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Operations Management 73-331 1. For each question, your answers to each individual part should be typed in

 

MICROSOFT WORD. Submit ONE Word document containing the answers to

 

all the questions and their respective parts.

 

2. If a question requires you to do a graph (e.g. decision trees), you can draw your

 

decision treey by hand, then use a scanner to scan your graph (as JEPG file) (or you

 

can also use your phone to take a picture of your graph). You can then copy your

 

graph/tree and paste it in your Word document.

 

QUESTION #1:

 

a) Briefly explain the concept of core competencies in your own words. Provide

 

examples of a core competency for a bank, a retail store, and an auto

 

manufacturer.

 

b) Name some operations management problems that occur in constructing a

 

building.

 

c) How are operations decisions affected by policies in marketing? In human

 

resources? In finance.

 

d) What capacity-related design considerations and demand modifications are most

 

important to a city that is planning to build a sports arena?

 

e) For the following 2 organizations: telephone company and furniture re-upholstery

 

shop, give a few examples of inputs, resources, and outputs. State whether the

 

operation would be labor- or capital-intensive.

 

f) Textbook: 1-6 page 29.

 

QUESTION #2:

 

Sterling Motors is a telephone or mail-order dealer in British auto parts. Sterling

 

has six telephones for receiving orders. Order takers (6) answer the telephones, check

 

inventory availability, and prepare picking tickets for the warehouse stock pickers. One

 

order may consist of several lines, with a different part or multiple of a part ordered on

 

each line. Each order taker can prepare picking tickets at a rate of one line every three

 

minutes. The telephones are normally answered weekdays from 6 a.m. to 4 p.m. Stock

 

pickers can fill and package parts at a rate of one line every five minutes. Sterling

 

employs eight stock pickers, who normally work weekdays from 8 a.m. to 5 p.m. (expect

 

for lunch hours)

 

a) What is the effective capacity of order taking in lines per week? What about the

 

stock picking area?

 

b) For three weeks after the spring catalogue is mailed in May, the eight warehouse

 

employees work 10 hours per day between 7 a.m. and 6 p.m., six days per week.

 

What is the peak capacity of the system in lines per week?

 

c) During the second week of May, Sterling filled 5000 order lines. What is the

 

capacity utilization? 1 Operations Management 73-331 QUESTION #3:

 

You have been asked to put together a capacity plan for a critical bottleneck

 

operation at the Surefoot Sandal Company (SSC). Your capacity measure is number of

 

machines. Three products (men?s, women?s, and children?s sandals) are manufactured.

 

On average, about 10000 sandals are in various stages of production. The time standards

 

(processing and setup times), batch (or lot) sizes, and demand forecast are given in the

 

following table. The firm operates two eight-hour shifts, five days per week, fifty weeks

 

per year. Experience shows that a capacity cushion of 5 percent is sufficient.

 

Product Processing

 

(hr./pair) Setup

 

(hr./batch) Batch size

 

(pairs/batch) Men?s sandals

 

Women?s sandals

 

Children?s sandals 0.05

 

0.10

 

0.02 0.5

 

2.2

 

3.8 240

 

180

 

360 Demand

 

forecast

 

(pairs/year)

 

80000

 

60000

 

120000 a) How long (expressed in days) does a typical pair of sandals take to move through

 

the manufacturing process? (Hint: This time is known as the throughput (or flow)

 

time; use Little?s Law).

 

b) Determine the peak capacity (in number of hours of operation per year) SSC

 

should plan for its production plan?

 

c) Determine the effective capacity SSC should use to set its production plan if it

 

wants to include a 5% capacity cushion (Note: effective capacity is less than peak

 

capacity).

 

d) How many machines are needed if the production plan is based on the effective

 

capacity? (Hint: Let D = annual demand, Q = batch size, and N = number of

 

setups per year, then D = N×Q.)

 

e) If the operation currently has two machines, what is the capacity gap?

 

QUESTION #6:

 

Managers in a company are using the concept of the learning curve in estimating

 

production-labour-hour requirements for a product. They estimate that by the time the

 

10th unit is produced, learning will have occurred to the point that this unit will require 75

 

direct labour hours. From previous experience with this type of product, they estimate

 

that it will follow 90% learning rate.

 

a) Determine the number of direct labour hours required to produce the first unit.

 

b) How many labour hours will be required to produce the eightieth unit? 2

 







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