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Final Exam
FE 1. Jane’s Teddy Bears
0.0/5.0 points (graded)
Instructions: Answer the question and click Submit.

Jane’s Teddy Bears from Manchester are selling stu ed toys all around the world. At
the moment, the market in Brazil is expanding and Jane is producing teddy bears as
fast as she can to meet demands. The reason for the success is that Jane have
launched a product line with teddy bears themed after football teams, and even
individual players, something that really resonates with the Brazilian market.

Jane is now in the process of shipping 35 pallets of products in time for the national
football playo s. Each pallet contains 90 teddy bears. Each bear is packaged in a box
with the dimensions 20 x 25 x 35 cm and each box weighs 450 grams.

An empty pallet weighs 23 kg. A 20 ft container loads 12 pallets. A 40 ft container loads


25 pallets.

Jane has two main options, lease containers or let a forwarder handle the entire
transport.

20ft container 40ft container


Capacity, pallets 12 25
Rent, $ 200 300
Transport port-port, $ 600 800
Haulage (both ends), $ 50 70

If a forwarder manages the transport, Jane pays $155 per tonne (1 tonne = 1000 kg).
However, the forwarder applies a cuto density at 270 kg/m3, meaning that goods
below that density pays as if they weighed 270 kg/m3.

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What should Jane do? What is the best alternative?

• Lease 3 x 20ft containers?


• Lease 2 x 40ft containers?
• Lease 1 x 20ft + 1 x 40ft containers?
• Use forwarder?

Calculate the combined transport cost for the di erent alternatives!


Enter the cost that represents the best alternative (lowest integer value).

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FE 2. Chemical Industry
0.0/4.5 points (graded)
Instructions: Answer the questions and click Submit.

A supplier for the chemical industry sells sulphuric acid to two customers. The supplier
manages the stock levels (VMI) for both customers.

The setup looks like this:

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The supplier has separate agreements with each customer regarding stock level
interval. For Customer 1, the stock level must be between 8-25 m3. For Customer 2, the
agreement is 5-17 m3. The distance D1 for Customer 1 is 100 km. The distance D2 for
Customer 2 is also 100 km. The distance between the Customer 1 and Customer 2 is 50
km. The transport cost is assumed to be proportional to the distance. The truck loads
30 m3.

Assume that once a stock reaches its lower limit, a replenishment is ordered and
delivered so that the stock level the next day will be increased with the delivered
quantity.

Example: The current stock level is 9 m3. The usage rate is 5 m3/day and the lower limit
is 5 m3. The top limit is 17 m3. Therefore, we want the stock level for the next day to be
17 m3. This means that we have to deliver (17 - 9) + 5 = 13 m3, since 5 m3 will be used
during the same day as the delivery.

In the table below, the current situation is presented:

Customer 1 Customer 2
Storage level, day 1 V1 = 17 m3 V2 = 12 m3
Product usage rate 8 m3/day 5 m3/day

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Tip: Use tables to plan the deliveries and nd the answers to questions 2a-2i.
Click here to open empty day-by-day delivery tables

2a. Assume Customer 1 manages their own inventory. Also assume that an order is
triggered when the stock level falls below 8 + 8 = 16 m3 and that delivery takes place
the next day. Disregard Customer 2 in questions 2a-2c.

Which day in the coming 10 days' period is the rst delivery needed?
Enter the correct integer value.

(day)

2b. During the coming 10 days' peiod, how many deliveries are needed?
Enter the correct integer value.

number of days

2c. How many kilometers are needed in total for the coming 10 days’ deliveries?
Enter the correct integer value.

km

2d. Similarily to question 2a-2c above, assume that Customer 2 manages their own
inventory. Also assume that an order is triggered when the stock level is 5 + 5 = 10 m3
and that delivery takes place the next day. Disregard Customer 1.

How many kilometers are needed in total for the coming 10 days’ deliveries?
Enter the correct integer value.

km

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2e. Assume that a Vendor Managed Inventory setup is used in questions 2e-2i.

On which day in the coming 10 days' period is the rst delivery run needed?
Enter the correct integer value.

(day)

2f. How many kilometers will the truck have to drive to complete the rst delivery
run?
Enter the correct integer value.

km

2g. On which day in the coming 10 days' period is the second delivery run needed?
Enter the correct integer value.

(day)

2h. How many delivery runs are needed in total?


Enter the correct integer value.

number of delivery runs

2i. How many kilometers will the truck have to drive in total to make the deliveries to
Customer 1 and 2?
Enter the correct integer value.

km

Submit You have used 0 of 3 attempts

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FE 3. Skateboard ICE
0.0/7.0 points (graded)
Instructions: Answer the questions and click Submit.

A company assembles and sells skateboards. One popular model is the "ICE". The nal
assembly plan for April to September, which also represents 50% of a full year’s
demand:

Month April May June July August September October


Forecast (units) 5000 7000 10000 2000 4000 3000 ?
Demand (units) 4500 8000 10000 1900 4000 3200 ?

The company is using MRP. The forecast for Skateboard ICE for the next coming six
weeks:

Week w36 w37 w38 w39 w40 w41


Demand (forecast, units) 750 750 750 900 950 1000

The company are buying all components from di erent suppliers. They are only
making the wheel assembly and the assembly of the nal skateboard, see also the
diagram above.

Item Stock level Value/item Lot size Lead time (weeks)


Skateboard ICE 1800 $250.00 2000 1
Decks 4000 $20.00 1500 2
Wheel assemblies 1200 $80.00 Even hundreds 1
Bolts and Nuts, M6 25000 $0.50 50000 1
Risers 30000 $1.00 50000 1

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Wheels 20000 $8.00 40000 2


Bearings 40000 $4.00 50000 2
Trucks 2000 $19.00 ? 2
Nuts, M8 50000 $0.25 100000 1

The company has an ordering cost of $150/order and the inventory carrying cost is
estimated to 10%.

3a. If we use moving average with n=5, what is the forecast for Skateboard ICE for
October?
Round o to the closest number of hundreds.

units

3b. If we use exponential smoothing with α=0.3, what is the forecast for Skateboard ICE
for October?
Round o to the closest number of hundreds.

units

3c. Suppose it's now week 35. In what week should production of wheel assemblies
start?
Answer with an integer number.

(week)

3d. In relation to question 3c above, what quantity of wheel assemblies will be needed?
Answer with an integer number.

wheel assembly units

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3e. The company have had some problems with the supplier of the truck parts and
therefore want to review the setup. But rst they want to check how many truck parts
they should order each time by calculating the Economic Order Quantity (EOQ).

What quantity of truck parts should the company order?


Round o to the closest number of hundreds that is the most economically favorable.

truck parts

3f. The supplier of the truck parts replies to the company that if they order in lots of 10
000 each time, they will get a 5 % discount.

What is the total cost for the truck parts if the company order 10 000 each time?
Round o to the closest integer.

3g. In relation to questions 3e and 3f above, which option is the most economically
favorable?
Select the alternative that applies.

Order truck parts according to EOQ? (See question 3e)

Order truck parts according to the discount o er? (See question 3f)

Submit You have used 0 of 5 attempts

FE 4. Route Planning
0.0/5.5 points (graded)
Instructions: Answer the questions and click Submit.

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A terminal has four customers that need delivery by truck. The customers have the
following demand:

Customer Demand
1 5 tonnes
2 9 tonnes
3 7 tonnes
11
4
tonnes

The truck load capacity is 15 tonnes. The distances (km) between the customers and
the terminal are:

Terminal Customer 1 Customer 2 Customer 3 Customer 4


Terminal -
Customer 1 120 -
Customer 2 90 40 -
Customer 3 140 20 30 -
Customer 4 180 15 45 60 -

4a. Calculate the driving distance savings matrix. Disregard from any load capacity
issues at this point.

4a.1. How much is saved if Customer 1 and 2 are served in one route?
Enter the correct integer value in the input eld.

km

4a.2. How much is saved if Customer 1 and 3 are served in one route?
Enter the correct integer value in the input eld.

km

4a.3. How much is saved if Customer 1 and 4 are served in one route?

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Enter the correct integer value in the input eld.

km

4a.4. How much is saved if Customer 2 and 3 are served in one route?
Enter the correct integer value in the input eld.

km

4a.5. How much is saved if Customer 2 and 4 are served in one route?
Enter the correct integer value in the input eld.

km

4a.6. How much is saved if Customer 3 and 4 are served in one route?
Enter the correct integer value in the input eld.

km

4b. Given the truck load capacity, to how many customers can the truck deliver in one
route, at the most?
Select the alternative that applies.

4c. Given the truck load capacity, how many routes are needed to deliver to all four
customers?

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Select the alternative that applies.

4d. Given the truck load capacity, which of the routes saves the most on driving
distance?
Select the alternative that applies.

Customers 1 and 2

Customers 1 and 3

Customers 1 and 4

Customers 2 and 3

Customers 2 and 4

Customers 3 and 4

4e. For the route that saves the most on driving distance, how many tonnes should be
loaded? (See 4d above.)
Enter the correct integer value in the input eld.

tonnes

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4f. What is the total driving distance for the combination of route alternatives that serves
all customers, saves the most on total driving distance and takes the truck load capacity
into account?
Enter the correct integer value in the input eld.

km

Submit You have used 0 of 3 attempts

FE 5. Online Store
0.0/6.0 points (graded)
Instructions: Answer all the questions and click Submit.

FE 5. An online store sells a product for which the daily demand is normally distributed
with a mean of 120 units and with a standard deviation of 10 units. We assume the
source of supply has a constant lead time of 14 days. The cost for placing an order is
$75 and the annual holding cost per item is $0.5. There is no stock out cost and we
assume that un lled orders are lled as soon as the orders arrives. Sales operate 365
days/year. The company wants to have a 95% service level of not stocking out during
the lead time.

Tables that might be useful for answering the questions (click to open):

Normal Distribution function table


Service loss function table

5a. What is the Economic Order Quantity (EOQ)?


Enter the correct value in the input eld. Round o to the closest integer.

units

5b. What Safety Stock level does the company need to reach the desired service level?
Enter the correct value in the input eld. Round o to the integer value that makes most sense.

units

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5c. What Re-Order Point (ROP) level does the company need to reach the desired
service level?
Enter the correct value in the input eld.

units

Submit You have used 0 of 5 attempts

FE 6. On-line Store and Kanban


0.0/6.0 points (graded)
Instructions: Answer the questions and click Submit.

FE 6. Assume the on-line store in question FE 5 above make the products ready for
shipping on a package line, i.e. they pack items in customised packages, labelling etc.
Before shipping, they store the products in an internal warehouse. Between the
warehouse and the package line they want to use a Kanban system. The package line is
supported by a materials manager, who inspects the line every hour. According to his
notes, the time from demand to replenishment is 3 hours. They transport the products
in containers, each containing 20 units. The package line work only day shift, i.e. the
operation time per day is 6 hours.

6a. What's the number of Kanban cards they need, if a safety factor of 0.3 is used?
Enter the correct value in the input eld. Round o to the closest (higher) integer.

cards

The company also wants to see if they can use a Kanban system towards the supplier,
instead of the ROP system. They want to keep the same service level, i.e. 95%. As stated
in question FE 5, the daily demand is normally distributed with a mean 120 and a
standard deviation of 10. The lead time is 14 days. The supplier ships in boxes each
containing 50 units. (Hint: You will need the Safety Stock value to answer the questions
below.)

6b. What will the safety factor α need to be?


Enter the correct value in the input eld. Answer with one valid digit.

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6c. How many Kanban cards do they need in this case?


Enter the correct value in the input eld. Round o to the closest (higher) integer.

cards

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