1. DYM is a small strategy consulting company in Dallas, Texas. Each year DYM hires 40 new graduates for the entry level Associate rank. Each Associate on average spends 4 years before being considered for promotion. About only 50 % of the Associates, who come up for promotion move to the Manager rank. Each year, the company also hires 5 Managers from competitive consulting firms. A Manager (either hired or promoted within) on average stays in this rank for 6 years before being considered for promotion to Principal. At any point in time, how many Associates and Managers does the company employ? Show Calculation.Associates: _____________________ Managers: ___________________________

2. Consider the following financials information collected from the Income Statement and Balance Sheet of Sofas-R-Us, a furniture manufacturer in Greenbrier, NC. WIP = Work-in-Progress and FG= Finished Goods

Suppose the process flow times at the factory and the accounts receivables/sales organization remain unchanged, what would be the forecasted average inventory and accounts receivable for the following year? Show Calculation/ Explanation Average Inventory =_________ Accounts Receivable = ________

3. A company places orders optimally based on the Economic Order Quantity model. Compared to last year, this year their demand has increased 8-fold while the cost of capital has doubled due to shortage of cash. The company wants to manage their ordering quantity optimally, and the operations manager states that they should quadruple their order quantity in comparison to last years order quantity. Is the operations manager right?Circle One: YES or NO. Show Calculation/ Explanation

4. If a retailer orders 250 units every 5-weeks. What is the average inventory and the average time a unit spends in inventory? Show Calculation/ Explanation

5. If a retailer of a short life-cycle product has an optimal customer service level that is less than 50%, that means the retailers overage cost is smaller than the underage cost. Show Calculation/ Explanation. Circle one TRUE or FALSE

6. Suppose a firm currently orders in batches of 2000 units every month. The ordering costs are $400/order. The supplier sells the units to the firm at the rate of $20/unit. In addition, the cost of capital is 15% per annum. Which of the following statements is true? Show Calculation/ Explanation

A) The current order quantity minimizes the total cost associated with inventory holding and ordering costs.

B) Annual inventory holding costs are higher that annual ordering costs.

C) If the firm increases its order quantity from the current level, its ordering costs will increase.

D) Annual ordering costs are higher than annual inventory holding costs. E) None of the above.

7. A custom tool production company purchases a numerical control (NC) machine for the production line. After adding the NC machine, the production manager finds out that the production line throughput is 4 units per hr. When the process operates at capacity, the new numerical control machine is busy 80% of the time. If thats the case, what is the capacity of the NC machine? Show Calculation/ Explanation

8. In The Goal, which of the following interventions did NOT increase the plant throughput: A) move quality inspection in front of the NCX-10 machine B) release materials so that the robots were always busy C) pre-load runs for the heat treat furnace D) stagger breaks for workers staffed to the NCX-10 machine E) None of the above

9. Consider the following two processes. Process 1 has inventory turns of 15 per month and Process 2 has inventory turns of 50 per year. If each process has a throughput of 100 units per day. How much inventory is in process 1 and in process 2 respectively? Assume 30 days per month and 365 days per year. Show Calculation/ Explanation

Process 1 inventory ______________________ Process 2 inventory ________________________

10. In The Goal, which of the following IS NOT something that Alex learned during his hiking trip with his son.

A) Bottleneck (the slowest moving/processing) resource determines the process capacity (speed of the hiking group).

B) To increase process capacity (to get the group move faster), one needs to remove load from the bottleneck and distribute it to non-bottleneck resources.

C) Moving the bottleneck to the front of the line speeds up the process.

D) Even if the process is balanced, when there are statistical fluctuations, the overall process capacity would suffer due to dependencies in the production process.

E) None of the above.

Net Annual Sales Cost of Goods Sold Average Inventory (WIP and FG) Accounts Receivable Current Year (in Million $) 300 200 50 Pro-Forma (Next Year) 250 ( forecasted) 125 ( forecasted) ? 60