Test 2

A supply chain has the following information. Supplier Factory. Wholesale. Retail Inventory in days 30 50. 40 25 Accounts rec in days. 20 45 30 45 Accounts pay in days 40 35 50. 47 Sourcing unit cost $ 10 $ 18 $ 82 $ 107 Added unit cost $ 5 $ 45. $ 20 $ 45 Sales unit price $ 18 $ 82. $ 107 $ 161 What is the total delivered cost across the supply chain?

$125

A manufacturer has decided to outsource and offshore a small electric motor that it currently manufactures itself. It has found an offshore supplier that charges $925,000 for a minimum order quantity of 5,000 motors. Shipping costs for this quantity are $15,000. The buyer expects to place four orders per year to meet its annual need for 20,000 motors. Annual carrying cost is 25% of unit price and import tariffs are 12% of unit price. The company expects to spend $12,500 per year on contracting and relationship maintenance. Using an order quantity of 5,000 motors, what is the total annual cost of outsourcing and offshoring each motor? (Round your answer to the nearest cent.)

$216.61 per unit

The following information is given for a CPM network: Activity.Pred.Suc.NormalTime.NormalCost.CrashTime.CrashCost A. --- B, C. 5 $ 60 2 $ 125 B A. D, C 4 70 2 90 C A,B. D 6 80 3 150 D B, C. --- 3. 40 1 60 What is the project cost if the project is crashed by one day?

$270

If the standard deviation of lead time demand is 10 units, management has a preferred service level of 99.9 percent (z = 3), and holding costs are $0.75 per unit per month, the annual cost of holding safety stock for this product will approximate to

$270.00.

The following information is given for a CPM network: Activity.Pred.Suc.NormalTime.NormalCost.CrashTime.CrashCost A. --- B, C. 5 $ 60 2 $ 125 B A. D, C 4 70 2 90 C A,B. D 6 80 3 150 D B, C. --- 3. 40 1 60 What is the project cost if the project is crashed by two days?

$295

Assume you discovered from historical records that simple linear regression is an effective means of predicting the labor cost of some project tasks. You found that the weight associated with an item (in pounds) produced in historical projects is an accurate and reliable predictor of labor cost. You develop a linear equation expressing the relationship between item weight and labor cost: estimated demand = 1,300 + 0.25x. For an upcoming project, that includes the task of manufacturing an item weighing 7,000 pounds, estimate the task cost using this regression equation.

$3,050

A U.S. hospital system is considering outsourcing a portion of its diagnostic workload to a medical consulting firm based in India. In the U.S. these diagnostic services, done internally by the hospital system, cost $700,000 per year. The consulting firm would charge $400,000 per year for the same workload. In addition the hospital system expects to spend $50,000 per year in managerial oversight, $8,000 per year administering the contract, and $125,000 to initially train the consulting firm's staff (amortized over 5 years). What is the total annual outsourcing cost during the first five years?

$483,000

Given that unit cost = $25, annual carrying charge = 10%, annual demand = 4,000 units, and ordering cost = $15 per order, the total cost per year, assuming no stockouts, is approximately equal to

$548.

A company has sales of $150 million, cost of goods sold of $100 million, and a before tax profit of 8%. If purchasing was able to reduce the cost of goods sold by $5 million, how much additional sales would be required to achieve the same impact on profit?

$62.5 million.

Assume a company has $700,000 worth of inventory and averages $10,000 per day in cost of sales. Also assume it takes 30 days for the average customer to pay off its invoice to this company and it takes 120 days for the company to pay for the materials supplied by its suppliers. What is the company's average cash-to-cash cycle time?

-20 days

The ideal setup time for a lean system is

0 minutes.

Using the same data as in Question 10, what is the lower control limit for a p-chart?

0.0191

The chair of the Quality Department at Motorola University wants to construct a p-chart for determining whether the four faculty members teaching the course are in a state of control concerning the number of students who fail in the course. Accordingly, the chair sampled 500 final grades from last year for each instructor, and computed the number of failures per instructor as 13, 11, 0, and 16 respectively. Compute the upper and lower standard control limits for this three sigma control chart.

0.0388 and 0.0012.

The work of 20 claims processors is sampled and examined for errors. 100 claims are randomly pulled for each processor with the results shown in the chart. What is the upper limit of the control chart? Sample# Errors. Sample# Errors 1 6. 11 6 2 5 12 1 3 0 13 8 4 1 14 7 5 4 15 5 6 2 16 4 7 5 17 11 8 3 18 3 9 3. 19 0 10 2 20 4 Total Errors: 80

0.099 (or 0.10).

A manufacturer of television wall mounts would like to make a chart to monitor the percentage of defective mounting brackets due to problems with drilled holes. These holes may be defective because they are off-center, out of round, or not drilled. Five samples, each of size 100, have been taken from the production process and the discrepancies are as follows: Sample. Percent defective 1 2.0 2 7.0 3 5.0 4 3.0 5 4.0 Using this information and a 3 standard deviation chart, the upper control limit is:

0.1022.

Suppose that you have taken 30 samples of 200 units each and calculated the proportion defective as p = 0.075. What is the upper control limit for a p-chart?

0.1309

A machining process is capable of producing a component with an average specification of 5 inches and a process standard deviation of 0.1 inch. Suppose the customer accepts the component as long as it falls between 4.8 inches and 5.2 inches, then the process capability is

0.667.

The forecast was 70 units for the current period while actual demand was 76. The forecast for the next period is 75.8. What is alpha if a simple exponential smoothing forecast method is being used?

0.967

A monthly production schedule calls for 20,000 units of product A, 10,000 units of product B, and 5,000 units of product C. If there are 20 days of production available each month, what is the appropriate uniform load per day?

1,000 units of A; 500 B; 250 C

A numerically controlled machining center has an average processing capacity of 5,000 units per day. It receives an average of 3,000 units of inventory from another machining center and it has to supply an average of 1,000 units of finished goods to the packaging section. Assuming that the company incurs a significant cost for carrying finished goods supplied to the packaging section, the flow rate of the machining process is

1,000 units per day.

Assume uniform annual demand for an item is 50,000 units, order costs are $10.00, and the annual cost of holding one unit in inventory is five percent of the $20.00 acquisition cost. The optimal order quantity is

1,000 units.

The Cowboy Saddle Company manufactures plastic saddles that are used in the assembly process of their Mr. Ed doll. If the run time for producing a batch of saddles is 4 days, the rate of production is uniform at 500 saddles per day, and the uniform usage rate is 200 saddles per day, what is the maximum inventory quantity? (Round to the nearest integer value.)

1,200 saddles

A brewer bottles beer labeled "net weight 12 ounces." A production employee pulled 20 random samples of 5 bottles each throughout the day and found that the average weight is exactly 12 ounces and the average range of the samples is 0.25 ounce. What is the lower control limit for the averages chart for this process?

11.856 ounces.

A particular brand of soap has a lead time of three weeks to reorder, a weekly standard deviation of ten units, and a weekly average usage of 30 units. The reorder point for this soap, assuming a 95% service level (z = 1.645), is

118.49 units.

Given the following information: Job. Workcenter/Machine Hours 1 A/3, B/3, C/4 2 B/3, A/1, C/2 3 C/2, B/3, A/3 Use a Gantt chart to schedule the jobs in order 1, 2, 3 and assume that jobs cannot be split. What is the makespan?

12

Given the following weekly demand figures, what is the MAD at the end of week 5? Week Demand forecast 1 100 120 2 120 130 3 110 120 4 130 125 5 160 145

12.0

Given no constraints, how many possible sequences are there if five jobs are in the queue for an operation?

120

A machine center can produce 175 units per day at 100% utilization. Demand is 75 units per day and suppliers are capable of delivering raw materials to support production of 125 units per day. If demand doubles, the flow rate will be

125 units.

The following information is given for a CPM network: Activity.Pred.Suc.NormalTime.NormalCost.CrashTime.CrashCost A. --- B, C. 5 $ 60 2 $ 125 B A. D, C 4 70 2 90 C A,B. D 6 80 3 150 D B, C. --- 3. 40 1 60 What is the normal project completion time?

14

Here is information pertaining to a project: *Activity Diagram* What is the expected completion time of the project?

15

Using a lot-for-lot ordering strategy for the following item, what is the planned order release amount in week 3? (Note: Use a lead time of one week, the gross requirements and scheduled receipts depicted, and assume you begin with 50 units in inventory.) Week. 1. 2. 3. 4 Gross requirements. 0. 100. 80. 15 Scheduled receipts 25. 0. 0. 0 Projected ending inventory (50) Net requirements Planned order receipts Planned order releases

15 units

Given that unit item cost = $30, annual carrying charge = 15%, annual demand = 3,600 units, and ordering cost = $15 per order, the EOQ is

154.92 units

Output from the Gantt chart drawn for a machining process is shown here. Determine the makespan of the process. Job. Waiting Time (hr). Delivery Time (hr) 1 0 10 2 10 15 3 1 16

16 hours

If mean daily demand is 20 units, lead time is 7 days, the standard deviation of demand during lead time is 12.0 units, and management has a preferred service level of 99.9 percent (z = 3), the reorder (R) level for the item would be

176 units.

A company has the following financial information (in millions of $): Sales $ 277 Cost of goods sold Direct labor 21 Materials 133 Overhead 17 All other costs 71 Pre-tax earnings 35 What is the percentage increase in earnings from a 5% savings in materials purchasing?

19.0%

One of the first stages in any statistical process control program is to ascertain that the equipment utilized for an operation is inherently capable of producing within the design tolerance. For a particular lathe operation, run under controlled conditions so that no assignable causes of variation have been introduced, the outside diameter of each sampled part was measured and the operator found that the standard deviation was 0.0075 centimeters (cm). What is the process capability if the upper specification limit is 7.508 cm and the lower specification limit is 7.388 cm?

2.67

If a factory has 100,000 units of materials in the system and if the average flow rate of the system is 5,000 units per day, then according to Little's Law, the average throughput time is

20 days

Suppose that a process is in a state of control and we have the following information for a human weights measurement study: Average weight of males in the study = 150 lbs. Average range of the male weights = 100 lbs. A2 = 0.577 D3 = 0 D4 = 2.115 What is the upper control limit for the average (mean) chart:

207.7 lbs

Suppose a warehouse is to be located to ship to the following three customers (A, B, and C) with demands and X, Y coordinates as follows: CustomerX CoordinateY Coordinate. Demand A 5 40 15,000 1bs B 25 40 25,000 1bs C 15 5 45,000 1bs What is the Y coordinate for the center-of-gravity location?

21.5.

Using the information from Question 8, what is the upper control limit for the range chart?

211.5 lbs

Given that unit cost = $25, annual carrying charge = 10%, annual demand = 4,000 units, and ordering cost = $15 per order, the EOQ is

219 units.

Given the following weekly demand figures: Week. Demand 1 20 2 60 3 30 4 20 5 40 What is the exponentially smoothed forecast for week 2? (Use F1 = 25 and alpha = 0.2.)

24

If it takes 100 minutes to complete a circuit, demand at the next work center is 5 parts per minute, and a kanban container holds 20 parts, how many containers are required?

25

A firm produces 12 different services and has capacity to service 360,000 customers per year. A total of 24 service workers are employed. If 270,000 customers receive service during a particular year, what is the capacity cushion during that year?

25%

Using a simple exponential smoothing model (alpha = 0.3), calculations for the most recent period generated a forecast of 25.10 units. Actual demand for that period was 31 units. What is the forecast of demand for the upcoming period?

26.87

Using a three-period weighted moving average model with weights of W1 = 0.5, W2 = 0.4, and W3 = 0.1, what is the forecast of demand for week 6 using the demand data shown in the chart? Week Demand 1 24 2 19 3 30 4 25 5 31

28.50

Using a simple three-period moving average forecast model, what is the forecast of demand for Week 6 given the historical demand levels shown in the chart? Week Demand 1 24 2 19 3 30 4 25 5 31

28.67 units

Calculate the productivity improvement from the following example: Year 1. Year 2. Annual Inflation Output (sales) $ million. $ 79.4. $ 86.8. 3% Labor (payroll) $ million$ 41.4. $ 43.0. 2% Capital $ million. $ 10.4. $ 10.9. 0%

3.56%

Given the following weekly demand figures: Week. Demand 1 20 2 60 3 30 4 20 5 40 Using a three-week moving average, what is your forecast for week 6:

30

End item A requires three component parts: B, C, and D. The BOM indicates that for each completed A, 1 unit of B, 2 units of C, and 1 unit of D are required. Current inventory for the four items is as follows: there are 15 As, 40 Bs, 50 Cs, and 15 Ds in stock. If the lead time for all items is 1 week and there are no scheduled receipts for any item, how many units of product A can be delivered to customers at the start of next week (week 2) if you realize now the BOM has been just changed? You now realize it takes 2 units of B to make 1 finished unit of A.

30 units

The ABC Cement Corporation produces a high quality cement that is supplied to construction companies. The potential demand and the probability of each potential demand quantity are given for the upcoming year: Demand in Tons. Probability 500,000 0.3 250,000 0.4 300,000 0.3 Assuming manufacturing capacity of 700,000 tons, the estimated capacity cushion is

360,000 tons.

The master production schedule (MPS) for two products, A and B, is shown. To manufacture item A, two units of component C are required. To manufacture item B, four units of component C are required. The inventory balance for C is 10 units at the start of week 1. Using this information, determine the gross requirements for component C to start week 1. MPS Week 1 Product A. 15 Product B 2

38 units

If a facility has a utilization rate of 80%, and current output levels requires 3,328 hours annually, what is the facility's annual capacity?

4,160 hours

Calculate the productivity improvement from the following example. Year 1. Year 2. Annual Inflation Output (sales) $ million $ 69.4 $ 76.8 3% Labor (payroll) $ million$ 31.4. $ 33.0 2%

4.22%

Demand for an item is 10 units per week, and delivery lead time is 3 weeks. The safety stock is known to be 11 units. Using a Q system, what is the reorder point (R)?

41

End item A requires three component parts: B, C, and D. The bill of materials indicates that for each completed A, one unit of B, 2 units of C, and 1 unit of D are required. Current inventory for the four items is as follows: there are 18 As, 40 Bs, 50 Cs, and 35 Ds in stock. If the lead time for all items is one week and there are no scheduled receipts for any item, how many units of product A can be delivered to customers at the start of next week (week 2)?

43

A bank has an average of ten customers per hour arriving into the system and it takes an average of 30 minutes for the clerk to complete a transaction with a customer. What is the average length of the queue in the bank?

5 customers

Using a lot-for-lot ordering strategy for the following item, what is the planned order release amount in week 3? (Note: Use a lead time of one week, the gross requirements and scheduled receipts depicted, and assume you begin with 100 units in inventory.) Week. 1. 2. 3. 4 Gross requirements. 0. 100. 80. 15 Scheduled receipts 75. 0. 0. 0 Projected ending inventory (100) Net requirements Planned order receipts Planned order releases

5 units

Assume you have been assigned the task of identifying a level strategy aggregate production plan for the coming year. You have been informed that beginning inventory is 2,000 units, your plan should provide an ending inventory for the year equal to 500 units, and you have been provided the following forecasts of aggregate demand. What should be the planned rate of quarterly production? Qtr. Forecast 1. 6,000 2. 5,500 3. 5,000 4. 6,500

5,375 units

Assume you have been assigned the task of identifying a chase strategy aggregate production plan for the coming year. You have been informed that beginning inventory is 500 units, your plan should provide an ending inventory for the year equal to 200 units, and you have been provided the following forecasts of aggregate demand. Knowing that the typical objective of chase plans is to avoid carrying inventory, what should be the planned rate of production for the first quarter? Qtr. Forecast 1. 6,000 2. 5,500 3. 5,000 4. 6,500

5,500 units

Assume you have been assigned the task of identifying a level strategy aggregate production plan for the coming year. You have been informed that beginning inventory is 0 units, your plan should provide an ending inventory for the year equal to 0 units, and you have been provided the following forecasts of aggregate demand. What should be the planned rate of quarterly production? Qtr. Forecast 1. 6,000 2. 5,500 3. 5,000 4. 6,500

5,750 units

Given the following information for period 15, what will be the smoothed mean absolute deviation for period 16? Demand = 120 Forecast = 180 MAD15 = 50 Alpha = 0.3

53

The Grand Bakery produces 60 special sourdough rolls every day. Any rolls that are not sold each day are given to the employees. They have collected sales data from the past week: Day Rolls sold 1 50 2 50 3 48 4 60 5 53 6 60 What is the value of F6 if they use a 3-day weighted moving average with W1 = 0.6, W2 = 0.2, and W3 = 0.2:

53.4

Using the data shown, calculate the forecast for period 7 using a four-period moving average. Day Rolls Sold 1 50 2 50 3 48 4 60 5 53 6 60

55.25

The following information is given for a CPM network: Activity.Pred.Suc.NormalTime.NormalCost.CrashTime.CrashCost A. --- B, C. 5 $ 60 2 $ 125 B A. D, C 4 70 2 90 C A,B. D 6 80 3 150 D B, C. --- 3. 40 1 60 What is the LS time for activity B?

7

A company has the following financial information (in millions of $): Sales $ 277 Cost of goods sold Direct labor 21 Materials 133 Overhead 17 All other costs 71 Pre-tax earnings 35 What is the profit leverage effect for this firm?

7.92

If the economic order quantity for an item is 140, what is the average number of cycle inventory units?

70 units

A production center is available for 8 hours per day in a factory. It is comprised of several rotary parts, and the worker operating it is required to lubricate these rotary parts once each day. It takes 2 hours to remove these parts from the equipment, lubricate them, and reassemble them. The production center is not available for production during these times. The availability of the production center is

75%

An assembly-line facility desiring enough flexibility to meet unexpected demand is likely to set planned utilization at

80%

A work center uses Kanban containers that hold 200 parts. To produce enough parts to fill a container, 60 minutes of setup plus run time are needed. Moving the container to the next workstation, waiting time, processing time at the next work station, and return of the empty container takes 120 minutes. There is an overall demand rate of ten units per minute. Calculate the number of containers needed for this process.

9

A product assembled of 10 purchased components, where the defective rate of each component is 0.5%, will result in finished product quality of

95.11%.

Here is information pertaining to a project: *Activity Diagram* For the network shown, which statement is correct about activity C?

A and B must be completed before C.

Here is the information pertaining to five jobs currently waiting to be processed on the same machine. Determine the sequencing of these five jobs at this machine using the SPT heuristic. Job Process Time Arrival Date Due Date A 2 days Oct. 12. Oct. 29 B 6 days Oct. 15. Oct. 28 C 5 days Oct. 18. Oct. 30 D 9 days Oct. 1. Oct. 31 E 7 days Oct. 10. Oct. 27

A-C-B-E-D

The following information is given for a CPM network: Activity.Pred.Suc.NormalTime.NormalCost.CrashTime.CrashCost A. --- B, C. 5 $ 60 2 $ 125 B A. D, C 4 70 2 90 C A,B. D 6 80 3 150 D B, C. --- 3. 40 1 60 What is the critical path of the network?

A-C-D.

Below is the information pertaining to five jobs that are in process. Determine the sequencing of these five jobs at this machine using the Critical Ratio rule. Job Remainingprocessing time Time remaining untildue date A 2 days 17 days B 6 days 12 days C 5 days 12 days D 10 days 30 days E 8 days 17 days

B-E-C-D-A

Measured by the mean absolute deviation, which of the forecast methods (1, 2, or 3) provides the highest degree of forecast accuracy for the five weeks of data shown? Week Demand Method 1 Method 2 Method 3 1 24 23 26 21 2 19 25 22 20 3 27 21 23 23 4 25 30 29 22 5 31 25 32 28

Methods 2 and 3 are equal

The operations manager for Dogs R Us is trying to understand the bottleneck in the dog grooming process. Times below are given in minutes per dog and where there are two or more employees they can process two or more dogs simultaneously. Process step Time Who Verify customer information 5 min./dogFront desk (staffed by 2 employees) Crate the dog 2 Front desk Wash and dry the dog 20 Washers (3 employees) Nails and teeth 13 Nail/teeth specialists (2 employees) Grooming 25 Groomers (4 employees) Call customer for pick-up 5 Front desk Assuming that demand and supply exceed capacity, what is the maximum flow rate (in dogs per hour) for this process?

None of these choices are correct.

Smith Equipment has a single shipment of 20 units, each weighing 1,500 lbs., to go from its headquarters to its East Coast warehouse. If cost is the primary concern, what is the best mode of transportation given the following information? ModeDelivery timeHandlingCostDirect truck3 days2 times$27 per hundredweight (cwt)LTL5 days6 times$35 per cwtRail10 days4 times$20 per cwtAir16 hours4 times$66 per cwt

Rail

A supply chain has the following information. Supplier Factory. Wholesale. Retail Inventory in days 30 50. 40 25 Accounts rec in days. 20 45 30 45 Accounts pay in days 40 35 50. 47 Sourcing unit cost $ 10 $ 18 $ 82 $ 107 Added unit cost $ 5 $ 45. $ 20 $ 45 Sales unit price $ 18 $ 82. $ 107 $ 161 Which of the four entities has the smallest cash-to-cash cycle time?

Supplier

A company needs to have 25,000 pounds of material trucked from plant A to plant C. It also needs to truck 30,000 pounds of another material from plant B to plant C. The company's carrier quoted them a cost of $18.00 per hundredweight for two separate shipments to plant C, or a cost of $15.00 per hundredweight if one truck picks up both shipments (with a $1,500.00 charge for the consolidation stop). Which of the following is correct?

The consolidated shipment is the low-cost option by $150.00.

If market demand is 2,000 units of a product per day and there is 14 hours of production time available each day across two shifts, how many units need to be produced per minute to match market demand?

approximately 2.4 units

A process for filling liquid laundry detergent bottles monitors the volume in each bottle. The operations manager has taken 5 samples with 4 observations (bottles) in each sample to determine if the variation in volume is reasonable. The measurement unit is fluid ounces. Calculate the center line for a process control chart that indicates whether the variation within samples is reasonable (in a state of control). Bottle. Sample 1. Sample 2. Sample 3. Sample 4. Sample 5 1. 11.8 12.0 11.8 11.9 10.7 2 12.1 12.0 11.8 12.0 11.2 3 12.0 11.9 11.9 11.8 11.9 4 12.2 11.8 11.7 11.9 11.7

between 0 and 1.0

Given the following information pertaining to item AX143, determine the appropriate number of kanban containers that should be used to support production. Demand rate = 500 units/week Time for container to complete circuit = 2 weeks Safety stock = 30 percent Size of container = 5 units

between 100 and 500 containers.

Smith Equipment has three separate shipments to customers all in the same city. The shipment weights are 20,000 lbs. 25,000 lbs., and 10,000 lbs. Smith Equipment's carrier charges $14 per hundredweight (cwt) if each shipment is sent separately. If the three shipments are consolidated at Smith Equipment's warehouse and sent in a single truck, the carrier charges $11 per cwt with a $500 consolidated delivery fee per destination added. Smith Equipment should

consolidate the shipments at a savings of $150.

Smith Equipment has a single shipment of 20 units, each weighing 1,500 lbs., to go from its headquarters to its East Coast warehouse. If today is Monday and the shipment must be received at the warehouse by this Friday, which is the best mode of transportation? ModeDelivery timeHandlingCostDirect truck3 days2 times$27 per hundredweight (cwt)LTL5 days6 times$35 per cwtRail10 days4 times$20 per cwtAir16 hours4 times$66 per cwt

direct truck

Demand for an item is 20 units per week, and delivery lead time is 2 weeks. The safety stock is known to be 14 units. Using a P system, and assuming a P value of 3 weeks, what is the target inventory level (T)?

more than 100

Smith Equipment has three separate shipments to customers all in the same city. The shipment weights are 20,000 lbs. 25,000 lbs., and 10,000 lbs. Smith Equipment's carrier charges $14 per hundredweight (cwt) if each shipment is sent separately. If the three shipments are consolidated at Smith Equipment's warehouse and sent in a single truck, the carrier charges $11 per cwt with a $500 consolidated delivery fee per destination added. Assume the carrier promises one-day delivery on the separate shipments, and two-day delivery on the consolidated shipment. If shorter delivery time is important to these customers, Smith Equipment should

send the shipments separately even though this is a slightly more expensive option.