Questions which are representative of the types that will be used on the midterm and final exam. Note that these questions, in many cases, correspond to chapters that we have not covered in the course. The purpose of this is to simply give you an idea of the types of questions to expect.

1. (Supplement Chapter 4) A bank manager has looked at the efficiency of the bank teller operation on Saturdays and has concluded that the bank is wasting labor. Currently, the bank services an average 20 people per hour (for all hours on Saturday) but has the capacity to serve 60 people per hour with its two tellers. The bank manager is arguing that only one teller is needed and that the expected wait would only increase by 11% in going from two to one teller.

a) (5 points) Using the appropriate waiting line model, calculate the average time a customer spends in the bank when two tellers are working.

b) (5 points) Using the appropriate waiting line model, calculate the average time a customer spends in the bank when one teller is working.

c) (5 points) What is the single MAJOR assumption which may make this analysis totally invalid?

2. (Chapter 15) The Big B bike and Trike Shop produces two basic bikes, called A and B. Each week, Paul, the owner, plans to assemble 30 A bikes and 5 B bikes. Paul is in the enviable position that all bikes assembled are already sold and are immediately shipped to eager customers. Given this information and the product structure diagrams for A and B presented below, fill out the MRP records (inventory status files) for component parts G and Y for the next seven weeks.

a. (5 points)

Q = lot for lot; lead time = 1 week; safety stock = 0.

b. (5 points)

Q = lot for lot; lead time = 2 weeks; safety stock = 0.

3. (Chapter 14) Given that the demand for an item is 20,000 units per year, the carrying cost is 30 percent of the unit cost of the item per year, and the ordering cost is $100/order.

a. (10 points) What is the economic order quantity if the company pays $2.00 per unit on orders less than 3,000 units, and $1.90 per unit on orders greater than or equal to 3,000 units? (Your answer must be supported with the appropriate calculations.)

4. (Chapter 14) The inventory control manager is trying to figure out whether to use a reorder point (ROP) system or an equal order period system (EOP) to manage cleaning fluid used in the shop. Data has shown the demand for the fluid to be normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons per day. The lead time for the item is 4 days. To take advantage of a quantity discount, the manager purchases approximately 200 gallons on each order. The manager wants to be 90% sure of not running out of stock each time a new order is placed. (A Standard Normal Curve table is the last page of the exam.)

a. (5 points) How much safety stock is needed if a reorder point (fixed-quantity) system is used?

b. (5 points) How much safety stock is needed if a fixed period system is used?

5. (Chapter 10) A producer of electronic equipment needs to add a component subassembly operation that can produce 80 units during a regular 8-hr shift. The manager will organize this in an assembly line. The workstations have already been designed as shown in the following table. The product must flow through the workstations in a strict A-B-C sequence. The cycle time for each workstation is given in the table below:

a. (5 points) How many work stations (in parallel) will be required for each activity? Assume 480 minutes are available for production each shift.

b. (5 points) Assuming that the workers at each station cannot be used for other activities in the plant, what is the expected percentage of idle time for this assembly line when operated at a production rate of 80 units per day?

6. (Chapter 12) Given the data shown in the accompanying table for a project:

a. (5 points) Draw the network and find the critical path.

b. (5 points) Each day the project can be shortened is worth $5,000. Should the firm pay $12,500 to reduce activity E to 2 days? Why?

7. (Chapter 13) The Great Michigan Furniture Company maintains a constant work force and will not use overtime or subcontracting to meet demand. Also, they do not want to back order any customer demand. They have the capacity to produce 3,000 tables per quarter. The annual demand is 12,000 units and is distributed seasonally in accordance with quarterly demand of Q₁ (January through March) = 2,400, Q₂ (April through June) = 4,200, Q₃ (July through September) = 3,000, and Q₄ (October through December) = 2,400.

(a) (5 points) How many tables must be in inventory at the beginning of the first quarter to prevent back orders?

(b) (5 points) How many tables must be in inventory at the end of each quarter?

8. (Chapter 8) Recently, a store renting video tapes in Bloomington went out of business. The store sold all of the video tapes in the store at a sale on January 1, 1993. Prior to the sale, the store advertised that the sale would start promptly at 11:00 a.m. with no one allowed in the store prior to that time.

At 11:00 a.m. on January 1st, 100 people were standing in line waiting for the doors to open! A doorman allowed only 50 people to be in the store at any one time. It took 5 minutes for the first customers to reach the two cash registers which were in operation during the sale. A continuous line formed behind the cash registers all day. The doorman collected some data and found that it took approximately 2 minutes to service each customer at a cash register. An average of 50 people joined the line each hour.

a) (10 points) How many people would you expect to be in line OUTSIDE the store at 3:00 p.m.?

9. (Chapter 10) Define the following in 15 words or less.

a. (5 points) Flow Time:

b. (5 points) Cycle Time:

c. (5 points) Lot Splitting:

The following questions are from outside readings.

1. (5 pts) In a plant using "frugal manufacturing" concepts, rank order from highest to lowest the importance of the following technologies.

a) Conveyors and material movement.

b) Large capacity, high volume machines and production lines.

c) Fail-safe mechanisms that catch defective work.

d) Statistical quality control systems.

Comment on the importance of each technology in the "frugal manufacturing" environment.

2. (5 pts) Uday Karmarkar in his "Getting Control of Just-in-Time" describes the difference between pull and push systems. What is the essential difference between these?

3. (5 pts) Describe four attributes of the "ideal" JIT environment.

4. (5 pts) What are the "theoretical" characteristics of a Group Technology cell?

To obtain credit for the following problems, all work must be shown.

5. (Chapter 12) (15 pts) PERT Problem

Given the data shown in the following table for a PERT network:

(a) Draw the network and find the critical path.

(b) What are the parameters of the ending time distribution (ie. the mean and variance)?

(c) Which activity has the most precise time estimate?

(d) Determine the earliest start times and latest finish times for all activities in the project.

(c) Each day the project can be shortened is worth $5,000. Should the firm pay $12,500 to reduce activity E to days?

6. (Chapter 3) (15 pts) American Printed Circuit Company (APC) was a small company which had been growing rapidly and successfully. Its printed circuits were custom-built in lots of 1 to 100 for about 20 principal customers and were used for engineering tests and development work. APC's process consisted of about 15 operations using simple equipment, such as hand-dipping tanks, drill presses, and manual touch-ups. There was considerable variation in the sequence and processes for different products. Delivery was a major element for success and price was not a key factor.

APC's president accepted an order from a large computer company to manufacture 20,000 printed circuit boards - a new product for the company - at a price equivalent to about one third of its average mix of products. APC made the decision to produce these circuit boards in order to build volume, broaden the company's range of markets, and diversify the line. The new product was produced in the existing plant.

The result was disastrous. The old products were no longer delivered on time. The costs of the new printed circuit boards were substantially in excess of the bid price. The quality on all items suffered as the organization frantically attempted to meet deliveries. Old customers grew bitter over missed deliveries, and the new customer returned one third of the merchandise for below-spec quality. Such heavy losses ensued that the APC company had to recapitalize. Subsequently, the ownership of the company changed hands.

a) What went wrong? Why was the new order so disruptive to the operations of the company?

b) Suggest changes that should be made so that these large orders can be accommodated in the future.

7. (Chapter 3) (10 pts) The Bloomington Job Shop is contemplating converting to a Group Technology (GT) layout. The company now has two turning machines, two milling machines, two polishing machines, three drill presses, and three grinding machines. Each machine of a particular type are identical. The following table shows the machines required to produce each of the 20 parts the company produces. Design three GT cells to produce these parts. Your answer should state which machines are assigned to each cell and which parts should be made in each cell. Assume that the machines assigned to each cell will have sufficient capacity to accommodate demand.

True/False and Multiple Choice Questions (2 pts each)

1. Capacity constrained resources are in little danger of becoming bottlenecks. (True/False)

2. Total quality control is achieved by increasing inspection. (True/False)

3. In critical path scheduling, there can be only one critical path. (True/False)

4. In just­in­time, the ideal lot size is one. (True/False)

5. To a Japanese manager, "Inventory is the root of all evil". (True/False)

6. The concept of uniform plant loading is designed to minimize the effects of schedule variation. (True/False)

7. Originally, the major difference between CPM and PERT was:

a. PERT utilizes statistics and CPM does not.

b. CPM is more costly and not as effective as PERT.

c. PERT is effective only in the aerospace industry.

d. There is no basic difference.

8. Some excess capacity in a JIT system:

a. means a poorly designed system

b. is not considered to be a serious problem

c. can always be eliminated

d. means that high­cost machines are idle

e. is not common

9. Bottom­round management:

a. reaches quick decisions

b. relies on consensus

c. is most effective in large organizations

d. is similar in style to U.S. management

10. Japanese union/management relations are based on all of the following except:

a. the existence of company­wide unions

b. a cooperative arrangement

c. the existence of company bonus plans

d. clearly defined and limited work rules

e. worker flexibility

11. According to the Chase and Aquilano, two reasons that capacity and location problems are interrelated are (choose the best answer):

a. increased networking and information needs.

b. the need for producers to locate near customers and the growth of

the network firm.

c. legal requirements and safety requirements.

d. logistics and information needs.

12. According to Goldratt, which of the following would be the best operational goal?

a. Minimize throughput, inventory and operating expenses.

b. Maximize throughput, inventory and operating expenses.

c. Minimize throughput, maximize inventory and minimize operating

costs.

d. Maximize throughput, minimize inventory and minimize operating

costs.

13. There are four work stations sequenced in alphabetical order: A­­> B­­> C­­> D. According to JIT principles, who should inspect the work performed at station B?

a. Workers at A

b. Workers at B

c. Workers at C

d. Workers at D

14. The manager of the Big and Qwik Copier Store is interested in JIT. He needs to increase copier capacity by 50 copies per minute and is considering the purchase of a new copier. Copier X produces 50 copies per minute and copier Z produces 25 copies per minute. Cost and space utilization are not considerations. As his JIT consultant, what should you recommend.

a. Buy one X.

b. Buy 2 Z's.

c. Buy one Z.

d. It doesn't matter.

15. The hockey­stick phenomenon is most closely related to:

a. the word­of­mouth syndrome.

b. the first­of­the­month syndrome.

c. the end­of­the­month syndrome.

d. the hit­the­goal syndrome.

16. Which of the following is a characteristic of critical path scheduling techniques?

a. The jobs or tasks are dependent on each other.

b. Interruptions may be permitted if they are documented.

c. The jobs or tasks must be well defined, and their completion marks

the end of the project.

d. The jobs or tasks do not necessarily have to be in a predetermined

sequence.

17. The hockey stick phenomenon occurs due to:

a. Early month use of global measurement and late month use of local

measures.

b. Early month use of local measurement and late month use of global

measures.

c. Early month performance vs. late month efficiency.

d. Poor ROI and cash flow.

18. The initial pull in a Kanban system is exerted by the:

a. first fabrication station

b. production foreman

c. final assembly schedule

d. first assembly station

e. scheduled due date

19. A layout which groups dissimilar machines into work centers is referred to as:

a. Process layout

b. Product layout

c. Group technology layout

d. Fixed­position layout

20. Skinner is cited as suggesting which of the following capacity­related concepts?

a. Capacity balance

b. Diseconomics of scale

c. Best operating level

d. Focus factory

e. None of the above

Question 1.

Conveyors and material movement (not needed)

Large capacity... no, should use small single purpose, focused machines

Fail-safe very important.. more important that statistical quality control

Question 2.

Pull system initiates production as a reaction to present demand, while push initiates production in anticipation of future demand.

Question 3.

Discrete repetitive manufacturing

Stable demand - little seasonality

Located in close proximity to customer

Few variations in the products produced (similar products)

Question 5.

The use of a group layout. Focus on setup reduction for part family.

Short cycle flow control (work released in cycles).

A planned loading sequence (follow the setup sequencing).

Grouping... Machines are grouped, parts are placed in families.