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business
operations management

Questions and Answers of Operations Management

Vijay Raines and Megan Waters own and operate the Rainwater Brewery, a micro-brewery that grew out of their shared hobby of making home-brew. The brewery is located in Kelowna, B.C. the home of
The family of a patient at the Metropolitan Hospital complained when the patient fell in the hospital and broke her hip. The family has threatened a lawsuit, and there has been some negative
The University Health Network uses SPC charts extensively to monitor various quality indicators and improve processes at its hospitals. One of the hospitals has discovered a potential problem in hand
The Elon Company manufactures parts for an air-craft company using three computerized numerical con-trolled (CNC) turning centres. The company wants to decide which machines are capable of producing
Explain to what extent the process for producing TE’s Long Life bulbs in Problem 3-35 would have to be improved to achieve 6-sigma quality.Problem 3-35TE’s Long Life 13-watt LED light bulbs are
Elon Corporation manufactures parts for an aircraft company. It uses a computerized numerical controlled (CNC) machining centre to produce a specific part that has a design (nominal) target of 3.244
The Pacific Fruit Company in Problem 3-13 has designed its packaging process for boxes to hold a net weight (nominal value) of 255 g of raisins with tolerances of ± 15 g. Using the
TE’s Long Life 13-watt LED light bulbs are designed to have a life of 1125 hours with tolerances of ± 210 hours. The process that makes light bulbs has a mean of 1050 hours, with a standard
The Great Outdoors Clothing Company, a mail-order catalogue operation, contracts with Purolator to deliver all of its orders to customers. As such, Great Outdoors considers Purolator to be part of
The dean of the College of Business at Local University wants to monitor the quality of the work performed by the college€™s administrative staff. Each completed assignment is returned to
The Lakeside Bank is concerned with complaints from customers about its drive-through window operation. Customers complain that it sometimes takes too long to be served. Since there are often cars in
Zita€™s Restaurant is a chain that employs independent evaluates to visit its restaurants as customers and assess the quality of the service by filling out a question-naire. The company
The Oceanside Apparel Company manufactures expensive, polo-style men€™s and women€™s short-sleeve knit shirts at its plant in Jamaica. The production process requires that
The City Square Grocery and Meat Market has a large meat locker in which a constant temperature of approximately 4.5º C should be maintained. The market manager decides to construct an R-chart
A machine at the Pacific Fruit Company fills boxes with raisins. The labelled weight of the boxes is 255 g. The company wants to construct an R-chart to monitor the filling process and make sure the
The Victoria Bread Company daily delivers multiple orders by truck from its regional distribution centre to stores in the T&T Supermarket chain. One measure of its supply chain performance is the
One of the stages in the process of making denim cloth at the Western Mills Company is to spin cotton yarn onto spindles for subsequent use in the weaving process. Occasionally the yarn breaks during
The Road King Tire Company wants to monitor the quality of the tires it manufactures. Each day the company quality-control manager takes a sample of 100 tires, tests them, and determines the number
The Blue Parrot is an expensive uptown restaurant that opens only for dinner. Entrees are set at a fixed price of $42. In a typical month, the restaurant will serve 3,600 entrees. Monthly variable
Why has ISO 9000 become so important to Canadian firms that do business overseas?
The Japanese are generally credited with starting the global quality revolution that in the 1970s became an integral part of corporate culture, and eventually led to the development of
Backwoods Canada, Inc. produces expensive water-repellent, down-lined parkas. The company implemented a total quality-management program in 2008. Following are quality-related accounting data that
The Backwoods Canada company operates a telephone order system for a catalogue of its outdoor clothing products. The catalogue orders are processed in three stages. In the first stage, the telephone
As a result of several years of severe cuts to its operating budget, the administration at Local University has raised tuition annually for the past five years. Five years ago getting an education at
a. Why do you think Mr. Gandhi organized the customer survey the way he did? What other things do you think he might have done to analyze the stores' quality problems?b. Develop Pareto charts to help
Choose an industry on which you will be the class “expert” for the duration of this course. Write an initial profile of major players, customers, structure, and competitive issues.
Statistics Canada collects input and output data from various countries for comparison purposes. Labour hours are the standard measure of input. Calculate the output per hour from the following data.
Rushing yardage for the three top running backs during a recent Vanier Cup is given below. Which player is the most productive running back? How did you measure productivity? Lévesque Peressini
Posey Ceramics makes ceramic vases for a chain of department stores. The output and cost figures over the past four weeks are shown here. Labour costs $20 an hour, and materials are $8 per kilogram.
Visions is a major Canadian electronics firm that manufactures a number of electronic components for domestic and global consumer electronics companies. It imports most of its materials and the
In Problem S1-10, suppose Visions is able to assign probabilities to each of the states of nature for each of the suppliers/ports as follows.a. Using expected value, determine the port/supplier
The Extron Oil Company is considering making a bid for a shale oil development contract to be awarded by the provincial government. The company has decided to bid $110 million. The company estimates
The Canucks major league baseball team is going to enter the free agent market over the winter to sign a new starting pitcher. They are considering five prospects who will enter the free agent
The management of Canuck Union Bank is concerned about the potential loss that might occur in the event of a physical catastrophe, such as a power failure or a fire. The bank estimates that the loss
A company offers three personal health, dental, vision care, and prescription drug plans for its employees to choose from, as follows.Plan 1€”monthly cost of $32 with a $500 deductible; the
Describe the impact that the creation of the Canada Awards for Excellence (CAE) has had on quality improvement in Canada.
Mary Khadir is suing the manufacturer of her car because of a defect that she believes caused her to have an accident, keeping her out of work for a year. She is suing the company for $3.5 million.
Brandon University is a small university that would like to increase revenues by expanding its student base and building ties with businesses in the surrounding area. To do so, it is considering
Mountain Side Electric Company is a manufacturing company located in southern Alberta. It is considering replacing some of its equipment and is attempting to decide whether it should replace an
How would you rank in order of importance, the three competitive dimensions for your university? For your favorite restaurant?
Explain economies of scale using a manufacturing firm; your university.
The product design costs are $250,000. Use a discount rate of 9 percent for the projected cash in-flows. Assume a 5-year lifespan. Calculate the projected NPV, the payback time, and the IRR.
Using a discount rate of 6 percent, determine the NPV, payback time and the IRR. Projected Year Cash Flows ($) - $405,000 Cost 174,000 128,000 110,000 4 102,000 Salvage 50,000 2. 3.
Find the NPV and the IRR for the cash flows by hand, using a discount rate of 10 percent. Cash Flows ($) Year -845,000 450,000 365,000 300,000 140,000 4 -25,000 2. 3.
Using your spreadsheet software, find the NPV and the IRR for the cash flows, using a discount rate of 10 percent. Cash Flows ($) Year -845,000 450,000 365,000 300,000 140,000 4 -25,000 2. 3.
Find the NPV and the IRR for the following cash flows by hand, and then using your spreadsheet software. Use a discount rate of 12 percent. Cash Flows ($) Year -425,000 -250,000 -55,000 220,000 4
Make a process flowchart for enrolling in and completing this class.
Village Plumbing can normally accommodate 25 customers per day. For the past 50 weeks, Village has served 5500 customers. If the shop is open five days per week, what was their capacity utilization
A company’s effective capacity is 12,000 units per day. If they normally produce 9,500 units per day, find the capacity utilization and the utilization growth necessary to produce 10,500 units per
Management wants to know how many units they have to sell to break even.
What is the make or buy break-even cost?
Jonnie Faith, a buyer for Global Metrics, is determining the make or buy quantity for a new instrument. She can have them made for $1200 each with an equipment investment of $80,000, or Global could
A firm can purchase whozits for $18 and sell them for $29. If they purchase 5000 units, how many units do they have to sell to break even? They could buy a whozits machine for $30,000 and make
Blake’s Donuts can make donuts for $0.25 each with their current equipment. They could purchase a different fryer for $12,000 which would reduce their costs to $0.20 each. Or, they could buy a
Calculate a 3-period simple moving average forecast for periods 4-8. Demand (units) Period 22 16 25 4 27 19 28 22 2. 3. 6.
Calculate a 3-period weighted moving average forecast for periods 4-8 using the weights 0.6, 0.3, and 0.1.
Calculate an exponential smoothing forecast for periods 2-8 using α = 0.3 and an initial forecast for period 1 of 22.
Plot the data. Do the two variables look correlated? Chance of Rain Umbrella Sales Month (%) Forecast error (units) 22 January 1420 1337.7 82.3 February 1374.4 26 1380 5.6 March 32 1440 1429.4 10.6
Your boss tells you to buy a 1-year supply of toilet paper for the company. What type of inventory is this?
What is the optimal order quantity?
What is the annual order cost?
What is the annual inventory carrying costand the relevant total annual inventory cost?
How many orders per year will Kathy make? How many days will there be, between orders?
What is the reorder point? What is Kathy’s optimal order policy?
Using the information in Problem 1, if Kathy’s carrying cost rate dropped by half, to 20 percent per year, how would this impact Problems 1 through 5?
Using the information in Problem 1, if Kathy’s order cost increased to $100, how does this impact Problems 1 through 5?
Find the economic order quantity and the reorder point for the following information: annual demand is 22,500 units, order cost is $70 per order, annual inventory carrying cost is $5 per unit, the
Calculate the EOQ for each of the three purchase prices. Which EOQs are valid?
Which purchasing alternative should Grebby take? What are the total annual inventory costs for the valid alternatives?
The Big Cheese Pizza Parlor buys lots of pizza boxes. They normally pay $1 per box when ordering from their supplier. Based on their annual forecast for pizza demand, their demand for boxes is
Average demand is 2500 units per year, order cost is $50 per order, holding cost rate is 20 % of the purchase cost per unit per year, and the cost of one unit is $42. What is the total inventory cost
The average demand is equal to 10 units per day, the order lead time is 7 days, and the standard deviation of the lead time demand is 4 units. If a 95 percent service level is desired, what is the
Roy and Gayle€™s Fix-It Shop purchased a new automated inventory control software application, and they wanted to put ROPs on all of their purchased tools and supplies. After forecasting
Phyllis was just hired as the new purchasing manager at Rich Furniture, and she decided to recalculate all of their ROPs, since she noticed that many of the suppliers’ delivery times varied
What is the EOQ?
What is the optimal review period?
What is the target quantity or order-up-to-level? If there were 225 cat treats in inventory when the supplier visited, what would be the order size?
Tom uses a fixed review period inventory system in his store. He counts his inventory every 30 days and then makes an order. Ten days later his order shows up from the supplier. On one ordering
Mennitt’s Bowlarama wants to determine their inventory management performance during their past year of operations. Calculate their inventory days of supply, days receivables outstanding, days
Use the Clark and Wright savings heuristic to determine an acceptable delivery route for the following network of customers, starting from location 1. Assume that any diagonal trip must pass through
Change the arrival rate at Josh’s Hot Dogs in question 9 above, to 14 customers per hour. What impact does this have on the queuing characteristics? What is the probability that there is more than
A company currently has produced 1,425,000 units, with a total defect level of 4,280. Each unit has a potential of 294 defects.a. What is his company’s DPMO?b. What is their Six Sigma operating
A weighted supplier scorecard is shown below. Determine the total weighted score for the supplier. Use a 10-point scale. Note that excellent = 10, good = 8, fair = 6, poor = 4. Supplier Name:The
Calculate the upper and lower control limits for the C chart. Plot the data on a C chart. Does the manufacturing process appear to be in control? Why/why not?
Calculate cÌ… and the sample standard deviation for the C chart. Over a 10-day period, a manufacturing company has counted the number of units not meeting design specifications. The
Determine PÌ… and ÏƒP. Error-checkers at the Whole Life Insurance Company checked 100 online applications per day for errors in the applications. The number of defective
After collecting and measuring a number of pizza delivery time samples, Lindi’s Pizzeria finds the mean of all the samples to be 27.4 minutes, with an average sample range of 5.2 minutes. They
Find the 3-sigmaUCL and LCL for the mean and range charts. Plot the data. Does the process look to be in statistical control.Why /why not?
Find the 3-sigma UCL and LCL for the mean and range charts. Plot the data. Does the deli wait time process look to be in statistical control? Why/why not?
A machine operator has produced 500 units of a particular part, and has stated he has only had 4 units fail to meet the company’s one design specification. Is this good from a Six Sigma standpoint?
Given the information shown below, complete the part records for all parts. Also:a. Determine the minimum lead time to make Part A starting with no current inventories.b. Determine the amounts of
Given the information shown below, complete the part records for all four parts. Use LFL order quantities for all parts. No safety stocks are required and there are no scheduled receipts. Beginning
Complete the following MRP part record (note the lot size, lead time, and safety stock).
Complete the following MRP part record (note the lot size, lead time, and safety stock).
Determine the quantities of all parts required to make 100 Part A.
Determine the quantities of Parts B, C, and D required to make 50 Part A. Part Leadtime (days) D 3 2. 3.
Determine the minimum number of days to make a complete Part A, starting with no current inventories. Part Leadtime (days) D 3 2. 3.
What are ERP system application add-ons, and which ones are the most popular?
Josh’s Hot Dogs is a one-person hot dog stand, and normally gets about 10 customers per hour. Assuming that Josh can serve one customer in about 3 minutes, calculate the stand’s queuing
What is the probability that more than 2 customers will arrive in an hour, when the mean arrival rate is 2 customers per hour and interarrival times are exponentially distributed?

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