Operations Management Chapter 1 Solved Problem 1 Student tuition at Boehring University is $100 per semester credit hour. The state supplements school revenue by matching student tuition dollar for dollar. Average class size for a typical three-credit course is 50 students. Labor cost are $4000 per class, materials costs are $20 per student per class, and overhead costs are $25000 per class. a. What is the multifactor productivity ratio for this course process? b. If instructors work an average of 14 hours per week for 16 weeks for each three-credit class of 50 students, what is the labor productivity ratio? c. Solved problem 2 Natalie Attired makes fashionable garments. During a particular week employees worked 360 hours to produce a …show more content…
Because of demand uncertainties, the operations manager obtained three demand forecasts(pessimistic, expexted, and optimistic). The manager believes that a 20 percent capacity cushion is best. a. What is the minimum number of machines needed? The experted number? The maximum number b. If the operation currently has three machines and the manager is willing to expand capacity by 20 percent through short-term options in the event that the optimistic demand occurs, what is the capacity gap? Table 6.2 CAPACITY INFORMATION FOR AUTOMOTIVE BRAKE SUPPLIER Time Standard Demand forcast Component Processing (hr/wait) Setup (hr/lot) Lot Size (unites/lot) Pessimistic Expected optimistic A 0.05 1.0 60 15000 18000 25000 B 0.20 4.5 80 10000 13000 17000 C 0.05 8.2 120 17000 25000 40000 Problem 6 OM Explorer Up, Up, and Away is a producer of kites and wind socks. Relevant data on a bottleneck operation in the shop for the upcoming fiscal year are given in the following table; Item Kites Wind socks Demand forecast 30000 units/year 12000 unit/year Lot size 20 units 70 units Standard processing time 0.3 hour/unit 1.0 hour/unit Standard setup time 3.0 hours/lot 4.0 hour/lot The shop works two shifts per day, eight hours per shift, 200 days per year. There currently are four machines, and a 25 percent capacity cushion is desired. How many machines should be purchased to meet the upcoming year’s demand
c. If we buy machine 3 because it's a bottleneck, without changing anything else, utilization for station 3 will become less which will cause less queue, less waiting time, less lead time, no or less penalty, more revenue.
10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?
B. 1. The impact of costs on the decision to move forward with the new Maui Sandal line is as follows: As the production continues, the hours needed for each batch, or individual pair, will begin to decrease. By continuing to produce this line the total labor costs will continue to decrease, but most likely, at a slower rate as more sandals are produced. This data can help the company decide employment levels, capacity, costs, and their pricing of this particular merchandise in the open market. The company predicts that it will take 1,000 labor hours for production to complete for the first batch, with 50 total batches between month 1 and month 4.
Name: Amber Smith CAUTION: See "round" rules in Excel Instructions before calculating OT for slaried employees. Enter the appropriate numbers/formulas in the shaded (gray) cells. An asterisk (*) will appear to the right of an incorrect answer. For a breakdown of the solution by chapter, see the worksheet tabs labeled CPP 2 through 6 representing the solutions for chapters 2-6. Continuing Payroll Problem-B
To determine the cost of labor to re-work under filled cases, I divided the hourly rate of the employee ($8.50/hr)
Consolidated Company makes cardboard boxes. During the most recent accounting period Consolidated paid $60,000 for raw materials, $48,000 for labor, and $52,000 for overhead costs that were incurred to make boxes. Consolidated started and completed 400,000 boxes. Based on this information, what is the average manufacturing cost per box?
1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar
The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and has estimated demand in three categories low, medium and high.
A. Assuming the number of hours Anna Sheen will spend developing the profile section will = 4; Ralph Armentrout’s optimal stocking quantity is 516, as portrayed in the table below:
Peter’s Peripherals assembles multimedia upgrade kits --- sets of components for adding sound and video to desktop computers. The demand for their kits for the next four quarters is estimated in the table below. Unit manufacturing cost for each kit is $160. Holding costs on each kit is $80 per quarter. Any kit that must be delivered late is assessed a backorder cost of $120. Each worker is capable of finishing 10 kits per quarter. If the company chooses to vary work force levels, it will incur costs of $400 for each additional worker; $600 for each termination. The company currently has 28 employees.
Start using the 2nd shift in the following period? 4.3 Results Machine capacity Capacity in previous period Installation of new machines Sale of machines Capacity in this period
(If the company produce the BB first, the company will buy 4000 labor hours, and it will use 2500 for BB and the remaining hours to produce WRM = 1500.
3. How does demand variability impact capacity issues at LAA? What can the company do to control variability in demand?
ML had developed a policy of selling manual machines and renting automatic machines. Manual machines did not cost much, did not require service, and could be modified to attach different fasteners inexpensively. Automatic machines were rented on an annual basis because they would have been more expensive to sell and it provided annual income to ML. However, about 700 of the rented machines were returned each year. During the time that machines were in inventory, ML would modify the machines to attach different fasteners. This was expensive with an average cost per modification of $2000. If all 700 machines were modified during a given year this would have cost $1.4 million per year. It was also industry practice to provide preventative maintenance and
Capacity planning is a necessary function of an organization to ensure that the highest rate of output is reached through the current processes taking place within an organization. These strategically defined processes must have the ability to provide flexibility to meet future capacity demand, whether due to opportunity growth or adjustments to make decreases to maximize profits. “Capacity decisions related to a process need to be made in light of the role the process plays within the organization and the supply chain as a whole, because changing the capacity of a