Final exam in Operational Management comprehensive examination type

1. 50 points

Firm have inventories for every large investment. The cost of carrying such inventory
runs from 25 to 35 percent of the inventory’s worth annually. Therefore, a
Major goal of most firm is to reduce inventory. Inventory reduction requires knowledge
of the operating system.

Distinguish in-process inventory, safety stock inventory, and seasonal inventory.

Under which conditions would a plant manager elect to use a fixed-order

inventory?

What are the disadvantages of using a fixed-time period ordering system?

2. 50 points

Activity Estimated time (days)

-----------------------------------------------------------------
1-2 5
2-3 6
2-4 4
3-6 9
6-7 2
4-5 4
4-7 18
5-7 10
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Using the information on the above table, do the following:

a. Construct a network diagram.

b. Determine which activities are on the critical path.
c. Compute the length of the critical path.

Prepared by:

MATT NUMER B. OFALLA, CHP, LPT, DBM-HM

Course Facilitator