Part A (65 marks) Answer all questions.

Qs 1 C B A Total Cost 20000 0V2 10000 V2 5000 V2 0 15000 40000 V2 V2 Volume of production me

The above diagram shows the total cost of production for processes A, B and C at different volumes of production. a) What is the Fixed Cost of Process B? What do the production volumes 15000 and 40000 on the graph indicate? b) The Fixed Cost of Process A is $ 5000 and Variable Cost is $15 per unit. If the revenue per unit is $ 25 then what is the breakeven volume of Process A? If 1000 units are made using Process A, will there be profit? Why? c) If the objective is to minimize the total cost of production, which process would you recommend in each case, if production volume , V is i. ii. iii. V = 10000 units V = 20000 units V = 45000 units 10 marks

Qs 2 You are interested to find out whether the number of defects in the stamping process is influenced by the speed of stamping. For this you have collected data and plotted as shown below. Speed of stamping (number per minute) 25 30 35 40 45 50 a. Draw a scatter diagram. a. Based on the information from the diagram what conclusion would you draw regarding the relationship between speed of stamping and number of defects? b. Base on your conclusion, what recommendation you would make to reduce the number of defects in the stamping process? c. Draw a fishbone diagram to identify other causes for defects in the stamping process. 15 marks Qs 3 A company has collected following information about its operations Last year 1000 300 50 3000 Current year 1000 270 45 2800 Number of defects 2 3 6 8 10 9

Units produced Labour used (hours) Material used (Kgs) Energy used (KW)

i. Calculate the change in labour productivity from last year to current year. What factors, do you think, would have caused the change in labour productivity? ii. If labour costs $10 per hour, material costs $5 per Kg and energy costs $0.50 per unit, calculate the multifactor productivity in the current year. 8 marks

Qs 4 a. A printing company is concerned because it is taking too long for operators to setup new printing jobs. To find out why setup times are taking so long, data was collected regarding major causes as shown n the table below.

Type of Problem Equipment needed for setup is missing Internal and external setup tasks are not separated Setup routines are not standardized Operator leaves setup tasks midway to take a break Extensive machine resetting and paper change is needed Others

Frequency (number of times) 124 70 315 28 51 17

Draw a Pareto chart. Based on the Pareto chart what decision would you take to reduce the problem of setups? 7 marks

Qs 5 The actual demand for ICU in a hospital is given in the table below. The hospital manager has used two methods of forecasting, 3- period moving average and 3 period weighted moving average to forecast demand from year 4 to 7, which his shown in the table below. Month 1 2 3 4 5 6 7 Actual Demand 10 12 14 17 18 20 23

a. What is the forecast for month 8 based on 3 period simple moving average? b.What is the forecast for month 8 based on weighted moving average? (weights are assigned as follow: 3 for month 7, 2 for month 6 and 1 for month 5). 5 marks Qs 6 Based on customer survey it was identified that customers look for the following characteristics in the pen they buy- (a) good grip, (b) smooth writing, (c) should be light in weight and (d) should not break if it falls. The manufacturers technical team has the following technical parameters that could be used for designing the pen- (a) thickness of material used for making the pen body, (b) material used for nib (writing tip), (c) design of the pen body and (d) colour of the pen body. Using Quality Function Deployment (QFD) draw the interaction matrix between customer requirements and technical parameters indicating the nature of impact (positive, negative or neutral) the technical parameters would have on the customer requirements. 10 marks Qs 7 Based on your experience of Ikea, explain some of the product design issues that are being considered by Ikea in designing the furniture. 10 marks

Part B (35 marks) Case Situation 1 Read the case study Creature Care Animal Clinic (A) and answer the following questions. Qs 1. Identify some of the operational problems being faced by the clinic. (6 marks) Qs 2 What is the output of Dr Barrs clinic- product, service or a combination? Why. (4 marks) Qs 3 Based on your knowledge of clinic/ hospital operation and the case facts, identify how each of the 10 decisions of OM is applied at Dr Barrs clinic. (15 marks) Qs 4 What factors should Dr Barr consider in forecasting the demand for the services of the clinic? (5 marks)