Final

Exam - Solutions

Module 1
Smooth Chin Device Company

SC1. Which station is the bottleneck of the process?
The activity capacities are:
A = 1/44 razor/sec
B = 1/40
C = 1/55
D = 1/60
E = 1/50
F = 1/40
So D, the slowest, is the bottleneck.
SC2. What is the process capacity (you can ignore any start-up or empty system effects)?
This is the capacity of Station D: 1/60 * 3600 razors/hour.

60 razor(s) / hour

SC3. What are the direct labor costs associated with producing one razor?
1 minute * 6 stations * $25/60 per minute = $2.5 per razor
SC4. What is the average labor utilization of the six workers?
289 / (289 + 71) = 0.802

Industrial Baking Process

IB1. Inventory = 4000 units/hr x 1/5 hr = 800 units

Save-A-Lot Retailers

SL1. Using Littles Law: Flow time=Inventory/Flow rate where Flow rate = COGS (cost of the
goods that flows per year)
Substituting, Flow time=$5,743MM/$53,962MM/year=0.106years

In days, Flow time=0.106years*365days/year=38.69 days

SL2.
First, we calculate inventory costs for Save-A-Lot. A product stays 38.69 days on average for
Save-A-Lot. The inventory costs for a $50 household cleaner are $50*0.2*38.69/365=$1.06
For Wallys Mart, the average number of days in inventory is
($40,694MM/$316,606MM)*365=46.91 days. The inventory costs for a $50 household cleaner
are $50*0.2*46.91/365=$1.29
The inventory cost for a $50 household cleaner is $0.23 lower for Save-A-Lot.

Great Valley Income Tax Advice

Resource

Capacity
(min/mth)

Workload for groups (min/mth)

Total
workload
(min/mth)

Admin

9600

7.5(70)+2.5(120)+25(50)+15(100)

3575

37%

Senior

9600

7.5(50)+2.5(150)+25(5)+15(30)

1325

14%

Junior

9600

7.5(120)+25(300)+25(80)+15(200)

6650

69%

Admin w/WP

9600

7.5(45)+2.5(80)+25(35)+15(70)

2462.5

26%

Implied
utilization

GV1. Junior accountant
GV2. Senior accountant: 14%
GV3. Junior accountant: 69%
GV4. Administrator: 37%

Module 2
Wind Tunnel Testing Carbon Bike Frames
CBF1.
On average, 2 out of 7 customers per day are refits, which leaves 5 new customers per day.

CBF2.
OEE = (100 min value-add time/customer x 5 new customers/day x 9 days/cycle) / (60 min/hr x
24 hr/day x 10 days/cycle) = 4500/14,400 = 0.31

Tasty Tims
TT1.
30+20+240+180+10+15+40+5+5+5+10+20 = 580 seconds = 9 minutes and 40 seconds
TT2.
1/demand =3600secs/120units=30 sec/unit
TT3.
Labor content/takt = 580/30 = 19.3 -> round up = 20 workers
TT4.
Takt=3600/40=90sec/unit
Labor content/takt = 580/90 = 6.4 -> round up = 7 employees

FastBus Inc.
FB1.
# of customers served per year = (28 seats sold per one-way trip) x (14 one-ways trips per day) x
(2 buses) x (365 days) = 286,160 customers
FB2.
0.3 (see Excel below, column 1)
FB3.
0.66 (see Excel below, column 2)



Module 3
PTests

PT1.

Capacity = 300 / (30 + (300 x 0.2)) = 200 samples/hr

PT2.

Capacity = 2.5 samples/min = B / (30 + (B x 0.2))
B = 150 samples

Power For All (PFA)

PFA1.

Total demand = 12 kg/hr. Total setup time = 1 hr. Processing time p = 1/20 hr/kg.
Setting capacity = demand and solving for B gives B = 30 kg. Therefore, the amount of soy based
protein that should be produced = 10/12 *30 = 25 kg.

PFA2.

Total demand = 15 kg/hr. Total setup time = 1.5 hr. Processing time remains the same.
Setting capacity = demand and solving for B gives B = 90. Therefore, the amount of soy based
protein that should be produced = 10/15 * 90 = 60 kg.


Module 4

Tom Opim

TO1.
Utilization = flow rate/capacity = (20 calls/hr) / (30 calls/hr) = 2/3 = 0.6667
Idle time = 1 utilization = 1/3 = 20 min/hr
In an 8-hour shift, Tom will have 8 * 20 = 160 min to read 160 pages

TO2.

Use wait time formula for one resource:

Average wait time = 2.5 min

TO3.
Line charge = $5.00/hr = $0.083/min
Average customer takes 2.5 min wait time + 2 min processing time = 4.5 min
Therefore the average line cost per customer = $0.083 * 4.5 = $0.375
Flow rate per day = (20 customers/hour) * 8 hours = 160 customers/day
Line cost per day = $0.375 * 160 = $60


Philly Barber Shops

PBS1.
Use wait time formula for multiple resources:
Activity time = 30 min
m = 4
Utilization = flow rate/capacity = (4 customers/hr) / (8 customers/hr) = 0.5
CVa = 1
CVp = 1
Therefore average wait time = 3.35 min

PBS2.
Use wait time formula for one resource:
Activity time = 30 min
Utilization = flow rate/capacity = (1 customer/hr) / (2 customers/hr) = 0.5
CVa = 1
CVp = 1
Therefore average wait time = 30 min

PBS3.
Total time = 20 min walking + 3.35 min wait time + 30 min haircut = 53.35 min

PBS4.
New flow rate = 5 customers/hr
Therefore new inter-arrival time = 12 min

PBS5.

Use wait time formula for multiple resources:

Activity time = 30 min
m = 5
Utilization = flow rate/capacity = (5 customers/hr) / (10 customers/hr) = 0.5
CVa = 1
CVp = 1
Therefore average wait time = 2.17 min. The waiting time is lower compared to the pre-merger
scenario because the only variable that has changed is m (the number of barbers); the greatest
impact of this change in the wait time formula is in reducing the size of the first term of the
formula (activity time/m).


Hospital Trauma Bays

HTB1.
m = 6
r = p/a = 90 min / 30 min = 3
From Erlang loss table, probability that all trauma bays are full and patient is sent to another
hospital = 0.0522
Thus, 5.22% of patients end up sent to another hospital

HTB2.
Average # of patients treated in trauma bays per day = (1 0.0522) * (demand of 2 patients/hr)
* (24 hrs/day) = 45.5 patients

HTB3.
Answer: b. Processing time changes, which gives us a new r = p/a = 60 min / 30 min = 2. Thus,
the probability that all trauma bays are full declines to 0.0121, and more patients will have
immediate access to a trauma bay.

HTB4.
Consulting the Erlang loss table reveals that the minimum number of trauma bays needed to
ensure a loss probability of < 0.1 is 6.
To Do List

TDL1. Answer: C (homework). Do the shortest task first. The sequence is the following: Friend
(finishes in 10 min from now), food (30 min from now), mother (60 min from now), Facebook

(120 min from now), homework (200 min from now), nap, snow shoes. Since 90 min < 120 min,
you will be doing homework in 190 minutes from the time that you start.


YourNurse

YN1. Answer: C


Module 5

50-Step Assembly Line
50SAL1. Probability of defect: 1-(0.99^50)=0.39499
50SAL2. Probability of shipping a defective product=0.39499*0.1*0.1=0.0039499

Process with Scrap
PS1. Assume the demand is D units. That implies that D units have to flow through steps 3 and
4. However, because of the scrap rate, 5D units have to flow through resources 1 and 2.
PS2. The capacity if 1/5, 1/4, 2/20, 1/12 units per minute respectively.
Calculate implied utilization (IU) for each resource as (demand at that resource) / (capacity at
that resource):
Resource 1: IU = 5D / (1/5) = 25D
Resource 2: IU = 5D / (1/4) = 20D
Resource 3: IU = D / (2/20) = 10D
Resource 4: IU = D / (1/12) = 12D
The highest implied utilization is at resource 1, which makes this resource the bottleneck.


Lean Burgers

LB1. Capability Score = (95.5-94.5) / (6*0.25) = 0.66667

LB2. What is the probability that beef patty is too heavy? This is
1- Normdist(95.5, 95, 0.25, 1)=0.02275
What is the probability that that the beef patty is too light? This is
Normdist(95.5, 95, 0.25, 1)= 0.02275
So the defect probability is: 2*0.02275 = 0.0455
LB3. To get the new standard deviation, we solve: (95.5-94.5) / (6*stdev) = 1 => stdev = 1/6 =
0.16666

Toyota Jidoka

TJ1. Answer: G. Jidoka refers to making production problems visible and stopping production
upon detection of defects