Jaipuria Institute of Management, Jaipur

Operations Management
Assignment
PGDM (2018-20)
1. An Electronics company makes communications devices for military contracts. The
company just completed two contracts. The navy contract was for 2,300 devices and took
25 workers two weeks (40 hours per week) to complete. The army contract was for 5,500
devices that were produced by 35 workers in three weeks. On which contract were the
workers more productive? Why?

2. A retail store had sales of Rs. 450000 in November and Rs. 560000 in December in Jaipur.
the store employs eight full-time workers who work a 40-hour week. In November the store
also had seven part-time workers at 10 hours per week, and in December the store had nine
part-timers at 15 hours per week (assume four weeks in each month). Which month is good
for store and why?

3. Nano Tech is ready to begin production of its exciting new technology. The company is
evaluating two methods of production. (A) a small production facility with older
equipment, (B) a larger production facility that is more automated. The costs of each
alternative are shown below. Determine for what level of demand each production process
should be chosen.
Process Fixed Cost Variable Cost
A $300,000 $35
B $400,000 $25

4. Keisha has been inundated with product-of-the-month offers from various marketing
companies. She is considering joining a club that allows DVDs to be downloaded from a
members-only Web site, but can’t decide which membership offers the best deal. Given
the cost information below, which club would you recommended basis on no. of DVDs for
Keisha?
Club Membership Fee Cost per DVD
Ehsaas Club $40 $5
Best Movies Club $65 $4
Choice Cinema Club $100 $3

5. The manager of LG Warehouse wants to analyze the process and has provided the process
flow diagram show below. There are four steps required to ship a customer order. Wally
promises that every order placed today gets shipped tomorrow. That means that the picking,
processing and packing operations must finish all orders before they go home.

Order Taker Pick Orders Order Processing Pack Orders

(80 Customer (60 Customer (55 Customer per (72 Customer
per hour) per hour) hour) per hours)
 a) If daily output is 1000 order if they work 11 hr. per day. Then, find capacity utilization?
b) What is max. capacity of LG warehouse and at max. capacity, calculate labour
utilization rate in process?
c) If we add another person, where would we add him or her what is benefit?

6. The basic block company needs to produce 4000 boxes of blocks per 40- hour week to
meet upcoming holiday demand. The process of making blocks can be broken down into
six work elements. The precedence and time requirements for each element are as follows.
Draw and label a precedence diagram for the production process. Set up a balanced
assembly line and calculate the efficiency of the line.

Work Element Precedence Performance time (min)

A ----------- 0.10
B A 0.40
C A 0.50
D ------ 0.20
E C, D 0.60
F B, F 0.40

7. South India furniture inc., produces all types of offices furniture. The “Executive
Secretary” is a chair that has been designed using ergonomics to provide comfort during
long work hours. The chair sells for Rs 5000. There are 480 min. available during the day,
and average daily demand has been 50 chairs. There are eight tasks.
Task A B C D E F G H
Performance time (min.) 4 7 6 5 6 7 8 6
Predecessors ---- ---- A, B C D E E F, G
Find the cycle time and efficiency of the assembly line? What are the ways to increase
efficiency of assembly line?

8. Daily demand of a Saras Ghee (1 Kg.) is normally distributed with a daily mean of 60 units
and standard deviation of 10 units. The supply is certain for a lead time of 3 days. The
ordering cost is Rs 18 and the annual holding rate is 12%. If the item price is Rs 170, find
the operating decision for the service level of 90 %. Assume 300 days in a year. (The
values of Z are 1.645 for 90% service level)

9. (a) Trinity Hospital, Bangalore sources 20000 Syringes every year from a local vendor.
Ordering Cost per order is Rs. 100. Inventory Carrying Cost is 10% per unit per year. Price
of the Syringe per unit is Rs. 5. Determine EOQ and the total annual cost of Syringes
purchased on EOQ basis.
(b) Toshiba outlet in Delhi sells Laptops under cut-throat competition from HP. Annual
demand is 36500. Average Lead time to receive stocks from Mumbai is 10 days. Estimate
Safety Stock and Re-Order Level, if the company policy is to maintain Super Critical
Service Level (Z=2) to avoid Stock-out.
10. It is your responsibility, as the new head of the automotive section of Nichols Department
Store, to ensure that reorder quantities for the various items have been correctly established.
You decide to test one item and choose Michelin tyres, XW size 185 x 14 BSW. A
perpetual inventory system has been used, so you examine this as well as other records and
come up with the following data:
Cost per tyre Rs 350 each
Holding Cost 20% of tyre cost per year
Demand 1,000 per year
Ordering cost Rs. 200 per order
Standard Deviation of daily demand 3 tyres
Delivery leads time 4 days
Because customers generally do not wait for tyres but go elsewhere, you decide on a service
probability of 98%. Assume the demand occurs 365 days per year.
a) Determine the order quantity and reorder point.
b) If a Rs 50 discount on each tyre is given if order are placed in quantities of 110
or more. Should orders be placed in quantities of 110, or should you stick to the
decision you made in a?

11. Mega-Mart, a discount store chain, wants to build a new superstore in an area in
southwest Virginia near four small towns with populations between 8000 and 42000. The
coordinates in miles of these four towns and the market population in each are as follows:
Coordinates Whitesburg Altonville Campburg Milligan
X 12 18 30 32
Y 20 15 7 25
W 26,000 12,000 18,300 9700
Determine the best site.

12. Given the following information, formulate an inventory management system. The item is
demand 50 weeks a year.
Item cost Rs 10 Standard Deviation of 25 per week
weekly demand
Order cost Rs. 250 Lead time 1 week
Annual holding 30% of the item cost Service probability 95%
cost (%)
Annual demand 25,750
a) State the order quantity and reorder point.
b) If a price break of Rs. 50 per order was offered for purchase quantities of over 2000,
would you take advantage of it? How much would you save annually.

13. Bob’s Old Fashioned Ice Cream Parlor operates 7 days a week during the summer. Demand
for Bob’s ice cream is highest on the weekends and relatively low early in the week. The
following table lists daily ice cream sales for the last two weeks.
Sales (litres)
Total
Day Week 1 Week 2
 Mon 63 60 123
Tue 55 56 111
Wed 78 100 178
Thurs 151 189 340
Fri 225 212 437
Sat 286 291 577
Sun 375 400 775
Total 1233 1308 2541

Find out next two week daily demand.

14. Sales of Refrigerators is the past tend to have an element of seasonality in addition to the
trend. The data in Table shows the sale (in Thousands) of refrigerators in the last three
years. A manufacturer of refrigerators wants to forecast the demand for next two years
monthly.
Sales of refrigerators (in thousands of units) in last three years
Year 2014 2015 2016 Total
January 360 405 323 1088
February 438 380 323 1141
March 359 360 277 996
April 406 454 333 1193
May 465 449 324 1238
June 464 496 296 1256
July 387 430 285 1102
August 393 375 305 1073
September 505 461 319 1285
October 443 476 432 1351
November 540 431 510 1481
December 618 432 432 1482
Total 5378 5149 4159 14686

The trend line based on data is Y = 6115 – 610 X. Where Y is yearly demand and X is time.
Find out next two year (2017, and 2018) month vise demand.

15. Sunrise Baking Company markets cakes through a chain of food stores. It has been
experiencing over and underproduction because of forecasting errors. The following data
are its demand in dozens of cakes for the past four weeks. Cakes are made for the following
 day; for example, Sunday’s cake production is for Monday’s sales, Monday’s production
is for Tuesday’s
4 Weeks Ago 3 Weeks Ago 2 Weeks Ago Last Week
Monday 2200 2400 2300 2400
Tuesday 2000 2100 2200 2200
Wednesday 2300 2400 2300 2500
Thursday 1800 1900 1800 2000
Friday 1900 1800 2100 2000
Saturday
Sunday 2800 2700 3000 2900
Make a forecast for this week on the following basis: [16]
a. Daily, using a simple four-week moving average.
b. Daily, using a weighted average of .40, .30, .20, and .10 for the past four weeks.
c. Sunrise is also planning its purchase of ingredients for bread production. If bread demand
had been forecast for last week at 22000 loaves and only 21000 loaves were actually
demanded, what would Sunrise’s forecast be for this week using exponential smoothing
with α=0.10?