Top of Form
In
CambodiaCambodia?,
sixsix
?laborers,
each making the equivalent of
$
3.00$3.00
per? day,
can produce
4040
units
per day. In
ChinaChina?,
eleveneleven
?laborers,
each making the equivalent of
$
2.00$2.00
per?day,
can produce
4848
units.
In
Billings
comma MontanaBillings, Montana?,
threethree
?laborers,
each making
$
63.00$63.00
per? day,
can make
102102
units.
Shipping
cost from
CambodiaCambodia
to? Denver,
Colorado, the final? destination, is
$
2.00$2.00
per
unit. Shipping cost from
ChinaChina
to
Denver is
$
1.25$1.25
per? unit,
while the shipping cost from
Billings
comma MontanaBillings, Montana
to
Denver is
$
0.25$0.25
per
unit.
Based
on total costs? (labor and? transportation) per? unit, the most
economical location to produce the item is
China
Billings,
Montana
Cambodia
China
?,
with
a total cost? (labor and?transportation) per unit of
?$1.701.70.
?(Enter your response
rounded to two decimal? places.)
Enter your answer in the answer box.
Bottom of Form
Zan Azlett and Angela
Zesiger have joined forces to start? A&Z Lettuce? Products, a
processor of packaged shredded lettuce for institutional use. Zan has years of
food processing? experience, and Angela has extensive commercial food
preparation experience. The process will consist of opening crates of lettuce
and then? sorting, washing,? slicing, preserving, and finally
packaging the prepared lettuce.? Together, with help from? vendors,
they think they can adequately estimate? demand, fixed? costs,
revenues, and variable cost per bag of lettuce. They think a largely manual
process will have monthly fixed costs of
$ 37 comma 500$37,500
and variable costs of
$ 1.75$1.75
per bag. A more
mechanized process will have fixed costs of
$ 75 comma 000$75,000
per month with variable
costs of
$ 1.25$1.25
per bag. They expect to
sell the shredded lettuce for
$ 2.50$2.50
per bag.
?a) The? break-even
quantity in units for the manual process? =
5000050000
bags ?(round your
response to the nearest whole? number).
?b) The revenue for the
manual process at the? break-even quantity? =
?$125000125000
?(round
your response to the nearest whole? number).
?c) The? break-even
quantity in units for the mechanized process? =
6000060000
bags ?(round your
response to the nearest whole? number).
?d) The revenue for the
mechanized process at the? break-even quantity? =
?$150000150000
?(round
your response to the nearest whole? number).
?e) For monthly sales of
55 comma 00055,000
?bags, for the option
with manual? processing, A&Z Lettuce Products will have a profit of
?$37503750
?(round
your response to the nearest whole number and include a minus sign if the
profit is? negative).
?f) For monthly sales of
55 comma 00055,000
?bags, for the option
with mechanized? processing, A&Z Lettuce Products will have a profit
of
?$negative
6250?6250
?(round
your response to the nearest whole number and include a minus sign if the
profit is? negative).
?g) The quantity at
which Zan and Angela are going to be indifferent between the manual and
mechanized process? =
7500075000
bags ?(round your
response to the nearest whole? number).
?h) If the demand
exceeds the point of? indifference, then Zan and Angela should prefer the
option with
mechanized
mechanized
manual
processing.
If the demand stays
below the point of? indifference, then Zan and Angela should prefer the
option with
manual
mechanized
manual
process
Question 3
Creative? Cabinets,
Inc., needs to choose a production method for its new office? shelf, the
Maxistand. To help accomplish? this, the firm has gathered the following
production cost? data:
??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
Annualized Fixed Cost of Plant? &
Equipment
Variable Costs? (per unit)? ($)
Process
Type
Labor
Material
Energy
Mass
CustomizationMass Customization
$ 1 comma 260 comma 000$1,260,000
3030
1818
1212
IntermittentIntermittent
$ 1 comma 000 comma 000$1,000,000
2424
2626
2020
RepetitiveRepetitive
$ 1 comma 720 comma 000$1,720,000
2828
1515
1212
ContinuousContinuous
$ 2 comma 100 comma 000$2,100,000
2525
1515
1010
Creative Cabinets
projects an annual demand of
24 comma 00024,000
units for the Maxistand.
The selling price for the Maxistand is
$ 120$120
per unit.
?a) Based on the
projected annual? demand, the best alternative available is to use the
Intermittent
Continuous
Intermittent
Repetitive
Mass Customization
process.
?b) The value of annual
profit using this method is
?$200000200000.
?(Enter
your response as an? integer.)
Top of Form
Eric
Johnson makes billiard balls in his New England plant. With recent increases in
his? costs, he has a newfound interest in efficiency. Eric is interested
in determining the productivity of his organization. He would like to know if
his organization is maintaining the manufacturing average of a? 3%
increase in productivity. He has the following data representing a month from
last year and an equivalent month this? year:
???????????????????????????????????????????????????????????????????????????????????????????????????????
Last Year
Now
Cost Per Input Unit
Units
Produced
1 comma 0001,000
1 comma 0001,000
Labor? (hours)
300300
275275
?$1010
per hour
Resin? (pounds)
4848
4343
?$66
per pound
Capital
Invested? ($)
10 comma 00010,000
11 comma 00011,000
22?%
per month
Energy? (BTU)
3 comma 0003,000
2 comma 8502,850
?$0.500.50
per BTU
The
percent change in productivity for one month last year versus one month this
year on a multifactor basis with dollars as the common denominator? =
9.39.3?%
?(enter your response as
a percentage rounded to two decimal? places).
Enter your answer in the answer box.
Top of Form
Susan? Meyer,
owner/manager of? Meyer’s Motor Court in Key? West, is considering
outsourcing the daily room cleanup for her motel to? Duffy’s Maid
Service. Susan rents an average of 50 rooms for each of 365 nights? (365
à 50 equals the total rooms rented for the? year). Susan’s cost to clean
a room is
$
13.50$13.50.
The? Duffy’s
Maid Service quote is
$
18.00$18.00
per
room plus a fixed cost of
$
26 comma 000$26,000
for
sundry items such as uniforms with the? motel’s name.? Susan’s
annual fixed cost for? space, equipment, and supplies is
$
65 comma 000$65,000.
Based
on the given information related to costs for each of the? options, the
crossover point for Susan? =
86678667
room
nights ?(round your response to the nearest whole
?number).
If
the number of room nights is less than the crossover? point, then
outsourcing
not
outsourcing
outsourcing
is
the best option available to Susan.
Based
on the given room nights that Susan expects to rent
?(18
comma 25018,250?),
the
best option is
outsourcing
not
outsourcing
outsourcing
.
Enter your answer in
the answer box.
Bottom of Form
Top of Form
A
gourmet coffee shop in downtown San Francisco is open
200200
days
a year and sells an average of
7676
pounds
of Kona coffee beans a day.? (Demand can be assumed to be distributed
normally with a standard deviation of
1212
pounds
per? day). After ordering? (fixed cost? =
?$1919
per? order),
beans are always delivered from Hawaii in exactly
44
days.? Per-pound
annual holding costs for the beans are
?$33.
Refer
to the
standard normal table
LOADING…
for? z-values.
?a)
What is the economic order quantity? (EOQ) for Kona coffee? beans?
439439
pounds
?(round your response to the nearest whole? number).
?b)
What are the total annual holding costs of stock for Kona coffee? beans?
?$658.18658.18
?(round
your response to two decimal? places).
?c)
What are the total annual ordering costs for Kona coffee? beans?
?$657.86657.86
?(round
your response to two decimal? places).
?d)
Assume that management has specified that no more than a
11?%
risk
of stockout during lead time is acceptable. What should the reorder point? (ROP)
be?
359.92359.92
pounds
?(round your response to two decimal? places).
?e)
What is the safety stock needed to attain a
11?%
risk
of stockout during lead? time?
55.9255.92
pounds
?(round your response to two decimal? places).
?f)
What is the annual holding cost of maintaining the level of safety stock needed
to support a
11?%
?risk?
?$167.76167.76
?(round
your response to two decimal? places).
?g)
If management specified that a? 2% risk of stockout during lead time would
be? acceptable, the safety stock holding costs will
decrease
not
change
increase
decrease
.
Enter your answer in each of the answer boxes.
Top of Form
The
following table shows the actual demand observed over the last 11? years:
?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
Year
1
2
3
4
5
6
7
8
9
10
11
Demand
77
88
66
1010
1212
88
1313
1212
88
99
66
This
exercise contains only parts? b, c, and d.
?b) Using the? 3-year
moving? average, provide the forecast from periods 4 through 12 ?(round
your responses to one decimal? place).
Year
4
5
6
7
8
9
10
11
12
Forecast
nothing
nothing
nothing
nothing
nothing
nothing
nothing
nothing
nothing
?c)
Using the? 3-year weighted moving average with weights
0.200.20?,
0.350.35?,
and
0.450.45?,
using
0.450.45
for the most recent? period,
provide the forecast from periods 4 through 12?(round your responses to two
decimal? places).
Year
4
5
6
7
8
9
10
11
12
Forecast
nothing
nothing
nothing
nothing
nothing
nothing
nothing
nothing
nothing
?d)
Mean absolute deviation for the forecast developed using the? 3-year
moving average is
2.632.63
and
for the? 3-year weighted moving average is
2.672.67.
Based
on this?information, the better forecast is achieved using the
3-year
moving average
approach.
Enter your answer in each of the answer boxes.
Top of Form
Under
ideal? conditions, a service bay at a Fast Lube can serve
88
cars
per hour. The effective capacity of a Fast Lube service bay is
5.75.7
cars
per? hour, with efficiency known to be
0.850.85.
The
minimum number of service bays Fast Lube needs to achieve an anticipated
production of
150150
cars
per
88?-hour
day? =
44
service bays ?(enter
your response rounded up to the next whole? number).
Enter your answer in the answer box.
Top of Form
The
Carbondale Hospital is considering the purchase of a new ambulance. The
decision will rest partly on the anticipated mileage to be driven next year.
The miles driven during the past 5 years are as? follows:
???????????????????????????????????????????????????????????????????????????????????????????????????????????????
Year
1
2
3
4
5
Mileage
3 comma 1003,100
4 comma 0504,050
3 comma 4503,450
3 comma 8503,850
3 comma 7503,750
?a)
Using a? 2-year moving? average, the forecast for year 6? =
38003800
miles
?(round your response to the nearest whole? number).
?b)
If a? 2-year moving average is used to make the? forecast, the MAD
based on this? =
125125
miles
?(round your response to one decimal? place). ? (Hint: You
will have only 3 years of matched? data.)
?c)
The forecast for year 6 using a weighted? 2-year moving average with
weights of
0.450.45
and
0.550.55
?(the
weight of
0.550.55
is
for the most recent? period) =
117117
miles
?(round your response to the nearest whole? number).
The
MAD for the forecast developed using a weighted? 2-year moving average
with weights of
0.450.45
and
0.550.55
?=
89.289.2
miles
?(round your response to one decimal? place).???(Hint: You will have
only 3 years of matched? data.)
?d)
Using exponential smoothing with
alpha?
?=
0.300.30
and
the forecast for year 1 being
3
comma 1003,100?,
the
forecast for year 6? =
37153715
miles ?(round your
response to the nearest whole?number).
Enter your answer in each of the answer boxes.
Top of Form
A
location analysis for Temponi? Controls, a small manufacturer of parts for? high-technology
cable? systems, has been narrowed down to four locations. Temponi will
need to train? assemblers, testers, and robotics maintainers in local
training centers. Cecilia? Temponi, the? president, has asked each
potential site to offer training? programs, tax?breaks, and other
industrial incentives. The critical? factors, their? weights, and the
ratings for each location are shown in the following table. High scores
represent favorable values.
????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
Factor
Factor
Description
Weight
Akron comma OHAkron, OH
Biloxi comma MSBiloxi, MS
Carthage comma NYCarthage, NY
Denver comma CODenver, CO
1
Labor
availability
0.150.15
9595
8080
9595
8585
2
Technical
school quality
0.100.10
8585
8080
6565
8080
3
Operating
cost
0.300.30
8080
8585
9595
8585
4
Land
and construction cost
0.150.15
6565
7575
8585
6565
5
Industrial
incentives
0.200.20
9090
7070
8080
5555
6
Labor
cost
0.100.10
8080
8080
8080
8080
?a)
The composite? (weighted average) rating for
Akron
comma OHAkron, OH
?=
82.582.5
?(round
your response to two decimal? places).
The
composite? (weighted average) rating for
Biloxi
comma MSBiloxi, MS
?=
78.7578.75
?(round
your response to two decimal? places).
The
composite? (weighted average) rating for
Carthage
comma NYCarthage, NY
?=
8686
?(round
your response to two decimal? places).
The
composite? (weighted average) rating for
Denver
comma CODenver, CO
?=
7575
?(round
your response to two decimal? places).
?b)
Based on the given? information, the best location for Temponi Controls is
to choose
Carthage,
NY
Denver,
CO
Carthage,
NY
Akron,
OH
Biloxi,
MS
.
?c)
If the weights for Factor 6? (Labor Cost) and Factor 3? (Operating
Cost) were? reversed, then using the given? information, the best
location for Temponi Controls is to choose
Akron,
OH
Biloxi,
MS
Akron,
OH
Carthage,
NY
Denver,
CO
.
Enter your answer in each of the answer boxes.
Top of Form
Boxes
of Organic Flakes are produced to contain
15.015.0
?ounces,
with a standard deviation of
0.200.20
ounce.
For a sample size of
4949?,
the
?3-sigma
x
overbarx
chart
control limits? are:
Upper
Control Limit
?(UCL
Subscript x overbarUCLx?)
?=
15.615.6
ounces
?(round your response to two decimal? places).
Lower
Control Limit
?(LCL
Subscript x overbarLCLx?)
?=
14.414.4
ounces ?(round your
response to two decimal? places).
Enter your answer in each of the answer boxes.
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