MMB 522 Tutorial -- 13 April 2016

1. Choosing appropriate suppliers involve trading off alternative attributes / factors. List three
factors each, based on short-term ability to supply and longer-term ability to supply, that can
be used to rate suppliers.

Answer

2. Develop an operations network for a shopping mall, showing first and second tier suppliers
and customers.

Answer
3. At Morgan's Transformer Rebuilding, five jobs are ready now for dispatching to a machine
center. The processing times and due dates for the jobs are given below. Use earliest due
date and shortest processing time to sequence the jobs, and calculate the average
completion time, and the average job lateness.

Job Work Time (days) Due Date (days)

A 15 38
B 13 28
C 7 20
D 18 50
E 9 15

The EDD sequence is E-C-B-A-D. Average completion time is 32 days. Average lateness is 3.8
days. Average number of jobs is 2.58
EDD Time Due Date Slack Flow time Late days
E 9 15 6 9 0
C 7 20 13 16 0
B 13 28 15 29 1
A 15 38 23 44 6
D 18 50 32 62 12
Total 160 19
Average 32 3.8
Average number of jobs in system 2.58

4. ABC has four jobs on order, as shown in the table below. Today is day 205 on the company’s
schedule.

Remaining
Job Due date Processing Time
A 212 6
B 209 3
C 208 3
D 210 8

In what sequence would the jobs be ranked according to the following decision rules:
i. FCFS
ii. SPT
iii. LPT
iv. EDD

Minimize total lateness. Comparing the scheduling efficiency of the several algorithms presented in terms of lateness:
(a) First come, first served (FCFS):
 Processing Due
Job Time Date Start End Days Late
A 6 212 205 210 0
B 3 209 211 213 4
C 3 208 214 216 8
D 8 210 217 224 14
Total: 26 days

(b) Shortest processing time (SPT):

Processing Due
Job Time Date Start End Days Late
B 3 209 205 207 0
C 3 208 208 210 2
A 6 212 211 216 4
D 8 210 217 224 14
Total: 20 days

(c) Longest processing time (LPT):

Processing Due
Job Time Date Start End Days Late
D 8 210 205 212 2
A 6 212 213 218 6
C 3 208 219 221 13
B 3 209 222 224 15
Total: 36 days

(d) Earliest due date (EDD):

Processing Due
Job Time Date Start End Days Late
C 3 208 205 207 0
B 3 209 208 210 1
D 8 210 211 218 8
A 6 212 219 224 12
Total: 21 days

5. The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each
A requires 2 of Part B. There are 30 units of B available.
a. Calculate the net requirements for A.
b. Calculate the gross requirements for B.
c. Calculate the net requirements for B.

(a) 110 - 60 = 50; (b) 50 x 2 = 100; (c) 100 - 30 = 70

6. Consider the following bill of materials. Fifty units of Product A are needed. Assuming no
on-hand inventory, explode the bill of materials.

Item A: 50 units; Item B: 50 * 1 = 50 units; Item C: (50 * 2) = 100 units; Item D: (50 *
2 * 1) + (100 * 1) = 200 units; Item E: (50 * 1 * 1) = 50 units; Item F: (50 * 1 * 1 * 4) +
(50 * 2 * 1) = 300 units. (MRP structure, moderate)

7. An automotive company has decided to change its supplier of vehicle parts because its
current supplier has become unreliable in its delivery performance. The three
alternative suppliers that it is considering have been evaluated, on a 1 - 100 scale,
against the criteria shown in Table Q3.1 below. The table also shows the relative
importance of each criterion, on a 0 - 1 scale. Which supplier should the company
chose?

Table Q3.1 Supplier rating

Supplier Score
Factor Weight A B C
Cost performance 0.15 86 72 90
Quality record 0.20 72 77 91
Delivery speed promised 0.18 86 90 90
Delivery speed achieved 0.21 94 86 80
Dependability record 0.16 99 89 81
Range provided 0.10 96 85 75

Answer – Supplier rating

 Weighted Supplier Score
Factor Weight A B C
Cost performance 0.15 0.15x86 = 12.9 0.15x72 = 10.8 0.15x90 = 13.5

Quality record 0.2 0.2x72 = 14.4 0.2x77 = 15.4 0.2x91 = 18.2

Delivery speed promised 0.18 0.18x86 = 15.48 0.18x90 = 16.2 0.18x90 = 16.2

Delivery speed achieved 0.21 0.21x94 = 19.74 0.21x86 = 18.06 0.21x80 = 16.8

Dependability record 0.16 0.16x99 = 15.84 0.16x89 = 14.24 0.16x81 = 13.12

Range provided 0.1 0.1x96 = 9.6 0.1x85 = 8.5 0.1x75 = 7.5

Weighted sum 87.96 83.2 85.32

8. A stadium has a carrying capacity of 2,000 people. However, due to some technical problems,
only 1,500 people are currently allowed per time into the stadium. During the last event that
took place in the stadium only 1,450 people attended the event.
i. What is the utilization of this system?
i. What is the efficiency of this system?

Solution

Where:
Design capacity = 2,000 students
Effective capacity = 1,500 students
Actual output = 1,450 students
Therefore:
Actual output 1,450
Utilization = = = 72.5%
Design capacity 2,000

Actual output 1,450

Efficiency = = = 96.7%
Effective capacity 1,500

9. A manufacturing company is considering two alternative locations for a new facility. The fixed
and variable costs for the two locations are found in table Q3.2 below.
i. For which volume of business would the two locations be equally attractive?
ii. If the company plans on producing 50,000 units, which location would be more
attractive?
 Table Q3.2 Location variables
Palapye Maun
Fixed Costs P1,000,000 P1,500,000
Variable Costs (P per unit) 25 23

Answer
i. For each of the two sites:

Total Cost = Fixed Cost + Variable Cost x Volume

For Palapye:
Total cost = 1000000 + 25V

For Maun:
Total cost = 1500000 +23V

The two locations are equally attractive when the cost of Palapye and Maun are the same, that
is, when:
1000000 + 25V = 1500000 +23V
2V = 500000
V = 250,000
The two sites are equally attractive for a volume of 250,000, at a cost of 1000000 +
25x250,000 = P7,250,00.00.

ii. Crossover is at 250,000 units. Below the crossover, Palapye must be cheaper as it has the lower
fixed cost. Thus, for an estimated unit volume of 50,000, Palapye should be chosen.

Volume analysis at 50,000 units:

Palapye Maun
total cost P2,250,000.00 P2,650,000.00

10.At ABC Manufacturing, a set of five jobs is ready for dispatching to a machine
center. The processing times and due dates for the jobs are given in the table
below. Using shortest processing time (SPT):
i. Produce a sequence for the jobs, [5 Marks]
ii. Calculate the average completion time, [2 Marks]
iii. Calculate the average job lateness, [2 Marks]

Job Work Time Due Date

(days) (days)
A 15 38
B 13 28
C 7 20
D 18 50
E 9 15
 Answer
The optimal sequence is C-E-B-A-D. The average completion time is 31.6 days. The average
lateness is 4 days. Details appear in the table below.

SPT Time Due Date Slack Flow time Late days

C 7 20 13 7 0
E 9 15 6 16 1
B 13 28 15 29 1
A 15 38 23 44 6
D 18 50 32 62 12
Total 158 20
Average 31.6 4

See lecturer notes for working and fomulars.

11.Consider the following bill of materials. Forty units of Product A are needed.
Assuming no on-hand inventory, and no scheduled receipts, explode the bill of
materials.

B(2) C(3) D

E F G E(2) G

Answer
Item A: 40 units;
Item B: 40 * 2 = 80 units;
Item C: (40 * 3) = 120 units;
Item D: (40 * 1) = 40 units;
Item E: (80 * 1) + (40 * 2) = 160 units;
Item F: (120 * 1) = 120 units;
Item G: 120 + 40 160 units.

12.Briefly describe ABC inventory analysis. What possible use can the results of an
ABC analysis be to an Inventory Manger? [4 Marks]
Answer
ABC inventory analysis is a method for dividing on-hand inventory into three classifications based on
annual dollar volume.
Possible use - any one of:
1. Purchasing resources expended on supplier development should be higher for individual A items
than for C items;
 2. A items should have tighter physical inventory control, and
3. Forecasting A items may warrant more care.

13.What impact on quality (disadvantages) do you think each of the following five
capacity planning strategies might have?

i. Changing inventory levels

ii. Hiring and layoffs
iii. Overtime or idle time
iv. Subcontracting
v. Using part-timers
Answer
i. Changing inventory levels—shortages can result in lost sales due to longer lead times and poorer
customer service
ii. Hiring and layoffs—poor training and low morale are issues
iii. Overtime or idle time—overtime can wear employees down, while idle time can impact morale
iv. Subcontracting—subs may not deliver the quality expected on time
v. Part-timers—may not be well trained or educated

14. State and briefly explain each of the seven lean production wastes.

15. A batch of 50 electronic components is tested for 2,000 hours. Four of the components fail
during the test as follows:

Failure 1 occurred at 1,200 hours

Failure 2 occurred at 1,450 hours
Failure 3 occurred at 1,720 hours
Failure 4 occurred at 1,905 hours

Find
i. Failure rate as a percentage (FR(%))
ii. Failure rate in terms of failures over time (FR(No.))
16. A company which designs and produces display posters for exhibitions and sales promotion
events competes largely on the basis of its speedy delivery. One particular piece of
equipment which the company uses is causing some problems. This is its large platform
colour laser printer. Currently, the mean time between failures of the printer is 70 hours and
its mean time to repair is 6 hours. Find availability.