Operations Management I

Time Duration: 2:00 Hours,

Term: I
RollNo:
Name:
Total Marks: 30

Answer the following question:

produce to restaurants and
Caselet 1: The Heartland Produce Company sells and delivers food
food supply business is
catering services within a 100-mile radius of its warehouse. The
customers and
competitive, and the ability to deliver orders promptly is a factor in getting new
drivers and vehicles
keeping old ones. The manager of the company wants to be certain enough
Therefore,
are available to deliver orders promptly and they have adequate inventory in stock.
the manager wants to be able to forecast the number of orders that will
occur during the next

month (i.e., to forecast the demand for deliveries). From records of delivery orders,
wants
management has accumulated the following data for the past 10 months, from which it
would be
tocompute three- and five-month moving averages. Suggest which of the methods
appropriate for the manager on the basis of mean absolute deviation. (5 Marks)

Month Orders
January 120
February 90
March 100
April 75
May 110
June 50
July 75
August 130
September 110
October 90

Caselet 2: HiTek Computer Services repairs and services personal computers at its store, and
it makes local service calls. It primarily uses part-time State University students as technicians,.
The company has had steady growth since it started. It purchases generic computer parts in
volume at adiscount from a variety of sources whenever they see a good deal. Thus, they need
a goodforecast of demandfor repairs so that they willknow how many computer component
parts to purchase andstock, and how many technicians to hire. The company has accumulated
the demand data shown in the following table for repair and service calls for the past 12 months,
from which it wants to consider exponential smoothing forecasts using smoothing constants
 (a) cqual to 0.30 and 0.50. Suggest which of the methodwould be appropriate on he bass
mean absolute deviation. (5 Marks)

Period Month Demand

1 37
2
January 40
February 41
March
4 April 37
May 45
6 June 50
July 43
August 47
9 September 56
10 October 52
11 November 55
12 December 54

Caselet 3: Quick Start Technologies (QST) helps companies design facility layouts. One of its
clients is building five new assembly plants across the continental United States. QST will
design the assembly-line layout and ship the layout instructions, along with the appropriate
machinery to each new locale. Use the precedence and time requirements given below to design
an assembly line that willproduce a new product every 12 minutes. (5 Marks)

a) Construct a precedence diagram,

b) Group the tasks into workstations,
c) Determine the efficiency of the line,
d) Calculate the expected output for an eight-hour day.
Task Precedence Time
(Min)
A 6

B
|<m<<< A 2
C B 2
D A
A
F A
G C 6
H D, E, F
 H 3
G 5

K 1,J 4

Caselet 4: Exotech Computers manufactures computer components such as chips, circuit

boards,motherboards, keyboards, LCD panels, and the like and sells them around the world. It
wants to construct a new warehouse/distribution centre in Asia to serve emerging Asian
markets. It has identified sites in Shanghai, Hong Kong, and Singapore and has rated the
important location factors for each site as follows. Recommend a site based on these location
factors and ratings. (2 Marks)

S. No. Location Factor Weight Jordan Singapore China

1 Political Stability 25 50 838|8%3|&l
80 90
Economic Growth 36 90 80 75
3 Port Facilities 30 60 95 90
4 Container Support 12 50 80 90
Land and Construction Cost 27 90 50 30
6 Transportation/Distribution 11 50 80 70
7 Duties and traffic 26 70 90 90
8 Trade Regulations 22 70 95 95
Airline service 20 60 80 70
10 Area Roads 60 70 80

Caselet 5: There are six stages in the semi-automated process and the relevant details are given
in the following table:
Process step Process Time Equipment Labour

(seconds)
Step 1 20 Machine A Worker A

Step 2 45 Machine B No Worker

Step 3 10 Machine C Worker A

Step 4 20 No resource No Worker

Step 5 MachineD Worker B

Step 6 10 No Resource Worker B

Use this information to answer the following questions. (8 Marks)

a) How long will it take to respond to an arrivingorder
 b) What is the daily production if the system works for 8 hours every day
c) What is the cycle time of the process?
cycle time of the
) nhe company produces 500 units in aday, what will be the
production process?
e) What isthe utilization of each resource in the system?
) If we need to increase production by 25 percent., what should we do?
g) The processing time at the bottleneck station could be reduced by 33 percent by
investing in better technology. The cost of this improvement is Rs. 1600000. Do you
think the investment is worthwhile If the daily requirement is 600 units?
h) If the company decided to make an investment of Rs. 1600000 in bottleneck station.
How long will it take to pay back if the sale of each item leaves a contribution of Rs

20? Assume an 8-hour-per-day,25-day-per-month steady-state operations.

Caselet 6: A manufacturer of washing machines is in the process of locating regional

warehouses in four geographical locations in south India to serve the markets. The markets are
geographically andorganizationally split into five segments. Based on the forecasting estimates
by the marketing department, it has been found that the average monthly demand for the
washing machine is 200, 450, 300, 550, and 400 in each of the market segments. Based on this
forecast andother costs including the fixed and the variable costs of setting up warehouses, it
has been decided to buildfour warehouses with a capacity to handle monthly requirements to
the extent of 600, 400, 700, and 200 units, respectively. Due to the geographicalspread of the
warehouses and the markets, the transportation cost per unit is different between these pairs of
warehouses and market segments. The following table presents the cost of transporting one
unit. Identify the most cost-effective way of serving the markets from the warehouses with the
help of Vogel's approximation method.
(5 Marks)
Market 1 Market 2 Market 3 Market 4 Market 5 Supply
Warehouse A 100 70 50 30 40 600
Warehouse B 30 90 40 120 50 Lg00
WarehouseC80 20 70 40 30 300
Warehouse D 20 40 90 90 80 200
Demand 200 450 300 550 400 1900