BBDM2153 Operations Management
Tutorial 9
1) What are the factors, other than globalization, that affect the location decision?
2) Manufacturers locate near their resources, retailers locate near their customers. Discuss this
statement, with reference to the ro!imit"#to#mar$ets arguments. %ro&ide e!amles to illustrate.
') (tarlight )ideos, *nc. lans to oen a large )+( tae dulication facilit". ,he" ha&e narrowed the
otential sites to three locations. Data for each location are ro&ided in the following table-
.ocation
/actors Weight %hoeni! Miami Detroit
0ost to dulicate .12 31.24 34.56 31.14
0ost of li&ing .24 .7 .8 .2
,ransortation .12 .6 .2 .2
9nion acti&ities .42 .8 .8 .6
:ecreation .12 .7 .6 .8
a) What is the total relati&e#aggregate#score for %hoeni!?
b) What is the total relati&e#aggregate#score for Miami?
c) What is the total relati&e#aggregate#score for Detroit?
1) ;<= *nc. roduces widgets in a con&entional rocess#focused >ob sho with the deartment
built around the $inds of wor$ needing to be erformed. ?ne of the engineers at ;<= has
reared a roosal to change from a >ob sho to a cellular manufacturing setting. ,he costs
for the current >ob sho and the roosed cellular setting are summarized below, assuming an
annual roduction &olume of 144,444 units-
%resent 0ellular
@ob sho %roosal
Annual fi!ed costs 324,444 3112,444
)ariable costs er widget 32.24 31.84
a) What would be the annual cost sa&ings if this roosal was acceted?
b) At what &olume would ;<= be indifferent toward the roosal?
c) What factor other than annual cost should be considered in this decision?
2) Blectronics 9nlimited is considering two different locations in (outheast Asia for manufacturing
remote control units for )0:s. ,he cost structure for each location is as follows Cfi!ed costs are on an
annual basis)-
.ocation /i!ed costs )ariable costs
,hailand 37,144,444 318.66
)ietnam 32,244,444 316.52
a) Which location is more economical for a first "ear &olume of 24,444?
b) Which location is more economical for a second "ear &olume of 124,444?
BBDM2153 Operations Management
8) A ma>or retail clothing store is considering whether to oen a new store on the other side of town or
wait one "ear and then oen the store. *n the meantime, the" ha&e aid 314,444 for a one "ear otion
on a building. *f the" oen the store now it will cost 3114,444 to refurbish it, but it will cost 3184,444
if the" wait one "ear. ,he" e!ect sales to deend on the econom" in the area at the time the" oen
the store. *f the" go ahead now, there is a 24D chance the econom" will go u, '4D it will sta" the
same, and 24D it will go down. ,he" then e!ect the following returns- if the econom" goes u
3244,444E sta"s the same 3184,444E and goes down #324,444. *f the" wait one "ear, the" can either
oen the store then or not oen the store and let the otion e!ire. *f the otion e!ires, the" will lose
the 314,444. ?ne "ear from now the" e!ect there is a 14D chance the econom" will go u, '4D sta"
the same, and '4D go down. ,he returns the" e!ect to get would then be- if the econom" goes u
3164,444E sta"s the same 3184,444E and goes down #3'4,444.
a) 9sing decision tree anal"sis, what is the e!ected &alue of oening the store now?
b) 9sing decision tree anal"sis, what is the e!ected &alue of waiting one "ear to oen the store?
c) What should the coman" do and what is the e!ected &alue of that decision?
7) A aint coman" has three sources for bu"ing bright red igment for their aints- )ietnam, ,aiwan, or ,hailand.
9nfortunatel", the igment is made from a bush whose annual growth is hea&il" deendent uon the amount of
rainfall during the growing season. ,he tables below show robabilities and rices for wet, dr" and normal
growing seasons-
%robabilities %riceF%ound C3)
Wet Dr" Gormal Wet Dr" Gormal
)ietnam .2 .2 .' .52 1.14 1.44
,aiwan .8 .' .1 .62 1.24 .56
,hailand .1 .1 .2 .54 1.12 1.42
a) 9sing decision tree anal"sis, what is the e!ected &alue Crice) for ,hailand?
b) What countr" should the coman" select and what is the e!ected &alue Crice) associated with
it?
BBDM2153 Operations Management
Tutorial 10
1) Describe the central focus of manufacturing facilit" la"outs in man" manufacturing comanies.
2) Describe /?9: C1) basic t"es of manufacturing la"outs. *llustrate with e!amles
') Describe the fundamental reHuirements of arts to be made in wor$ cells.
1) A ser&ice coman" is interested in determining a new la"out to better ser&e its customers. ,he" are
lanning to use the closeness rating scale from 1 Cnecessar") to 8 Cundesirable) to determine where to
locate the four deartments. ,he following table shows the deartments and their closeness ratings-
a) What two deartments should be located ne!t to each other based on their closeness ratings?
b) What two deartments should G?, be located ne!t to each other based on their closeness
ratings?
2) A large deartment store is about to mo&e to a new location in a shoing mall. Management wishes
to design the new store la"out using oerations seHuence anal"sis. ,he following data reresents
hourl" customer traffic between the current deartments-
Bstimated 0ustomersFhour
Det A I 0 D
A 144 244 144
I 244 144
0 144
D
a) Which deartments should be located ne!t to each other?
b) Which deartments should be located farthest from each other?
BBDM2153 Operations Management
8) A large international insurance coman" has four deartments de&oted to rocessing claims.
Deending on the nature of the claim, the aerwor$ route tra&eled for rocessing differs. ,he table
below details the rocessing seHuence and the monthl" &olume-
0laim Deartmental Monthl"
t"e seHuence &olume
A#2' 1#2#'#1 6,244
A#21 1#'#1 18,164
I#18 1#2#1 14,224
,wo la"outs ha&e been roosed for a new facilit". ,he coman" is interested in using load#distance
anal"sis to determine the best la"out. Distances for claim mo&ements for each la"out are shown
below-
Deartmental Distance between dets.. Cft)
mo&ements .a"out A .a"out I
1#2 24 24
1#' 72 144
2#' 144 24
2#1 124 72
'#1 22 24
a) What is the total tra&el distance in la"out A for claims A#2', A#21, I#18 resecti&el"?
b) What is the total tra&el distance in .a"out I for claims A#2', A#21, and I#18 resecti&el"?
c) What is the total distance tra&eled in feet for all claims in a month using .a"out A?
d) What is the total distance tra&eled in feet for all claims in a month using .a"out I?
BBDM2153 Operations Management
Tutorial 11
1) Discuss the imortance of scheduling in oerations.
2) Describe the ,W? C2) traditional lans for ro&iding roduction caacit".
') Describe the rationales on using le&el caacit" aroach with in&entor" will associate with low
roduction costs.
1) B!lain the difficulties encountered in scheduling ersonnel in ser&ice oerations.
2) Describe the fi&e most common seHuencing rules.
8) A coman" is interested in de&eloing a Huarterl" aggregate roduction lan but the" arenJt sure if
le&el caacit" or matching demand would be better. ,he" ha&e the following information a&ailable
regarding their roduction oeration-
Gumber of wor$ing da"s er Huarter K 82 da"s
Gumber of hours er da" er erson K 6 hours
.abor standard to roduce one unit K ' hours
Demand for four Huarters resecti&el"-
14,444, 12,444, 11,444, and 11,444 units
a) 9sing a le&el caacit" lan, how man" wor$ers would be needed each Huarter?
b) /or a le&el caacit" lan, what is the beginning in&entor" in Huarter 2?
c) 9sing a matching demand lan, how man" wor$ers are needed for Huarter 1?
d) +ow man" additional wor$ers are needed in Huarter 2 under a matching demand lan?
7) ,he following artial inut#outut control reort for wor$ center 66 disla"s the situation at the end
of wee$ four Call hours shown are labor hours).
Wee$- 4 1 2 ' 1
%lanned inut 244 144 '44 '44
Actual inut 244 124 '24 144
0umulati&e de&iation 4 24 144 244
%lanned outut 244 144 '44 '44
Actual outut 244 144 '44 '44
0umulati&e de&iation 4 4 4 4
%lanned ending W*% 244 244 244 244
Actual ending W*% 244
a) What is the actual ending W*% for wee$s 1 and 2, resecti&el"?
b) What is the actual ending W*% for wee$s ' and 1, resecti&el"?
BBDM2153 Operations Management
6) A coman" is see$ing to de&elo a master roduction schedule for its roduct. ,heir beginning
in&entor" is 1444 units and the" want to maintain a safet" stoc$ le&el of 1444 units. ,he" roduce the
roduct in a fi!ed lot size of 1244 units. *nformation regarding wee$l" demand is shown below-
Wee$
1 2 ' 1 2 8
Demand 1444 1144 1'44 544 244 1444
a) What is the ending in&entor" le&el for wee$ 2?
b) What is the roduction Huantit" for wee$ 1?
5) A "oung entrereneur has >ust oened an electronics store. ?ne of the man" tas$s that she must
address is wor$ scheduling. (he lans to sta" oen from 5a.m. to 5 .m. Monda" through (aturda".
(he e!ects her emlo"ees to stoc$ the shel&es and also be a&ailable for cashier chec$#out when
needed. All emlo"ees are full time and wor$ four da"s in a row with two consecuti&e da"s off each
wee$. (he estimates the number of emlo"ees needed each da" as follows-
Mon ,ue Wed ,hu /ri (at ,otal
8 5 2 7 5 14 18
a) What is the minimum number of emlo"ees reHuired?
b) 9sing the c"clical scheduling Cwor$ shift heuristic) aroach, what are the two consecuti&e da"s
off for the second emlo"ee?
c) +ow much slac$ er wee$ is resent in "our c"clical scheduling Cwor$ shift schedules)?
d) What wa"s could be used to reduce this slac$?
BBDM2153 Operations Management
Tutorial 12
1) Describe four t"es of in&entor".
2) What are the costs incurred of holding high le&els of in&entor"?
') B!lain the relationshi of the economic order Huantit" CB?L) to demandE to setu costE to holding
cost.
1) Differentiate between a fi!ed order Huantit" and a fi!ed order eriod in&entor" s"stem.
2) An auto arts warehouse is imlementing a c"cle counting s"stem for its three classes of in&entor"
items. 0lass A items are counted monthl", class I Huarterl", and class 0 annuall". Bight" ercent are
class 0, 12D are class I, and 2D are class A. ,he" wor$ 214 da"s er "ear and ha&e '2,444 different
in&entor" items. A c"cle counter can count 124 items er da".
a) +ow man" items are in class I?
b) +ow man" items need to be counted dail"?
c) +ow man" c"cle counters does the coman" need?
8) A manufacturing facilit" currentl" uses c"cle counting but thin$s imro&ements can be made in their
s"stem. ,he facilit" has 12,444 different materials. 0"cle counters are aid 322,444 er "ear and can
count an a&erage of 22 items each da". ,here are 224 da"s a&ailable each "ear for counting. ,he
material class information is-
Material %ercentage of /reHuenc"
0lass items in class of counting
A 12D Monthl"
I '2D Luarterl"
0 24D Annuall"
a) +ow man" items should be counted each da"?
b) +ow man" c"cle counters are reHuired?
c) What is the aro!imate annual labor cost?
7) A suermar$et re&iews its in&entor" le&els of wine on a eriodic basis. ,he manager was wondering
if this method is wor$ing and has chosen one oular item, a branded in$ wine, to e!amine. ,he
following information was gathered regarding this wine-
Annual demand K 14,444 bottles
Annual carr"ing cost K 14D Cac)
AcHuisition cost K 32.24
?rder cost K 312.24
0urrent in&entor" le&el K '24
9er in&entor" target K 1'72
BDD., K 224
a) +ow often should the manager order the wine?
b) +ow man" bottles should be ordered at this time?
c) What is the total annual stoc$ing costs for the wine?
6) What are some aroaches for dealing with non#uniform demand?
BBDM2153 Operations Management
Tutorial 13
1) Discuss material reHuirements lanning CM:%). What are the three ma>or ob>ecti&es of M:%?
2) Discuss the rationale wh" ?erations managers li$e to order and roduce large lots of materials.
') Describe the differences between infinite and finite loading.
1) What is the difference between indeendent demand and deendent demand in&entories?
2) M:% is more than an in&entor" s"stemE what additional caabilities does M:% ossess?
8) A comuter rinter ma$er has decided to subcontract the manufacture of the roller assembl" on their
oular laser model. ,here are three candidates under consideration to sul" the art under the @*,
s"stem- 0hina, ,aiwan, or (ingaore. Data is ro&ided below-
Performance Factor Weight Factor China Taiwan Singapore
%rice .2 36.14 35.'2 36.78
Bngineer Lualit" .' .74 .62 .64
/unction Lualit" .' .84 .64 .62
(ul" :eliabilit" .2 .84 .54 .54
a) What is the total relati&e#aggregate#score for 0hina?
b) What is the total relati&e#aggregate#score for ,aiwan?
c) What is the total relati&e#aggregate#score for (ingaore?
7) A 9.(. motorc"cle manufacturer has the otion of either ma$ing the gas tan$ in their newl" designed
c"cle, or subcontracting it out to a (ingaore manufacturer. 0osts for the two otions are-
(ource /i!ed 0ost )ariable 0ost
Ma$e in#house 312,444 321.24
Iu" from (ingaore 34 325.44
a) Which otion would be referred at an annual &olume of 1, 444 gas tan$s?
b) Which otion would be referred at an annual &olume of 2,444 gas tan$s?
c) /or what range of roduction &olume would it be better to ma$e the gas tan$s in#house?
