Practice Problems Set 1

Problem 1:

George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a
newfound interest in efficiency. George is interested in determining the productivity of his organization.
He would like to know if his organization is maintaining the manufacturing average of 3%
increase in productivity per year? He has the following data representing a month from last year
and an equivalent month this year:

Show the productivity percentage change for each category and then determine the improvement
for labor-hours, the typical standard for comparison.

Problem 2:

DeHoratius Electronics, Inc., is evaluating several options for sourcing a critical processor for its new
modem. Three sources are being considered: Hi-Tech in Canada, Zia in Hong Kong, and Zaragoza
in Spain. The owner, Nicole DeHoratius, has determined that only three criteria are critical. She has
rated each firm on a 1–5 scale (with 5 being highest) and has also placed an importance weight on each of
the factors, as shown below:

Find the outsourcing score.

Problem 3:

Rao Technologies, a California-based high-tech man-ufacturer, is considering outsourcing some of its

electronics pro-duction. Four firms have responded to its request for bids, and CEO Mohan Rao has
started to perform an analysis on the scores his OM team has entered in the table below.

Weights are on a scale from 1 through 30, and the outsourcing provider scores are on a scale of 1
through 5. The weight for the labor factor is shown as a w because Rao’s OM team cannot agree on a
value for this weight. For what range of values of w, if any, is company C a recommended outsourcing
provider, according tothe factor-rating method?