MGT-455 Topic 5 Benchmark Chapter 7 and S7 Problem Set Assignment

Benchmark Chapter 7 and S7 Problem Set

Complete problems 7.1, 7.3, 7.8, S7.3, S7.5, S7.7, S7.11, S7.15, and S7.32 in the textbook.

Submit one Excel file.  Put each problem result on a separate sheet in your file.  Ensure that your last name is in your filename.

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Problem 7.1

Borges Machine Shop, Inc., has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:

Annual Contracted Units 200,000 200,000 200,000
Annual Fixed Cost $100,000 $200,000 $500,000
Per Unit Variable Cost $15.00 $14.00 $13.00

Which process is best for this contract?

Problem 7.3

Using the data in Problem 7.1, determine the best process for each of the following volumes  (1) 75,000 (2) 275,000 and (3) 375,000

Annual Contracted Units 200,000 200,000 200,000
Annual Fixed Cost $100,000 $200,000 $500,000
Per Unit Variable Cost $15.00 $14.00 $13.00

Problem 7.8

Matthew Bailey, as manager of Designs by Bailey, is upgrading his CAD software. The high-performance (HP) software rents for $3,000 per month per workstation. The standard-performance (SP) software rents for $2,000 per month per workstation. The productivity figures that he has available suggest that the HP software is faster for his kind of design. Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translates into a variable cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 drawings per month, which system should he rent?

Problem S7.3

If a plant has an effective capacity of 6,500 and an efficiency of 88%, what is the actual (planned) output?

Problem S7.5

Material delays have routinely limited production of household sinks to 400 units per day. If the plant efficiency is 80%, what is the effective capacity?

Problem S7.7

Southeastern Oklahoma State University’s business program has the facilities and faculty to handle an enrollment of 2,000 new students per semester. However, in an effort to limit class sizes to a  reasonable” level (under 200, generally), Southeastern’s dean, Holly Lutze, placed a ceiling on enrollment of 1,500 new students. Although there was ample demand for business courses last semester, conflicting schedules allowed only 1,450 new students to take business courses. What are the utilization and efficiency of this system?

Problem S7.11

The three-station work cell illustrated in Figure S7.7 has a product that must go through one of the two machines at station 1 (they are parallel) before proceeding to station 2.

  1. a) What is the bottleneck time of the system?
  2. b) What is the bottleneck station of this work cell?
  3. c) What is the throughput time?
  4. d) If the firm operates 10 hours per day, 5 days per week, what is the weekly capacity of this work cell?

Problem S7.15

A production process at Kenneth Day Manufacturing is shown in Figure S7.9. The drilling operation occurs separately from, and simultaneously with, the sawing and sanding which are independent and sequential operations. A product needs to go through only one of the three assembly operations (the operations are in parallel).

  1. a) Which operation is the bottleneck?
  2. b) What is the bottleneck time?
  3. c) What is the throughput time of the overall system?
  4. d) If the firm operates 8 hours per day, 20 days per month, what is the monthly capacity of the manufacturing process?

Problem S7.32

James Lawson’s Bed and Breakfast, in a small historic Mississippi town, must decide how to subdivide (remodel) the large old home that will become its inn. There are three alternatives: Option A would modernize all baths and combine rooms, leaving the inn with four suites, each suitable for two to four adults. Option B would modernize only the second floor; the results would be six suites, four for two to four adults, two for two adults only. Option C (the status quo option) leaves all walls intact. In this case, there are eight rooms available, but only two are suitable for four adults, and four rooms will not have private baths. Below are the details of profit and demand patterns that will accompany each option:

A (Modernize all) $90,000 0.5 $25,000 0.5
B (Modernize 2nd) $80,000 0.4 $70,000 0.6
C (Status Quo) $60,000 0.3 $55,000 0.7

Which option has the highest expected monetary value?

Course: MGT-455 Production/Operations Management
School: Grand Canyon University

  • 01/05/2020
  • 175
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