MEMORIAL UNIVERSITY OF NEWFOUNDLAND Operations Management FINAL EXAM August 2022 NAME: Last (Please Print) First (Please Print) MUN #: INSTRUCTIONS: 1. This exam consists of one case study with 6 parts; the parts consist of theory and word problems. Either print this document and provide your answers in the space provided OR provide your answers on blank pieces of paper, indicating each question/answer appropriately. 2. Once you complete the test, upload your answers to the Assignment Folder for Final Exam. A pdf document is preferable. 3. For the word problems, please show all work, without which you will not receive credit. 4. Be neat and legible. Please remember, if I cannot read it then I cannot give credit for it. 5. You may use a calculator and/or computer but you must submit your handwritten or typed solutions (i.e. do not submit an Excel file of your solution). 6. Please ensure you have all 16 pages of this test (including cover page) 7. This test is an individual assessment; you must complete the test on your own and not in collaboration with anyone else. University Regulations against academic dishonesty apply to this examination. PART A B C D E F Total Mark Out of 20 14 17 15 19 15 15 100 ROCK Promotions holds a summer festival every year at the end of August. This summer is no different and they are finalizing plans now for the festival weekend from August 26 - 28, 2022. Some of the key activities that are part of the planning include: detailing the specifics and timing of the venue set up, constructing stages and beverage and food booths, estimating sales during the festival, ordering drink, food and merchandise supplies, determining employees required, and hiring and training employees. As part of their planning, they have determined key activities that need to occur for the venue set up. The following table provides information about the various activities required for the venue set up, the normal time for each activity, activity sequence and information about costs to shorten some of the activities and therefore the project duration. Looking at the long range forecast for the weeks leading up to the festival, ROCK Promotions feels they may need to explore reducing the project duration as much as possible. Activity Precedes Normal Duration (days) Days Available to Crash Crashing Cost per Day (in $000s) A B, F 5 2 8 B D 6 2 7 C H 3 1 14 D I 3 1 9 E G 7 1 8 F | 5 2 10 G 4 - H F 5 2 12 I 5 1 20 The company will construct the stages and the beverage/food booths and need to develop their assembly plan. They will have 6 stages and 15 beverage/food booths. To construct these areas, ROCK Promotions either rents or purchases the various required components: frames of metal rods (F), floor boards for the stages (B), electrical consoles (E), backdrop curtains (C), tables (T), joiners (J) and miscellaneous items (X). The items required and structure tree for each area are displayed below: STAGE BEVERAGE/FOOD F E (2) T F (2) B (6) E (5) | J(2) C(3) J (8) X (6) X (20) Operations Management Final Exam-Spring 2022 Page 2 ROCK Promotions will assemble 2 stages in each of days 6, 7 & 8; and assemble 3 booths in each of days 5 through 9. Information on the current inventory levels, scheduled receipts, lead times and lot-size requirements are outlined in the table below: Item Currently On Hand Scheduled Receipt Lead Time Lot Sizing Stage Amount 0 Day (days) Method 2 Lot for lot Bev/Food 0 0 2 Lot for lot F 5 1 Order size of 5 J 1 40 10 10 2 Multiples of 20 2 if > 60 X 30 20 2 1 Multiples of 10 B 3 1 E 2 6 4 & 6 1 Lot for lot Order size of 3 T 0 1 Lot for lot C 2 5 2 Order size of 5 Instead of renting the tables, ROCK Promotions is considering constructing the tables themselves and then making them available for other events and concert promotors. Currently, they pay $15.10 each and transportation costs are $20 per package of 5. To make a table, one method (Method A) will cost $14.00 each and $2,200 annually in fixed costs; another method (Method B) will cost $16.00 each and $2,000 annually in fixed costs. Annual demand for tables is expected to be 510 units. ROCK Promotions is preparing to place its order for t-shirts to sell at the festival. In previous years, they have purchased the t-shirts from a local supplier, Tees R Us, who lists these prices: less than 1,000, $20.00 each; 1,000 to 3,999, $14.00 each; 4,000 or more, $12.00 each. Ordering cost is $50 per order, annual holding cost is 20 percent of purchase price and annual demand is expected to be 4,900 t-shirts. A new supplier, Shirts 4 Less, has approached ROCK Promotions and offered a price of $15.00 per t-shirt (ordering and holding costs the same), regardless of how many they order. ROCK Promotions will need to anticipate drink sales at the beverage/food booths to ensure they have enough supplies on hand for the festival. They expect sales to be similar to previous years. They also have a pre-Festival day (Day 0) and they use drink sales from this to help predict sales during the festival. Last year, the forecast and actual for this pre-Festival day was 400 and 425, respectively. A case contains 24 bottles and they get 16 drinks out of a bottle. The following data is available for the previous year: Operations Management Final Exam-Spring 2022 Page 3 Actual Sales Day (bottles) 1 405 2 478 3 546 ROCK Promotions also needs to ensure consistency in the quantity of alcohol for each drink mixed. Each drink should ideally contain a 1.5 ounce shot. Three days of training sessions were held initially with servers; each day of training, a sample of 5 randomly selected shots were taken and measured. The table below shows the measurements in ounces for each of the inspections from the initial training: 1 2 3 4 5 Day 1 1.44 1.56 1.52 1.49 1.42 Day 2 1.45 1.54 1.55 1.43 1.52 Day 3 1.56 1.49 1.47 1.53 1.56 A final two days of training were held and again randomly selected shots were taken and measured, with the following measurements observed: 1 2 3 4 5 Day 4 Day 5 1.48 1.53 1.5 1.49 1.51 1.47 1.52 1.56 1.49 1.5 For the beverage and food booths, festival attendees arrive at a booth and form one line to wait for the first available server, with 3 servers at each booth. Requests for food or drinks average 19 per hour. On average it takes 6 minutes to serve one festival attendee. To increase the speed and efficiency of serving food and beverages, ROCK Promotions has rented several vending machines that dispense cans of beer, cans of wine and snack foods. These machines will be located throughout the venue and will take cash, debit or credit. From previous experience, ROCK estimates that festival attendees will arrive at a vending machine at a rate of 30 per hour and each machine has a constant service duration of 75 seconds per item. Operations Management Final Exam-Spring 2022 Page 4 PART A (20 marks): a) (15 marks) Develop the material requirements plan for the Stages, Beverage/Food booths, and parts J and E. Use the tables below and following page to prepare your MRP for ROCK Promotions. 1 2 3 Gross Requirements Scheduled Receipts Projected On Hand Net Requirements Planned Order Receipt Planned Order Release Gross Requirements Scheduled Receipts Projected On Hand Net Requirements Planned Order Receipt Planned Order Release + 5 6 7 8 0 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 Gross Requirements Scheduled Receipts Projected On Hand Net Requirements Planned Order Receipt Planned Order Release Operations Management Final Exam-Spring 2022 Page 5 Gross Requirements Scheduled Receipts Projected On Hand Net Requirements Planned Order Receipt Planned Order Release Gross Requirements Scheduled Receipts Projected On Hand Net Requirements Planned Order Receipt Planned Order Release 1 2 3 4 5 6 7 8 9 1 2 3 4 5 19 6 7 8 9 b) (5 marks) Advise ROCK Promotions whether they should continue to rent the Tables or make them internally; if internally, indicate which method. Operations Management Final Exam-Spring 2022 Page 6 PART B: (14 marks) a) (10 marks) Based on the data provided from shot samples taken on the first three days of training, calculate sample means and ranges, and the upper and lower control limits for the sample mean and the range. Assume standard deviation is not known and use three sigma control limits. Is the process in control? Explain why or why not. Operations Management Final Exam-Spring 2022 Page 7 b) (2 marks) Using data from shot samples taken during the last two days of training and the control limits calculated in part a), determine if the process in control? Explain why or why not. c) (2 marks) What type of chart would be used when only occurrences can be counted? Provide an example of a type of occurrence. Operations Management Final Exam-Spring 2022 Page 8 PART C: (17 marks) a) (10 marks) Determine the order quantity for t-shirts from Tees R Us that will minimize total cost. Operations Management Final Exam-Spring 2022 Page 9 b) (4 marks) What is the EOQ at the price offered by Shirts 4 Less? Based on the total annual costs, should ROCK Promotions go with this local supplier? c) (3 marks) Given the t-shirts can only be sold at this year's festival, are there any other factors that ROCK Promotions should consider with respect to your recommendations in a) and b)? Operations Management Final Exam-Spring 2022 Page 10 PART D (15 marks): a) (4 marks) Draw the precedence diagram for the venue set up project, indicating the critical path and the current project duration assuming the project isn't shortened. b) (11 marks) Prepare a crashing plan using the table below, indicating how many days they could crash the project and what the minimum total crash plan would be. State your recommended plan and the minimum cost. Operations Management Final Exam-Spring 2022 Page 11 PART E (19 marks): a) (8 marks) Using actual sales data from last year's festival, forecast drink sales for each day at this year's festival using the Linear Trend method. Operations Management Final Exam-Spring 2022 Page 12 b) (3 marks) Using actual sales data from last year's festival, and the forecast and actual from last year's pre-Festival day, forecast drink sales for each day at this year's festival using the Exponential Smoothing with a = 0.5. c) (5 marks) Based on your calculations in a) and b) and using actual from last year's drink sales, calculate the MAD for each of the methods. Using your MAD, what is the preferred method for forecasting? d) (3 marks) Provide 3 factors of a good forecast: Operations Management Final Exam-Spring 2022 Page 13 PART F (15 marks): (8 marks) Calculate the following performance measures serving customers at the beverage and food booths: a) Server utilization: b) The average number of customers waiting: The average time (in minutes) a customer waits for a server: d) The probability all servers will be busy when a customer comes to the booth: Operations Management Final Exam-Spring 2022 Page 14 ROCK Promotions are trying to determine if they need additional servers. To assist their decision making, answer the following (2 marks): e) If they added one more server in each booth, what would be the average wait time (in minutes)? (5 marks) For the vending machines that dispense beer, wine and snacks, determine the following performance measures: f) Vending machine utilization: g) The average number of customers waiting: h) The average time (in minutes) a customer is in the 'system': Operations Management Final Exam-Spring 2022 Page 15 Use this space for any additional workings Operations Management Final Exam-Spring 2022 Page 16