OPERATION MANAGEMENT DHU 2224

ANSWER ALL QUESTION

QUESTION 1

The faculty of Accounting of a University is planning to offer a five-player program leading

to Master in Accounting. The program will be offered as soon as the planning has been
completed. The faculty has identified the related planning activities. These are shown in
following table
Activity Immediate Time
(sub- Predecessors
project)
Optimistic Most Pessimistic(b) t σ²
(a) Probable(m)
A - 7 9 17 - -
B A 2 4 6 - -
C A 4 5 61 - -
D A 2 3 10 - -
E B 1 2 3 - -
F B 2 3 4 - -
G C,F 1 2 3
H D 2 3 4
I H 2 3 4
J G,I 1 2 3
K E,J 1 2 3

a) Fill in the blank of expected project completion time and the variance for each sub-
project
(5 Mark)

Activity(sub- t σ²
project
A 10 2.78
B 4 0.44
C 14.167 90.25
D 4 1.78
E 2 0.44
F 3 0.11
G 2 0.11
H 3 0.11
I 3 0.11
J 2 0.11
K 2 0.11
 OPERATION MANAGEMENT DHU 2224

t = (a+4m+b)/6
σ² =[(b-a)/6] ²

b) Develop network diagram

(10 Mark)

E
2
B 4 F 3
A C G J K

BEGIN 2 2 Finish

10 14.167 3 I 2
D 4
H

c) Determine the critical path and project completion time

(10 Mark)

The path combination Time

A-B-E-J-K 20

A-B-F-G-J-K 23

A-C-G-J-K 30.167

A-D-H-I-J-K 24
 OPERATION MANAGEMENT DHU 2224

The critical path of the project is the activities A-C-G-J-K, and the project duration is
30.167 weeks

E
2
B 4 F 3
A C G J K

BEGIN 2 2 Finish

10 14.167 3 I 2
D 4
H

The project variance σ² is the total variance of the activities on the critical path. The
critical activities are A-C-G-J-K, hence the project variance σ² will be σ² (A)+ σ² (G)+ σ²
(J)+ σ² (K), thus

QUESTION 2
a ) Calculate location analysis below
City Fixed cost Variable cost Total cost
Russia I. RM 90 RM 68 000
Germany RM 6800 II. RM 99 000
United Kingdom RM 3000 III. RM -73 000

Selling price = RM 82
OPERATION MANAGEMENT DHU 2224

Expected volume = 700 units

( 9 Mark)
I. RM 68000 = X + (RM90 x 700units)
RM 68000 = X + RM63000
X = RM5000

Fixed cost RM5000

II. RM99000 = RM6800 + (RMX x 700units)

RM99000 = RM6800 + 700X
RM92200 = 700X
RM131.71 = X

Variable cost = RM131.71

III. RM-73000 = RM3000 +(RMX x 700units)

RM-73000 = RM3000 + 700X
RM-76000 = 700X
X = RM108.57

Variable cost = RM108.57

Russia = 82(700)-68000 = -RM10600

German = 82(700)-99000 = -RM41600
UK = 82(700)-73000 = -RM15600

b) In Jun Fiqri can get RM 1000 if he produce 10 chair every day. He must pay RM 60
commission for labour ,he also must pay RM 200 for rent the place to get revenue he do the
advertising RM 60 in this month. Calculate the total cost for Fiqri in this month

( 3 Mark)
Total cost = 60+200+60
Total cost = RM320 month
OPERATION MANAGEMENT DHU 2224

QUESTION 3

Develop a productivity measure for a product that utilizes labour machine time, raw materials
and purchase materials. Assume 5000 units are produced in 500 hours and are sold for
RM30/unit. The labor rate is Rm 25/hour, the cost of the materials is Rm 5000 and the cost of
overhead is 2X labor cost

( 3 Mark)
5000 units / 500 hours =10 units
Labour rate = RM25 per hours
Cost material = RM5000 for 5000 units

Overhead = RM10000
Total cost = RM25(500 hours) + RM5000 + RM10000
Total cost = RM27500

Total sales = RM30(5000 units)

Total sales = RM150000

Total profit = total sales - total cost

Total profit = RM150000 – RM27500
Total profit = RM122500