OPERATION MANAGEMENTMAT345

NAME: SAIFUDIN BIN MOHD YASINID NO. : 2012826338GROUP: JBM1116CLECTURERS NAME : SHAFIEE MD. TARMUDI

April 2011

Part A Question 1

B

cKJIGEHFDA

CYCLE TIME: PRODUCTIVE TIME / OUTPUT 0.62 X : 400 x=645.16> 645 UNITS

THEORETICAL MIN = S. TASK TIME / C.T 3.83/ 0.62 = 6.18> 6 UNITS

LAYOUT WORKSTATION

6754321111111

A B,C, D F,H E G J I ,K 0.56 0.54 0.57 0.43 0.62 0.57 0.54 (TASK TIME)0.06 0.08 0.05 0.19 - 0.05 0.08 (IDLE TIME)

EFFICIENCY =SUM TASK TIME/ (C.T X WORK STATION) X 100% > 3.83/ (0.62X 7) x 100% = 88.25%BALANCE DELAY = 100%- 88.25% = 11.75%

THE COST OF IDDLENESS PER WEEK

IDLE TIME PER UNIT: (CT X WS) SUM TASK TIME : (0.62 x 7)- 3.83 = 0.51 MIN/UNITIDLENESS PER DAY: 0.51 x 654 = 328.95/ 60 min THE COST OF IDDLENESS PER WEEK > 5.4825 HOUR x 5 DAYS x RM 6.25 /HOUR= RM 171.33 #

Question 2 (DUMMY)

52 D, 12 G, 10A, 3

10967431 B, 9 E, 10 F, 11 H, 7 I, 14 K, 9

8 C, 7 J, 15

C) PROJECT COMPLETE TIME = 60 WEEKSD) CRITICAL ACTIVITIES = B, E, F, H, I, KE)FREE FLOAT D =15-3-12: 0 INDEPENDENT FLOAT D= 15-9-12: -6 WEEKS TOTAL FLOAT= 51-37-4: 10 W

QUESTION 3

SELLS: 20000 TIRES PER YEARCOST TO STORE EACH TIRES: 20% OF ITS PURCHASE PRICECOST FOR EACH ORDER: RM 40PURCHASE PRICE RM20 >500 TIRES RM18 > MORE 500 BUT LOWER 1000 RM17 MORE THAN 1000

ORDER QUANTITY PRICE CARRYING COST (H) LESS THAN 500 RM 20 0.2(20) = 4500-1000 RM 18 0.2(18) = 3.61000 MORE RM 17 0.2 (17) = 3.4

1) EOQ: 2DS/H = 2 (20000 X 40)/ 4 = 632.45> 632 UNIT PER ORDER2 (20000 X 40)/ 3.6 = 666.67> 667 UNITSTHIS IS FEASIBLE, RM 18 PER UNIT RANGE 500-1000TAC= (D/Q) (S) + (Q/2) (H) + (P) (P) = (20000/667) (40) + (667/2) (3.6) + (18) (20000) = RM 362400TAC = (20000/1000) (40) + (1000/2) (3.4) + (17)(20000) = RM 342500TAC = (20000/632) (40) + (632/2) (40) + (20)(20000) = RM413905.82

THUS THE MINIMUM COST ORDER IS 1000 AT LOWEST COST RM342500#

QUESTION 4

UNIT PRODUCE: (NO. OF WORKER) X (WORKING DAYS) X (STANDARD OUTPUT PERDAY) : 15 X 26 X (60/30 X 6 HOUR)

A) MONTH FORECAST DEMAND(+2000)UNIT PRODUCEUNIT EXCESSUNIT SHORTAGEO.T UNITMAX 500END.INVENTORYSUB. UNIT

JUNE 44004680280280

JULY52004680520240

AUGUST54004680720500220

SEPTEMBER56004680920500420

OCTOBER40004680680680

NOVEMBER5300468062060

DECEMBER45004680180240

TOTAL 3276012401260640

TOTAL COST: (TOTAL UNITS PRODUCE X WAGE PER HOUR X STANDARD OUTPUT PER HOUR) 32760 X 4 X (30/60) = RM 65520OVERTIME COST: (1240 X 6 X (30/60) ) = RM 3720INVENTORY HOLDING COST: 1260 UNITS X 1.50 = RM1890SUBCONTRACT UNIT: 640 X 8 = RM 5120TOTAL COST: RM 65520 + RM 3720 + RM 1890 + RM 5120 = RM 76250

Question 5

Cost per breakdown =RM 300 Expected breakdown per month =24 month

Preventive maintenance cost =RM 150i) Frequency of occurrence : No of breakdown the total period of breakdown

2/218/24 5/244/243/242/24TOTAL

0.080.330.210.0170.130.081

Frequency of occurrence ii) Exp. No. of breakdown : (number of breakdown) corresponding frequency) : (0)(0.08)+ (1)(0.33+(2) (0.21)+(3)(0.17)+(4)(0.13)+(5)(0.08) : 0+0.33+0.42+0.51+0.52+0.4 : 2.18 breakdown / month Iii) Exp. Breakdown cost : (Expected no of breakdown) (cost per breakdown) : (2.18) (300) : RM 654/ month

iii) Prevent. Maint. Cost : (Preventive maintenance cost )+ (Cost of contract term) : RM150 + (24 month * 300) : RM 7350The manager should proceed with the service contract since it is less expensive to purchase the contract (RM 654) than to repair the machine when it breakdowns (RM7350 ).

APRIL 2011 Part bQUESTION 1Explain any 4 disadvantages of process oriented layoutThere are also disadvantages despite the advantages of process oriented layout. There are, low utilisation of machines. Equipment utilization rates in process layout are frequently very low, because machine usage is dependent upon a variety of output requirements. The other disadvantages is scheduling is difficult. Constantly changing schedules and routings makejugglingprocess requirements more difficult. Next is high labor skills required. High labor skill needs also increase the required level of training and experience and high work in process levels that will increase capital investment. Besides that, can have high work-in-progress . work in process inventories are higher because of imbalances in the production process. QUESTION 2Explain the 4 basic types of allowanceThere are 4 basic types of allowance which is relaxation allowance, contingency allowance ,process allowance and policy allowance. Relaxation allowance is the extra time in percent given to workers to take a short break to overcome mental or physical fatigue. It includes nature calls, drinking, stretching or resting. Besides that, contingency allowance is the extra time in percent given to workers for unexpected situation occurrence. For example, repairing minor defects on equipments or as simple as to pick a dropped tools. Next is process allowance which is the allowance that give the extra time in percent give to workers due to natural delay in the process. For example, waiting for a crane to come, computers to respond and automated machines to be set up. Meanwhile, policy allowance is the extra time in percent given to workers due to labor regulations or union agreement. For example, allowing Muslims to perform their prayers .

QUESTION 3Explain the four factors that influence the choice of plant locationThere are many factors that will influence the choice of plant location and this is some of the factors. Firstly, Labor productivity. The wage rates are not the only cost because when the labor productivity is low, this may increase total cost . Secondly, exchange rates and currency risks. This can have a significant impact on cost structure because the rates change over time. Next factor is the costs. The cost can be classified into two types which is tangible and intangible. Tangible is the easily measured costs such as utilities, labor, materials and taxes. Meanwhile, Intangible is less easy to quantify and include education, public transportation, community and quality of life. Lastly is the factor that influence decision plant location is political risk, values, and culture. One should consider national, state, local governments attitudes toward private and intellectual property, zoning, pollution, employment stability that may be in flux and also worker attitudes towards turnover, unions, absenteeism because globally cultures have different attitudes towards punctuality, legal, and ethical issues.

QUESTION 4Discuss four types of quality costsThe four types of quality costs is prevention costs, appraisal costs, Internal failure, and external costs. Prevention costs are related to expenditure before breakdown occurs to reduce the potential for defects. For example is a maintenance cost. Meanwhile, appraisal costs ,It is related to expenditure assessing auditing the level of quality attained in production to evaluating products. For example are inspection costs. Next is Internal failure, which related to expenditure for correcting or reworking on products or services due to defects incurred during process. For example ,reworking cost. Lastly is external cost. It is related to expenditure occur after delivery or production process. For example is warranty cost.QUESTION 5Explain any four importance of maintenanceThe importance of maintenance is to avoid production or service disruptions. Poorly maintained equipments produce low quality products. Equipments that have not been properly maintained have frequent break downs and cannot provide adequate service to customers. For example, air craft fleets of the airline, railway and road transport services not maintained well can result in poor service to customers. The other importance is to not adding costs due to neglected maintenance work. It is because , neglecting maintenance can cause the breakdown of machine. When machine malfunctions result in scrap, unit labor and material costs increase. Besides, cost of maintenance which includes such costs as costs of providing repair facilities, repair crews, preventive maintenance inspections, spare parts and stand by machines will increase as machines break down frequently. Other than that , the other importance is to ensure employee or customer safety. This is because worn-out equipment is likely to fail at any moment and these failures can cause injuries to the workers, working on those equipments. Products such as two wheelers and automobiles, if not serviced periodically, can break down suddenly and cause injuries to the stress. The last importance is to make sure the customer satisfaction. When production equipments break own, products often can not be produced according to the master production schedules, due to work stoppages. This will lead to delayed deliveries of products to the customers.

SEPTEMBER 2011PART AQuestion 1a) Precedence diagram

22

JHDA 12 25 54

LGB 30 65 18

KIFEC 52 40 41 50 42

b) Cycle time = Productive time per day Output per day (units) = 7 hours x 60 minutes x 60 secs350 units = 72 secs/unit

c) No. of workstation = Sum of task timeCycle time = 451 72 = 6.26 units ~ 7 units of WS

d) Line layout =

76543211Workstation :

ACBEDFGHIKJLTask : Task time : 6470 72 6566 42 72Idle time : 8 2 - 7 6 30 -(Total idle time = 53 secs)e) Efficiency = Sum of task timex100%CT x WS = 451 x 100%72 x 7 = 89.48%

Balance delay = 100% - Efficiency = 100% - 89.48% = 10.52%

f) Cost per hour = Rm327 hours = Rm4.57Cost of idleness per day = (53x350) (60x60)= 5.15 hour per day

Cost of idleness per week = 5.15 x 4.57 x 5 = RM117.68

Question 2a) D = 150 x 365 = 54750 kg

EOQ = 2(54750)(20) 1.20 = 1416.8627 = 1417 kg

b) ROP = 150 x (2+4) = 900 kg

c) N = 54750 1417 = 39 times

d) T = 1417 x 365 54750 = 9.4667

e) TAC = [(54750/1417) x (22)] + [[(1417/2) + 600](1.20)] + (1.90 x 54750) = 850.0353 + 1570.2 + 104025 = RM 106445.24

f) Max inventory = 1417 + 600 = 2017 kg

Question 3a) TANGIBLE FACTORSKUANTANTEMERLOHJERANTUTBANDAR JENGKA

Labor580540570520

Raw material450420470480

Rental600550560570

TOTAL1630151015001570

RANKING1342

= The best is to choose Jerantut because it has the lowest cost.

b) Ranking = Outstanding - 5Very good - 4 Good - 3 Fair - 2 Poor - 1INTAGIBLE FACTORSWEIGHTKUANTANTEMERLOHJERANTUTBANDAR JENGKA

Labor availability431228520520

Transportation service3412391339

Community acceptance111553344

Supplier availability2510123611

Facilities515525315420

TOTAL40494754

RANKING1324

= The best is to choose Bandar Jengka because it has the highest score.c) WeightKUANTANTEMERLOHJERANTUTBANDAR JENGKA

Tangible212364824

Intangible111332244

TOTAL39108

= The location that the company should select is Jerantut because it has the highest score.

Question 4a) b) 22149

239614

18611F,5D,356

18d,3M,4G,4J,3A,63

1213d,1N,3

0d,291

300

3027K,4B,4L,5I,2

271002874

H,3C,2E,2

2211864

221613114

c) Critical path = 13569101213 Critical activity = A,D,F,K,L,N

d) 30 monthse) i) Total float activity J

221823-18 = 5 weeks

2318

J,3

ii) Free float for J

221822-18 = 4 weeks

2318

J,3

iii) Independent Float for J

221823-18 = 4 weeks

2318

Question 5MonthForecast demandUnits producedUnit excessUnit shortageOT units (max= 1000units)End inventorySubcontracting units

JULY95008320-11801000-180

AUGUST103008320-19801000-980

SEPTEMBER105008320-21801000-1180

OCTOBER107008320-23801000-1380

NOVEMBER94008320-10801000-80

DECEMBER104008320-20801000-1080

TOTAL4992060004880

Units produced = (no. of worker) x working days x standard output per day= 20 x 26 x (60/30 x 8)= 8320 units.

Regular production cost = Units produced x labor cost x standard output per hour= 49920 x Rm5 x (30/60)= RM 124800

Overtime cost = 6000 x RM8 x (30/60) = RM 24000

Subcontracting cost = 4880 x Rm9 = RM 43920

Total production cost = RM 124800 + RM 24000 + RM 43920 = RM 192720

PART BQuestion 1a) Operations management is the set of activities that creates goods and services through transformation of inputs into output.b) Basic components of operation system :i. Hospital - The inputs include the medicine and patients, the conversion process is the treatment given by doctors, the outputs include improvement in health and the feedback is patients can continue to live normally.ii. University - The inputs include books, research reports and classmates, the conversion process is the acquisition of knowledge and gaining new insights, the outputs include students who are better qualified to pursue future undertakings and the feedback can come from students when they participate in a class discussion.Question 2a) Inventory is a stock of items kept to meet demand or a stock of any items or resources used in an organization. In a broader context, inventory can include inputs such as human, financial, energy, equipment, and physical items.b) 3 reasons companies keep inventoryFirst reason why companies keep inventory is to meet anticipated customer demand. Inventories should be available regardless whether they held for satisfy planned or expected demand. These inventories are aptly known as anticipation stocks.Next is to smooth production requirements. Some companies produce large inventories to meet demand that is seasonal or cyclical. They build up inventories during pre-season periods to meet overly high requirements during seasonal periods. These inventories are known as seasonal inventories.

Last is to protect against stock outs. Delayed deliveries and unexpected increases in demand increase the risk of shortages. Delays happen due to weather conditions, supplier stock outs, deliveries of wrong materials, quality problems and so on. The risk of shortages can be reduced by holding safety stock.

Question 3

4 important factors that will influence location decision.

First factor that will influence location decision is facility costs. The cost of acquiring a piece of land or building or renting an office space can be quantified/valued even though the cost may vary from one location to another.

Next factor is utilities and taxes costs. Utility costs like telephone, energy, and water; local and state service charges and taxes are important factors too.

Next factor is attractiveness of location. From a company standpoint, a number of factors determine the desirability of a community as a place for its worker and manager to live. They include facilities for education, shopping, recreation, transportation, local attitudes toward the company and the size of community.

Last factor is community acceptance/feelings. Communities do not, as a rule, want companies that will create pollution problems or otherwise lower the quality of life in the community. Extreme examples are a nuclear facility and a trash dumpsite. However, many communities view new businesses as potential sources of future tax revenues and new job opportunities.

Question 4

i) Product focus the sequence of work tasks is very rigid and the processes have very long continuous production runs and use highly specialized and automated equipment. The process, designed for a very narrow range of goods or services is typically in operation continuously 24 hours a day. Example is Rolex, a company that specialized in producing watch.ii) Process focus production operations are grouped together according to type of processes. All production operations that have similar technological processes are grouped together to form a production department. Example is company that produce furniture will use same machineries to produce furniture.Question 5

4 importance of maintenance.

First importance of maintenance is avoid production or service disruptions. If there is a breakdown, the system will probably stop, causing delay in production and a possibility of accident occurs can put employees or customers in danger. Maintenance effort must be managed effectively to keep any type of interference to an economical minimum.Next importance is not add to production or service costs. Some companies have workers regularly perform maintenance on the machines they operate, thus ensuring the system is in working condition most of the time. Additional cost incurred when maintenance is neglected or not a part of important function. Thus, there is no output and yet overhead continues, increasing the cost per unit.

Next importance is to maintain high quality. Smooth running equipment can ensure products or services can be produced efficiently and their quality can be maintained. For instance, a baker will be upset if the ovens breakdown in the middle of baking process. If such happens, the whole bakery products will simply be thrown out in the bins.

Last importance is to avoid missed delivery date. Meeting the customer deadline is important to ensure customer satisfaction and loyalty. It can only be done when production runs without some disruptions either due to machine breakdown or to employees absenteeism.

MARCH 2012PART A QUESTION 1 a) Precedence diagram

FHCA0.40.60.550.5

D0.6

B0.5

EGIJ0.70.6

0.60.45

b) Cycle Time of the line =Productive Time per dayOutput per day (units)= 8 hours x 60 minutes320 units= 1.5 sec/unit

c) Theoretical min. # of WS= Sum of Task Time Cycle time = 5.5 minute 1.5 minutes= 3.6 = 4 units of WS

d) Line Layout

54321Workstation :

Task :ABCDEFGHIJ

Task Time : 1.5 1.2 1.250.5 1.1Idle Time : - 0.3 0.251 0.4(Total = 1.95 min)

e) Efficiency = Sum of Task Time X 100%CT * Actual # of WS= 5.5 minute 1.5 min/unit * 5 unit of WS= 73.33 %Balance Delay=100% - Efficiency100% - 73.33%=26.67%

f) RM 32 Per day, compute idleness per month= RM 32 per day = RM 4 per hr8 hours per day=idle time in min/day60 min=1.95 minutes/units * 320 units/day 60 minutes=10.4 hours/day =10.4 hours/day x RM4 X 5days/week=RM 208

QUESTION 2a) PERT networkb) EET and LET

C,7

22111

221166

27F,60

27E,5J,5B,5A,60761234

16

16

D,7G,7H,8I,714135

d,1

c)Critical activities : A, B, E, F,

d)Compute the following:i)Free Float for activity D:

610= 13 - 6 7

146= 0 weeks D, 7ii)Total Float for activity G:

222211111 = 22 - 11 - 7= 4 weeks G, 7

132214iii)Independent Float for activity H

22 = 22 - 14 - 8 H, 8= 0 weekse) Completion time if activity F were revised to 8 weeks

22221616= 22 -16 6= 0 weeks F, 6

QUESTION 3 d = 300 bags per dayD = 300 bag/day * 250 day/year = 75 000 bag per yearH = RM 0.37 bags/per yearL = 5days SS = 2 daysS = RM 55

a) Economic order quantity= 2DS/H= 2(75 000)(55)/0.37= 4 722.00 bags per order.

b) No. of order placed per year= D/Q= 75 000/ 4722.00= 15.88 order per year.

c) The reorder point= d (L + usage rate of SS)= 300 (5 days + 2 days)= 2100 bag.

d) Reoder cycleT = (D/Q) * working daysT = (4722.00/75 000) * 250T = 15.74

e) Total annual inventory cost= (D/Q)(S) + (Q/2+SS)(H)= [(75 000/4722.00)x(55)] + [(4722.00/2)+600)x(0.37)]= 873.57 + 1095.57

f)

QUESTION 4a) Basic time of the operation.TASKSUM OF ALL ELEMENT CYCLEAVERAGE ELEMENTRFNORMAL TIME

A2.5 + 2.8 + 2.5 + 2.6= 10.4410.4 / 4 = 2.60.952.47

B1.5 + 1.4 + 1.6 + 1.5 + 1.5= 7.557.5 / 5 = 1.51.21.8

C2.5 + 2.5 + 2.2 + 2.5 + 2.3 = 12512 / 5 = 2.41.052.52

D8.0 + 8.4 + 8.5 + 8.5 + 8.6= 42542 / 5 = 8.4 1.19.24

E2.6 + 2.7 + 2.8 + 2.5 + 2.5 = 13.1513.1 / 5 = 2.620.92.36

F1.6 + 1.5 + 1.6 + 1.8 + 1.5= 858 / 5 = 1.6 1.051.68

TOTAL20.07

b) Allowance factor= Relaxation + Process= 50 minute + 22 minute = 72 minutes.= 72 minutes * 100 6 hours x 60 minutes= 20%

c) Standard time = (NT) (1+ALL TIME)= (20.07)(1+ 0.2)= 24.084 min per units

d) Expected number of letter= 60 minute / 24.084 min= 2.491 e) Number of typist= 120 letters / 2.491= 48.173 of typist

QUESTION 5N = 10n = 50z = 3 = 34a) Average Fraction defective= defectives= N (n)=34 10 (50)= 0.068

b) Standard deviation = 0.068 (1-0.068)50= 0.0356

c) Control limitUCL= 0.068 + 3 (0.0356)= 0.1748LCL= 0.068 3 (0.0356)=- 0.0388=0

d) PLOT

PART BQUESTION 1(4) Basic components of an operation system.There had 4 basic components of an operation system which is inputs, conversion process or Transformation, outputs and lastly control. Firstly inputs. Inputs are whatever entitles that proceed into a transformation process to produce output. Inputs can be classified into three general categories are external, market and primary resources. Second is Conversion process. It is the actual process or physically changing the inputs into output of products and services. Next is Output. Output is the accomplishment of operations system that is of the greater value than the sum of the inputs. It is in the form of desired product and services. There are two types of output, direct output and indirect outputs. Lastly is control. Control is the process of making sure that the desired output are obtained by taking. QUESTION 2a) 2 types of research in operation management Development research It deals with technical activity or product-oriented research which concerns with translating basic or applied research results into products or processes. Pure Research It is conducted for the advancement of scientific knowledge about a subject without any near-term expectation of commercial uses.

b) 4 objectives of research and development Generate new idea and concept to develop these ideas and concept into useful product. Develop new uses of existing product Develop new process that will help reduce capital and manufacturing costs. To improve on get improvement and to better than before.

QUESTION 32 differences between Process Focus and Product FocusPROCESS FOCUSPRODUCT FOCUS

Production operations are grouped together according to type of process and the facilities are organized around specific activities and processes. It is used when a very high volume of nondiscrete, highly standardized output is desired. It also very long production runs, highly specialized and automated equipment that control by computers.

Able to produces a wide variety of goods and services, often in small quantity. It also general purpose equipment and labor force is highly skilled. Control specialized nature of a system can set standard and maintain quality of high volume and low variety product.

QUESTION 44 dimension of quality services. TangiblesThese are the physical appearance of facilities, equipment, personnel, and communication materials. ConvenienceIt relates to the availability and accessibility of the service. How difficult is it to find an ASTRO service agent. ResponsivenessThis refers to the willingness of services dependably, consistently and accurately. One may say the Maybank online banking provides a good example of a firm that provides highly reliable service. TimeIt related to the speed with which services delivered.

QUESTION 5Defined following term:i) Inventory Inventory is a stock of item kept to meet demand or stock of any items or resources used in an organization.

ii) Material Required Planning (MRP)MRP is a computer-based system that determines how such of eac material, any inventory item with a unique part number, should be purchased or produced in each future time period to support the MPS.

iii) Lead TimeIt known and constant it is the time to waiting the goods. (2DS/H)

iv) Reorder pointReorder point is happened when the quantity on hand of an item drops to this amount, the item is reordered.

PART A (OCT 2012)QUESTION 1a) Construct a three (3) total cost curves for all locations on a single graph.

Total cost (RM)

Quantity(Unit)10002200Kota Bharu3250 + 75Machang2200 + 90Pasir Puteh1000 + 15070203250

Kota Bharu

Pasir Puteh

Mach-ang

*PasirPuteh = Machang

*Machang = Kota Bharu

PasirPuteh = MachangRM 1000 + RM 150 Q = RM 2200 +RM 90 QRM 150 Q RM 90 Q = RM 2200 RM 1000 RM 60 Q = RM 1200Q = RM 20 unit

Machang = Kota BharuRM 2200 + RM 90 Q = RM 3250 + RM 75 QRM 90 Q RM 75 Q = RM 3250 RM 2200 RM 15 Q = RM 1050 Q = RM 70 unit

b) Identify the relevant range of productions which provide the lowest total cost for each location.

i)The break even point between PasirPuteh and Machang is 20 units. Location PasirPuteh result lowest cost if use produce up to 20 units. Choose PasirPuteh< 20 units.ii)The break even point between Machang and Kota Bharu is 70 units. Location Kota Bharu result lowest cost if use produce 70 units and more. Choose Kota Bharu> 70 units.iii)Location Machang would result in lowest cost if produce the output in range of 20 units to 70 units. Choose Machang = 20 units > 70 units

c) Based on the break-even point analysis, which location should Halimah choose and explain why?

*CM = SP VC*BEP (unit) = FC / CM

= RM 1000 / RM 110= 9.09 ~ 9 units= RM 260 RM 150= RM 110-Pasir Puteh-Pasir Puteh

= RM 3250 / RM 325= 10 units= RM 400 RM 75= RM 325-Kota Bharu-Kota Bharu

= RM 2200 / RM 190= 11.58 ~ 12 units= RM 280 RM 90= RM 190-Machang-Machang

*BEP (RM) = BEP units x SP

-Machang = 12 x RM 280 = RM 3360-Kota Bharu = 10 x RM 400 = RM 4000Pasir Puteh = 9 x RM 260 = RM 2340-

=* Halimah should choose the location in Pasir Puteh because the break-even point is Lowest.

QUESTION 2a) Construct the precedence diagram.

5

4A

74HGIFEDCB

612

6

86

b) *CT = Productive time per day Output per day (unit)Output = 7 x 60 12

= Sum of Task TimeCT= 58/12= 4.88 ~ 5 units of ws = 35 units c) Theoretical min # of ws

d) Balance

42351WS

IGHFEDCBATask

12120= 2 min12120121201211112111CTTask TimeIdle Time

e) Calculate the efficiency and balance delay percentages.

= Sum of Task Time CT x Actual # of ws= 58 x 100 12 x 5= 96.67% Efficiency

= 100% - 96.67%= 3.33%Balance Delay

= Idle time x Output60 min= 2 x 35 60= 1.167 hoursf) Idle time

= RM5 x 1.167 hours= RM5.835 ~ RM5.85Cost of idleness

QUESTION 3a) Construct the CPM network for the project.

517

5282417

1302824138259

K, 4I, 7H, 2J, 6G, 3E, 2F, 4C, 8D, 1B, 2A, 55513022162217746

c) Critical activities = A, C, F, I, Kd) Programs estimated completion time = 5 + 8 + 4 + 7 + 4= 28 weekse) Free float for activity G.

5161313

Free float, G =16 13 3 = 0 weekG, 322

f) If activity D is revised from 1 week to 4 weeks, how would this affect the project?

Total float, G =13 5 4 = 4 weeksD, 113135

QUESTION 4a) Develop an aggregate production plan using vary workforce strategy to meet forecasted demand for the next six month period.

= (No. days per month) x daily standard output= (31) x (60/7) x 7 hours = 651 workers Monthly standard output for January, March and May:

= (No. days per month) x daily standard output= (30) x (60/7) x 7 hours = 630 workers Monthly standard output for April and June :

Monthly standard output for February :

= (No. days per month) x daily standard output= (28) x (60/7) x 7 hours = 588 workers

MonthForecast Demand (units)Current WorkersWorker requiredHireLayoff

January4612 55 = 455784557/651 = 71

February5080 + 800 = 588075880/588 = 103

March6510106510/651 = 10

April5220 + 450 = 5670105670/630 = 91

May 585995859/651 = 9

June5600 + 700 = 630096300/630 = 101

Total3477642

b) The total cost for the plan.

Total production cost :

= Total unit produced x regular cost per hour x standard output per hour= 34831 x (RM40/7) x (20/60)= RM 66240Regular Production cost

= Hire x Hiring cost= 4 x RM 200= RM 800Hiring cost

= Layoff x Layoff cost= 2 x RM 300= RM 600Layoff cost

Thus, Total cost = RM 66240 + RM 800 + RM 600 = RM 67640

QUESTION 5

No. of problems expected01234

Frequency of accurance0.20.10.20.30.2

Expected number of breakdown :

= (0)(0.2) + (1)(0.1) + (2)(0.2) + (3)(0.3) + (4)(0.2)= 0 + 0.1 + 0.4 + 0.9 + 0.8= 2.2 breakdown per month

= 2.2 x 600= RM 1320 per monthExpected breakdown cost per month :

Preventive cost :

= RM 1700 + (1/5 breakdown per month x RM 300)= RM 1700 + 60= RM 1760 per month

Conclusion :The manager should proceed with repair machine since it is less expensive to purchase the contract (RM 1320) to proceed service contract to preventive maintenance less (RM 1760) . The monthly saving is RM 440.

PART B (OCT 2012)Question 1 a) According to Render and Heizer (2006), production is the creation of goods and services and Operations management is the set of activities that creates goods and services through transformation of inputs and output.ServicesManufactured products

Services are intangible They are experienced They cannot be produced ahead of timeGoods are tangible They are consumed They can be touched, seen, tasted or smelled

Services cannot be kept in stock or cannot be inventoried As described in hospitality industry, We sell time. You cant put a hotel room on the shelf.Goods can be kept in stock until needed or can be inventoried They can be moved, stored and repaired and generally require physical skills and expertise during production.

Services are more likely to be unique and cannot be mass produced Just as a haircut produced for a customer may not be the same as anyone elses.Goods are usually similar and can be mass produced Due to capital-intensive (i.e.mechanized), goods can be standardized since manufacturers can carefully control the amount of variability of inputs.

b)

Question 2a) Research and development (R&D) refers to organised efforts that are directed toward increasing scientific knowledge and product or process innovation.

b) 1. Pure/Basic Research It is conducted for the advancement of scientific knowledge about a subject without any near-term expectation of commercial uses. This type of research is likely to be carried out at major scientific and technical universities such as UPM, USM and UTM and supported by various government agencies for example RISDA and FELDA.2. Applied Research It is conducted for the advancement of scientific knowledge that has specific potential commercial uses. It is more on problem-oriented research that is dedicated to discovering new concepts, ideas and materials with specific applications. Such as NST, TV3, TENAGA and PETRONAS. 3. Development Research It deals with technical activity or product-oriented research which concerns with translating basic or applied research results into products or processes.

Question 3a) Work measurement Determines how long it takes to do a job, or in other words, how much work employees can do during a specific period.b) Average observed time It is an average time a worker being observed, took to work on individual/elemental tasks from the moment of starting to the moment of finishing.c) Standard time Is the average operation tome for a job, which is obtained by adding the necessary allowances to the normal time or basic time.d) Allowance factor The extra time, expressed in a percentage of the normal working time that is allowed to workers through no fault of them, but is due to work conditions such as unavoidable delays, personal time and fatigue.

Question 4Units

Max. Inv. Level =Order Quantity, Q Demand rate

Inventorydepleted

Inventory Level

Reorder Point, ROP

Time

Receive orderPlace OrderMin. Inv. Level = 0

Lead Time, LLead Time, L

a) Maximum inventory level The maximum inventory level equals the economic order quantity, Qb) Usage rate It is a measure of the demand for product per unit of timec) Reorder point (ROP) This is the point at which you place an order for Q units, which are timed to arrive just as the inventory level reaches zero. The inventory goes from zero to Q and then is depleted at ac constant rate.d) Safety stock is a buffer added to the inventory on hand during lead timee) Lead time is known and constant. Lead time, L is the amount of time it takes from order replacement until it arrives at the manufacturing company.f) Minimum inventory level with the basic EOQ should be zero

Question 5a) Quality is defined as meeting or exceeding customer expectations, which often vary from one customer to the next. Also, the expectations of customers today may not be satisfied tomorrow as customer tastes and preference changes.b) Purpose of inspection is intended to provide information on the degree to which items conform to a standard.c) 100% inspection Total or 100 percent inspection is justified when the cost of a loss incurred by not inspecting is greater than the cost of inspection. For example, suppose a faulty item result in a RM10 loss. If the average percentage of defective items in a lot 3 percent, the expected cost of faulty items is (0.03)(RM10), or RM0.30 each. Therefore, if the cost inspecting each item is less than RM0.30, the economic decision is to perform 100 percent inspection.

MARCH 2013(PART A)QUESTION 1

Aa) 8

C 4

G F E B 5 3 4 5

I J7

H D 8 4

b) Cycle Time : Productive time/day Output per day ( units) Output per day : 420 12 : 35 unitsc) # of workstation : Sum of task times Cycle Time : 56 12

1 : 4.6667 5 units of workstation

65432d) Workstation Cycle time 12 12 12 12 12 12

Task time 12 5 11 12 12 4Idle time 0 7 1 0 0 8 = 16 minutes

e) Efficiency : Sum of task time x100 Cycle time x actual of work station : 56 x 100 12 x 6

: 77.78%

Balance delay : 100 - efficiency : 100 - 77.78% : 22.22%

7124QUESTION 2

81350

7 5 20 1a) EET LETC , 3 F , 5

6A , 11H , 2

6 d2

3 9 8 6 4B, 2D , 4E , 3G , 2I , 4

1511922

15119d1

3 1

9 8 6 4c) Critical Path : Critical Activity : B D E G I 2 4 3 2 4 = 15 weeksd) 15 weeks

11e) Total Float 9 (-)

11 9

8 6G , 2 11 - 9 - 2= 0 weeks

9 11 9Free Float (-)

11

8 6 G , 2 11 - 9 - 2 = 0 weeks

QUESTION 3

Unit Produced : Number of Workers x working days per period x standard output per day : 15 x 20 x ( 60/30 x 8 ) : 4800 units per worker per month

MONTHFORECASTDEMAND(UNITS)UNITPRODUCEDUNITEXCESSUNITSHORTAGEOVERTIMEENDINGINVENTORY

JANUARY54004800600600

FEBRUARY49504800150150

MARCH3600480012001200

APRIL52604800460740

MAY390048009001640

JUNE456048002401880

TOTAL288007505460

Total Production Cost :Regular production cost : total unit produced x regular cost per hour x hourly standard output : 28800 x 6 x (30/60) : RM 86400

Overtime : 750 x 9 x ( 30/60 ) : RM 3375Holding inventory : 5460 x 1.50 : RM 8190Total Cost : RM 97965

QUESTION 4d = 240 unitH = RM 0.50 X 12 = RM6 per yearworking day = 250 days per yearS = RM 48SS = 2D = 240 unit x 250 days = 60000 units per year

a) EOQ : 2DS/H : 2(60000)(48)/6 : 979.79 980 units per orderb) Number of order per year (N) : D/Q : ( 60000/ 980) : 61.22 61 times per yearc) Safety Stock(SS) : d x usage rate of SS : 240 (2) : 480 unitsd) ROP : d ( L + usage rate of SS) : 240 ( 5+2) : 1680 unitse) max inventory level : Q + SS : 980 + 480 :1460 unitsf) Total annual relevant cost ( TARC) : [(D/Q) X (S)] + [(Q/2) X (H)]: [(60000/980) X 48] + [( 980/2) X 6 ]: 2938.76 + 2940: RM 5878.76g) min inventory level : 480 units

h) average inventory level : Q/2 + SS : 980/2 + 480: 970 unitsQUESTION 5

cost per breakdown :RM 300limit number of breakdown : 1 per daypreventive maintenance cost : RM 130

Number of breakdown0123Total

Frequency ( days)397322

Frequency of occurrence3/22= 0.13649/22= 0.40917/22= 0.31823/22= 0.13641.0

Expected Number of Breakdown0 x 0.1364= 01 x 0.4091= 0.40912 x 0.3182= 0.63643 x 0.1364= 0.40921.4547

Expected breakdown cost : ( expected number of breakdown)(cost per breakdown) : ( 1.4547) ( 300): RM 436. 41 per daysPreventive maintenance cost : (preventive maintenance cost) + ( cost of contract term ) : 130 + ( 1 x 130) : RM 260. choose service contract because less expensive and have monthly saving , RM 176. 41 per day .

PART B QUESTION 1Four objective of operation system :i. To minimize the operational costs by reducing some fixed and variable costs can help increase the value-added of products or services.ii. To enhance productivity through efficient operation by eliminating and improving such operations decreases the cost, thereby increasing efficiency and effectiveness of operations.iii. To satisfy customers' needs and want by delivering product or service of quality standards at the affordable price and scheduled date to the customers can pledge customers' confidence and loyalty.iv. To provide better working condition as employees are the main asset of the organizations. By doing this, organizations helps their human capital to become more productive and creative.

QUESTION 2Four factors that influence layout :i. Design of facility , it should be consider overall objective set by the organization, also decision about windows, planters and also partition height to circulate airflow.ii. Optimum space needs to be allocated for process as there are vary of machines and equipment that will be used.iii. Selection of appropriate material handling such as conveyors and crane to ensure a proper safety measure to avoid mishaps.iv. Identification of the cost of moving between the various work areas. There may be unique considerations related to moving materials or the importance of certain areas being next to each other.

QUESTION 3Four factors that can affect companies when they want to locate their factories :i. Facility Costs which are the costs of acquiring a piece of land or building or renting an office space can be quantified / valued even though the cost may vary from one location to another. For example, an Office Space or a Building.ii. Proximity to suppliers and resources can be beneficial as it can reduce the transportation costs, have prompt delivery and gain guaranteed after-sale service.iii. Attractiveness of location because it determine the desirability of a community as a place for its worker and manager to live and also have facilities such as education, shopping and transportation.iv. Utility costs like telephone, energy, and water; local and state service charges and taxes are important factors too.QUESTION 4Four function of inventory in an organizations :i. Inventory should be available regardless whether they held for satisfy planned or expected demand to meet anticipated customers demand.ii. To take advantage of quantity discount as a company will purchase large amounts of inventory to take advantage of the price discount. Suppliers normally will provide discount for those who buy in large quantities.iii. Some companies produced large inventories to meet demand that is seasonal or cyclical. They build up inventories during pre-season period to smooth production requirement.iv. To permit operations as it take a certain amount of time which means they are not instantaneous. Thus there will be some WIP inventories readily to be used at the production sites, ensuring a smooth production of the finished goods.

QUESTION 5 Four reasons why maintenance is important in production :i. Avoid production or service disruptions, well maintenance equipment and machines will ensure a production system runs smoothly and operation capacity met without any glitch.ii. Not add to production or service costs because some companies have workers regularly perform maintenance on the machines they operate, thus ensuring the system is in working condition most of time, otherwise additional cost incurred.iii. Maintain high quality, for example change car's lubricant to ensure that the car condition and performance can be maintained.iv. Avoid missed delivery date because it will reduce customer satisfaction and loyalty. This can be avoid if production runs without some disruption either due to machine breakdown or to employee's absenteeism.

Sept 2013Part A

GQuestion 114

B15

A24

FJC13 9 24

ID1011

E1212

H14

Cycle Time, CT = Productive Time per dayOutput per day ( in units )

= 8 x 60 x 601152= 25sec/unit

Theoretical min. # of WS = Sum of Task TimesCycle Time (CT)

= 14625

= 5.84= 6 units

Layout using Longest Task Time Rule

Workstation 12345 6

TaskABFCEDHG I J

Task Time 24 24252425 24

Idle Time 1 1010 1(Total = 4 secs )

Efficiency = Sum of Task Times x 100CT x Actual # of WS

= 146x 10025 x 6= 97.33%

Balance Delay = 100 % - 97.33 %= 2.67 %

Cost of Idleness per week = 4 x 115260 x 60

= 1.28 hour/day

Cost of Idleness per week = 1.28 x 7.5 x 5

= RM48

Question 2

D = 150 kgWorking days = 365 daysP = RM1.90S = RM 22L = 2 daysUsage rate of ss = 4daysD = d x working days = 150kg x 365days/year = 57450 kg per year

SS = d ( usage rate of ss ) = 150 (4) = 600 kg

a) EOQ = 2DS H

= 2(54750)(22) 1.20

= 1417 kg per order

b) ROP = d ( L + usage rate of ss ) = 150 ( 2 + 4 ) = 900 kg

c) N = D/Q = 54750/1417 = 39 times per year

d) Length of times between order T = working days N = 365 39= 9.359 times

e) Total annual costTAC = annual carrying cost + annual ordering cost = ( Q/2 x H ) + ( D/Q x S ) = ( 1417/2 x 1.20 ) + ( 54750/ 1417 x 22 ) = 850.20 + 850.04 = RM 1700.24

f) Maximum inventory= Q + SS= 1417kg + 600kg= 2017 kgQuestion 3

Tangible FactorsLocation

Muar(RM)Rembau(RM)Nilai (RM)

Annual Operating Cost1,600,0001,570,0001,580,000

Ranking132

Conclusion : The best location to choose is Rembau since it has lowest operating costs.

Intangible FactorWeightMuarRembauNilai

Labour availability44162828

Government Inducement31339412

Quality of life236510510

Community Acceptace1554444

Total weighted score303134

Ranking123

Conclusion : The best location to choose is Nilai since it has highest total weighted scores.

FactorsWeightLocation

MuarRembauNilai

Tangible2123624

Intangible1112233

Total Weighted Score387

Ranking132

Conclusion :The side that should the company select is Rembau because it has the highest amount which is 8

Question 4

5

5476231

5

2210H,9

2210B, 4

8911111818A , 1E,6I,4G,7C , 3

F,2D, 7

765321Critical Path

Critical Activities A BE G I146 7 4 = 22weeks

811Total Float, activity F

911

4F, 25 11 8 2 = 1 week

118Free Float, activity F

119

4F, 25 11 8 2 = 1 week

118Independent Float, activity F

119

4F, 25 11 9 2 = 0 week

Question 5

Job element Sum of all elemental timesNumber of cycleAverage elemental times RFNormal time

110 + 12 + 15 + 10 + 14= 615 12.21.112.2 x 1.1=13.42

233 + 30 + 35 + 37= 135433.751.1533.75 x 1.15=38.81

321 + 25 + 26 + 22=94423.50.9523.5 x 0.95=22.33

The Normal Time per unit74.56

Normal time = 74.56minAllowance factor Unavoidable delay : 15minutes Rest periods : 50minutes Area clean up : 20minutes Clothes change : 10minutes

Total allowance time : 15 + 50 + 20 + 10 x 100 8 x 60= 19.79%

Standard Time := (NT)(1+ All time )= (74.56) (1 + 0.1979)= 89.32

Number of units per operator for every 8hour shift

= 8 x 60 89.32=5 units

Wage rate RM60 per day, calculate idleness per week

Idle time per unit = ( CT x Actual # WS ) sum of task time = ( 25 x 6 ) 146 = 4secsIdle time in sec per day = idle time per unit x output per day = 4 x 1152 = 4608 sec/day

Idle time in hour per day = idle time in sec/day 60 min/hr x 60 sec/min = 1.28hour/day

Idleness per week = 1.28 x RM 60/day x 5days = RM384

Part B Question 1

a) It is process of deciding on the unique characteristic and features of the companys product. Specifically, it defines a products characteristic, such as its appearance, the materials it is made of, its dimensions and tolerances, and its performance standards.

b) College-the inputs include books, research reports, videotapes, CDs, the knowledge of professors ( in our case, lecturers) and our classmates. The conversion process is not directly noticeable because it is the acquisition of knowledge and gaining of new insight; understanding relationships and improved ability to think, to evaluate situations and to make better-informed decisions. These processes are value-added. The outputs include new knowledge and insights, new research discovery and students who are better qualified to pursue future undertakings.

Hospital the inputs include medicine, surgery equipment , bed , room and the profession of doctor. The conversion process is where the nurse helping and taking care for every patient in the hospital, doctor operating and giving a medicine or an advice to the patient. The output arise when the patient getting well from their sick or disease.

Question 2

Explain four objectives of R&D To generate new ideas and concepts To find out a new idea for improving and developing these ideas and concepts into useful product

To develop new uses of the existing products To upgrade the existed products or service for meet the customers satisfaction

To develop new processes that will help reduce capital and manufacturing costs To find out new way to process the service or product at the lowest cost of manufacturing and reducing capital.

Question 3

Name and explain two types of inspection in Operations Management

100% inspection Total or 100 percent inspection is justified when the cost of a loss incurred by not inspecting is greater than the cost of inspection. For example, suppose a faulty item results in a RM10 loss. If the average percentage of defective items in a lot is 3 percent, the expected cost of faulty items is (0.03)(RM10) or each RM 0.30. Therefore, if the cost of inspecting each item is less than RM0.30, the economic decision is to perform 100 percent inspection

Sampling inspection It involves inspecting a random sample of product input such as raw materials or parts or the final product and comparing it to a quality standard. If the sample fails he comparison or the test then that is seen to imply poor quality and the entire group of items from which the sample was taken is rejected. Rejected item may be subjected to 100 percent inspections, or maybe returned to the supplier for credit or replacement.

Explain two types of maintenance

Breakdown maintenance This option is reactive, which means it deal with breakdowns or other problem when they occur. Management cannot schedule breakdowns but must deal with them on an irregular basis. Breakdown maintenance is the most effective option when it takes into account the degree of importance a piece of equipment has in the operations system, and the ability of the system to do without it for a period of time

Preventive maintenance This option is proactive, that is reduces breakdowns through a program of lubrication, adjustment, cleaning, inspection and replacement of worn parts. The goal is to reduce the incidence of breakdowns or failures in the factory or equipment to avoid the associated costs. These costs include loss of output , idle workers, schedule disruptions, injuries, damage to other equipment, products, or facilities and repairs which may involve maintaining inventories of spare parts, repair tools and equipment and repair specialists.

Question 4

Describe four objectives of layouts

Utilize space and labour efficiency-To provide optimum space to organize equipment and facilitate movement of goods and to create safe and comfortable work environment. Good Communication Facilitate communication and interaction between workers,their supervisor or workers and customers Provide flexibility to adapt to changing condition Having better control over the production cycle by having greater flexibility for changes in the design of the product. Eliminate wasted or redundant movement Reducing idle time for every workers to achieve the best time in producing product for every unit.

Question 5

Define inventory Inventory is a stock of items kept to meet demand or a stock of any items or resources used in an organization. In a broader context, inventory can include inputs such as human, financial, energy, equipment and physical items

Explain three types of inventory

Raw materials are the vendor-supplied items or purchased items that have not had any labour added, that are transformed into components or products. For instance, gold is a raw material that transformed in jewellery. Finished goods are products sold to customers such as bicycles, computers, oven and automobiles that the company sells to its customers. Distribution Inventory consists of finished goods and spare parts at various point in the distribution system for example stored in warehouse or in transit between warehouse and consumers