Scribd
Upload
217 views12 pages

Group I - Module 2 - Assignment 2

This document provides a summary of assignment questions and problems from Module 2 that are due on May 23, 2016 for Laurentian University's COMM 2055 Operations Management course. It includes summaries and solutions for 6 problems from chapters 5 and 6 relating to topics like break-even analysis, alternative selection, project scheduling, facility layout, and transportation modeling. Tables, diagrams, and calculations are provided to demonstrate the steps and reasoning for each problem.

Uploaded by

ivana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
217 views12 pages

Group I - Module 2 - Assignment 2

This document provides a summary of assignment questions and problems from Module 2 that are due on May 23, 2016 for Laurentian University's COMM 2055 Operations Management course. It includes summaries and solutions for 6 problems from chapters 5 and 6 relating to topics like break-even analysis, alternative selection, project scheduling, facility layout, and transportation modeling. Tables, diagrams, and calculations are provided to demonstrate the steps and reasoning for each problem.

Uploaded by

ivana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 12

Module 2- Assignment 2

Discussion case questions and problems


Due Date: May 23, 2016

Prepared for: Laurentian University- COMM 2055 Operations Management


Professor: Sean Romenco

Table of Contents
Case question -Shoes for Moos, page 160............................................................................ 3
Chapter 5, Problem 8, page 155........................................................................................... 3
Chapter 5, Problem 17, page 157.......................................................................................... 5
1 | Page

Chapter 6, Problem 6, page 230........................................................................................... 7


Chapter 6, Problem 11, page 231.......................................................................................... 8
Chapter 6, Problem 15, page 232.......................................................................................... 9

2 | Page

Case question -Shoes for Moos, page 160


a) How many shoes per year must Jim sell to break even?
QBEP = FC/(R v).
FC = (10,000/5) + 1,000 + 10,000 = $13,000.00
QBEP = FC/R-v = 13,000/40-20 = 650 shoes

b) What is the annual cost at the BEP found in part a?


FC + VC = 13,000 + (650 x 20) = 26,000.00

c) If Jim could sell 2,000 shoes per year, should he go ahead with this venture? Why?
Q = 2,000
P = Q (R-v) FC = 2000 (40 20) 13,000 = 27,000
Jim should go ahead with this venture if he could sell 2000 shoes as profit would be
$27,000.00.

Chapter 5, Problem 8, page 155


a) If the manager anticipates an annual demand of 10,000 units, which alternative
would be best from a cost standpoint? For 60,000 units, which alternative would be
best?
Alternative
Internal 1
Internal 2
Vendor A
Vendor B

Fixed Cost (FC)


$200,000.00
$240,000.00
$0
$0

Variable Cost per unit (v)


$16.00/unit
$14.00/unit
$20.00/unit up to 30,000 units
$22 for 1000 units or less
$18.00 for all units if demand
> 1000 units

Vendor C

$0

$21.00 for first 1000 units


and $19.00/unit for additional
units
3 | Page

Total Cost (TC) for Q =10,000 units


Internal 1: 200,000 + (16 x 10000) = 360,000
Internal 2: 240,000 + (14 x 10000) = 380,000
Vendor A: 20 x 10000 = 200,000
Vendor B: 18 x 10000 = 180,000 (best alternative)
Vendor C: 21 x 1000 + 19 x 9000 = 192,000
At 10,000 units, the manager should choose vendor B as best alternative.
Total Cost (TC) for Q =60,000 units
Internal 1: 200,000 + (16 x 60000) = 1,160,000.00
Internal 2: 240,000 + (14 x 60000) = 1,080,000.00 (best alternative)
Vendor A: N/A
Vendor B: 18 x 60000 = 1,080,000.00 (best alternative)
Vendor C: 21 x 1000 + 19 x 59000 = 1,142,000.00
At 60,000 units, the manager can choose internal 2 or vendor B as best alternative.

b) Determine the range for which each alternative is best. Are there any alternatives
that are never best? If so, which ones?
Units
0
1000
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
110000

Internal 1
200,000
216,000
360,000
520,000
680,000
840,000
1,000,000
1,160,000
1,320,000
1,480,000
1,640,000
1,800,000
1,960,000

Internal 2
240,000
254,000
380,000
520,000
660,000
800,000
940,000
1,080,000
1,220,000
1,360,000
1,500,000
1,640,000
1,780,000

Vendor A
0
20,000
200,000
400,000
600,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Vendor B
0
22,000
180,000
360,000
540,000
720,000
900,000
1,080,000
1,260,000
1,440,000
1,620,000
1,800,000
1,980,000

Vendor C
0
21,000
192,000
382,000
572,000
762,000
952,000
1,142,000
1,332,000
1,522,000
1,712,000
1,902,000
2,092,000

4 | Page

Range(units
)
1-1000
1001-60000
>60000

Best
Alternative
Vendor A
Vendor B
Internal 2

Internal 1 and Vendor C are never the best alternatives.

Chapter 5, Problem 17, page 157

Cost of tin cans Purchased


Manufactured tin cans @
plant
Building expansion
Equipment
Variable production cost
Useful life

Toronto Plant
$6.00/case of 48

U.S. Plant
$5.00/case

$2.0 Million
$12 Million
$5.50/case
10 years

a) Calculate the annual fixed cost of the canning line


FC = 2,000,000 + 12,000,000
FC = 14,000,000
Annual FC = 14,000,000 / 10
Annual FC = $1,400,000

b) Calculate the annual break-even quantity between buying and making the cans in-house
QBEP = FC/(Vb Vm)
QBEP = $1,4000,000/($6.00-$5.50)
QBEP = 2,800,000 cases per year
Therefore; the break-even quantity between buying and making the cans in-house is 2,800,000
cases per year.

5 | Page

c) If annual requirements at the Toronto plant was 5 million cases of can, determine which
option is better, buying or making

Therefore; based on the above calculation, it is more cost effective to make versus buy as the
total cost to make 5 million cans is $28,900,000 versus $30,000,000 to buy.

Make vs. Buy


(in 000's)

0.50

1.00

1.50

2.00

2.50

Total Cost of making

3.00

3.50

4.00

4.50

5.00

Total Cost of buying

6 | Page

Chapter 6, Problem 6, page 230


a) Draw the precedence network
.2
B

.9

.2

.6
D

.1

.1

.4
G

.2

.3

.7

.2

.1

b) Assign tasks to workstations.


Workstat
ion
1

Time
Left
1.5
1.4
1.2
0.3
0.2

Eligib
le
A&E
B&E
B
C
D

Will
fit
A&E
E
B
C

1.5
0.9
0.7
0.3
0.2
0

D
F
G
H
I
J

D
F
G
H
I

1.5
0.8
0.5
0.3

J
K
L

J
K
L

Time

Idle
Time

A (.1)
B (.2)
C (.9)
E (.1)

0.2

D (.6)
F (.2)
G (.4)
H (.1)
I (.2)

J (.7)
K (.3)
L (.2)

0.3
0.5

c) Percentage idle time= (Sum of idle times per unit/ Nactual x cycle time) x 100

7 | Page

= [.5/ (3 x 1.5)] x 100= 11.1%

Chapter 6, Problem 11, page 231

Degrees of closeness:
A -Absolutely necessary

E Very Important

X -Undesirable

1- 3, 8 (Count=2)
2 - 7 (Count =1)
3- 1, 5, 6, 8 (Count=4) 2nd Priority
4- 5, 8 (Count=2)
5- 3, 4, 7, 8 (Count=4) 3rd Priority
6- 3, 8 (Count=2)
7- 2, 5 (Count=2)
8- 1, 3, 4, 5, 6 (Count=5) 1st Priority

1- 6 (Count=1)
2 6, 8 (Count=2)
7- 8 (Count=1)
8- 7 (Count=1)

1 not with 2
2 not with 4
1 not with 7

Floor Plan based on set priorities:


4

8 | Page

Chapter 6, Problem 15, page 232


A
1
C
6
F
7
Department
Pairs
1st
2nd
8-7
7-8
8-6
6-8
8-5
5-8
8-4
4-8
8-3
3-8
8-2
2-8
8-1
1-8
7-1
1-7
7-2
2-7
7-3
3-7
7-4
4-7
7-5
5-7
7-6
6-7
6-5
5-6
6-4
4-6
6-3
3-6
6-2
2-6
6-1
1-6
5-4
4-5
5-3
3-5
5-2
2-5
5-1
1-5
4-3
3-4
4-2
2-4
4-1
1-4
3-2
2-3
3-1
1-3
2-1
1-2

B
5
D
4
G
8

E
3
H
2
Work
Flow
1st 2nd
0
20
0
20
0
10
20 170
0
200
0
120
0
0
0
0
45
0
20
0
50
0
0
40
40
10
0
10
70
0
40
0
80
35
0
135
180 10
100 10
40
0
5
365
240 110
110 10
0
90
220 140
0
5
0
10

Total

20
20
10
190
200
120
0
0
45
20
50
40
50
10
70
40
115
135
190
110
40
370
350
120
90
360
5
10

9 | Page

Departmen
t

Numb
er of
loads
to:

2
:
3
:
4
:
5
:
6
:
7
:
8
:
1
:
3
:
4
:
5
:
6
:
7
:
8
:
1
:
2
:
4
:
5
:
6
:
7
:
8
:

10

Locati
on

Loads*Dist
ance

90

10
0
11
0
80

365

40

135

40

125

60

12
0

140

40

10

50

45

$
1,575

40

$
4,800

220

40

110

50

10

90

$
8,800
$
5,500
$
900

Distan
ce
betwe
en
Cente
rs:
G

$
1,000
$
550
$
7,200
$
14,600
$
5,400
$
7,500

D
$
5,600
$
500

0
35
0
120
0

0
0
200

$
200
10 | P a g e

1
:
2
:
3
:
5
:
6
:
7
:
8
:
1
:
2
:
3
:
4
:
6
:
7
:
8
:
1
:
2
:
3
:
4
:
5
:
7
:
8
:
1
:
2
:
3
:

110
240

60

$
14,400

40

$
6,800
$
700
$
2,400
$
4,000

10
0
0
170
5

40

14
0
60

100

40

10

40

13
0
60

10

12
0

80

40

40

70

70

45

10

85

20

90

180

$
1,300
$
2,400
$
1,200

C
$
3,200
$
2,800
$
3,150

$
850
$
1,800

45
20

11 | P a g e

4
:
5
:
6
:
8
:
1
:
2
:
3
:
4
:
5
:
6
:
7
:

50

40

$
2,000

0
40
20
0

0
0
20
0
0
0
Total

$
111,125

12 | P a g e

You might also like