Debre Markos University

Institute of Technology
School of Mechanical and Industrial Engineering

Name Id No
Sinamaw Nega TER/1074/08
Mfg. Section C
Submitted to: Mr. Alebel (Ms.)
Submission date: 26/04/2013 E.C
 1. Amhara Pipe Factory PLC is compiling the monthly productivity report for its Board of
Directors. From the following data, calculate (a) labor productivity, (b) machine
productivity, (c) the multifactor productivity and (d) the total productivity of dollars spent
on labor, machine, materials, and energy. The average labor rate is $12 an hour, and the
average machine usage rate is $7 an hour. [10%]

Units produced cost $150,000

Labor hours 11,000
Machine hours 6,000
Cost of materials $36,000
Cost of energy $12,000

Solution

Hence, the average labor rate is $12 an hour, so

$ 12
Labor cost¿ average labor rate∗labor hour= ∗11000 hr=$ 132000
hr

output of the unit $ 150,000

A. labor productivity¿ = =1.13636
the labor input $ 132000

Hence. the average machine usage rate is $7 an hour

$7
Machine cost¿ average machine rate∗machine hour = ∗6000hr =$ 42000
hr

output $ 150000
B. machine productivity¿ = =3.5714
machine $ 42000

C. multifactor productivity=

output producd $ 150000 $ 150000

= = =0.8333 or
labor+energy +material $ 132000+ $ 12,000+$ 36000 $ 180000

output
=
labor+material +machine

$ 150000 $ 1500000
= = =0.8065
$ 132000+ $ 42000+ $ 12000 $ 186000
D.

output $ 150000
Total productivity= =
machine+labor+ material+energy $ 42000+ $ 132000+$ 36,000+ $ 12,000

$ 1500000
= =0.67567
$ 222000

2. A Fincha hydroelectric power station has decided to build a new sub district somewhere
in Addis Ababa town so as to provide a speedy service for its customers. In order to
choose a site, it has decided to evaluate all options against a number of criteria, as
follows:
 The cost of the site;
 The rate of local property taxation;
 The availability of suitable skills in the local labor force;
 The site’s access to the motorway network;
 The site’s access to the airport;
 The potential of the site for future expansion.
After consultation with its property agents, Finch hydroelectric power station identifies three
sites which seem to be broadly acceptable. These are known as sites A, B and C. The station
also investigates each site and draws up the weighted-score in table shown below. It is
important to remember that the scores shown in the table below are those which the manager
has given as an indication of how each site meets Finch hydroelectric power station’s need
specifically. Nothing is necessarily being implied regarding any intrinsic worth of the
locations. Likewise, the weightings are an indication of how important the station finds each
criterion in the circumstances it finds itself. Which site is best for the district to locate &
provide a speedy service for its customers in Addis Ababa town? Why? [5%]
 Solution

First we are going to do weighted Score for each criteria, Site = (importance weight)(site score)

Weighted score for site A Weighted score for site B

Criteria Site A Criteria Site B

Cost of the site 320 Cost of the site 260
Local taxes 40 Local taxes 100
Skills availability 80 Skills availability 60
Access to motorways 50 Access to motorways 60
Access to airport 20 Access to airport 60
Potential for expansion 75 Potential for expansion 40
Total weighted scores 585 Total weighted scores 580

Weighted score for site C

Criteria Site C
Cost of the site 240
Local taxes 160
Skills availability 40
Access to motorways 40
Access to airport 70
Potential for expansion 55
Total weighted scores 605

 Site C is the best site to district to locate Addis Abeba from the above three given
sites, since 605>585>580.
3. A bakery buys flour in 25 pound bags. The bakery uses 1,215 bags a year. Ordering cost is
$10 per order. Annual carrying cost is $75 per bag. [10%]
a. Determine the economic order quantity.
b. What is the average number of bags on hand?
c. How many orders per year will there be?
d. Compute the total cost of ordering and carrying flour.
e. If holding costs were to increase by $9 per year, how much would that affect the minimum
total annual cost?

Solution

Given; D=1215 bags per year

H=$75 Annual carrying cost

S=$10 per order

Q=25 pound bags per order

EQC=Economic Order Quantities

2 DS 2∗1215∗$ 10
A. EOQ¿
√ H
=
√ $ 75
= √ 324=18

B. In order to get average number of bags, first let’s find ordering time

Orders per year=D/ EOQ=1215/18=67.5=67.5 per year

The average number of the bag equal to the maximum and minimum divided by 2

Max =18, Min= 0

18
So, Average numbers of bags on hand= =9
2

D 1215
C. Orders per year= = =67.5 per year
EOQ 18

Q
D. Carrying cost= × H =18/2× $ 75=$ 675 Per year
2

D 1215
Ordering cost= × S= × $ 10=$ 675 Per year
Q 18
 Therefore; annual carrying cost is equal to annual ordering cost

The total carry and order cost=carrying cost +ordering cost

=$675+$675=$1350

E. If holding costs were to increase by $9 per year, how much would that affect the minimum
total annual cost?

Since the holding cost is increased by $9,

The annual carrying cost is =$75+$9=$84=cc
The order cost per order =$10=co
The economic order quantity is
2∗D∗CO 2∗1215∗10
Q=
√ CC
=
√
84
=17

The total cost of ordering and carrying cost so =

Q D
T C= ∗Cc+ ∗Co
2 2
17 1215
= ∗84 + ∗10
2 2
=$714+$714
=$1428
 The effect of minimum total annual cost,
The total cost without the minimum annual cost is =$1350
The effect of minimum annual cost=$1428-$1350=$78
The total cost is increased by $78, this indicates that the annual carrying cost is increase,
the total cost is increase

4. For each of the following network diagrams, determine both the critical path and the expected
project duration. The numbers on the arrows represent expected activity times. [5%]

a. AOA diagram
 Solution

There are 3 paths in the diagram

In the given equation there is no unit in the project duration, so the length of project
duration is any unit like (week, hours...)

Path Length of project(Weeks)

1-2-4-7-10-12 23
SO, Path
1-2-5-8-10-12 24
1-3- 6-9-
11- 1-3-6-9-11-12 31 12 is
the
longest path (31weeks), because highest length of duration of project, so it is the critical path
Therefore; the expected project duration is= 10+6+4+5+6=31

i. The expected duration of the project is equal to the length of the critical path (i.e.,
31 weeks).
i.e., 10+6+4+5+6=31

b. AON diagram
 SOLUTION

There are four paths in the given diagram

Path Length of durations

Start-B-E-End 3+4=7
Start-C-F-E-End 5+7+4=16
Start-A-D-End 7+8=15
Start-C-F-G-End 5+7+6=18
The critical path in the above diagram is path four because the time duration of the
project highest, so path (start-C-F-G-End) is critical path.

The expected project duration is =18