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Operations Management I 73-331 Winter 2001
Faculty of Business Administration
University of Windsor

Final Exam
Tuesday, April 17, Noon – 3:00 p.m.
Faculty of Education Neal Building Room 1101

Instructor: Mohammed Fazle Baki
Aids Permitted: Calculator, straightedge, and a both-sided formula sheet. Time available: 3 hours
Instructions:
This exam has 11 pages including this cover page and 1 page of Table Please be sure to put your name and student ID number on each page. Show your work.

Grading:
QuestionMarks:

1. /2
2. /4
3. /6
4. /6
5. /10
6. /8
7. /4
8. /6
9. /4
10. /5
11. /5
Total:/60

Question 1: (2 points)
A supplier of instrument gauge clusters uses a kanban system to control material flow. The gauge cluster housings are transported five at a time. A fabrication centre produces approximately 10 gauges per hour. It takes approximately two hours for the housing to be replenished. Due to variations in processing times, management has decided to keep 25 percent of the needed inventory as safety stock. How many kanban card sets are needed? [pic]

Question 2: (4 points)
One unit of A is made of two units of B, three units of C, and two units of D. B is composed of one unit of E and two units of F. C is made of two units of F and one unit of D.

a. (2 points) Construct a product structure tree.

b. (2 points) Suppose that the gross requirement of A is 100 units. Items A, C and D have on-hand inventories of 25, 50 and 75 units respectively. Find the net requirement of D. Gross requirement, A 100 units

Less on hand, A 25
Net requirement, A 100 – 25 = 75
Gross requirement, C (=3A)75 ( 3 =225
Less on hand, C50
Net requirement, C225 – 50 = 175
Gross requirement, D (=2A+C)2(75+175 = 325
Less on hand, D75
Net requirement, D325 – 75=250

Question 3: (6 points)
The MRP gross requirements for Item X are shown here for 4 weeks. Lead time for A is one week, and setup cost is $9. There is a carrying cost of $0.20 per unit per week. Beginning inventory is 20 units in Week 1. | |Week | | |1 |2 |3 |4 | |Gross requirements |20 |10 |15 |45 |

a. (3 points) Use the EOQ method to determine when and for what quantity the first order should be released. [pic], [pic] per unit per year
Since 4-week demand is 20, 10, 15 and 45, 52-week demand,[pic] units EOQ = [pic] units
Hence, order 45 units. Since the beginning inventory of 20 units can cover Week 1, the first order must be received in Week 2. Since there is a lead-time of 1 week, the order must be placed in Week 1. Hence, order 45 units in Week 1. b. (3 points) Use the Silver-Meal heuristic to determine when and for what quantity the first order should be released. Since the beginning inventory of 20 units can cover Week 1, the gross requirements for which order must be placed are the demands of Weeks 2, 3 and 4 i.e., 10, 15 and 45 units. |Order for |Order quantity, |[pic]Inventory at the|[pic]Inventory at the |[pic]Inventory at the |Holding cost |Ordering cost |Per period cost | |weeks |Q |end of Week 2 |end of Week 2 |end of Week 2 | |...
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