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Question 2
Part A
Lenovo uses the ZX81 chip in some of its laptop computers. The prices for the chip during the past 12 months were as follows
Month Price per chip Month Price per chip
January \$1.80 July \$1.80
February \$1.67 August \$1.83
March \$1.70 September \$1.70
April \$1.85 October \$1.65
May \$1.90 November \$1.70
June \$1.87 December \$1.75
a) Explain what are the initial steps that you should carry out before you determine the forecast for the next 2 months
b) Use a 2-month moving average on all the data and plot the averages of the prices
c) Use a 3-month moving average and add the 3-month plot to the graph created in part (b).
d) Which is better (using the mean absolute deviation MAD) using the 2 month average or the 3 month average?
e) Compute the forecasts for each month using exponential smoothing with an initial forecast for January of \$1.80. Use a =.1, then a =.3, and finally a =.5. Using MAD which is the best?
f) Explain which of the above techniques is the most suitable for forecasting over the next few months, and derive the forecasts for January and February of the next year
Part B
Identify and describe two (2) of the methods of qualitative forecasting and the circumstances where each method might be appropriate. Using examples discuss issues with reliability and error of each method.
Notes:
Part C
The administrator of the Life-Time Insurance Company HMO, Ms. Taylor, was anxious to solve potential problems before their new clinic opened in Austin, Texas. In Buffalo, New York, where the original clinic is located, the pharmacy had been extremely busy from the beginning, and long waiting times for prescriptions to be filled presented a very real problem.
The Buffalo HMO pharmacy was modern, spacious, and well designed. The peak time for prescriptions was between 10 A.M. and 3 P.M. During this period, prescriptions would back up, and the waiting time would increase. After 5 P.M., the staff would be reduced to one pharmacist and one technician, but the two had no trouble providing very timely service throughout the evening.
Ms. Taylor became acutely aware of the long waiting times after several complaints had been lodged. Each stated that the waiting time had exceeded 1 hour. The pharmacy is staffed with five persons on duty until 5 P.M. Ms. Taylor personally studied the tasks of all the pharmacy personnel. She noted the time required to accomplish each task, and her results are listed below. The prescriptions were filled in an assembly-line fashion by two technicians and three pharmacists, and each person performed only one task.
Activity Time in Seconds
Type labels 120
Fill prescriptions 60
Check prescriptions 40
Dispense prescriptions 30
Draw a simple process flow diagram and attempt the following questions:
a) Identify the bottleneck activity, and show how capacity can be increased by using only two pharmacists and two technicians.
b) In addition to savings on personnel costs, what benefits does this arrangement have?
c) Explain if you could further improve the overall process time and efficiency. In your answer state what additional resources, if any, would be needed or if lesser resources will be required.
Notes
• Limit your answer to 500 words. This word length should exclude any tables, diagrams or figures.
Question 3
Part A
The following table details the task required to manufacture a fully portable industrial vacuum cleaner. The times in the table are in minutes. Demand forecasts indicate the need to operate with a cycle time of 10 minutes
A Attach wheels to tub - 5
B Attach motor to lid - 1.5
C Attach battery pack B 3
D Attach safety cut-off C 4
E Attach filters B 3
F Attach lid to tub A, E 2
G Assemble attachments - 3
H Function test D,F,G 3.5
I Final inspection H 2
J packing I 2
Produce a short report on the proposed layout offering the following:
a) A diagram showing the relationships among the tasks
b) The cycle time
c) Minimum number of workstations that can be formed
d) Identification of tasks in each work station using a combination of algorithmic and heuristic approaches
e) The efficiency of the line
Part B
The following table gives the map coordinates and the shipping loads for a set of cities that we wish to connect through a central hub.
City Map Coordinate (x, y) Shipping Load
A
B
C
D
E
F
G (5, 10)
(6, 8)
(4, 9)
(9, 5)
(7, 9)
(3, 2)
(2, 6) 5
10
15
5
15
10
5
a) Near which map coordinates should the hub be located?
b) If the shipments from city A triple, how does this change the coordinates? PX
Part C
a) Explain the assumptions behind the centre-of-gravity method. Discuss how the model can be used in a service facility location and the issues that can be experienced as a consequence.
b) Explain the reasons that a large volume of freight movements in Australia is by trucks rather than by train, although the latter is more efficient
Notes
Question 4
Part A
The layout in a supermarket can have a major impact on its profitability. Layout designs focus on maximising the revenue and contribution per square meter, as well as minimising the operating costs of supermarkets. In addition, customer orientated factors are also considered.
Discuss the methods that Supermarkets employ in designing their layouts in their attempts to achieve the above stated objectives. In your answer, begin with describing the basic layout used in most supermarkets. Continue by examining the various approaches or methods used for increasing profitability, reducing costs and yet attracting more customers.
Notes :
Part B
One of the products that a bottled drink manufacturer produces has a net weight of 800 grams. There is concern that some of these products actually have lesser than the stipulated 800 grams. In the past, senior management at the plant has tried to ensure that the minimum net weight is 800 grams and simply re-iterated this in their operations policy. However, they have now decided to investigate this concern, by implementing some form of quality monitoring system and requested your assistance in this exercise.
You spend some time in examining the process and notice that the bottling and packaging is highly automated. Later, you decide to use a random sampling technique where samples will be retrieved every hour and the net weight of each is determined. 3 bottles make up a sample.
A day’s data has been collated and these are represented below.
Weight of Sample in Grams
Time Unit 1 Unit 2 Unit 3
09:00 a.m. 803.4 802.1 802.9
10:00 a.m. 805.4 803.4 802.9
11:00 a.m. 803.5 805.0 802.2
12:00 p.m. 801.9 804.2 810.9
01:00 p.m. 799.0 801.1 798.1
02:00 p.m. 805.0 800.8 799.7
03:00 p.m. 803.8 800.8 803.8
04:00 p.m. 800.3 792.2 794.1
05:00 p.m. 792.8 787.8 795.8
a) Analyse the data and explain whether the automated process is under control.
b) If the process is not under control, state what recommendations you would make to senior management.
Notes
• You do not need to work out the solution in Part B. Simply explain how you would analyse the situation and make recommendations to senior management.
• Limit your answer to 350 words for Part a and another 350 words for Part b. This word length should exclude any tables, diagrams or figures
Question 5
Part A
Jack Egans newsstand uses naive forecasting to order tomorrows papers. The number of newspapers ordered corresponds to the previous day’s demands. Today’s demand for papers was 22. Jack buys the papers for \$1.00 and sells them for \$1.60, whenever there is unsatisfied demand, Jack estimates the lost goodwill costs at \$.30. Complete the accompanying table and answer the questions that follow.
Demand Probability
21 .25
22 .15
23 .10
24 .2
25 .3
Day Papers ordered Random numbers Demand Revenue
Cost Goodwill lost Net Profit
1 22 37
2 19
3 52
4 8
5 22
6 61
a) What is the demand on day 3?
b) What is the total net profit at the end of 6 days?
c) What is the lost goodwill on day 6?
d) What is the net profit on day 2?
e) How many papers has Jack ordered for day 5?
f) State what your recommendations would be to Jack Egan to maximise the profits.
Notes
• Limit your answer to 150 words. This word length should exclude any tables, diagrams or figures.
Part B
Explain how simulation can be used effectively in one of the following situations:
a) An Assembly Line where the Operations Manager has been using a technique that includes the use of heuristics, and the results yield relatively high efficiencies but does not represent an optimum outcome
b) The Reserve Bank of Australia which is seeking a better understanding of possible economic conditions in the future
Notes
• In Part A, limit your answer to 750 words. This word length should exclude any tables, diagrams or figures.