please do a practice questions. in the past I have submitted an assignment to you and received all wrong answers
REM Operations Management I. Littlefield Technologies (50 points) Imagine that you are running your Littlefield factory with the following resources: 3 board stuffing machines, 2 testing machines, and 1 tuning machine. Each customer order is for 60 units. Customer orders are arriving to Littlefield at the stable average rate of 14 orders per day. The setup and processing times at each step are as follows: Step Setup Time (per batch) Processing Time (per unit) Step 1 0.9 hours 0.05 hours Step 2 0 hours 0.01 hours Step 3 0.4 hours 0.015 hours Step 4 0 hours 0.03 hours (a) (20 points) What is the capacity utilization at each of the stations if orders are processed as a single batch of 60 units? (b) (5 points) If you could have one additional machine at any of the three stations, which one would you choose (please briefly justify your answer)? (c) (10 points) After running Littlefield for 50 days, you have found that the average inventory at each station (including both units in queue and being processed) to be 279 units, 97 units, and 205 units at stations 1, 2, and 3 respectively. What is the average throughput time for an order in your facility? (d) (15 points) What is the smallest batch size you could use and still have enough capacity (i.e., utilization no more than 100%) at Station 3 with one machine? (Note: assume you have plenty of capacity at each of the other stations.) II. Short Answers (80 points, 10 points each) 1. In the Executive Shirt case, Mike’s plan was to cut the batch size down to 5 from 60 on all steps except cutting. This plan resulted in a significant reduction in the manufacturing lead time. However, in the Littlefield simulation reducing the batch size from 60 to 5 when the number of machines at each station was 3, 2, and 1 respectively significantly increased the manufacturing lead time. Explain why. 2. The process for forming a penny involves three steps: i) rolling a copper slug, ii) cutting a blank, and iii) stamping the front and back images. The United States Treasury will only accept coins between 12.0 and 13.0 mm in diameter. Step i) produces a slug with a diameter that is normally distributed with a mean of 12.0 mm and a standard deviation of 0.2 mm. Step ii) reduces the diameter by an amount that is uniformly distributed between 1% and 4%. Step iii) adds to the diameter an amount that is normally distributed with a mean of 0.7 mm and a standard deviation of 0.1 mm. You have developed a simulation to assess the performance of this process. Using the following output, what is the process capability index (Cpk) of this process? 3. When offering multiple versions of products like in the Cambridge Software case, what makes the pricing decision more complicated than just selecting the optimal price for each individual version? 4. In the Global Financial Corporation case, what impact will eliminating the regionalization at the Evaluation & Analysis and Loan Terms steps have on the utilization of the Final Issuing step? 5. Identify all of the following which would double the capacity at Benihana (in customers per hour)? a) Offer a special: two dinners for the price of one b) Double all aspects of the restaurant (i.e., bar, tables, employees, etc.) c) Double all prices d) Double the number of cooks e) Decrease average customer eating time by 50% For questions 6-8, please indicate whether the statements below are true or false. Explain each answer briefly. (You will be graded on your explanation; NO explanation means NO credit!) 6. You determine through SPC that a process is in control. This means that it is meeting customer requirements. 7. The primary cause of the bullwhip effect when we played the Beer Game was order batching. 8. The reorder point in Littlefield was set at 4200 kits initially. The lead time for replenishment was 4 days. Assuming that the daily number of orders (for 60 receivers) placed on the factory is normally distributed with a mean of 12.22 and a standard deviation of 3.41, then the initial reorder point provided a service level less than 99%. III. Chick-fil-A (55 points) The Chick-fil-A fast food restaurant is interested in examining the capacity of a new, mini-restaurant that they have created. The restaurant offers the following menu: Chicken Sandwich$5.00 Chicken Nuggets$4.50 Large Fry$2.00 Small Fry$1.25 Drink$1.50 Through market research, Chick-fil-A has discovered that 40% of their arriving customers will purchase a sandwich and 40% will purchase nuggets (20% of arriving customers do not purchase any chicken). All customers buy a drink and all customers buy fries, with 1/3 choosing a large fry and 2/3 choosing a small fry. Chick-fil-A has two people working at the counter who take and fill orders from customers. On average, it takes 20 seconds for one of these counter people to take the customer’s order, get their drink, and get the rest of their meal. There are two people who work in the back room, one cooking fries and the other preparing chicken. The fry cook spends 3 minutes preparing each 2 pound batch of fries. A large fry consists of 1/4 pound of fries, and a small fry consists of 1/8 pound. The chicken preparer spends 10 seconds on each sandwich and 5 seconds on each order of chicken nuggets. (a) (30 points) What is the capacity of each resource (Counter Help, Fry Cook, and Chicken Preparer), measured in customers per hour? (b) (20 points) Chick-fil-A is considering the addition of a hand-scooped milk shake onto their menu. The milk shake would sell for $4.00, and would take 30 seconds to prepare for each customer. Chick-fil-A has a corporate policy that customers should be served within 1.5 minutes. In order to adhere to this policy, they are planning to hire a dedicated milk shake maker to work at the facility. Analysis has revealed that both the time between arriving customers and the time to make a milk shake are distributed exponentially. Given the variability, Chick-fil-A has determined that the average throughput time for a milk shake must be no more than 50 seconds in order to consistently meet the 1.5 minute service standard. What is the maximum number of customers/hour who can order a milkshake and still have the average throughput time within the 50 second limit? IV. Short Problems (70 points) 1. Coffins ‘R Us produces and sells pine and mahogany coffins to mortuaries. Demand is high and constant at 6,000 pine coffins and 12,000 mahogany coffins annually. An average coffin is comprised of 15 board feet of wood. Coffins ‘R Us buys both types of wood from a single supplier. Igor, the head of purchasing, has heard that you are an expert at determining lowest cost inventory replenishment policies and has asked for your help. He estimates the ordering cost to be $42 and the inventory holding cost to be $2.00 per year per board foot of wood. (Note: these two cost figures are the same for both products.) (a) (15 points) Compute the optimum order sizes for pine and mahogany wood, separately, in terms of board feet per order. (b) (20 points) Igor tells you that if he can combine orders for both types of wood into one weekly aggregate order (assume 50 weeks per year), it would still only cost $42 for each combined order. The variable per-board item cost will not change. If orders are placed weekly, then what is the difference in the total annual procurement related cost (holding cost plus ordering cost) between Igor’s new policy and the policy calculated in (a)? 2. Consider a retailer who sells UNC and Duke T-shirts. Their highest sales this spring will occur during the week of the first UNC-Duke basketball game and they have special T-shirts made for that game with the date of the game (February 8) printed on the T-shirts. Due to the manufacturing and delivery lead times, the company must place orders for the T-shirts by mid-January. The company believes that the demand for UNC-logoed T-shirts will be normally distributed with mean 800 and standard deviation 300. Similarly the demand for Duke-logoed T-shirts is forecasted to be normally distributed with mean 500 and standard deviation 100. Additional cost and revenue data is provided in the table below. School logo Retail price Wholesale price (the price at which the retailer buys a T-shirt) Salvage value UNC $20 $8 $5 Duke $20 $8 $2 (a) (20 points) How many of each school’s T-shirts should the company order? (b) (15 points) Instead of having separate T-shirts for UNC and Duke another option is to have a single “rivalry” T-shirt with both school logos and the date of the game. The retailer believes that the new T-shirt will fetch a price of $20, and will have the same demand (as noted above) from each school’s fanbase. However due to the more complex print involved, the wholesale price will be $9 per T-shirt and the salvage value will be $3. If the retailer decides to sell a single “rivalry” T-shirt instead of two different T-shirts for UNC and Duke, how many T-shirts should she order? Standard Normal Table 1