# operations management (Graded A+) - use as a guide only - 26013

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## arsalanahmed

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OPERATIONS MANAGEMENT

Answer the questions in Microsoft Word.  Each question is worth 10 points and partial credit will be given.  FOR MAXIMUM PARTIAL CREDIT SHOW ALL WORK.

1.            A company uses 121000 units a year.  If the inventory carrying charge is 25%, the item costs \$60 a unit, and an order costs \$75, how many should be ordered at a time if they are using EOQ ordering rules?  What is the total annual inventory cost?

2.            A company has an order to produce 25 specially designed safes for a bank.  It is estimated that the first safe will require 70 hours of shop time and a 75% learning curve is expected.  How many hours will the whole order require?

3.            A company is concerned about the diameter of one of its steel pipes.  They took 10 daily samples with 10 observations each and obtained the following sample means: 15.0, 16.4, 13.8, 14.6, 17.2, 15.2, 15.0, 16.9, 17.9, and 16.5.  If the average range for the samples was 2 inches, what are the upper and lower control limits for the X-bar chart?

4.            Explain producer and consumer risk in an acceptance plan.

5.            In a time study of a process, the average time to complete a unit was 36.5 minutes, the performance rating of the worker observed in the study was 1.2, and the allowances were 60 minutes per eight-hour shift.  What would the labor standard be for the process?

6.            Name six different factors that might be important to a company deciding on a location for a new facility.  For each of the factors, explain why it would be important in the location decision.

7.            How would you decide what amount of quality inspection would be optimal?

8.            A company is trying to establish a desirable transportation arrangement from its three plants to its four regional warehouses.  The capacity of the three plants is 400, 600, and 1000 tons per day from plants A, B, and C, respectively.  The daily demand of the four warehouses is 500, 400, 600, and 500 tons for warehouses W, X, Y, and Z, respectively.  Set up an initial solution matrix for the transportation problem, BUT DO NOT SOLVE.

9.            When would you use the Economic Production Quantity formula instead of the Basic EOQ formula?  Which would produce the higher optimal quantity given the same annual demand, ordering cost, and annual carrying cost per unit?

10.         List 8 functions of inventory.

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