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operation management

Problem 1.

Arsenal Electronics is going to construct a new $1.2 billion semiconductor plant and has selected four towns in the Midwest as potential sites. The important location factors and ratings for each town are as follows:

Scores (0 to 100)
Location FactorWeightAbbetonBaysideCane CreekDunnville
Work ethics0.1880907075
Quality of life0.1675859590
Labor laws/unionization0.1290606070
Infrastructure0.1060506070
Education0.0880908595
Labor skill and education0.0775657080
Cost of living0.0670808575
Taxes0.0565705560
Incentive package0.0590957080
Government regulations0.0340506555
Environmental regulations0.0365607080
Transportation0.0390809580
Space for expansion0.0290959090
Urban proximity0.0260907080

 

Recommend a site based on these location factors and ratings.

Answer 1:

 

 

 

 

Problem 2.

Sawyer Furniture is one of the few remaining domestic manufacturers of wood furniture. In the current competitive environment, cost containment is the key to its continued survival. Demand for furniture follows a seasonal demand pattern with increased sales in the summer and fall months, culminating with peak demand in November.

The cost of production is $16 per unit for regular production, $24 for overtime, and $33 for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs are $20 per unit per month. There is no beginning inventory. Ten workers are currently employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot exceed regular production. Given the following demand data, use Excel Solver to design an aggregate production plan for Sawyer Furniture that will meet demand at the lowest possible cost.

Input:Beg. Wkrs10Regular$16Hiring$500 
 Units/wkr50Overtime$24Firing$500 
 Beg. Inv.0Subk$33Inventory$20 
 MonthDemandRegOTSubkInv#Wkrs#Hired#Fired
 Jan5005000001000
 Feb5005000001000
 Mar10001,00000020100
 Apr12001,000200002000
 May20001,0001,000002000
 Jun4004000008012
 Jul400400000800
 Aug10001,00000020120
 Sep10001,0000002000
 Oct15001,50000030100
 Nov70003,5003,5000070400
 Dec50050000010060
 Total17,00012,3004,700002467272

Answer 2:

 

 

 

 

 

 

 

 

Problem 3.

A retailer experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow.

 

Period123456
Requirement121012898

 

Costs associated with operations are as follows:

Wages = $1,500 per worker per month

Hiring cost = $1,500 per worker

Layoff cost = $1,500 per worker

 

The current workforce level is 11 workers. Use the spreadsheet approach and the preceding data to answer the following questions.

 

  1. What is the total cost of the staffing plan, including the cost of regular wages, hiring, and layoffs using a chase strategy with hiring and layoffs, but no overtime?
  2. What is the total cost of the staffing plan, including the cost of regular wages, hiring, and layoffs using a level strategy with hiring and layoffs, with overtime of up to 25% of the regular-time capacity, and that overtime wages are 150% of the regular-time rate.

 

  1. CHASE Strategy
 123456Total
INPUTS       
Forecasted demand12101289859
Workforce level       
Undertime       
Overtime       
Utilized time       
        
Hires       
Layoffs       
CALCULATED       
Utilized time cost       
Undertime cost       
Overtime cost       
Hiring cost       
Layoff cost       
        
Total Cost       

 

 

 

 

 

 

  1. LEVEL Strategy
 123456Total
INPUTS       
Forecasted demand12101289859
Workforce level       
Undertime       
Overtime       
Utilized time       
        
Hires       
Layoffs       
CALCULATED       
Utilized time cost       
Undertime cost       
Overtime cost       
Hiring cost       
Layoff cost       
        
Total Cost       

 

**Don’t forget to figure out the required number of employees for the Level Strategy

 

 

Answer 3:

 

 

 

 

 

 

 

 

 

 

Problem 4.

 The Union Manufacturing Company is producing two types of products: A and B. The demand forecast, batch size, and time standards for the Mark I operation follow:

 

 Product AProduct B
Demand forecast (units/yr.)1,0004,000
Batch size (units/batch)2010
Process time (hr./unit)3.24.5
Setup time (hr./batch)1020

 

The company works 250 days per year and operates 2 shifts, each covering 8 hours. If a 20 percent capacity cushion is maintained, how many Mark I machines are required if Union does not resort to any short-term capacity options?

Answer 4:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Problem 5.

A firm of four departments has the following trip matrix and current block plan of all departments:

Trips Between Departments

Dept. NameABCD
A….1469
B ….716
C  ….2
D   ….

 

AB
DC

 

 

 

 

  1. What is the weighted-distance score for the current layout? (Assume rectilinear distance and that the distance between departments A and B is one unit of distance.)
  2. What would be the weighted-distance score for the following layout?

 

AC
DB

 

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Answer 5:

 

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