Question 1:

Operations Management inevitably involves trade-offs and compromises. No organization can be the best at everything. Production and service systems must emphasize aspects of operations in which they wish to excel, perhaps at the expense of lower levels of performance on other dimensions. Discuss, giving examples, some operational tradeoffs that an organization needs to address and their linkages with the various dimensions of competitiveness.

 

Question 2:

A nursery is in the process of deciding how many Christmas trees should be stocked. The trees are sold for Rs. 20 and cost Rs. 5. Since Christmas trees are a seasonal product, they can be purchased only once and unsold trees are a complete loss. The probability distribution for demand is as follows:

D	P(D)
4000	0.2
4100	0.3
4200	0.1
4300	0.2
4400	0.1
4500	0.1

a)  How many trees should the nursery purchase to maximize its expected profit?

b)  What is the expected profit if the nursery purchases the optimal number of trees?

c)  What is the expected number of unsold trees if the nursery purchases the optimal number of trees? 

Question 3

Answer the following questions:

a)  You have been given the task of developing a forecast for widgets. The market for widgets is extremely volatile due to reasons that cannot be predicted. You would like to develop a forecast using an exponential model that filters out a major portion of this volatility. How will this influence your selection of the smoothing constant? 

b)  The demand for widgets over the past 12 months is shown in the following table:

t	Dt
1	526.1
2	549.4
3	606.0
4	627.0
5	695.7
6	734.9
7	761.1
8	845.4
9	1,021.1
10	1,137.1
11	1,173.6
12	1,233.4

c)  Determine forecasted values for months 11, 12, 13 and 14 using exponential smoothing with smoothing constant of 0.1. 

d) Are these good forecasts? Justify your answer. 

Question 4

Demand for a product over the next 4 weeks is 23, 86, 40 and 12 units respectively. The cost per setup is Rs. 300 and the cost to hold one unit of inventory for a week is Rs. 2. Which lot sizing heuristic will you select? What are the optimal lot sizes and the optimal cost? 

 

Answer rating: 100% (QA)

Question 1 Operations Management inevitably involves tradeoffs and compromises No organization can be the best at everything Production and service systems must emphasize aspects of operations in whic... View the full answer