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# 1.

(Chapter 2) Various financial data for SunPath Manufacturing for 2012 and 2013 follow.

What is the percentage change in the labor partial productivity measure for SunPath
between 2012 and 2013?

Answer:
300,000/40,000 = 7.5
330,000/43,000 = 7.67
7.67-7.5/7.5 = 2.33%

## BUSN 6110 Final

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2.

(Chapter 4) Here are the data for a time-cost CPM scheduling model analysis. The time is in
days and the costs include both direct and indirect costs.

What are the total time of this project and total normal cost?

Answer:
Total time -12 days
Total cost - \$1700
The Critical path is ABDE, hence 12 days. Normal cost is \$200 + \$300 + \$200 + \$500 +
500 = \$1,700
3.

(Chapter 4) You have collected the data for a time-cost CPM scheduling model analysis. The
time is in days and the project "direct costs" are given here.

The indirect costs for the project are determined on a daily duration basis. If the project
lasts 16 days, the total indirect costs are \$400; 15 days, they will be \$250; 14 days, they
will be \$200; and 13 days, they will be \$100. At what day do we achieve the lowest total
project cost (i.e., direct plus indirect costs)?
Answer:
Critical path - ABDEFG
Project duration is 3 + 3 + 3 + 2 + 3 + 2 = 16 days.
Normal direct cost is \$300 + \$100 + \$200 + \$400 + \$500 + \$200 + \$100 = \$1,800.
The indirect costs are an additional \$400 for a total of \$2,200.
The only activities that can be crashed are A, D & E. A costs \$100/day to crash, D costs
\$150/day to crash and E costs \$400/day to crash. Reducing the duration of A by one day at
an additional cost of \$100 is the most economical. Direct costs are now \$400 + \$100 +
\$200 + \$400 + \$500 + \$200 + \$100 = \$1,900.
Overall duration of the project is 15 days and indirect costs are \$250. The total cost of

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## crashing this project for one day is \$2,150.

4.

(Chapter 5) If the best operating level of a piece of equipment is at a rate of 400 units per
hour and the actual output during an hour is 300 units, which of the following is the
capacity cushion?
Answer
400-300= 100 units /hour

5.

(Chapter 6) A company's production process has an 85 percent learning curve rate. The
process has produced 1,000 units to date. A process refinement is estimated to allow a
future learning curve rate for the identical product of 75 percent. However, the initial unit
made using the new process will take the same amount of time as the very first unit
produced using the old process. At what point, using the new process, will the production
rate exceed the production rate achieved by the old process?

At 50th unit

6.

(Chapter 7) Assume a fixed cost for a process of \$15,000. The variable cost to produce each
unit of product is \$10, and the selling price for the finished product is \$25. Which of the
following is the number of units that has to be produced and sold to break even?

## 25x = 10x + 15000

Answer :
X = break even quantity = 1000

7.

(Chapter 8) You have just determined the actual number of workstations that will be used
on an assembly line to be 8 using the assembly-line balancing procedure. The cycle time of
the line is 10 minutes, and the sum of all that tasks required on the line is 60 minutes.
Which of the following is the correct value for the resulting line's efficiency?

Answer: = (60/10)/8
= 0.75

## BUSN 6110 Final

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8.

(Chapter 9) A company is concerned about the number of customers who have to wait for
service in its customer service department. Assume the rate at which customers are
serviced is 12 per hour. Using the infinite queuing notion for the models presented in the
textbook, which of the following is the mean time between arrivals?

Answer:

## =1/12 hour = 5 minutes

9.

(Chapter 14) In setting up a Kanban control system you need to determine the number of
kanban card sets needed. If assume the expected demand during lead time is 50 per hour,
the safety stock is 20 percent of the demand during lead time, the container size is 4, and
the lead time to replenish an order is 8 hours, what number of Kanban card sets is needed?

## Answer =[ (50 + 20 % of 50 ) * 8 ]/4 =120

10.

(Chapter 17) If the average aggregate inventory value is \$45,000 and the cost of goods sold
is \$10,000, which of the following is weeks of supply?

Answer:
= (45000/10000)*52=234

11.

(Chapter 17) What is the cash-to-cash cycle time if ARd = 6.5 days, Id = 22.2 days, and APd
= 4.2 days?

Answer:
= 22.2 + 6.5 4.2 = 24.5 days

## BUSN 6110 Final

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12.

(Chapter 18) A company wants to forecast demand using the simple moving average. If the
company uses four prior yearly sales values (i.e., year 2010 = 100, year 2011 = 120, year
2012 = 140, and year 2013 = 210), which of the following is the simple moving average
forecast for year 2014?
Answer:

## Forecast for 2014 = (100 + 120 + 140 + 210)/4 = 570/4 = 142.5

13.

(Chapter 19) Using the cut-and-try method for aggregate operations planning, we can
determine the production requirement in units of product. If the beginning inventory is 100
units, the demand forecast is 1,200, and the necessary safety stock is 20 percent of the
demand forecast, which of the following is the production requirement?

## Answer= (1200 + 20% of 1200) -100 =1340

14.

(Chapter 20) If annual demand is 35,000 units, the ordering cost is \$50 per order, and the
holding cost is \$0.65 per unit per year, which of the following is the optimal order quantity
using the fixed-order-quantity model?
Answer = Squareroot (2* 35000 * 50/ 0.65) = 2320

15.

(Chapter 22) Assume there are five jobs (i.e., A, B, C, D, and E) that need to be sequenced
in a production schedule. The remaining operating time necessary for completion of job A is
4 days (i.e., job A will take 4 more days to complete), B will take 7 days, C will take 8 days,
D will take 2 days, and E will take 5 days. Which job should be scheduled first if you use the
SOT priority rule for job sequencing?
Answer D as it will take 2 dyas

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