CONFIDENTIAL 1 BA/FEB 2022/OPM545

FACULTY OF BUSINESS AND MANAGEMENT

FINAL ASSESSMENT

COURSE : PRODUCTION PLANNING AND CONTROL

COURSE CODE : OPM545
EXAMINATION : FEBRUARY 2022
TIME : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of FIVE (5) questions.

2. Answer ALL questions. Start each answer on a new page.

3. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages
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 CONFIDENTIAL 2 BA/FEB 2022/OPM545

QUESTION 1

a) Capacity is defined as the throughput or number of units that a facility can receive, hold
or produce in a period of time. Differentiate between design capacity and effective
capacity in an organization.
(5 marks)

b) A repair shop has a capacity to repair 850 lorries per month. However, due to the
planned schedule maintenance of the equipment, management feels that they can repair
not more than 650 lorries per month. Last month, three of the employees were absent
for several days which resulted to only 450 lorries were repaired. Calculate the utilization
and efficiency of the repair shop.
(5 marks)

c) Explain five (5) factors that influence an organization to design its new products.

(10 marks)

QUESTION 2

a) Observed weekly sales of hammers at a town hardware store over an eight-week period
are 14, 9, 30, 22, 34, 12, 19 and 23.

i. Calculate the forecast demand for week 9 using a three-week moving average.

(4 marks)

ii. Compute the forecast demand for week 9 using exponential smoothing with a
smoothing constant of α = 0.15 if the forecast for week 4 is 22.
(5 marks)

iii. By using Mean Absolute Deviation (MAD), calculate the forecast error for the
forecasted demand that you have identified in i) and ii). Recommend and justify a
better method for the company.
(7 marks)

b) Explain the importance of forecasting on the following organizational activities:

i. Human resources
(2 marks)

ii. Supply-chain management

(2 marks)

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 CONFIDENTIAL 3 BA/FEB 2022/OPM545

QUESTION 3

a) The forecasted demand for the next 6 months for a manufacturing factory in Seremban
is as follows:

MONTH DEMAND (Units)

July 1800
August 2000
September 2400
October 2500
November 2600
December 1600

Additional information:
Previous month’s output 1900
Beginning inventory 0
Stockout cost RM55 per unit
Holding cost RM10 per unit per month
Hiring workers RM50 per unit
Laying off workers RM95 per unit
Subcontracting cost RM70 per unit
Regular production cost RM30 per unit
Overtime cost RM55 per unit

Calculate and recommend the suitable production plan based on the following
production plan:

i. Plan A - Match demand by hiring and laying off workers only.

(8 marks)

ii. Plan B - Keep a stable workforce by maintaining a constant production rate equal
to the average requirements. Allow varying inventory levels and overtime.

(10 marks)

b) Recommend the best strategy that the factory should select. Justify your answer.

(2 marks)

QUESTION 4

a) Describe four (4) JIT layout tactics that should be applied in a manufacturing company.

(10 marks)

b) JIT partnership exists when supplier and purchaser work together to remove waste
and drive down costs. Explain four (4) goals of JIT partnership.
(10 marks)

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 CONFIDENTIAL 4 BA/FEB 2022/OPM545

QUESTION 5

a) Eddy’s Freezer Repair is under a contract to repair, recondition, and/or refurbish

commercial and industrial icemakers from restaurants, frozen food processors, and
similar organizations. Eddy currently has five jobs to be scheduled, shown in the order
in which they arrive as follows:

Processing Time
Job Due (hours)
(hours)
H 20 50
I 10 35
J 50 90
K 15 35
L 55 75

Calculate sequence of the jobs according to the following priority rules and determine
the best priority rules to be used by Eddy.

i. First come first serve (FCFS)

ii. Shortest processing time (SPT)
iii. Longest processing time (LPT)

(14 marks)

b) Five jobs are waiting to be processed. Their processing times and due dates are given
below. By using the critical ratio rule, decide the sequence of jobs to be processed. All
the dates are specified as planning calendar days and assume that today’s date is 5.

Processing Job due date

Job Time (days) (days)
A 4 7
B 7 9
C 8 11
D 3 6
E 5 8

(6 marks)

END OF QUESTION PAPER

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