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> Material delays have routinely limited production of household sinks to 400 units per day. If the plant efficiency is 80%, what is the effective capacity?

> Portland Savings and Loan is considering new computer software, which, because of installation and training cost, will have an unusual pattern of net receipts. The expected receipts are: $20,000 in year 1, nothing in the next year, $30,000 in year 3, and

> Cheryl Druehl needs to purchase a new milling machine. She is considering two different competing machines. Milling Machine, a will cost $300,000 and will return $80,000 per year for 6 years, with no salvage value. Milling machine B will cost $220,000 an

> Justin Bateh is considering a new machine for his shop. The machine is expected to generate receipts as follows: $50,000 in year 1, $30,000 in year 2, nothing in the next year, and $20,000 in year 4. At an interest rate of 6%, what is the present value o

> Tony and Steve are considering whether to purchase a new “bending brake.” This machine puts precise bends in a material used in their vinyl siding business. The machine will cost $70,000. Tony and Steve estimate that the machine will generate profits as

> Evaluate the following capital investments according to net present value. Each alternative requires an initial investment of $20,000. Assume a 10% cost of capital. Which is the preferred investment?

> What are the assumptions of break-even analysis?

> Kurt Hozak, VP of Operations at McClain Manufacturing, has to make a decision between two investment alternatives. Investment A has an initial cost of $61,000, and investment B has an initial cost of $74,000. The useful life of investment A is 6 years; t

> A plant has an effective capacity of 900 units per day and produces 800 units per day with its product mix; what is its efficiency?

> Bold’s Gym, a health club chain, is considering expanding into a new location: the initial investment would be $1 million in equipment, renovation, and a 6-year lease, and its annual upkeep and expenses would be $75,000 (paid at the beginning of the year

> Your boss has told you to evaluate two ovens for Tink-the-Tinkers, a gourmet sandwich shop. After some questioning of vendors and receipt of specifications, you are assured that the ovens have the attributes and costs shown in the following table. The fo

> Tim Smunt has been asked to evaluate two machines. After some investigation, he determines that they have the costs shown in the following table. He is told to assume that: 1. The life of each machine is 3 years. 2. The company thinks it knows how to mak

> What is the present value of $5,600 when the interest rate is 8% and the return of $5,600 will not be received for 15 years?

> The initial cost of an investment is $65,000 and the cost of capital is 10%. The return is $16,000 per year for 8 years. What is the net present value?

> What is the net present value of an investment that costs $75,000 and has a salvage value of $45,000? The annual profit from the investment is $15,000 each year for 5 years. The cost of capital at this risk level is 12%.

> As operations manager of Holz Furniture, you must make a decision about adding a line of rustic furniture. In discussing the possibilities with your sales manager, Steve Gilbert, you decide that there will definitely be a market and that your firm should

> James Lawson’s Bed and Breakfast, in a small historic Mississippi town, must decide how to subdivide (remodel) the large old home that will become its inn. There are three alternatives: Option A would modernize all baths and combine roo

> What is the theory of constraints?

> Use the same data in Problem S7.28: a) If the expected volume is 28,500 units, which alternative should be chosen? b) If the expected volume is 15,000 units, which alternative should be chosen? Data from Problem S7.28: Wolfgang Kersten Mfg. intends to i

> Given the data in Problem S7.28, at what volume (units) of output would the two alternatives yield the same profit (loss)? Data from Problem S7.28: Wolfgang Kersten Mfg. intends to increase capacity through the addition of new equipment. Two vendors hav

> If a plant has an effective capacity of 6,500 and an efficiency of 88%, what is the actual (planned) output?

> You are given the data in Problem S7.28: a) What is the break-even point in dollars for proposal X? b) What is the break-even point in dollars for proposal Y? Data from Problem S7.28: Wolfgang Kersten Mfg. intends to increase capacity through the additi

> Wolfgang Kersten Mfg. intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed costs for proposal X are $150,000, and for proposal Y, $170,000. The variable cost for X is $120.00, and for Y, $100

> As manager of the St. Cloud Theatre Company, you have decided that concession sales will support themselves. The following table provides the information you have been able to put together thus far: Last year’s manager, Scott Ellis, has

> As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories,

> Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food-processing experience, and Angela has extensive commercial food- preparation experience.

> The electronics firm in Problem S7.23 is now considering the new equipment and increasing the selling price to $1.10 per unit. With the higher-quality product, the new volume is expected to be 45,000 units. Under these circumstances, should the company p

> An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. Current volume is 30,000 units. The firm can substantially improve the product quality by add

> Distinguish between bottleneck time and throughput time.

> You are considering opening a copy service in the student union. You estimate your fixed cost at $15,000 and the variable cost of each copy sold at $.01. You expect the selling price to average $.05. a) What is the break-even point in dollars? b) What is

> Given the following data, calculate a) BEPx; b) BEP$; and c) the profit at 100,000 units: P = $8/unit V = $4/unit F = $50,000

> Janelle Heinke, the owner of Ha’Peppas! is considering a new oven in which to bake the firm’s signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the variable costs are $2.00

> For the past month, which has an effective capacity of 6,500, has made only 4,500 hammers per day because of material delay, employee absences, and other problems. What is its efficiency?

> Given the data in Problem S7.17, at what volume (units) of output would the two alternatives yield the same profit? Data from Problem S7.17: Sroufe Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment.

> Using the data in Problem S7.17: a) What is the break-even point in dollars for proposal A if you add $10,000 installation to the fixed cost? b) What is the break-even point in dollars for proposal B if you add $10,000 installation to the fixed cost? Da

> Sroufe Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.

> Smithson Cutting is opening a new line of scissors for supermarket distribution. It estimates its fixed cost to be $500.00 and its variable cost to be $0.50 per unit. Selling price is expected to average $0.75 per unit. a) What is Smithson’s break-even p

> A production process at Kenneth Day Manufacturing. The drilling operation occurs separately from, and simultaneously with, sawing and sanding, which are independent and sequential operations. A product needs to go through only one of the three assembly o

> Klassen Toy Company, Inc., assembles two parts (parts 1 and 2): Part 1 is first processed at workstation A for 15 minutes per unit and then processed at workstation B for 10 minutes per unit. Part 2 is simultaneously processed at workstation C for 20 min

> Explain why doubling the capacity of a bottleneck may not double the system capacity.

> The Pullman Mfg., Inc., three-station work cell has two machines at station 1 in parallel. The manager, Ms. Hartley, has asked you to evaluate the system if she adds a parallel machine at station 2. a) What is the throughput time of the new work cell? b)

> The three-station work cell at Pullman Mfg., Inc. It has two machines at station 1 in parallel (i.e., the product needs to go through only one of the two machines before proceeding to station 2). a) What is the throughput time of this work cell? b) What

> The three-station work cell has a product that must go through one of the two machines at station 1 (they are parallel) before proceeding to station 2. a) What is the bottleneck time of the system? b) What is the bottleneck station of this work cell? c)

> A work cell at Chris Ellis Commercial Laundry has a workstation with two machines, and each unit produced at the station needs to be processed by both of the machines. (The same unit cannot be worked on by both machines simultaneously.) Each machine has

> Amy Xia’s plant was designed to produce 7,000 hammers per day but is limited to making 6,000 hammers per day because of the time needed to change equipment between styles of hammers. What is the utilization?

> Organic Grains LLC uses statistical process control to ensure that its health-conscious, low-fat, multigrain sandwich loaves have the proper weight. Based on a previously stable and in-control process, the control limits of the x- and R-charts are UCLx =

> A. Choudhury’s bowling ball factory in Illinois makes bowling balls of adult size and weight only. The standard deviation in the weight of a bowling ball produced at the factory is known to be 0.12 pounds. Each day for 24 days, the aver

> Auto pistons at Wemming Chung’s plant in Shanghai are produced in a forging process, and the diameter is a critical factor that must be controlled. From sample sizes of 10 pistons produced each day, the mean and the range of this diamet

> Sampling four pieces of precision-cut wire (to be used in computer assembly) every hour for the past 24 hours has produced the following results: Develop appropriate control charts and determine whether there is any cause for concern in the cutting proce

> IBM asked SMT and one other, much larger company to bid on 80 more units of a particular computer product. The request for quote (RFQ) asked that the overall bid be broken down to show the hourly rate, the parts and materials component in the price, and

> Hard Rock brings the concept of the “experience economy” to its cafe operation. The strategy incorporates a unique “experience” into its operations. This innovation is somewhat akin to mass customization in manufacturing. At Hard Rock, the experience con

> In an acceptance sampling plan developed for lots containing 1,000 units, the sample size n is 85. The percent defective of the incoming lots is 2%, and the probability of acceptance is 0.64. What is the average outgoing quality?

> The percent defective from an incoming lot is 3%. An OC curve showed the probability of acceptance to be 0.55. Given a lot size of 2,000 and a sample of 100, determine the average outgoing quality in percent defective.

> An acceptance sampling plan has lots of 500 pieces and a sample size of 60. The number of defects in the sample may not exceed 2. This plan, based on an OC curve, has a probability of .57 of accepting lots when the incoming lots have a defective rate of

> As the supervisor in charge of shipping and receiving, you need to determine the average outgoing quality in a plant where the known incoming lots from your assembly line have an average defective rate of 3%. Your plan is to sample 80 units of every 1,00

> The upper and lower design specification limits for a medical procedure performed by Dr. Muge Yayla Kallu are 15 minutes and 13 minutes, respectively. The process x = 14.5 minutes and  = .2 minutes. Compute the Cp and interpret its meaning.

> Ross Hopkins is attempting to monitor a filling process that has an overall average of 705 mL. The average range is 6 mL. If you use a sample size of 10, what are the upper and lower control limits for the mean and range?

> Product specifications call for a part at Vaidy Jayaraman’s Metalworks to have a length of 1.000" +- .040". Currently, the process is performing at a grand average of 1.000" with a standard deviation of 0.010". Calculate the capability index of this proc

> Two machines are currently in use in a process at the Dennis Kira Mfg. Co. The standards for this process are LSL = .400" and USL = .403". Machine One is currently producing with mean = .401" and standard deviation .0004". Machine Two is currently produc

> A new process has just been established on Jianli Hu’s assembly line. The process is supposed to place 4 grams of a deep red coloring in each bottle of nail polish with an Upper Specification Limit of 4.1 grams and a Lower Specification Limit of 3.9 gram

> A process filling small bottles with baby formula has a target of 3 ounces +- 0.150 ounce. Two hundred bottles from the process were sampled. The results showed the average amount of formula placed in the bottles to be 3.042 ounces. The standard deviatio

> Custom Vans, Inc., specializes in converting standard vans into campers. Depending on the amount of work and customizing to be done, the customizing can cost from less than $1,000 to more than $5,000. In less than 4 years, Tony Rizzo was able to expand h

> Frank Pianki, the manager of an organic yogurt processing plant, desires a quality specification with a mean of 16 ounces, an upper specification limit of 16.5, and a lower specification limit of 15.5. The process has a mean of 16 ounces and a standard d

> The specifications for a plastic liner for concrete highway projects calls for a thickness of 3.0 mm +- .1 mm. The standard deviation of the process is estimated to be .02 mm. What are the upper and lower specification limits for this product? The proces

> Linda Boardman, Inc., an equipment manufacturer in Boston, has submitted a sample cut-off valve to improve your manufacturing process. Your process engineering department has conducted experiments and found that the valve has a mean () of 8.00 and a sta

> Meena Chavan Corp.’s computer chip production process yields DRAM chips with an average life of 1,800 hours and  = 100 hours. The tolerance upper and lower specification limits are 2,400 hours and 1,600 hours, respectively. Is this process capable of pr

> The difference between the upper specification and the lower specification for a process is 0.6". The standard deviation is 0.1". What is the process capability ratio, Cp? Interpret this number.

> Rosters Chicken advertises “lite” chicken with 30% fewer calories than standard chicken. When the process for “lite” chicken breast production is in control, the average chicken breast contains 420 calories, and the standard deviation in caloric content

> In order to monitor the allocation of patrol cars and other police resources, the local police chief, Timothy Kraft, collects data on the incidence of crime by city sector. The city is divided into ten sectors of 1000 residents each. The number of crime

> Daily samples of 100 power drills are removed from the assembly line at Drills by Stergios Fotopoulos and inspected for defects. Over the past 21 days, the following information has been gathered. Develop a 3 standard deviation (99.73% confidence) p-char

> The smallest defect in a computer chip will render the entire chip worthless. Therefore, tight quality control measures must be established to monitor these chips. In the past, the percent defective at Chieh Lee’s Computer Chips has been 1.1%. The sample

> Micro laboratories have decided to develop a quality control program. The semiconductor parts that it gets from suppliers are either good or defective. The total number of semiconductors in every sample is 200. Determine the upper control chart limit and

> François Caron is considering developing an app for a week-long music festival in southern France, which will have 18 stages on a 2 km2 land and around 200 performers. It generally attracts more than 150,000 visitors. The app will include sc

> A part at Belleh Fontem Manufacturing requires holes of size .5 +- 0.01 inches. The drill bit has a stated size of .5 +- 0.005 inches and wears at the rate of .00017 inches per hole drilled. Give the most and least number of holes that can be drilled wit

> Your supervisor, Lisa Lehmann, has asked that you report on the output of a machine on the factory floor. This machine is supposed to be producing optical lenses with a mean weight of 50 grams and a range of 3.5 grams. The following table contains the da

> A process at Amit Eynan Bottling Company that is considered in control measures liquid in ounces. Below are the last 12 samples taken. The sample size = 4. a) What are the control limits for the mean chart? b) What are the control limits for the range ch

> Auto pitch devices are made for both major- and minor-league teams to help them improve their batting averages. When set at the standard position, Auto pitch can throw hardballs toward a batter at an average speed of 60 mph. To monitor these devices and

> Thirty-five samples of size 7 each were taken from a fertilizer-bag-filling machine at Panos Kouvelis Lifelong Lawn Ltd. The results were overall mean = 57.75 lb; average range = 1.78 lb. a) Determine the upper and lower control limits of the x-chart, wh

> The overall average of a process you are attempting to monitor at Feryal Erhun Enterprises is 50 units. The average range is 4 units. The sample size you are using is n = 5. a) What are the upper and lower control limits of the 3-sigma mean chart? b) Wha

> The overall average of a process you are attempting to monitor at Gihan Edirisinghe Motors is 75 units. The process standard deviation is 1.95, and the sample size is n = 10. What would be the upper and lower control limits for a 3-sigma control chart?

> The accounts receivable department at Rick Wing Manufacturing has been having difficulty getting customers to pay the full amount of their bills. Many customers complain that the bills are not correct and do not reflect the materials that arrived at thei

> Telephone inquiries of 100 IRS “customers” are monitored daily at random by Xiangling Hu. Incidents of incorrect information or other nonconformities (such as impoliteness to customers) are recorded. The data for last

> The school board is trying to evaluate a new math program introduced to second-graders in five elementary schools across the county this year. A sample of the student scores on standardized math tests in each elementary school yielded the following data:

> Frito-Lay, the multi-billion-dollar subsidiary of food and beverage giant PepsiCo, maintains 36 plants in the U.S. and Canada. These facilities produce dozens of snacks, including the well-known Lay’s, Fritos, Cheetos, Doritos, Ruffles, and Tostitos bran

> An ad agency tracks the complaints, by week received, about the billboards in its city: a) What type of control chart would you use to monitor this process? Why? b) What are the 3-sigma control limits for this process? Assume that the historical complain

> Peter Ittig’s department store, Ittig Brothers, is Amherst’s largest independent clothier. The store receives an average of six returns per day. Using z = 3, would 9 returns in a day warrant action?

> Jamison Kovach Supply Company manufactures paper clips and other office products. Although inexpensive, paper clips have provided the firm with a high margin of profitability. Sample size is 200. Results are given for the last 10 samples: a) Establish up

> The overall average on a process you are attempting to monitor is 50 units. The process population standard deviation is 1.72. Determine the upper and lower control limits for a mean chart, if you choose to use a sample size of 5. a) Set z = 3. b) Now se

> Houston North Hospital is trying to improve its image by providing a positive experience for its patients and their relatives. Part of the “image” program involves providing tasty, inviting patient meals that are also

> Five data entry operators work at the data processing department of the Birmingham Bank. Each day for 30 days, the number of defective records in a sample of 250 records typed by these operators has been noted, as follows: a) Establish 3ï&sup3

> Refer to Problem S6.16. If the defective rate was 3.5% instead of 1.5%, what would be the control limits (z = 3)? Data from Problem S6.16: In the past, the defective rate for your product has been 1.5%. What are the upper and lower control chart limits

> In the past, the defective rate for your product has been 1.5%. What are the upper and lower control chart limits if you wish to use a sample size of 500 and z = 3?

> The results of an inspection of DNA samples taken over the past 10 days are given below. Sample size is 100. a) Construct a 3-sigma p-chart using this information. b) Using the control chart in part (a), and finding that the number of defectives on the n

> You are attempting to develop a quality monitoring system for some parts purchased from Charles Sox Manufacturing Co. These parts are either good or defective. You have decided to take a sample of 100 units. Develop a table of the appropriate upper and l

> Orlando’s Arnold Palmer Hospital, founded in 1989, specializes in treatment of women and children and is renowned for its high-quality rankings (top 10% of 2,000 benchmarked hospitals), its labour and delivery volume (more than 14,000 births per year), a

> The defect rate for data entry of insurance claims at Sadegh Kazemi Insurance Co. has historically been about 1.5%. a) What are the upper and lower control chart limits if you wish to use a sample size of 100 and 3-sigma limits? b) What if the sample siz

> Eagletrons are all-electric automobiles produced by Mogul Motors, Inc. One of the concerns of Mogul Motors is that the Eagletrons be capable of achieving appropriate maximum speeds. To monitor this, Mogul executives take samples of 8 Eagletrons at a time

> Twelve samples, each containing five parts, were taken from a process that produces steel rods at Emmanuel Kodzi’s factory. The length of each rod in the samples was determined. The results were tabulated and sample means and ranges wer

> A process that is considered to be in control measures an ingredient in ounces. Below are the last 10 samples (each of size n = 5) taken. The population process standard deviation, , is 1.36. a) What is x? b) If z = 3,

> Boxes of Honey-Nut Oatmeal are produced to contain 14 ounces, with a standard deviation of .1 ounces. Set up the 3-sigma x-chart for a sample size of 36 boxes.