OMIS 2010 Practice Questions Final Exam NEW

Topics: Economic order quantity, Costs, BMW Sports Activity Series Pages: 9 (1929 words) Published: March 24, 2015
OMIS 2010
Examples from Final exams with solutions:
1.(20 pts) GNO is a retail phone-catalog company that specializes in outdoor clothing and equipment. A phone station at the company will be staffed with either full time operators or temporary operators 8 hours per day. Full time operators, because of their experience and training, process more and make fewer mistakes than temporary operators. However, temporary operators are cheaper because they receive a lower wage rate and they are not paid benefits. A full-time operator can process about 360 orders per week, whereas a temporary operator can process about270 orders per week. A full-time operator averages 1.1 defective orders per week, and a part time operator incurs about 2.7 defective orders per week. The company wants to limit the defective orders to 200 per week. The cost of staffing a station with $610 per week, and the cost of a station with part-time operators is $450 per week. Using historical data and forecasting techniques, the company has developed estimates of phone orders for an 8-week period, as follows: Week Orders Week Orders

1
19,500 5
33,400
2
21,000 6
29,800
3
25,600 7
27,000
4
27,200 8
31,000
The company wants to hire and add full-time operators as the 8 week period progress, although once it hires full-time operators, it will not dismiss them. On the other hand, the part time operators can be hired on weekly basis. Please formulate an LP in order to help the company to determine how many full time and part time operators to hire each week to meet weekly demand while minimizing labor costs.

2. (10 pts) Norfolk, Virginia, a major seaport on the East Coast, has a ship coal-loading facility. Coal trucks filled with coal arrive at the port facility at the mean rate of 149 per day (Poisson distributed). The facility operates 24 hours a day. The coal trucks are unloaded one at a time, on a first-come, first served basis, by automated mechanical equipment that empties the trucks in a constant time of 8 minutes per truck, regardless of truck size. The port authority is negotiating with a coal company for an additional 30 trucks per day. However, the coal company will not use this port facility unless the port authority can assure that the coal trucks will not have to wait to be unloaded at the port facility more than 12 hours per truck, on average. Can the port authority provide this assurance?

3. (10 pts) The annual carrying cost for a computer at the University Bookstore is 15% of the purchase price. The ordering cost is $2,500, and annual demand for this particular computer is estimated to be 200 units. The bookstore can order the computers following the quantity discount pricing schedule given below:

Quantity
Price
1–49
$1,400
50 – 89
$1,100
90+
$900
Determine the optimal order size.

MULTIPLE CHOICE QUESTIONS
1. All of the following costs are likely to decrease as a result of better quality except a. customer dissatisfaction costs
b. inspection costs
c. scrap costs
d. warranty and service costs
e. maintenance costs
2. A successful TQM program incorporates all of the following except a. continuous improvement
b. employee involvement
c. benchmarking
d. centralized decision-making authority
e. none of the above; a successful TQM program incorporates all of the above 3. The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as

a. continuous improvement
b. employee empowerment
c. benchmarking
d. copycatting
e. patent infringement
4. Pareto charts are used to
a. identify inspection points in a process
b. outline production schedules
c. organize errors, problems, or defects
d. show material flow
e. all of the above

5. A waiting-line system that meets the assumptions of M/M/S has λ = 5, µ = 4, and M = 2. For these values, Po is approximately 0.23077 and Ls is approximately 2.05128. The average time a unit spends...
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