PRODUCTION AND OPERATION

MANAGEMENT
SPRING 2021 Instructor: Shahid Zaki

FINAL TERM EXAMINATION

NAME: ______________________ ERP: ______________ DATE: ___________________

Instructions: Write your name on both attachments. Answer on question paper.
Marks Distribution: Case= 30 Time = 3 Hours MCQ Marks = 45

Total Marks: 75

Q1)

(a) Define Operations management and how it adds value in the organization. Give examples from
manufacturing and service sectors. (3 lines answer)

(b) From the video shown in the class, what conclusions can you drive about the following:

i) Difference between business strategy and operational strategy. (3 lines answer)

ii) Difference between brand promise and value proposition. (3 lines answer)

*Illustrate them with examples from the video.

Q2) The critical path for the network activities shown below is ________ with duration
________.

Immediate
Activity Duration Predecessors
A 10 --
B 8 --
C 4 A
D 2 A
E 6 B,C,D

Based on the time estimates above, make a network diagram and find out the critical path.
Q3)

(a) Given the following data, calculate the five-year moving averages for years 6 through 10.

Year Demand
1 74
2 90
3 59
4 91
5 140
6 98
7 110
8 123
9 99

(b) Use exponential smoothing with trend adjustment to forecast deliveries for period 10. Let
alpha = 0.4, beta = 0.2, and let the initial trend value be 4 and the initial forecast be 200.

Actual
Period Demand
1 200
2 212
3 214
4 222
5 236
6 221
7 240
8 244
9 250
10 266

Formulas
Forecast including trend (FITn) = Exponentially smoothed forecast average (Ft) +
Exponentially smoothed trend (Tt)
Ft = a(At - 1) + (1 - a)(Ft - 1 + Tt - 1)

Tt = b(Ft - Ft - 1) + (1 - b)Tt - 1
Q4)

(a) A production line is to be designed to make 375 El-More dolls per day. Each doll
requires 11 activities totaling 16 minutes of work. The factory operates 750 minutes per
day. What is the required cycle time for this assembly line?

(b) A work cell is required to make 80 computerized diagnostic assemblies (for installation
into hybrid automobiles) each day. The cell currently works an eight-hour shift, of which
seven hours are available for productive work. These assemblies require five operations,
with times of 1.0, 1.8, 2.4, 2.5, and 1.4 minutes each. What is takt time for this cell?

Q5)

(a) Using the formulas for Annual setup costs, Annual holding costs, Optimal order quantity,
derive the formula for Q*.

(b) Given the following data: D = 65,000 units per year, S = $120 per setup, P = $5 per unit,
and I = 25% per year, (i) calculate the EOQ, and (ii) calculate annual costs of holding and
setup following EOQ behavior.

Q6) The diagram below identifies the elements of service as provided by a soft drink vending
machine. Each element has an estimate of its own reliability, independent of the others.
What is the reliability of the "system"?

Q7) Identify the 7 steps involved in building the house of quality.

Q8) Explain why the critical path is the longest, not the shortest, path through a network.