Plan production for the next year. The demand forecast is: spring, 20,000; summer, 10,000; fall, 15,000; winter, 18,000. At the beginning of spring you have 70 workers and 1,000 units in inventory. The union contract specifies that you may lay off workers only once a year, at the beginning of summer. Also, you may hire new workers only at the end of summer to begin regular work in the fall. The number of workers laid off at the beginning of summer and the number hired at the start of fall should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $100 per new worker; layoff, $200 per worker laid off; holding, $20 per unit-quarter; backorder cost, $8 per unit; straight-time labor, $10 per hour; overtime, $15 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter. Find the total cost.
> Distinguish between dependent and independent demand in a McDonald’s, in an integrated manufacturer of personal copiers, and in a pharmaceutical supply house.
> Why is managing bottlenecks so important in workcenter scheduling?
> What job characteristics would lead you to schedule jobs according to “longest processing time first”?
> Why does batching cause so much trouble in workcenters?
> The SOT rule provides an optimal solution in a number of evaluation criteria. Should the manager of a bank use the SOT rule as a priority rule? Why?
> List at least four of the seven prominent types of waste that should be eliminated from the supply chain.
> Distinguish between a work center, a GT cell, and an assembly line.
> What are the objectives of work-center scheduling?
> Good doctor–patient relations begin with both parties being punctual for appointments. I am Dr. Schafer, and being punctual is particularly important in my specialty: pediatrics. Mothers whose children have only minor problems don’t like them to sit in
> An important difference between service and manufacturing operations is that customers induce far more variability into the operation in a service system. Name at least three of the basic types of variation that customers bring to a service system.
> In anticipation of the ad campaign, AlwaysRain bought an additional bronze machine. Will this be enough to ensure that adequate capacity is available?
> What are some capacity balance problems faced by the following organizations or facilities? a. An airline terminal b. A university computing lab c. A clothing manufacturer
> Assume that product Z is made of two units of A and four units of B. A is made of three units of C and four of D. D is made of two units of E. Lead times for the purchase or fabrication of each unit to final assembly are: Z takes two weeks; A, B, C, and
> In the following MRP planning schedule for item J, indicate the correct net requirements, planned-order receipts, and planned-order releases to meet the gross requirements. Lead time is one week. Week Number Item J 2 3 4 Gross requirements 75 50 70
> Semans is a manufacturer that produces bracket assemblies. Demand for bracket assemblies (X) is 130 units. The following is the BOM in indented form: The following is a table indicating current inventory levels: a. Using Excel, create the MRP using t
> Match the industry type to the expected benefits from an MRP system as High, Medium, or Low. Industry Type Expected Benefit (High, Medium, or Low) Assemble-to-stock Assemble-to-order Make-to-stock Make-to-order Engineer-to-order Proce
> Product A consists of two units of subassembly B, three units of C, and one unit of D. B is composed of four units of E and three units of F. C is made of two units of H and three units of D. H is made of five units of E and two units of G. a. Construct
> What term refers to the optimization of value-adding activities and elimination of non-value adding activities that are part of a value stream?
> The MRP gross requirements for item X are shown here for the next 10 weeks. Lead time for A is two weeks, and setup cost is $9. There is a carrying cost of $0.02 per unit per week. Beginning inventory is 70 units. Use the least total cost or the least
> The MRP gross requirements for item A are shown here for the next 10 weeks. Lead time for A is three weeks and setup cost is $10. There is a carrying cost of $0.01 per unit per week. Beginning inventory is 90 units. Use the least total cost or the leas
> Audio Products, Inc., produces two AM/FM/CD players for cars. The radio/CD units are identical, but the mounting hardware and finish trim differ. The standard model fits intermediate and full-sized cars, and the sports model fits small sports cars.
> Product A is an end item and is made from two units of B and four of C. B is made of three units of D and two of E. C is made of two units of F and two of E. A has a lead time of one week. B, C, and E have lead times of two weeks, and D and F have lead t
> How have price and variety competition changed McDonald’s basic formula for success?
> As the degree of customer contact increases in a service system, what worker skills would be more important, clerical skills or diagnostic skills?
> Each unit of A is composed of one unit of B, two units of C, and one unit of D. C is composed of two units of D and three units of E. Items A, C, D, and E have on-hand inventories of 20, 10, 20, and 10 units, respectively. Item B has a scheduled rece
> Suppose that AlwaysRain Irrigation’s marketing department will undertake an intense ad campaign for the bronze sprinklers, which are more expensive but also more durable than the plastic ones. Forecast demand for the next four years is
> One unit of A is composed of two units of B and three units of C. Each B is composed of one unit of F. C is made of one unit of D, one unit of E, and two units of F. Items A, B, C, and D have 20, 50, 60, and 25 units of on-hand inventory, respectivel
> One unit of A is made of two units of B and one unit of C. B is made of three units of D and one unit of F. C is composed of three units of B, one unit of D, and four units of E. D is made of one unit of E. Item C has a lead time of one week; items A, B,
> One unit of A is made of one unit of B and one unit of C. B is made of four units of C and one unit each of E and F. C is made of two units of D and one unit of E. E is made of three units of F. Item C has a lead time of one week; items A, B, E, and F ha
> What phrase refers to the idea that every step in supply chain processes that deliver goods and services to the customer should create value?
> What is value stream mapping?
> One unit of A is made of two units of B, three units of C, and two units of D. B is composed of one unit of E and two units of F. C is made of two units of F and one unit of D. E is made of two units of D. Items A, C, D, and F have one-week lead times; B
> One unit of A is made of three units of B, one unit of C, and two units of D. B is composed of two units of E and one unit of D. C is made of one unit of B and two units of E. E is made of one unit of F. Items B, C, E, and F have one-week lead times; A a
> Consider a department store. Which departments probably should not be located near each other? Would any departments benefit from close proximity?
> Big10Sweaters.com is a new company started last year by two recent college graduates. The idea behind the company was simple. It will sell premium logo sweaters for Big Ten colleges with one major, unique feature. This unique feature is a special large m
> What category of planning covers a period from a day to six months, with daily or weekly time increments?
> Major operations and supply planning activities can be grouped into categories based on the relevant time range of the activity. What time range category does sales and operations planning fit into?
> What strategy do the following organizations seem to use to manage customer-introduced variability? a. EBay b. Ritz-Carlton Hotels c. New airline check-in procedures
> List some practical limits to economies of scale; that is, when should a plant stop growing?
> The essence of yield management is the ability to manage what?
> In a yield management system, pricing differences must appear logical and justified to the customer. The basis for this justification is commonly called what?
> Under what type of demand is yield management most effective?
> The widespread scientific application of yield management began within what industry?
> Refer to Example 14.1 as the basis for this problem. Meritor hires a team of consultants. The consultants suggest a partial robotic automation, as well as an increase in safety stock to 12.5 percent. Meritor implements these suggestions. The result is an
> How would you show a pull system in VSM Symbols between the blanking and CNC stages of the bolt manufacturing solved problems?
> Which of the four costs relevant to aggregate production planning is the most difficult to accurately measure?
> List at least three of the four costs relevant to the aggregate production plan.
> What is the term for a more complex production strategy that combines approaches from more than one basis strategy?
> In the agriculture industry, migrant workers are commonly employed to pick crops ready for harvest. They are hired as needed and are laid off once the crops are picked. This approach is made necessary by the realities of the industry. Which production p
> Suppose you were the manager of a restaurant and you were told honestly that a couple eating dinner had just seen a mouse. What would you say to them? How would you recover from this service crisis?
> Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers
> What capacity problems are encountered when a new drug is introduced to the market?
> Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,000; winter, 8,000; spring, 7,000; summer, 12,000. Inventory at the beginning of fall is 500 units. At the beginning of fall, you currently have 30 worke
> Helter Industries, a company that produces a line of women’s bathing suits, hires temporaries to help produce its summer product demand. For the current four-month rolling schedule, there are three temps on staff and 12 full-time employ
> A bottling plant fills 2,400 bottles every two hours. The lead time is 40 minutes and a container accommodates 120 bottles. The safety stock is 10 percent of expected demand. How many kanban cards are needed?
> Develop a production schedule to produce the exact production requirements by varying the workforce size for the following problem. Use the example in the chapter as a guide (Plan 1). The monthly forecasts for Product X for January, February, and March a
> Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices have very fast access and large storage capacity. Shoney is trying to determine a production plan for the next 12 months.
> Alan Industries is expanding its product line to include three new products: A, B, and C. These are to be produced on the same production equipment, and the objective is to meet the demands for the three products using overtime where necessary. The deman
> Old Pueblo Engineering Contractors creates six-month “rolling” schedules, which are recomputed monthly. For competitive reasons (it would need to divulge proprietary design criteria, methods, and so on), Old Pueblo
> DAT, Inc., needs to develop an aggregate plan for its product line. Relevant data are The forecast for next year is Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and sh
> In what way does the time horizon chosen for an aggregate plan determine whether it is the best plan for the firm?
> Can a manufacturer have a service guarantee in addition to a product guarantee?
> What are the major differences between aggregate planning in manufacturing and aggregate planning in services?
> How would you apply yield management concepts to a barbershop? A soft drink vending machine?
> Refer to Exhibit 5.6. Why is it that the “critical zone” begins at a utilization rate of about 70 percent in a typical service operation? Draw upon your own experiences as either a customer or a server in common serv
> Transmissions are delivered to the fabrication line four at a time. It takes one hour for transmissions to be delivered. Approximately four vehicles are produced each hour, and management has decided that 50 percent of expected demand should be maintaine
> Define yield management. How does it differ from the pure strategies in production planning?
> What are the basic controllable variables of a production planning problem? What are the four major costs?
> How does forecast accuracy relate, in general, to the practical application of the aggregate planning models discussed in the chapter?
> Distinguish between pure and mixed strategies in production planning.
> You are the operations manager for a manufacturing plant that produces pudding food products. One of your important responsibilities is to prepare an aggregate plan for the plant. This plan is an important input into the annual budget process. The plan p
> Here are the data for the past 21 months for actual sales of a particular product: Develop a forecast for the fourth quarter using a three-quarter, weighted moving average. Weight the most recent quarter 0.5, the second most recent 0.25, and the third
> What category of forecasting techniques uses managerial judgment in lieu of numerical data?
> Could a service firm use production line approach or self-serve design and still keep a high customer focus (personal attention)? Explain and support your answer with examples.
> What is the term for forecasts used for making day-to-day decisions about meeting demand?
> What is the first step in CPFR?
> The Sun River beverage company is a regional producer of teas, exotic juices, and energy drinks. With an interest in healthier lifestyles, there has been an increase in demand for its sugar-free formulation. The final packing operation requires 13 tasks
> How many steps are there in collaborative planning, forecasting, and replenishment (CPFR)?
> What are some major capacity considerations in a hospital? How do they differ from those of a factory?
> Often times, firms will work with their partners across the supply chain to develop forecasts and execute production and distribution between the partners. What technique does this describe?
> When forecasting demand for new products, sometimes firms will use demand data from similar existing products to help forecast demand for the new product. What technique is this an example of?
> Which qualitative forecasting technique was developed to ensure the input from every participant in the process is weighted equally?
> What forecasting technique makes use of written surveys or telephone interviews?
> The following table shows predicted product demand using your particular forecasting method along with the actual demand that occurred. (Answers in Appendix D) a. Compute the tracking signal using the mean absolute deviation and running sum of forecast
> In this problem, you are to test the validity of your forecasting model. Here are the forecasts for a model you have been using and the actual demands that occurred: Use the method stated in the text to compute MAD and the tracking signal. Then, decide
> Behavioral scientists suggest that we remember events as snap shots, not movies. How would you apply this to designing a service?
> Not all the items in your office supply store are evenly distributed as far as demand is concerned, so you decide to forecast demand to help plan your stock. Past data for legal sized yellow tablets for the month of August are a. Using a three-week mo
> A supplier of instrument gauge clusters uses a kanban system to control material flow. The gauge cluster housings are transported five at a time. A fabrication center produces approximately 10 gauges per hour. It takes approximately two hours for the hou
> Assume an initial starting Ft of 300 units, a trend (Tt) of eight units, an alpha of 0.30, and a delta of 0.40. If actual demand turned out to be 288, calculate the forecast for the next period.
> The following table contains the number of complaints received in a department store for the first six months of operation. If a three-month moving average is used to smooth this series, what would have been the forecast for May? Month Complaints M
> Historical demand for a product is as follows. a. Using a simple four-month moving average, calculate a forecast for October. b. Using single exponential smoothing with α = 0.2 and a September forecast = 65, calculate a forecast for Octob
> Consider the example in Exhibit 5.5. Can you think of anything else you might do with that example that would be helpful to the ultimate decision maker? exhibit 5.5 Decision Tree Analysis Using Net Present Value Calculations Strong growth 0.550 $31
> Assume that your stock of sales merchandise is maintained based on the forecast demand. If the distributor’s sales personnel call on the first day of each month, compute your forecast sales by each of the three methods requested here.
> The number of cases of merlot wine sold by the Connor Owen winery in an eight-year period is as follows. Using an exponential smoothing model with an alpha value of 0.20, estimate the smoothed value calculated as of the end of year 8. Use the average d
> Actual demand for a product for the past three months was a. Using a simple three-month moving average, make a forecast for this month. b. If 300 units were actually demanded this month, what would your forecast be for next month? c. Using simple expon
> The following table contains the demand from the last 10 months. a. Calculate the single exponential smoothing forecast for these data using an α of 0.30 and an initial forecast (F1) of 31. b. Calculate the exponential smoothing with tren
> The following tabulations are actual sales of units for six months and a starting forecast in January. a. Calculate forecasts for the remaining five months using simple exponential smoothing with α = 0.2. b. Calculate MAD for the forecasts
> What do you think might be some barriers to the successful, effective use of the project management software packages discussed in the chapter?
> Under a kanban approach to lean manufacturing, order quantities should be as small as possible. For a part that is manufactured in-house, what part of its manufacturing process needs to be reduced to reduce the optimal order quantity for an item?
> Given the following history, use a three-quarter moving average to forecast the demand for the third quarter of this year. Note, the 1st quarter is Jan, Feb, and Mar; 2nd quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov, Dec.
