Operations Management

Sample Midterm 1

Please write your name:

Instructions:

1. Write your name above on this Exam paper.

2. Answer all questions in the indicated spaces on this Exam paper. Use the back of the pre-
ceding page if you need more space, and clearly indicate where your work can be found.

3. Please show all your work on this Exam paper. Your grade will depend on the clarity of
your answers, the detailed reasoning that you used and the correctness of your work and answers.

4. If the answer to a sub-question depends on the answer to a previous one, you will get full
credit if you give the right reasoning based on an incorrect previous response. Therefore do not
skip sub-questions because you could not answer the previous ones.

5. The exam is closed book, closed notes. You may use calculators but no computer or mo-
bile phone is allowed.

6. Total possible points = 100.

7. Exam duration: 1 hour and 15 minutes.

8. Stern Honor Code: “I will not lie, cheat or steal to gain an academic advantage, or toler-
ate those who do”.

Good Luck!

Problem 1 2 3 4 Total
Max 10 35 30 25 100
Points

1
1. (10 points total, 2 points each) True or False (Write your answers below each statement).

(a) As the utilization of the M/M/1 queue goes to 100%, the average waiting time of a customer
decreases to zero.

(b) The M/M/S queue assumes that customer service times are normally distributed.

(c) A Gantt chart is helpful in visualizing how an order moves through a process.

(d) According to Little’s Law, inventory is equal to throughput divided by flow time.

(e) Every point on an isoprofit line of a linear program will yield the same objective function value.

2
2. (35 points total) Suppose that Je↵, Anna and Paul are making bicycles to sell. The bicycle mak-
ing process consists of four steps: assembling the handlebars, placing the handlebars on the frame,
attaching the wheels to the frame and finally placing a kickstand on the bike. Je↵ is responsible
for assembling the handlebars, Anna is responsible for placing the handlebars on the frame and
attaching the wheels to the frame, and Paul is responsible for placing the kickstand on the bike.
The process flow diagram looks as follows.

a. (15 points) List each resource and the activities that each resource is responsible for. Also
calculate the capacity of each resource.

b. (5 points) What is the bottleneck of the process and what is the capacity of the process?

3
c. (5 points) Assuming that the process is operating at maximum capacity, calculate the utilization
of each resource.

d. (10 points) Suppose that a rush order of 2 bicycles comes to the process. How long will it take
to fill the order? You may use the Gantt chart below to help you with your answer.

4
3. (30 points total) Consider the following linear program.

maximize x1 + x2

subject to
x1  2
x2  1
x1 + 2x2  2.5
x 1 , x2 0

a. (15 points) Draw the feasible region of the above linear program and identify its corner points.

b. (5 points) Identify the optimal solution(s) to the above linear program and determine its optimal
objective function value.

5
c. (5 points) Suppose that we increase the righthand side of the first constraint by 0.1 so that
the new linear program becomes:

maximize x1 + x2

subject to
x1  2.1
x2  1
x1 + 2x2  2.5
x 1 , x2 0

What are the optimal solution and the optimal objective function value of this new linear program?

d. (5 points) What is the shadow price of the first constraint in the linear program in part a
above?

6
4. (25 points total) Target has hired 12 cashiers to work the registers in its store. Each cashier
spends on average 4 minutes checking out a customer and the length of time that a customer spends
being checked out at a cashier is exponentially distributed. On average, 120 customers arrive to
the store per hour and the inter-arrival times are exponentially distributed.

a. (5 points) Suppose that Target is considering pooling all of its cashiers together with a common
line in front of them. How many total customers should Target expect to see waiting to be checked
out (this does not count customers actually being checked out)?The Lq table (which can be found
at the end of the exam) may be useful for this question.

b. (5 points) Again suppose that Target is considering pooling all of its cashiers together with
a common line in front of them. How many total customers should Target expect to see being
checked out (this does not count customers waiting to be checked out)?

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c. (5 points) Now suppose that Target decides to have a separate line in front of each cashier and
to split the arriving stream of customers evenly between each of the cashiers. How many total cus-
tomers should Target now expect to see waiting to be checked out (this does not include customers
being checked out)?

d. (10 points) Now suppose that each customer spends an average of 30 minutes shopping around
the store before proceeding to the checkout area and assume that Target keeps the 12 separate lines
as in part c above. On average, how many customers in total should Target now expect to see in
the store?