BUS002 Operations Management

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BUS002

Operations Management

Assessment Questions

Q1. (20%) Rivaldo and Ronaldo oversee the competition for a new football outfit production line in São Paulo. They identified 30 distinct tasks in the production process that must be balanced in the workflow. They provided task names, precedence, and time estimates for each step using work-sampling techniques. Their objective is to produce 1,500 outfits per standard 35-hour workweek.

a) Draw the network diagram using the following notation and calculate the theoretical number of workstations (6%).

b) Balance this operation using the shortest operation time heuristic (primary) and compute the efficiency of the line. (6%).

In case that 2 or more tasks have the same sorter time, select the one with the most following tasks (secondary).

Briefly discuss the answer by comparing the theoretical number of workstations with the actual number of workstations, and comment on the task distribution.

c) Explore if the balance of 1B could be improved by another set of heuristics. (Prime heuristic: longer time. Secondary heuristic: least following tasks) (6%).

Briefly discuss the answer by comparing the theoretical number of workstations with the actual number of workstations, and comment on the task distribution.

d) Discuss if it is possible to improve this balance to 100%? (2%).

Q2. (15%) Christian Ronaldo and David Beckham partners of Eagle Athletic Equipment Inc., are about to prepare the capacity plan to cover seven periods. The company has a normal capacity of 280 footballs per period, except for the seventh period, when the capacity will be 330 balls. The demand forecast is given in the following table.

• They intend to start with zero inventory on hand in the first period

• Use overtime of no more than 10 units per period if needed.

• Use subcontracting of no more than 30 units per period if needed.

• Plan for an ending inventory of zero for period 7.

• Backorders cannot exceed 40 units per period.

• Compute the total cost of the most economic plan.

• Operations Costs:

a) Prepare the capacity plan using the level strategy. Compute the costs and discuss the answer. (7%)

b) Prepare the capacity plan using the chase strategy. Compute the costs and discuss the answer. (4%)

c) Compare and contrast the two strategies. (4%)

Q3. (15%) Pitsos Appliance is a company that produces all kinds of major appliances. Paolo Rossi, the president of Pitsos, is concerned about the production policy for the company’s best-selling refrigerator. The annual demand has been about 8,000 units each year, and this demand has been constant throughout the year. The production capacity is 200 units per day.

Each time production starts, it costs the company £120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is £50 per year. The current production plan calls for 400 refrigerators to be produced in each production run. Assume there are 250 working days per year.

a) If the company produces 400 refrigerators at a time, what would the total annual setup cost and holding cost be? Discuss your answer. (8%)

b) If Paolo Rossi wants to minimize the total annual inventory cost, how many refrigerators should be produced in each production run? Discuss your answer. (4%)

c) How much would this save the company in inventory costs compared to the current policy of producing 400 in each production run? Discuss your answer. (3%)

Q4. (15%) Geoge Sideris of Fontakas Sport Equipment’s uses unstable chemical materials sensitive to temperature and humidity, to produce biodegradable goalkeeper nets. The company use 128 kilos per month of this specific chemical substance. The estimated holding cost is £5.50 (because of spoilage), and the estimated order costs are £15 per order. The cost schedules of the four suppliers are as follows:

a) Identify and discuss what quantity should be ordered, and which supplier should be used. (10%)

b) Discuss (explain) factor(s) that should be considered besides total cost. (5%)

Q5. (15%) Kalamata foods produce olive oil. Takis Batzis, a quality inspector took 25 samples, each with 10 observations as follows:

a) Using this information, obtain with 95.45% confidence the control limits for a mean control chart and control limits for a range chart, respectively. Discuss your answer. (8%)

b) Discuss, with justification and observation, whether the process is in control or not. (7%)

Q6. (20%) Giovani from Thrylos Sportswear is planning to organize an athletic event. To facilitate the execution process, he has developed a detailed schedule, outlining the activities, their durations, and the predecessor relationships, as shown in the following table.

a) Draw the Network Diagram, and identify and discuss the project duration and the critical path using the following activity notation (8%)

b) Draw and explain the project’s Gantt chart (4%)

c) Change the time of at least two (non-terminal preferably) activitiesthat can reduce the overall project duration and discuss the new project duration and the new critical path (if changed). Discuss the outcome (5%)

d) Draw and discuss the new critical path and the new Gantt chart (3%)