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ASSIGNMENT # 1: EXPERIENTIAL LEARNING EXERCISE

A PARTIAL REQUIREMENT IN PRODUCTION MANAGEMENT

MASTER OF SCIENCE IN ENGINEERING MANAGEMENT

DATE SUBMITTED:

OCTOBER 13, 2018

SUBMITTED BY:

RUSSEL RENZ C. DE MESA

SUBMITTED TO:

MELANI B. CABRERA, PIE


Visit a fast food restaurant and answer these questions:

1. In what ways is quality, or lack of quality, visible?

I have visited Buffalo Wild Wings restaurant located at Glorietta 1, Makati, Metro Manila.
I can say that the quality is visible because the food they served were deliciously cooked
and well presented. This restaurant has a quality of food, restaurant cleanliness,
customer’s satisfaction and absolute of service quality and politeness. Some high-end
restaurants I have visited have one waiter dedicated to one customer. That gives the
customer a feeling of extreme service. Maybe, the cost of the meal is higher to
compensate for the extra staff.

2. What items must be stocked in addition to the food?

It will be better if they will add pasta and pizza to their menu and beer for adult
customers. Also, as I have observed, more tissue paper should also be put in the tables.

3. How important do you think employee scheduling is? Explain.

A well-planned schedule is necessary for the efficient operation of a business. If an


employee comes to the office and does not know what to do, it can affect his / her
morale because there is no proper schedule to serve his / her needs and skills. In the
long run, it can affect their career growth. Maximum productivity of the employees will
not be able to utilize without a proper scheduling. Proper scheduling ensures smooth
and efficient operation. It helps to manage employee attendance issues effectively
especially for business that run 24/7.

4. How might capacity decisions affect the success or failure of the restaurant?

Capacity decisions affect the success or failure of a restaurant because it would


determine how many among the customers were served and facilitated. Short term
situations such as if there is enough number of seats available in the restaurant or are
there enough crew that could cater customers request would matter most since this
would cause either success or failure. The decisions must be made carefully to avoid
excessive labor costs from having too many employees for the number of customers
being served.
ASSIGNMENT # 2: COMPETITIVENESS, STRATEGY AND PRODUCTIVITY

A PARTIAL REQUIREMENT IN PRODUCTION MANAGEMENT

MASTER OF SCIENCE IN ENGINEERING MANAGEMENT

DATE SUBMITTED:

OCTOBER 13, 2018

SUBMITTED BY:

RUSSEL RENZ C. DE MESA

SUBMITTED TO:

MELANI B. CABRERA, PIE


PROBLEMS
P1. The Cool-Tech Company produces various types of fans. In May, the company
produced 1,728 window fans at a standard price of $40.00. The company has 12 direct
labor employees. During May, window fans were produced on 9 working days (of 8
hours each), and other products were produced on other days. Determine the labor
productivity of the window fans.
P2. The Cool-Tech Company (see P1) also produces desk fans at a standard price of
$25.00. During May, 1,872 desk fans were produced on 11 working days (of 8 hours
each). On one day, two employees called in sick.
a. Determine the labor productivity of the desk fans.
b. Was productivity higher for the window fans or for the desk fans in May?
P3. Here is additional information about the Cool-Tech Company (see P1 & P2). There were
20 working days in May, during which the compensation for a Cool-Tech direct labor
employee (including wages and fringe benefits) amounted to $21.00 per hour. The
direct material cost of window fans is $7.00; the direct material cost of desk fans is
$5.00. The annual overhead expense incurred in operating the factory is $600 per
working day.
a. Determine the multi-factor productivity of the Cool-Tech Company in May.
b. What is the interpretation of the multi-factor productivity?
P4. In June, the Cool-Tech Company produced 1,730 window fans (see P1) in 10 working
days. No employees were absent during that time period. What was the percentage
change in labor productivity of window fans from May?

ANSWERS:

P1.

P=Productivity
W= Number of window fans = 1728
H=Number of direct labor hours = 8 hours per day
E= Number of Employees = 12
D= Number of Working days = 9

W
𝑃=
E∗D∗H
1728
𝑃 = 12∗9∗8= 2 fans per hour

P2.

a. Determine the labor productivity of the desk fans.


P = Productivity
F = Number of desk fans = 1,872
H = Number of direct labor hours = 8 hours per day
E1 = Number of employees = 12;
E2 = Number of employees = 12 - 2 =10
D1 = Number of days = 11 - 1 = 10

D2 = Number of days = 1
F 1872
𝑃= = = 𝟏. 𝟖 𝒇𝒂𝒏𝒔 𝒑𝒆𝒓 𝒉𝒐𝒖𝒓
(E1 ∗ D1 ∗ H) + (E2 ∗ D2 ∗ H) (12 ∗ 10 ∗ 8) + (10 ∗ 1 ∗ 8)

b. Was productivity higher for the window fans or for the desk fans in May?
The productivity of the window fans is higher.

P3.

A. Determine the multi-factor productivity of the Cool-Tech Company in May.

P = Multi-factor productivity
WS =Standard price of window fans = $40
FS =Standard price of desk fans = $25
L = Labor cost per hour = $21
MW =Direct material cost of window fans = $7
MF =Direct material cost of desk fans = $5

H =Total direct labor hours = 864 + 1040 = 1904

(𝑊 ∗ Ws) + (F ∗ Fs) (1728 ∗ 40) + (1872 ∗ 25)


𝑃= = = 𝟏. 𝟖𝟗
(H ∗ L) + (W ∗ Mw) + (F ∗ Mf) (1904 ∗ 21) + (1728 ∗ 7) + (1872 ∗ 5)

B. What is the interpretation of the multi-factor productivity?


A dollar's worth of inputs produces $1.89 worth of outputs.

P4.

PMAY = 2 fans per hour (Problem 1)

W 1730
𝑃(𝐽𝑢𝑛𝑒) = = = 1.83 𝑓𝑎𝑛𝑠 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟
(E ∗ D ∗ H) (12 ∗ 10 ∗ 8)

P(June) − P(May) 1.83 − 2.0


(100) = = −𝟖. 𝟓% 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒗𝒊𝒕𝒚 𝒅𝒆𝒄𝒍𝒊𝒏𝒆𝒅
𝑃(𝑀𝑎𝑦) 2.0
𝒇𝒓𝒐𝒎 𝑴𝒂𝒚 𝒕𝒐 𝑱𝒖𝒏𝒆.
ASSIGNMENT # 3: FORECASTING

A PARTIAL REQUIREMENT IN PRODUCTION MANAGEMENT

MASTER OF SCIENCE IN ENGINEERING MANAGEMENT

DATE SUBMITTED:

OCTOBER 13, 2018

SUBMITTED BY:

RUSSEL RENZ C. DE MESA

SUBMITTED TO:

MELANI B. CABRERA, PIE


PROBLEMS
P1. The data below consist of the closing price of the common stock of the American
Telephone and Telegraph Corporation on 10 recent trading days.
Time(t) Price Time(t) Price
1 $24.10 6 $22.73
2 23.80 7 22.60
3 23.39 8 21.76
4 22.90 9 22.14
5 22.10 10 21.69
a. Using a five-period moving average, forecast the price of the stock for period 10.
SOLUTION:
A forecast for t = 10 will require the previous five prices.

MA5 = (22.10 + 22.73 + 22.60 + 21.76 + 22.14)/5 = $22.27

b. What is the error of the forecast in #1-a?


SOLUTION:
ERROR= Actual - Forecast = 21.69 - 22.27 = -$0.58

c. Using a five-period moving average, forecast the price of the stock for period 11.
SOLUTION:
MA5 = (22.73 + 22.60 + 21.76 + 22.14 + 21.69)/5 = $22.18

P2. A product is manufactured in distinct batches of various sizes. The cost accountant
wished to obtain an equation to use for estimating the cost of a batch. He obtained data
on a number of batches, consisting of the size of the batch, measured in number of
pieces, and the total cost of the batch, consisting of the setup cost and the variable costs
of labor, material, etc. Costs are stated in thousands of dollars.

Size Cost of
of
Batch Batch
20 $1.4
30 3.4
40 4.1
50 3.8
70 6.7
80 6.6
100 7.8
120 10.4
150 11.7

a. Which is the dependent variable? The independent variable?


The size will be the independent variable (X) and the cost will be the dependent
variable (Y).
b. Draw the scatterplot of this data. Does a straight line look like a reasonable fit?

Cost of Batch
$14.00

$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$0.00
0 20 40 60 80 100 120 140 160

c. Obtain ∑ x 2 , ∑xy, and ∑ y 2 .


∑x= 660; ∑y= 55.9; ∑x2= 63,600; ∑y2= 429.11; ∑xy= 5,264

d. What is the value of the slope of the regression line that best fits this data?
SOLUTION:
𝑛(∑𝐱𝐲) − (∑𝐱)(∑𝐲) 9(5264) − (660)(55.9)
𝑏= = = 𝟎. 𝟎𝟕𝟔𝟔
𝑛(∑𝐱^𝟐) − (∑𝐱)^𝟐 9(63600) − (660)^2

e. What is the interpretation of the slope?


It is estimated that each additional piece in a batch costs 0.0766*103 = $76.6

f. What is the value of the y intercept?


a=ӯ-bx̅ = 6.211 -(0.0766*73.333)= 0.5937
g. What is the interpretation of the y intercept?
It is estimated that the cost of setting up to produce a batch is 0.5937(103) = $593.70

h. Estimate the cost of a batch of 125 pieces.


yo = a+bx = 593.7+76.6(125) = $10,168.70

i. What is the value of the coefficient of correlation? Does it appear to indicate a high
degree of association between the size of the batch and the cost?
With this high value confirms the impression given by the scatterplot diagram and
indicates a strong linear relationship.

j. What is the value of r 2 ?


r 2 = (0.9854)2 = 0.9710

P3. The president of the Rich and Greene College of Business Administration wishes to forecast
the enrollment for next fall. The enrollment is measured in Full Time Equivalents (FTE),
which represent the number of full-time students, which is equivalent to the existing
mixture of full-time and part-time students. Data representing the fall enrollment for the
past ten years is given below:
time(t) Enrollme
nt
1 907
2 981
3 1014
4 1015
5 1050
6 1071
7 1123
8 1118
9 1175
10 1216

a. Draw a scatterplot. Does the data appear to contain a linear trend?

Enrollment
1400

1200

1000

800

600

400

200

0
0 2 4 6 8 10 12

It contain a linear trend in the graph.


b. Obtain the ∑t, ∑y, and ∑ty.
∑t = 55; ∑t2 = 385; ∑y = 10,670; ∑ty = 61,187

c. What is the value of the slope?

d. What is the interpretation of the slope?


It is estimated that the enrollment increase by 30.33 FTE per year, on the
average.

e. What is the value of the y intercept?


a = ӯ – bt = 1067-30.33(5.5) = 900.2

f. What is the interpretation of the y intercept?


It is estimated that the enrollment at t=0 was 900.2 FTE.

g. Forecast the enrollment for next fall.


y0= a+bt = 900.2+30.33(11) = 1,233.83 FTE

P4. The table below contains data on the monthly amount, in millions of dollars, which was
spent by "leading national advertisers" for advertising apparel and accessories in
magazines, in four recent years.

Year
Month 1 2 3 4
January $6.7 $7.9 $ 8.8 $ 7.4
February 6.2 8.4 10.3 17.4
March 12.1 15.1 20.4 26.1
April 14.4 15.9 17.3 26.6
May 11.1 11.8 15.7 17.0
June 7.4 5.5 9.0 10.4
July 6.4 7.6 8.9 7.9
August 12.9 13.0 20.0 24.7
September 21.1 23.2 32.6 35.6
October 15.4 17.2 24.2 24.8
November 16.5 16.7 22.0 22.2
December 11.6 11.9 16.9 19.8
Source: Survey of Current Business, U.S. Department of Commerce, Washington, D.C., various
dates.

P5. Use the data in Problem P4 to create the following two naïve forecasts:
a. Use the actual value in the previous period to forecast the amount which will be
spent on advertising apparel and accessories in January of Year 5.

b. Use the actual value in the same month of the previous year to forecast the amount
which will be spent on advertising apparel and accessories for January of Year 5.

P6. Use the data for Problem P4 to complete the following:


a. Construct the worksheet for single-factor exponential smoothing with   0.20 to
obtain the forecasts for the months of February through December of Year 1.
Assume that the forecast for January of Year 1 is the same as the actual for January
of Year 1.
Month t At Ft (At-Ft)

January 1 6.7 0 0

February 2 6.2 6.7 -5.5

March 3 12.1 6.6 5.5

April 4 14.4 7.7 6.7

May 5 11.1 9.04 2.06

June 6 7.4 9.45 -2.05

July 7 6.4 9.04 -2.64

August 8 12.9 8.51 4.39

September 9 21.1 9.39 11.71

October 10 15.4 11.73 3.67

November 11 16.5 12.46 4.04

December 12 11.6 13.27 1.67

b. Draw the graph of the actual values and the forecasted values.

Chart Title
25

20

15

10

0
0 2 4 6 8 10 12 14
-5

-10

At Ft (At-Ft)
ASSIGNMENT # 4 CASE STUDY: THE U.S. POSTAL SERVICE

A PARTIAL REQUIREMENT IN PRODUCTION MANAGEMENT

MASTER OF SCIENCE IN ENGINEERING MANAGEMENT

DATE SUBMITTED:

OCTOBER 13, 2018

SUBMITTED BY:

RUSSEL RENZ C. DE MESA

SUBMITTED TO:

MELANI B. CABRERA, PIE


Questions

1. Why is it important for the USPS to have a high volume of mail to process?
Answer:
It is important for USPS to have a high volume of mail to process because USPS is the
largest postal service in the world handling about 41% of the world’s mail volume.
The second largest is Japan and they only handled 6% of the world’s mail volume,
which is a way of showing how important and huge is USPS as a company and that
shows the importance of being able to handle and process high volume of mail. Also, it
is employing around 7,60,000 people, making it the largest civilian employer in the
United States.

2. What caused productivity to increase?


Answer:
In order to maintain their productivity, USPS had to keep postal rates low and also
maintain a fast delivery system. In order to improve their productivity, they had to
introduce the use of zip codes. They also increased the use of automation. The mail
system underwent a major shift to mechanization between the 50’s and the 60’s which
allowed USPS to be more rapid in the mail processing and that increased productivity.
Also in 1978, an expansion of the zip codes was introduced and in 1983 there was an
expansion by adding 4 more digits to the current zip codes structure that was in place.
The concept of zip code had to be supported by new equipment such as bar code and
optical reader. USPS also started using automated processing equipment and bar
codes and optical readers which added value to their productivity.

3. What impact did competitive pressures have on the USPS?


Answer:
The impact was that there has been a drop in the volume of the mails. There are many
reasons for this drop in volume. They are as follows:
 Competitors like Fedex and UPS, offered speedy delivery service and good
package tracking. Whereas USPS could not offer these services.
 The evolution of electronic machines affected USPS. These machines send the
information much faster to the receiver .For example Fax Machines.
 Increased use of alternate forms of advertising such as cable TV, also resulted
in a tremendous cut into the volume of mail.
 With the introduction of Emails and automated bill paying, the popularity of
USPS came down.

4. What measures did the USPS adopt to increase competitiveness?


Answer:
In order to compete with their rivals, USPS introduced new strategies. It
emphasized on reorganizing, reducing the cost, increasing productivity, emphasizing
on quality and improving customer service. In order to maintain customer satisfaction,
they worked very closely with the
customers in order to identify their needs and conveniences. They introduced
Customer Advisory Councils, which consisted of groups of citizens who volunteered to
work with the local postal management on postal issues of management, in order to
meet the interests of the local community.
 They even issued contracts to private firms to measure the first class mail
service and customer satisfaction.
 As a part of reorganizing, layers of management were removed and number of
position in service was cut down by 30000. Five regions and 73 field divisions
were replaced by just 10 areas.
 The ten customer service areas had managers for customer service,
processing, distribution, marketing and sales. This helped the managers to be
focused on their work, improve communication and empowered employees to
meet customer need.
 They expanded their retail hours for the convenience of the customers. In
cooperation with business customers USPS developed better services which is
mailer specific and also to reduce the complex rate structure.

5. What results were achieved by the USPS's changes?


Answer:
It helped them to reduce the cost, improve their productivity, customer
satisfaction, attract new business, reduce the company’s projected deficit.

6. What effect does the increased use of e-mail have on postal productivity?
Answer:
With the increase in the usage of email, there has been a drop in the mail
volume. Compared to mail Emails reach the receiver within seconds. Through e-mail
the productivity is more. It gives the sender a delivery note.
7. How does the use of standard shipping containers and flat-rate mailers help
competitiveness?
Answer:
The United States postal service is the largest. It employees over 760000
workers, making it the largest civilian employer in the US. It also has more than 75000
pieces of mail processing equipment. Using standard shipping containers and flat rate
mailers will allow other mailing companies to be able to provide similar service as the
postal service, which will lead to more competition in mailing market.