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BUS 515 Operations Management Homework Problems Solution

BUS 515 Week 2 Problems Chapter 2 & 3

Chapter 2: Problems 2,4,6,8

2. Last week a painter painted three houses in five days. This

week she painted two houses in four days. In which week was

the painter more productive?

4. A company that makes kitchen chairs wants to compare

productivity at two of its facilities. At facility #1, six workers produced

240 chairs. At facility #2, four workers produced 210 chairs

during the same time period.Which facility was more productive?

6. Aztec Furnishings makes hand-crafted furniture for sale in

its retail stores. The furniture maker has recently installed a new

assembly process, including a new sander and polisher.With this

new system, production has increased to 90 pieces of furniture

per day from the previous 60 pieces of furniture per day. The

number of defective items produced has dropped from 10 pieces

per day to 1 per day. The production facility operates strictly

eight hours per day. Evaluate the change in productivity for

Aztec using the new assembly process.

8. Med-Tech labs is a facility that provides medical tests and

evaluations for patients, ranging from analyzing blood samples

to performing magnetic resonance imaging (MRI). Average cost

to patients is $60 per patient. Labor costs average $15 per patient,

materials costs are $20 per patient, and overhead costs are

averaged at $20 per patient.

(a) What is the multifactor productivity ratio for Med-Tech?

What does your finding mean?

(b) If the average lab worker spends three hours for each patient,

what is the labor productivity ratio?

Chapter 3: Problems 2, 8, 10, 12, 14, 16, 18

2. Med-First is a medical facility that offers outpatient medical

services. The facility is considering offering an additional

service, mammography screening tests, on-site. The facility

estimates the annual fixed cost of the equipment and skills necessary

for the service to be $120,000. Variable costs for each patient

processed are estimated at $35 per patient. If the clinic plans to

charge $55 for each screening test, how many patients must it

process a year in order to break even?

8. George Fine, owner of Fine Manufacturing, is considering

the introduction of a new product line. George has considered

factors such as costs of raw materials, new equipment, and requirements

of a new production process. He estimates that the

variable costs of each unit produced would be $8 and fixed costs

would be $70,000.

(a) If the selling price is set at $20 each, how many units have

to be produced and sold for Fine Manufacturing to break

even? Use both graphical and algebraic approaches.

(b) If the selling price of the product is set at $18 per unit,

Fine Manufacturing expects to sell 15,000 units. What

would be the total contribution to profit from this product

at this price?

(c) Fine Manufacturing estimates that if it offers the product

at the original target price of $20 per unit, the companywill sell about 12,000 units.Which pricing strategy—$18

per unit or $20 per unit—will yield a higher contribution

to profit?

(d) Identify additional factors that George Fine should consider

in deciding whether to produce and sell the new product.

10. Easy-Tech Software Corporation is evaluating the production

of a new software product to compete with the popular word

processing software currently available. Annual fixed costs of producing

the item are estimated at $150,000, and the variable cost is

$10 per unit. The current selling price of the item is $35 per unit,

and the annual sales volume is estimated at 50,000 units.

(a) Easy-Tech is considering adding new equipment that

would improve software quality. The negative aspect of

this new equipment would be an increase in both fixed

and variable costs. Annual fixed costs would increase by

$50,000 and variable costs by $3. However, marketing expects

the better-quality product to increase demand to

70,000 units. Should Easy-Tech purchase this new equipment

and keep the price of their product the same? Explain

your reasoning.

(b) Another option being considered by Easy-Tech is the increase

in the selling price to $40 per unit to offset the additional

equipment costs. However, this increase would

result in a decrease in demand to 40,000 units. Should

Easy-Tech increase its selling price if it purchases the new

equipment? Explain your reasoning.

12. Mop and Broom Manufacturing is evaluating whether to

produce a new type of mop. The company is considering the operations

requirements for the mop as well as the market potential.

Estimates of fixed costs per year are $40,000, and the variable

cost for each mop produced is $20.

(a) If the company sells the product at a price of $25, how

many units of product have to be sold in order to break

even? Use both the algebraic and graphical approaches.

(b) If the company sells 10,000 mops at the product price of

$25, what will be the contribution to profit?

14. Jacob’s Baby Food Company must go through the following

steps to make mashed carrots: (1) unload carrots from truck;

(2) inspect carrots; (3) weigh carrots; (4) move to storage; (5) wait

until needed; (6) move to washer; (7) boil in water; (8) mash

carrots; (9) inspect. Draw a process flow diagram for these steps.

16. Oakwood Outpatient Clinic is analyzing its operation in

an effort to improve performance. The clinic estimates that a patient

spends on average hours at the facility. The amount of

time the patient is in contact with staff (i.e., physicians, nurses,

office staff, lab technicians) is estimated at 40 minutes. On average

the facility sees 42 patients per day. Their standard has been

40 patients per day. Determine process velocity and efficiency for

the clinic.

18. Mop and Broom Manufacturing estimates that it takes

hours for each broom to be produced, from raw materials to final

product. An evaluation of the process reveals that the amount of

time spent working on the product is 3 hours. Determine process

velocity.

BUS 515 Week 3 Chapter 4 Problems

2. Gabriela Manufacturing was able to find a new supplier

that would provide the item for $1.80 per unit with an annual

fixed cost of $200,000. Should Gabriela Manufacturing insource

or outsource the item?

4. Fast Finish, Inc. (FFI) has made a technological breakthrough

in snow board finish application. FFI will apply the finish for $0.23

per unit in variable costs plus a fixed annual cost of $230,000. Use

the cost and demand information given in Problem 3 for Downhill

Boards to evaluate this proposal.

(a) What will it cost Downhill Boards to outsource the finishing

process?

(b) At what demand level does it make sense economically to

outsource the finishing process?

(c) What additional factors should be considered when making

this outsourcing decision?

6. Cal’s Carpentry is considering outsourcing its accounts receivable

function. Currently, Cal employs two full-time clerks

and one part-time clerk to manage accounts receivable. Each

full-time clerk has an annual salary of $36,000 plus fringe benefits

costing 30 percent of their salary. The part-time clerk makes

$18,000 per year but has no fringe benefits. Total salary plus

fringe cost is $111,600. Cal estimates that each account receivable

incurs a $10 variable cost. The Small Business Accounts Receivables

Group (SBARG) specializes in handling accounts

receivable for small- to medium-size companies. Doris Roberts

from SBARG has offered to do the accounts receivable for Cal’s

Carpentry at a fixed cost of $75,000 per year plus $30 per account

receivable. Next year, Cal expects to have 2000 accounts

receivable.

(a) Calculate the cost for Cal’s Carpentry to continue doing

accounts receivable in-house.

(b) Calculate the cost for Cal’s Carpentry to use SBARG to

handle the accounts receivable.

(c) If the fixed annual cost offered by SBARG is nonnegotiable

but it is willing to negotiate the variable cost, what

variable cost from SBARG would make Cal indifferent to

the two options?

(d) What other alternatives might Cal consider in terms of

his current staffing for accounts receivable?

(e) What additional criteria should Cal consider before outsourcing

the accounts receivable?

BUS 515 Week 4 Problems Chapter 5

2. A jet engine has 10 components in series. The average reliability

of each component is 0.998.What is the reliability of the engine?

4. An engine system consists of three main components in a

series, all having the same reliability. Determine the level of reliability

required for each of the components if the engine is to have

a reliability of 0.998.

6. What would be the reliability of the bank system above if

each of the three components had a backup with a reliability of

0.80? How would the total reliability be different?

8. A university Web server has five main components, each

with the same reliability. All five components must work for the

server to function as intended. If the university wants to have a

95 percent reliability, what must be the reliability of each of the

components?

10. The following system of components has been proposed

for a new product. Determine the reliability of the system.

R _ 0.85 R _ 0.90

R _ 0.90 R _ 0.85 R _ 0.90 R _ 0.95

BUS 515 Week 5 Problems Chapter 7 & 8

Chapter 7

2. A manufacturer of thermostats uses a kanban system to

control the flow of materials. The packaging center processes 10

thermostats an hour and receives completed thermostats every

30 minutes. Containers hold 5 thermostats each.

(a) How many kanbans are needed for the packaging center?

(b) If management decides to keep two thermostats as safety

stock, how many kanbans will be needed?

4. Carlos Gonzales is production manager at an assembly plant

that manufactures cordless telephones. The company is planning

to install a pull system. The process is being planned to have a

usage rate of 50 pieces per hour. Each container is designed to

hold 10 pieces. It takes an average of 30 minutes to complete a

cycle.

(a) How many containers will be needed?

(b) How will the number of needed containers change as the

system improves?

6. Anna works on an assembly line where it takes her 30

minutes to produce 20 units of a product needed to fill a container.

It takes her an additional 5 minutes to transport the container

to Josh, who works at the next station. The company uses a

safety stock of 20 percent. The current assembly line uses five

kanbans between Anna’s and Josh’s stations. Compute the demand

for the product.

8. Consider the information from Problem 7. Determine how

the number of kanbans and the inventory level will be affected if

the time required for Robert to receive the material increases to

30 minutes.

Chapter 8

6. The manager of the health clinic in Problem 5 would also

like to use exponential smoothing to forecast demand for emergency

services in the facility. As in Problem 5, she is not sure

whether to use a high or low value of _. To make her decision,

she would like to compare the forecast accuracy of a high and low

_ on historical data. Again, she has decided to use an _ _ 0.7 for

the high value and _ _ 0.1 for the low value.

(a) Given the following historical data, which value of _ do

you think would be better to use?

(b) Is your answer the same as in Problem 5? Why or why

not?

8. A manufacturer of printed circuit boards uses exponential

smoothing with trend to forecast monthly demand of its product.

At the end of December, the company wishes to forecast sales

for January. The estimate of trend through November has been

200 additional boards sold per month. Average sales have been

around 1000 units per month. The demand for December was

1100 units. The company uses _ _ 0.20 and _ _ 0.10. Make a

forecast including trend for the month of January.

10. Rosa’s Italian restaurant wants to develop forecasts of

daily demand for the next week. The restaurant is closed on

Mondays and experiences a seasonal pattern for the other six

days of the week. Mario, the manager, has collected information

on the number of customers served each day for the past two

weeks. If Mario expects total demand for next week to be

around 350, what is the forecast for each day of next week?

12. The number of students enrolled at Spring Valley Elementary

has been steadily increasing over the past five years. The

school board would like to forecast enrollment for years 6 and 7

in order to better plan capacity. Use a linear trend line to forecast

enrollment for years 6 and 7.

16. A company uses exponential smoothing with trend to

forecast monthly sales of its product, which show a trend pattern.

At the end of week 5, the company wants to forecast sales for

week 6. The trend through week 4 has been 20 additional cases

sold per week. Average sales have been 85 cases per week. The demand

for week 5 was 90 cases. The company uses _ _ 0.20 and

_ _ 0.10.Make a forecast including trend for week 6.

20. A company has used three different methods to forecast

sales for the past five months. Use MAD and MSE to evaluate the

performance of the three methods.

(a) Which forecasting method performed best? Do MAD

and MSE give the same results?

(b) Which of these is actually the naïve method?

BUS 515 Week 6 Problems Chapter 6

4. A production manager at Ultra Clean Dishwashing Company

is monitoring the quality of the company’s production

process. There has been concern relative to the quality of the

operation in accurately filling the 16 ounces of dishwashing liquid.

The product is designed for a fill level of 16.00 _ 0.30. The

company collected the following sample data on the production

process:

(a) Are the process mean and range in statistical control?

(b) Do you think this process is capable of meeting the design

standard?

6. The Awake Coffee Company produces gourmet instant coffee.

The company wants to be sure that the average fill of coffee

containers is 12.0 ounces. To make sure the process is in control,

a worker periodically selects at random a box of six containers of

coffee and measures their weight.When the process is in control,

the range of the weight of coffee samples averages 0.6 ounces.

(a) Develop an R-chart and an chart for this process.

(b) The measurements of weight from the last five samples

taken of the six containers follow:

Is the process in control? Explain your answer.

8. A tire manufacturer has been concerned about the number

of defective tires found recently. In order to evaluate the true

magnitude of the problem, a production manager selected 10

random samples of 20 units each for inspection. The number of

defective tires found in each sample are as follows:

x-

(a) Develop a p-chart with a z _ 3.

(b) Suppose that the next four samples selected had 6, 3, 3,

and 4 defects.What conclusion can you make?

10. University Hospital has been concerned with the number

of errors found in its billing statements to patients. An audit of

100 bills per week over the past 12 weeks revealed the following

number of errors:

(a) Develop control charts with z _ 3.

(b) Is the process in control?

14. Quality Style manufactures self-assembling furniture. To

reduce the cost of returned orders, the manager of its quality

control department inspects the final packages each day using

randomly selected samples. The defects include wrong parts,

missing connection parts, parts with apparent painting problems,

and parts with rough surfaces. The average defect rate is

three per day.

(a) Which type of control chart should be used? Construct a

control chart with 3-sigma control limits.

(b) Today the manager discovered nine defects. What does

this mean?

20. Breeze Toothpaste Company has been having a problem

with some of the tubes of toothpaste leaking. The tubes are

packed in containers with 100 tubes each. Ten containers of

toothpaste have been sampled. The following number of toothpaste

tubes were found to have leaks:

Develop a p-chart with 3-sigma control limits and evaluate

whether the process is in statistical control.

22. The Crunchy Potato Chip Company sells chips in boxes

with a net weight of 30 ounces per box (850 grams). Each box

contains ten individual 3-ounce packets of chips. Product design

specifications call for the packet-filling process average to be set

at 86.0 grams so that the average net weight per box will be 860

grams. Specification width is set for the box to weigh 850 _ 12

grams. The standard deviation of the packet-filling process is 8.0

grams per box. The target process capability ratio is 1:33. The

production manager has just learned that the packet-filling

process average weight has dropped down to 85.0 grams. Is the

packaging process capable? Is an adjustment needed?

BUS 515 Week 7 Problems Chapter 9 And 10

Chapter 9

2. A manufacturer of printed circuit boards has a design capacity

of 1000 boards per day. The effective capacity, however, is

700 boards per day. Recently, the production facility has been

producing 950 boards per day. Compute the design and effective

capacity utilization measures.What do they tell you?

8. The owners of Sweet-Tooth Bakery have determined that

they need to expand their facility in order to meet their increased

demand for baked goods. The decision is whether to expand now

with a large facility or expand small with the possibility of having

to expand again in five years.

The owners have estimated the following chances for demand:

• The likelihood of demand being high is 0.70.

• The likelihood of demand being low is 0.30.

Profits for each alternative have been estimated as follows:

• Large expansion has an estimated profitability of either

$80,000 or $50,000, depending on whether demand turns

out to be high or low.

• Small expansion has a profitability of $40,000, assuming demand

is low.

• Small expansion with an occurrence of high demand would

require considering whether to expand further. If the bakery

expands at this point, the profitability is to be $50,000.

(a) Draw a decision tree showing the decisions, chance

events, and their probabilities, as well as the profitability

of outcomes.

(b) Solve the decision tree and decide what the bakery

should do.

10. Spectrum Hair Salon is considering expanding its business,

as it is experiencing a large growth. The question is whether

it should expand with a bigger facility than needed, hoping that

demand will catch up, or with a small facility, knowing that it will

need to reconsider expanding in three years.

The management at Spectrum has estimated the following

chances for demand:

• The likelihood of demand being high is 0.70.

• The likelihood of demand being low is 0.30.

Estimated profits for each alternative are as follows:

• Large expansion has an estimated profitability of either

$100,000 or $70,000, depending on whether demand turns

out to be high or low.

• Small expansion has a profitability of $50,000, assuming

that demand is low.

• Small expansion with an occurrence of high demand would

require considering whether to expand further. If the business

expands at this point, the profitability is expected to be

$90,000. If it does not expand further, the profitability is expected

to be $60,000.

Draw a decision tree and solve the problem. What should

Spectrum do?

12. The owners of Speedy Logistics, a company that provides

overnight delivery of documents, are considering where

to locate their new facility in the Midwest. They have narrowed

their search down to two locations and have decided to use factor

rating to make their decision. They have listed the factors

they consider important and assigned a factor score to each location

based on a five-point scale. The information is shown

here. Using the procedure for factor rating, decide on the better

location.

14. The Bakers Dozen Restaurant is considering opening a

new location. It has considered many factors and identified the

ones that are most important. Two locations are being evaluated

based on these factors, using factor rating. Each location has been

evaluated relative to the factors on a five-point scale. These numbers

are shown here. Use factor rating to help the restaurant decide

on the better location.

16. Given here are the coordinates for each of the four towns

to be serviced by the warehouse in Problem 15. Use the information

from Problem 15 and the center of gravity method to determine

coordinates for the warehouse.

18. The Quick Copy center for document copying is deciding

where to locate a new facility. The annual fixed and variable

costs for each site it is considering have been estimated as

follows:

If demand is expected to be 3000 units, which location is best?

Chapter 10

2. Use trial and error to find a better layout for Fresh Foods

Grocery in Problem 1. Compute the ld score and compare it to

the ld scores computed for Fresh Foods’ current and proposed

layouts.Which is best?

6. Use trial and error to develop a better layout for Gator Office

Supplies. Which departments do you think need to be in

close proximity to one another?

8. David’s Sport Supplies is a store that sells sports equipment

and gear for teenagers and young adults. David’s is in the process

of assigning the location of storage areas in its warehouse (Figure

10-16) to minimize the number of trips made to retrieve needed

items. Given here in Table 10-14 are the departments that need to

be located, the number of trips made per week for each department,

and the area needed by each department.

10.Michael Marc, the President of MMS Associates, is considering

an alternative plan for the sales staff situation described in

Problem 9. His alternative plan is shown in Figure 10-18.What is

the ld score for this plan? How does it compare to the original

plan considered in Problem 9?

12. A manufacturing company is designing an assembly line

to produce its main product. The line should be able to produce

60 units per hour. The following data in Table 10-16 give

the necessary information.

(a) Which task is the bottleneck?

(b) Draw a precedence diagram for the above information.

(c) Compute the cycle time with a desired output of 60 units

per hour.

18. A dress-making operation is being designed as an assembly

line. Table 10-22 shows the tasks that need to be performed, their

task times, and preceding tasks. If the goal is to produce 30 dresses

per hour, answer the questions that follow the table.

(a) Compute the cycle time.

(b) Which task is the bottleneck?

(c) What is the maximum output for this line?

(d) Compute the theoretical minimum number of stations.

(e) Assign work elements to stations, using the longest task

time rule.

(f) Compute the efficiency and balance delay of your

assignment.

20. Use the data from Problem 19 to rebalance the line with a

cycle time of 90 seconds. How does the number of workstations

change? What happens to the output and the line’s efficiency?

BUS 515 Week 8 Problems Chapter 11 And 16

Chapter 11

2. Using the information in Problem 1, determine the sample

size needed if the standard time estimate is to be within 5 percent

of the true mean 99 percent of the time.

4. Using the information in Problem 3, calculate the sample

size needed if the standard time estimate is to be within 5 percent

of the true mean 99 percent of the time. Calculate the percentage

increase in sample size for the higher precision.

Use the following information from the Arkade Company for

Problems 5–10.

12. Frank’s Fabricators has collected the following information

to develop a standard time for producing their high-volume

Navigator III, a universal remote control. All of the times are in

minutes.

(a) Calculate the mean observed time for each element.

(b) Calculate the normal time for each element.

(c) Using an allowance factor of 15 percent of job time, calculate

the standard time for each element.

(d) Calculate the standard time for completing one Navigator

III.

(e) If an employee is able to produce at a rate equal to the

standard (100 percent efficiency), how many units should

she produce each hour?

(f) If an employee is working at 90 percent efficiency, how

many units should she complete in one hour?

(g) If a process improvement has changed the mean observed

time for element 6 to 1.50 minutes, what is the

new standard time for the Navigator III?

(h) If the company builds 20,000 Navigator IIIs each month,

how much less time does it require using the new

process?

14. You have 25 observations of university policeman Sgt.

Jack B. Nimble during his normal workday. The results are

shown here. Assume that the estimated proportion is to be

within 5 percent of the true proportion 95 percent of the time.

(a) Based on your preliminary observations, how many total

observations do you need to estimate the proportion of

time Sgt. Nimble spends doing paperwork?

(b) How many total observations do you need to estimate the

proportion of time Sgt. Nimble spends on the phone?

(c) How many total observations do you need to estimate the

proportion of time Sgt. Nimble seems to be unavailable?

16. As a class project you have been asked to project the proportion

of time a professor spends on various activities. You have

decided to use the work-sampling method. Your initial observations

are shown.

You are instructed that your estimates are to be within 5 percent

of the true value with 97 percent confidence (z _ 2.17).

(a) Based on your initial observations, how many total observations

are needed to estimate the proportion of time

the professor spends on each activity?

After taking additional observations, the following data are

available.

(b) Determine what proportion of time the professor spends

teaching class.

(c) Determine what proportion of time the professor spends

working on research.

(d) If the professor works approximately 54 hours per week,

determine the amount of time that would normally be

spent on each activity.

Chapter 16

Use the following project information for Problems 1 and 2.

1. Construct a network diagram using AON notation.

2. Using the network diagram constructed in Problem 1,

(a) Calculate the completion time for the project.

(b) Determine which activities are included on the critical

path.

6. Using the information given, calculate the variance for each

of the project activities.

8. Using your results from Problem 6,

(a) Calculate the probability that the project will be completed

in 38 weeks.

(b) Calculate the probability that the project will be completed

in 42 weeks.

10. Using the information given and the project completion

time calculated in Problem 9(a), reduce the completion time of

the project by 3 weeks in the most economical way.

14. Using the information given and expected project completion

time from Problem 13(c),

(a) Calculate the probability of completing the project in 36

weeks.

(b) Calculate the probability of completing the project in 40

weeks.

BUS 515 Week 9 Problems Chapter 12 & 13

Chapter 12 Problems

2. Yasuko’s Art Emporium (YAE) ships art from its studio located

in the Far East to its distribution center located on the West

Coast of the United States. YAE can send the art either via

transoceanic ship freight service (15 days transit) or by air freight

(2 days transit time). YAE ships 18,000 pieces of art annually.

(a) Calculate the average annual transportation inventory

when sending the art via transoceanic ship freight service.

(b) Calculate the average annual transportation inventory

when sending the art via air freight.

(c) What additional information is needed to compare the

two alternatives?

8. A technology problem has rendered some of the inventory

at FFF (Problem 6) obsolete. FFF estimates that the risk cost of its

inventory is now 10 percent.

(a) Calculate the new annual holding cost rate.

(b) Calculate the new total annual holding costs for FFF.

14. In an effort to reduce its inventory, Rapid Grower is offering

Greens, a local nursery (Problems 12 and 13), two additional

price breaks to consider. If the nursery orders a three-month supply,

the cost per bag is $16. If Greens orders a six-month supply,

the cost per bag is $14.50. Should Greens change its order quantity

calculated in Problem 13?

16. Sam’s Auto Shop services and repairs a particular brand of

foreign automobile. Sam uses oil filters throughout the year. The

shop operates 52 weeks per year, and weekly demand is 150 filters.

Sam estimates that it costs $20 to place an order and his annual

holding cost rate is $3 per oil filter. Currently, Sam orders in

quantities of 650 filters. Calculate the total annual costs associated

with Sam’s current ordering policy.

18. The local Office of Tourism sells souvenir calendars. Sue,

the head of the office, needs to order these calendars in advance

of the main tourist season. Based on past seasons, Sue has determined

the probability of selling different quantities of the calendars

for a particular tourist season.

The Office of Tourism sells the calendars for $12.95 each. The

calendars cost Sue $5 each. The salvage value is estimated to be

$0.50 per unsold calendar. Determine how many calendars Sue

should order to maximize expected profits.

Chapter 13 Problems

2. Jill has decided that the BackPack Company must have very

good customer service. She has asked you to develop a level aggregate

plan using inventories but not back orders. All demand

must be met each period. You must:

(a) Calculate the aggregate production rate.

(b) Calculate the appropriate workforce given the aggregate

production rate.

(c) Show what would happen if this plan were implemented.

(d) Calculate the costs of this plan.

(e) Evaluate the plan in terms of cost, customer service, operations,

and human resources.

4. Now that you have calculated the number of workers

needed each period in Problem 3, Jill wants to see how the plan

would actually work. You need to:

(a) Show what would happen if this plan were implemented.

(b) Calculate the costs associated with this plan.

(c) Evaluate the plan in terms of cost, customer service, operations,

and human resources.

6. Jill Nicholas believes there must be a better aggregate plan.

She has suggested a hybrid plan, using a permanent workforce of

195 employees and subcontracting as needed. Once again, Jill has

requested that you provide the following information:

(a) Calculate the regular-time production possible each period

given a workforce of 195.

(b) Show what would happen if this plan were implemented.

(c) Calculate the costs associated with this plan.

(d) Evaluate the plan in terms of cost, customer service, operations,

and human resources.

8. Calculate the size of the workforce needed for the company

to meet average weekly demand.

10. Develop a level aggregate plan for the Draper Company if

no back orders are permitted.

(a) Show what would happen if this plan were implemented.

(b) Calculate the costs associated with this plan.

(c) Evaluate the plan in terms of cost, customer service, operations,

and human resources.

12. Develop a chase aggregate plan for Draper using a permanent

workforce of 12 employees supplemented by overtime. All

demand must be met each period.

(a) Show what would happen if this plan were implemented.

(b) Calculate the costs associated with this plan.

(c) Evaluate the plan in terms of cost, customer service, operations,

and human resources.

BUS 515 Week 10 Problems Chapter 14 & 15

Chapter 14 Problems

18. Using the planned orders generated in Problem 17, complete

inventory records for components AB501, AB511, and

AB521. Use the lot size rule, lead time, and usage information

given in Problem 12.

20. The Yankee Machine Shop currently has three machines

working in Work Center 111, eight hours per day, five days per

week, a utilization rate of 90 percent, and an efficiency rate of

90 pecent.

(a) Calculate the available capacity.

(b) Is the available capacity enough to complete the orders

given in Problem 19 that are already scheduled in Work

Center 111? If not, how much additional capacity is

needed?

22. Unfortunately, after extending the work day from eight

hours to ten hours, the Yankee Machine Shop has noted that efficiency

has decreased to 80 percent. Given this new piece of information,

is there enough capacity to complete the orders given in

Problem 19?

24. In an effort to increase capacity in Work Center 111 for

week 13, Yankee Machine Shop has authorized overtime. The

work center will be staffed 12 hours per day for six days. Because

of the additional stress on the three machines, it is expected that

the utilization rate will drop to 85 percent. The efficiency rate is

expected to fall to 80 percent.

(a) Calculate the capacity available in Work Center 111 for

week 13.

(b) Will this plan provide sufficient capacity to complete the

orders given in Problem 23? If not, what do you recommend

be done?

Chapter 15 Problems

16. Barb’s Beach Bar operates seven days per week. Barb uses

only full-time employees and wants each employee to have two

consecutive days off each week. She believes that she needs a

minimum of three employees on Monday, Tuesday, Wednesday,

Thursday, and Sunday. On Friday and Saturday, she believes that

she needs six employees. Develop a workforce schedule for Barb.

18. Marvin’s Beach Cleaners is responsible for keeping the

beach clean. Marvin estimates that he needs a minimum of two

people on Monday; three people on Tuesday and Sunday; four

people on Wednesday and Thursday; and five people on Friday

and Saturday. Contractually, Marvin is required to give each employee

two consecutive days off during the week. Develop a

workforce schedule for Marvin to use.

20. Cathy’s Coney Islands operates seven days per week. Demand

is relatively constant during the week and tails off on the

weekend. She estimates that she needs five employees Monday

through Friday, and two employees on Saturday and Sunday. She

is committed to giving each employee two consecutive days off

during the week. Develop a workforce schedule for Cathy.

22. Bill’s Bar & Grill is open seven nights a week. Business is

busiest on Thursday, when there is a concert in the park across

the street. Bill wants a workforce schedule that allows each employee

two consecutive days off each week. He believes that he

needs four employees every day except on Thursday, when he believes

he needs six employees. Develop a workforce schedule for

Bill.