ASSESSMENT- TWO

OPERATION MANAGEMENT

TIME: 45 MINS FM: 10

SET: X P.M: 4

Read the question carefully and attempt all questions.

Q1. Examine the information and present a set of plans for centrally locating the total
quality management team. Suppose that Consolidated wishes to place its team in a city in
which the company has a plant. Which city is best? (4 Marks)
City X (Latitude) Y (Longitude)
Albuquerque 35 107
Baltimore 39 77
Boston 42 71
Chicago 42 88
Dallas 33 97
Denver 40 105
Detroit 42 83
Houston 30 95
Kansas City 39 95
Los Angeles 34 119
Portland 45 123
St. Paul 45 94

Q2. Draw the product-process matrix. Where on this matrix do the following types of
organizations fall (2 Marks)
a. A Full-service Italian restaurant
b. A light-bulb manufacturing company
c. A customized pager manufacturing company
d. A garment manufacturing company

Q3. Smooth Boards Inc., wants to enter the market quickly with a new finish on its ski
boards. It has three choices: (4
Marks)
(a) Repair the old equipment at a cost of $800,
(b) Make major modifications at the cost of $1100, or
(c) Purchase new equipment at a net cost of $1800

If the firm chooses to repair the old equipment, materials and labor cost would be $1.10
per board. If it chooses to make modifications, materials and labor cost would be $0.70
per board. If it buys new equipment, variable costs are estimated at $0.40 per board.

(i) Which alternative would be chosen if more than 3,000 ski-boards can be sold?
(ii) Which alternative should the firm use if it thinks the market for boards would be
between 1,000 and 2,000?