Questions based on Main Text: Operations Management 10

th
Edition (2011) Jay Heizer & Barry
Render
EXCERCISES
A. Problem 1.11 (page 54) Cunningham Performance Auto, Inc. modifies 375 autos per year.
The manager, Peter Cunningham is interested in obtaining a measure of overall performance.
He has asked you to provide him with a multifactor measure of last years performance as a
bench mark for future comparison. You have assembled the following data. Resource inputs
were: Labour, 10,000 hours; 500 suspension and modification kits; and energy, 100,000
kilowatt-hours. Average labour cost last year was $20 per hour, kits cost $1,000 each and
energy cost were $3 per kilowatt-hour. What do you tell Mr. Cunningham?
B. Problem 1.12 (page 54) Lake Charles Seafood makes 500 wooden packing boxes for fresh
seafood per day, working in two 10-hour shifts. Due to increased demand, plant managers
have decided to operate three 8-hour shifts instead. The plant is now able to produce 650
boxes per day.
a. Calculate the companys productivity before the change in work rules and after the
change.
b. What is the percentage increase in productivity?
c. If production is increased to 700 boxes per day, what is the new productivity?
C. Problem 1.17 (page 54) Natalie Attired runs a small job shop where garments are made.
The job shop employs 8 workers. Each worker is paid $10 per hour. During the first week of
March, each worker worked 45 hours. Together, they produced a batch of 132 garments. Of
these garments, 52 were seconds (flawed). The seconds were sold for $90 each at a factory
outlet store. The remaining 80 garments were sold to retail outlets at a price of $198 per
garment. What was the labour productivity, in dollar per labour-hour, at this job shop during
the first week of March?
D. Problem 3.7 (page 122) Task time estimates for a production line setup project at Robert
Klassens Ontario factory are as follows:-
Activity
Time
(hours)
Immediate
Predecessors
A 6 -
B 7.2 -
C 5 A
D 6 B, C
E 4.5 B, C
F 7.7 D
G 4 E, F
Table 1
a. Draw the project network using AON
b. Identify Critical Path
c. What is the expected project length?
d. Draw a Gantt Chart for the project
E. Problem 8.18 (page 366) Audi Motors is considering three sites A, B and C; at which to
locate a factory to build its new-model automobile, the Audi SUV XL500. The goal is to locate
at minimum-cost site, where cost is measure by the annual fixed plus variable cost of
production. Audi Motors has gathered the following data:-
Site Annual Fixed Cost
Variable Cost per
Auto Produced
A $ 10,000,000 $ 2,500
B $ 20,000,000 $ 2,000
C $ 25,000,000 $ 1,000
Table 2

The firms knows it will produce between 0 and 60,000 SUV XL500s at the new plant each
year, but, thus far, that is the extend of its knowledge about production plants.
a. For what values of volume, V, of production, if any, is site C a recommended site?
b. What volume indicates site A is optimal?
c. Over what range of volume is site B optimal? Why?

CASE STUDY
A. Norwegian Salmon Processing Facility, Trondheim (page 55)

1. What is the productivity of the processing facility, with the equipment currently in used?
2. What would the productivity of the plant become if the new equipment were purchased
and implemented?
3. What would be the amount of additional expense on equipment that would make
productivity of the two systems equal?
4. What might happen if the energy costs increase in the future?

B. Finding a Location for Electronics Component Manufacturing in Asia (pg 368)

1. What advantages and disadvantages does each potential location offer?
2. What other relevant factors that are not mentioned in this case study might play a role in
the teams decision?
3. This is a long term strategic decision; what factors might change in the next 10 to 20
years? How will the possibility of such changes influence the decision?
4. Which alternative would you recommend, under which circumstances?