LAGOS BUSINESS SCHOOL

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GROUP 4 MOCK
Question 1
The Smooth Chin Device Company is a manufacturer of high-end electric razors. These
razors are produced using a machine-paced process. For each razor, a tray with
components enters the process at the beginning of a conveyor belt. The tray then passes
through the six steps (consisting of various tasks) explained in the table below. Workers
perform the assembly operations on the moving tray. The last step consists of an
inspection of the then fully assembled razor. The activity times of the process are as
follows:

Station Tasks

A 1. Lay out chassis [12 sec]

Preparation 2. Lay out screws [15 sec]
3. Lay out all other components [17 sec]
Total time for A: 44 sec
B 4. Perform task AS1 [10 sec]
5. Perform task AS2 [10 sec]
Assembly 1 6. Perform task AS3 [20 sec]
Total time for B: 40 sec
C 7. Perform task AS4 [14 sec]
8. Perform task AS5 [16 sec]
Assembly 2 9. Perform task AS6 [20 sec]
10. Perform task AS7 [5 sec]
Total time for C: 55 sec
D 11. Perform task AS8 [30 sec]
Assembly 3 12. Perform task AS9 [30 sec]
Total time for D: 60 sec
E 13. Perform task AS10 [11 sec]
Assembly 4 14. Perform task AS11 [19 sec]
15. Perform task AS12 [20 sec]
Total time for E: 50 sec
F 16. Inspect electrics [20 sec]
Inspection 17. Inspect aesthetics [20 sec]
Total time for F: 40 sec

There are six workers, one at each of the six stations (A-F). They begin their workday at
8:00 am and work steadily until 4:00 pm. (They are replaced with other workers for breaks
and lunches, but the production is not slowed or stopped during these times.) Their hourly
wage rate is $25 per hour. You can assume unlimited demand.

a. Which station is the bottleneck of the process?

b. What is the process capacity (you can ignore any start-up or empty system effects), in
razors/hour?

c. What is the utilization of each process? 2

Question 2
As inventory manager, you must decide on the order quantity for an item that has an annual
demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost,
expressed as a percentage of average inventory value, is 20 percent. Your supplier has
provided the following price schedule:

Minimum Order Quantity Price per Unit

1 $2.50
200 $2.40
300 $2.25
1000 $2.00

What ordering policy do you recommend?

Question 3
A quality inspector took five samples, each with four observations of the length of time for
glue to dry when the process was in control. All values are in minutes.
SAMPLE
1 2 3 4 5
1 12.11 12.15 12.09 12.12 12.09
Observation 2 12.10 12.12 12.09 12.10 12.14
3 12.11 12.10 12.11 12.08 12.13
4 12.08 12.11 12.15 12.10 12.12

Calculate control limits for an R-chart and an x-chart.

Question 4
⅄ = 3 customers/hour
µ = 5 customers/hour
M=1
a. What is the system utilization?
b. What is the average number of customers waiting for service?
c. What is the average time customers wait in line for service?

A vending machine dispenses hot chocolate or coffee. Service time is 30 seconds per cup and
is constant. Customers arrive at a mean rate of 80 per hour, and this rate is Poisson-
distributed.
Determine:
a. The average number of customers waiting in line.
b. The average time customers spend in the system.
c. The average number in the system.

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Question 5
The following gives the number of pints of type B blood used at Woodlawn Hospital in the
past 6 weeks:
WEEK OF PINTS USED
August 31 360
September 7 389
September 14 410
September 21 381
September 28 368
October 5 374

a. Forecast the demand for the week of October 12 using a 3-week moving average.
b. Use a 3-week weighted moving average, with weights of 0.1, 0.3, and .6, using .6 for the
most recent week. Forecast demand for the week of October 12.
c. Compute the forecast for the week of October 12 using exponential smoothing with a
forecast for August 31 of 360 and a = 0.2.