Happy Henry’s car dealer sells an imported car called the EX123. once every three months, a shipment of the cars is made to Happy Henry’s. Emergency shipments can be made between these three-month intervals to resupply the cars when inventory falls short of demand. The emergency shipments require two weeks, and buyers are willing to wait this long for the cars, but will generally go elsewhere before the next three month shipment is due. From experience, it appears that the demand for EX123 over a three-month interval is normally distributed with mean of 60 and a variance of 36. the cost of holding an EX123 for one year is $500. emergency shipments cost $250 per car over and above normal shipping cost.
a. How many cars should they be purchasing every three months?
b. Repeat the calculations, assuming that excess demand are back ordered form one three-month period to the next. Assume a loss-of-goodwill cost of $150 for customers having to wait until the next three-month period and acost of $45 per customer for bookkeeping expenses.
c. Repeat the calculations, assuming that Happy Henry’s Is out of stock. The customer will purchase the car elsewhere. In this case assume that the car cost H. H. an average of $10000 and sell for an average of $14500. Ignore loss-of-goodwill costs.
An automotive warehouse stocks a variety of parts that are sold at the neighborhood stores. One particular part, a popular brand of ail filter, is purchased by the warehouse for $1 each. It is estimated that the cost of order processing and receipt is $110 per order. The company uses an inventory carrying charge based on a 28 percent annual interest rate. The mothly demand for the filter folows a normal distribution with mean 290 and a standart deviation 88. Order lead time is assumed to be five months. Assume that a filter is demanded when the warehouse is out of stock, then the demand is back ordered, and the cost assesed for each back ordered demand is $12.50. Determine the following quantities:
a. The optimal values of the order quantity and the reorder level.
b. The average annual cost of holding, set up, and stock out associated with this itemassuming that an optimal policy is used.
c. Evaluate the cost of uncertainty for this process. That is, compare the average annual cost you obtained in part b with the average annual cost that would be incurred if the lead time demand had zero variance.
d. Suppose that the stock out cost is replaced with Type I service objective of 95 percent. Find the optimal values of (Q,R) in this case.
Chapter 7: Service Operations Management
Customers arrive to a local bakery with an average time between arrivals of 6 minutes. However, there is quite a lot of variability in the customers’ arrivals, as one would expect in an unscheduled system. The single bakery server requires an amount of time having the exponential distribution with mean 4.55 minutes to serve customers (in the order in which they arrive). No customers leave without service.
a. Calculate the average utilization of the bakery server.
b. Calculate how long customers spend on average to complete their transactions at the bakery (time in queue plus service time). What percentage of that time is spent queuing?
c. How many customers are in the bakery on average?
d. Calculate the probability a customer will spend more than an hour at the bakery (time in queue plus service time).
e. What is the probability that there are fewer than two customers in the bakery?
f. Why are the estimated waits in this system so long? Are the assumptions behind them reasonable? Why or why not?
At the SuperSpeedy drive-through the time between consecutive customer arrrivals has a mean of 55 seconds and a standard deviation of 35 seconds. There are two servers who service time averages 70 seconds with a standard deviation of 15 seconds. Assume that no customers leave the drive-through after entry.
a. What is the utilization of the employees?
b. What is the average time a customer spends at the drive-through? What fraction of that is the waiting in the queue?
c. How many cars on average are in the drive-through lane (including those in service)?
d. What suggestions would you have for the drive-though to improve customer satisfaction?
Chapter 8: Push and Pull Production Control Systems: MRP and JIT
The Noname Computer Company builds a computer designated model ICU2. It imports the motherboard of the computer from Taiwan, but the company inserts thesockets for the chips and boards in its plant in Lubbock, Texas. Each computer requires a total of ninety 64K dynamic random access memory (DRAM) chips. Noname sells the computers with three add-in boards and two disk drives. The company purchases both the DRAM chips and the disk drives from an outside supplier.The product structure diagram for the ICU2 computer is given in Figure 8-6.Suppose that the forecasted demands for the computer for weeks 6 to II are 210, 170, 180, 125, 65, 350. The starting inventory of assembled computers inweek 6 will be 75, and the production manager anticipates returns of 30 in week 8 and 10 in week 10.
a. Determine the MPS for the computers
b. Determine the planned order release for the motherboards assuming a lot-forlotscheduling rule
c. Determine the schedule of outside orders for the disk drives.
The time-phased net requirements for the base assembly in a table lamp over the next six weeks are
Week 1 2 3 4 5 6
Requirements 350 210 150 430 210 250
The setup cost for the construction of the base assembly is $250, and the holding cost is $0.20 per assembly per week
a. What lot sizing do you obtain from the EOQ formula
b. Determine the lot sizes using the Silver-Meal heuristic
c. Determine the lot sizes using the least unit cost heuristic
d. Determine the lot sizes using part period balancing
e. Compare the holding and setup costs obtained over the six periods using the polices found in parts (a) through (d) with the cost of a lot-for-lot policy
Chapter 9: Operations Scheduling
The Southeastern Sports Company produces golf clubs on an assembly line in its plant in Marietta, Georgia. The final assembly of woods requires the eight operations given the following table.
Task Time required (min.) Immediate predecessors
1. Polish Shaft 12
2. Grind the shaft end 14
3. Polish club head 6
4. Imprint number 4 3
5. Connect wood to shaft 6 1,2,4
6. Place and secure connecting pin 3 5
7. Place glue on the other end of shaft 3 1
8. Set in grips and balance 12 6,7
a. Draw a network to represent the assembly operation.
b. What is the minimum cycle time that can be considered? Determine the balance that results from the ranked positional weight technique for this cycle time.
c. By experimentation, determine the minimum cycle time that can be achieved with a three-station balance
The assembly of a transistorized clock radio requires a total of 11 tasks. The task times and predecessor and relationships are given in the following table.
Task Time (seconds) Immediate predecessors
4 12 1,2
5 10 2
6 8 4
7 12 5
8 10 6
9 2 7
10 10 8,9
11 34 3,10
a. Develop a network for this assembly operation.
b. What is the minimum cycle time that could be considered for this operation? What is the minimum number of stations that could be used with this cycle time?
c. Using the ranked positional weight technique, determine the resulting balancing using a cycle time of 45 seconds.
d. Determine by eperimentation the minimum cycle time that results in a four-station balance.
e. What is the daily production rate for this product if the company adopts the balance you determined in part (c)? (Assume a six-hour day for your calculations). What would have to be done if the company wanted a higher rate of production?