Ch 1, 2, 3, 4, & 5 Concept and Problem Solving

It takes a lawyer 120 minutes to serve one customer. Demand is 2 customers per eight hour day. The lawyer has a wage rate of $200 per hour. What is the cost of direct labor for the lawyer expressed in $ per customer?

$200*8/2 = 800 per customer since they work 8 hours ignore the 120

A consulting company must hire 15 new associates per year to replace those who have left the company for other positions or have retired. The company employs 120 associates overall.

120/15 = 8 years

SmartPhones are made on a 40-step assembly process. All 40 steps are connected through a conveyor belt and all of the 40 steps must work at the same rate even if some of them have more capacity than others. Is this process a machine-paced process or a worker-paced process? -machine-paced -worker-paced

-machine-paced

Which of the following questions would be asked in a process analysis of a college admissions office? -How long does it take the office to process an application? -When was the college founded? -how much is the yearly tuitiion of the college? -how long does it take an average student to complete a degree program at the college?

-How long does it take the office to process an application?

Which of the following questions would be asked in a process analysis of a college admissions office? -When was the college founded? -How long does it take the office to process an application? -How much is the yearly tuition at the college? -How long does it take the average student to complete a degree program at the college?

-How long does it take the office to process an application?

You are sitting in a restaurant and the waiter brings you the food that you ordered a while ago. If you think about you being the flow unit in the process of the restaurant - which step of this process will be downstream relative to your current position in the process? -Waiting to order -Being seated at a table -Paying the bill -Reviewing the menu

-Paying the bill

You observe a vehicle registration department at your local township. Assume that all employees are ready to work at 9 a.m. You arrive at 9 a.m. sharp and are the first customer. Is your time through the empty process longer or shorter than flow time averaged across all customers that arrive over the course of the day? -Longer than the average flow -Shorter than the average flow

-Shorter than the average flow

what is the relationship between a process with rework and a process with scrap -scrap and rework are related -scrap and rework are sequential processes. first they are scrapped and then reworked -a process either has scrap or rework. the two are mutually exclusive -scrap is a special case of rework in which flow units have to repeat all resources in the process up to the defects

-scrap is a special case of rework in which flow units have to repeat all resources in the process up to the defects

When an operation improves its efficiency, its revenue will always stay constant while its costs will go down

.False

A process is replicated in another country where wages are 50 percent lower. Staffing and processing times are identical. What would be the effect on the costs of direct labor? 1. Costs of direct labor would be 50 percent lower. 2. Costs of direct labor would be the same. 3. Costs of direct labor would be 50 percent higher. 4. Cannot determine from the given information.

1. Costs of direct labor would be 50 percent lower. Processing time required x Number of labor x Wage per labour / unit of time

The table below shows the time stamps of 10 customers who visited a local bank branch from 9:00 a.m. to 10:00 a.m. What is the flow rate of customers?

10/60min = 0.1667 or 10/58 =0.1724 because enter time was 9:01 and last call was 9:59 equaling 58 minutes

One of chair lifts at a ski resort unloads 1800 skiers per hour at the top of the slope. The ride from the bottom to the top takes 12 minutes. How many skiers are riding on the lift at any one time?

1800/60min = 30 skiiers per min 12*30 = 360

CodeDesk Inc matches programmers with freelance jobs. They have 30 employees who staff their online chat room. They receive on average 240 chat requests per hour and the average chat session takes 5 minutes to complete (i.e. from start to finish).

240 chat/hr X 5 min -------- 60 minutes =20 chat sessions

Last year there were 3,400,000 visitors to a national park and, on average, each visitor spent 22 hours in the park. Last year on average, how many visitors were in the park?

3,400,000 x 22= 74,800,000 365 x 24 = 8,760 # of visitors = (total # visitor hours / total # year hours) 74,800,000/8,760 = 8,539 visitors

Four regional less-than-truckload (LTL) carriers handle shipments traveling from Lexington, Kentucky, to Springfield, Illinois. All four companies say that their normal service time is to deliver these shipments in 2 business days. The four carriers compete with each other on the basis of price and service quality rating as shown in the table below. The price reported in the table is the (non-discounted) cost per hundredweight (cwt) of sending a 600-pound shipment from Lexington to Springfield at freight class 70. The service quality rating measures a carrier's loss and damage record and goes from 0 (poor quality) to 100 (high quality). Carrier/Price/Service quality rating A /$103.90/95 B/$98.50/91 C/$127.20/98 D/$111.40/94 (picture of chart in files)

A /$103.90/95 B/$98.50/91 C/$127.20/98

Which of the following statements about takt time and cycle time is true? A. Takt time only depends on demand, not capacity. Cycle time does depend on capacity. B. Takt time only depends on capacity, not demand. Cycle time does depend on demand. C. Takt time and cycle time only depend on capacity. D. Takt time and cycle time only depend on demand.

A. Takt time only depends on demand, not capacity. Cycle time does depend on capacity. Explained. Takt time is the cycle time required to match the rate of production to the rate of sales and it depends on the demand rate. Takt time does not depend on capacity. Cycle time is the time between completing two successive flow units and it depends on capacity.

There are four hotels competing with otherwise very similar products on the dimensions of price ($ per night) and amenities (measured by the number of stars (*) awarded by customer reviews). Which of these hotels are on the efficient frontier? a) Hotel A: price = $200 per night; rating: *** b) Hotel B: price = $150 per night; rating: **** c) Hotel C: price = $300 per night; rating: ***** d) Hotel D: price = $80 per night; rating: **

B,C,D

Which of the following items would be considered resources in a restaurant? Recipes Foods Brand image Chefs

Chefs

Which of the following is not a dimension or sub-dimension in a customer's utility function?Convenience Price Location Customer Satisfaction Performance

Customer Satisfaction

Which of the following inefficiencies in a bank's operations results from variability? -Customers directed to the wrong associate for a particular service -Associates read the terms and conditions of each account to the customer -Customers incorrectly list information on forms -Employee work schedules set a week in advance

Customers incorrectly list information on forms

True/False: the implied utilization can never be bigger than 100%

False

t/f A computer server experiences large fluctuations in the amount of data requests it receives throughout the day. Because of this variation, Little's Law does not apply.

False

Which of the following items would be considered an input in the operations of a soft drink manufacturer? Brand image Bottling machines Empty bottles Workers

Empty bottles

Is the capacity of the bottleneck larger than, equal to, or smaller than the capacity of the process? Larger than Equal to Smaller than The answer depends on the specific process under consideration

Equal to

Balancing a process with a fixed sequence of activities will achieve a higher average labor utilization than balancing a process with no fixed sequence of activities. T/F

False

Specialization increases the costs of labor as specialists will command a higher wage rate. True or False

False

T/F The efficient frontier is given by the cheapest company in the industry.

False

T/F There can be no more than two firms on the efficient frontier.

False

Which of the following is not one of the three system inhibitors? Waste Variability Fatigue Inflexibility

Fatigue

(Below are a number of slogans used for advertisement) --Which dimensions of customer utility do the slogans emphasize? We build lenses uniquely to the needs of your eyes.-- Fit Timing Price Location Performance Fit

Fit

Custom-built windows are designed and produced for the unique needs of a particular building. --Which dimension of the customer utility function is particularly emphasized with the concept of "custom-built"?-- Performance Fit Price Location

Fit

The table below provides the time stamps for the 8 people who called a reservation desk for a ferry service between 8:00 am and 8:20 am. Based on the data in the table, what is the flow time of callers? calls 1 8:01-05 2 8:02-07 3 8:06-08 4 8:09-12 5 8:10-15 6 8:12-20 7 8:16-19 8 8:17-19

Flow time of callers = sum of call duration / number of calls = (4+5+2+3+5+8+3+2)/8 = 32/8 =4 minutes

Which of the following questions is NOT related to operations management? How much will the CEO be paid? Who are the customers? How efficiently are the products or services delivered? Where will the demand be fulfilled? What is the product or service?

How much will the CEO be paid?

A process has high fixed cost and low variable costs. It is currently capacity constrained. Will the impact of an efficiency improvement be small or large? Small Large

Large

Patients take a drug for severe acne for 6 months and there are 150,000 new patients each month. How many patients are taking this drug on average at any given time?

P = 150,000 new patients / month T = 6 months Number of patients taking drug at any point of time = P X T = 150000 X 6 = 900,000

The fastest internet in the nation. Which dimension of the customer utility function is particularly emphasized? --Which dimension of the customer utility function is particularly emphasized?-- Performance Timing Fit Price Location

Performance

Which of the following characteristics is a subcomponent of consumption utility in a customer utility function? Performance Timing Price Location

Performance (and Fit)

We match any price in town. --Which dimension of the customer utility function is particularly emphasized?-- Performance Timing Fit Price Location

Price

A process has low fixed cost and high variable costs. It is currently capacity constrained. Will the impact of an efficiency improvement be small or large

Small -High variable costs result in a low unit margin, which reduces the impact of each additional customer on profitability.

Littles Law

The average amount of inventory in a system is equal to the product of the average demand rate and the average time a unit is in the system. WIP inventory = flow rate* flow time

As the attrition loss in a process increases, what happens to the yield? The yield increases The yield stays the same The yield decreases cannot determine from given Information

The yield decreases

What is the relationship between the processing time at a resource and its capacity?' They are the same They are reciprocals of eachother They are multiples of eachother They are not related

They are reciprocals of eachother

Get your burger in 1 minute or less - otherwise, you eat free. --Which dimension of the customer utility function is particularly emphasized?-- Performance Timing Fit Price Location

Timing

T/F In a process with rework, we find the bottleneck as the resource with the highest implied utilization.

True

T/F A resource has an implied utilization of 150%. This is the highest implied utilization in the process. This means that the resource is the bottleneck.

True

T/F The total demand rate for a resource is the sum of the individual demand rates that need to be processed by the resource.

True

The bottleneck resource in a process has the least idle time. True False

True

Consider the baggage check-in process of a small airline. Check-in data indicates that from 9am to 10am, 240 passengers checked in. Moreover, based on counting the number of passengers waiting in line, airport management found that the average number of passengers waiting for check-in was 30. How long did the average passenger have to wait in line?

WIP inventory = flow rate* flow time (30/240)*60 =7.5

Two retailers compete on costs and ambience of the retail store. They are identical on all other dimensions of customer utility. Retailer A is cheaper than retailer B. Retailer A also has the better ambience. Does this mean that retailer A is on the efficient frontier?

Yes

Which of the following operational decisions correspond to the convenience component of the consumer utility function? (more than one answer) a) When will the demand be fulfilled? b) How efficiently will the products or the services be delivered? c) What is the product or service to be delivered? d) Where will the demand be fulfilled?

a) When will the demand be fulfilled? d) Where will the demand be fulfilled?

A small mortgage lender has one receptionist, four loan officers, and two office managers. When applicants apply for a new loan in person, they first fill out paperwork with the receptionist. Then the applicants meet with one of the loan officers to discuss their needs. The loan officer spends additional time processing the application after the applicants leave the office. Finally, the application must be reviewed by an office manager before it can be approved. The following table lists the processing times at each stage. The office is open for eight hours per day, five days per week. receptionist 1 person -1 hour load officer 4 person -7 hr office man 2 person - 4 hr a. what is bottleneck unlimited demand, what is process flow rate? b. no blockage loans, how long take to complete 10 loans c. customer demand is 18 loans/week what is the utilization of office manager d. office has no backlog of loans, how long to complete 10 loans?

a. 1/1= 1 hour 7/4 = 1.75 hr 4/2= 2 hours office manager=bottleneck b. 8hr* 5 days = 40hr week bottleneck decides 40/2=20 loans per week c. 20/18 = 90% d. capacity is 2/4 = .5 first loan takes (1+7+4)=12 12+ (9/.5) =30 hrs

Mr. K's is a very popular hair salon. It offers high-quality hairstyling and physical relaxation services at a reasonable price, so it always has unlimited demand. The service process includes five activities that are conducted in the sequence described below. (The time required for each activity is shown in parenthesis): Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes) Activity 2: Wash and condition hair. (10 minutes) Activity 3: Neck, shoulder, and back stress release massage. (10 minutes) Activity 4: Design the hairstyle and do the hair. (25 minutes) Activity 5: Check out the guest. (5 minutes) Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following: S1 does Activity 1. S2 does activities 2 and 3. S3 does activities 4 and 5. c.What is the labor content? b.What is the average labor utilization? c.At a wage rate of $20 per hour, what is the cost of direct labor per customer? d.Mr. K considers hiring a new employee to help any one (and only one) of the servers without changing the tasks performed by each server. How would this change his cost of direct labor? e.Mr. K also contemplates redesigning the assignment of tasks to servers. For this, Mr. K is evaluating the reassignment of activity 5 from S3 to S1. How would this change his cost of direct labor?

a. 10+10 +10+25+5=60 mintues b. S1 = 10 minutes S2=20 min S3=30 min s3= bottleneck utilization = Labor content / (Cycle time*Number of resources) 60/(30*3)=.66 = 66.67% c. direct labor = Cycle time(hr) * # of resources * Labor rate(hr) = (30min/60)*3ppl*$20 = 30 d. new worked and now S2 is bottleneck with 20 min (20/60)*4*$20 = 26.67 e. s1 60/20 = 3 s2 60/20=3 s3 60/25 = 2.4 (25min /60)*3ppl*$20 = $25 per customer

For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing the main operation of a gas station? a. Sales Dollars b. number of gasoline pumps c. number of employees working per day d. number of customers served per day

a. sales dollars d. number of customers served per day

You observe a long line at the airport security. The process currently is:capacity constrained.demand constrained.unconstrained.linearly constrained. -capacity constrained. -demand constrained -unconstrained -linearly constrained

capacity constrained.

Consider a process consisting of three resources. Assume there exists unlimited demand for the product. Resource 1 has a processing time of 6 minutes per unit. Resource 2 has a processing time of 3 minutes per unit. Resource 3 has a processing time of 5 minutes per unit. a. What is the capacity of resource 2? b. What is the bottleneck in the process? c. What is the utilization of resource 2? d. How long does it take the process to produce 200 units starting with an empty system, assuming this is a worker-paced process?

a. 3 minutes and 60 minutes in an hour 60/3=20 b. 1/6=1.6 1/3=.33 1/5=.2 bottleneck is resource 1 c. 60/3= 10 per hour 10/20 = 0.5=50% d. 200*6 + 3+5 = 1208 200*Processing time of bottleneck resource + Processing time of resource 2 for last unit + Processing time of resource 3 for last unit

3. Consider a process consisting of three resources. Assume there exists unlimited demand for the product. • Resource 1 has a processing time of 6 minutes per unit. • Resource 2 has a processing time of 3 minutes per unit. • Resource 3 has a processing time of 5 minutes per unit. All three resources are staffed by one worker with 12$ hr. a. what is the cost of direct labor? b. what is the labor content? c. how much idle time does the worker at resource 3 have per unit? d. what is the avg labor utilization? e. assume the demand rate is 20 un/hr waht is the takt time? f. demans rate is 20/hr what is the target manpower?

a. flow rate = total time/ actual time 60/6 = 10 minutes total wage is 3*12 = 36 direct labor = total wages / flow rate 36/10 = 3.60 b. labor content = sum of process time 6+3+5 = 14 c. idle time = cycle time - activity time 6-5 =1 minute d. total idle time= ideal time at resource 1+resource2 +resource3 (6-6) + (6-3) + (6-5) = 4 avg utilization = labor content/ total labor content + idle time (14/3)/6 = 77.78 e. takt time = available time / required quantity 60/20 = 3 f. target manpower= labor content/ takt time 14/3 =4.67

An automated car wash serves customers with the following serial process: pre-treat, wash, rinse, wax, hand dry. Each of these steps is performed by a dedicated machine except for the hand dry step, which is performed manually on each car by one of three workers. The steps of the process have the following processing times: Pre-treat: 1 minute per car Wash: 5 minutes per car Rinse: 2 minutes per car Wax: 3 minutes per car Hand dry: 8 minutes per car a. If the car was has a demand of 15 cars per hour, what is the flow rate of the process? b. if the car wash has a demand of 15 cars per hour, what is the utilication of the machine that performs the wax process?

a. hand dry: 8/3(poeple) = 2.67 flow rate bottleneck is 5 min and in an hour so 60/5=12 flow rate is min of demand and process capacity b. utilization = flow rate/capacity 60 min / 3min = 20 cars/hr 12/20 = 60%

Over the course of a day, fans pour into a NASCAR venue at the rate of 8,000 people per hour. The rate at which fans leave the venue a) must be less than 8,000 people per hour b) must be exactly 8,000 people per hour c) must be more than 8,000 people per hour d) could be more or less than 8,000 people per hour

b) must be exactly 8,000 people per hour

From the perspective of process analysis, which of the following could be appropriate flow units for a hardware store? a) number of workers b) number of cash registers c) number of customers d) number of suppliers

c) number of customers

A national restaurant chain has just opened a sit-down location at Chicago's O'Hare International Airport. Next to the sit-down location, it has also established a "to-go" section where travelers can purchase pre-made sandwiches and salads as well as drinks and snacks. Which dimension of the customer utility function is particularly emphasized with the "to-go" section? a) fit b) timing c) price d) performance

c) timing

T/F To find the bottleneck in a process with attrition loss, all we need to do is find the resource with the lowest capacity.

false

It takes about 5 minutes for a customer to fill out the paperwork. Entry of information on the paperwork 5 minutes for a receptionist. There are 2 receptionists. It takes 15 minutes on average for the dental assistant to take an X-ray. There are three dental assistants o There are 10 dentists working at the clinic. Each check-up takes 30 minutes on average. Aume unlimited demand and dentist gets 100$ per hour while dental assistent gets $30 an hour What is labor content? What is cost of direct labor?

labor content is 5+15+30 = 50 - # dentists * hourly 10*$100= $1000 receptionist and assisstent (2+3) *30 =$150 flow rate 3/15 = .2*60 = 12 customers/ hour bottleneck direct labor = total cost / flow rate 1150/12 = 95.83

Our dealership network provides service, wherever in the country you may be. We match any price in town. --Which dimension of the customer utility function is particularly emphasized?-- Performance Timing Fit Price Location

location

What are the subcomponents of inconvenience in a customer utility function? Location and Price Price and Volume Location and Time Time and Performance

location and timing.farther location= reduce utility by inconvenience longer time it takes= reduce utility by inconvenience

You observe a bank and notice that a customer leaves the bank about every five minutes. These five minutes between customers are:the capacity of the process. the processing time of the last resource. the cycle time. the lead time.

the cycle time.

Over the course of a month, which of the following is most likely to describe an appropriate flow unit for a process analysis of a hospital? a) the number of physicians b) the number of beds c) the square footage of the building d) the number of patients

the number of patients

What happens to the target manpower if the labor content is doubled?

the target manpower doubles becuase if labor doubles so does manpower

It is possible to balance a process without involving the bottleneck resource.

true