COMM399-204, 2013 Winter Term 2

Mid-Term Review Problems Part I (Introduction + Process Analysis + Inventory Build-Up + OM Triangle) True or False (You must explain your judgment if it is false!) 1. In any process, the flow time cannot be smaller than the cycle time. True. cycle time = time spent on the bottleneck resource, which must be smaller or equal to the flow time 2. If a process has two bottleneck resources, then they must have the same capacity rate. True. Bottleneck resource is the resource with the minimal capacity rate. So if there is more than one bottleneck resource, they must all have the minimal capacity rate and therefore their capacity rate must be equal. 3. In any process, the non-bottleneck resource always gets idled for some time. True. Because the unit load on a non-bottleneck resource has to be smaller than the unit load of the bottleneck resource, which is also the cycle time. So in each cycle, the non-bottleneck resource must have some time idled. 4. A manager of the call center wants to reduce the customer’s waiting time, then the only thing he (she) could do is to recruit more telephone operators. False. According to the OM triangle, increasing the capacity is not the only solution. The manager could also get more information about input rate and dynamically schedule the operators (capacity) to meet the variable input rate (customer arrivals). 5. The long-run average input rate cannot be smaller than the long-run average output rate; although it is possible that the short-run input rate be smaller than the short-run output rate when there is a positive inventory. True. In short time, if output rate > input rate, the rest is from the inventory. However, in the long run, the inventory is finite, so the long-run average of output cannot be larger than the long run average of the input rate. 6. From the Benihana’s lessons, we know that keeping the menu size smaller is the gold rule for running a successful restaurant. False. Keeping the menu size smaller fits the business strategy of the Benihana (highlight on show, culture). A smaller menu size might be less attractive to return customers and might not work in some other cases.

Yichuan Ding

COMM399-204, 2013 Winter Term 2

7. In order to have finite inventory in the long run, the long-run average input rate cannot be larger than the long-run average capacity rate. True. Explained in Class (Lecture 04, Slide 16). 8. To process a multi-unit order, the bottleneck resource may depend on the mix of the units. True. The unit load of each resource depends on the product mix, and the bottleneck resource is the one with the maximal unit load. 9. According to the Little’s law, the inventory equals the product of the throughput rate and the flow time at any time. False. Little’s law is for long-run average. In a random short-time scenario, I=RT not necessarily holds. Example: a shop opens at 9am. Before 9am, some customers already arrived and waited outside. Then the throughput rate before 9am is zero (no customer could enter the shop). Then by Little’s law, the inventory has to be zero. But there are customers waiting! 10. The average inventory of the inventory build-up diagram does not depend on the time points at which the inventory is observed. False. It indeed depends the time point you choose to count the inventory. See lecture 4 Slide 18-23. 11. A flow shop process usually results in a lower unit variable cost compared to a job shop. True. Compared to a job shop, a flow shop may incur a setup cost for the production line, but has a smaller unit variable cost. “unit variable cost” refers to the cost to process each additional order (marginal cost). 12. The OM triangle tells us that in order to increase the throughput rate, we have to improve all the following factors: capacity, inventory, and information. False. The OM triangle tells us that improve any one of the three may results in an improvement in throughput rate. Answer...