Practice Midterm Examinations

Date / Start Time ***

INSTRUCTIONS TO CANDIDATES

1. This is a closed-book examination.

2. The time allowed for this examination paper is 2 hours.

3. This examination paper contains a total of five (5) questions and comprises eight (8)
pages including this instruction sheet.

4. You are required to answer all questions.

NAME ____________________________________________

NRIC ______________________________________________

SECTION __________________________________________
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QUESTION 1

State whether you agree or disagree with the following statements and briefly explain
your reasoning:

(a) [1.5 points] Operations management is the management of material and

Disagree. It includes the management of not only material and equipment but
also capital, information, human resources and etc.

(b) [1.5 points] One important reason to measure productivity is to benchmark across
products, production lines, and sites.

Agree. Based on productivity, firms may decide the bonus to the workers at
different production lines and decide which product to offer.

(c) [1.5 points] Operations capability (faster delivery and quality) can affect
marketing decisions.

Agree. Marketing may advertise faster delivery and high quality, or charge
higher prices.

(d) [1.5 points] Compared to a job shop, a flow shop usually has highly skilled
workers.

Disagree. A job shop usually has highly skilled workers.

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(e) [1.5 points] During the introduction stage in a product’s life circle, a job shop
should be used.

Agree. Usually output volume is low and variety is high during the introduction
stage, which makes a job shop suitable.

(f) [1.5 points] Total Quality Management focuses on the production department of a
company so that the products meet consumers’ expectations.

Disagree. TQM manages the entire organization not only production department.

QUESTION 2

Consider the following batch flow process consisting of three process steps performed by
three machines:

Step 1 Step 2 Step 3

Activity Time: 1 min/part 2 min/part 1.5 min/part

Setup Time: 20 min 0 0

Work is processed in batches at each step. Before a batch is processed at step 1, the
machine has to be set up. During a setup, the machine is unable to process any product.

(a) [3 points] Assume that the batch size is 50 parts. What is the capacity of the
process?

First, we calculate the process capacity at each step using the formula for
process capacity with batching. So, the first step has a process capacity of 50
units / (20 minutes + (1*50) minutes) = .714 units/minute = 42.86 units/hour.
The second step has a process capacity of 50 units / (2*50) minutes = 30
units/hour. The third step has a process capacity of 50 units / (1.5*50) minutes
= 40 units/hour. Therefore, the process capacity of the entire process = 30
units/hour.

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(b) [3 points] Using the current production batch size of 50 parts, how long would it
take to produce 20 parts starting with an empty system? Assume that the units in
the batch have to stay together (no smaller transfer batches allowed) when
transferred to step 2 and to step 3. A unit can leave the system the moment it is
completed at step 3. Assume step 1 needs to be set up before the beginning of
production.

If the batch size is 50 parts, and the batch must stay together, then in order to
process 20 parts, a batch of 50 parts must be processed through Step 1 and
Step 2. The total time to process through Step 1 = 20 minutes for set-up + 50
minutes for processing = 70 minutes. The total time to process the batch
through Step 2 = 100 minutes. So, the batch takes 170 minutes through the
first two steps. At Step 3, we merely need to process the 20 parts. Processing
20 parts through Step 3 takes 30 minutes. Under these conditions it takes a
total of 200 minutes to process 20 parts.

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QUESTION 3

[4 points] A firm has redesigned its production process so that it now takes 10 hours for a
unit to be made. Using the old process, it took 15 hours to make a unit. If the process
output is two units each hour on average and each unit is worth $1,500, what is the
reduction in work-in-process value?

WIP before redesign = 2 unit/hour * 15 hours = 30 units

QUESTION 4

[5 points] AVI supplies vended food to a large university. Because students kick the
machines at every opportunity, management has a constant repair problem. The
machines break down on an average of three per hour, and the breakdowns are
distributed in a Poisson manner. Downtime costs the company $25/hour per machine,
and each maintenance worker gets $4/hour. One worker can service machines at an
average rate of five per hour, distributed exponentially; two workers working together
(as one team) can service seven per hour, distributed exponentially; and, a team of three
workers can do eight per hour, distributed exponentially. What is the optimum
maintenance crew size?

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QUESTION 5

Wilson Inc. is the official producer of tennis balls used in the US open Tournament. For
the tournament, each year Wilson delivers 50,000 tennis balls. With players using their
own custom rackets and wearing sponsor supplied shoes, if they lose, they only have the
umpires to blame – or the tennis balls that Wilson manufactured. Every ball in the play
has to meet specifications of the International Tennis Federation and the United States
Tennis association for weight, size, hardness and rebound. Wilson racket technology labs
in Elk Grove tests balls for hardness in a hefty metal ball smusher called the Stevens
Machine. The leeway for deformation that is acceptable by the US open is between 0.220
to 0.290 inches. Wilson’s manufacturing technology can produce tennis balls with an
average deformation of 0.255 inches.
(a) [2 points] Of the 50,000 tennis balls, if Wilson wants at least 49,000 to meet US open
specifications, what is the maximum process output variability (standard deviation)
that Wilson should aim for?

Wilson wants a minimum of 49,000/50,000 = 98% conformance to specifications.

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(b) [2 points] Suppose Wilson has improved its process to be a 6-sigma process. To
check if the process is in control, in the lab the operator plans to take samples and
measure the average deformation of the sample. He plans to take samples of 16
tennis balls. For Wilson to have a 6-sigma process, what standard deviation should
the process have? What control limits should the operator use for the sample mean?

For the Wilson process to be a 6 - sigma process the standard deviation should be
(0.29 – 0.255) / 6 = 0.0058.
Control limits are given by 0.255 +/- 3*0.0058/4
UCL = 0.25935
LCL = 0.25065

(c) [2 points] The following Statistical Process Control (SPC) chart is recorded. Does
this process have any problem? Why or Why not?

The process is in control since the observations are within the upper and lower
control limits. However, the observations get closer to the limits and the process
variance is increasing and it may go out of control soon.

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- End of Paper -
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