Ops Pre Midterm
Suds and Duds Laundry washed and pressed the following numbers of dress shirts per week: Week|Work Crew|Total Hours|Shirts 1 | Sud and Dud | 24 | 68 2 | Sud and Jud | 46 | 130 3 | Sud, Dud, and Jud | 62 | 152 4 | Sud, Dud, and Jud | 51 | 125 5 | Dud and Jud | 45 | 131 a. Calculate the labor productivity ratio for each week. b. Explain the labor productivity pattern exhibited Ch 1 - Question 2
2. Suds and Duds Laundry a. Labor productivity Week|# Workers|Input(Labor-hrs)|Output(Shirts)|Output/Input Ratio 1 | 2 | 24 | 68 | 2.83 shirts/hour 2 | 2 | 46 | 130 | 2.83 shirts/hour 3 | 3 | 62 | 152 | 2.45 shirts/hour 4 | 3 | 51 | 125 | 2.45 shirts/hour 5 | 2 | 45 | 131 | 2.91 shirts/hour b. Output per person does not vary much whether it is Sud, Dud, or Jud working. Productivity declines when all three are present. Perhaps there isn't enough work to keep three persons occupied, or perhaps there is not enough work space or equipment to accommodate three workers.
CD players are produced on an automated assembly line process. The standard cost of CD players is $150 per unit (labor, $30; materials, $70; and overhead, $50). The sales price is $300 per unit. a. To achieve a 10% multifactor productivity improvement by reducing materials costs only, by what percentage must these costs be reduced? b. To achieve a 10% multifactor productivity improvement by reducing labor costs only, by what percentage must these costs be reduced? c. To achieve a 10% multifactor productivity improvement by reducing overhead costs only, by what percentage must the costs be reduced? Ch 1 - Question 3
3. Compact disc players Value of Output: $300 Value of Input: Labor + Materials + Overhead Productivity=Ouput/Input= $300/$30+$70+$50 = 2 10% productivity improvement -->2.00*1.10=2.200 Given productivity= 2.20, and the value of output=$300, we solve for the cost of inputs: Productivity=Ouput/Input= $300/Input=2.20 Input=$300/2.2=$136.36 or $136 The cost of inputs must decrease by ($150-$136)= $14. a. A $14 reduction in material costs is $14/$70= 20.00% b. A $14 reduction in labor costs is $14/$30= 46.67% c. A $14 reduction in overhead is $14/$50 = 28.00%
Five samples of size 4 were taken from a process. A range chart was developed that had LCLR = 0 and UCLR = 2.50. Similarly, an average chart was developed with the average range from the five samples, with LCL =15.0 and UCL -=24.0. The ranges for each of the five samples were 1.75, 2.42, 2.75, 2.04, and 2.80, respectively. The values of the sample average for each sample were 19.5, 22.3, 17.4, 20.1, and 18.9, respectively. What can you tell management from this analysis?
The process variability is out of control, and we cannot make a statement about the process average
A systematic approach to process analysis includes the step:
define scope
An effective tool for showing steps of a service process with a high level of customer contact is a:
service blueprint
An effective tool for showing steps of a service process when the business process spans multiple department boundaries is a.
swim lane flowchart.
Front offices typically emphasize:
top quality and customization.
A layout is the physical arrangement of human and capital resources used by processes clustered together into operations.
T
A learning curve is a line showing the relationship between processing time and the cumulative quantity of a product or service produced.
T
A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts.
T
A nested process refers to a process within a process.
T
A predetermined data approach to time standards can be completed before actual production begins.
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A process involves transforming inputs into outputs.
T
A process's capacity requirement states the future process capacity needed to meet projected customer demands, and includes an allowance for the desired capacity cushion.
T
A scatter diagram is a graphical technique that shows whether two variables may be related.
T
A service blueprint is a flowchart of a service process that shows which of its steps has high customer contact.
T
An expansionist capacity strategy involves large, infrequent jumps in capacity, where a wait-and-see strategy involves smaller, more frequent jumps.
T
As a functional area of a business, Operations translates materials and services into outputs.
T
At the process level, it is much easier to distinguish whether the process is providing a service or manufacturing a product.
T
Benchmarking by tracking the performance of a process over time is always available.
T
Benchmarking is a continuous, systematic procedure that measures a firm's products, services, and processes against those of industry leaders.
T
Brainstorming sessions can be effectively conducted on the Internet using software that allows one person to see another's ideas and build on them.
T
Capacity can be expressed by output or input measures.
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Customer involvement reflects the ways in which customers become part of the process and the extent of their participation.
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Economies of scope reflect the ability to produce multiple products more cheaply in combination than separately.
T
Elemental standard time data can help managers develop time standards for new work before production begins.
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Every process has a customer.
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External failure costs arise when a defect is discovered after the customer has received the product or service.
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Fixed automation maximizes efficiency and results in the lowest variable cost per unit possible with high output volume.
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Flexibility is a possible competitive priority.
T
Flowcharts, service blueprints, and process charts are effective for documenting and evaluating processes.
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ISO 14000:2004 is a documentation standard that requires participating companies to keep track of their raw-materials use.
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ISO 26000:2010 address human rights as part of the social responsibility standard for public and private organizations.
T
In a line process, there is little variability in the products manufactured, and production and material handling equipment are often specialized.
T
Labor productivity is an index of the output per person or hours worked.
T
Manufacturing processes usually have long response times compared to service processes.
T
Most products today are composites of global materials and services from throughout the world.
T
One advantage of a smaller capacity cushion is that it is less expensive than a larger cushion.
T
One of the principles that total quality management (TQM) stresses is customer satisfaction.
T
One of the principles that total quality management (TQM) stresses is employee involvement.
T
Operations management refers to the direction and control of inputs that transform processes into products and services.
T
Performance measures that are established for a process are known as metrics.
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Process analysis is the documentation and detailed understanding of how work is performed and how it can be redesigned.
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Process capability determines whether a process is capable of producing the product or services that customers demand.
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Process decisions are strategic in nature.
T
Service providers with a line process tend to move customers, materials, or information in a fixed sequence from one operation to the next.
T
The best data analysis tool for recording which gas pump most customers use would be a checklist.
T
The capacity requirement for a year's output is inversely proportional to the total number of hours per year during which the process operates.
T
The general principle that 80% of a company's revenue is generated by 20% of its customers is known as the Pareto concept.
T
The investment a company makes in training employees to perform their duties and redesigning products and processes to improve them would be categorized as prevention costs.
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Value requires an assessment of the quality of a product or service with reference to the cost of obtaining it.
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Volume flexibility involves accelerating or decelerating the rate of production of services or products to handle large fluctuations in demand.
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When a firm makes a long-term capacity decision, selecting the base case alternative means doing nothing and losing orders from any demand that exceeds current capacity, or incurring costs due to excess capacity.
T
Wider limits on a control chart result in lower probability of a type I error.
T
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including benefits. The accounting department provided the following information about the process for the past four weeks: Week 1 | Week 2 | Week 3 | Week 4 Units Produced: 1124 | 1310 | 1092 | 981 Labor ($): 12735 | 14842 | 10603 | 9526 Material ($): 21041 | 24523 | 20442 | 18364 Overhead ($): 8992 | 10480 | 8736 | 7848 a. Use the multifactor productivity ratio to see whether recent process improvements had any effect and, if so, when the effect was noticeable. b. Has labor productivity changed? Use the labor productivity ratio to support your answer. Ch 1 - Question 4
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including benefits. The accounting department provided the following information about the process for the past four weeks: Week 1 | Week 2 | Week 3 | Week 4 Units Produced: 1124| 1310 | 1092 | 981 Total Value: 112,400 | 131,000 | 109,200 | 98,100 Labor ($): 12,735 | 14,842 | 10,603 | 9526 Labor (hrs): 254.7 | 296.8 | 212.1 | 190.5 Material ($): 21,041 | 24,523 | 20,442 | 18,364 Overhead ($): 8,992 | 10,480 | 8,736 | 7,848 Multifactor Productivity: 2.63 | 2.63 | 2.75 | 2.75 Labor Productivity: 4.41 units/hr|4.41units/hr | 5.15 units/hr | 5.15 units/hr a. Use the multifactor productivity ratio to see whether recent process improvements had any effect and, if so, when the effect was noticeable. Value of output 1124 units*$100 =$112,400 Value of input: labor + material + overhead $12,735 + $21,041 + $8,992 = $42,768 Productivity ratio: Labor Productivity=Output/Input Week 1: Productivity=Output/Input=$112,400/$42,768= 2.628 Week 2: Productivity=Output/Input=$131,000/$49,845= 2.628 Week 3: Productivity=Output/Input=$109,200/$39,781= 2.745 Week 4: Productivity=Output/Input=$98,100/$35,738= 2.745 (2.745-2.628)/2.628*100%= 4.45% Improved 4.45% - noticeable in Week 3 b. Has labor productivity changed? Use the labor productivity ratio to support your answer. Labor-hours of input: Labor $50/hour Labor costs Week 1 = $12,735/$50 = 254.7 Week 2 = $14,842/$50 = 296.84 Week 3 = $10,603/$50 = 212.06 Week 4 = $9,526/$50 = 190.52 Productivity ratio: Labor Productivity=Output/Input Week 1 = Labor Productivity= Output/Input=1124/254.7hrs= 4.4130/ hour Week 2 = Labor Productivity = Output/Input=1310/296.84hrs = 4.413/ hour Week 3 = Labor Productivity = Output/Input=1092/212.06hr =5.1495/ hour Week 4 = Labor Productivity = Output/Input=981/190.52hr = 5.1491/ hour (5.1491 - 4.4130)/4.4130*100% = 16.68% Improved 16.68%
The five categories of activities (operation, transportation, inspection, delay, and storage) are used in which of the following methods of process analysis?
process chart
Use trial and error to find a particularly good block plan for Baker Machine. Because of excessive relocation costs, shipping and receiving (department 3) must remain at its current location. Compare wd scores to evaluate your new layout, again assuming rectilinear distance. Ch 3, Question 4
Baker Machine Block Plan A good plan would locate the following department pairs close together: 1-2, 3-5, 1-5, 3-6, 1-6. The following layout satisfies these requirements and leaves department 3 unmoved. It also provides one-unit distances for department pairs 2-4 and 4-6. |3|6|4| |5|1|2| The weighted-distance (wd) score is: [8(l) + 3(2) + 9(l) + 5(l) + 3(l) + 8(l) + 9(l) + 3(l) + 3(2)] = 57, a 43.6% reduction over Problem 3's solution.
Baker Machine Company is a job shop that specializes in precision parts for firms in the aerospace industry. |3|4|2| |1|5|6| shows the current block plan for the key manufacturing centers of the 75,000 square foot facility. Refer to the following closeness matrix and use rectilinear distance (the current distance from inspection to shipping and receiving is three units) to calculate the change in the weighted distance, wd, score if Baker exchanges the locations of the tool crib and inspection. Closeness Matrix: Department | Trips between Departments: 1|2|3|4|5|6| 1. Burr and grind| ---|8|3|__|9|5| 2. Numericaly controlled (NC) equipment|---|__|3|__|_| 3. Shipping and receiving|---|__|8|9| 4. Lathes and drills|---|__|3| 5. Tool crib|---|3| 6. Inspection|---| Ch 3, Question 3
Baker Machine Company DepartmentPair|ClosenessRating|CurrentPlan|Proposed Plan __ | (wij) | Distance (dij), wijdij | Distance (dij), wijdij 1-2 | 8 | 3, 24 | 3, 24 1-3 | 3 | 1, 3 | 1, 3 1-5 | 9 | 1, 9 | 2, 18 1-6 | 5 | 2, 10 | 1, 5 2-4 | 3 | 1, 3 | 1, 3 3-5 | 8 | 2, 16 | 3, 24 3-6 | 9 | 3, 27 | 2, 18 4-6 | 3 | 2, 6 | 1, 3 5-6 | 3 | 1, 3 | 1, 3 __ | __| wd = 101 | wd = 101 There is no change in the weighted-distance score. These layouts can be assessed using the Layout solver of OM Explorer, as shown following for the current plan. Department Pair | Closeness Factor | Distance | Score 1, 5 | 9 | 1 | 9 3, 6 | 9 | 3 | 27 1, 2 | 8 | 3 | 24 3, 5 | 8 | 2 | 16 1, 6 | 5 | 2 | 10 1, 3 | 3 | 1 | 3 2, 4 | 3 | 1 | 3 4, 6| 3 | 2 | 6 5, 6 |3 | 1 | 3 TOTAL 101 Box: |3|4|2| |1|5|6|
Contact with the customer is usually higher in a manufacturing process than in a service process.
F
Continuous flow processes have a high level of customization.
F
Convicting an innocent defendant is an example of a type II error.
F
Diseconomies of scale is a concept that states that the average unit cost of a service or good can be reduced by increasing its output rate.
F
Economies of scale drive down cost even though the cost of purchased materials can be expected to increase.
F
Environmental scanning refers to the unique resources and strengths that an organization's management considers when formulating a strategy.
F
High customer involvement increases service provider productivity and makes quality measurement easier.
F
In a swim lane flowchart, the line of visibility is used to separate the process steps in view of the customer from those hidden from view of the customer.
F
Input measures of capacity are inherently more accurate than output measures of capacity.
F
On a control chart, a type I error occurs when the employee concludes that the process is in control when it is actually out of statistical control.
F
Output measures are used for estimating capacity requirements when product variety and process divergence are high.
F
Productivity is measured as input divided by output.
F
Resource flexibility determines whether resources are organized around products or processes.
F
Services that process possessions or information are more likely to be found in a front office instead of a back office.
F
Statistical process control (SPC) is the application of statistical techniques to determine whether a quantity of material should be accepted or rejected.
F
The advantage of variable measurements is that they can be quickly counted compared to attribute measurements.
F
The four core processes that merit thorough analysis are supplier relationship, new service/product development, order fulfillment, and service/product recovery.
F
The head of a fishbone diagram represents the cause of the problem being analyzed.
F
The increased global presence of many firms has lessened the burden to behave ethically.
F
The supplier relationship process selects the suppliers of services, materials and information, while the order fulfillment process facilitates the timely and efficient flow of these items into the firm.
F
A block plan allocates space and indicates the placement of each department within the framework of a new or existing facility.
T
A firm's core competencies should determine its core processes.
T
A great job of flowcharting and benchmarking a process is of only academic interest if the proposed changes are not implemented.
T
Dr. Gulakowicz is an orthodontist. She estimates that adding two new chairs will increase fixed costs by $150,000, including the annual equivalent cost of the capital investment and the salary of one more technician. Each new patient is expected to bring in $3000 per year in additional revenue, with variable costs estimated at $1000 per patient. The two new chairs will allow Dr. G to expand her practice by as many as 200 patients annually. How many patients would have to be added for the new process to break even? Ch 3, Question 1
Dr. Gulakowicz Fixed cost, F = $150,000 Revenue per patient, p = $3,000 Variable cost per unit, c = $1000 Break-even volume, Q=F/(p-c)=$150,000/($3000-$1000) = 75 patients
The central line on a p-chart is 0.50 with a UCL of 0.65 and an LCL of 0.35. The results of the next six samples are 0.60, 0.37, 0.45, 0.48, 0.45, and 0.42. What should you do?
Explore assignable causes because there is a run.
A capacity cushion is the amount of inventory that a firm maintains to handle sudden increases in demand or temporary loss of production capacity.
F
A fishbone diagram identifies which category is most frequently observed out of all the categories for which you have data.
F
A histogram is a summarization of data measured on a yes-or-no basis.
F
A wait-and-see capacity strategy minimizes the chances of lost sales due to insufficient capacity.
F
An example of an internal failure cost would be warranty cost.
F
At the level of the firm, service providers offer just services and manufacturers offer just products.
F
Because Six Sigma involves the elimination of defects, it can only be applied in manufacturing processes.
F
Capacity decisions should be made separately from strategic decisions.
F
Capital intensity is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions.
F
Which one of the following statements about flexible automation is best?
It is an automatic process that can be reprogrammed to handle various products.
A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. Which statement concerning this process is TRUE?
None of these is true.
The UCL and LCL for an chart are 25 and 15 respectively. The central line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 24, and 16. What should you do?
Nothing; the process is in control.
A group of people, who are knowledgeable about the process and its disconnects, meets to propose ideas for change in a rapid-fire manner. Such a session is called a brainstorming session.
T
A larger capacity cushion may be required due to variation in demand, changing product mix, or supply uncertainty.
T
Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an chart with a sample size of 10- and 3- sigma limits. The LCL for the chart would be:
greater than 2.50
Which of the following is sometimes called mass production?
line process and make-to-stock strategy
A manufacturer that produces standard products in large volumes is likely to be using a(n):
make-to-stock strategy.
