Homework 1 - Online Questions

$0.64 ( $40 x 16% = $6.40 $6.40/10 = $0.64 )

A company's holding cost is 16% per year. Its annual inventory turns are 10. The company buys an item for $40. What is the average cost (in$s) to hold each unit of this item in inventory?

$1.00 per book ( ($10 COGS/3 turns) x 30% = $1 )

A local bookstore turns over its inventory once every four months. The bookstore's annual cost of holding inventory is 30% What is the inventory holding cost (in $) for a book that the bookstore purchases for $10 and sells for $20

54 hours ( Step 3 is the bottleneck step of the process, so the machine-paced process will be set at a speed of 1/2 hour per unit at each step. The first unit will take 4 ×1/2 = 2 hours to complete. The remaining 104 units will have a cycle time of 1/2 hour. The total time required to complete a batch of 105 units is 2 + 104 × 1/2 = 54 hours. )

Consider a four-step serial process with processing times given in the list below. There is one machine at each step of the process, and this is a machine-paced process. Step 1: 25 minutes per unit Step 2: 15 minutes per unit Step 3: 30 minutes per unit Step 4: 20 minutes per unit Assuming that the process starts out empty, how long will it take (in hours) to complete a batch of 105 units?

a. 0.333 units per minute, b. Resource 1, c. 50%, and d. 1,208 minutes ( )

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. The flow diagram is shown. a. What is the capacity of resource 2? (Round to 3 decimal places) 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 product 200 units starting with an empty system, assuming this is a worker-paced process?

a and d

For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analysis the main operation of a gas station? (select all that apply) a. Sales dollars b. Number of gasoline pumps c. Number of employees working per day d. Number of customers served per day

c. Number of customers

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

a. 12 customers/hour, b. 7 customers/hour, c. 58.33%, and d. 8.57 minutes/customer ( a. 60 minutes / 5 minutes = 12 customers per hour b. Flow rate is the lesser of demand and capacity = min(7 customers per hour, 12 customers per hour) = 7 customers per hour c. Utilization = flow rate /capacity = 7 customers per hour / 12 customers per hour = 58.33% d. Cycle time (in minutes) = 60* 1 / flow rate in customers per hour, 60*(1/7) = 8.57 minutes per customer )

It takes a barber 5 minutes to serve one customer. Round your answer to two decimal places. a. What is the capacity of the barber expressed in customer per hour? b. Assuming the demand for barber is 7 customer per hour, what is the flow rate? c. Assuming the demand for the barber is 7 customers per hour, what is the utilization? (percent) d. Assuming the demand for the barber is 7 customers per hour, what is the cycle time? (minutes)

8,539 visitors ( Little's law: Inventory = Flow rate x Flow time Flow rate = 3400000 visitors divided by 365 days = 9315.07 visitors per day Flow time = 22 hours/ 24 hours per day = 0.92 days Inventory = 9315.07 (flow rate) × 0.92 (flow time) = 8539 visitors per day )

Last year there were 3,400,000 visitors to a national park and, on average, each visitor spent 22 hours in the park. On average, how many visitors were in the part at any particular time last year? (Round to nearest integer)

a. Machine-paced

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? a. Machine-paced b. Worker-paced

37.33 boxes per day ( Boxes per day = (3.2 turns × 350) / 30 = 37.33 )

Suppose that a movie theater snack turns over its inventory of candy 3.2 times per month. If the snack bar has an average of 350 boxes of candy in inventory, what is its average daily sales rate for candy? (Assume that there are 30 days per month.)

b. False

The resource with the largest total demand rate is the bottleneck. a. True b. False

11.6 minutes ( 9 + 6 + 10 + 18 + 8 + 13 + 11 + 18 = 93 93/8 = 11.625 )

The table below provides the time stamps for the 8 people who called a reservation desk for a ferry service between 8:00 am ad 8:40 am. Based on the data in the table, what is the flow time of callers? (Round to 1 decimal)

a. True

The total demand rate for a resource is the sum of the individual demand rates that need to be processed by the resource. a. True b. False

d. Minutes or hours of work

What flow unit do you use when dealing with flow unit dependent processing times? a. Revenue dollars b. Customers c. Each different type of finished goods d. Minutes or hours of work

a. Lose the sale and lose the customer

Which of the following possible responses by a customer who is faced with a stockout is the most costly to the firm? a. Lose the sale and lose the customer b. Lose the sale c. Lose the sale of one item, but the customer purchases another item d. Customer waits for the item to become available

a. capacity constrained

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

6.7 minutes ( I = R x T R = 250 customers/2 hours = 125 customers/hour 125/60 = 2.1 customers/minute I = 14 (is given) T = I/R 14/2.1 = 6.7 minutes )

A campus deli serves 250 customers over its busy lunch period from 11:30 am to 1:30 pm. A quick count of the number of customers waiting in line and being served by the sandwich makers shows that an average of 14 customers are in process at any point in time. What is the average amount of time that a customer spends in process? (Round your intermediate and final answer to 1 decimal place.)

910 units ( Using Little's Law: Inventory (loaves in oven) = Flow rate (required output per hour) x Flow Time (baking time in hours) = 4200 units x (13 minutes/60 minutes) = 910 units )

A large-scale bakery is laying out a new production process for their packaged bread, which they sell to several grocery chains. It takes 13 minutes to bake the bread. How large of an oven is required so that the company is able to produce 4200 units of bread per hour (measured in the number of units that can be baked simultaneously)? (Round to nearest integer)

1.2 turns ( 51,000,000/2,250 = 22.66666667 COGS = 22.66666667 x 1,250 = 28,333,333.33 )

A manufacturing company producing medical devices reported $51 million in sales over the last year. At the end of the same year, the company had $24 million worth of inventory of ready-to-ship devices. Assuming that units in inventory are valued (based on cost of goods sold) at $1,250 per unit and are sold for $2,250 per unit, what is the company's annual inventory turnover?

a. 12 customers per hour and b. 60 percent ( a. The bottleneck is the Wash process, with a capacity of 12 cars per hour. The flow rate is the minimum of the capacity of the bottleneck and the demand. b. Utilization is the flow rate divided by the capacity of the process step. If the demand is 15 cars per hour, the flow rate is 12 cars per hour, because the flow rate is the minimum of the capacity of the bottleneck and the demand. The capacity of the machine that performs the Wax process is 1 / 3 × 60 = 20 cars per hour. The utilization of this machine is 12 / 20 = 60%. )

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 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 minutes 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 wash has a demand of 15 cars per hour, what is the flow rate of the process? (No decimal, round it up) b. If the car wash has a demand of 15 cars per hour, what is the utilization of the machine that performs the Wax process? (No decimal, round it up)