Name: SOLUTIONS Section:

OIT 262 (Operations - Base) Sections 1, 2, 3

Professor Plambeck Spring 2021

Final Examination

This is an individual exam. In recognition and in the spirit of the Honor Code, every student that
submits the exam certifies that they neither received nor gave unpermitted aid on this exam.
This is an open-course-material exam. You may refer to any of the materials on the OIT262 canvas
website, the textbook, and your own notes. Please relax and treat this exam as learning opportunity
to reflect on, apply and reinforce your operations knowledge and skills. The exam is designed to
challenge all OIT 262 students so, by design, no student should be able to perfectly solve every
problem.
Having opened the exam, you have 4 hours or until the end of the exam period, whichever comes
first, to complete the exam and re-upload through Canvas. (NOTE: Neil and Hank to email exam
back to Erica.) Enter your name and Section number above. In in the space provided after each
question/problem, enter your answer and show the work (logic, analysis, assumptions) by which
you developed your answer. If you are not certain that you fully understand a question, please
make an assumption and write that assumption at the start of your response. Submit the
document, with your responses, in a self-contained PDF. Auxiliary material (such as spreadsheets)
will not be graded. A list of the problems and number of points assigned to each problem, out of
the total of 175 points, is below.

Problem Description Points Score

1 Quantitative 20
2 Quantitative 25
3 Quantitative 10
4 Quantitative 20
5 Hybrid 20
6 Hybrid 25
7 Hybrid 20
8 Qualitative 10
9 Qualitative 10
10 Qualitative 10
11 Qualitative 10
12 Qualitative 10
13 Qualitative 10
Total 200

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 QUANTITATIVE QUESTIONS

Problem 1. (20 points) The voting bill passed in the Texas Senate on Sunday May 30
would reduce the operating hours of polling stations and add new identification
requirements for voting by mail. Those changes could reduce the total number of votes
cast in an election, while substantially increasing the rate at which voters arrive at a
polling station during operating hours.

(a.) (15 points) Suppose that a polling station has 5 voting machines, voters arrive
according to a Poisson process with a rate of 165 per hour, and a voter requires on average
100 seconds (with a standard deviation of 120 seconds) with a voting machine to cast a
vote. On average, how long must a voter wait in order to cast a vote?

M=5

𝟏𝟏
= 165 per hour
𝒂𝒂

p= 100 seconds = 1.6667 minutes

𝒑𝒑 𝟏𝟏 𝒉𝒉𝒉𝒉𝒉𝒉𝒉𝒉 𝟏𝟏𝟏𝟏𝟏𝟏 𝟏𝟏
𝒖𝒖 = 𝒎𝒎𝒎𝒎 = 𝟏𝟏𝟏𝟏𝟏𝟏 𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔 𝟑𝟑,𝟔𝟔𝟔𝟔𝟔𝟔 𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔 𝟏𝟏 𝒉𝒉𝒉𝒉𝒉𝒉𝒉𝒉 𝟓𝟓
= 0.9167

𝑪𝑪𝑪𝑪𝒂𝒂 = 𝟏𝟏

std. dev 𝟏𝟏𝟏𝟏𝟏𝟏

𝑪𝑪𝑪𝑪𝒑𝒑 = = = 𝟏𝟏. 𝟐𝟐
𝒑𝒑 𝟏𝟏𝟏𝟏𝟏𝟏

𝒑𝒑 𝒖𝒖�𝟐𝟐(𝒎𝒎+𝟏𝟏)−𝟏𝟏 𝑪𝑪𝑪𝑪𝒂𝒂 𝟐𝟐 + 𝑪𝑪𝑪𝑪𝒑𝒑 𝟐𝟐 𝟏𝟏. 𝟔𝟔𝟔𝟔𝟔𝟔𝟔𝟔 𝟎𝟎. 𝟗𝟗𝟗𝟗𝟗𝟗𝟗𝟗�𝟐𝟐(𝟓𝟓+𝟏𝟏)−𝟏𝟏 𝟏𝟏𝟐𝟐 + 𝟏𝟏. 𝟐𝟐𝟐𝟐
𝑻𝑻𝒒𝒒 = � �� �= � �� �
𝒎𝒎 𝟏𝟏 − 𝒖𝒖 𝟐𝟐 𝟓𝟓 𝟏𝟏 − 𝟎𝟎. 𝟗𝟗𝟗𝟗𝟗𝟗𝟗𝟗 𝟐𝟐

= 4 minutes.

(b.) (5 points) Suppose that the arrival rate of voters at the polling station increases to 281
per hour. How many additional voting machines would be needed at the polling
station to keep the average wait time to vote below 30 minutes?

The voting station requires at least 8 voting machines in total, because having 7 or fewer
would result in utilization above 1. With 8 voting machines, the average wait time to vote is
10 minutes, so 8 voting machines is enough. The polling station would need to purchase
and set up 3 new voting machines.

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M=8

𝟏𝟏
= 281 per hour
𝒂𝒂

p= 100 seconds = 1.6667 minutes

𝒑𝒑 𝟏𝟏 𝒉𝒉𝒉𝒉𝒉𝒉𝒉𝒉 𝟐𝟐𝟐𝟐𝟐𝟐 𝟏𝟏
𝒖𝒖 = 𝒎𝒎𝒎𝒎 = 𝟏𝟏𝟎𝟎𝟎𝟎 𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔 𝟑𝟑,𝟔𝟔𝟔𝟔𝟔𝟔 𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔𝒔 𝟏𝟏 𝒉𝒉𝒉𝒉𝒉𝒉𝒉𝒉 𝟖𝟖
= 0.976

𝑪𝑪𝑪𝑪𝒂𝒂 = 𝟏𝟏

std. dev 𝟏𝟏𝟏𝟏𝟏𝟏

𝑪𝑪𝑪𝑪𝒑𝒑 = = = 𝟏𝟏. 𝟐𝟐
𝒑𝒑 𝟏𝟏𝟏𝟏𝟏𝟏

𝒑𝒑 𝒖𝒖�𝟐𝟐(𝒎𝒎+𝟏𝟏)−𝟏𝟏 𝑪𝑪𝑪𝑪𝒂𝒂 𝟐𝟐 + 𝑪𝑪𝑪𝑪𝒑𝒑 𝟐𝟐 𝟏𝟏. 𝟔𝟔𝟔𝟔𝟔𝟔𝟔𝟔 𝟎𝟎. 𝟗𝟗𝟗𝟗𝟗𝟗�𝟐𝟐(𝟖𝟖+𝟏𝟏)−𝟏𝟏 𝟏𝟏𝟐𝟐 + 𝟏𝟏. 𝟐𝟐𝟐𝟐
𝑻𝑻𝒒𝒒 = � �� �= � �� �
𝒎𝒎 𝟏𝟏 − 𝒖𝒖 𝟐𝟐 𝟓𝟓 𝟏𝟏 − 𝟎𝟎. 𝟗𝟗𝟗𝟗𝟗𝟗 𝟐𝟐

= 10 minutes.

Problem 2. (25 points) The Pez company operates the boats in a fishery. In each month
of the year, the boats catch fish at a predictable rate, shown in the figure and table below.
Within each month that fishery output rate is constant and does not vary from day to
day. The Pez company also has a fish cannery, which operates its full capacity whenever
fish are available to process. The Pez company operates according to the same process
year after year, with exactly the same fishery output.

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(a) (5 points) What is the minimum capacity of the cannery (in tons per month) required
to process all of the fish, assuming the Pez company has an infinitely large freezer to store
the fish before processing them?

Answer: 60 tons/month

The total number of fish required in a year is 4 mo x (120 tons/mo) + 8 mo x (30 tons/mo)
= 480 tons + 240 tons = 720 tons.

To process this same amount in a year, the cannery must have a capacity of 720 tons /
12 months = 60 tons/mo.

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(b) (10 points) Suppose that the cannery capacity is your answer in part (a). What is the
minimum size of the freezer (in tons) required? In other words, how much fish must the
freezer be able to hold (in tons) to enable Pez company to process and sell all of the fish
it catches?

Answer: 240 tons

Build-up of fish occurs in Nov-Dec-Jan-Feb of each year. During this time fish are
produced at 120 tons/mo, but are only processed at 60 tons/mo. So the build-up is at a
rate of 60 tons/mo over four straight months, meaning the total buildup is 4 x 60 = 240
tons.
(c) (5 points) Suppose that the cannery capacity is your answer in part (a) and the size
of the freezer is your answer in part (b). What is the average amount of frozen fish in
the freezer?

Answer: 120 tons

Fish inventory increases linearly from 0 to 240 tons during the period from November
through February, and decreases linearly thereafter. The buildup rate starting in
March is 30 – 60 = - 30 tons/month, so after 240 tons / (30 tons/month) = 8 months, at the
end of October, the fish inventory reaches 0.

(d) (3 points) Make the same assumptions as in (c). What is the average amount of time
that a fish spends in the freezer?

Answer: 2 months

Using Little’s Law, T = I/R= 120 tons/(60 tons/mo) = 2 months

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(e) (2 points) Make the same assumptions as in (c) and (d). If fish are processed in the
order that they are caught, what is the maximum amount of time that a fish spends in
the freezer?

Answer: 4 months

The maximum wait occurs when the amount of fish in the freezer is the maximum of
240 tons. 240 tons/(60 tons/mo) = 4 months

Problem 3. (10 points) The Stanford Graduate School of Business doctoral program
admits an average of 18 students per year. Some of these doctoral students exit early, at
the end of the second year, with only a master’s degree. Essentially all of the other
doctoral students finish the doctoral degree, in an average of 4.8 total years of study. The
Stanford Graduate School of Business awards an average of 10 doctoral degrees per year.
What is the average number of doctoral students enrolled at the Stanford Graduate
School of Business?

This is an application of Little’s Law. First consider the students that exit early, with
only the master’s degree.

Rm = 18-10 = 8 students per year. Tm = 2 years. I m = Tm Rm = 16 students.

Now consider the students that finish the doctoral program.

Rd = 10 students per year. Td = 4.8 years. I d = Td Rd = 48 students.

The expected number of doctoral students at the GSB is

I m + I d = 64 students.

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Problem 4. (20 points) MeasurementBiz (MB) assembles high-end customized bathroom
scales in southern California. One particular component has daily demand
approximately normally distributed with mean 200 and standard deviation 150.
(Demand for this component is the result of its use in assembly, which, in turn, is initiated
by customer orders. Assume daily demands are independent.) Whenever MB places an
order for this component, there is a fixed cost of $5.26, regardless of the order quantity.
The supplier ships the order quantity immediately, and it arrives exactly 14 days later.
The component costs $20 per unit, at the time of shipment (MB owns the pipeline
inventory from the supplier to its factory). MB has a cost of capital of 24% per year. Its
physical inventory holding costs are negligible. MB operates 365 days per year, and has
a 98% target service level for the component.

(a) (10 points) Find the optimal order quantity for this component.

The marginal holding cost is h = $20 (0.24) = $4.80.

The annual demand rate is R = 200/day (365 days/yr) = 73,000/yr.

The fixed ordering cost is K = $5.26.

The Economic Order Quantity is �𝟐𝟐𝟐𝟐𝟐𝟐/𝒉𝒉 = 400.

(b) (10 points) What is the reorder point that MB should use to maintain its 98% in-stock
probability target?

The leadtime is L = 14 days. The reorder point is X* = E[Y] + z σ[Y].

The expected demand is E[Y] = 14 days × 200 units/day = 2800 units.

The standard deviation of demand is σ[Y] = √14 days × 150 units / day = 561.25 units.

The target in-stock probability of 98% corresponds to a critical ratio of 0.98. The
Standard Normal table gives a z-value of z=2.054.

The reorder point is: X* = E[Y] + z σ[Y] = 2800 + 2.054 (561.25) = 3952.8.

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Problem 5. (20 points) You are planning a German Oktoberfest with singing, dancing
and beer. You have sold all 1,000 tickets for the event at $30 per ticket. Each ticketholder
will demand an amount of beer that is a random variable with mean 0.5 liter and standard
deviation 0.4 liter. Total beer demand from all ticketholders has a normal distribution.
You much decide how much beer to order in advance, at a cost of $3 per liter. You will
sell any leftover beer to an undergraduate for $2 per liter. If you run out of beer on the
day of the Oktoberfest, you must pay $8 per liter for resupply from a nearby store, to
meet ticketholders’ demand for beer. You will donate all profit from the Oktoberfest to
your favorite charity. Your goal is to maximize expected profit.

(a.) (15 points) Assuming that individual beer demand is independent and identically
distributed across ticketholders, how much beer should you buy in advance?

This is a newsvendor problem.

C0 = $3 - $2 = $1

Cu = $8 - $3 = $5

critical ratio is Cu/(C0 + Cu) = 5/(1+5) = 0.833

z = normsinv(0.833) = 0.967

expected demand for beer is 1000 x 0.5 liters = 500 liters

standard deviation is sqrt( 1,000 x (0.4)2) = 12.649 liters

buy 500 + 0.967 x 12.649 = 512 liters

(b.) (5 points) If individual beer demand is positively correlated across ticketholders

(rather than independent) should you buy less, more, or the same amount of beer in
advance as you calculated in (a.)? Briefly justify your response.

More, because the positive correlation increases the standard deviation of the total
beer demand and the z value is strictly positive because the underage cost is greater
than the overage cost.

Problem 6. (20 points) You operate a skin-rejuvenation service that has customers lining
up around the block, 24 hours per day. In preparation for the skin-rejuvenation

8
treatment, a customer must first sit in the steam room for exactly 20 minutes then undergo
an exfoliating body scrub for exactly 30 minutes. The total amount of time required for
the rejuvenation treatment is a random variable with a mean of 80 minutes and standard
deviation of 10 minutes, which depends on the customer’s skin type and the skill of the
rejuvenation expert. The rejuvenation expert applies special sauce to the customer’s skin
and wraps the customer in tinfoil, which takes 15 minutes on average, with a standard
deviation of 10 minutes. Customers stay wrapped in the tinfoil for exactly 1 hour, until
a rejuvenation expert unwraps them; the unwrapping takes 5 minutes. You allow a
maximum of 6 customers to enter the steam room at the same time. You operate with 3
body-scrubbers and 8 rejuvenation experts. You have plenty of space for customers.

(a.) (15 points) What is your process capacity? In other words, how many customers can
you serve per hour?

The capacity for body scrub is 3 scrubbers x 1 customer/ (30 minutes) x (60 min/hour) =
6 customer/hour

The capacity for rejuvenation is 8 rejuvenators x 1 customer/ (20 minutes) x (60

min/hour) = 24 customer/hour

The capacity of the steam room is (6 customers)/(20 minutes) x (60 min/hour) = 18

customers/hour

The bottleneck, body scrubbing, determines the process capacity of 6 customers/hour.

NOTE: While the customer remains wrapped in tinfoil, the rejuventation expert does
not need to work on that customer, so should be serving other customers, in the same
manner that workers at Beleza switch to serving another customer, while a customer is
resting with a treatment in her hair and does not need work, then switch back. If a
student does not recognize this opportunity for the rejuvenation to be much more
efficient and instead assumes without comment that the rejuvenation expert must idle
for the entire hour that the customer is wrapped in tinfoil, then deduct 5 points. If all
the responses in part (a.) and (b.) are correct under the assumption that a rejuvenation
expert must idle (accompany the customer without doing any other work) while the
customer is wrapped in tinfoil, then do not deduct any additional points on (a.) or (b.).

(b.) (10 points) Which of the following actions would increase your ROIC? You may select
more than one option. Briefly justify your answer.

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 I. Through training, reduce the mean time required for a rejuvenation expert to
wrap a customer in tinfoil.
II. Through training, reduce the standard deviation of the time required for a
rejuvenation expert to wrap a customer in tinfoil.
III. Allow a maximum of 7 customers to enter the steam room at the same time.
IV. Operate with 1 additional body-scrubber, for a total of 4.

(IV) Adding 1 body-scrubber increases the capacity for body scrub - and the
capacity for the entire process - to
4 scrubbers x 1 customer/ (30 minutes) x (60 min/hour) = 8 customer/hour. This
improves utilization of the facility and all other non-bottleneck resources.
Presumably the revenue from serving an additional 2 customers per hour is
greater than the hourly cost for a body-scrubber, so this increases ROIC.

Body-scrub is still the bottleneck after adding a body-scrub expert, so the other
changes cannot increase ROIC.

Problem 7. (20 points) An online retailer allows a customer to return a product for a full
refund. To do so, the customer must enter the retailer’s website and select from a drop-
down menu the reason for returning the item (“I realized that I don’t want it” or “The
item is defective”). The online retailer pays for the return shipping if the customer selects
“the item is defective” and otherwise the customer must pay for the return shipping.
Historical data shows that the vast majority of customers are truthful, despite the small
financial incentive to falsely report that the item is defective. When the system is in
control, meaning that the product is not defective, a customer selects “The item is
defective” in only 0.3% of returns. Currently, when a single customer selects “The item
is defective” for a return, the online retailer immediately removes that specific product
from its website so that no other customer will order it, halts delivery of that product
from its supplier, and informs the supplier that it has a quality problem to resolve. The
online retailer’s rationale for this policy is that “we always trust our customer”.

Based on what you have learned in OIT 262, propose a policy for when to take action on
a specific product (remove that product from the website, halt delivery from the supplier,
and inform the supplier that it has a quality problem), based on the daily number of
returns for that specific product and number of those returns for which the customer
selects “The item is defective”. Justify your proposal.

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When the system is in control (the product is not defective) the likelihood that a customer that
returns the product will select “The item is defective” is 𝑝𝑝̅ = 0.003. Let ni denote the number of
returns and di denote the number of those returns for which the customer selects “the item is
defective” on day i, so that
𝑑𝑑𝑖𝑖
𝑝𝑝𝑖𝑖 =
𝑛𝑛𝑖𝑖
is the fraction of returns that are reported to be defective on day i. If the system is in control then
the expected value of pi is
𝐸𝐸[𝑝𝑝𝑖𝑖 ] = 𝑝𝑝̅ = 0.003
𝑝𝑝̅ (1−𝑝𝑝̅ )
and the standard deviation of pi is � . When the fraction of returns reported as defective is
𝑛𝑛𝑖𝑖
more than 3 standard deviations above the mean, one can infer that the system is likely out of
control, i.e., that the product is defective.

Therefore, taking the standard p-chart approach, take action if and only if
𝑑𝑑𝑖𝑖 𝑝𝑝̅ (1 − 𝑝𝑝̅ )
𝑝𝑝𝑖𝑖 = > 𝑝𝑝̅ + 3 �
𝑛𝑛𝑖𝑖 𝑛𝑛𝑖𝑖
where 𝑝𝑝̅ = 0.003.

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 QUALITATIVE QUESTIONS

The following questions are to be answered in at most a few sentences -- no more than 50 words
per question. Longer answers will be penalized.

Problem 8. (10 points) Company T is making a highly innovative electric vehicle on an

assembly line. Company T operates the assembly line “around the clock” by scheduling
workers in 3 shifts of 8 hours for a total of 24 hours every day, 7 days per week. The
assembly line has 25 stations. The CEO has set an ambitious goal for every station to
reduce the activity time at that station to 3 minutes on average. Assuming that that goal
is met, how many vehicles can the line assemble in one week? Select the most plausible
response and justify your answer.

I. 80,000 vehicles
II. 84,000 vehicles
III. 3,360 vehicles
IV. 3,000 vehicles

(IV) The capacity of each station on the assembly line is 7 days/week x 24 hours/day
x 60 min/hour x 1 vehicle/(3 minutes) = 3,360 vehicles per week. However, random
variability in the activity time at each station will lead to blocking and starving on the
line, so the line as a whole cannot achieve 3,360 vehicles. Full credit for justification
that each station will also need some setup, downtime or maintenance. The capacity of
the line must be lower.

Problem 9. (10 points) In the Toyota production system, managers can reduce the
number of kanban cards at any given process stage to tighten inventory limits. (This could
be WIP inventory between two internal processing operations, or an inventory of items
provided by an outside supplier.) Name one important negative effect and one important
positive effect of such an action.

An important and obvious negative effect is that blockage and starvation increase as
inventory is removed from the system, causing a loss of throughput.

Another negative effect is vulnerability to disruptions that may occur due to

breakdowns or supply chain glitches.

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The positive effect emphasized by Toyota managers is that reduced inventory levels
expose problems, necessitating solutions and driving process improvement.

Other positive effects are reduced flow time and inventory holding costs.

Problem 10. (10 points) Suppose you are managing patient flow in a health clinic. This
clinic consists of a single triage nurse who, after a brief examination, routes patients either
to 3 nurse practitioners (NPs) or 3 doctors (MDs) based on the type and severity of their
ailments:

NP (3)
Triage
Nurse
(1)

MD (3)

A staff member suggests specializing NPs into different tasks: have one NP focus only on
patients with flu-like symptoms, have another treat only cuts and scrapes, and have the
third treat patients with all other problems. Assuming patient volumes are equally
divided among these three types and the average utilization of the NPs is 80% in the
original system, under which of the following circumstances might this recommendation
reduce patient waiting times, and why? You may select more than one option.

I. If there is no variability in patient arrivals or service time.

II. If all patient types take exactly the same amount of time to treat.
III. If specializing in a particular patient type makes nurse practitioners faster.
IV. If nurse practitioners are faster than doctors.
V. If specializing in a particular patient type reduces variability in the amount of time
that a nurse practitioner requires to treat that type of patient.

III and V. If specialization increases the service rate or reduces variability, it’s possible
to decrease wait times (although a counteracting effect will be the elimination of
pooling resources).

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If I is true, then pooling or de-pooling the NPs has no impact on customer wait times
(all wait times are zero).

If II is true, then de-pooling will only increase the average wait for all customer types.

Problem 11 (10 points) The LCA Exhibit 6 in “Process Innovation for Efficiency and
Environmental Sustainability in the Building Industry” suggests that the total life cycle
global warming impact of building with a timber wall system would be greater than with
a BONE Structure. Which of the following are shortcomings of the LCA that inflate that
difference in global warming impact, in favor of the BONE Structure? You may select
more than one option. Provide a brief justification for each option that you select.

I. Transportation distances for the components of the Bone Structure system are
assumed to be the same as for the timber system, 250 km.
II. The analysis does not account for carbon sequestered during timber growth.
III. The analysis assumes that the CO2 emission intensity of grid electricity used in air
conditioning the building remains constant, at the current level of kg CO2 per MJ.

I, II and III.
I As we discussed in class, for Mark Jacobson’s house, the BONE Structure was
transported 5,000 km from Ottawa, Canada, to Stanford, increasing the global
warming impact of that BONE Structure. increasing the transportation emissions by
a factor of 5,000/250=20, from 686 kg CO2-eq to 13,720 kg CO2-eq, which is 6x the
estimated emissions from making the steel components, and a third of the estimated
total life cycle emissions associated with the timber wall system. For other homes,
BONE Structure aims to source from a local job shop so the transport emissions will
be lower, but ideally the LCA should conduct sensitivity analysis over the plausible
range of transport distances for the BONE Structure

II Insofar as building in wood creates more demand for trees that sequester carbon
from the air, building in wood would remove carbon from the atmosphere. Failing to
account for benefit associated with timber favors the BONE Structure.

III The LCA assumed that the house would be on grid electricity for air conditioning
and the BONE structure requires less air conditioning and associated electricity than
the timber building. One could expect that carbon intensity of grid electricity would
decrease over time, decreasing the carbon emissions savings from BONE relative to
timber.

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Problem 12. (10 points) Which of the following changes (if the change were to occur)
would decrease the variability in demand for a polycrystalline silicon manufacturer?
(Polycrystalline silicon is an input for solar photovoltaics and semiconductor devices
used in automobiles and consumer electronics.) You may select more than one option.
Provide a brief justification for each option that you select.

I. Transportation leadtimes increase throughout the supply chains for automobiles,

consumer electronics, and solar photovoltaics.
II. Automobile manufacturers, consumer electronics manufacturers, and solar
photovoltaic manufacturers improve the sharing of demand information
throughout their supply chains.
III. Stable government policy reduces variability in demand for solar photovoltaics.

Only II and III.

II would mitigate the bullwhip effect. The bullwhip effect amplifies the variability in
demand for autos, electronics, and photovoltaics into even greater variability for
upstream suppliers. Mitigating the bullwhip effect would therefore reduce variability
in demand for polycrystalline silicon.

The reduction in variability in solar photovoltaic demand in III would translate into a
reduction in variability in demand for upstream suppliers, including a manufacturer
of polycrystalline silicon.

Problem 12. (10 points) One might say that call blueprinting – writing up specific
instructions that a call center agent needs to follow – stifles creativity and innovation on
the part of telephone call center agents, but it can also be argued that blueprinting
facilitates the role of agents as "process designers." Explain the latter point of view.

A call blueprint documents "best practice" at a relatively detailed level. With such a
step-by-step procedure established, workers generate incremental changes whose
potential impact they can evaluate based on their limited view of the total system.
When incremental improvements are found, they are incorporated into the blueprint
and quickly disseminated.

15
 Table 1: Standard Normal Cumulative Distribution (Negative z Values)
This is identical to the table in Appendix B of Cachon & Terwiesch.

z -0.09 -0.08 -0.07 -0.06 -0.05 -0.04 -0.03 -0.02 -0.01 0.00
-4.0 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
-3.9 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
-3.8 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
-3.7 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
-3.6 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0002 0.0002
-3.5 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002
-3.4 0.0002 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003
-3.3 0.0003 0.0004 0.0004 0.0004 0.0004 0.0004 0.0004 0.0005 0.0005 0.0005
-3.2 0.0005 0.0005 0.0005 0.0006 0.0006 0.0006 0.0006 0.0006 0.0007 0.0007
-3.1 0.0007 0.0007 0.0008 0.0008 0.0008 0.0008 0.0009 0.0009 0.0009 0.0010
-3.0 0.0010 0.0010 0.0011 0.0011 0.0011 0.0012 0.0012 0.0013 0.0013 0.0013
-2.9 0.0014 0.0014 0.0015 0.0015 0.0016 0.0016 0.0017 0.0018 0.0018 0.0019
-2.8 0.0019 0.0020 0.0021 0.0021 0.0022 0.0023 0.0023 0.0024 0.0025 0.0026
-2.7 0.0026 0.0027 0.0028 0.0029 0.0030 0.0031 0.0032 0.0033 0.0034 0.0035
-2.6 0.0036 0.0037 0.0038 0.0039 0.0040 0.0041 0.0043 0.0044 0.0045 0.0047
-2.5 0.0048 0.0049 0.0051 0.0052 0.0054 0.0055 0.0057 0.0059 0.0060 0.0062
-2.4 0.0064 0.0066 0.0068 0.0069 0.0071 0.0073 0.0075 0.0078 0.0080 0.0082
-2.3 0.0084 0.0087 0.0089 0.0091 0.0094 0.0096 0.0099 0.0102 0.0104 0.0107
-2.2 0.0110 0.0113 0.0116 0.0119 0.0122 0.0125 0.0129 0.0132 0.0136 0.0139
-2.1 0.0143 0.0146 0.0150 0.0154 0.0158 0.0162 0.0166 0.0170 0.0174 0.0179
-2.0 0.0183 0.0188 0.0192 0.0197 0.0202 0.0207 0.0212 0.0217 0.0222 0.0228
-1.9 0.0233 0.0239 0.0244 0.0250 0.0256 0.0262 0.0268 0.0274 0.0281 0.0287
-1.8 0.0294 0.0301 0.0307 0.0314 0.0322 0.0329 0.0336 0.0344 0.0351 0.0359
-1.7 0.0367 0.0375 0.0384 0.0392 0.0401 0.0409 0.0418 0.0427 0.0436 0.0446
-1.6 0.0455 0.0465 0.0475 0.0485 0.0495 0.0505 0.0516 0.0526 0.0537 0.0548
-1.5 0.0559 0.0571 0.0582 0.0594 0.0606 0.0618 0.0630 0.0643 0.0655 0.0668
-1.4 0.0681 0.0694 0.0708 0.0721 0.0735 0.0749 0.0764 0.0778 0.0793 0.0808
-1.3 0.0823 0.0838 0.0853 0.0869 0.0885 0.0901 0.0918 0.0934 0.0951 0.0968
-1.2 0.0985 0.1003 0.1020 0.1038 0.1056 0.1075 0.1093 0.1112 0.1131 0.1151
-1.1 0.1170 0.1190 0.1210 0.1230 0.1251 0.1271 0.1292 0.1314 0.1335 0.1357
-1.0 0.1379 0.1401 0.1423 0.1446 0.1469 0.1492 0.1515 0.1539 0.1562 0.1587
-0.9 0.1611 0.1635 0.1660 0.1685 0.1711 0.1736 0.1762 0.1788 0.1814 0.1841
-0.8 0.1867 0.1894 0.1922 0.1949 0.1977 0.2005 0.2033 0.2061 0.2090 0.2119
-0.7 0.2148 0.2177 0.2206 0.2236 0.2266 0.2296 0.2327 0.2358 0.2389 0.2420
-0.6 0.2451 0.2483 0.2514 0.2546 0.2578 0.2611 0.2643 0.2676 0.2709 0.2743
-0.5 0.2776 0.2810 0.2843 0.2877 0.2912 0.2946 0.2981 0.3015 0.3050 0.3085
-0.4 0.3121 0.3156 0.3192 0.3228 0.3264 0.3300 0.3336 0.3372 0.3409 0.3446
-0.3 0.3483 0.3520 0.3557 0.3594 0.3632 0.3669 0.3707 0.3745 0.3783 0.3821
-0.2 0.3859 0.3897 0.3936 0.3974 0.4013 0.4052 0.4090 0.4129 0.4168 0.4207
-0.1 0.4247 0.4286 0.4325 0.4364 0.4404 0.4443 0.4483 0.4522 0.4562 0.4602
0.0 0.4641 0.4681 0.4721 0.4761 0.4801 0.4840 0.4880 0.4920 0.4960 0.5000

Continued on next page….

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 Table 1: Standard Normal Cumulative Distribution Continued (Positive z Values)
This is identical to the table in Appendix B of Cachon & Terwiesch.

z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359
0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5753
0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141
0.3 0.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.6517
0.4 0.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879
0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
0.6 0.7257 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7517 0.7549
0.7 0.7580 0.7611 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7995 0.8023 0.8051 0.8078 0.8106 0.8133
0.9 0.8159 0.8186 0.8212 0.8238 0.8264 0.8289 0.8315 0.8340 0.8365 0.8389
1.0 0.8413 0.8438 0.8461 0.8485 0.8508 0.8531 0.8554 0.8577 0.8599 0.8621
1.1 0.8643 0.8665 0.8686 0.8708 0.8729 0.8749 0.8770 0.8790 0.8810 0.8830
1.2 0.8849 0.8869 0.8888 0.8907 0.8925 0.8944 0.8962 0.8980 0.8997 0.9015
1.3 0.9032 0.9049 0.9066 0.9082 0.9099 0.9115 0.9131 0.9147 0.9162 0.9177
1.4 0.9192 0.9207 0.9222 0.9236 0.9251 0.9265 0.9279 0.9292 0.9306 0.9319
1.5 0.9332 0.9345 0.9357 0.9370 0.9382 0.9394 0.9406 0.9418 0.9429 0.9441
1.6 0.9452 0.9463 0.9474 0.9484 0.9495 0.9505 0.9515 0.9525 0.9535 0.9545
1.7 0.9554 0.9564 0.9573 0.9582 0.9591 0.9599 0.9608 0.9616 0.9625 0.9633
1.8 0.9641 0.9649 0.9656 0.9664 0.9671 0.9678 0.9686 0.9693 0.9699 0.9706
1.9 0.9713 0.9719 0.9726 0.9732 0.9738 0.9744 0.9750 0.9756 0.9761 0.9767
2.0 0.9772 0.9778 0.9783 0.9788 0.9793 0.9798 0.9803 0.9808 0.9812 0.9817
2.1 0.9821 0.9826 0.9830 0.9834 0.9838 0.9842 0.9846 0.9850 0.9854 0.9857
2.2 0.9861 0.9864 0.9868 0.9871 0.9875 0.9878 0.9881 0.9884 0.9887 0.9890
2.3 0.9893 0.9896 0.9898 0.9901 0.9904 0.9906 0.9909 0.9911 0.9913 0.9916
2.4 0.9918 0.9920 0.9922 0.9925 0.9927 0.9929 0.9931 0.9932 0.9934 0.9936
2.5 0.9938 0.9940 0.9941 0.9943 0.9945 0.9946 0.9948 0.9949 0.9951 0.9952
2.6 0.9953 0.9955 0.9956 0.9957 0.9959 0.9960 0.9961 0.9962 0.9963 0.9964
2.7 0.9965 0.9966 0.9967 0.9968 0.9969 0.9970 0.9971 0.9972 0.9973 0.9974
2.8 0.9974 0.9975 0.9976 0.9977 0.9977 0.9978 0.9979 0.9979 0.9980 0.9981
2.9 0.9981 0.9982 0.9982 0.9983 0.9984 0.9984 0.9985 0.9985 0.9986 0.9986
3.0 0.9987 0.9987 0.9987 0.9988 0.9988 0.9989 0.9989 0.9989 0.9990 0.9990
3.1 0.9990 0.9991 0.9991 0.9991 0.9992 0.9992 0.9992 0.9992 0.9993 0.9993
3.2 0.9993 0.9993 0.9994 0.9994 0.9994 0.9994 0.9994 0.9995 0.9995 0.9995
3.3 0.9995 0.9995 0.9995 0.9996 0.9996 0.9996 0.9996 0.9996 0.9996 0.9997
3.4 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9997 0.9998
3.5 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998 0.9998
3.6 0.9998 0.9998 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.7 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.8 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999 0.9999
3.9 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
4.0 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

17