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MOS 3330 Test 2

Review Problems & Solutions


General Information
Course grade distribution policy:
• DAN Management 3000 & 4000 level courses: Mean of between 70-77% for all sections of the
same course taught by the same instructor in that semester

Test date, time, location:


• See the course outline
• See also the course web site: dan.uwo.ca/courses/3330
• Test time conflict (due to having a Wed. evening class) – must report to the instructor no later than
one week before the test date
• Exam conflict consists of having 3 exams within 23 hours
• Missing the test – check the course web site for instruction

Test coverage:
• Test 2 is not cumulative of Test 1 materials.
• Topic areas covered in Test 2:
o Aggregate Production Planning
o MRP (including Scheduling)
o ERP (including Project Management)
• Test 2 covers all materials covered in the lecture slide book for the topics mentioned above
• Materials that are in the textbook but NOT in the lecture slide book will NOT be on the test.
• Therefore, you do not have to memorize everything in the textbook; in the textbook, read only
the same materials covered in the lecture slide book.

Test structure:
• Test 2 is worth 25% of your course grade
• Test 2 = total 65 marks
o Question 1 – Computational, 2 parts, total 16 marks
o Question 2 – Short answers, 1 question (conceptual, no calculation), total 9 marks
o Question 3 – Multiple choice, 40 questions (concepts and simple calculations), 1 mark each,
total 40 marks
o Formula sheet – provided on the last page of the test (the sheet is the same from Test 1)

Don’t forget to bring to test:


• Student ID
• Non-programmable calculator
• Pencils for multiple choice scantron sheet (also a good idea for doing aggregate plan tables)
• No cell phones on person or on desk during the test
• No personal scrap paper

1
A. Computational
General Tips
Recommended steps for how to prepare for computational questions in Test 2:

1. Review computational examples in the lecture notes.


− Familiarize yourself with typical input data for an aggregate plan.
− Familiarize yourself with the format of the aggregate plan table as shown in the
lecture notes (you don’t have to memorize the column headings because they will
be provided in the test).
− Understand how to calculate columns of the aggregate plan table and the total cost.
− Understand the aggregate plan examples shown in the lecture notes (Examples 1a-
1d & 2a-2d)
− Understand the differences among level, chase, and hybrid approaches; for Test 2,
you have to determine which one to use based on the description of the plan given
in the test question.
2. Download the formula sheet from the course web site.
− Test 2 covers the middle ¹∕₃ of the formula sheet.
− Recall that symbols are not defined on the formula sheet; you should know what
they stand for.
3. Study questions from the old exams.
− See A1 → this is not a mistake; for Test 2, you should do the questions from the old
exams (A1) before the textbook questions (A2).
4. Study end-of-chapter problems in the textbook.
− See A2.
− The textbook questions may be confusing because they sometimes refer to hybrid
cases as “level” or “chase”; also, their solutions sometimes include additional
improvement, which was not specified in the question.
− If you get stuck with a textbook question, check the solution right away and learn
from it.

Rounding Reminder
• For a physical quantity (e.g., order quantity), the final answer should be an integer.
• For a dollar amount, the final answer should have two decimal points.

2
A1. Computational Questions from Old Exams
1. Wetski currently maintains a steady production level at the average demand all year around and does
not hire or fire workers. Fill all blank spaces in the following table so that it represents an aggregate
production plan based on Wetski’s current production and hiring policy. What is the total cost of this
plan?

Regular production cost = $55 per unit Production rate = 750 units/worker/quarter
Overtime production cost = $82 per unit Holding cost = $4 per unit per quarter
Subcontracting cost = $77 per unit Backorder cost = $80 per unit per quarter
Opening workforce level = 11 Hiring cost = $140 per worker
Overtime capacity = 2500 units per quarter Firing cost = $550 per worker
Subcontracting capacity = 1000 units per quarter Opening inventory = 0

Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hiring Firing
(units) Prod. Prod. Prod.
Fall 3700
Winter 4600
Spring 14500
Summer 21000

2. University Press publishes textbooks for the academic market. The relevant cost and printing
equipment-related capacity information are given below.

Regular production cost = $20 per book Regular production max. capacity = 10 000 books per quarter
Overtime production cost = $30 per book Overtime production max. capacity = 5000 books per quarter
Subcontracting cost = $35 per book Beginning inventory = 0
Holding cost = $2 per book

a) Fill all blank spaces in the following table so that it represents an aggregate production plan using a
pure level approach with average demand. What is the total cost of the initial plan?

Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000
2 10000
3 30000
4 25000

b) Fill all blank spaces in the following table so that it represents an aggregate production plan using a
pure chase approach. For this question, we will ignore workforce-related costs since the cost
information is not provided. What is the total cost of the plan? Compared to the level approach in
part a), which approach seems better? Justify your answer briefly.

Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000
2 10000
3 30000
4 25000

3
c) Based on parts a) and b), develop an improved aggregate production plan in terms of the total cost.
The plan may deviate from a pure level or a pure chase approach. Assume that no other information
or objective will be considered. Provide the total cost of the improved plan and explain briefly how
you came up with your improved plan.

Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000
2 10000
3 30000
4 25000

A2. Textbook Computational Problems


Topic Suggested textbook end-of-chapter problems
Aggregate Planning For #1-7: Do the following conversions once at the beginning; then you don’t have
to worry about conversion after that. FOR THE TEST, IF YOU NEED TO DO ANY
CONVERSION, DO IT ONCE AT THE BEGINNING AND MAKE THE UNIT
CONSISTENT THROUGHOUT THE QUESTIONS.

(1) Convert “per hour” to “per unit”: “regular-time labor cost per hour” × “labor
standard per unit” = regular-time labor cost per unit = 10×6 = $60
(2) Convert “overtime labor cost per hour” to “overtime labor cost per unit” in the
same manner = 15×6 = $90
(3) Convert “time available” to “production rate”: “regular time available per period” ÷
“labor standard per unit” = production rate/worker/period = 160÷6 = 26.67
(4) Convert “overtime available per period” to production rate/worker/period in the
same manner = 32÷6 = 5.33

FOR ALL QUESTIONS, #1


USE THE SAME #2 – (a) The textbook solution is based on the max of cumulative demand, but this
TABLE FORMAT & question, as it reads, can actually be done in two ways: the highest demand or
COLUMN HEADINGS the max of cumulative average; in the test, either a question has enough
AS THE LECTURE information so that it is not ambiguous or it will accept multiple answers if
NOTES: ambiguous; (b) the question refers to this plan as “level” but it is
hybrid/modified because part (b) suggests hiring of 18 employees.
#3
#4
#6
#7 – The textbook solution contains some errors; see the alternative solution provided
in this review document
#8
#9 – Use the workforce calculated in 8) as the opening workforce; the textbook solution
contains some errors; see the alternative solution provided in this review
document
#11 – The textbook solution contains some errors; see the alternative solution
provided in this review document
#12 – The textbook solution contains some errors; see the alternative solution
provided in this review document; also (a) says “all demand must be met each
period” – however, it is not possible to do so, and this is mentioned in the
solution for (c)

4
Resource Planning #1
(MRP) #2
#3
#4
Scheduling #5
#7
#8

5
B. Multiple Choice
General Tips
Recommended steps for how to prepare for multiple choice questions in Test 2:

1. Focus on the lecture slide book.


− All multiple choice questions are based on the lecture notes.
− Be able to define/explain all terms and concepts contained in the lecture notes.
− If you are not sure about a term or concept, make a note of that and look it up in the
textbook later (see Step 2).
2. Read the textbook chapters that correspond to the test coverage.
− DO NOT read the textbook unless you are clear about what is in the lecture notes.
− Take notes only on the materials covered in the lecture notes.
− Take notes on terms/concepts that you were not sure about in the lecture notes.
− Read quickly through the terms/concepts that are not in the lecture notes (don’t
take any notes).
− Generally, you can find the materials covered in the lecture notes in the following
chapters/pages: Chapter 13 (pp. 483-516), Chapter 14 (pp. 517-552), and Chapter
15 (pp. 553-566, 569-588)
3. Study questions from the old exams.
− See B1 below.

B1. Multiple Choice Questions from Old Exams


1) The active strategy in aggregate production planning
a. is developed for product families rather than individual products
b. changes workforce levels so that production capacity meets demand
c. maintains resources for high demand levels
d. produces products with counter-cyclic demands
2) Which of the following is true concerning aggregate production planning?
a. When a firm wants to minimize inventory investment, a level production strategy is best.
b. When a firm wants to keep skilled labour, a level production strategy is best.
c. When a firm wants to emphasize plant utilization, a chase strategy is best.
d. When a firm wants to minimize changes in production, a chase strategy is best.
3) Aggregate production planning
a. may be constrained by management policies and labour agreements
b. assumes a planning horizon of 2 years and longer
c. assumes that facilities, products, and processes may change during the planning period
d. deals with one product at a time
4) The best way to manage fluctuating demand when using a level production strategy is to
a. hire part-time workers
b. hire or fire full-time workers
c. increase inventory
d. backorder

6
5) Which of the following best describes the chase approach?
a. Production always lagging behind demand
b. Constant production capacity
c. Inventory minimization policy
d. Stable labour management cost
6) Capacity lag strategy
a. may lose some customers
b. may attract some customers from competitors
c. takes advantage of economies of scale
d. is synonym with the one-step expansion strategy
7) MRP
a. requires customer demand as input
b. is a simulation tool to determine capacity feasibility
c. is designed primarily for repetitive and continuous manufacturing
d. is useful to analyze lead time uncertainty
8) A bill of material specifies all of the following except
a. lot size and lead time of each component
b. how many of each component is needed
c. a brief description of each component in the product
d. when a component is needed in the assembly process
9) Product A is assembled from 10 units of S1 and 4 units of S2. S1 is made of 3 unit of C1, 6 units of C2,
and 2 unit of C3. S2 is made of 5 units of C2 and 7 units of C3. Assume no inventory on hand, products
take 1 day to assemble, subassemblies take 2 days, and lead time of components is 4 days. When should
an order be released for C3 if the 100 As are needed by day 9? How many C3 should be ordered?
a. Order 48 units of C3 on day 2
b. Order 48 units of C3 on day 6
c. Order 4800 units of C3 on day 1
d. Order 4800 units of C3 on day 2
10) Typical ERP modules include
a. finance and accounting
b. production and materials management
c. human resources
d. all of the above
11) EDI
a. is the exchange of all business documents
b. is the exchange of business documents in a standard format
c. consolidates purchasing orders from all suppliers
d. acts as a centralized agent to coordinate information flows
12) Typically, project teams include individuals
a. from other areas in the organization
b. selected because of their special skills
c. from the functional areas of the project
d. all of the above
13) The critical path is used for
a. showing the actual progress of different tasks
b. managing the project scope
c. assessing the impact of a task being late
d. showing which task is late

7
14) Which of the following is a responsibility of the scheduling function of a production system?
a. Deciding on which machine a part will be routed for processing
b. Assigning workers to operate machines that process the parts
c. Determining in what order the parts will be processed
d. All of the above
15) Given the data below, using the SPT heuristic sequencing rule, determine the completion date and
tardiness for each job as well as the average completion time and average tardiness for all four jobs.
Which of the following statements is true?
Job A B C D
Processing time (days) 10 5 15 8
Due date (in days) 10 8 25 15
a. Jobs B and D will have no tardiness
b. The average completion time is 6.5
c. The tardiness for Job A is 12 days
d. The average tardiness is 19.75
16) What is an information system designed to integrate internal and external members of the supply
chain?
a. ERP
b. MRP
c. MPS
d. EIS
17) Each A (finished good) requires 1 of component B and 2 of component C. Each B requires 2 of part D
and 1 of part E; and each C requires 1 of part D and 1 of part F. If the demand for product A is 30 units,
and there are 10 units of B on hand and none of C, how many units of part D will be needed?
a. 60
b. 120
c. 100
d. 80
18) MPS should not be
a. a realistic plan
b. a final assembly schedule
c. an anticipated build schedule
d. all of the above
19) Which of the following is not an ERP enabler?
a. EFT
b. Shared databases
c. EDI
d. All of the above are ERP enablers
20) Which one of the following is considered a technical issue in ERP implementation?
a. Lack of management support
b. Inaccurate data
c. Expensive software
d. Employee resistance

8
C. Short Answers
General Tips
Recommended steps for how to prepare for short answer questions in Test 2:

1. Study the lecture slide book.


− The justification of your answer should be built on the understanding of terms and
concepts covered in the lecture notes.
− Be able to define/explain all terms and concepts contained in the lecture notes.
− If you study the lecture notes for multiple choice questions, then you are studying
for short answers at the same time.
2. Read the textbook chapters that correspond to the test coverage.
− DO NOT read the textbook unless you are clear about what is in the lecture notes.
− Take notes only on the materials covered in the lecture notes.
− Take notes on different examples and alternate explanations.
− In regard to the terms/concepts that are not in the lecture notes but are in the
textbook, reading through them once is recommended because it provides you with
a broad perspective, which is helpful for building your justification.
− Generally, you can find the materials covered in the lecture notes in the following
chapters/pages: Chapter 13 (pp. 483-516), Chapter 14 (pp. 517-552), and Chapter
15 (pp. 553-566, 569-588)
3. Study end-of-chapter discussion questions from the textbook.
− See C1 below.
4. Study questions from the old exams.
− See C2 below.

A short answer question may be about:


• Application of a concept to a real-world setting
• Suitability of a strategy/method/model for a particular organization
• Choice of strategies/methods/models for a particular organization
• Improvement suggestions for various operational issues
• Real-world examples of a concept

Do’s and Don’ts:


• Do demonstrate the basic understanding of concepts covered in the course.
• Do provide a sound and comprehensive justification/explanation that fits the context of the
question.
• Do answer the question as directly as possible.
• Don’t include irrelevant ideas.
• Don’t go off at a tangent.
• Don’t repeat/rephrase the same points.

9
C1. Textbook Discussion Questions
Topic Suggested end-of-chapter discussion questions
Aggregate Planning #3, 4, 5, 6, 7, 8, 9, 10, 11
Resource Planning (MRP, ERP) #1, 2, 3, 6, 8, 9, 10, 13, 15

C2. Short Answer Questions from Old Exams


1. ERP implementation requires a great deal of attention to behavioural issues. Describe two behavioural
issues and make suggestions for how to deal with those issues.
2. What is the main problem with MRP that requires human intervention? How could the problem be
dealt with?
3. Describe how MRP can be used as an analysis tool for the inventory manager.
4. For a restaurant, what would be an example of the active strategy and an example of the reactive
strategy? Which of the two strategies is better suited for the Wave Restaurant on UWO campus during
the summer time? Justify your answer briefly.
5. Is ERP more advantageous than MRP II? Justify your answer briefly.

10
Solutions
A1. Computational Questions from Old Exams
1.
Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hiring Firing
(units) Prod. Prod. Prod.
Fall 3700 10950 11 7250 8250 1700 1000 0 0
Winter 4600 10950 11 13600 8250 1700 1000 0 0
Spring 14500 10950 11 10050 8250 1700 1000 0 0
Summer 21000 10950 11 0 8250 1700 1000 0 0

Note: subcontracting is cheaper than overtime

Total cost = (regular production) + (overtime production) + (subcontract) + (inventory)


= 55×33,000 + 82×6800 + 77×4000 + 4×30,900 = 1,815,000 + 557,600 + 308,000 + 123,600
= $2,804,200

2. a)
Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000 17500 0 12500 10000 5000 2500 0 0
2 10000 17500 0 20000 10000 5000 2500 0 0
3 30000 17500 0 7500 10000 5000 2500 0 0
4 25000 17500 0 0 10000 5000 2500 0 0

Total cost = (regular production) + (overtime production) + (subcontracting) + (inventory)


= 20×40000 + 30×20000 + 35×10000 + 2×40000 = $1,830,000

b)
Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000 5000 0 0 5000 0 0 0 0
2 10000 10000 0 0 10000 0 0 0 0
3 30000 30000 0 0 10000 5000 15000 0 0
4 25000 25000 0 0 10000 5000 10000 0 0

Total cost = (regular production) + (overtime production) + (subcontracting) + (inventory)


= 20×35000 + 30×10000 + 35×25000 + 2×0 = $1,875,000

The level approach seems better because the chase approach costs more than the level approach
even without workforce-related costs.

c) In any aggregate plan, there are 3 general components to the total cost: production, inventory, and
workforce. Hence, if you want to reduce the total cost, look at the 3 components to see which
one can be reduced.

11
From part a), we can see that the level approach has zero workforce cost. From part b), we can see
that the chase approach has zero workforce cost and zero inventory cost. Hence, if you start with
the chase plan, then you can focus only on reducing production cost → production cost consists of
regular-time + overtime + subcontracting → subcontracting is most expensive → try to reduce
subcontracting cost in the first three quarters of the chase plan (in b) by using cheaper regular and
overtime production.

Quarter Demand Total Workforce Inventory Regular Overtime Subcontract Hire Fire
Production Production Production
1 5000 15000 0 10000 10000 5000 0 0 0
2 10000 15000 0 15000 10000 5000 0 0 0
3 30000 15000 0 0 10000 5000 0 0 0
4 25000 25000 0 0 10000 5000 10000 0 0

Total cost = (regular production) + (overtime production) + (subcontracting) + (inventory)


= 20×40000 + 30×20000 + 35×10000 + 2×25000 = $1,800,000

A2. Textbook Computational Problems


Agg, #1 Appendix A (look for chapter 5 answers)
(c) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


210 400
1 6000 5600 210 0 5600 0 0 0 0
2 4800 5600 210 800 5600 0 0 0 0
3 7840 5600 210 –1440 5600 0 0 0 0
4 5200 5600 210 –1040 5600 0 0 0 0
5 6560 5600 210 –2000 5600 0 0 0 0
6 3600 5600 210 0 5600 0 0 0 0

Agg, #2 (a) production rate per period = 6080 units


(b) 228 employees
(c) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


210 400
1 6000 6080 228 480 6080 0 0 18 0
2 4800 6080 228 1760 6080 0 0 0 0
3 7840 6080 228 0 6080 0 0 0 0
4 5200 6080 228 880 6080 0 0 0 0
5 6560 6080 228 400 6080 0 0 0 0
6 3600 6080 228 2880 6080 0 0 0 0

(d) total cost = (60×36480) + (10×6400) + (600×18) = $2,263,600


(e) the cost of this plan is $150,000 higher than a level aggregate plan using inventories and
back orders; the inventory and hiring costs are also considerably higher than a level
aggregate plan using inventories and backorders; however, in terms of customer service,
this plan has a high degree of customer service since no orders are placed on back order

12
Agg, #3 Appendix A (look for chapter 5 answers)
Agg, #4 (a) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


210 400
1 6000 5600 210 0 5600 0 0 0 0
2 4800 4800 180 0 4800 0 0 0 30
3 7840 7840 294 0 7840 0 0 114 0
4 5200 5200 195 0 5200 0 0 0 99
5 6560 6560 246 0 6560 0 0 51 0
6 3600 3600 135 0 3600 0 0 0 111

(b) total cost = (60×33600) + (165×600) + (240×450) + = $2,223,000


(c) this plan yields no inventory carrying cost since it produces exactly what is needed; the
total cost was lower than the level aggregate plan in problem 2; moreover, customer service
is high since no backorders are needed; however, from a planning perspective, this plan
would be difficult to implement due to the high variability of resources needed each period;
moreover, employee morale would tend to be fairly low with such a plan due to lack of job
security.

Agg, #6 (a) regular-time production units possible in each period given a workforce of 195 =
(160 hours/employee/period)/(6 hours/unit)×(195 employees) = 5200 units/period
(b) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


210 400
1 6000 5700 195 100 5200 0 500 0 15
2 4800 5200 195 500 5200 0 0 0 0
3 7840 6200 195 –1140 5200 0 1000 0 0
4 5200 6200 195 –140 5200 0 1000 0 0
5 6560 6200 195 –500 5200 0 1000 0 0
6 3600 5200 195 1100 5200 0 0 0 0

(c) total cost = (60×31200) + (84×3500) + (10×1700) + (20×1780) + (450×15)= $2,225,350


(d) this plan provides stable use of resources throughout the production periods; however,
periods 3-5 experience backorder costs, and hence, this plan will not provide a high level of
customer satisfaction

Agg, #7 (a) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


210 400
1 6000 5600 210 0 5600 0 0 0 0
2 4800 5600 210 800 5600 0 0 0 0
3 7840 6720 210 –320 5600 1120 0 0 0
4 5200 5600 210 80 5600 0 0 0 0
5 6560 6480 210 0 5600 880 0 0 0
6 3600 5600 210 2000 5600 0 0 0 0

(b) total cost = (60×33600) + (90×2000) + (10×2880) + (20×320) = $2,231,200


(c) this plan provides some backorders but only in period 3; overtime costs are still
significant, but this plan fits the existing available overtime hours and should not be too
disruptive to operations

13
Agg, #8 Average weekly demand = 43.3 clients; workforce needed = 43.3×(12hrs/client)/(40
hrs/employee) ≅ 13
Agg, #9 Appendix A (look for chapter 5 answers)
(a) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


12 0
1 576 520 13 –56 520 0 0 1 0
2 432 520 13 0 520 0 0 0 0
3 600 520 13 –80 520 0 0 0 0
4 480 520 13 –40 520 0 0 0 0
5 456 520 13 0 520 0 0 0 0
6 576 520 13 –56 520 0 0 0 0
Note: use the workforce calculated in 8) as the opening workforce

(b) TC = (25×3120) + (500×232) + (2000×1) = $196,000

Agg, #11 Appendix A (look for chapter 5 answers)


(a) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


12 0
1 576 600 15 0 600 0 0 3 0
2 432 440 11 0 440 0 0 0 4
3 600 600 15 0 600 0 0 4 0
4 480 480 12 0 480 0 0 0 3
5 456 480 12 0 480 0 0 0 0
6 576 600 15 0 600 0 0 3 0

(b) TC = (25×3200) + (2000×10) + (1200×7) = $108,400

Agg, #12 (a) Solution in the lecture note format:

Period Dem TP WF Inv Reg OT Sub Hire Fire


12 0
1 576 576 12 0 480 96 0 0 0
2 432 480 12 0 480 0 0 0 0
3 600 576 12 –24 480 96 0 0 0
4 480 480 12 0 480 0 0 0 0
5 456 480 12 0 480 0 0 0 0
6 576 576 12 0 480 96 0 0 0

(b) TC = (25×2880) + (37.5×288) + (500×24) = $94,800


(c) The major flaw of this plan is that demand in period 3 cannot be met.

Resource, #1 Appendix A (look for chapter 6 answers)


Resource, #2 In order to assemble Q, components R, S and T must be ready ; for R, the lead time = time
needed for both X and Y to be ready + time needed to make R = 3 + 3 = 6 weeks; for S, the
lead time = 4 weeks ; for T, the lead time = 3 + 2 = 5 weeks ; for Q, the lead time = time
needed for all R, S and T to be ready + time needed to make Q = 6 + 2 = 8 weeks
Resource, #3 Q = 100, R = 2×100 = 200, S = 1×100 = 100, T = 3×100 = 300, X = 2×2×100 = 400,
Y = 1×2×100 = 200, V = 1×3×100 = 300, Z = 3×3×100 = 900
Resource, #4 Q = 100, R = 200 – 200 = 0, S = 100, T = 300 – 150 = 150, X = 0, Y = 0, V = 1×150 = 150,
Z = 3×150 = 450

14
Sched, #5 Appendix A (look for chapter 7 answers)
Sched, #7 Appendix A (look for chapter 7 answers)
Sched, #8 (a) ABCDEF
(b) make span = 45 days, mean job flow time = (9+14+22+32+39+45)/6 = 26.83 days,
average number of jobs in the system = 161/45 = 3.58 jobs, average job lateness = 16/6 =
2.67 days, average job tardiness = 47/6 = 7.83 days, maximum tardiness = 30 days

B1. Multiple Choice Questions from Old Exams


Question Answer
1 d
2 b
3 a
4 c
5 c
6 a
7 d
8 a
9 d
10 d
11 b
12 d
13 c
14 d
15 a
16 a
17 c
18 b
19 d
20 b

C1. Textbook Discussion Questions


Agg, #3 Lecture notes, Aggregate Planning, slide 3
Agg, #4 A composite product is used when developing the aggregate plan in order to minimize the
level of detail in the plan; also, aggregate forecasts are usually more accurate than
individual product forecasts
Agg, #5 Lecture notes, Aggregate Planning, slide 5
Agg, #6 Lecture notes, Aggregate Planning, slide 4
Agg, #7 Lecture notes, Aggregate Planning, slide 4
Agg, #8 A hybrid aggregate plan uses options from both the level and chase plans
Agg, #9 Lecture notes, Aggregate Planning, slide 6
Agg, #10 E.g., we would want to consider the availability of workers based on the unemployment
rate; the cost of holding inventory should be determined; we should also determine the
impact of backorders on customer satisfaction
Agg, #11 In services, we cannot use inventory buildup as a way of dealing with peaks in demand
15
Resource, #1 Lecture notes, ERP, slide 7
Resource, #2 Lecture notes, ERP, slide 7
Resource, #3 Lecture notes, ERP, slide 5-7
Resource, #6 Lecture notes, MRP, slide 3
Resource, #8 Lecture notes, MRP, slide 3
Resource, #9 Lecture notes, MRP, slide 4
Resource, #10 Lecture notes, MRP, slide 4
Resource, #13 Companies do capacity requirements planning because the MRP may create a production
schedule that exceeds our available capacity
Resource, #15 MRP II synchronizes internal functions with a common database

C2. Short Answer Questions from Old Exams


GUIDELINES only since there is more than one way to answer short answer questions.

1. Examples of behavioural issues: a lack of top management support, a lack of commitment by


employees, coordination among different functions, ownership claim problem, etc.

Examples of possible solutions: explain what ERP is, what it does, and why it is needed; provide
adequate training; increase involvement by all; set up a project team including all functions

2. Main problem with MRP = shortage


Solution examples: move some jobs forward, move some jobs backward, produce more ahead of time,
purchase more ahead of time

3. Examples: to provide useful information, to determine MPS feasibility, to compare different solutions
for dealing with MRP shortage problems

4. Active strategy examples: incentives and promotions, such as 2 for 1 deal and coupons
Reactive strategy examples: staff overtime and undertime (being sent home early), hiring/firing

During the summer, active strategies may be better for Wave because it is critical to bring in more
customers from a non-student population (otherwise, the restaurant may have to be closed for not
having enough business)

5. Discuss main differences between MRP II and ERP; based on MRP II and ERP characteristics, explain
what kind of companies would benefit from MRP II or ERP

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