1

!"#$% '($) * +,-.%/ 0 1./23",#2

4%/$2/ 2.5)"3 6,.7 $#28/72 9"$ 3:/ +,-.%/ 0 8/5 ;,7) ,# 3:/ <,.72/7$ 2"3/=

SmooLh Chln uevlce Company

1he SmooLh Chln uevlce Company ls a manufacLurer of hlgh-end elecLrlc razors. 1hese razors
are produced uslng a machlne-paced process. lor each razor, a Lray wlLh componenLs enLers
Lhe process aL Lhe beglnnlng of a conveyor belL. 1he Lray Lhen passes Lhrough Lhe slx sLeps
(conslsLlng of varlous Lasks) explalned ln Lhe Lable below. Workers perform Lhe assembly
operaLlons on Lhe movlng Lray. 1he lasL sLep conslsLs of an lnspecLlon of Lhe Lhen fully
assembled razor. 1he acLlvlLy Llmes of Lhe process are as follows:

>3$3",# ?$2@2
A
47/B$7$3",#
1. Lay ouL chassls [12 sec]
2. Lay ouL screws [13 sec]
3. Lay ouL all oLher componenLs [17 sec]
?,3$% 3")/ ;,7 AC DD 2/E
F
A22/)5%6 0
4. erform Lask AS1 [10 sec]
3. erform Lask AS2 [10 sec]
6. erform Lask AS3 [20 sec]
?,3$% 3")/ ;,7 FC DG 2/E
<
A22/)5%6 H
7. erform Lask AS4 [14 sec]
8. erform Lask AS3 [16 sec]
9. erform Lask AS6 [20 sec]
10. erform Lask AS7 [3 sec]
?,3$% 3")/ ;,7 <C II 2/E
J
A22/)5%6 K
11. erform Lask AS8 [30 sec]
12. erform Lask AS9 [30 sec]
?,3$% 3")/ ;,7 JC LG 2/E
'
A22/)5%6 D
13. erform Lask AS10 [11 sec]
14. erform Lask AS11 [19 sec]
13. erform Lask AS12 [20 sec]
?,3$% 3")/ ;,7 'C IG 2/E
!
M#2B/E3",#
16. lnspecL elecLrlcs [20 sec]
17. lnspecL aesLheLlcs [20 sec]
?,3$% 3")/ ;,7 !C DG 2/E

1here are slx workers, one aL each of Lhe slx sLaLlons (A-l). 1hey begln Lhelr workday aL 8:00 am
and work sLeadlly unLll 4:00 pm. (1hey are replaced wlLh oLher workers for breaks and lunches,
2
buL Lhe producLlon ls noL slowed or sLopped durlng Lhese Llmes.) 1helr hourly wage raLe ls $23
per hour. lor Lhe flrsL flve quesLlons, you can assume unllmlLed demand.
><0= Whlch sLaLlon ls Lhe boLLleneck of Lhe process?

a. A
b. 8
c. C
d. u
e. L
f. l

><H= WhaL ls Lhe process capaclLy (you can lgnore any sLarL-up or empLy sysLem effecLs), ln
razors/hour?
><K= WhaL are Lhe dlrecL labor cosLs (you can lgnore any sLarL-up or empLy sysLem effecLs)
assoclaLed wlLh produclng one razor, ln dollars?
><D= WhaL ls Lhe average labor uLlllzaLlon (you can lgnore any sLarL-up or empLy sysLem effecLs)
of Lhe slx workers? lease glve your answer ln declmal form (e.g. 0.3 for 30 uLlllzaLlon).


lndusLrlal 8aklng rocess

MF0= SLrohrmann, a large-scale bakery ln ennsylvanla, ls laylng ouL a new producLlon process
for Lhelr packaged bread, whlch Lhey sell Lo several grocery chalns. lL Lakes 12 mlnuLes Lo bake
Lhe bread. Pow large an oven ls requlred so LhaL Lhe company ls able Lo produce 4,000 unlLs of
bread per hour (glve your answer ln Lerms of Lhe number of unlLs LhaL can be baked
slmulLaneously)?

Save-A-LoL 8eLallers
1he followlng Lable shows flnanclal daLa (year 2009) for Lwo uS reLallers: Save-A-LoL 8eLallers
and Wally's MarL.

Save-A-LoL Wally's MarL
lnvenLorles ($MM) 3,743 40,694
Sales (neL $MM) 39,217 397,206
CCCS ($MM) 33,962 316,606

Assume LhaL boLh companles have an average annual holdlng cosL raLe of 20 (l.e. lL cosLs boLh
reLallers $2 Lo hold an lLem for one enLlre year LhaL Lhey procured for $10).

3
>N0= Pow many days, on average, does a producL sLay ln Save-A-LoL's lnvenLory before lL ls
sold? Assume LhaL sLores operaLe 363 days a year.

>NH= Pow much lower, on average, ls Lhe lnvenLory cosL for Save-A-LoL compared Lo Wally's
MarL of a household cleaner valued aL $30 CCCS? Clve your answer ln Lerms of dollars. Assume
LhaL Lhe unlL cosL of Lhe household cleaner ls Lhe same for boLh companles and LhaL Lhe prlce
and Lhe lnvenLory Lurns of an lLem are lndependenL.


CreaL valley lncome 1ax Advlce

Cv ls a small accounLlng flrm supporLlng wealLhy lndlvlduals ln Lhelr preparaLlon of annual
lncome Lax sLaLemenLs. Lvery uecember, Cv sends ouL a shorL survey Lo Lhelr cusLomers, asklng
for Lhe lnformaLlon requlred for preparlng Lhe Lax sLaLemenLs. 8ased on 30 years of experlence,
Cv caLegorlzes Lhelr cases lnLo Lhe followlng groups:

- Croup 1 (new cusLomers, easy): 13 percenL of cases
- Croup 2 (new cusLomers, complex): 3 percenL of cases
- Croup 3 (repeaL cusLomers, easy): 30 percenL of cases
- Croup 4 (repeaL cusLomers, complex): 30 percenL of cases

Pere, easy" versus complex" refers Lo Lhe complexlLy of Lhe cusLomer's earnlng slLuaLlon.
ln order Lo prepare Lhe lncome Lax sLaLemenL, Cv needs Lo compleLe Lhe followlng seL
of acLlvlLles. rocesslng Llmes (and even whlch acLlvlLles need Lo be carrled ouL) depend on
whlch group a Lax sLaLemenL falls lnLo. All of Lhe followlng processlng Llmes are expressed
ln mlnuLes per lncome Lax sLaLemenL.
Croup llllng lnlLlal
meeLlng
reparaLlon 8evlew by
Senlor
accounLanL
WrlLlng
1 20 30 120 20 30
2 40 90 300 60 80
3 20 no meeLlng 80 3 30
4 40 no meeLlng 200 30 60

1he acLlvlLles are carrled ouL by Lhe followlng Lhree people:

- AdmlnlsLraLlve supporL person: flllng and wrlLlng.
- Senlor accounLanL (who ls also Lhe owner): lnlLlal meeLlng, revlew by senlor accounLanL.
- !unlor accounLanL: preparaLlon.

Assume LhaL all Lhree people work elghL hours per day and 20 days a monLh. lor Lhe
followlng quesLlons, assume Lhe producL mlx as descrlbed above. Assume LhaL Lhere are 30
4
lncome Lax sLaLemenLs arrlvlng each monLh.

OP0= Whlch of Lhe Lhree persons ls Lhe boLLleneck?
a. AdmlnlsLraLor
b. Senlor accounLanL
c. !unlor accounLanL

OPH= WhaL ls Lhe (lmplled) uLlllzaLlon of Lhe senlor accounLanL?

OPK= WhaL ls Lhe (lmplled) uLlllzaLlon of Lhe [unlor accounLanL?

OPD= WhaL ls Lhe (lmplled) uLlllzaLlon of Lhe admlnlsLraLlve supporL person?