CH 1 Reference: 

productivity (20%)
1) Barry's Tire Service completed 100 tire changes, six brake jobs, and 16 alignments in an eight-hour day
with his standard crew of six mechanics. A brake specialist costs $16 per hour, a tire changer costs $8 per
hour, and an alignment mechanic costs $14 per hour. The materials cost for a day was $2000, and overhead
cost was $500.
a. What is the shop's labor productivity if the retail price for each respective service is $60, $150, and $40?
b. What is the multifactor productivity, if the crew consisted of two of each type mechanic?
Answer:  
2)The Abco Company manufactures electrical assemblies. The current process uses 10 workers and
produces 200 units per hour. You are considering changing the process with new assembly methods that
increase output to 300 units per hour, but will require 14 workers. Particulars are as follows: (20%)

CURRENT PROCESS NEW PROCESS

OUTPUT (UNITS / HOUR) 200 300
NUMBER OF WORKERS  10 14
MATERIAL COST / HOUR $120 $150

Workers are paid at a rate of $10 per hour, and overhead is charged at 140% (or 1.4 times) labor costs.
Finished switches sell for $20/unit.
a. Calculate the multifactor productivity for the current process.
b. Calculate the multifactor productivity for the new process.
Answer:  
CHPATER 2 Reference: break-even quantity (20%)
3) Two manufacturing processes are being considered for making a new product. Process #1 is less capital
intensive, with fixed costs of $50,000 per year and variable costs of $700 per unit. Process #2 has fixed costs
of $400,000 annually, with variable costs of $200 per unit.
a. What is the break-even quantity for the two processes?
b. If annual sales are expected to be 600 units, which process should be selected?
Chapter 4 Reference:  utilization & Planning Long-Term Capacity)
4(20%)
4-1) Although the fire marshal had declared the capacity of the classroom at 45 students, the introduction to
operations management class was so popular, the average attendance was 55 students, literally standing
room only. Shouts of "You the man!" accompanied the successful solution of problems such as this: What is
the utilization of the operations management professor?
A) 122% B) 100% C) 55 students D) 45 students
Answer: 
4-2) Although the fire marshal had declared the capacity of the classroom at 55 students, the introduction to
operations management class was so popular, the average attendance was 75 students, literally standing
room only. Squeals of excitement and the occasional burning of an overturned car accompanied the
successful solution of problems such as this: What is the utilization of the operations management
professor?
A) 100% B) 136% C) 75 D) 55
Answer: 
Chapter 4 Reference:  A Systematic Approach to Long-Term Capacity Decisions (20%)
6) A printing company works on three types of printing jobs, each of which could be produced on the same
model printing machine. The predicted annual demands and typical order sizes are shown in the table. The
company has 2000 production hours available each year and requires a 10% capacity cushion to allow for
preventive maintenance, breakdowns, and other unforeseen circumstances. How many printing machines
must they have under these circumstances?

Job Type Job A Job B Job C

Demand 6000 4000 5000
Process time per unit .8 .75 .25
Average order size 40 100 50
setup time (hours) 1 .75 .5