OPERATION MANAGEMENT

MAT345

NAME
ID NO.
GROUP

: SAIFUDIN BIN MOHD YASIN

: 2012826338
: JBM1116C

LECTURERS NAME

: SHAFIEE MD. TARMUDI

April 2011

Part A
Question 1

B
G

E
A

c
I
H
D

F
K
J

CYCLE TIME: PRODUCTIVE TIME / OUTPUT

THEORETICAL MIN = S. TASK TIME / C.T

0.62 X : 400

x=645.16> 645 UNITS

3.83/ 0.62 = 6.18> 6 UNITS

LAYOUT WORKSTATION

111111
1

B,C, D F,H

0.56
(TASK TIME)

0.54

4
E
0.57

G
0.43

J
0.62

I ,K
0.57

0.54

0.06
(IDLE TIME)

0.08

0.05

0.19

0.05

0.08

EFFICIENCY =SUM TASK TIME/ (C.T X WORK STATION) X 100% > 3.83/ (0.62X 7) x
100% = 88.25%
BALANCE DELAY = 100%- 88.25% = 11.75%

THE COST OF IDDLENESS PER WEEK

IDLE TIME PER UNIT: (CT X WS) SUM TASK TIME

: (0.62 x 7)- 3.83 = 0.51 MIN/UNIT
IDLENESS PER DAY: 0.51 x 654 = 328.95/ 60 min
THE COST OF IDDLENESS PER WEEK > 5.4825 HOUR x 5 DAYS x RM 6.25 /HOUR=
RM 171.33 #

Question 2 (DUMMY)

D, 12
5

E, 10
K, 9 4

G, 10

A, 3
1

B, 9
I, 14

C, 7

F, 11

H, 7

J, 15
8

C) PROJECT COMPLETE TIME = 60 WEEKS

D) CRITICAL ACTIVITIES = B, E, F, H, I, K
E)FREE FLOAT D =15-3-12: 0 INDEPENDENT FLOAT D= 15-9-12: -6 WEEKS
TOTAL FLOAT= 51-37-4: 10 W

QUESTION 3

SELLS: 20000 TIRES PER YEAR

COST TO STORE EACH TIRES: 20% OF ITS PURCHASE PRICE
COST FOR EACH ORDER: RM 40
PURCHASE PRICE RM20 >500 TIRES
RM18 > MORE 500 BUT LOWER 1000
RM17 MORE THAN 1000

ORDER QUANTITY

PRICE

LESS THAN 500

RM 20

0.2(20) = 4

500-1000

RM 18

0.2(18) = 3.6

1000 MORE

RM 17

0.2 (17) = 3.4

1) EOQ:

2DS/H =

CARRYING COST (H)

2 (20000 X 40)/ 4 = 632.45> 632 UNIT PER ORDER

2 (20000 X 40)/ 3.6 = 666.67> 667 UNITS

THIS IS FEASIBLE, RM 18 PER UNIT RANGE 500-1000
TAC= (D/Q) (S) + (Q/2) (H) + (P) (P)
= (20000/667) (40) + (667/2) (3.6) + (18) (20000) = RM 362400
TAC = (20000/1000) (40) + (1000/2) (3.4) + (17)(20000) = RM 342500
TAC = (20000/632) (40) + (632/2) (40) + (20)(20000) = RM413905.82

THUS THE MINIMUM COST ORDER IS 1000 AT LOWEST COST RM342500#

QUESTION 4

UNIT PRODUCE: (NO. OF WORKER) X (WORKING DAYS) X (STANDARD OUTPUT

PERDAY)
: 15 X 26 X (60/30 X 6 HOUR)

A)
MONTH

JUNE
JULY
AUGUST
SEPTEMB
ER
OCTOBER
NOVEMB
ER
DECEMB
ER
TOTAL

FORECA
ST
DEMAN
D
(+2000)
4400
5200
5400
5600

UNIT
PRODU
CE

UNIT
EXCES
S

4680
4680
4680
4680

280

4000
5300

4680
4680

680

4500

4680

180

UNIT
SHORTA
GE

O.T
UNIT
MAX
500

END.INVENT
ORY

SUB.
UNIT

280
520
720
920

240
500
500

220
420
680
60

620

240

32760

1240

1260

640

TOTAL COST: (TOTAL UNITS PRODUCE X WAGE PER HOUR X STANDARD OUTPUT PER
HOUR)
32760 X 4 X (30/60) = RM 65520
OVERTIME COST: (1240 X 6 X (30/60)

) = RM 3720

INVENTORY HOLDING COST: 1260 UNITS X 1.50 = RM1890

SUBCONTRACT UNIT: 640 X 8 = RM 5120
TOTAL COST: RM 65520 + RM 3720 + RM 1890 + RM 5120 = RM 76250

Question 5

Cost per breakdown

month

=RM 300 Expected breakdown per month =24

Preventive maintenance cost =RM 150

i)

Frequency of occurrence

No of breakdown
the total period of breakdown

2/21

8/24

5/24

0.08
0.33 0.21
Frequency of occurrence
ii)

Exp. No. of breakdown

frequency)

4/24

3/24

2/24

0.017

0.13

0.08

TOTA
L
1

: (number of breakdown) corresponding

: (0)(0.08)+ (1)(0.33+(2) (0.21)+(3)

(0.17)+(4)(0.13)+(5)(0.08)
: 0+0.33+0.42+0.51+0.52+0.4
: 2.18 breakdown / month
Iii)
Exp. Breakdown cost
breakdown)

: (Expected no of breakdown) (cost per

: (2.18) (300)
: RM 654/ month

iii)

Prevent. Maint. Cost

contract term)

: (Preventive maintenance cost )+ (Cost of

: RM150 + (24 month * 300)
: RM 7350

The manager should proceed with the service contract since it is less expensive
to purchase the contract (RM 654) than to repair the machine when it
breakdowns (RM7350 ).

APRIL 2011
Part b
QUESTION 1
Explain any 4 disadvantages of process oriented layout
There are also disadvantages despite the advantages of process oriented layout. There are, low
utilisation of machines. Equipment utilization rates in process layout are frequently very low, because
machine usage is dependent upon a variety of output requirements. The other disadvantages is scheduling
is difficult. Constantly changing schedules and routings make juggling process requirements more
difficult. Next is high labor skills required. High labor skill needs also increase the required level of
training and experience and high work in process levels that will increase capital investment. Besides that,
can have high work-in-progress . work in process inventories are higher because of imbalances in the
production process.

QUESTION 2
Explain the 4 basic types of allowance
There are 4 basic types of allowance which is relaxation allowance, contingency
allowance ,process allowance and policy allowance. Relaxation allowance is the extra time in
percent given to workers to take a short break to overcome mental or physical fatigue. It includes
nature calls, drinking, stretching or resting. Besides that, contingency allowance is the extra time
in percent given to workers for unexpected situation occurrence. For example, repairing minor
defects on equipments or as simple as to pick a dropped tools. Next is process allowance which is
the allowance that give the extra time in percent give to workers due to natural delay in the
process. For example, waiting for a crane to come, computers to respond and automated machines
to be set up. Meanwhile, policy allowance is the extra time in percent given to workers due to
labor regulations or union agreement. For example, allowing Muslims to perform their prayers .

QUESTION 3
Explain the four factors that influence the choice of plant location
There are many factors that will influence the choice of plant location and this is some of the
factors. Firstly, Labor productivity. The wage rates are not the only cost because when the labor
productivity is low, this may increase total cost . Secondly, exchange rates and currency risks. This can
have a significant impact on cost structure because the rates change over time. Next factor is the costs.
The cost can be classified into two types which is tangible and intangible. Tangible is the easily measured
costs such as utilities, labor, materials and taxes. Meanwhile, Intangible is less easy to quantify and
include education, public transportation, community and quality of life. Lastly is the factor that influence
decision plant location is political risk, values, and culture. One should consider national, state, local
governments attitudes toward private and intellectual property, zoning, pollution, employment stability

that may be in flux and also worker attitudes towards turnover, unions, absenteeism because globally
cultures have different attitudes towards punctuality, legal, and ethical issues.

QUESTION 4
Discuss four types of quality costs
The four types of quality costs is prevention costs, appraisal costs, Internal failure, and external
costs. Prevention costs are related to expenditure before breakdown occurs to reduce the potential for
defects. For example is a maintenance cost. Meanwhile, appraisal costs ,It is related to expenditure
assessing auditing the level of quality attained in production to evaluating products. For example are
inspection costs. Next is Internal failure, which related to expenditure for correcting or reworking on
products or services due to defects incurred during process. For example ,reworking cost. Lastly is
external cost. It is related to expenditure occur after delivery or production process. For example is
warranty cost.
QUESTION 5
Explain any four importance of maintenance
The importance of maintenance is to avoid production or service disruptions. Poorly maintained
equipments produce low quality products. Equipments that have not been properly maintained have
frequent break downs and cannot provide adequate service to customers. For example, air craft fleets of
the airline, railway and road transport services not maintained well can result in poor service to
customers. The other importance is to not adding costs due to neglected maintenance work. It is because ,
neglecting maintenance can cause the breakdown of machine. When machine malfunctions result in
scrap, unit labor and material costs increase. Besides, cost of maintenance which includes such costs as
costs of providing repair facilities, repair crews, preventive maintenance inspections, spare parts and
stand by machines will increase as machines break down frequently. Other than that , the other
importance is to ensure employee or customer safety. This is because worn-out equipment is likely to fail
at any moment and these failures can cause injuries to the workers, working on those equipments.
Products such as two wheelers and automobiles, if not serviced periodically, can break down suddenly
and cause injuries to the stress. The last importance is to make sure the customer satisfaction. When
production equipments break own, products often can not be produced according to the master production
schedules, due to work stoppages. This will lead to delayed deliveries of products to the customers.

SEPTEMBER 2011
PART A
Question 1
a) Precedence diagram

22
12

25

54
J

30

65

18

52

40

50

b) Cycle time = Productive time per day

Output per day (units)
= 7 hours x 60 minutes x 60 secs
350 units
= 72 secs/unit

c) No. of workstation = Sum of task time

Cycle time
= 451
72
= 6.26 units ~ 7 units of WS

41

42

d) Line layout =
Workstation :

A
Task

1
1
B

6
K

Task time
42

:
72

64

70

72

Idle time
-

(Total idle time = 53 secs)

e) Efficiency = Sum of task time

x100%

CT x WS
= 451 x 100%
72 x 7
= 89.48%

Balance delay = 100% - Efficiency

= 100% - 89.48%
= 10.52%

f)

Cost per hour = Rm32

7 hours
= Rm4.57
Cost of idleness per day = (53x350)
(60x60)
= 5.15 hour per day

65
7

66
6

30

Cost of idleness per week = 5.15 x 4.57 x 5

= RM117.68

Question 2
a) D = 150 x 365
= 54750 kg

EOQ = 2(54750)(20)
1.20
= 1416.8627 = 1417 kg

b) ROP = 150 x (2+4)

= 900 kg

c) N = 54750
1417
= 39 times

d) T = 1417 x 365
54750
= 9.4667

e) TAC = [(54750/1417) x (22)] + [[(1417/2) + 600](1.20)] + (1.90 x 54750)

= 850.0353 + 1570.2 + 104025
= RM 106445.24

f) Max inventory = 1417 + 600

= 2017 kg

Question 3
a)
TANGIBLE
FACTORS
Labor
Raw material
Rental
TOTAL
RANKING
= The best is to

KUANTAN

TEMERLOH

JERANTUT

580
540
450
420
600
550
1630
1510
1
3
choose Jerantut because it has the

BANDAR
JENGKA
520
480
570
1570
2

570
470
560
1500
4
lowest cost.

b) Ranking = Outstanding - 5
Very good - 4
Good

-3

Fair

-2

Poor

-1

INTAGIBLE
FACTORS
Labor
availability
Transportati
on service
Community
acceptance
Supplier
availability
Facilities
TOTAL
RANKING
= The best is

WEIGHT

KUANTAN

TEMERLOH

JERANTUT

12

20

BANDAR
JENGKA
5
20

12

10

1
5
5
25
3
15
4
40
49
47
54
1
3
2
4
to choose Bandar Jengka because it has the highest score.

20

c)

Tangible
Intangible
TOTAL

Weight

KUANTAN

TEMERLOH

JERANTUT

2
1

1
1
3

3
3
9

4
2
10

2
1

6
3

8
2

BANDAR
JENGKA
2
4
4
4
8

= The location that the company should select is Jerantut because it has the highest
score.

Question 4
a)
b)
14

9
6

D,3

d,1

A,
6

G,4

J,3

I,2

B,4
4
C,2

K,4

11

11

13

16

c) Critical path = 13569101213

Critical activity = A,D,F,K,L,N

d) 30 months
e) i) Total float activity J
23-18 = 5 weeks
18

L,5
10
0

H,3

E,2

M,4
d,3

12

N,3

0
2

11

18

d,2

23

18

F,5
5

22

14

22

22
22

13

27

30

27

30

18

23
J,3

ii) Free float for J

22-18 = 4 weeks
18

22

18

23
J,3

iii) Independent Float for J

23-18 = 4 weeks
18

22

18

23

Question 5
Month

JULY
AUGUST
SEPTEMB
ER
OCTOBE
R

Forecas
t
deman
d
9500
10300
10500

Units
produce
d

Unit
excess

Unit
shortag
e

End
inventor
y

Subcontract
ing units

1180
1980
2180

OT units
(max=
1000uni
ts)
1000
1000
1000

8320
8320
8320

180
980
1180

10700

8320

2380

1000

1380

NOVEMB
ER
DECEMB
ER
TOTAL

9400

8320

1080

1000

80

10400

8320

2080

1000

1080

49920

6000

4880

Units produced = (no. of worker) x working days x standard output per day
= 20 x 26 x (60/30 x 8)
= 8320 units.

Regular production cost = Units produced x labor cost x standard output per hour
= 49920 x Rm5 x (30/60)
= RM 124800

Overtime cost = 6000 x RM8 x (30/60)

= RM 24000

Subcontracting cost = 4880 x Rm9

= RM 43920

Total production cost = RM 124800 + RM 24000 + RM 43920

= RM 192720

PART B
Question 1
a) Operations management is the set of activities that creates goods and
services through transformation of inputs into output.
b) Basic components of operation system :
i.

Hospital - The inputs include the medicine and patients, the

conversion process is the treatment given by doctors, the outputs
include improvement in health and the feedback is patients can
continue to live normally.

ii.

University - The inputs include books, research reports and

classmates, the conversion process is the acquisition of knowledge and
gaining new insights, the outputs include students who are better
qualified to pursue future undertakings and the feedback can come
from students when they participate in a class discussion.

Question 2
a) Inventory is a stock of items kept to meet demand or a stock of any items or
resources used in an organization. In a broader context, inventory can include
inputs such as human, financial, energy, equipment, and physical items.
b) 3 reasons companies keep inventory
First reason why companies keep inventory is to meet anticipated customer
demand.
Inventories should be available regardless whether they held for satisfy
planned or expected
demand. These inventories are aptly known as
anticipation stocks.
Next is to smooth production requirements. Some companies produce large
inventories to meet demand that is seasonal or cyclical. They build up inventories
during pre-season periods to meet overly high requirements during seasonal
periods. These inventories are known as seasonal inventories.

Last is to protect against stock outs. Delayed deliveries and unexpected

increases in demand increase the risk of shortages. Delays happen due to weather
conditions, supplier stock outs, deliveries of wrong materials, quality problems and
so on. The risk of shortages can be reduced by holding safety stock.

Question 3

4 important factors that will influence location decision.

First factor that will influence location decision is facility costs. The cost
of acquiring a
piece of land or building or renting an office space can be
quantified/valued even though the
cost may vary from one location to another.

Next factor is utilities and taxes costs. Utility costs like telephone,
energy, and water;
local and state service charges and taxes are important
factors too.

Next factor is attractiveness of location. From a company standpoint, a

number of factors determine the desirability of a community as a place for its
worker and manager to live.
They include facilities for education, shopping,
recreation, transportation, local attitudes toward
the company and the size of
community.

Last factor is community acceptance/feelings. Communities do not, as

a rule, want
companies that will create pollution problems or otherwise lower
the quality of life in the
community. Extreme examples are a nuclear facility
and a trash dumpsite. However, many communities view new businesses as
potential sources of future tax revenues and new job
opportunities.

Question 4

i)

Product focus the sequence of work tasks is very rigid and the
processes have very long continuous production runs and use highly
specialized and automated equipment. The process, designed for a
very narrow range of goods or services is typically in operation
continuously 24 hours a day. Example is Rolex, a company that
specialized in producing watch.

ii)

Process focus production operations are grouped together according

to type of processes. All production operations that have similar
technological processes are grouped together to form a production
department. Example is company that produce furniture will use same
machineries to produce furniture.

Question 5

4 importance of maintenance.

First importance of maintenance is avoid production or service

disruptions. If there is a breakdown, the system will probably stop, causing delay
in production and a possibility of
accident occurs can put employees or
customers in danger. Maintenance effort must be managed effectively to keep
any type of interference to an economical minimum.

Next importance is not add to production or service costs. Some

companies have
workers regularly perform maintenance on the machines they
operate, thus ensuring the
system is in working condition most of the time.
Additional cost incurred when maintenance is
neglected or not a part of
important function. Thus, there is no output and yet overhead
continues,
increasing the cost per unit.

Next importance is to maintain high quality. Smooth running

equipment can ensure
products or services can be produced efficiently and their
quality can be maintained. For instance, a baker will be upset if the ovens
breakdown in the middle of baking process. If such happens, the whole bakery
products will simply be thrown out in the bins.

Last importance is to avoid missed delivery date. Meeting the

customer deadline is
important to ensure customer satisfaction and loyalty. It
can only be done when production
runs without some disruptions either due to
machine breakdown or to employees absenteeism.

MARCH 2012
PART A

QUESTION 1
a) Precedence diagram
0.4

0.6
0.55

C
F

0.6
0.5

0.5

0.7

0.6

0.6

0.45

b) Cycle Time of the line =Productive Time per day

Output per day (units)
= 8 hours x 60 minutes
320 units
= 1.5 sec/unit
c) Theoretical min. # of WS

= Sum of Task Time

Cycle time
= 5.5 minute
1.5 minutes
= 3.6 = 4 units of WS

d) Line Layout
Workstation :

Task

J
Task Time
:
1.1
Idle Time
:
(Total = 1.95 min)
e) Efficiency

1.5

1.2

1.25

0.3

0.25

Sum of Task Time X 100%

CT * Actual # of WS

5.5 minute
1.5 min/unit * 5 unit of WS
73.33 %
=
100% - Efficiency
100% - 73.33%
26.67%

=
Balance Delay
=

0.5
1

0.4

f) RM 32 Per day, compute idleness per month =

RM 32 per day
= RM 4 per hr
8 hours per day
=
idle time in min/day
60 min
=

1.95 minutes/units * 320

=
=

60 minutes
10.4 hours/day
10.4 hours/day x RM4 X

RM 208

units/day

5days/week

QUESTION 2
a) PERT network
b) EET and LET
C,7
6
0
0

6
A,6

1
1

B,5

E,5
1

d,1

1
D,7

F,6

2
2

J,5

1
1
G,7

H,8
I,7

c) Critical activities

A, B, E, F,

d) Compute the following :

i)

Free Float for activity D:

6

= 13 - 6 7

2
2

= 0 weeks

D, 7
ii)

Total Float for activity G:

2

1
1

= 22 - 11 - 7
= 4 weeks

G, 7
iii)

Independent Float for activity H

1
1

e)

2
H, 8

= 22 - 14 - 8
= 0 weeks

Completion time if activity F were revised to 8 weeks

1

F, 6

= 22 -16 6
= 0 weeks

QUESTION 3
d = 300 bags per day
D = 300 bag/day * 250 day/year
= 75 000 bag per year
H = RM 0.37 bags/per year
L = 5days
SS = 2 days
S = RM 55
a) Economic order quantity = 2DS/H
= 2(75 000)(55)/0.37
= 4 722.00 bags per order.
b) No. of order placed per year
= D/Q
= 75 000/ 4722.00
= 15.88 order per year.
c) The reorder point

= d (L + usage rate of SS)

= 300 (5 days + 2 days)
= 2100 bag.

d) Reoder cycle

T = (D/Q) * working days

T = (4722.00/75 000) * 250
T = 15.74

e) Total annual inventory cost

= (D/Q)(S) + (Q/2+SS)(H)
= [(75 000/4722.00)x(55)] +
[(4722.00/2)+600)x(0.37)]
= 873.57 + 1095.57
f)

QUESTION 4
a) Basic time of the operation.
TASK
A

2.5

1.5

2.5

8.0

2.6

1.6

SUM OF ALL
ELEMENT
+ 2.8 + 2.5 +
= 10.4
+ 1.4 + 1.6 +
+ 1.5
= 7.5
+ 2.5 + 2.2 +
+ 2.3
= 12
+ 8.4 + 8.5 +
+ 8.6
= 42
+ 2.7 + 2.8 +
+ 2.5
= 13.1
+ 1.5 + 1.6 +
+ 1.5
=8

AVERAGE ELEMENT

RF

NORMAL TIME

2.6

CYC
LE
4

10.4 / 4 = 2.6

0.95

2.47

1.5

7.5 / 5 = 1.5

1.2

1.8

2.5

12 / 5 = 2.4

1.05

2.52

8.5

42 / 5 = 8.4

1.1

9.24

2.5

13.1 / 5 = 2.62

0.9

2.36

1.8

8 / 5 = 1.6

1.05

1.68

TOTAL

20.07

b) Allowance factor

= Relaxation + Process
= 50 minute + 22 minute = 72 minutes.
=
72 minutes
* 100
6 hours x 60 minutes
= 20%

c) Standard time

= (NT) (1+ALL TIME)

= (20.07)(1+ 0.2)
= 24.084 min per units

d) Expected number of letter

= 60 minute / 24.084 min
= 2.491
e) Number of typist

= 120 letters / 2.491

= 48.173 of typist

QUESTION 5
N = 10
n = 50
z=3
= 34
a) Average Fraction defective
=
=
=
b) Standard deviation

c) Control limit
UCL
LCL

d) PLOT
0

defectives
N (n)
34
10 (50)
0.068

0.068 (1-0.068)
50
0.0356

=
=
=
=
=

0.068 + 3 (0.0356)
0.1748
0.068 3 (0.0356)
- 0.0388
0

PART B
QUESTION 1
(4) Basic components of an operation system.

There had 4 basic components of an operation system which is inputs,

conversion process or Transformation, outputs and lastly control. Firstly inputs.
Inputs are whatever entitles that proceed into a transformation process to produce
output. Inputs can be classified into three general categories are external, market
and primary resources. Second is Conversion process. It is the actual process or
physically changing the inputs into output of products and services. Next is Output.
Output is the accomplishment of operations system that is of the greater value than
the sum of the inputs. It is in the form of desired product and services. There are
two types of output, direct output and indirect outputs. Lastly is control. Control is
the process of making sure that the desired output are obtained by taking.
QUESTION 2
a) 2 types of research in operation management
Development research
It deals with technical activity or product-oriented research which
concerns with translating basic or applied research results into
products or processes.
Pure Research
It is conducted for the advancement of scientific knowledge about a
subject without any near-term expectation of commercial uses.
b) 4 objectives of research and development
Generate new idea and concept to develop these ideas and concept
into useful product.
Develop new uses of existing product
Develop new process that will help reduce capital and manufacturing
costs.
To improve on get improvement and to better than before.

QUESTION 3
2 differences between Process Focus and Product Focus

PROCESS FOCUS
Production operations are
grouped together according to
type of process and the
facilities are organized around
specific activities and
processes.
Able to produces a wide
variety of goods and services,
often in small quantity. It also
general purpose equipment
and labor force is highly
skilled.

PRODUCT FOCUS
It is used when a very high
volume of nondiscrete, highly
standardized output is desired. It
also very long production runs,
highly specialized and automated
equipment that control by
computers.
Control specialized nature of a
system can set standard and
maintain quality of high volume
and low variety product.

QUESTION 4
4 dimension of quality services.

Tangibles
These are the physical appearance of facilities, equipment, personnel, and
communication materials.
Convenience
It relates to the availability and accessibility of the service. How difficult is it
to find an ASTRO service agent.
Responsiveness
This refers to the willingness of services dependably, consistently and
accurately. One may say the Maybank online banking provides a good
example of a firm that provides highly reliable service.
Time
It related to the speed with which services delivered.

QUESTION 5
Defined following term:
i)

Inventory
Inventory is a stock of item kept to meet demand or stock of any items or
resources used in an organization.

ii)

Material Required Planning (MRP)

MRP is a computer-based system that determines how such of eac
material, any inventory item with a unique part number, should be
purchased or produced in each future time period to support the MPS.

iii)

Lead Time
It known and constant it is the time to waiting the goods.
(2DS/H)

iv)

Reorder point
Reorder point is happened when the quantity on hand of an item drops to
this amount, the item is reordered.

PART A (OCT 2012)

QUESTION 1
a) Construct a three (3) total cost curves for all locations on a single graph.

Total cost (RM)

Pasir
Puteh
1000 +

3250

Machang
2200 + 90

x
2200

Pasir
Puteh

1000

Mach-ang

20

70

*PasirPuteh = Machang

*Machang = Kota Bharu

PasirPuteh

= Machang

RM 1000 + RM 150 Q

= RM 2200 +RM 90 Q

RM 150 Q RM 90 Q

= RM 2200 RM 1000

RM 60 Q
Q

= RM 1200
= RM 20 unit

Machang

= Kota Bharu

RM 2200 + RM 90 Q

= RM 3250 + RM 75 Q

Kota
Bharu

Kota
Bharu
3250 +
Quantity
(Unit)

RM 90 Q RM 75 Q
RM 15 Q
Q

= RM 3250 RM 2200
= RM 1050
= RM 70 unit

b) Identify the relevant range of productions which provide the lowest total cost for each
location.
i)The break even point between PasirPuteh and Machang is 20 units. Location
PasirPuteh result lowest cost if use produce up to 20 units. Choose PasirPuteh< 20
units.
ii)The break even point between Machang and Kota Bharu is 70 units. Location Kota
Bharu result lowest cost if use produce 70 units and more. Choose Kota Bharu> 70
units.
iii)Location Machang would result in lowest cost if produce the output in range of 20
units to 70 units. Choose Machang = 20 units > 70 units

c) Based on the break-even point analysis, which location should Halimah choose and
explain why?
*CM = SP VC

*BEP (unit) = FC / CM

-Pasir Puteh
-Kota Bharu
-Machang

-Pasir Puteh
= RM 260 RM 150
= RM 110
= RM 400 RM 75
= RM 325
= RM 280 RM 90
= RM 190

-Kota Bharu
-Machang

= RM 1000 / RM 110
= 9.09 ~ 9 units
= RM 3250 / RM 325
= 10 units
= RM 2200 / RM 190
= 11.58 ~ 12 units

*BEP (RM) = BEP units x SP

Pasir Puteh = 9 x RM 260
= RM 2340

-Kota Bharu = 10 x RM 400

= RM 4000

-Machang = 12 x RM 280
= RM 3360

=* Halimah should choose the location in Pasir Puteh because the break-even point is
Lowest.

QUESTION 2
a) Construct the precedence diagram.
5

F
12

B
6

H
b) *CT = Productive time per day
Output per day (unit)
Output = 7 x 60
12
= 35 units
c) Theoretical min # of ws
= Sum of Task Time
CT
= 58/12
= 4.88 ~ 5 units of ws

d) Balance
WS
1

Task

CT

12

12

12

12

12

Task Time

11

11

12

12

12

Idle Time

= 2 min

e) Calculate the efficiency and balance delay percentages.

Efficiency
= Sum of Task Time
CT x Actual # of ws
= 58
x 100
12 x 5
= 96.67%
Balance Delay

f) Idle time

Cost of idleness

= 100% - 96.67%
= 3.33%
= Idle time x Output
60 min
= 2 x 35
60
= 1.167 hours

= RM5 x 1.167 hours

= RM5.835 ~ RM5.85

QUESTION 3
a) Construct the CPM network for the project.

0
0

17

17

13
13

A, 5

4
B, 2 C, 8

I, 7

F, 4
E, 2

24

28

24

28

8
6

K, 4

H, 2

D, 1

17

J, 6

22
5

G, 3

16
c) Critical activities = A, C, F, I, K
d) Programs estimated completion time

22

=5+8+4+7+4
= 28 weeks
e) Free float for activity G.
13

16

13

22

Free float, G =16 13 3

= 0 week

G, 3

f) If activity D is revised from 1 week to 4 weeks, how would this affect the project?

13

13
D, 1

Total float, G =13 5 4

= 4 weeks

QUESTION 4
a) Develop an aggregate production plan using vary workforce strategy to meet forecasted
demand for the next six month period.
Monthly standard output for January, March and May:
= (No. days per month) x daily standard output
= (31) x (60/7) x 7 hours
= 651 workers
Monthly standard output for April and June :
= (No. days per month) x daily standard output
= (30) x (60/7) x 7 hours
= 630 workers
Monthly standard output for February :
= (No. days per month) x daily standard output
= (28) x (60/7) x 7 hours
= 588 workers
Month

Forecast Demand (units)

Current
Workers

Worker
required

January

4612 55 = 4557

4557/651 = 7

February

5080 + 800 = 5880

5880/588 = 10

March

6510

10

6510/651 = 10

April

5220 + 450 = 5670

10

5670/630 = 9

May

5859

5859/651 = 9

June

5600 + 700 = 6300

6300/630 = 10

Total

34776

Hire

Layoff
1

1
4

b) The total cost for the plan.

Total production cost :
Regular Production cost
= Total unit produced x regular cost per hour x standard output per hour
= 34831 x (RM40/7) x (20/60)
= RM 66240
Hiring cost
= Hire x Hiring cost
= 4 x RM 200
= RM 800
Layoff cost
= Layoff x Layoff cost
= 2 x RM 300
= RM 600
Thus, Total cost = RM 66240 + RM 800 + RM 600
= RM 67640

QUESTION 5

No. of problems expected

Frequency of accurance

0
0.2

1
0.1

2
0.2

3
0.3

4
0.2

Expected number of breakdown :

= (0)(0.2) + (1)(0.1) + (2)(0.2) + (3)(0.3) + (4)(0.2)
= 0 + 0.1 + 0.4 + 0.9 + 0.8
= 2.2 breakdown per month
Expected breakdown cost per month :
= 2.2 x 600
= RM 1320 per month
Preventive cost :
= RM 1700 + (1/5 breakdown per month x RM 300)
= RM 1700 + 60
= RM 1760 per month
Conclusion :
The manager should proceed with repair machine since it is less expensive to
purchase the contract (RM 1320) to proceed service contract to preventive maintenance less
(RM 1760) . The monthly saving is RM 440.

PART B (OCT 2012)

Question 1
a) According to Render and Heizer (2006), production is the creation of goods and services
and Operations management is the set of activities that creates goods and services
through transformation of inputs and output.
b)
Services

Manufactured products

Services are intangible

Goods are tangible

They are experienced

They cannot be produced ahead of

They are consumed

They can be touched, seen, tasted

time
or smelled
Services cannot be kept in stock or cannot Goods can be kept in stock until needed or
be inventoried

can be inventoried

As described in hospitality industry,

They can be moved, stored and

We sell time. You cant put a hotel

repaired

and

generally

require

room on the shelf.

physical skills and expertise during

production.

Services are more likely to be unique and

Goods are usually similar and can be mass

cannot be mass produced

produced

Just as a haircut produced for a

Due

to

capital-intensive

customer may not be the same as

(i.e.mechanized),

goods

can

be

anyone elses.

standardized since manufacturers

can carefully control the amount of
variability of inputs.

Question 2
a) Research and development (R&D) refers to organised efforts that are directed toward
increasing scientific knowledge and product or process innovation.
b) 1. Pure/Basic Research
o It is conducted for the advancement of scientific knowledge about a subject
without any near-term expectation of commercial uses. This type of research is
likely to be carried out at major scientific and technical universities such as UPM,

USM and UTM and supported by various government agencies for example
RISDA and FELDA.
2. Applied Research
o

It is conducted for the advancement of scientific knowledge that has specific

potential commercial uses. It is more on problem-oriented research that is
dedicated to discovering new concepts, ideas and materials with specific
applications. Such as NST, TV3, TENAGA and PETRONAS.

3. Development Research
o

It deals with technical activity or product-oriented research which concerns with

translating basic or applied research results into products or processes.

Question 3
a) Work measurement Determines how long it takes to do a job, or in other words, how
much work employees can do during a specific period.
b) Average observed time It is an average time a worker being observed, took to work
on individual/elemental tasks from the moment of starting to the moment of finishing.
c) Standard time Is the average operation tome for a job, which is obtained by adding
the necessary allowances to the normal time or basic time.
d) Allowance factor The extra time, expressed in a percentage of the normal working
time that is allowed to workers through no fault of them, but is due to work conditions
such as unavoidable delays, personal time and fatigue.

Question 4
Units
Max. Inv. Level =
Order Quantity, Q

Inventory Level

Demand rate

Inventory
depleted

Reorder Point, ROP

Time
Min. Inv.
Level = 0

Place
Order

Lead
Time, L

Receive
order

Lead
Time, L

a) Maximum inventory level The maximum inventory level equals the economic order
quantity, Q
b) Usage rate It is a measure of the demand for product per unit of time
c) Reorder point (ROP) This is the point at which you place an order for Q units, which
are timed to arrive just as the inventory level reaches zero. The inventory goes from zero
to Q and then is depleted at ac constant rate.
d) Safety stock is a buffer added to the inventory on hand during lead time
e) Lead time is known and constant. Lead time, L is the amount of time it takes from
order replacement until it arrives at the manufacturing company.
f) Minimum inventory level with the basic EOQ should be zero

Question 5
a) Quality is defined as meeting or exceeding customer expectations, which often vary from
one customer to the next. Also, the expectations of customers today may not be satisfied
tomorrow as customer tastes and preference changes.
b) Purpose of inspection is intended to provide information on the degree to which items
conform to a standard.
c) 100% inspection Total or 100 percent inspection is justified when the cost of a loss
incurred by not inspecting is greater than the cost of inspection.
o For example, suppose a faulty item result in a RM10 loss. If the average
percentage of defective items in a lot 3 percent, the expected cost of faulty items
is (0.03)(RM10), or RM0.30 each. Therefore, if the cost inspecting each item is
less than RM0.30, the economic decision is to perform 100 percent inspection.

MARCH 2013

(PART A)
QUESTION 1
a)

C
5

7
I

b) Cycle Time

: Productive time/day
Output per day ( units)

Output per day : 420

12
: 35 units
c) # of workstation :

Sum of task times

Cycle Time

56
12

: 4.6667 5 units of workstation

d) Workstation

Cycle time

12

12

12

12

12

12

Task time

12

11

12

12

Idle time

8 = 16 minutes

e) Efficiency :

Sum of task time

x100

Cycle time x actual of work station

:

56
12 x 6

x 100

: 77.78%
Balance delay : 100 - efficiency
: 100 - 77.78%
: 22.22%

QUESTION 2
4

1
2

a) EET

LET

8
C,3

1
F,5

A , 11

H,2

d2

B, 2
3

D,4

E,3

G,2

d1

I,4

c) Critical Path :
Critical Activity :

3
2

= 15 weeks
d) 15 weeks

4
4

G
3

I
2

9
4

e) Total Float

11
9

(-)

11

G,2

11 - 9 - 2
= 0 weeks
Free Float

(-)

11
9

11

G,2
11 - 9 - 2
= 0 weeks

QUESTION 3

Unit Produced : Number of Workers x working days per period x standard output per day
: 15 x 20 x ( 60/30 x 8 )
: 4800 units per worker per month

MONTH
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
TOTAL

FORECAST
DEMAND
(UNITS)
5400
4950
3600
5260
3900
4560

UNIT
PRODUCED
4800
4800
4800
4800
4800
4800
28800

UNIT
EXCESS

UNIT
SHORTAGE
600
150

OVERTIME
600
150

1200
460
900
240
750

Total Production Cost :

Regular production cost : total unit produced x regular cost per hour x hourly standard output
: 28800 x 6 x (30/60)
: RM 86400

Overtime

: 750 x 9 x ( 30/60 )
: RM 3375

Holding inventory

: 5460 x 1.50
: RM 8190

Total Cost : RM 97965

ENDING
INVENTORY

1200
740
1640
1880
5460

QUESTION 4
d = 240 unit
H = RM 0.50 X 12 = RM6 per year
working day = 250 days per year
S = RM 48
SS = 2
D = 240 unit x 250 days
= 60000 units per year

a) EOQ :
:

2DS/H
2(60000)(48)/6

: 979.79 980 units per order

b) Number of order per year (N)

: D/Q
: ( 60000/ 980)
: 61.22 61 times per year

c) Safety Stock(SS) : d x usage rate of SS

: 240 (2)
: 480 units
d) ROP : d ( L + usage rate of SS)
: 240 ( 5+2)
: 1680 units
e) max inventory level : Q + SS
: 980 + 480
:1460 units
f) Total annual relevant cost ( TARC) : [(D/Q) X (S)] + [(Q/2) X (H)]
: [(60000/980) X 48] + [( 980/2) X 6 ]
: 2938.76 + 2940
: RM 5878.76

g) min inventory level : 480 units

h) average inventory level : Q/2 + SS

: 980/2 + 480
: 970 units
QUESTION 5

cost per breakdown :RM 300

per day

limit number of breakdown : 1

preventive maintenance cost : RM 130

Number of breakdown
Frequency ( days)
Frequency of
occurrence
Expected Number of
Breakdown

0
3
3/22
= 0.1364
0 x 0.1364
=0

1
9
9/22
= 0.4091
1 x 0.4091
= 0.4091

2
7
7/22
= 0.3182
2 x 0.3182
= 0.6364

3
3
3/22
= 0.1364
3 x 0.1364
= 0.4092

Expected breakdown cost : ( expected number of breakdown)(cost per breakdown)

: ( 1.4547) ( 300)
: RM 436. 41 per days
Preventive maintenance cost : (preventive maintenance cost) + ( cost of contract term )
: 130 + ( 1 x 130)
: RM 260. choose service contract because less expensive and
have monthly
saving , RM 176. 41 per day .

Total
22
1.0
1.4547

PART B
QUESTION 1
Four objective of operation system :
i.

To minimize the operational costs by reducing some fixed and variable costs can help

ii.

increase the value-added of products or services.

To enhance productivity through efficient operation by eliminating and improving
such operations decreases the cost, thereby increasing efficiency and effectiveness of

iii.

operations.
To satisfy customers' needs and want by delivering product or service of quality
standards at the affordable price and scheduled date to the customers can pledge

iv.

customers' confidence and loyalty.

To provide better working condition as employees are the main asset of the
organizations. By doing this, organizations helps their human capital to become more
productive and creative.

QUESTION 2
Four factors that influence layout :
i.
ii.
iii.
iv.

Design of facility , it should be consider overall objective set by the organization, also
decision about windows, planters and also partition height to circulate airflow.
Optimum space needs to be allocated for process as there are vary of machines and
equipment that will be used.
Selection of appropriate material handling such as conveyors and crane to ensure a
proper safety measure to avoid mishaps.
Identification of the cost of moving between the various work areas. There may be
unique considerations related to moving materials or the importance of certain areas
being next to each other.

QUESTION 3
Four factors that can affect companies when they want to locate their factories :
i.

ii.
iii.

iv.

Facility Costs which are the costs of acquiring a piece of land or building or renting an
office space can be quantified / valued even though the cost may vary from one location
to another. For example, an Office Space or a Building.
Proximity to suppliers and resources can be beneficial as it can reduce the
transportation costs, have prompt delivery and gain guaranteed after-sale service.
Attractiveness of location because it determine the desirability of a community as a
place for its worker and manager to live and also have facilities such as education,
shopping and transportation.
Utility costs like telephone, energy, and water; local and state service charges and
taxes are important factors too.

QUESTION 4
Four function of inventory in an organizations :
i.
ii.

iii.

iv.

Inventory should be available regardless whether they held for satisfy planned or
expected demand to meet anticipated customers demand.
To take advantage of quantity discount as a company will purchase large amounts of
inventory to take advantage of the price discount. Suppliers normally will provide
discount for those who buy in large quantities.
Some companies produced large inventories to meet demand that is seasonal or
cyclical. They build up inventories during pre-season period to smooth production
requirement.
To permit operations as it take a certain amount of time which means they are not
instantaneous. Thus there will be some WIP inventories readily to be used at the
production sites, ensuring a smooth production of the finished goods.

QUESTION 5
Four reasons why maintenance is important in production :
i.

ii.

iii.
iv.

Avoid production or service disruptions, well maintenance equipment and machines

will ensure a production system runs smoothly and operation capacity met without any
glitch.
Not add to production or service costs because some companies have workers
regularly perform maintenance on the machines they operate, thus ensuring the system
is in working condition most of time, otherwise additional cost incurred.
Maintain high quality, for example change car's lubricant to ensure that the car
condition and performance can be maintained.
Avoid missed delivery date because it will reduce customer satisfaction and loyalty.
This can be avoid if production runs without some disruption either due to machine
breakdown or to employee's absenteeism.

Sept 2013
Part A
Question 1

14
G

15
B

24
A
13
10

24
F

12D

12
E

14
H

Cycle Time, CT = Productive Time per day

Output per day ( in units )
= 8 x 60 x 60
1152
= 25sec/unit
Theoretical min. # of WS = Sum of Task Times
Cycle Time (CT)
= 146
25
= 5.84
= 6 units

11
I

Layout using Longest Task Time Rule

Workstation
Task

1
A

BF

Task Time
24
Idle Time
1
(Total = 4 secs )

2
CE

DH

24

24

Efficiency = Sum of Task Times

CT x Actual # of WS

x 100

= 146 x 100
25 x 6
= 97.33%
Balance Delay = 100 % - 97.33 %
= 2.67 %
Cost of Idleness per week = 4 x 1152
60 x 60
= 1.28 hour/day
Cost of Idleness per week = 1.28 x 7.5 x 5
= RM48

4
I

J
25

24
01

25
0

Question 2
D = 150 kg
Working days = 365 days
P = RM1.90
S = RM 22
L = 2 days
Usage rate of ss = 4days
D = d x working days
= 150kg x 365days/year
= 57450 kg per year
SS = d ( usage rate of ss )
= 150 (4)
= 600 kg
a) EOQ = 2DS
H
=

2(54750)(22)
1.20

= 1417 kg per order

b) ROP = d ( L + usage rate of ss )
= 150 ( 2 + 4 )
= 900 kg
c)

N = D/Q
= 54750/1417
= 39 times per year

d) Length of times between order

T = working days
N
= 365
39
= 9.359 times
e) Total annual cost
TAC = annual carrying cost + annual ordering cost
= ( Q/2 x H ) + ( D/Q x S )
= ( 1417/2 x 1.20 ) + ( 54750/ 1417 x 22 )
= 850.20 + 850.04
= RM 1700.24
f) Maximum inventory
= Q + SS
= 1417kg + 600kg

= 2017 kg
Question 3
Tangible Factors
Annual Operating
Cost
Ranking

Muar(RM)
1,600,000

Location
Rembau(RM)
1,570,000

Nilai (RM)
1,580,000

Conclusion : The best location to choose is Rembau since it has lowest operating
costs.
Intangible
Factor

Weight

Muar

Rembau

Nilai

Labour
availability

16

Government
Inducement

12

Quality of life

10

10

Community
Acceptace

Total weighted score

30

31

34

Ranking

Conclusion : The best location to choose is Nilai since it has highest total weighted
scores.
Factors

Weight

Tangible

Location
Rembau
3
6

Intangible

Muar

Nilai
2

Total Weighted Score

Ranking

Conclusion :The side that should the company select is Rembau because it has the
highest amount which is 8
Question 4
5
5

H,9

3
0
A 0, 1
1

B, 4

E,6

I,4
G,7

2
C,3

1
1

1
F,2

D, 7
4
8
9

Critical Path

Critical Activities
I

A
1

B
4

11

11

F, 2

11 8 2 = 1 week

Free Float, activity F

11

11

F, 2

11 8 2 = 1 week

G
7

22weeks

Total Float, activity F

Independent Float, activity F

8

11

11

F, 2

11 9 2 = 0 week

Question 5

Job element

Sum of all
elemental
times

Number of
cycle

10 + 12
15 + 10
14
= 61
33 + 30
35 + 37
= 135
21 + 25
26 + 22
=94

+
+

12.2

2
3

Average
elemental
times

RF

1.1

12.2 x 1.1
=13.42

33.75

1.15

23.5

0.95

33.75 x
1.15
=38.81
23.5 x 0.95
=22.33

The Normal Time per unit

Normal time = 74.56min

Allowance factor

Unavoidable delay : 15minutes

Rest periods
: 50minutes
Area clean up
: 20minutes
Clothes change
: 10minutes

Total allowance time :

Normal
time

15 + 50 + 20 + 10
8 x 60
= 19.79%

x 100

Standard Time :
= (NT)(1+ All time )
= (74.56) (1 + 0.1979)
= 89.32

Number of units per operator for every 8hour shift

= 8 x 60
89.32
=5 units

Wage rate RM60 per day, calculate idleness per week

74.56

Idle time per unit = ( CT x Actual # WS ) sum of task time

= ( 25 x 6 ) 146 = 4secs
Idle time in sec per day = idle time per unit x output per day
= 4 x 1152
= 4608 sec/day
Idle time in hour per day = idle time in sec/day
60 min/hr x 60 sec/min
= 1.28hour/day
Idleness per week = 1.28 x RM 60/day x 5days
= RM384

Part B
Question 1
a) It is process of deciding on the unique characteristic and features of the
companys product. Specifically, it defines a products characteristic, such as

its appearance, the materials it is made of, its dimensions and tolerances,
and its performance standards.
b)
College
-the inputs include books, research reports, videotapes, CDs, the
knowledge of professors
( in our case, lecturers) and our classmates.
The conversion process is not directly noticeable because it is the
acquisition of knowledge and gaining of new insight; understanding
relationships and improved ability to think, to evaluate situations and to
make better-informed decisions. These processes are value-added. The
outputs include new knowledge and insights, new research discovery
and students who are better qualified to pursue future undertakings.
Hospital
- the inputs include medicine, surgery equipment , bed , room and the
profession of doctor. The conversion process is where the nurse
helping and taking care for every patient in the hospital, doctor
operating and giving a medicine or an advice to the patient. The
output arise when the patient getting well from their sick or disease.

Question 2
Explain four objectives of R&D
To generate new ideas and concepts
- To find out a new idea for improving and developing these ideas and
concepts into useful product
To develop new uses of the existing products
- To upgrade the existed products or service for meet the customers
satisfaction
To develop new processes that will help reduce capital and manufacturing
costs
- To find out new way to process the service or product at the lowest
cost of manufacturing and reducing capital.

Question 3
Name and explain two types of inspection in Operations Management

100% inspection
- Total or 100 percent inspection is justified when the cost of a loss incurred
by not inspecting is greater than the cost of inspection. For example,
suppose a faulty item results in a RM10 loss. If the average percentage of
defective items in a lot is 3 percent, the expected cost of faulty items is
(0.03)(RM10) or each RM 0.30. Therefore, if the cost of inspecting each
item is less than RM0.30, the economic decision is to perform 100 percent
inspection

Sampling inspection
- It involves inspecting a random sample of product input such as raw
materials or parts or the final product and comparing it to a quality
standard. If the sample fails he comparison or the test then that is seen to
imply poor quality and the entire group of items from which the sample
was taken is rejected. Rejected item may be subjected to 100 percent
inspections, or maybe returned to the supplier for credit or replacement.

Explain two types of maintenance

Breakdown maintenance
- This option is reactive, which means it deal with breakdowns or other
problem when they occur. Management cannot schedule breakdowns but
must deal with them on an irregular basis. Breakdown maintenance is the
most effective option when it takes into account the degree of importance
a piece of equipment has in the operations system, and the ability of the
system to do without it for a period of time

Preventive maintenance
- This option is proactive, that is reduces breakdowns through a program of
lubrication, adjustment, cleaning, inspection and replacement of worn
parts. The goal is to reduce the incidence of breakdowns or failures in the
factory or equipment to avoid the associated costs. These costs include
loss of output , idle workers, schedule disruptions, injuries, damage to
other equipment, products, or facilities and repairs which may involve
maintaining inventories of spare parts, repair tools and equipment and
repair specialists.

Question 4
Describe four objectives of layouts
o

Utilize space and labour efficiency

-To provide optimum space to organize equipment and facilitate movement of
goods and to create safe and comfortable work environment.
Good Communication
- Facilitate communication and interaction between workers,their supervisor
or workers and customers
Provide flexibility to adapt to changing condition
- Having better control over the production cycle by having greater
flexibility for changes in the design of the product.
Eliminate wasted or redundant movement
- Reducing idle time for every workers to achieve the best time in producing
product for every unit.

Question 5
Define inventory
Inventory is a stock of items kept to meet demand or a stock of any items or
resources used in an organization. In a broader context, inventory can include
inputs such as human, financial, energy, equipment and physical items
Explain three types of inventory

Raw materials are the vendor-supplied items or purchased items that have
not had any labour added, that are transformed into components or products.
For instance, gold is a raw material that transformed in jewellery.
Finished goods are products sold to customers such as bicycles, computers,
oven and automobiles that the company sells to its customers.
Distribution Inventory consists of finished goods and spare parts at various
point in the distribution system for example stored in warehouse or in transit
between warehouse and consumers