THE UNIVERSITY OF THE WEST INDIES

Semester I 10 Semester II - 0 Weelotod Summer School -

Final Examination December El July 0 2017/2018

Originating Campus: Cave Hill 0 MONA, WJC St. Augustine 0

Mode: On Campus IE By Distance 0

Course Code and Title: MGMT3057 - Productivity and Quality Management

Time: 1:00 —3:00 p.m

Date: Monday December 11, 2017
Duration: 2 Hours Papt.r No: Final Examination

Materials required:

Answer booklet: Normal El Special D Not required 0

Calculator: Programmable 0 Non Program rable El (where applicable)

Multiple Choice answer sheets: numerical 0 alphatetical 0 1-100 0

Auxiliary/Other material(s) — Please specify: None

Candidates are permitted to bring the following items to their desks:

Pen, Marker, Ruler, UWI ID Card, UWI Examination Card, and Calculator

Instructions to Candidates: This exam has 7 pages. and 5 questions (20 marks each).
Please select 3 (three) to answer and start each answer on a new page.

Good Luck!

Semester 1 2017/2018

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 2

QUESTION 1:

(A) Farlen & Helikman is a CPA firm specializing in payroll preparation.

The firm has been successful in automating much of its work, using high-
speed printers for check processing and report preparation.

The computerized approach, however, has problem. Over the past 20

months, the printers have broken down at the rate indicated in the following
table.

Number of Number of Months That Breakdown

Breakdown Occurred
0 2
1 8
2 6
3 4

Each time the printers break down, Farlen & Halikman estimates that it
loses an average of $300 in production time and service expenses. One
alternative is to purchase a service contract for preventive maintenance.
Even if Farlen & Halikman contracts for preventive maintenance, there will
still be breakdown, averaging one breakdown per month. The price of this
service is $150 per month.

Should CPA firm contract for preventive maintenance? Justify your answer,
by showing the necessary calculations. (10 Marks)

(B) "One of the elements of total quality is continual improvement."

(i) What is management's role in continual improvement of processes?

(3 Marks)

(ii) List and discuss standard process improvement strategies. Please

provide examples to support your answer. (7 Marks)

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OUESTION 2:
(A) You are the process improvement managr and have developed a new
machine to cut insoles for the company's tp-of-the-line running shoes.
You are excited because the company's goal i no more than 3.4 defects per
million and this machine may be the innovatio i you need. The insole cannot
be more than +1- 0.001 of an inch from the required thickness of 0.250
inch. You want to know if you should replacc the existing machine, which
has a Cpk of 1. Estimated standard deviation of new process is 0.0005 inch.
Show full working of your calculations. (8 Marks)

(B) Clerks at Mosier Data Systems key in th usands of insurance records

each day for a variety of client firms. CEO Donna Mosier wants to set
control limits to include 99.73% (z=3) of the random variation in the data
entry process when it is in control. Samples if the work of 20 clerks are
gathered (and shown in the table below). Mcsier carefully examines 100
records entered by each clerk and counts the number of errors. Calculate
the control limits and develop appropriate cont ol chart (show full working
of your calculations). (12 Marks)

Sample Number Number of Errors Sample Number 'Number of Errors

1 6 11 6
2 5 12 1
3 0 13 8
4 1 11 7
5 4 15 5
6 2 1 4
7 5 1 11
8 3 1 3
9 3 1' 0
10 2 21 4

(V
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Semester 1201712018
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QUESTION 3:
(A) What is management's role in benchmarking? What are the
prerequisites management should check before getting involved in
benchmarking? What are some of the common obstacles to successful
benchmarking? Please provide examples to support your answer.

(15 Marks)

(B) Twenty air conditioning systems designed for use by astronauts in

NASA's space shuttles were operated for 1,000 hours at NASA's
Huntsville, Alabama, test facility. Two of the systems failed during the test
one after 200 hours and the other after 600 hours. If the typical space
shuttle trip lasts 6 days, what is NASA's failure rate per trip? Please show
full working of your calculations.
(5 Marks)

QUESTION 4:

(A) "Quality means that the organization's culture is defined by and

supports the constant attainment of customer satisfaction through an
integrated system of tools, techniques and training." How organizations that
develop and maintain a quality culture differ significantly from those with
a traditional culture. Provide examples to support your answer.
(10 Marks)

(B) "Leadership for quality is based on the philosophy that continually

improving work methods and processes will, in turn, improve quality,
productivity, cost and return on investment." List and discuss key
principles of leadership for quality. Provide examples to support your
answer. (10 Marks)

Semester 1 201712018
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QUESTION 5:
(A) The manager of Michigan County's v‘ elfare office, Dana Johnson,
estimates that her employees are idle 25% of the time. She would like to
take a work sample that is accurate within 2% and wants to have 95.45%
(z=2) confidence in the results. Show full working of your calculations.
(5 Marks)

(B) Management Science Associates promotes its management development

seminars by mailing thousands of individually composed and typed letters
to various firms. A time study has been conducted on the task of preparing
letters for mailing. On the basis of the following observations, develop a
time standard for this task. The firm's personal, delay, and fatigue
allowance factor is 15%. Please show full working of your calculations as
you standardize the time. (15 Marks)

Observations
(Minutes)
Job Element 1 2 3 4 5 Performance
Rating
(A) Compose and type letter 8 10 9 21 11 120%
(B) Type envelope address 2 3 2 1 3 105%
(C) Stuff, stamp, seal, and sort 2 1 5 2 1 110%
envelopes

Semester 1 2017/2018
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FORMULA SHEET

Upper bontrol limit (UCL) = ; + zo.,7 Lower control limit (LCL) = - zai

Upper control limit (UCL) = ; + A2if Lower control limit (LCL) =;- A2fi

Upper control limit (UCLR) = D4 Lower control limit (LCLR)=

UCLA = p zerts LCLp = - zais

P = Total number of errors

Total number of records examined

won j5)

UCLc = E+ 3.1E LCLc = - 3rd

C = mean number defective in the sample

Upper Specification - Lower Specification
C, a
Sc

[Upper Lower
C w minimum of Specification -R P - Specificatio
Limit ' Limit
3a 3a

Rs = Ri X R2 X R3 X ... X lin
[Pro
orr ;My] [Fr:
..b
.. .
, 1 czcgr dl
ela iln
l 1

corn t 4" Component X socond

Redundancy = working working componOnt

Number of failures
Number of units tested x 100%

Number of failures
FR(N) =
Number of unit hours of operatingtime

1
MTBF -
FR(N)

Expected number) V [(Number of ) (Co

r respondlnl
(of breakdowns breakdowns )( frequency

(Expected 1 = (E
xpected number) (Cost per
breakdown cost of breakdowns 3( breakdown

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(Preventive 1 Cost of expected

maintenance cost j ' breakdowns If service a is
Ce°rv
stict contract)
contract signed

(Sum of the times recorded]

Average. to perform each element
observed .
time Number of observations

Average _ Performance
Normal' time = [observed ". rating factor
time

Total normal time

Standen( time a
1 - Allowance factor

p(1 - p)
n —
tr2

Control Chart Factors

Sample Size Mean Factor Upper Range Lower Range
A2 Da D3
2 1.880 3.268 0
3 1.023 2.574 0
4 .729 2.282 0
5 .577 2.115 0
6 .483 2.004 0
7 .419 1.924 0.076
8 .373 1.864 0.136
9 .337 1.816 0.184
10 .308 1.777 0.223
12 .266 1.716 0.284

-37

END OF QUESTION PAP! R

THANK YOU 4)

Semester 1 2017/2018