PRFS 4703: Production Planning and Scheduling

PRFS 4703: Production Planning and Scheduling Exam 2 Name: Directions: This exam is worth a total of 100 points. You have approximately one week to complete and return these problems. I must have this ...

PRFS 4703: Production Planning and Scheduling Exam 2 Name: Directions: This exam is worth a total of 100 points. You have approximately one week to complete and return these problems. I must have this returned in some form by 5:00 p.m. CDT, Monday, March 21, 2011. You are to submit this exam in a number of ways: 1. either to my mailbox, located within 111 Baldor Technology Center; 2. to my office, 119B Baldor Technology Center; or 3. scan the exam (as a *.pdf) and attach the assignment to email WITHIN BLACKBOARD. For those of you taking this course via distance, you may either: 1. fax your answers to me at (479) 788-7784; or 2. scan the exam (as a *.pdf) and attach the assignment to email WITHIN BLACKBOARD. In completing this assignment, please show all your work. Each problem is to be solved using the problem-solving procedures distributed via Blackboard. If a problem is solved via calculator or Microsoft Excel, please make note of this, as I cannot assign appropriate credit without understanding the work you engaged in to arrive at the answer you did. All output from any Microsoft Excel work must be submitted along with the exam. Given the method of administration, you may use your textbook and notes to complete this exam. However, you are not to use one another! There is to be no collaboration in completing this work. I have endeavored to make all questions as straightforward as possible. If you should have any questions, feel free to email me. Good luck, and have a good day! Problem 1: (20 points) Clarkson Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing, or (b) having the value analysis team complete a study. If Ed Lusk, VP for operations, proceeds with the existing prototype (option a), the firm can expect sales to be 100,000 units at $550 each, with a probability of 0.6; and a 0.4 probability of 75,000 units at $550. If, however, he uses the value analysis team (option b), the firm expects sales of 75,000 units at $750, with a probability of 0.7; and a 0.3 probability of 70,000 units at $750. Value analysis costs $100,000 and is only used in option b. Which option has the highest expected monetary value (EMV)? Problem 2: (10 points) The manager of a food processing plant desires a quality specification with a mean of 16 ounces, an upper specification limit of 16.5, and a lower specification limit of 15.5. The process has a mean of 16 ounces and a standard deviation of 1 ounce. Determine the Cpk of the process. Does this process meet specifications? Explain. Problem 3: (10 points) Church’s Chicken announces advertises its “hallelujah special,” which features chicken with 30% fewer calories than standard chicken. When the process for “hallelujah” chicken breast production is in control, the average chicken breast contains 420 calories, and the standard deviation in caloric content of the chicken breast population is 25 calories. Church’s wants to design a mean chart to monitor the caloric content of chicken breasts, where 25 chicken breasts would be chosen at random to form each sample. What are the lower and upper control limits for this chart if these limits are chosen to be four (4) standard deviations from the target? Problem 4: (20 points) Under ideal conditions, a service bay at Jiffy Lube can serve 6 cars per hour. The effective capacity and efficiency of a Jiffy Lube service bay are known to be 5.5 and 0.880, respectively. What is the minimum number of service bays Jiffy Lube needs to achieve an anticipated production of 200 cars per 8-hour day? Or, Actual Production = 0.880*5.5 = 4.84 cars per hour per bay Actual Production per day per bay would be, 4.84*8 = 38.72 cars Therefore, minimum number of service bays Jiffy Lube needs to achieve an anticipated production of 200 cars per 8-hour day would be 200/38.72 = 5.165 or 5 bays. Problem 5: (20 points) Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000; and for proposal B, $70,000. The variable cost for proposal A is $12,000; and for proposal B, $10,000. The revenue generated by each unit is $20.00. a) What is the breakeven point in units for proposal A? b) What is the breakeven point in units for proposal B? Problem 6: (20 points) The fixed and variable costs for three potential manufacturing plant sites are shown below: | Site | Fixed Costs per Year | Variable Costs per Year | Texarkana | $500 | $11 | Fort Smith | $1,000 | $7 | Tulsa | $1,700 | $4 a) Over what range of production is each location optimal? b) For a production of 200 units, which site is best? In this problem sales price per unit is not given. Assuming sales price per unit to be $12 range of optimal production are as follows –