e company must ensure te products are of i! quality. Dot only are tere strict la$s about o$
foodstuff is made# but also )adbury 7c$eppes $ould not $ant to dama!e its reputation by allo$in!
inferior products to be sold.
)adbury 7c$eppes undertaFes extensi"e researc and de"elopment .4ND/ to de"elop ne$ products
and to find $ays of manufacturin! existin! brands more efficiently. )adbury 7c$eppes uses te
ser"ices of a specialist 4ND business based at 4eadin! for its C@ confectionery business
4ead te small case study about )adbury 7c$eppes. In te case study it is stated tat )adbury
7c$eppes uses batc production metods to maFe its products and tat it is important te products
are of i! quality. 3ased on te information pro"ided
.a/ Describe te differences bet$een batc and flo$ production.
.b/ )ritically e"aluate te reasons $y )adbury 7c$eppes uses batc production $en maFin!
cocolate bars.
)ase ': conflict of interests
-e 8M .$orFs/ as problems $it manufacturin! bud!ets# meetin! cost reduction tar!ets# and
dealin! $it ne$ products manufacturin! scedules. (en an in dept inter"ie$ . non-directi"e
type/ $as conducted bet$een te 8M.$orFs/ and te cairman of te company# te 8M .$orFs/
explained tat many tin!s are appenin! in te company about $ic e is i!norant#
particularly te preparation# ne$ product inte!ration# etc. e a!rees to te "ie$ tat te company
is interested in i! !ro$t and i! profit# but e as ne"er been !i"en an opportunity to re"ie$
is o$n sceme of tin!s and explain to te top mana!ement. -e production culture of te
company as ne"er been assessed $ereas te strin!ent rules are bein! directed by te finance
and personnel departments. Bnd sometimes# so$ cause notices are bein! ser"ed to super"isors
and senior employees. -e company is introducin! ne$ products $itout assessin! te capability
of te manufacturin! system and te resources.
a. Cnder te abo"e situation# if you are asFed to $orF as a consultant to so$ te perspecti"es to te
board of mana!ement# $at action plans $ould you su!!est
b. Does business process re-en!ineerin! elp in situations liFe tese%
)ase *: =I- in Bction
B ne$ penomenon called Bpparel on Demand is slo$ly maFin! its presence felt. It is an
extension of =I- linFin! retailers and manufacturers for a 6ust in time responsi"eness. B clotin!
inc. promoted by a youn! mana!ement !raduate as recently "entured in to te business of
maFin! reasonably priced custom 6eans for $omen. It as partnered $it many stores sellin!
$omen !arments. In te stores# $omen are electronically measured and information liFe color#
fabric style etc. are recorded. -e information reaces te aFa manufacturin! facilities at Bddis
Bbaba almost immediately trou! a stat of te art information system. BFa !uarantees deli"ery
of te custom 6eans $itin 1< days. (it te !ro$in! acceptance of 6eans amon! te $omen in
1tiopia # specially in te urban areas# te marFeter for $omenKs 6eans is !ro$in! at a fast pace.
BFa $it its unique business model opes to !arner a si!nificant sare of tis marFet. -e
promoter of aFa alon! $it er top executi"es is confident tat teir concept of =I- 6eans $ould
$orF.
a. Do you tinF aFaJs strate!y $ould $orF0 $y or $y not% (at is te importance of retailers
into its business strate!y
b. (ill customers $ait for 1< days to a"e te 6eans deli"ered% $at can B@B do to compete on
customer ser"ice if deli"ery taFes tis muc time
c. )omment on te necessity of a robust supply cain in te context of BFa clotin! inc.
Case 6: Location Decision
Porta-Putt, Inc. manufactures and distributes gasoline- powered outboard motors for boats. One
of their three assembly plants, the St. Louis plant is obsolete. The Los Angeles and Chicago
assembly plants were recently renovated. Rather than continue operation in St. Louis,
management is considering a new location for the third plant. This is an opportune time, because
in two years the new Denever distribution warehouse will be opened. Since the new assembly
plant could be the primary suppliers of motors to the Denever warehouse, the new plant could be
located to minimize shipping costs, which are substantial part of Porta-Putts operating costs.
Two types of shipping costs are incurred at the St. Louis plant. First, raw materials and sub
components are shipped from Minneapolis and Seatle to the St. Louis facility. Then, after final
assembly, the St. Louis plant ships the finished motors to the Denver distribution warehouse. The
annual number of loads shipped between St.louis and each of the other three sites are given in the
table below. The cost of shipping a load is estimated to be $0.10/mile.
Management would like to find a location that would minimize the potentially high annual
transportation costs. At the same time moving away from metropolitan St. Louis, the original
assembly plant established 35 years ago. Porta- putts experienced work force has survived many
work methods and assembly line changes. From these refinements evolved in intricate assembly
operation that efficiently produced quality motors until recently, when the plant became
technologically obsolete. The vice president, who must tell the St. Louis employees they might
lose their jobs, but so far he has only discussed the possibility with several St. Louis managers.
When the idea of relocation was introduced, these managers were dismayed at the prospect of
leaving St. Louis.
Shipping facilities Annual load between facilities
and st. Louis
Coordination Location of facilities (x,
y)
Denver 10, 000 (1,000, 550)
Seattle 8, 000 (100, 1100)
Minneapolis 4,000 (1, 600, 900)
Based on the above given information answer the following questions:
B. Present an analysis of te ma6or factors in tis decision
3. 4ecommend te appropriate location for te plant usin! te median load model
). )ompute te minimum transportation costs to be incurred by Porta-Putt# Inc .int
unit cost per load is * birr.