MBA 512 – Homework Assignment – H3-B

Chapter 13 - Resource Management

Enter Student Name: Sudharshni

PROBLEM #1

The Academic Company mixes and bottles a high-energy beverage in various container types and sizes for college students. The aggregate forecast for the next four quarters (one year) in thousands of gallons is given below.
Academic's management makes the following assumptions:
 Each employee works 550 standard hours of regular time each quarter.
 On average, it takes 27 hours to produce and package one unit (1,000 gallons).
 Regular-time labor costs $6.00/hour; overtime labor costs $9.00/hour.
 Inventory holding cost is approximately $4.50/unit (1,000 gallons) per quarter based upon
the ending inventory per quarter.
 Because of extremely hot weather, there is no beginning inventory available to start
quarter 1.
 Management wants a constant work force (no hiring or firing).
 Managers have also decided to always round up the number of employees needed to the
next whole integer, e.g., 37.2 yields 38 employees.

Forecast
Quarter
Demand
1 400
per
2 700
1,000
3 850
Gallons
4 650
Total 2,600

ANSWER (You must show all formulas, calculations, and "highlight" corrrect Answers)

Determine how many employees would be

a. needed to meet the peak required in quarter 3 Time Taken for One Unit 27 hrs
Total Number of Units in Q3 850
Total Hours required 22950
Time required by One employee 550
Number of employees required 41.727273 42 Employees
 Production Rate per quarter 650 units per quarter
Ending Inventory
Inventory(ProductionRat Cost(Ending
Determine the annual inventory holding cost if e -Demand)+Old Inventory*Holding
b. Academic decides to use a level Quarter Demand Rate Inventory Holding Cost Cost)
production rate of 650 units per quarter. 1 400 650 250 4.5 1125
2 700 650 200 4.5 900
3 850 650 0 4.5 0
4 650 650 0 4.5 0

Total 2025

Production Hours Labor Cost(Labor

Required(Time Taken To Cost per
Number of Employees Required
produce and Package hour*Hours per
(Total Hours/550)
Using a level schedule of 650 units per quarter, one unit *Production employee*number
c. what will the annual employee costs be? Quarter Demand Rate Rate ) of employees
1 400 650 17550 32 105600
2 700 650 17550 32 105600
3 850 650 17550 32 105600
4 650 650 17550 32 105600
Total 422400

Using a level schedule of 650 units per quarter,

what will the annual employee costs be if only Hours taken by 30 Overtime
30 employees are available and overtime is Production Hours employees Hours
d used? Quarter Demand Rate Required Number of EmployeesGiven (30) Labor Cost
1 400 650 17550 30 16500 1050 108450
2 700 650 17550 30 16500 1050 108450
3 850 650 17550 30 16500 1050 108450
4 650 650 17550 30 16500 1050 108450
Total 433800

if management decides on a chase demand Rate Change

strategy, with production last quarter of 600 and Production Cost=Change in
a rate change cost of $3,00/1,000 gallons, Rate production*Rate
e. determine the total rate change cost. Quarter Demand Change in Production Rate Change Cost per gallon per change
1 400 400 200 3 600
2 700 700 300 3 900
3 850 850 150 3 450
4 650 650 200 3 600
Total rate change 2550
 MBA 512 – Homework Assignment – H3-B
Chapter 13 - Resource Management
Enter Student Name: Sudharshni

PROBLEM #2

A paint company has the below aggregate demand requirements and cost data for the upcoming year by quarter.

Forecast
Quarter
Demand(units)
1 1,200
2 1,500
3 1,900
4 1,000
Totals 5,600

Previous quarter's production 900 units

Beginning inventory 0 units
Back-order costs $60/unit
Inventory holding cost (on ending inventory) $12/unit/quarter
Hiring employees $30/unit increase in production
Firing employees $70/unit decrease in production

ANSWER (You must show all formulas, calculations, and "highlight" corrrect Answers)
Determine the change in workforce
costs (hiring and firing employees) if
the paint company decides to use a
a. chase demand strategy Previous Quarter Production 900 units
Quarters Production Hiring / Firing
Quarter 1 1200 300
Quarter 2 1500 300
Quarter 3 1900 400
Quarter 4 1000 900 Firing

Total Hiring Units 1000

Hiring Costs 30000

Total Firing Units 900 Total Cost 93000
Firing Cost 63000
 Determine the inventroy holding and
back-order costs for the year if the
paint company wants to use a level
production strategy, ending quarter 4
b. with no inventory. LEVEL PRODUCTION STRATEGY
Production in each quarter(TOTAL UNITS/NUM OF QUARTERS) 1400
Inventory holding cost / unit $12 Back order cost per unit 60

Quarter Demand Beginning Inventory Ending Inventory Inventory Holding Cost Back Order cost
Quarter 1 1200 0 200 $2,400
Quarter 2 1500 200 100 $1,200
Quarter 3 1900 100 -400 Back order 24000
Quarter 4 1000 -400 0 $0

Total Inventory and Back order cost $27,600

 MBA 512 – Homework Assignment – H3-B
Chapter 13 - Resource Management
Enter Student Name: Sudharshni

PROBLEM #3

Given the information below, complete the MRP record below and explain what it tells the inventory analyst to do?

Given:
Lot Size Rule: Fixed Q = 200 Units
Safety Stock: 0 units
Lead Time = 2 Weeks
Current On-Hand Quantity = 100 units

(You must show all formulas, calculations, and "highlight" corrrect Answers)

ANSWER
Current On Hand 100

a Complete MRP Schedule Week 1 2 3 4 5 6 7 8

Gross Requirement 50 100 60 0 0 50 50 200

Scheduled Receipts 0 200 0 0 0 0 0 0

Projected On-Hand (100) 50 150 90 90 90 40 40 190

Planned Receipts 0 0 60 0 0 0 200 200

Planned
Order Release 0 0 0 0 200 200 0 0
b What does it tell the analyst? the two-week advance period, it indicates that an order release for weeks 5 and 6 is scheduled in order to fulfill the needs for weeks 7 and 8.
Since the scheduled receipts and the present on-hand quantity cover the gross requirements for every week, the MRP record indicates that the inventory analyst does not need to take any action.
 MBA 512 – Homework Assignment – H3-B
Chapter 13 - Resource Management
Enter Student Name: Sudharshni

PROBLEM #4

The following five jobs, along with their processing time and due dates, are given below:

Processing Days Due

Job Time (Days) from Today
A 8 12
B 4 9
C 3 6
D 7 7
E 5 20

ANSWER
(You must show all formulas, calculations, and "highlight" corrrect Answers)

Use the shortest-

a. processing=time (SPT) and
determine the average flow-time
for the five jobs.
For SPT rule the jobs are sorted as follows
Job Processing Time Flow Time
c 3 3
B 4 7
E 5 12
D 7 19
A 8 27
Average Flow Time 13.6

Use the earliest-due-date rule

(EDD) and determine the
b. average lateness and tardiness
For EDD Rule , The jobs are sorted by earliest due date
Job Processing Time Flow Time Due Date Lateness Tardiness
C 3 3 6 -3 0
D 7 10 7 3 3
B 4 14 9 5 5
A 8 22 12 10 10
E 5 27 20 7 7

Average Lateness 4.4 Days

Average Tardiness 5 Days
 MBA 512 – Homework Assignment – H3-B
Chapter 13 - Resource Management
Enter Student Name: Sudharshni

PROBLEM #5

A new surgical facility called Cut & Sew is opening in neighborhoods throughout the United States.
They are job shops that handle a variety of outpatient surgical procedures. Their process is set up so
that one doctor cuts and the other sews. They have five patients to sequence for tomorrow. Since the
weather forecast is for a cool and sunny day, they would also like to play golf tomorrow. They want to
sequence their patients with the objective of minimizing the time from the beginning of the first job
until the finish of the last job. The patients and estimated times are as follows:
Patient Cut Time (hours) Sew Time (hours)

Cut Time Sew Time

Patient (hours) (hours)
A 2.3 2.8
B 2.5 3.0
C 2.0 1.5
D 0.6 1.0
E 3.6 2.6

ANSWER (You must show all formulas, calculations, and "highlight" corrrect Answers)

Sequence the patients using

Johnsons method..state the
a. schedule for each operation Sequencing Start Time Cut Time Sew Time Finish Time
D 0 0.6 1.0 1.6
C 0 2.0 1.5 3.5
A 1.6 2.3 0 3.9
B 3.5 0 3.0 6.5
C 6.2 0 2.6 8.8

Determine the minimum

b. Makespan.

The minimum make span 8.8 Hours

B