XAVIER UNIVERSITY

MBA-RM
OPERATIONS MANAGEMENT
2020-21, TERM-III
End Term Examination- April 2021
Name………………………………………………………………………………………..........Roll Number…………………
INSTRUCTIONS:
 Answer all questions. Marks allocated for each question is indicated near the right hand margin..
 Clearly state the assumptions, if any, on the answer sheet.
 Assume suitable data, if necessary.
 Use of non-programmable calculator is permissible.
 Maximum time is 120 minutes.
 Maximum mark is 40.
Question 1:
Logistics Express Inc. is starting a new distribution service for Sanchi Diary to deliver the milk and milk products
to the retail booths in the city. The company has found two types of small trucks (M-1 and M-2) to perform the
jobs satisfactorily. The company is looking for one truck on a priority basis to perform the new service. It is
expected that the trucks may run up to 25000 km. in a year. Assume the average fuel price per gallon be Rs.250.
The relevant data collected in respect to both these trucks are presented in the table below:
Relevant parameters M-1 M-2
Purchase cost (Rs.) 11,50,000 12,80,000
Operating cost in rupees per km. 8 6
Useful life in years 15 15
Kms. Per gallon of fuel 55 60
(i) Compute the vehicle life cycle cost of both the trucks.
(ii) Determine the break-even point in kms. between these two trucks.
(iii) Compute the payback period of both the trucks in years.
(iv) Also outline the managerial insights for this case on hand.
[6 MARKS]

Question 2:
Jain Irrigation has summarized the price list from two potential suppliers of an underground control valve. Annual
usage is 2,400 valves; order cost is Mu 10 per order; and annual inventory holding costs are Mu 3.35 per unit.
Which vendor should be selected and what order quantity is best if Jain Irrigation wants to minimize total cost?
Draw the managerial insights of this case.
The cost schedules of two chemical vendors are as follows:
VENDOR-A VENDOR-B
Order Quantity(units) Price/unit(Mu) Order Quantity(units) Price/unit(Mu)
1-99 34.50 1-199 34.25
100-199 33.75 200-399 33.00
200-399 32.50 400+ 31.00
400+ 31.10
(a) What is the EOQ for each vendor?
(b) What quantity should be ordered and which vendor should be selected?
(c) What is the total cost for the most economic order size?
(d) What factors should be considered besides total cost? Draw managerial insights for this case.
[8 Marks]

1|Page
Question 3:
A pure flow shop has two machines and all the jobs visit these machines. The processing time in Time Unit (TU)
of each job in each machine is given in the table:
Job Number
Processing Time 1 2 3 4 5 6 7 8
Machine 1 (TU) 20 16 16 19 18 17 15 15
Machine 2 (TU) 17 20 16 15 20 20 13 16
Due Date ( TU from start of planning horizon) 70 35 50 62 80 60 90 65
a) Compare the performances of the SPT rule, EDD rule, LPT rule and STR rule using the following
performance criteria: (i) Mean flow or completion time, (ii) Average number of jobs, (iii) Mean lateness
or tardiness (iv) Number of tardy jobs, (v) Make span
b) Compute the utilization of the machines for schedules in all the above priority rules outlined.
[10 Marks]

Question 4:
A manufacturing organization has received a turnkey project for the manufacture of a custom-made equipment
for one of its clients. The project involves several activities. The details of the activities, duration, and the three-
time estimates (in weeks) of these activities are depicted in the following table. Since it is a turnkey project, and
some of the workers were very unreliable while completing some recent jobs, the project manager wants to have
a special supervision of the project. Draw an AOA diagram of the project. Advise the project manager suitably in
respect to the following:
(a) Expected completion time and variance of each activity
(b) Total project completion time and the critical path for the project
(c) The probability that the entire project can be completed in 25 weeks or less
Activity Predecessor Optimistic Time (weeks) Most Likely Time (weeks) Pessimistic Time (weeks)
A -- 3 5 7
B A 1.5 2 2.5
C A 2 4 6
D B 4 5 6
E B 3 4 11
F C 2 5 8
G E,F 1 2 3
H D 1.5 3 4.5
I G,H 3 5 7
[12 Marks]
Question5:
The Bakers Enterprise wishes to create a consecutive-days-off schedule for its skilled staff. Even though business
is heaviest on Friday and Saturday, part-time skilled workers are difficult to find in this area. Create a five-days-
on, two-consecutive days-off schedule using the fewest skilled staff possible given the following staff
requirements for each day of the week:
DAYS
MON TUE WED THU FRI SAT SUN
REQUIREMENTS 6 5 5 5 8 9 3
[4 Marks]

_______________

2|Page