THE INTERNATIONAL UNIVERSITY (IU) – VIETNAM NATIONAL UNIVERSITY – HCMC

MID-TERM EXAMINATION
Date: 20 July 2021
Duration: 120 minutes

Student ID: .................................. Name:................................................

SUBJECT: PRODUCTION AND OPERATIONS MANAGEMENT
Dean of School of Business Administration Lecturer
Signature: Signature:

Full name: Full name: TRUONG QUANG DUOC, Ph.D

GENERAL INSTRUCTION(S)
1. This is open book online examination.
2. Your answer will be submitted in Blackboard
3. Your webcam must be opened during the examination time
4. The due time to submit this test in Black Board is 11:30 AM
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Problem 1: (20 points)

There are three primary strategies for operations managers to achieve the sustainable competitive
advantage? Give explanation and suitable examples.

Problem 2: (20 points)

A company collect information of defect shipments. The form of 280 shipments has been turned in. The
number of defective items in each sample was recorded as follows.

No of Number of Reasons of defective shipment

Week shipments shipment Incorrect
defects Incorrect truck Damage Trucks
bill load product late
1 23 6 2 2 1 1
2 31 8 1 4 1 2
3 28 6 2 3 1
4 37 11 4 4 2 1
5 35 10 3 4 2 1
6 40 14 5 6 3
7 41 12 3 5 3 1
8 45 15 4 6 3 2

1. Develop a Pareto chart for the type of defects that have occurred.
2. What is the meaning of this Pareto chart? In the case you are CEO of this shipping company. What’s
is your plan?

POM Midterm Exam 1 20/07/2021

 Problem 3: (20 points)
Casumina Coorporation makes a plan to produce 1,000 tires per day with the following resources:
• Labor: 500 hours per day@$12.50 per hour
• Raw material: 20,000 kg per day@$1 per kilo
• Energy: $5,000 per day
• Capital: $10,000 per day
a) What is the labor productivity per labor-hour for these tires at Casumina Co.?
b) What is the multifactor productivity for these tires at Casumina Co.?
c) What is the percent change in multifactor productivity is Casumina Co. can reduce the energy
bill by $1,000 per day without cutting production or changing any other inputs?

Problem 4: (20 points)

Svarobski, an Austrian company specializing in crystal is experiencing a substantial shortage of their
product. The company management is considering 3 options: (1) arrange for subcontracting, (2) begin
overtime production and (3) construct new facility. The correct decision depends largely upon future
demand, which may be low, medium or high. By consensus, management ranks the respective
probabilities as 0.10, 0,50 and 0.40. A cost analysis reveals the effect upon profits which is shown the
the table as follow:
Alternatives Low demand Medium demand High demand
Arrange for subcontracting $10,000 $50,000 $50,000
Begin overtime -$20,000 $60,000 $100,000
Construct new facility -$150,000 $20,000 $200,000
Market probability 0.10 0.50 0.40
a) Draw the decision tree for Svarobski company.
b) Determine the best strategy using expected monetary value.

Problem 5: (20 points)

The local convenience store makes personal pan pizzas. Currently, its process makes complete pizzas,
fully cooked, for the customer. This process has a fixed cost of $20,000, and a variable cost of $1.75
per pizza. The owner is considering a different process that can make pizzas in two ways: completely
cooked (as before), or partially cooked and then flash frozen for the customer to finish heating at home.
This alternate process has a fixed cost of $24,000, but a lower variable cost (because much less energy
is used in baking) of $1.25 per pizza.
a) What is the crossover point between the existing process and the proposed process?
b) If the owner expects to sell 9,000 pizzas, should he get the new oven?

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Good Luck!

POM Midterm Exam 2 20/07/2021