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# Operations management problems

Document Type:Coursework

Subject Area:Economics

Document 1

Use 52 weeks/year) Solution In a week – 65 pounds sold (Demand) X 52 = 3380 Cost price - \$4 Ordering cost - \$ 50 Holding cost – 20% x 4 = \$ 0. a) What is the economic order quantity (EOQ) for Colombian coffee? EOQ = = = = = 650 b) What is the optimal number of orders per year? No of orders = = =5. orders per year c) What is the optimal interval (in weeks) between the orders? 52/5. weeks Chapter 9: A store has collected the following information on one of its products: • Demand = 6,760 units/year • Standard deviation of weekly demand = 18 units • Ordering costs = \$40/order • Holding costs = \$2/unit/year • Cycle-service level = 90% --- z value = 1. • Lead-time = 3 weeks • Number of weeks per year = 52 weeks a) If the firm uses the continuous review system to control the inventory, what would be its order quantity and reorder point? Solution. Job Time since arrival (weeks ago) Process time (weeks) Due date (weeks from now) FCFS Process time (weeks) Waiting time (weeks) Due date Flow Time = waiting time + process time Due past weeks =flow time-due date A 5 2 7 C 4 7 4 11 7 B 6 8 16 B 8 6 16 14 C 7 4 4 A 2 5 7 7 D 4 10 17 D 10 4 17 14 E 2 5 15 F 12 3 18 15 F 3 12 18 E 5 2 15 7 Total 41 27 68 7 Avg flow time = total flow time / number of jobs 11.

Avg weeks past due = total weeks past due /number of weeks 1. b) Create a schedule using the earliest due date (EDD) rule, calculating the average flow time and average weeks past due. Job Time since arrival (weeks ago) Process time (weeks) Due date (weeks from now) EDD Process time (weeks) Waiting time (weeks) Due date Flow Time = waiting time + process time Due past weeks =flow time-due date A 5 2 7 C 4 7 4 11 7 B 6 8 16 B 8 6 16 14 C 7 4 4 A 2 5 7 7 D 4 10 17 D 10 4 17 14 E 2 5 15 F 12 3 18 15 F 3 12 18 E 5 2 15 7 Total 41 27 68 7 Avg flow time = total flow time / number of jobs 11. Avg weeks past due = total weeks past due /number of weeks 1. • Chapter 12: The Marlin Company operates 50 weeks a year, and its cost of goods sold last year was \$1,800,000. The firm carries six items in inventory: three raw materials, two work-in-process items, and one finished good.

The following table shows the company’s last year’s average inventory levels for these items, along with their unit values. Category Part Number Average Inventory Units Value per Unit Raw Materials RM-1 RM-2 RM-3 1750 1500 1900 \$15 \$20 \$10 Work-in-process WIP-1 WIP-2 1500 1300 \$45 \$50 Finished Goods FG-1 1000 \$120 a) What is their average aggregate inventory value? Category Part Number Average Inventory Units (a) Value per Unit (b) Total value (Axb) Raw Materials RM-1 RM-2 RM-3 1750 1500 1900 \$15 \$20 \$10 26,250 30,000 19,000 Work-in-process WIP-1 WIP-2 1500 1300 \$45 \$50 67,500 65,000 Finished Goods FG-1 1000 \$120 120,000 Average aggregate Inventory value \$ 327,750 b) How many weeks of supply does the firm have? Average weekly sales at cost = = No of weeks of supply = 9. weeks c) What was their inventory turnover last year? Inventory turnover = = = 5. Further it can sacrifice the customer service levels to an extent. Chapter 13: A manufacturer’s research and development center must expand by building a new facility.

The search has been narrowed to five locations, all of which are acceptable to management. The assessment of these sites is being made on the basis of the five subjective location factors that follow. Management has agreed to use a five-point scale (Excellent = 5, and Poor = 1) to quantify and compare their subjective opinions about the relative goodness of the sites. Using the Total Cost Analysis for Supplier Selection, which supplier should Burdell choose? Provide details to justify your answer. Supplier Shipping Quantity Annual Shipping Costs Price Annual Holding Cost Lead Time (days) Annual Administrative Cost Total cost Lexington Tire 2,000 \$18,000 \$1025000 \$205000 7 \$14,000 \$1262000 Irmo Auto 1,500 \$22,000 \$1000000 \$200000 5 \$18,000 \$1240000 Differential cost 500 -\$ 4000 \$ 1 \$5000 2 -\$ 4000 \$22000 Irmo Auto is the low cost supplier. Burdell should go for Irmo Chapter 15: Explain in what ways reverse logistics management is more difficult than the management of more typical supply chain flows.