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Assignment 1

This document contains 7 questions for a term assignment on operations management. Question 1 provides production data on units, labor costs, material costs, and overhead costs for a process over 4 weeks and asks about multifactor productivity and labor productivity. Question 2 provides sales data for irons and ironing board covers over 4 years and asks to develop a linear regression model and calculate the coefficient of correlation. Question 3 provides sales history data for water heaters over 6 periods and asks to use different forecasting methods to predict demand for periods 5 and 6. Question 4 provides a 6 month forecast and asks to develop an aggregate production plan. Question 5 provides a product structure tree and asks to develop an MRP for multiple products. Question 6 provides gross requirements

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43 views

Assignment 1

This document contains 7 questions for a term assignment on operations management. Question 1 provides production data on units, labor costs, material costs, and overhead costs for a process over 4 weeks and asks about multifactor productivity and labor productivity. Question 2 provides sales data for irons and ironing board covers over 4 years and asks to develop a linear regression model and calculate the coefficient of correlation. Question 3 provides sales history data for water heaters over 6 periods and asks to use different forecasting methods to predict demand for periods 5 and 6. Question 4 provides a 6 month forecast and asks to develop an aggregate production plan. Question 5 provides a product structure tree and asks to develop an MRP for multiple products. Question 6 provides gross requirements

Uploaded by

Kitty
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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OPER 3006

Term Assignment #1
Winter 2024
7 Questions
Question 1:
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour including
benefits. The accounting department provided the following information about the process for the
past four weeks:

Week 1 Week 2 Week 3 Week 4

Units produced 1,250 1325 1092 981

Labour ($) 15,465 16,399 10,603 9,526

Material ($) 19,854 21,342 20,442 18,364

Overhead ($) 7,936 8,107 8,736 7,848

a) Use the multifactor productivity ratio to see whether recent process improvements had any effect
and, if so, when the effect was noticeable.
b) Has labor productivity changed? Use the labor productivity ratio to support your answer
(calculate labor productivity as unit per labour-hour).

Question 2:
Use linear regression to develop a predictive model for demand for ironing board covers based on
sales of irons.
Year Sales of Irons (000) Demand for Covers (000)
1 8 5
2 7 2
3 12 7
4 9 6

a) Develop the equation.


b) What is the coefficient of correlation for this data?
Question 3:
Marie Bain is the production manager at a company that manufactures hot water heaters. Marie needs
a demand forecast for the next few years to help decide whether to add new production capacity. The
company's sales history (in thousands of units) is shown in the table below.

a) Use 2 year moving average to forecast the demand for periods 5 and 6.
b) Use three-year weighted moving average with weight 3, 2, 1 (largest weight is for the most
recent data) to forecast the demand for periods 5 and 6.
c) Use exponential smoothing with smoothing constant of 0.2 to forecast the demand for periods
5 and 6, assuming the forecast for period 4 is 15.
d) Use trend-adjusted exponential smoothing to forecast the demand for periods 5 and 6, assuming
α=0.2, β=0.4, S3=15, and T3=1.
e) What is the most accurate method?

Question 4:
4. A manager has prepared a forecast of expected aggregate demand for the next six months.
Develop an aggregate production plan to meet this demand given this additional information: A
level production rate of 100 units per month will be used. Backorders are allowed, and they are
charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month.
Determine the cost of this plan if regular time cost is $20 per unit and beginning inventory is zero.
Month Forecast
1 100
2 80
3 120
4 120
5 100
6 80
Question 5:
The following figure shows the product structure tree of product A.

The company requires 200 units of product A in period 8 and 150 units in period 6. The on hand
inventory for products A, B, C, D and E are 50, 150, 40, 100, 70 respectively. The lead times for
products A, B, C, D and E are 1, 0, 2, 1, 1. Develop the MRP and specify gross and net
requirements, projected on-hand, planned order receipts, and planned order release for all the
products. Assume we use lot-for-lot ordering for all the products and not safety stock is required.

Question 6:
A company wants to develop an MRP for a single product that they have and they want to use
part-period method to determine their lot sizes (planned order receipt). Assume the ordering cost
is $160 and unit holding cost is $2 per period. In addition, the lead time is 1 period, and at the
beginning, there are 20 units of inventory on hand. The gross requirements for this product are as
follows:
Product Periods
1 2 3 4 5 6
Gross Requirements 10 20 60 10 30 10

Develop the MRP plan for this product and report projected on-hand, net requirements, planned
order receipts and planned order releases (no safety stock is required).

Question 7:
A production system uses kanban cards to control production and movement of parts. One work
centre uses an average of 40 pieces per hour of a certain part. Standard containers hold 10 parts.
The waiting time for parts containers is about 36 minutes. Management has assigned a safety
factor of .20 to this work centre. How many containers should be used to support this operation?

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