Sample Midterm 1
Sample Midterm 1
Sample Midterm 1
Duration: 90 mins
Name:
This is a closed book, closed notes test. You are allowed to use only the cheat sheet. There are 2 sections with
multiple parts. Points are stated at (or near) the beginning of each part. The total points available are 100 (+2
points bonus). Please show all your work on the exam sheet; any work not included on the exam sheet will not
be graded. The exam has 8 pages (including cover sheet). Please count the pages and print your name on each
page.
Section I. Multiple-Choice and True-False Questions (3 pts each)
1) Service involves a much higher degree of customer contact than manufacturing. True False
Answer: TRUE
Answer: C
Answer: FALSE
4) Environmental scanning is a search for events or trends that present either threats or opportunities to the
organization. True False
Answer: TRUE
5) In an assembly operation at a furniture factory, six employees assembled an average of 450 standard dining
chairs per 5-day week. What is the labor productivity of this operation?
Answer: C
6) “If the standard deviation of interarrival time increases, then the queue size decreases in a service system.”
Is this statement correct? Explain briefly.
Section II. Quantitative Questions
Question 1 (21 points): Consider the following tasks that need to be distributed among four workers on a
conveyor-paced assembly line. Each worker must be assigned at least one task, and suppose that demand and
raw material amount is unlimited.
Worker 1: Tasks 1, 2, 3
Worker 2: Tasks 4, 5, 6
Worker 3: Tasks 7, 8, 9
a. (3 points) What is the bottleneck in this process? What is the capacity of the current line?
Total activity time for worker 1: 20+25+15=70 seconds, Capacity of worker 1: 3600/70=51.43 units/hour
Total activity time for worker 2: 20+15+20=55 seconds, Capacity of worker 2: 3600/55=65.45 units/hour
Total activity time for worker 3: 50+15+20=85 seconds, Capacity of worker 3: 3600/85=42.35 units/hour
Total activity time for worker 4: 25+15+20=60 seconds, Capacity of worker 4: 3600/60=60 units/hour
b. (3 points) How much time is required to produce 40 units of products, in steady state?
Cycle time=1/42.35 hour
c. (3 points) What is the direct labor cost for the product with the current process if each worker receives
$20/hour, expressed in dollars per unit of product?
For parts (d) and (e) assume that because of a drastically reduced forecast, the plant manager has decided to cut
staffing from four to three workers per shift.
d) (7 points) What is the maximum capacity that can be achieved if (i) the tasks are not divisible, (ii) a
worker can only perform adjacent tasks and (iii) all tasks need to be done in numerical order? Find
direct labor cost if each worker receives $20/hour.
Worker Task(s) Activity Time (sec) Capacity (units per hour)
1 1,2,3,4 90 3600/90=40 units
e) (5 points) What is the maximum capacity that can be achieved if (i) the tasks are perfectly divisible, (ii)
a worker can only perform adjacent tasks and (iii) all tasks need to be done in numerical order? Find
direct labor cost if each worker receives $20/hour. How does the direct labor cost change compared to
part (d), why?
Assume that each order consists of one dozen, Kristen has two identical ovens, and there is infinite number of
trays and unlimited empty space.
(b) (15 points) Find the capacity of each resource. Which resource is the bottleneck resource? What is the
capacity of the process?
Dish up
Packing
Payment
(c) (7 points) Assume that Kristen’s roommate receives the payment while cookies are being cooled, and then
she packs the cooled cookies. So, the new process flow is as follows:
With this new process flow, calculate the capacity of each resource and the rush order flow time. Which
resource is the bottleneck resource? What is the capacity of the process? Why?
Since cooling and payment are different tasks conducted in parallel, the capacity of each resource and capacity
of the process is the same as part (c).
Question 3. (20 points) The airport branch of a car rental company maintains a fleet of 50 SUVs. The
interarrival time between requests for an SUV is 2.4 hours, on average, with a standard deviation of 2.4 hours.
There is no indication of a systematic arrival pattern over the course of a day. Assume that, if all SUVs are
rented, customers are willing to wait until there is an SUV available. An SUV is rented, on average, for 3 days,
with a standard deviation of 1 day.
CV_a=2.4/2.4=1
CV_p=1/3
u=(1/a)/(m/p)=(1/2.4)/(50/72)=0.6
a. (5 points) What is the average number of SUVs parked in the company’s lot?
m-u*m=50-0.6*50=20 cars
b. (5 points) Through a marketing survey, the company has discovered that if it reduces its daily rental price
of $80 by $25, the average demand would increase to 12 rental requests per day and the average rental
duration will become 4 days. Is this price decrease warranted? Provide an analysis!
When the daily rental price is $80, average revenue per customer=average service time*average daily
demand*$80=3*(1/a)*$80=3*24/2.4*$80=$2400
When the daily rental price is reduced to $25, average revenue per customer==4*12*$25=$1200.
Since $2400>$1200, the company should not decrease its daily rental price to $25.
c. (5 points) What is the average time a customer has to wait to rent an SUV? What is the average number of
customers waiting for an available SUV? Please use the initial parameters rather than the information in
part (b).
Average time a customer has to wait to rent an SUV:
p √ 2 (m +1)−1 72
∗u ∗0.6 √ 2 (50+1)−1
()
2
m 50 1
2 2
∗C V a +C V p ∗12 +
1−u 1−0.6 3
T q= = =0. 019 hours
2 2
T q 0.019
Average number of customers waiting for an available SUV: I q= =
a 2.4
d. (5 points) How would the waiting time change if the company decides to limit all SUV rentals to exactly 4
days? Assume that if such a restriction is imposed, the average interarrival time will increase to 3 hours,
with the standard deviation changing to 3 hours. Please use the initial parameters rather than the
information in part (b).
The waiting time should be calculated with CVp=0, p=4 days=96 hours, a=3 hours, CV_a=3/3=1
u=(1/a)/(m/p)=(1/3)/(50/96)=0.64
Average time a customer has to wait to rent an SUV:
p √ 2 (m +1)−1 96
∗u ∗0.6 4√ 2 (50+1 )−1
m 2 2 50
∗C V a +C V p ∗12 +0 2
1−u 1−0.6 4
T q= = =0.0 46 hours
2 2
The waiting time would increase from 0.019 hour to 0.046 hours if all SUV rentals were limited to exactly
4 days. Hence, the company should not impose such a restriction.
Question 4 (14 points): Customers arrive at a mountain bike rental store in Moab, Utah, between 10am and
12pm at a rate of 12 customers per hour. From 12pm to 6pm, the arrival rate is at 6 customers per hour. The
average time it takes a staff person of the bike rental store to help a customer get set on the bike, charge their
credit card, and chat about the dangers of local riding is 50 minutes and the coefficients of variation for both the
inter-arrival time and the service time is equal to one. All customers patiently wait until they are served.
Assume there are 8 staff members working in the rental store throughout the day.
a) (5 points) How much idle time, on average, will a staff member have from 10am to 12pm?
Answer:
We know that demand exceeds capacity here because we have an average inter-arrival time of 5 minutes,
an average processing time = 50 minutes, and m=8. Therefore utilization = u = p/(ma) = 50/40 > 100%.
So, we cannot use our wait time formula to calculate wait times. Since the servers are utilized more than
100%, for all practical purposes, there is no idle time for the first two hours.
Now, assume there are 16 staff members in the store throughout the day.
b) (5 points) How long, on average, will a customer arriving at 11 am have to wait (not counting the actual
service time)?
Answer:
Now we can use our wait time formula, with a = 5 minutes, p = 50 minutes, m = 16, CV a = 1 and CVp =1.
u= p/(am) = 50/(5*16) = 0.625
c) (4 points) How much idle time, on average, will a staff member have from 12pm to 6pm?
Answer:
The average interarrival time between 12:00 pm and 6:00 pm = 10 minutes, so utilization = p / (ma) = 50 /
(16*10) = 50/160 = 31.25%. Therefore, each worker has 41.25 minutes of idle time each hour, or 247.5
minutes for 6 hours.