Question 1

You as vice president of operations at Jackson Manufacturing Company, has just received a request for
quote from AMC electric supply for 400 units per week of a motor armature. You have conduct a time
study on the task to determine standard time. The actual times observed (in minutes) as follows
Table: Observation Time
Observations 1 2 3 4 5 6 7 8 9
Observed time (min) 2.05 1.92 2.01 1.89 1.77 1.80 1.86 1.83 1.93
Observations 10 11 12 13 14 15 16 17
Observed time (min) 1.96 1.95 2.05 1.79 1.82 1.85 1.85 1.99

The worker had a 115% performance rating. The task can be performed in a sitting position. The fatigue
allowance should be 8% because the detailed work required of the task. The company has an established
personal allowance of 6% and previous record shows the delay was 2%. The workday is 7.5 hours, but
operators are paid for 8 hours at an average of RM12.50 per hour with 5 working days per week.

a) Anlyse the sample should be taken for a statistically accurate standard with 99% confidence level
and accuracy ±5%. Is the sample size adequate?
b) Determine the number of units should be produced at this workstation per day and per week.
c) Determine the cost per unit for this task in direct labor cost.

Answer:

a) n= 8
b) Ts = 2.53 minutes, number units produced = 178 units per day.
c) RM 0.56 / unit

Question 2

Montegut Manufacturing produces a product for which the annual demand is 10,000 units. Production
averages 100 units per day, while demand is 40 units per day. Holding costs are RM 2.00 per unit per year,
and setup cost is RM 200.00.
(a) If the firm wishes to produce this product in economic batches, determine the size batch should be used.
(b) Determine the maximum inventory level.
(c) Determine how many order cycles are there per year.
(d) Determine the total annual holding and setup costs.

Answer:

a) Q* = 1826 units
b) 1095 units
c) 5.48 cycles per year
d) RM 2191
Question 3

The soft goods department of a large department store sells 175 units per month of a certain large bath
towel. The unit cost of a towel to the store is $2.50 and the cost of placing an order has been estimated to
be $12.00. The store uses an inventory carrying charge of I = 27% per year.
Determine
(a) the optimal order quantity,
(b) the order frequency,
(c) the annual holding and setup cost.

If, through automation of the purchasing process, the ordering cost can be cut to $4.00, what will be (d) the
new economic order quantity, (e) the order frequency, and (f) annual holding and setup costs. Explain these
results.

Answer:

a) Q* = 273.25
b) 7.69
c) RM 184.44
d) Q* = 157.76
e) 13.31
f) RM 106.48

Question 4

Lockport Marine Services, Inc. wishes to assign a set of jobs to a set of machines. The following table
provides data on the cost of production of each job when performed on a specific machine.
(a) Determine the set of assignments that minimizes production cost.
(b) Find the total production cost of your assignments.

Machine
Job A B C D
1 27 29 28 30
2 30 29 27 26
3 31 25 29 26
4 29 31 25 28

Answer:

Job 1 – Machine A

Job 2 – Machine D

Job 3 – Machine B

Job 4 – Machine C

Total production cost, RM 103

Question 5

Five jobs are waiting for processing through two work centers. Their processing time (in minutes) at each
work center is contained in the table below. Each job requires work center Sigma before work center
Delta.
Find the sequence of jobs will minimize the completion time for all jobs.

Job Sigma Delta

R 40 10
S 25 30
T 50 20
U 35 35
V 55 15

Answer:

S –U – T- V- R

Question 6

A manufacturer has the following jobs waiting on a single work center. The firm has not decided which
dispatching rule to apply in order to prioritize the jobs and fix them into the schedule. Processing time in
15-minute time blocks and due date for each job are in the table below.

Time Due Date

Job 1 5 17
Job 2 4 20
Job 3 3 16
Job 4 7 9
Job 5 3 6
Job 6 5 7

Show your calculations below and discuss. .

Dispatching Average Average Average

Rule Job Sequence Flow Time Number of Jobs Lateness
EDD 5-6-4-3-1-2 15.67 3.48 3.67
SPT 3-5-2-1-6-4 13.50 3.00 5.17
LPT 4-6-1-2-5-3 18.00 4.00 5.83