Final Exam
Operations Management
QSO 600 Operations Management
The final exam consists of five essay and five problem questions. Answer all the
questions.
Essay Questions:
There is no set length for answers; students may be as verbose or brief as they feel
necessary to cover the question. Use this same exam document for your answers,
placing them below each question. This portion of the exam is worth 75 points
Problem Questions:
Make sure to show all your work to get full credit. The instructor needs to know the
formulas and calculations you used to get to your final answer. You can do part of the
exam in Excel and Paste your Excel work into this document. This portion of the exam is
worth 75 points.
File Convention:
File name for the exam attachment to be
studentlastname-finalexam (Be sure there are no spaces)
Be sure to put your name on the exam paper.
Note: You may use the text and any other materials. You are NOT to work with anyone
else including other students in completing the exam nor discuss it with them.
QSO 600 Final Exam Essay Questions
Question 1: What is operations management? Why is it important? Is a good knowledge
of operations management more important in service or manufacturing industries?
Explain your answer.
Question 2: Discuss the use of PERT/CPM techniques for managing projects. Describe
what PERT/CPM does. Discuss advantages and disadvantages of using it. What other
techniques might you choose to manage your project?
Question 3: What are economies of scale in a manufacturing plant? Do they continue
forever? What are diseconomies of scale? How might you decide the optimal size of a
plant?
Question 4: What, in your opinion, are the three most important issues in supply chain
management? Discuss why you think these are the key issues.
Question 5: Discuss why (or if) inventories are necessary. What are the benefits of
inventories? What are the disadvantages of holding inventories?
QSO 600 Final Exam Problem Questions
Problem 1.
Arsenal Electronics is going to construct a new $1.2 billion semiconductor plant and has
selected four towns in the Midwest as potential sites. The important location factors and
ratings for each town are as follows:
Scores (0 to 100)
Location Factor
Weight Abbeton Bayside Cane Creek Dunnville
Work ethics
0.18
80
90
70
75
Quality of life
0.16
75
85
95
90
Labor laws/unionization
0.12
90
60
60
70
Infrastructure
0.10
60
50
60
70
Education
0.08
80
90
85
95
Labor skill and education
0.07
75
65
70
80
Cost of living
0.06
70
80
85
75
Taxes
0.05
65
70
55
60
Incentive package
0.05
90
95
70
80
Government regulations
0.03
40
50
65
55
Environmental regulations
0.03
65
60
70
80
Transportation
0.03
90
80
95
80
Space for expansion
0.02
90
95
90
90
Urban proximity
0.02
60
90
70
80
Recommend a site based on these location factors and ratings.
Answer 1:
Problem 2.
Sawyer Furniture is one of the few remaining domestic manufacturers of wood
furniture. In the current competitive environment, cost containment is the key to its
continued survival. Demand for furniture follows a seasonal demand pattern with
increased sales in the summer and fall months, culminating with peak demand in
November.
The cost of production is $16 per unit for regular production, $24 for overtime, and $33
for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs
are $20 per unit per month. There is no beginning inventory. Ten workers are currently
employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot
exceed regular production. Given the following demand data, use Excel Solver to design
an aggregate production plan for Sawyer Furniture that will meet demand at the lowest
possible cost.
Input:
Beg. Wkrs
10
Regular
$16
Hiring
$500
Units/wkr
50
Overtime $24
Firing
$500
Beg. Inv.
0
Subk
$33
Inventory $20
Mont DeReg
OT
Subk
Inv
#Wkrs
#Hired #Fired
h
mand
Jan
500
500
0
0
0
10
0
0
Feb
500
500
0
0
0
10
0
0
Mar
1000
1,000
0
0
0
20
10
0
Apr
1200
1,000
200
0
0
20
0
0
May
2000
1,000
1,000
0
0
20
0
0
Jun
400
400
0
0
0
8
0
12
Jul
400
400
0
0
0
8
0
0
Aug
1000
1,000
0
0
0
20
12
0
Sep
1000
1,000
0
0
0
20
0
0
Oct
1500
1,500
0
0
0
30
10
0
Nov
7000
3,500
3,500
0
0
70
40
0
Dec
500
500
0
0
0
10
0
60
Total
17,000
12,300
4,700
0
0
246
72
72
Answer 2:
Problem 3.
Complete the following MRP matrix for Item X. Determine when orders should be
released and the size of those orders.
Item: X
LLC: 0
Lot Size: Min 50
LT: 2
Gross Requirements
Period
1
3
4
5
6
7
8
25 30 5 25 100 4 30 20
6
0
Scheduled Receipts
Projected on Hand
2
50
30
Net Requirements
Planned Order Receipts
Planned Order Releases
Answer 3:
Problem 4.
Fibrous Incorporated makes products from rough tree fibers. Its product line consists of
five items processed through one of five machines. The machines are not identical, and
some products are better suited to some machines. Given the following production time
in minutes per unit, determine an optimal assignment of product to machine:
Machine
Product A
B
C
D
E
1
2
12 9 16 9 14
3
11 16 14 15 12
4
14 10 10 18 17
5
Answer 4:
17 10 15 16 20
13 12 9 15 11
Problem 5.
The following probabilistic activity time estimates are for a CPM/PERT network.
Time Estimates (days)
Time Estimates (days)
Activity
a
m
b
Activity
a
m
b
1
1
2
6
7
1
1.5
2
2
1
3
5
8
1
3
5
3
3
5
10
9
1
1
5
4
3
6
14
10
2
4
9
5
2
4
9
11
1
2
3
6
2
3
7
12
1
1
1
Determine the following:
a.
Expected activity times
b.
Earliest start and finish times
c.
Latest start and finish times
d.
Activity Slack
e.
Critical Path
Expected Project duration and standard deviation.
Answer 5: