Productivity

1. Ramisa, Sabila and Salma run a Chocolate manufacturing company. Their production runs
30-hour per week and they pay $6 per hour to their labors. Material cost is $3.5 per lbs.
Machine productivity is 2.5 times weekly labor cost. Overhead is $300 per week. The monthly
productivity figures are given below:

Weeks Output (Units) Labors Material (lbs)

1 1400 8 36
2 1500 9 34
3 1250 6 33
4 1300 7 35

a) Compute multi-factor productivity of machine and material for each of the months
shown for their Chocolate manufacturing firm.

b) Compute total productivity measure for each of the months shown for their Chocolate
manufacturing firm.

c) What do the productivity figures suggest?

Project Management

1 (i). Activity Activity Activity

Predecessor Duration
(in weeks)
a - 3

b - 2

c a,b 2

d b,c 1

e a,c 2

f e 3

g d,f 1

a) Draw a Gantt Chart.

b) Construct an Activity on Node Diagram.

c) How many paths are here? What are they?
d) Which one is the Critical path? What are the critical activities?
e) What’s the expected project completion time?
f) Can we delay activity ‘a’ and ‘d’ without delaying the project?
g) If we delay activity ‘c’ and ‘e’, would that affect project completion time anyway?

1 (ii) Prepare a table like Ques. No. 2 (i) & Show your daily life activities (24 hours
breakdown). Construct a Gantt chart based on that table.
2.
Activity Activity Activity Slack
Predecessor Duration
(In weeks)
a - 3

b a 2

c - 1

d b,c 2

e d 3

f b,e 2

g f 1

a) Draw an Activity on Node Diagram. Compute the early and Latest starting and finish
time. Compute slack times.
b) Find out the possible paths and the critical path. What are the critical activities?
c) Find out the expected duration and variance for each of the paths from the table
given in the next page
3. Develop a crashing schedule.
Activity Normal Time Crash Time Cost per day to
crash
a 7 5 $200
b 8 6 $350
c 5 5 -
d 7 6 $350
e 9 8 $150
f 3 1 $450

Project costs are $600 per day.

7 7
5 3

c d f
a

b e

8 9
 Forecasting

1. Prepare a forecast based on the following data for period 6 using each of the following
forecasting approaches:

a) A Naïve Forecast;
b) A three period moving average;
c) A weighted moving average using weights of .15, .25, .60;
d) Exponential Smoothing with a smoothing constant of .20;
e) Linear Trend.
Period Demand
1 60
2 63
3 67
4 70
5 75
 2. Compare the error performance of the following two forecasting techniques (P. MA= Periods
Moving Average; ES= Exponential Smoothing) using MAD, MSE and MAPE. Which one among
these two forecasting techniques has the greatest accuracy?

Period Actual Two

Demand P. ES
MA

1 70 62 62

2 71 63 65

3 77 81 80

4 76 85 81

5 87 89 93
 3. Kashundi has 3 shops in NSU’s canteen. Sales figures and profits for the stores are given in
the following table:

Unit Profit ($)

Sales X Y

5 30
7 65
7 55
9 70
13 78
14 85
22 99

a) Calculate Regression analysis of the data.

b) Calculate profit of a shop for 500 unit sales.
c) Compute the Correlation between Unit Sales and Profit.
d) What is the coefficient of determination of these variables?
 4. Prepare a forecast based on the following data for period 6 and period 7 using each of the
following forecasting approaches:
a) Exponential Smoothing.

b) A weighted moving average using weights of .20, .35, .45;

Period Demand
1 70
2 55
3 58
4 62
5 75

c) Compare the error performance of the following two forecasting techniques using MAD,
MSE and MAPE. Which one among these two forecasting techniques has the greatest
accuracy?

Period Actual Two

Demand P. ES
MA

1 70 63 61

2 71 65 68

3 77 70 75

4 76 75 71

5 87 91 93
Capacity Planning (Break-Even)

1. Part-I: Aatef owns a fashion house called Alfania which sells Punjabi. Now they want to
introduce a wallet line, which require leasing new equipment for monthly payment of Taka
9,200. Variable costs would be Taka 70 per unit produced. Each item is sold to retailers at an
average price of Taka 100 each.

a) What volume per month is required in order to break even?

b) What profit or loss would be realized on a monthly volume of 300 units? 500 wallets?
c) What volume is needed to obtain a profit of Taka 6,000 per month?
d) If 80 wallets can be sold and a profit target is Taka 12,000, What price should be
charged per wallet?

Part-II: He has the options of purchasing 1, 2, 3 or 4 machines. Fixed cost and potential
volumes are as follows:
No. of Machines Fixed Costs Potential Volumes

1 5,000 Taka Upto 100 Units

2 9,000 Taka 101- 150 Units
3 12,000 Taka 151- 200 Units

Variable cost is 100 taka per wallet and selling price is 180 taka per wallet.

a) Determine the break-even point for each range.

b) If projected annual demand is in between 60 wallets to 130 wallets, how many machines
should they buy and why?
Waiting Line Management

1. Customers arrive at a bakery at an average rate of 18 per hour on weekday mornings. (The
arrival distribution can be described by a Poisson distribution with a mean of 18). Each clerk
can serve a customer on an average of three minutes; (this time can be described by an
exponential distribution with a mean of 3.0 minutes).

A. What are the Arrival and Service rates?

B. Compute the average number of customers being served at any time.

C. Suppose it has been determined that the average number of customers waiting in line
is 8.1. Compute:

i. The average number of customers in the system (i.e., waiting in line

or being served),
ii. The average time customers wait in line, and
iii. The average time in the system.
D. Determine the system utilization for M = 1, 2, and 3 servers.

2. Star Cineplex has opened a new branch at SKS Tower. They are planning to open an
automated ticket desk. It is estimated that requests for tickets will average 10 per hour, and
requests will have a Poisson distribution. Service time is assumed to be constant. Previous
experience with similar satellite operations suggests that mean service time should average
about 5 minutes per request. Determine each of the following:

a. System utilization.
b. Percentage of time the server (agent) will be idle.
c. The expected number of customers waiting to be served.
d. The average time customers will spend in the system.
e. The probability of zero customers in the system.
f. The probability of four customers in the system.