SOLOMON ISLANDS NATIONAL

UNIVERSITY
SCHOOL OF BUSINESS AND MANAGEMENT

ADMINISTRATION

Operation Management
group Assignment II

NAME: martin rozo

ID: 20006199
UNIT CODE: FMGD23
LECTURER: KENNEDY A
DUE DATE: FRIDAY 29TH APRIL 2016
 FMGD23 Introduction to Operations Management

Topic 5: Capacity Planning.

1. The fifth unit job took 14.5 hours to complete. If a 90% learning curve is appropriate:
a. How long should it take to complete the last unit?
= 14.5.0

b. How long should it take to complete the 10th unit?

=

2. Amy Xia’s plant was designed to produce 7,000 hammers per day but is limited to making 6,000 hammers per day
because of the time needed to change equipment between styles of hammers. What is the utilization?
Actual output
Utilization=
designcapacity

6000 hammers per day

Utilization= ×100 %
7000 hammers per day

¿ 0.8771 ×100 %
= 85.71
= 85.7%
Therefore, its Utilization is 85.7 %

3. If a plant has an effective capacity of 6,500 and efficiency of 88%, what is the actual output?
Actual output
efficiency =
effective capacity
x
88 %= × 100
6500

x
0.88=
6500

x = 0.88 x 6500
= 5720
Therefore the Actual Output is 5720.

4. A plant has an effective capacity of 900 units per day and produce 800 units per day with its products mix; what is
its efficiency?

Actual output
efficiency =
effective capacity
800
=
900
= 0.8888 x 100 %
= 88.9 %
Therefore its efficiency is 88.9 %

Topic 6: Location Strategy.

 1. Solomon Telekom, with more than 20,000 outlets in Solomon Islands, is planning for a new centre in Auki, Malaita
Province. Three locations are being considered. The following table gives the factors for each site.

Factor Weight Kiluufi Hospital Aligegeo School Guonaru’u

airstrip
Space 0.30 60 70 80

Costs 0.25 50 80 30

Traffic 0.20 40 80 60
density
Neighbourho 0.15 40 70 40
od income
Zoning laws 0.10 80 20 90

a. At which site should Telekom open the new centre? Show calculations.

Factor Weight Kilufi Hospital Aligegeo School Guonaru'u airstrip

Space 0.30 0.30 x 60 = 18 0.30 x 70 = 21 0.3 x 80 = 24

Costs 0.25 0.25 x 50 = 12.5 0.25 x 80 = 20 0.25 x 30 = 7.5

Traffic density 0.20 0.20 x 40 = 8 0.20 x 80 = 16 0.20 x 60 = 12

Neighbourhoo
d income 0.15 0.15 x 40 = 6 0.15 x 70 = 10.5 0.15 x 40 = 6

Zoning laws 0.10 0.10 x 80 = 8 0.10 x 20 = 2 0.10 x 90 = 9

Total 100% 52.5 69.5 58.5

Answer: Therefore Telekom should open its new centre at Aligegeo School.

2. The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown:

Site Fixed cost per year ($) Variable cost per unit ($)

1 500 11

2 1,000 7

3 1,700 4

a. Over what range of production is each location optimal?

 Title: total cost versus total outputs

Total costs
5000

4500

4000

3500

3000

2500 Site 1 total costs

site 2 total cost
2000 site 3 total cost
1500

1000

500

0
0 50 100 150 200 250 300 350 400

Therefore the optimal range of each location is;

Site 1 range – (0- 125)

Site 2 range – (126- 234)

Site 3 range – (235- more)

Range is - site 1≤ 125≤ site 2 ≤ 234 ≤ sites 3

b. For what production of 200 units, which site is best?

Answer – Site 2 is the best option or alternative. At this particular range it can produce 200 units at a minimum
(lowest) cost to maximize its profit compared to the other two sites.

c. What are the three main steps to location cost-volume analysis?

i. Determine the fixed and variable cost associated with each location alternative.
ii. Plot the total cost lines for all location alternatives on the same graph.
iii. Determine which location will have the lowest total cost for the expected output, alternatively, determine
which location will have the highest profit.
Topic 8: Short-term Scheduling

A lumber Yard in Ranadi has four jobs on order, as shown in the following table. Today is day 205 on the yards schedule.

Job Processing time Due date (Days)

A 212 6
B 209 3
C 208 3
D 210 8

1. In what sequence would the jobs be ranked according to the following decision rules.
a. FCFS

job work
processing time
Job (days) flow time job due date Job lateness
A 212 212 6 206
B 209 421 3 418
C 208 629 3 626
D 210 839 8 831
839 2101   2081

Sequence A, B, C, D

b. SPT

job work
processing time
Job (days) flow time job due date Job lateness
C 208 208 3 205
B 209 417 3 414
D 210 627 8 619
A 212 839 6 833
839 2091   2017

Sequence C, B, A, D

c. EDD

job work
processing time
Job (days) flow time job due date Job lateness
C 208 208 3 205
B 209 417 3 414
A 212 629 6 623
D 210 839 8 831
839 2093   2073

Sequence C, B, D, A
 d. LPT-

job work
processing time
Job (days) flow time job due date Job lateness
A 212 212 6 206
D 210 422 8 414
B 209 631 3 628
C 208 839 3 836
839 2104   2084

Sequence- D, A, C, B

e. Critical ratio

Job Critical ratio Priority order

A (6-205)/212 = -0.94 2
B (3- 205)/209 = -0.96 3
C (3- 205)/208 = -0.97 4
D (8 - 205)/210 = -0.93 1

Sequence D, C, A, B

2. Which is the best and why? Which has the minimum lateness?

the results of these floor rules are summarized in the following table;
Average
completion Utilizations Average number of
Rule time metric (%) jobs in system Average lateness (days)

FCFS 525.25 days 39.9% 2.5 520.25

SPT 522.75 days 40% 2.49 504.25

EDD 523.25 days 40% 2.49 518.25

LPT 526 days 29.8% 2.51 521

Therefore, the shortest processing time is the best technique for minimizing job flow and minimizing the average
job in the system. In minimum lateness, critical ratio tends to perform better than FCFS, SPT, EDD or LPT on the
average job – lateness criterion. This is because it gives priority to jobs that must be done to keep on schedule.
However in between the other four, SPT, has the minimum lateness?
b) What is the average inventory if the economic order quantity is used?

Average Inventory = EOQ/2

= 190 units/ 2
= 95 Units.

c) What is the optimal number of orders per year?

Optimum orders = Demand per year/ Optimum quantity

= 6000units/190 units
= 31.57894737
= 32 orders per year.
Bibliography:

Jay Heizer, Barry Render. (2014). Operation Management. Essex: Personal Education Limited.