Question 1 (2 marks):

Answer Problem S7.1

If a plant were designed to produce 7000 hammers per day but is limited to making 6000 hammers per day because of the time needed to change equipment between styles of hammers, what is the utilization?

Question 2 (3 Mark):

Answer Problem S7.9

A production line at V. J. Sugumarans machine shop has three stations. The first station can process a unit in 10 minutes. The second station has two identical machines, each of which can process a unit in 12 minutes (each unit needs only to be processed on one of the two machine). The third station can process a unit in 8 minutes. Which station is the bottleneck station?

Question 3 (4 Marks):

The staff-training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1800 employees per year. Since the training center was first put in use, the program has become more complex, so that 1400 now represents the most employees that can be trained per year. In the past year, 1350 employees were trained. Calculate the efficiency and the utilization of this system.

Question 4 (4 marks)

Answer Problem S7.17

Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for Proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.00, and for B, $10.00. The revenue generated by each unit is $20.00

a) What is the breakeven point in units for Proposal A?

b) What is the breakeven point in units for Proposal B?

Group A:

Question 5 (5 Mark):

A shipment of parts valued at $75,000 needs to be shipped from Tampa, FL, to Chicago, IL. They could be shipped by rail, taking 15 days at a cost of $1,575, or by truck, taking 4 days at a cost of $2,640. The annual holding cost rate for this type of item has been estimated at 22%. What option is more economical? Show your calculations.

Question 6 (2 marks):

Using Table 11.4, determine the sales necessary to equal a dollar of savings on purchases for a company that:

a) Has a net profit of 4% and spends 40% of its revenue on purchases.

b) Has a net profit of 6% and spends 80% of its revenue on purchases.

Question 7 (6 marks)

Answer Problem 11.11

Baker Mfg Inc. wishes to compare its inventory turnover to those of industrial leaders, who have turnover about 13 times per year and 8% of their assets invested in inventory.

Baker Mfg Inc

Net revenue $27,500

Cost of sales $21,500

Inventory $ 1,250

Total assets $16,600

a) What is Bakers inventory turnover?

b) What is Bakers percentage of assets committed to inventory?

c) How does Bakers performance compare to the industry leaders?

Question 8 (5 Marks):

Problem 12.1

L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the companys manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system?

Item # Average Inventory (units) Value ($/unit)

1289 400 3.75

2347 300 4.00

2349 120 2.50

2363 75 1.50

2394 60 1.75

2395 30 2.00

6782 20 1.15

7844 12 2.05

8210 8 1.80

8310 7 2.00

9111 6 3.00

Group A:

Question 9 (6 Marks):

Problem 12.5

William Bevilles computer training school, in Richmond, stocks workbooks with the following characteristics:

Demand D = 19,500 units / year

Ordering Cost S = $25 / order

Holding Cost H = $4 / unit / year

a) Calculate the EOQ for the workbooks

b) What are the annual holding costs for the workbooks?

c) What are the annual ordering costs?

Question 9 (3 Marks):

Answer Problem 14.1

You have developed the following simple product structure of items needed for your gift bag for a rush party for prospective pledges in your organization. You forecast 200 attendees. Assume that there is no inventory on hand of any of the items. Explode the bill of materials. How many units of each do you need.

J

K(1)

L(4)

Answer Problem 14.1 You have developed the following simple product structure of items needed for your gift bag for a rush party for prospective pledges in your organization. You forecast 200 attendees. Assume that there is no inventory on hand of any of the items. Explode the bill of materials. How many units of each do you need. K(1) I L(4) Mai +