Exam Section 2 Operations Management
A firm has redesigned its production process so that it now takes 9 hours for a unit to be made. Using the old process, it took 13 hours to make a unit. If the process makes one unit(s) each hour on average and each unit is worth $2,000, what is the reduction in work-in-process value?
$8,000
How long would customers have to wait in line, on average, at the ice cream shop discussed in question 7? (An ice cream stand has a single window and one employee to serve customers. During their busy season, 30 customers arrive each hour, on average. It takes 1.5 minutes, on average, to serve a customer. What is the utilization of the employee?}
.075 hours, or 4.5 minutes
What is the average utilization of the servers in a system that has three servers? On average, 15 customers arrive every 15 minutes. It takes a server exactly three minutes to wait on each customer.
100%
There are three teller windows in the bank described in the prior question. On average, 60 customers per hour arrive at the bank. What will be the average number of customers in line at the bank? (A bank teller takes 2.4 minutes, on average, to serve a customer. What would be the hourly service rate used in the queuing formulas?)
2.5888
If a production process makes a unit every two hours and it takes 42 hours for the unit to go through the entire process, what is the expected work-in-process equal to?
21 units = 42/2
A bank teller takes 2.4 minutes, on average, to serve a customer. What would be the hourly service rate used in the queuing formulas?
25 customers per hour
A firm is using an assembly line and needs to produce 500 units during an eight-hour day. What is the required cycle time in seconds?
57.6 seconds = (8 × 60 × 60)/500
A finished goods inventory, on average, contains 10,000 units. Demand averages 1,500 units per week. Given that the process runs 50 weeks a year, what is the expected inventory turn for the inventory? Assume that each item held in inventory is valued at about the same amount.
7.5 turns = (1,500 × 50)/10,000
Firms that desire high service levels where customers have short wait times should target server utilization levels at no more than this percentage.
70-80%
An ice cream stand has a single window and one employee to serve customers. During their busy season, 30 customers arrive each hour, on average. It takes 1.5 minutes, on average, to serve a customer. What is the utilization of the employee?
75%
What is the efficiency of an assembly line that has 25 workers and a cycle time of 45 seconds? Each unit produced on the line has 16 minutes of work that needs to be completed based on a time study completed by engineers at the factory.
85% = (16 × 60)/(25 × 45)
This is a part of an organization that takes inputs and transforms them into outputs.
A process
If you wanted to produce 20 percent of one product (A), 50 percent of another (B), and 30 percent of a third product (C) in a cyclic fashion, what schedule would you suggest?
AABBBBBCCC (then repeat)
Useful for checking quality when we periodically purchase large quantities of an item and it would be very costly to check each unit individually.
Acceptance sampling
A layout where the work to make an item is arranged in progressive steps and work is moved between the steps at fixed intervals of time.
Assembly line
Variation that can be clearly identified and possibly managed.
Assignable variation
Quality characteristics that are classified as either conforming or not conforming to specification.
Attributes
* This is when one company compares itself to another relative to operations performance.
Benchmarking
This is when an activity stops because there is no place to put the work that was just completed.
Blocking
This is a step in a process that is the slowest compared to the other steps. This step limits the capacity of the process.
Bottleneck
What are the four strategies for managing customer-induced variability?
Classic accommodation, low-cost accommodation, classic reduction, uncompromised reduction
Variation inherent in the process itself.
Common variation
Relates to how well a product or service meets design specifications.
Conformance quality
Service systems can generally be categorized according to this characteristic that relates to the customer.
Customer contact
A point where inventory is positioned to allow the production process to operate independently of the customer order delivery process.
Customer order decoupling point
The standard quality improvement methodology developed by General Electric.
DMAIC cycle
If a process has a capability index of 1 and is running normally (centered on the mean), what percentage of the units would one expect to be defective?
Design limits are at ±3σ or 2.7 defects per thousand
This refers to the inherent value of the product in the marketplace and is a strategic decision for the firm.
Design quality
A firm that designs and builds products from scratch according to customer specifications would have this type of production environment.
Engineer-to-order
Random service times can be modeled by this.
Exponential distribution
The queuing models assume that customers are served in what order?
First come, first served
Relates to how the customer views the ability of the product to meet his or her objectives.
Fitness for use
This is the time it takes a unit to travel through the process from beginning to end. It includes time waiting in queues and buffers.
Flow time
In most cases, if a firm increases its service capacity by 10 percent, it would expect waiting times to be reduced by what percentage? Assume customer arrivals and service times are random.
Greater than 10%
The series of international quality standards.
ISO 9000
Having your luggage arrive on time when you land at an airport is what type of service in the service package?
Implicit service
What is the mathematical relationship between time and units in a process?
Inventory = Throughput rate × Flow time
This is when a job is increased vertically or horizontally
Job enrichment and enlargement
This is the key feature that distinguishes a service blueprint from a normal flowchart.
Line of visibility
The relationship between time and units in a process is called this.
Little's law
A firm that makes predesigned products directly to fill customer orders has this type of production environment.
Make-to-order
This is a production layout where similar products are made. Typically, it is scheduled on an as-needed basis in response to current customer demand.
Manufacturing cell
This involves scheduling several different models of a product to be produced over a given day or week on the same line in a cyclical fashion.
Mixed-model line balancing
A measure used to evaluate a workcenter layout.
Number of annual movements multiplied by the distance of each movement, and then multiplied by the cost
A chart that depicts the manufacturer's and consumer's risks associated with a sampling plan.
Operating characteristic curve
This refers to the fixed timing of the movement of items through a process.
Pacing
These procedures are done to make a system mistake-proof.
Poka-yokes
What is the major assumption about how a process is operating for Little's law to be valid?
Process is operating in steady state
The relationship between how different layout structures are best suited depending on volume and product variety characteristics is depicted on this type of graph.
Product-process matrix
The front end and the back end of a service encounter are referred to as what?
Service bookends
A service triangle consists of these four features.
Service strategy, support systems, employees, customer
This framework relates to the customer service system encounter.
Service-system design matrix
A term used to refer to the physical surroundings in which a service takes place and how these surroundings affect customers and employees.
Servicescape
What is the double-edged sword of job design?
Specialization
This is when one or more activities stop because of a lack of work.
Starving
An alternative to viewing an item as simply good or bad due to it falling in or out of the tolerance range.
Taguchi loss function
What are the four basic work measurement techniques?
Time study, work sampling, predetermined motion-time data systems, elemental data
A Six Sigma process that is running at the center of its control limits would expect this defect rate.
Two parts per billion units
This is a way to shorten the cycle time for an assembly line that has a task time that is longer than the desired cycle time. Assume that it is not possible to speed up the task, split the task, use overtime, or redesign the task.
Use parallel workstations
This is the ratio of the time that a resource is activated relative to the time it is available for use.
Utilization
A quality characteristic that is actually measured, such as the weight of an item.
Variable
What is the enemy of good quality?
Variation
Consider two identical queuing systems except for the service time distribution. In the first system, the service time is random and Poisson distributed. The service time is constant in the second system. How would the waiting time differ in the two systems?
Waiting time in the first system is two times the second.
Three terms commonly used to refer to a layout where similar equipment or functions are grouped together.
Workcenter, job-shop, or functional
Resistors for electronic circuits are manufactured on a high-speed automated machine. The machine is set up to produce a large run of resistors of 1,000 ohms each. Use Exhibit 10.13. To set up the machine and to create a control chart to be used throughout the run, 15 samples were taken with four resistors in each sample. The complete list of samples and their measured values are as follows: Use three-sigma control limits. SAMPLE READINGS NUMBER (IN OHMS) 1 976 998 985 979 2 1018. 993 974 1025 3 1027 1021 990. 1019 4 1015 1028 1027 1009 5 1002 1016 992 972 6 974 981 1009 1006 7 976 1016 1027 1027 8 999 1000 1015 992 9 1024 997 986 979 10 1009 996 987 1028 11 994 974 994 1010 12 977 990 1024 990 13 993 1000 1006 1018 14 1012 1015 1015 1004 15 972 977 1018 1020 a) Calculate the mean and range for the above samples. (Round "Mean" to 2 decimal places and "Range" to the nearest whole number.) SAMPLE # MEAN RANGE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 b) Determine x-double bar and r- bar c) Determine the UCL and LCL for an x-bar chart d) Determine the UCL and LCL for R-chart. e) What comments can you make about the process?
a) SAMPLE # MEAN RANGE 1 984.50 22 2 1,002.50 51 3 1,014.25 37 4 1,019.75 19 5 995.50 44 6 992.50 35 7 1,011.50 51 8 1,001.50 23 9 996.50 45 10 1,005.00 41 11 993.00 36 12 995.25 47 13 1,004.25 25 14 1,011.50 11 15 996.75 48 b) X- 1,001.617 R- 35.667 c) UCL- 1,027.653 LCL- 975.580 d) UCL- 81.320 LCL- 0 e) The process is in statistical control.
Rockness recycling refurbishes rundown business students. The process uses a moving belt, which carries each student through the five steps of the process in sequence. The five steps are as follows: STEP DESCRIPTION TIME REQUIRED PER STUDENT 1. Unpack and place on belt 1.2minutes 2 Strip off bad habits 1.0minutes 3 Scrub and clean mind 1.5minutes 4 Insert modern methods 0.8minutes 5 Polish and pack 1.0minutes One faculty member is assigned to each of these steps. Faculty members work a 40-hour week and rotate jobs each week. Mr. Rockness has been working on a contract from General Eclectic, which requires the delivery of 2,000 refurbished students per week. A representative of the human resources department has just called complaining that the company hasn't been receiving the agreed-upon number of students. A check of finished goods inventory by Mr. Rockness reveals that there is no stock left. a)Calculate the maximum output for each step. STEP MAXIMUM OUTPUT (STUDENTS PER WEEK) 1 2 3 4 5 b) Which step is the bottleneck?
a) 1 2 3 4 5 b) Step 3
Assume three nurses are available. Each takes an average of 5.00 minutes to prepare the patients' serum and administer the injection. What is the average total time of a patient in the system? (Round your intermediate calculations to 3 decimal places and final answer to 2 decimal places. Do not interpolate your λ/μ ratio when using Exhibit 10.9. Use the closest λ/μ ratio appearing in the table.) a) What can you say (quantitatively) regarding the process capability? Assume that the process is centered with respect to specifications. (Round your answer to 4 decimal places.) b) Suppose the process average shifts to 96. Calculate the new process capability. (Round your answer to 4 decimal places.) c) What is the probability of defective output after the process shift? (Use Excel's NORM.S.DIST() function to find the correct probability. Round "z" values to 2 decimal places. Round probabilities to 4 decimal places (0.####).)
a) 1.3333 b) .4444 c) .0918
A cafeteria serving line has a coffee urn from which customers serve themselves. Arrivals at the urn follow a Poisson distribution at the rate of 3.0 per minute. In serving themselves, customers take about 14 seconds, exponentially distributed. a) How many customers would you expect to see on the average at the coffee urn? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b)How long would you expect it to take to get a cup of coffee? (Round your answer to 2 decimal places.) c) What percentage of time is the urn being used? (Do not round intermediate calculations. Round your answer to 1 decimal place.) d) What percentage of time is the urn being used? (Do not round intermediate calculations. Round your answer to 1 decimal place.) e) If the cafeteria installs an automatic vendor that dispenses a cup of coffee at a constant time of 14 seconds, how many customers would you expect to see at the coffee urn (waiting and/or pouring coffee)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) f) If the cafeteria installs an automatic vendor that dispenses a cup of coffee at a constant time of 14 seconds, how long would you expect it to take (in minutes) to get a cup of coffee, including waiting time? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a) 2.32 b) .77 minutes c) 70.0 % d) 34.0% e) 1.52 f) .51 minutes
A book publisher has fixed costs of $400,000 and variable costs per book of $10.00. The book sells for $25.00 per copy. a) How many books must be sold to break even? (Roundup your answer to the next whole number.) b)If the fixed cost increased, would the new break-even point be higher, lower, remain the same, or is there not enough info? c)If the variable cost per unit decreased, would the new break-even point be higher, lower, remain the same, or is there not enough info?
a) 26,667 b) Higher c) Lower
Students arrive at the Administrative Services Office at an average of one every 12 minutes, and their requests take on average 8 minutes to be processed. The service counter is staffed by only one clerk, Judy Gumshoes, who works eight hours per day. Assume Poisson arrivals and exponential service times. a)What percentage of time is Judy idle? (Round your answer to 1 decimal place.) b) How much time, on average, does a student spend waiting in line? (Do not round intermediate calculations. Round your answer to 1 decimal place.) c) How long is the (waiting) line on average? (Round your answer to 2 decimal places.) d) d. What is the probability that an arriving student (just before entering the Administrative Services Office) will find at least one other student waiting in line? (Do not round intermediate calculations. Round your answer to 4 decimal places.)
a) 33.4% b) 16.0 min c) 1.33 customers d).4445
L. Winston Martin (an allergist) has an excellent system for handling his regular patients who come in just for allergy injections. Patients arrive for injection and fill out a name slip, which is then placed in an open slot that passes into another room staffed by one or two nurses. The specific injections for a patient are prepared, and the patient is called through a speaker system into the room to receive the injection. At certain times during the day, patient load drops, and only one nurse is needed to administer the injections. Use Exhibit 10.9. Let's focus on the simpler case of the two—namely when there is one nurse. Also, assume that patients arrive in a Poisson fashion and the service rate of the nurse is exponentially distributed. During this slower period, patients arrive with an inter-arrival time of approximately 5 minutes. It takes the nurse an average of 4.00 minutes to prepare the patients' serum and administer the injection. a) What is the average number of patients you would expect to see in Dr. Martin's facilities? (Round your intermediate calculations to 3 decimal places and final answer to 2 decimal places.) b) How long would it take for a patient to arrive, get an injection, and leave? (Round your answer to 2 decimal places.) c) What is the probability that there will be three or more patients on the premises? (Round your intermediate calculations to 3 decimal places and final answer to 1 decimal place.) d) What is the utilization of the nurse? (Round your intermediate calculations to 3 decimal places and final answer to 1 decimal place.) e) Assume three nurses are available. Each takes an average of 5.00 minutes to prepare the patients' serum and administer the injection. What is the average total time of a patient in the system? (Round your intermediate calculations to 3 decimal places and final answer to 2 decimal places. Do not interpolate your λ/μ ratio when using Exhibit 10.9. Use the closest λ/μ ratio appearing in the table.)
a) 4.00 b) 20.00 minutes c) 51.2% d) 80.0% e) 4.10 minutes
The Goodparts Company produces a component that is subsequently used in the aerospace industry. The component consists of three parts (A, B, and C) that are purchased from outside and cost 35, 30, and 10 cents per piece, respectively. Parts A and B are assembled first on assembly line 1, which produces 155 components per hour. Part C undergoes a drilling operation before being finally assembled with the output from assembly line 1. There are in total six drilling machines, but at present only three of them are operational. Each drilling machine drills part C at a rate of 50 parts per hour. In the final assembly, the output from assembly line 1 is assembled with the drilled part C. The final assembly line produces at a rate of 175 components per hour. At present, components are produced eight hours a day and five days a week. Management believes that if need arises, it can add a second shift of eight hours for the assembly lines. The cost of assembly labor is 25 cents per part for each assembly line; the cost of drilling labor is 10 cents per part. For drilling, the cost of electricity is 1 cent per part. The total overhead cost has been calculated as $1,400 per week. The depreciation cost for equipment has been calculated as $30 per week. a) Determine the process capacity (number of components produced per week) of the entire process. b-1) Suppose a second shift of eight hours is run for assembly line 1 and the same is done for the final assembly line. In addition, four of the six drilling machines are made operational. The drilling machines, however, operate for just eight hours a day. What is the new process capacity (number of components produced per week)? b-2) Which of the three operations limits the capacity? (Drilling machines, Final assembly line, Assembly line 1) c-1) Management decides to run a second shift of eight hours for assembly line 1 plus a second shift of only four hours for the final assembly line. Five of the six drilling machines operate for eight hours a day. What is the new capacity? c-2) Which of the three operations limits the capacity? (Drilling machines, Final assembly line, Assembly line 1) d-1) Determine the cost per unit output for part b. (Round your answer to 2 decimal places.) d-2) Determine the cost per unit output for part c. (Round your answer to 2 decimal places.) e) The product is sold at $6 per unit. Assume that the cost of a drilling machine (fixed cost) is $34,000 and the company produces 7,400 units per week. Assume that four drilling machines are used for production. If the company had an option to buy the same part at $5 per unit, what would be the break-even number of units? (In your calculations, use the two-digit cost per unit from page d-1. Round your answer to the nearest whole number.)
a) 6,000 b-1) 8000 b-2) Drilling machines c-1) 10,000 c-2) Drill Machines d-1) $1.54 d-2) $1.50 e) 39,306
At the Children's Hospital in Seattle there are, on average, 60 births per week. Mother and child stay, on average, one day before they leave the hospital. At the Swedish Hospital (also in Seattle), the average number of births per week is 210. Mothers and children stay in the hospital one day on average. a) How many new mothers, on average, are staying at the Children's Hospital? (Round your intermediate calculations to 4 decimal places and final answer to 1 decimal place.) b) How many new mothers, on average, are staying at the Swedish Hospital? (Round your intermediate calculations to 4 decimal places and final answer to 1 decimal place.) c) The directors of the two hospitals are negotiating unifying the maternity wards of the two hospitals. They believe that by doing so they will be able to reduce the number of new mothers staying in the unified ward. How many new mothers would be staying, on average, in the unified ward? (Assume that the average number of births and the length of stay of the new mothers will not change.) (Round your intermediate calculations to 4 decimal places and final answer to 1 decimal place.)
a) 8.6 b) 30.0 c) 38.6
Assume a fixed cost of $1,200, a variable cost of $7.00, and a selling price of $8.50. a) What is the break-even point? (Roundup your answer to the next whole number.) b) How many units must be sold to make a profit of $500.00? (Roundup your answer to the next whole number.) c) How many units must be sold to average $0.25 profit per unit? (Roundup your answer to the next whole number.)
a) 800 b) 1,134 c) 960
An enterprising student has set up an internship clearinghouse for business students. Each student who uses the service fills out a form and lists up to 10 companies that he or she would like to have contacted. The clearinghouse has a choice of two methods to use for processing the forms. The traditional method requires about 19 minutes to review the form and arrange the information in the proper order for processing. Once this setup is done, it takes only four minutes per company requested to complete the processing. The other alternative uses an optical scan/retrieve system, which takes only five minutes to prepare but requires five minutes per company for completing the processing. a) Calculate the process time under each method? b) If it costs about the same amount per minute for processing with either of the two methods, which method is better?
a) Traditional Method- 59 min Scan/Retrieve System- 55 min b) Scan/ Retrieve System
A shirt manufacturer buys cloth by the 100 yard roll from a supplier. For setting up a control chart to manage the irregularities (e.g., loose threads and tears) the following data was collected from a sample provided by the supplier. SAMPLE 1. 2. 3. 4. 5. 6. 7. 8 9 10 IRREGULARITIES 1. 6. 5. 3. 4. 5. 6. 5 4 3 a) Determine the c⎯bar , Sp, UCL and LCL for a c -chart with z = 2. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places.) b) Suppose the next five rolls from the supplier had two, two, six, two, and six irregularities. Is the supplier process under control?
a) c- 4.20 Sp- 2.05 UCL- 8.30 LCL- .10 b) Yes
Ten samples of 15 parts each were taken from an ongoing process to establish a p-chart for control. The samples and the number of defectives in each are shown in the following table: SAMPLE. n. NUMBER OF DEFECTIVE ITEMS IN THE SAMPLE 1 15 1 2 15 0 3 15 0 4 15 0 5 15 2 6 15 0 7 15 3 8 15 1 9 15 0 10 15 3 a) Determine the p- bar, Sp, UCL and LCL for a p-chart of 95 percent confidence (1.96 standard deviations). (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 3 decimal places.) b) What comments can you make about the process?
a) p- .067 Sp- .064 UCL-.193 LCL- (-) 0.060 -> (0) b) Process is out of statistical control
A quality chart suitable for when a number of blemishes are expected on each unit, such as a spool of yarn.
c-chart
A quality chart suitable for when an item is either good or bad.
p-chart
