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2nd Practice 2310 MT2

The document provides data on the activities, predecessors, normal and crash times and costs for a project network. It asks to manually crash the network for 3 months, indicating the final critical path, crashed activities and optimal crashing cost. It also provides two other questions on concession stand pizza ordering and a textile mill safety compliance project.

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raymond
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100 views4 pages

2nd Practice 2310 MT2

The document provides data on the activities, predecessors, normal and crash times and costs for a project network. It asks to manually crash the network for 3 months, indicating the final critical path, crashed activities and optimal crashing cost. It also provides two other questions on concession stand pizza ordering and a textile mill safety compliance project.

Uploaded by

raymond
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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QUESTION 1

The following table provides the crash data for the network of a project provided below:

Activity Time Activity Cost


(months) ($I,OOOs)
Activity PredecessorActivity Normal Crash Normal Crash
A 8 5 $700 $1,200
B - 10 9 1,600 2,000
C A 9 7 900 1,500
D A 4 2 500 700
E B 6 4 500 900
F B 5 4 500 800
G C 7 5 700 1,000
H D, E 15 14 1,400 2,000
I E,F 12 10 1,800 2,300
J G, H 18 14 1,400 3,200
K I 4 3 500 800
L J, K 7 6 800 1,400

Manually crash the network for 3 months. Indicate the final critical path(s) activities, the activities
crashed, and the optimal cost of crashing the network. (DO NOT USE LINEAR
PROGRAMMING)

QUESTION 2

The concession stand at the Métiers High School stadium sells pizza during soccer
games which lasts for about 6 hours for all the teams. Concession stand sales are a
primary source of revenue for high school athletic programs, so the athletic director
wants to sell as much food as possible. However, any pizza not sold is given away free
to the players, coaches, and referees, or it is thrown away. The athletic director wants to
optimum order quantity that will meet the demand for pizza. Pizza sales are uniformly
distributed, with a minimum of 50 pizzas and maximum of 90 pizzas during the 6 hours.
Pizzas cost $4.50 each. If the selling price of each pizza is $10?

a. What is the optimum order quantity? (0 decimal points)


b. What should the selling price of each pizza be in order to have a 98% pizza availability
service level?
QUESTION 3

The Stone River Textile Mill was inspected by OSHA and found to be in violation of a
number of safety regulations. The OSHA inspectors ordered the mill to alter some
existing machinery to make it safer (add safety guards, etc.); purchase some new
machinery to replace older, dangerous machinery; and relocate some machinery to
make safer passages and unobstructed entrances and exits. OSHA gave the mill only 30
weeks to make the changes; if the changes were not made by then, the mill would be
fined $500,000.

The mill determined the activities in a CPM/PERT network that would have to be
completed and then estimated the indicated activity times, as shown in the following
table:

Time Estimates (weeks)


Most
Activity PredecessorActivity Optimistic Probable Pessimistic
a 1 2 3
b - 2 5 8
c - 1 3 5
d a 4 10 25
e b 3 7 10
f b 10 15 20
g a, c 5 9 13
h d, e 2 3 4
i d, e, f 1 4 7
J e, f, g 2 5 9
k h, i, j 2 2 4

Construct the project network for this project and determine the following:

a. Expected activity times (1 decimal point)


b. Earliest and latest activity times and activity slack
c. Critical path(s)
d. Expected project duration and variance
e. The probability that the mill will be fined $500,000 (2 decimal points)

2
QUESTION 4

Northern Distributors is a wholesale organization that supplies retail stores with lawn
care and household products. One building is used to store Neverfaillawn mowers. The
building is 8 metres wide by 12 metres deep by 3 metres high. Anna Young, manager of
the warehouse, estimates that about 60% of the warehouse can be used to store the
Neverfaillawn mowers. The remaining 40% is used for walkways and a small office.
Each Neverfaillawn mower comes in a box that is 2 metres by 1 metre by 0.6 metres
high. The annual demand for these lawn mowers is 12 000, and the ordering cost for
Northern Distributors is $30 per order. It is estimated that it costs Northern $2 per lawn
mower per year for storage. Northern Distributors is thinking about increasing the size of
the warehouse. The company can only do this by making the warehouse deeper. At the
present time, the warehouse is 12 metres deep. Remember that only 60% of the total
area can be used to store Neverfaillawn mowers.

a) How many metres of depth (1 decimal points) should be added on to the warehouse
to minimize the annual inventory costs?

b) How much more should the company be willing to pay annually for this additional
lease?

QUESTION 5

For a company, the annual demand is 8000 units. The annual production rate is 32,000
units. Setup costs are $200 each time and inventory holding cost rate is 25% per year.
The production set up time is 3 days and there are 250 working days in a year. Cost of
producing a unit is $11.00

a. Determine the optimal order quantity (0 decimal points), the total annual inventory
cost, the number of production runs per year, the length of the production run, and
the maximum inventory level.

b. If the company can buy these units from an outside supplier for $12 each, what is the
net benefit/ loss to the company at the ordering cost of $28 per order?

Question 6

A company is contemplating to switch from its continuous-reorder method to a periodic-


review method. The following information is available: Lead time is 5 working days and
the company works 300 days a year. Currently the lead time demand with a normal
distribution has a mean of 110 units and a standard deviation of 20 units. Under a
periodic review method with a 10 days review period during which the demand for the
review period and lead time, with a normal distribution, has a mean of 330 units and a
standard deviation of 35 units. The inventory item costs $7.50 each and the holding cost
rate is 22%. The company wishes to tolerate the risk of a maximum of one percent
stockout per year. Ordering costs are $25 each. What is the net savings / loss for
switching the system? How often will the company face a stockout under each method?

3
AREAS FOR THE STANDARD NORMAL DISTRIBUTION

z .00 .01 .02 .03 .04 .05 .06 .07 .08 .09
0.0 .0000 .0040 .0080 .0120 .0160 .0199 .0239 .0279 .0319 .0359
0.1 .0398 .0438 .0478 .0517 .0557 .0596 .0636 .0675 .0714 .0753
0.2 .0793 .0832 .0871 .0910 .0948 .0987 .1026 .1064 .1103 .1141
0.3 .1179 .1217 .1255 .1293 .1331 .1368 .1406 .1443 .1480 .1517
0.4 .1554 .1591 .1628 .1664 .1700 .1736 .1772 .1808 .1844 .1879
0.5 .1915 .1950 .1985 .2019 .2054 .2088 .2123 .2157 .2190 .2224
0.6 .2257 .2291 .2324 .2357 .2389 .2422 .2454 .2486 .2517 .2549
0.7 .2580 .2611 .2642 .2673 .2704 .2734 .2764 .2794 .2823 .2852
0.8 .2881 .2910 .2939 .2967 .2995 .3023 .3051 .3078 .3106 .3133
0.9 .3159 .3186 .3212 .3238 .3264 .3289 .3315 .3340 .3365 .3389
1.0 .3413 .3438 .3461 .3485 .3508 .3531 .3554 .3577 .3599 .3621
1.1 .3643 .3665 .3686 .3708 .3729 .3749 .3770 .3790 .3810 .3830
1.2 .3849 .3869 .3888 .3907 .3925 .3944 .3962 .3980 .3997 .4015
1.3 .4032 .4049 .4066 .4082 .4099 .4115 .4131 .4147 .4162 .4177
1.4 .4192 .4207 .4222 .4236 .4251 .4265 .4279 .4292 .4306 .4319
1.5 .4332 .4345 .4357 .4370 .4382 .4394 .4406 .4418 .4429 .4441
1.6 .4452 .4463 .4474 .4484 .4495 .4505 .4515 .4525 .4535 .4545
1.7 .4554 .4564 .4573 .4582 .4591 .4599 .4608 .4616 .4625 .4633
1.8 .4641 .4649 .4656 .4664 .4671 .4678 .4686 .4693 .4699 .4706
1.9 .4713 .4719 .4726 .4732 .4738 .4 7 44 .4750 .4756 .4761 .4767
2.0 .4772 .4778 .4 783 .4 788 .4793 .4 798 .4803 .4808 .4812 .4817
2.1 .4821 .4826 .4830 .4834 .4838 .4842 .4846 .4850 .4854 .4857
2.2 .4861 .4864 .4868 .4871 .4875 .4878 .4881 .4884 .4887 .4890
2.3 .4893 .4896 .4898 .4901 .4 904 .4906 .4909 .4911 .4913 .4916
2.4 .4918 .4920 .4922 .4925 .4927 .4929 .4931 .4932 .4934 .4936
2.5 .4938 .4940 .4941 .4943 .4945 .4946 .4948 .4949 .4951 .4952
2.6 .4953 .4955 .4956 .4957 .4959 .4960 .4961 .4962 .4963 .4964
2.7 .4965 .4966 .4967 .4968 .4969 .4970 .4971 .4972 .4973 .4974
2.8 .4974 .4975 .4976 .4977 .4977 .4978 .4979 .4979 .4980 .4981
2.9 .4981 .4982 .4982 .4983 .4984 .4984 .4985 .4985 .4986 .4986
3.0 .4987 .4987 .4987 .4988 .4988 .4989 .4989 .4989 .4990 .4990

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