Production and Operation Management

Pearl Marie G. Honorio

BSA 3-8
SUMMARY OF ANSWERS

A.
1. D
2. A
3. D
4. B
5. D
6. E
7. B
8. D
9. A
10. B
11. E
12. D
13. D
14. D
15. D
16. A
17. B
18. C
19. C
20. D
21. C
22. C
23. A
24. E
25. C

26. E
27. E
28. D
29. C
30. E
31. C
32. E
33. C
34. A
35. B
36. C
37. A
38. E
39. E
40. C
41. C
42. B
43. A
44. A
45. A
46. C
47. D
48. C
49. E
50. E

B.
51. D
52. C
53. C
54. C
55. C
56. E
57. C
58. A
59. D
60. D
61. B
62. E
63. A
64. C
65. B
66. A
67. E
68. E
69. E
70. A
71. E
72. D
73. C
74. E
75. B

COMPUTATIONS:
51. D
Internet service sold
Divide:
Labor
Leased Bandwidth
Service Fees
Replacement Parts
Multifactor productivity

10,000,000
50,000
25,000
45,000
80,000

200,000
50

52. C
Units produced
Less: Defective units
Units remaining

500
50
450

Defective units
Divide: Units remaining
Percentage increase in productivity

50
450
11.11%

53. C
Hours per day
8
Multiply: Number of workers
4
Total
32
Multiply: Days per week
6
Total
192
Multiply: Number of weeks in a month
4
Total number of hours in a month
768
Cakes per month
Divide: Hours in a month
Labor productivity
54. C
Production:
Machine 1
Machine 2
Total Production
Divide: Number of Machine
Daily machine productivity
55. C.
Total revenue = Total cost
TR = selling price * units

5060
768
6.59/hour

300 frames
180 frames
480 frames
2
240 frames/machine

TC = Fixed cost + (variable cost per unit * units)

(50*20,000) = 250,000 + VC(20,000)

1,000,000 = 250,000 + (20,000) VC
1,000,000 = 250,000 = (20,000) VC
20,000 VC = 750,000
VC = 37.50

56. E
240 sec / 60 sec = 4 minutes
8.5 hrs * 60 mins = 510 minutes
510 mins / 4 mins = 127.5
110 moves / 127.5 = 0.86274 or 86.27%

57. C
TC = Fixed cost + (Variable per unit * no. of units)
Insourcing = outsourcing
500,000 + 60x = 750,000 + 20x
60x 20x = 750,000 500,000
40x = 250,000
x(units) = 6250

58. A
FCoutsourcing + (VCoutsourcing * Q) = FCinsourcing + (VCinsourcing * Q)
900,000 + 28Q = 800,000 + 32Q
32Q = 100,000
Q = 25000
Quantity of Units to produce
Current Annual Demand
Required increase in
demand

25,000 units
22,000
3,000 units

59. D
Sale = Cost
1.50Q = 36,000 + 1.20Q
0.30Q = 36,000
Q = 120,000 units

60. D
RS = (R1)(R2)(R3)
RS = (0.898)(0.933)(0.946)
RS = 79.26%

61. Reliability of each component = 0.95(1/5) = 98.98% B

62. E

UCL= x + A2 R

UCL=34.16

UCL=26+ 1.02 ( 8 )

LCL= x A 2 R

LCL=261.02( 8)

LCL=17.84

63. A.
p=

total number of defective items 80

=
=0.2
total number of observations 400

p=

p (1 p )
0.2 ( 10.2 )
=
n
50

= 0.0566

UCL= p + z ( p ) =0.2+3 ( 0.0566 )= 0.3698

LCL=p z ( p ) =0.23 ( 0.0566 ) = 0.0302

64. C.
Cp=

USLLSL
6

( USLLSL) =C p6

= 1.2*6(1.3) = 9.36

65. B
AOQ= (Pac)P(N-n)/N
AOQ= (.9974 x .05)[(2000-10)2000)]

4.96%

66. A
N= (DT + S) C
D= 4 units per minute
T= 2 hours = 120 minutes
S= 20% (160 mins) (4 units) = 96 units
C= 10 units
N= [(4 units x 120) + 96 units] 10 units
67. E
N= (DT + S) C
D= 4000 units per hour
T= 15 mins = 1/4 hr
S= 20% (1/4 hr) (4000 units) = 200 units

57.6

C= 20 units
N= [(4000 units x 1/4 hr) + 200 units] 20
units

60

68. E
N= (DT + S) C
D= 4 units per minute
T= 10 minutes
S= 20% (10 mins) (4 units) = 8 units
C= 10 units

4.8

N= [(4 units x 10 mins) + 8 units] 10 units

69. E
Week sales
Decline in sales per week (200 x 20%)
Forecasted amount of sales next week

P200
40
P160

70. A
Current period forecast

100

Multiply: No. of periods

Total

500

Add: Current actual demand

Actual value for current period

86
586

Divide: No. of periods

Forecast of demand next period

98

71. E

Ft 1= A 1+ ( 1 ) F1
Period
1
2

Demand
7
9

Forecast
5
(7 x .2) + (5 x (1 0.2)) = 5.4

Ft 1=( 9 0.2 ) + ( 10.2 ) 5.4

1.8+4.32

Ft 1=6.12
72. D
Day Sales

Sale Forecast

Error

24
31
27
29
25

37
41
46
47
50

13
10
19
18
25
85

Error2
169
100
361
324
625
1579

actualforecast = 85 =17
n

MAD=
2
(actualforecast) 1579

MSE=
=
=315.8=316

73. C

Ft 1= A 1+ ( 1 ) F1
MONTH
March
April

DEMAND
10,000
2,000

May

20,000

June

30,000

FORECAST
8,000
(10,000 x 0.4) + (8,000 x 0.6)
= 8800
(2,000 x 0.4) + (8,800 x 0.6)
= 6080
(20,000 x 0.4) + (6,080 x 0.6)
= 11, 648

Ft 1=( 30,000 0.4 )+ ( 10.4 ) (11,648)

Ft 1=12, 000+6,989
Ft 1=18,989

74. E
2009
50
150
500
400
1100

Fall
Winter
Spring
Summer
Total

2010
80
450
600
490
1620

2011
120
510
700
610
1940

Average Demand for each Season

Fall

2009 1100 / 4 =
2010 1620 / 4 =
2011 1940/
0.1824 = 0.198

Winter
Spring
Summer

0.545
1.818
1.455

1.111
1.481
1.210

275
405
485
0.247
1.052
1.443
1.258

Average Seasonal Index

Fall
Winter
Spring
Summer

(0.182+0.198+0.247)/
3
(0.545+1.111+1.052)/
3
(1.818+1.481+1.443)/
3
(1.455+1.210+1.258)/
3

0.209
0.903
1.581
1.307

Average Demand per Season for Next Year

2,000 / 4 = 500

Seasonal Index

FINAL ANSWER:
Forecast for Each Quarter in 2012
Fall
Winter
Spring
Summer

500(0.209
)
500(0.903
)
500(1.581
)
500(1.307
)

104.5
451.4
790.5
653.5

75. B
Actual Sales
68
48
50
30

Forecast
60
50
60
30

Error
8
2
10
0
20

actualforecast = 20 =5
n
MAD=