1. A loan application process involves 8 separate tasks. Task A takes 10 minutes and does not require any other of the tasks to be performed before it can be started. Similarly, Task B can be started without any other task being completed and takes 8 minutes. Task C takes 16 minutes and cannot be performed until Task A has been done. Task D cannot be done until both A and B have been performed and takes 8 minutes. Task E requires tasks C and D to be finished and takes 8 minutes. After task E has been performed, Tasks F and G, taking 5 and 17 minutes respectively, can be performed. Finally (but only after Tasks F and G have been performed), Task H can be performed and takes 11 minutes. Devise a precedence diagram for this process. Assuming a required cycle time of 18 minutes, determine how many people will be required to perform the task, and if they are arranged in a product layout, how the tasks will be allocated to each person. Calculate the balancing loss for this layout.

2. A hotel has two wings, an east wing, and a west wing. Each wing has 4 room service maids working 7-hour shifts to service the rooms each day. The east wing has 40 standard rooms, 12 de luxe rooms and 5 suites. The west wing has 50 standard rooms and 10 de luxe rooms. The standard times for servicing rooms are as follows: standard rooms 20 standard minutes, de luxe rooms 25 standard minutes, and suites 40 standard minutes. In addition, an allowance of 5 standard minutes per room is given for any miscellaneous jobs such as collecting extra items for the room or dealing with customer requests. What is the productivity of the maids in each wing of the hotel? What other factors might also influence the productivity of the maids?

3A. A new optical reader for scanning documents is being considered by a retail bank. The new system has a fixed cost of A30,000 per year and a variable cost of A2.5 per batch. The cost of the new scanner is A100,000. The bank charges A10 per batch for scanning documents and it believes that the demand for its scanning services will be 2,000 batches in year 1, 5,000 batches in year 2, 10,000 batches in year 3, and then 12,000 batches per year from year 4 onwards. If the realistic discount rate for the bank is 6 per cent, calculate the net present value of the investment over a 5-year period.

3B. In the example above, one of the maids in the west wing wants to job-share with his partner, each working 3 hours per day. His colleagues have agreed to support him and will guarantee to service all the rooms in the west wing to the same standard each day. If they succeed in doing this, how has it affected their productivity?

4. A local government office issues hunting licenses. Demand for these licenses is relatively slow in the first part of the year but then increases after the middle of the year before slowing down again towards the end of the year. The department works a 220-day year on a 5-days-a-week basis. Between working days 0 and 100, demand is 25 percent of demand during the peak period which lasts between day 100 and day 150. After 150 demand reduces to about 12 percent of the demand during the peak period. In total, the department processes 10,000 applications per year. The department has 2 permanent members of staff who are capable of processing 15 license applications per day. If an untrained temporary member of staff can only process 10 licenses per day, how many temporary staff should the department recruit between days 100 and 150?

5. A field service organization repairs and maintains printing equipment for a large number of customers. It offers one level of service to all its customers and employs 30 staff. The operations marketing vice president has decided that in the future the company will offer 3 standards of service, platinum, gold, and silver. It is estimated that platinum-service customers will require 50 percent more time from the companys field service engineers than the current service. The current service is to be called the gold service. The silver service is likely to require about 80 percent of the time of the gold service. If future demand is estimated to be 20 percent platinum, 70 percent gold, and 10 percent silver service, how many staff will be needed to fulfill demand?

6. Three managers are attending a seminar on Getting More Value from Your Purchasing Function. One manager is from a large retail bank, one is from a general hospital and the third is from a printing company. At the seminar, they were discussing their problems during coffee. This is really useful; I think that even a relatively small reduction in our bought-in supplies bill could have a major impact on the profitability of our printing company. Yes, I agree the hospital will also benefit from an exercise that would reduce the bought-in supplies bill. At the moment it accounts for almost 30 percent of all our expenditure. Yes, at the bank we spend almost 20 percent of our expenditure on bought-in supplies. Given that our profit is 20 percent of our total revenue, any saving in bought-in supplies would be valuable. I have to say that profits are not so high in the printing industry. Our profits are only 10 percent of sales revenue. However, with bought-in supplies accounting for 70 percent of our total costs, I am sure that any reduction in bought-in supplies costs will be useful.

Which of these three managers would benefit most from a 5 percent reduction in their bought-in supplies bill?

7. Your company has developed a simple, but amazingly effective, mango peeler. It is constructed from a blade and a supergrip handle that has a top piece and a bottom piece. The assembled mango peeler is packed in a simple recycled card pack. All the parts simply clip together and are bought in from suppliers, who can deliver the parts within one week of orders being placed. Given enough parts, your company can produce products within a day of firm orders being placed. Initial forecasts indicate that demand will be around 500 items per week. (Read the supplement to this chapter before attempting this and the following question.)

(a) Draw a component structure and Bill of Materials for the mango peeler.

(b) Develop a Master Production Schedule for the product.

(c) Develop a schedule indicating when and how many of each component should be ordered (your scheduler tells you that the economic order quantity, EOQ, for all parts is 2,500).