FACULTY OF ENGINEERING AND BUILT THE ENVIRONMENT

DEPARTMENT OF QUALITY AND OPERATIONS AND MANAGEMENT

Subject: Operations Management Techniques 4A Code: OMT7X01 Date: 28 March 2023

Groups: Advanced Diploma: Operations Management Time allowed: 2 hours

Examiner: Dr. OA Makinde Total: 70 Marks

Moderator: Dr. TT Munyai
Head of Department: Dr. N Madonsela Weight: 10%
Number of Pages: 2
INSTRUCTIONS
1. Answer all questions
2. Write your student number as well as initials and surname in your answer sheet
3. Closed Book Assessment
4. The general University of Johannesburg policies, procedures, and rules pertaining to Written
Assessments apply to this assessment.

QUESTION 1 [30]

Four sandwich shops A, B, C and D can be supplied with bread from three
bakeries, X, Y and Z. The table below shows the cost, in Rand, of
transporting one tray of bread from each bakery to each shop, the number
of trays of bread required by each shop and the number of trays of bread
that can be supplied by each bakery.

A B C D Supply
X 27 33 34 41 60
Y 31 29 37 30 60
Z 40 32 28 35 80
Demand 40 90 50 20

a. Formulate a Linear Programming (LP) model that will minimize the cost
of supplying trays of bread from each bakery to each sandwich shop. (7)

b. Determine the initial basic feasible solution to this transportation problem

using the North West Corner rule. (9)
c. Determine whether you can improve the initial basic feasible solution
further using the Stepping Stone method. (8)

d. Determine the new solution to this transportation problem using the

Stepping Stone method. (6)

QUESTION 2 [20]

An electronics firm has a contract to deliver the following number of radios during the
next four months; month 1, 200 radios; month 2, 370 radios; month 3, 430 radios;
month 4, 550 radios. For each radio produced during months 1 and 2, a R100
variable cost is incurred; for each radio produced during months 3 and 4, a R120
variable cost is incurred. The inventory cost is R10 for each radio in stock at the end
of a month. The cost of setting up for production during a month is R2500. Radios
produced during a month may be used to meet demand for that month or any future
month. Capacity limitations allow a maximum of 1300 radios to be produced during
each month. The size of the company’s warehouse restricts the ending inventory for
each month to 820 radios at most.

Given that the initial inventory level is 0 unit, use dynamic programming to determine
an optimal production schedule that will meet all demands on time and will minimize
the sum of production and holding costs during the four (4) months assuming that
backordering is not allowed.

QUESTION 3 [20]

A company knows that the demand for its product during each of the next four
months will be as follows: month 1, 16 units; month 2, 25 units; month 3, 9 units;
month 4, 31 units. At the beginning of each month, the company must determine
how many units should be produced during the current month. During a month in
which any units are produced, a setup cost of R1000 is incurred. In addition, there is
a variable cost of R100 for every unit produced. At the end of each month, a holding
cost of R25 per unit on hand is incurred. Capacity limitations allow a maximum of 60
units to be produced during each month. The size of the company’s warehouse
restricts the ending inventory for each month to 40 units at most. Assuming that: (i)
0 unit of product is on hand at the beginning of the first month, (ii) the demand of
each month can be met at a later date within the four (4) months’ period and (iii) the
unit cost of backordering customer order is R35.

Determine a production schedule that will minimize the sum of production, holding
and backordering costs in meeting the organisation’s next four (4) months demand.

TOTAL MARKS = 70 MARKS