# task problem set 5 (due 03-02-2014)

## Project Description:

due date: mar 09, 2014 23:59:59 max points: 90

details:
complete problems 7.5, 7.7, and 7.11 in the textbook.
complete supplement problems s7.3, s7.5, s7.7, s7.11, s7.15, and s7.28 in the textbook.
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7.5 borges machine shop, inc., has a 1-year contract for
the production of 200,000 gear housings for a new off-road vehicle.
owner luis borges hopes the contract will be extended and
the volume increased next year. borges has developed costs for
three alternatives. they are general-purpose equipment (gpe),
flexible manufacturing system (fms), and expensive, but efficient,
dedicated machine (dm). the cost data follow:
generalpurpose flexible dedicated
equipment manufacturing machine
(gpe) system (fms) (dm)
annual contracted
units 200,000 200,000 200,000
annual fixed cost \$100,000 \$200,000 \$500,000
per unit variable
cost \$ 15.00 \$ 14.00 \$ 13.00
which process is best for this contract?
7.7 using the data in problem 7.5, determine the best process
for each of the following volumes: (1) 75,000, (2) 275,000,
and (3) 375,000.

7.11 tim urban, owner/manager of urban’s motor court
in key west, is considering outsourcing the daily room cleanup
for his motel to duffy’s maid service. tim rents an average of
50 rooms for each of 365 nights (365 × 50 equals the total rooms
rented for the year). tim’s cost to clean a room is \$12.50. the
duffy’s maid service quote is \$18.50 per room plus a fixed cost
of \$25,000 for sundry items such as uniforms with the motel’s
name. tim’s annual fixed cost for space, equipment, and supplies
is \$61,000. which is the preferred process for tim, and why?

s7.3 if a plant has an effective capacity of 6,500 and an
efficiency of 88%, what is the actual (planned) output?
s7.5 material delays have routinely limited production
of household sinks to 400 units per day. if the plant efficiency is
80%, what is the effective capacity?

s7.7 southeastern oklahoma state university’s business
program has the facilities and faculty to handle an enrollment
of 2,000 new students per semester. however, in an effort
to limit class sizes to a “reasonable” level (under 200, generally),
southeastern’s dean, holly lutze, placed a ceiling on enrollment
of 1,500 new students. although there was ample demand for
business courses last semester, conflicting schedules allowed only
1,450 new students to take business courses. what are the utilization
and efficiency of this system?

s7.11 the three-station work cell illustrated in figure s7.7
has a product that must go through one of the two machines at
station 1 (they are parallel) before proceeding to station 2.

a) what is the bottleneck time of the system?
b) what is the bottleneck station of this work cell?
c) what is the throughput time?
d) if the firm operates 10 hours per day, 5 days per week, what is
the weekly capacity of this work cell?

s7.15 a production process at kenneth day manufacturing
is shown in figure s7.9. the drilling operation occurs separately
from, and simultaneously with, the sawing and sanding operations.
a product needs to go through only one of the three assembly
operations (the operations are in parallel).
a) which operation is the bottleneck?
b) what is the bottleneck time?
c) what is the throughput time of the overall system?
d) if the firm operates 8 hours per day, 20 days per month, what
is the monthly capacity of the manufacturing process?

s7.28 james lawson’s bed and breakfast, in a small historic
mississippi town, must decide how to subdivide (remodel)
the large old home that will become its inn. there are three
alternatives: option a would modernize all baths and combine
rooms, leaving the inn with four suites, each suitable for two to
four adults. option b would modernize only the second floor; the
results would be six suites, four for two to four adults, two for
two adults only. option c (the status quo option) leaves all walls
intact. in this case, there are eight rooms available, but only two
are suitable for four adults, and four rooms will not have private
baths. below are the details of profit and demand patterns that
will accompany each option:

annual profit under various
demand patterns
alternatives high p average p
a (modernize all) \$90,000 .5 \$25,000 .5
b (modernize 2nd) \$80,000 .4 \$70,000 .6
c (status quo) \$60,000 .3 \$55,000 .7

which option has the highest expected monetary value?
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