Section A
Question 1. For the following organizations, explain how their operations functions can support business strategy, implement business strategy and drive business strategy:
– a fast-food restaurant
– a film-processing service
– an oil refinery.
Question 2. Why is operations management relevant to managers in other organization functions?
Question 3. Using an example of your own choice, describe how the cost of the operation might be affected by changing the levels of performance of quality, speed, dependability and flexibility.
Question 4. Draw the hierarchy of operations for a small manufacturing company.
Section B
Question 1. A company which specializes in fabricating large lathes inspects every lathe before it is shipped to the customer’s site. Given below are the defects found on a sample of 10 lathes.
Find whether the processes are under the control for 99 percent defects. Justify your answer
Sample
1
2
3
4
5
6
7
8
9
10
No.
No.
2
1
0
3
4
2
2
3
4
1
Defects
Question 2. A firm is planning to set up a production line to assemble 300 units per hour, and 50 minutes per hour are productive. The time to perform each task and the tasks that must precede eachtask are:
Task
Task That
Immediately
Precedes
Time to Perform Task (Minutes) Task
Tasks That Immediately Precede
Time to Perform Task (Minutes)
A
—
.69
F
B
1.10
B
A
.55
G
C,D,E
.75
C
B
.21
H
G,F
.43
D
B
.59
I
H
.29
E
B
.70
a. Draw a diagram of precedence relationships.
b. Compute the cycle time per unit in minutes.
c. Compute the minimum number of work stations required to produce 300 units per hour
and find the efficiency of the balance line
Question 3.What is statistical process control (SPC) Explain why x and R charts are used together?
Section C
Questions 1
a) Define what you think the five performance objectives (quality, speed, dependability, flexibility and cost) mean for an operation such as Flame Electrical.
b) What are the most important of these performance objectives for Flame Electrical?
c) What seems to influence the stock replenishment policy of Flame Electrical?
d) How does this differ from conventional economic order quantity theory?
Questions:
a) In developing this product, Ford put together a team of suppliers. Do you think it would do the same for every single supplier of every part in every product? If not, how should it choose which suppliers, which parts and which products to subject to this sort of treatment?
b) Should Ford have included its suppliers’ suppliers as well?
Section D
1. Explain the relationship between material requirements planning and scheduling decisions. From where in the MRP system does the information for making shop-floor scheduling decisions come?
2. Name and describe seven costs that are increased by holding inventories.
3. Compare and contrast the philosophy of traditional and JIT manufacturing. What are their objectives? How do they achieve them?
4. Define and describe: a. CAD b. CAM c. CAD/CAM d. CIM e. ERP.
Section D.2
1. A company produces a mix of high technology products for use in automobiles. The annual sales data are as follows:
Product Type
Number of Units
Unit Price (Rs)
1
1,000
2.50
2
250
0.55
3
150
6.50
4
300
1.00
5
100
1.50
6
700
1.43
7
500
7.00
8
15
4.98
9
1,000
0.75
10
600
1.62
11
25
33.00
12
4
15.50
13
1,000
5.00
14
2,850
2.50
15
10
0.83
16
355
0.98
17
50
1.37
18
393
1.85
For inventory control reasons, the company wants to classify these items into three groups on the basis of annual sales value of each item. Suggest an inventory control technique and classify the above items with a precise graph?
2. A firm needs to develop a sales forecast for next year. It believes that its annual sales are related to
the sales of its industry. It has prepared these historical data:
Industry Sales (Millions of Dollars)
Firm’s Annual Sales (Number of Boats)
976
329
1,068
332
845
315
763
321
1,125
345
689
329
837
331
If the industry estimates next year’s sales at $820 million, use simple linear regression to forecast annual demand for the firm’s boats for next year.
3. The Bi-State Trucking Company, a local deliverer of freight in Durham, North Carolina, has been experiencing customer complaints about late deliveries. Bi-State’s management strives for an average delivery of local freight in 24 hours. Weekly samples of 20 customers are taken
and exhibit an average range of 3.5 hours. Bi-State’s management thinks this is about right.
a. Compute 3σ control limits for x
b. Plot these sample means on a 3σ control chart for x : 23.4, 24.5, 23.9, 25.6, 26.5, 23.8, 23.7, 24.1, 25.1, 24.9
c. Is management’s target of an average 24-hour delivery being met?
Question 4
1. What are the underlying causes of the quality control problem at the Gas Generator plant?
2. Discuss any deficiencies in the quality control program that are apparent from the case.
3. Why didn’t the acceptance tests indicate the problem before the customer discovered it? Is such an occurrence possible? How would such a problem arise?
4. Discuss the appropriateness of the methods that Mr. Blane used to investigate the problem. How might he have acted to achieve better results?
5. Describe how a quality control program should operate so that such problems are avoided.
6. What changes should Mr. Blane make at the Gas Generator plant?
Question 5
1. If the sales price of the refined products averages $.425 per gallon at the cracking unit, which process would be preferred in each year?
2. At what annual volume of refined products would Phelps be indifferent between the two processes if the only consideration were economic analysis?
3. What other considerations would affect this decision?
