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SECTION A – OPEN QUESTION

Question 1 (20 points)
In sourcing strategies, what is backward and forward vertical integration? Illustrate the advantages and
disadvantages of them by giving an example of a Vietnamese company.

During reverse integration, the company acquires or partners with supply chain organizations who
supply raw materials, parts, or components for products. Future integration is a process in which the
company operates itself on the supply chain to reach the consumer, the end customer by opening retail
outlets or distribution centers.

SECTION B – PROBLEMS
Problem 1 (20 points)
The times required to complete each of eight jobs in a two-machine flow shop are shown in the table
that follows. Each job must follow the same sequence, beginning with Printing machine and moving to
Binding machine .
a) Determine a sequence that will minimize makespan time.
b) Construct a chart of the resulting sequence, and find the total idle time.

Job Printing (hours) Binding (hours)

A 16 5
B 3 13
C 9 6
D 8 7
E 2 14
F 12 4
G 18 14
H 20 11

Problem 2 (20 points)

Consider the following requirements for a certain product.

Period 1 2 3 4 5 6 7 8
Gross requirements 0 50 0 10 40 20 30 5

Beginning inventory = 20 units

Setup cost = $100 per setup
Lead time = 1 week
Holding cost = $1 per unit per week
Lot size = 62 units

a) Develop the MRP table by filling the below table

b) Calculate total inventory costs for the eight weeks.

Week
0 1 2 3 4 5 6 7 8
Gross requirement
 Scheduled receipts

On Hand Inventory

Net Requirement

Planned receipts

Planned orders

Problem 3 (20 points)

A manufacturing line requires 11 separate tasks as below. The firm needs to complete 144 instruments
per 24-hour day.

Task Performance Time Immediate

(min) predecessors
A 3 -
B 6 -
C 7 A
D 5 A, B
E 2 B
F 4 C
G 5 F
H 7 D, E
I 1 H
J 6 E
K 4 G, I, J
a) Draw the precedence diagram.
b) Assign tasks to the minimum feasible number of workstations according to the “ranked positioned
weight” decision rule.
c) What is the efficiency of the process you completed in b) ?
d) What is the idle time per cycle?

Problem 4 (20 points)

Toyota Vietnam Car Manufacturer has an 1,400 annual demand for Innova product. The cost of a typical
SONY audio system to Toyota is $ 400. Carrying cost is estimated to be 20% of the unit cost, and the
ordering cost is $25 per order. If a Toyota Operations Manager orders in quantities of 300 or more, he
can get a 5% discount in the cost of the audio systems. Should Toyota Vietnam take the quantity
discount?

Good Luck!