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Work must be shown

Problem 1:

Following is cost structure of an independent comic book publisher:

Fixed cost = 75,000

Variable cost = 8.00 per book

Selling price = 13.00 per book

Compute the following:

- How many books have to be sold to make a profit of 2000 dollars? (3 points)
- The publisher has an estimate of demand of 5000 books. At what selling price would the publisher break even? (6 points)

Problem 2:

TransCanada Corp. is in the business of manufacturing toys using assembly lines. The time to perform each task and the tasks that must immediately precede each task are:

Task Precedence Duration (seconds)

A — 18

B — 30

C A, B 12

D B 6

E C, D 12

F D 36

G F 24

Demand per day is 560 units. The company works one 8-hour shift each day. A shift includes 2 snack breaks of 20 minutes (each). In addition, every hour there is a 6-minute rest break (i.e. 48 minutes per 8-hour shift).

Compute cycle time. (3 points)

For a cycle time of 45 seconds, balance the line using the Longest Operation Time first rule. (4 points)

If cycle time is 45 seconds, what is the production rate per day? (2 points)

Problem 3:

A Woodwork company employed six full-time (40 hours/week) workers. In April the company had four part-time workers working 10 hours per week. In May there were 2 part-time workers and they only worked 25 hours per week. The company had revenues that averaged $60,000 per week in April and $50,000 per week in May. Assume 4 weeks in each month (April and May).

What is the percentage change in labor productivity from April to May for the company? (2 points)

Problem 4

Activity | Immediate Predecessor | (Time Weeks) |

A | – | 1 |

B | A | 4 |

C | A | 4 |

D | B | 2 |

E | C ,D | 5 |

F | D | 2 |

G | F | 2 |

H | E, G | 3 |

- Draw the project network. (3 points)
- What is the critical path? (2 points)
- How many weeks will it take to complete the project? (2 points)
- Which activities have slack, and how much? (3 points)

Problem 5:

Sales data for Doomed International Co. are as follows:

Year | Annual Sales (millions) |

| |

1 | 98.0 |

2 | 85.1 |

3 | 77.9 |

4 | 74.2 |

5 | 59.3 |

6 | 46.7 |

Using simple linear regression analysis, calculate forecast for Year 8. (10 points)

Problem 6:

Historical demand for a product is as follows:

DEMAND |

April | 60 |

May | 55 |

June | 75 |

July | 75 |

August | 89 |

September | 76 |

| |

- Using a simple three-month moving average, calculate a forecast for October. (3 points)
- Using single exponential smoothing with a.2 and July forecast = 80, calculate a forecast for October. (7 points)

Problem 7:

Jill’s Job Shop buys the following Part (X-123) for use in its production system. The parts are needed throughout the entire 52-week year. Data for the part are as follows:

ITEM | X-123 |

Annual demand | 10,000 |

Holding cost per unit per year | $2 |

Order cost | $150 |

Lead time | 4 weeks |

Safety stock | 35 units |

Item cost | $10.00 |

a) Compute the optimal order quantity. (6 points)

b) What is the reorder point for X-123? (4 points)

Problem 8:

Benji’s Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. Weekly demand is 100 bottles (closed two weeks per year) with a standard deviation of 30 bottles. The wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Benji figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to arrive.

Benji would like to use an inventory system (Fixed – Order Quantity model) that minimizes inventory cost and will provide a 95 percent service probability.

At what inventory level (reorder point) should he place an order? (6 points)

Problem 9:

UDI Pharmaceuticals orders its antibiotics every two weeks (14 days) when a salesperson visits from one of the Pharmaceutical companies. Tetracycline is one of its most prescribed antibiotics, with average daily demand of 2,000 capsules. The standard deviation of daily demand was derived from examining prescriptions filled over the past three months and was found to be 800 capsules. It takes five days for the order to arrive.

UDI uses Fixed – Time Period Model. UDI would like to satisfy 99 percent of the prescriptions. The salesperson just arrived, and there are currently 25,000 capsules in stock. How many capsules should be ordered? (4 points)

Problem 10:

Jobs A, B, C, D and E must go through Processes I and II in that sequence (Process I first, then Process II).

- Use Johnson’s rule to determine the optimal sequence in which to schedule the jobs to minimize the total required time. (7 points)
- If jobs were processed in the sequence: A-B-C-D-E, when will job ‘B’ be completed? (3 points)

JOB | Required Processing Time on Process (Machine) I (in hours) | Required Processing Time on Process (Machine) II (in hours) |

A | 4 | 5 |

B | 16 | 14 |

C | 10 | 7 |

D | 13 | 11 |

E | 3 | 9 |

Problem 11:

The following table contains information regarding jobs that are to be scheduled through one machine:

OPERATIONS TIME |

JOB | PROCESSING TIME(DAYS) | DUE DATE |

A | 4 | 20 |

B | 12 | 30 |

C | 2 | 15 |

D | 11 | 16 |

E | 10 | 18 |

F | 3 | 5 |

G | 6 | 9 |

- What is the shortest operating time (SOT) schedule? (2 points)
- What is the slack time remaining (STR) schedule? (4 points)
- For the schedule F-G-C-D-E-A-B, compute average lateness? (4 points)1806354_1_operationmanagement