Assignment-4

MBA 646: Operations and Supply Chain Management

CLO1- Demonstrate advanced knowledge of operations and supply chain management and its contribution to organization's performance.

Chapter-6 Managing Quality & Statistical Process Control

Instructions

Use Excel Sheet for solution.

Case study [page 305 of Textbook]

1. The first thing that must be done is to develop quality control limits for the sample means. This can be done as follows. Because the process appears to be unstable, we can use the desired mean as the nominal line. Desired x = 50.0, o = 1.2 (from past results of Wet-Land Drilling), o= = /wn =1.216 =1.2 /2.45 =0.489. At a 99.73% confidence interval Z = 3: UCL = X+30- =50+3x 0.489 = 50 +1.47 =51.47 LCL =X+ 30-=50-1.47 =48.53* 8.9 A location analysis for Cook Controls, a small manu- facturer of parts for high-technology cable systems, has been nar- rowed down to four locations. Cook will need to train assemblers. testers, and robotics maintainers in local training centers. Lori Cook, the president, has asked each potential site to offer training programs, tax breaks, and other industrial incentives. The critical factors, their weights, and the ratings for each location are shown in the following table. High scores represent favorable values. LOCATION AKRON, BILOXI, CARTHAGE, DENVER, FACTOR WEIGHT OH MS TX CO Labor availability 15 90 80 90 80 Technical school quality .10 95 75 65 85 Operating cost 30 80 85 95 85 Land and construction cost 15 60 80 90 70 Industrial incentives .20 90 75 85 60 Labor cost 10 75 80 85 75 a) Compute the composite (weighted average) rating for each location. b) Which site would you choose? c) Would you reach the same conclusion if the weights for oper- ating cost and labor cost were reversed? Recompute as neces- sary and explain. PxRANGE RANGE AVERAGE AVERAGE WEIGHT WEIGHT TIME (POUNDS) SMALLEST LARGEST TIME (POUNDS SMALLEST LARGEST 6:00 A.M. 48.6 47.4 52 0 6:00 P.M. 46.4 44.0 49.7 7:00 50.0 49 2 52.2 7:00 46.4 44 4 50 0 8:00 49 8 49 0 52 4 8:00 47.2 46.6 48 9 9:00 50.3 49.4 51.7 9:00 48.4 47.2 49.5 10:00 50.2 49.6 51.8 10:00 49.2 48.1 50.7 11:00 50.0 49.0 52.3 11:00 48.4 47.0 50 8 12 noon 50.0 48.8 52.4 12 midnight 47.2 46.4 49.2 1:00 P.M. 50.1 49.4 53.6 1:00 A.M. 47.4 46.8 49.0 2:00 49.7 48.6 510 2:00 48.8 47.2 51.4 3:00 48.4 47.2 51.7 3:00 49.6 49.0 50.6 4:00 47.2 45.3 50.9 4:00 51.0 50.5 51.5 5:00 46.8 44.1 49.0 5:00 50.5 50.0 51.9 The additional night-shift bagging crew was staffed entirely To verify this expectation, the quality control staff randomly by new employees. The most experienced foremen were tem- sampled the bag output and prepared the chart on the previous porarily assigned to supervise the night-shift employees. Most page. Six bags were sampled and weighed each hour. emphasis was placed on increasing the output of bags to meet ever-increasing demand. It was suspected that only occasional Discussion Questions reminders were made to double-check the bag weight-feeder. (A double-check is performed by systematically weighing a bag 1. What is your analysis of the bag-weight problem? on a scale to determine if the proper weight is being loaded 2. What procedures would you recommend to maintain proper by the weight-feeder. If there is significant deviation from 50 quality control? pounds, corrective adjustments are made to the weight-release Source: Reprinted with permission from Jerry Kinard. Dr. Jerry Kinard; mechanism.) Professor Emeritus. Western Carolina University. Dr. Brian Kinard; Professor, University of North Carolina Wilmington..* * 8.18 Hyundai Motors is considering three sites A, B, and C-at which to locate a factory to build its new-model automobile, the Hyundai Sport C150. The goal is to locate at a minimum-cost site, where cost is measured by the annual fixed plus variable costs of production. Hyundai Motors has gathered the following data: ANNUALIZED VARIABLE COST PER SITE FIXED COST AUTO PRODUCED A $10,000,000 $2,500 B $20,000,000 $2,000 C $25,000,000 $1,000 The firm knows it will produce between 0 and 60,000 Sport C150s at the new plant each year, but, thus far, that is the extent of its knowledge about production plans. a) For what values of volume, V. of production, if any, is site Ca recommended site? b) What volume indicates site A is optimal? c) Over what range of volume is site B optimal? Why? Px. . 8.32 The main post office in Tampa. Florida, is due to be replaced with a much larger, more modern facility that can handle the tremendous flow of mail that has followed the city's growth since 1970. Since all mail, incoming or outgoing, trav- els from the seven regional post offices in Tampa through the main post office, its site selection can mean a big difference in overall delivery and movement efficiency. Using the data in the following table, help Postmaster Purushottam Meena calculate the center of gravity location for the proposed new facility. Px TRUCK ROUND MAP TRIPS PER REGIONAL POST OFFICE COORDINATES (x, y) DAY Ybor City (10, 5) 3 Davis Island (3. 8) 3 Dale Mabry (4, 7) Palma Ceia (15, 10) 6 Bayshore (13, 3) Temple Terrace (1, 12) Hyde Park (5, 5) 10RANGE RANGE AVERAGE AVERAGE WEIGHT TIME (POUNDS) WEIGHT SMALLEST LARGEST TIME (POUNDS) SMALLEST LARGEST 6:00 A.M. 49.6 48 7 50.7 6:00 P.M. 46.8 410 51.2 7:00 50.2 49.1 51.2 7:00 50.0 46 2 51.7 8:00 50.6 49 6 51.4 8:00 47 4 44 0 48.7 9:00 50.8 50.2 51.8 9:00 47.0 44 2 48.9 10:00 49.9 49 2 52.3 10:00 47.2 46 6 50.2 11:00 50.3 48.6 51.7 11:00 48.6 47 0 50.0 12 noon 48.6 46.2 50.4 12 midnight 49.8 48 2 50.4 1:00 P.M. 49.0 46.4 50.0 1:00 A.M. 49.6 48 4 51.7 2:00 49.0 46.0 50.6 2:00 50.0 49 0 52.2 3:00 49.8 48.2 50.8 3:00 50.0 49.2 50.0 4:00 50.3 49 2 52.7 4:00 47.2 46.3 50.5 5:00 51.4 50.0 55.3 5:00 47.0 44 1 49.7 6:00 51.6 49.2 54.7 6:00 48.4 450 49.0 7:00 51.8 50.0 55.6 7:00 48.8 44.8 49.7 8:00 51.0 48.6 53.2 8:00 49.6 48.0 51.8 9:00 50.5 49.4 52.4 9:00 50.0 48.1 52.7 10:00 49.2 46.1 50.7 10:00 51.0 48.1 55.2 11:00 49.0 46.3 50.8 11:00 50.4 49.5 54.1 12 midnight 48.4 45.4 50.2 12 noon 50.0 48.7 50.9 1:00 A.M. 47.6 44.3 49.7 1:00 P.M. 48.9 47.6 51.2 2:00 47.4 44. 1 49.6 2:00 49.8 48.4 51.0 3:00 48.2 45.2 49.0 3:00 49.8 48.8 50.8 4:00 48.0 45.5 49.1 4:00 50.0 49.1 50.6 5:00 48.4 47.1 49.6 5:00 47.8 45.2 51.2 (cont'd)CASE STUDIES Bayfield Mud Company In November 2018, John Wells, a customer service representa- Wet-Land management, however, was not completely satis- tive of Bayfield Mud Company, was summoned to the Houston fied with the issuance of credit. The charts followed by their mud warehouse of Wet-Land Drilling, Inc., to inspect three boxcars engineers on the drilling platforms were based on 50-pound bags of mudtreating agents that Bayfield had shipped to the Houston of treating agents. Lighter-weight bags might result in poor chem- firm. (Bayfield's corporate offices and its largest plant are located ical control during the drilling operation and thus adversely affect in Orange, Texas, which is just west of the Louisiana-Texas bor- drilling efficiency. (Mud-treating agents are used to control the der.) Wet-Land had filed a complaint that the 50-pound bags of PH and other chemical properties of the core during drilling oper- treating agents just received from Bayfield were short-weight by ation.) This defect could cause severe economic consequences approximately 5%. because of the extremely high cost of oil and natural gas well- The short-weight bags were initially detected by one of Wet- drilling operations. Consequently, special-use instructions had to Land's receiving clerks, who noticed that the railroad scale tick- accompany the delivery of these shipments to the drilling plat- ets indicated that net weights were significantly less on all three forms. Moreover, the short-weight shipments had to be isolated boxcars than those of identical shipments received on October in Wet-Land's warehouse, causing extra handling and poor space 25, 2018. Bayfield's traffic department was called to determine utilization. Thus, Wells was informed that Wet-Land might seek if lighter-weight pallets were used on the shipments. (This might a new supplier of mud-treating agents if, in the future, it received explain the lighter net weights.) Bayfield indicated, however, that bags that deviated significantly from 50 pounds. no changes had been made in loading or palletizing procedures. The quality control department at Bayfield suspected that Thus, Wet-Land engineers randomly checked 50 bags and discov- the lightweight bags might have resulted from "growing pains" ered that the average net weight was 47.51 pounds. They noted at the Orange plant. Because of the earlier energy crisis, oil from past shipments that the process yielded bag net weights and natural gas exploration activity had greatly increased. In averaging exactly 50.0 pounds, with an acceptable standard devi- turn, this increased activity created increased demand for prod- ation o of 1.2 pounds. Consequently, they concluded that the ucts produced by related industries, including drilling muds. sample indicated a significant short-weight. (The reader may wish Consequently, Bayfield had to expand from a one-shift (6:00 A.M. to verify this conclusion.) Bayfield was then contacted, and Wells to 2:00 p.M.) to a two-shift (2:00 P.M. to 10:00 p.M.) operation in was sent to investigate the complaint. Upon arrival, Wells verified mid-2013, and finally to a three-shift operation (24 hours per day) the complaint and issued a 5% credit to Wet-Land. in the fall of 2018