Republic of the Philippines

BATANGAS STATE UNIVERSITY ROSARIO

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND
INTERNATIONAL HOSPITALITY MANAGEMENT
Brgy. Namunga, Rosario, Batangas

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND INTERNATIONAL HOSPITALITY MANAGEMENT

MGT 303: OPERATIONS MANAGEMENT

PROBLEMS, ACTIVITES, AND DISCUSSIONS

1. Discuss some forecasting issues that you encounter in your daily life. How
do you make your forecasts?
2. Forecasts and actual sales of portable MP3 players at Just Say You Love ME
Music are follows:

Months Forecast Actual Sales

March 150 170
April 220 229
May 205 192
June 256 241
July 250 238
August 260 210
September 270 225
October 280 179
a. Plot the data and provide insights about the time series.
b. What is the forecast for December, using a three-period moving
average?
c. What is the forecast for December, using a two-period moving
average?
d. Compute the MAD, MSE, and MAPE for the two-and three-period
moving average models and compare your results.
e. Compute a weighted average forecast using a weight of .40 for the
most recent period,.30 for the next most recent, .20 for the next, and .
10 for the next.
3. AMD Fruit Farm ships boxed fruit anywhere in the Tropical country
Philippines. Using the following information, forecast shipments for the
first four months of next year.
4. Develop a linear trend line for the following data. Plot the line and the
data on a graph, and verify visually that a linear trend line is appropriate.
Then use the equation to predict the next two values of the series.

Period Demand
1 44
2 52
3 50
4 54
5 55
6 55
7 60
8 56
9 62

Leading Innovations, Tranforming Lives

 Republic of the Philippines
BATANGAS STATE UNIVERSITY ROSARIO
COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND
INTERNATIONAL HOSPITALITY MANAGEMENT
Brgy. Namunga, Rosario, Batangas

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND INTERNATIONAL HOSPITALITY MANAGEMENT

5. Pinatubo Inc., intends to use sales of lawn fertilizer to predict lawn mower
sales. The store manager estimates a probable six-week lag between
fertilizer sales and mowers sales. The pertinent data are:

Period Fertilizer Sales (tons)

Number of Mowers
sold (six-week lag)
1 1.6 10
2 1.3 8
3 1.8 11
4 2.0 12
5 2.2 12
6 1.6 9
7 1.5 8
a. Compute the correlation between the two variables. Does it appear
that a relationship between these variables will yield good predictions?
b. Use the least squares method to obtain a linear regression line for the
data.
c. Predict lawn mower sales for the first week in August, given fertilizer
sales six weeks earlier of 2 tons.

6. The director of social services of a county has learned that the state has
mandated additional information requirements. This will place an
additional burden on the agency. The director has identified three
acceptable alternatives to handle the increased workload. One alternative
is to reassign present staff members, the second is to hire and train two
new workers, and the third is to redesign current practice so that workers
can readily collect the information with little additional effort. An unknown
factor is the caseload for the coming year when the new data will be
collected on a trial basis. The estimated costs for various options and
caseloads are shown in the following table:
CASELOAD
Moderate (.10) High (.30) Very High (.60)
Reassign staff $ 50,000 60,000 85,000
New staff 60,000 60,000 60,000
Redesign 40,000 50,000 90,000
collection

Assuming that past experience has shown the probabilities of various

caseloads to be unreliable, what decision would be appropriate using each of the
following criteria?
a.Maximin
b.Maximax
c.Minimax Regret
d.EMV

Leading Innovations, Tranforming Lives

 Republic of the Philippines
BATANGAS STATE UNIVERSITY ROSARIO
COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND
INTERNATIONAL HOSPITALITY MANAGEMENT
Brgy. Namunga, Rosario, Batangas

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND INTERNATIONAL HOSPITALITY MANAGEMENT

e.EVPI

7. A manager has compiled estimated profits for various alternative courses of

action but is reluctant to assign probabilities to the states of nature. The
payoff table is:

State of Nature
Alternative #1 #2
A $20* 140
M 120 80
D 100 40

a. Plot the expected-value lines on a graph

b. Is there any alternative that would never be appropriate in terms of
maximizing expected profit? Explain on the basis of your graph
c. For what range P(2) would alternative A be the best choice if the goal is to
maximize expected profit?
d. For what range P(1) would alternative A be the best choice if the goal is to
maximize expected profit?

8. A small construction firm specializes in building and selling single-family

homes. The firm offers two basic types of houses, model A and model B.
Model A houses requires 4,000 labor hours, 2 tons of stone, and 2,000
board feet of lumber. Model B houses require 10,000 labor hours, 3 tons
of stone, and 2,000 board feet of lumber. Due to long lead times for
ordering supplies and the scarcity of skilled and semiskilled workers in the
area, the firm will be forced to rely on its present resources for the
upcoming building season. It has 400,000 hours of labor, 150 tons of
stone, and 200,000 board feet of lumber. What mix of model A and B
houses should the firm construct if model A’s yield a profit of $1000 per
unit and model B’s yield $2000 per unit? Assume that the firm will be able
to sell all the units it builds.

9. Solve these problems using graphical linear programming and answer the
questions that follow. Use simultaneous equations to determine the
optimal values of the decision variables.
Maximize Z=2x1 + 10x2
Subject to:
Labor 10x1 + 4x2 > 40 hours
Material 1x1 + 6x2 > 24 pounds
Storage 1x1 + 2x2 < 14 square feet
X1, x2 > 0

Leading Innovations, Tranforming Lives

 Republic of the Philippines
BATANGAS STATE UNIVERSITY ROSARIO
COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND
INTERNATIONAL HOSPITALITY MANAGEMENT
Brgy. Namunga, Rosario, Batangas

COLLEGE OF ACCOUNTANCY, BUSINESS, ECONOMICS, AND INTERNATIONAL HOSPITALITY MANAGEMENT

1. What are the optimal values of x1, x2, and Z?

2. Do any constraints have (nonzero) slack? If yes, which one(s) and
how much slack does each have?
3. Do any constraints have (nonzero) surplus? If Yes, which one(s) and
how much surplus does each have?
4. Are any constraint redundant? If yes, which one(s)? Explain briefly

10. For each of these problems, solve using the simplex technique, and then
identify the optimal values of these variables: Z, x1, x2, x3, s1, s2 and s3

a. Maximize 4x1 + 2x2 + 5x3

Subject to
1x1 + 2x2 + 1x3 < 25
1x1 + 4x2 +2x3 < 40
3x1 + 3x2 + 1x3 < 30
x1,x2,x3> 0

b. Maximize 10x1 + 6x2 + 3x3

Subject to
1x1 + 1x2 + 2x3 < 25
2x1 + 1x2 + 4x3 < 40
1x1 + 2x2 + 3x3 < 40
x1, x2, x3 > 0

General Instructions: The class will consist of groups of two-three members per
group. In order to solve the following problems, each group must read and apply
the lessons learned in the previous discussion or carry out some advanced self-
study work. Participatory and collaborative work is strongly encouraged. You may
opt to use MS Excel as a problem-solving tool, but the team is required to use the
final output written in a yellow paper with the requisite attachments, such as
graphs and a printed copy from excel, if you chose to use it.
If you're finished with the exercises, anyone in the group member can
send the scanned copy or picture of the final output and attachments to
aquino.delapena@g.batstateu.edu.ph with the filename format: GN#1_COURSE
CODE/SECTION. Do not forget to write the complete name of the members in
your final output with course and section.
Submission: OCTOBER 28, 2020
GOOD LUCK!

Leading Innovations, Tranforming Lives