North South University

School of Business | MBA

BUS 650 Operations Management

M. Mahboob Rahman Assignment 1 Solutions and Hints Q 2.1 Solution in text. Q 2.2 Average FT = Average Inv/Average FR = 35/255 = ? Q 2.4 a) b) Inventory turns = 1/.1yr = 10 times/yr Per unit inventory cost = 40%/10 = 4% Per unit actual inventory cost = 4% ($30) = $1.2 Q 2.8 A diagram of the process is as follows

Associates

Managers

Partners

Average Inv of Associates = 200, Average FT = 4 years, Average FR = 200/4 = 50MBA/yr Average FR of Managers = 60/6 = 10 associates/yr Average FR of Partners = 20/10 = 2 managers/yr Pr(Associate will be promoted) = 10/50 = .20 Pr(Manager will be promoted) = 2/10 = .20 Pr(Associate will be promoted to partner) = .2X.2 = .04 or 4%.