EIN 6336 HW Solution V12 (9-16-2016)

Chapter 2 HW Solution:

3.
Week / Output / Number of
Workers / Material
(lbs.) / Labor Cost / Overhead Cost / Material Cost / Total Cost / MFP
1 / 30,000 / 6 / 450 / 2,880 / 4,320 / 2,700 / 9,900 / 3.03
2 / 33,600 / 7 / 470 / 3,360 / 5,040 / 2,820 / 11,220 / 2.99
3 / 32,200 / 7 / 460 / 3,360 / 5,040 / 2,760 / 11,160 / 2.89
4 / 35,400 / 8 / 480 / 3,840 / 5,760 / 2,880 / 12,480 / 2.84

Notes:

Labor Cost = Number of Workers x 40 hours x $12/hour

Overhead Cost = Labor Cost x 1.50

Material Cost = Material (lbs.) x $6/lb.

Total Cost = Labor Cost + Overhead Cost + Material Cost

Multifactor Productivity (MFP) = Output / Total Cost (rounded to two decimals)

Multifactor productivity dropped steadily from a high of 3.03 to a low of 2.84.

(The week one has the highest productivity)

5. Without scrap the output can be 80 pieces per hour

The increase in productivity would be 80 – 72 = 8 pieces per hour.

This would amount to an increase of (8 / 72) = 11.1%.

(The productivity would increase by 11.1%, by eliminating scrap)

6.  Current period productivity =

Previous period productivity =

Thus, there was an increase of 4.44% in productivity.

Chapter 3 HW Solution:

4. Given:

Week / Requests
1 / 20
2 / 22
3 / 18
4 / 21
5 / 22

a. Naïve approach forecast for Week 6 = Demand in Week 5 = 22

b. Four-period moving average forecast for Week 6:

(round to two decimals)

c. Exponential smoothing with alpha = 0.30 and a Week 2 Forecast = 20 (round to two decimals):

F3 = 20 + 0.30(22 – 20) = 20.60

F4 = 20.60 + 0.30(18 – 20.6) = 19.82

F5 = 19.82 + 0.30(21 – 19.82) = 20.17

F6 = 20.17 + 0.30(22 – 20.17) = 20.72

8. a. There appears to be a long-term upward increasing trend in the data. If we use an averaging technique, the forecast will underestimate when data values increase.

b.

t / Y / t*Y / t2
1 / 405 / 405 / 1
2 / 410 / 820 / 4
3 / 420 / 1,260 / 9
4 / 415 / 1,660 / 16
5 / 412 / 2,060 / 25
6 / 420 / 2,520 / 36
7 / 424 / 2,968 / 49
8 / 433 / 3,464 / 64
9 / 438 / 3,942 / 81
10 / 440 / 4,400 / 100
11 / 446 / 4,906 / 121
12 / 451 / 5,412 / 144
13 / 455 / 5,915 / 169
14 / 464 / 6,496 / 196
15 / 466 / 6,990 / 225
16 / 474 / 7,584 / 256
17 / 476 / 8,092 / 289
18 / 482 / 8,676 / 324
171 / 7,931 / 77,750 / 2,109

Round b & a to two decimals:

Forecasted demand for the next three week (round to two decimals):

Y19 = 397.01 + (4.59)(19) = 484.22

Y20 = 397.01 + (4.59)(20) = 488.81

Y21 = 397.01 + (4.59)(21) = 493.40

13. Given:

Quarter / Year 1 / Year 2 / Year 3 / Year 4
1 / 2 / 3 / 7 / 4
2 / 6 / 10 / 18 / 14
3 / 2 / 6 / 8 / 8
4 / 5 / 9 / 15 / 11

SA method (round season averages to three decimals and seasonal relatives to two decimals):

Quarter / Year 1 / Year 2 / Year 3 / Year 4 / Season Average / Seasonal Relative
1 / 2 / 3 / 7 / 4 / 4.000 / 0.50 (4.000/8.000)
2 / 6 / 10 / 18 / 14 / 12.000 / 1.50 (12.000/8.000)
3 / 2 / 6 / 8 / 8 / 6.000 / 0.75 (6.000/8.000)
4 / 5 / 9 / 15 / 11 / 10.000 / 1.25 (10.000/8.000)
8.000
Overall Average

Sum of Seasonal Relatives = 0.50 + 1.50 + 0.75 + 1.25 = 4.00

Chapter 5 HW Solution:

1. a.

b.

c. This is not necessarily true. If the design capacity is relatively high, the utilization could be low even though the efficiency was high.

5. Demand = 30,000 = Q

FC = $25,000

VC = $.37/pen

a. Revenue = $1.00/pen

Breakeven Point:

b. Target profit = $15,000 @ demand of 30,000,

Solving for Rev:

Rev = $1.71 [rounded up]

11. a. Given: 10 hrs. or 600 min. of operating time per day per machine.

250 days x 600 min. = 150,000 min. per year operating time per machine.

Machine purchase costs: A = $40,000; B = $30,000; C = $80,000.

Total processing time by machine
Product / A / B / C
1 / 48,000 / 64,000 / 32,000
2 / 48,000 / 48,000 / 36,000
3 / 30,000 / 36,000 / 24,000
4 / 60,000 / 60,000 / 30,000
Total / 186,000 / 208,000 / 122,000

Options:

Buy two A machines at a total purchase cost of 2 x $40,000 per machine = $80,000.

Buy 2 B machines at a total purchase cost of 2 x $30,000 per machine = $60,000.

Buy 1 C machine at a total purchase cost of $80,000 for one machine.

Conclusion: We should buy 2 of the B machines at a total cost of $60,000.

b. Given: Operating Costs: A = $10/hour/machine; B = $11/hour/machine; C = $12/hour/machine.

Total cost for each type of machine:

A (2): 186,000 min. / 60 min./hour = 3,100.00 hrs. x $10 = $31,000 + $80,000 = $111,000

B (2): 208,000 min. / 60 min./hour = 3,466.67 hrs. x $11 = $38,133 + $60,000 = $98,133

C(1): 122,000 min. / 60 min./hour = 2,033.33 hrs. x $12 = $24,400 + $80,000 = $104,400

Conclusion: Buy 2 Bs—these have the lowest total cost.

Chapter 6 HW Solution

11. Determine if the department locations shown below are appropriate. If not, modify the assignments.

2 / 5 / 4
1 / 8 / 6
7 / 3

Check whether the following conditions have been satisfied:

A Links / X Links / E Links / I Links
1-3 / 1-2 (no) / 1-6 (no) / 3-7
1-8 / 1-7 (no) / 2-6 (no)
2-7 (no) / 2-4 / 2-8
3-5 (no) / 7-8
3-6
3-8
4-5
4-8
5-7 (no)
5-8
6-8

Next, re-arrange departments to determine if all conditions can be satisfied. We will start with our table of links shown below.

A Links / X Links / E Links / I Links
1-3 / 1-2 / 1-6 / 3-7
1-8 / 1-7 / 2-6
2-7 / 2-4 / 2-8
3-5 / 7-8
3-6
3-8
4-5
4-8
5-7
5-8
6-8

Rather than drawing clusters, we can start with a blank layout and then try to satisfy the A and the X conditions above. After that, we can shift departments around to satisfy E conditions followed by I conditions.

Looking at the A links, we can see that Department 8 appears most frequently, followed by Departments 3 & 5, Departments 1, 4, 6, & 7, and then Department. 2. Department 8 is a good candidate for a center position. We can try to satisfy those conditions in order in our layout, shifting departments around to meet all A and X conditions. After that, we can shift departments more if needed using trial and error to meet E conditions and then I conditions.

The layout below satisfies the A and the X conditions. It does not satisfy one E condition (1-6) and the single I condition (3-7).

1 / 5 / 4
3 / 8 / 7
6 / 2

13. Given: We must arrange departments in a 3 x 3 grid, and Department 5 must be located in the lower left corner (shown in the shaded area in the layout).

We start by placing the Muther grid information into a table.

A Links / X Links / E Links / I Links
1-3 / 1-2 / 1-4 / 2-4
1-7 / 1-6 / 1-9
1-8 / 2-3 / 2-9
2-5 / 3-4 / 3-7
2-6 / 3-6 / 4-8
2-7 / 3-8 / 6-7
3-9 / 4-5
4-6 / 4-9
4-7 / 5-6
5-7 / 5-8
5-9 / 6-9
7-8 / 8-9
7-9

Looking at the A links, we can see that that Department 7 appears most frequently followed by Departments 1, 2, 5, & 9, and then Departments 3, 4, 6, & 8.

Department 7 is a good candidate for a central location. Then, we satisfy the remaining A conditions along with the X conditions. After that, we can use trial and error to move departments around to satisfy the E and I conditions.

The layout below satisfies all conditions.

3 / 1 / 8
9 / 7 / 4
5 / 2 / 6

Chapter 7 HW Solution

1. Given: Average time = 10.40 minutes. Standard deviation = 1.20 minutes for a worker with a performance rating of 125%. Assume an allowance of 16% of job time.

Standard Time = Normal Time x Allowance Factor

ST = NT x AF

NT = Observed Time x Performance Rating

NT = OT x PR = 10.4 x 1.25 = 13.00 minutes (round to 2 decimals)

AFjob = 1 + A, where A = Allowance % based on job time

AFjob = 1 + .16 = 1.16

ST = NT x AFjob = 13.0 minutes x 1.16 = 15.08 minutes (round to 2 decimals)

1. / Average time per cycle (OT) = 10.4 minutes
Standard deviation (s) = 1.2 minutes
Performance rating (PR) = 1.25
Job time allowance = 16%
AFjob = 1+A= 1.16
Normal time (NT):
NT = OT x PR = 10.4 x 1.25 = 13.0 minutes

Standard time (ST)

ST = NT x AFjob = 13.0 x 1.16 = 15.08 minutes

2. Given: Average time = 1.2 minutes per piece. Performance rating = 95%. Workday allowances = 10%.

a.  Observed Time (OT) = 1.2 minutes

b.  Normal Time (NT):

NT = Observed Time x Performance Rating

NT = OT x PR = 1.2 x .95 = 1.14 minutes (round to 2 decimals)

c.  Standard Time:

Standard Time = Normal Time x Allowance Factor

ST = NT x AF

A = .10 of work time

(round to 3 decimals)

ST = NT x AFday = 1.14 minutes x 1.111 = 1.27 minutes (round to 2 decimals)

2. / OT = 1.2 minutes
Performance rating (PR) = .95
Workday allowance (A) = 10%
a. / OT = 1.2 minutes
b. / NT = OT x PR = 1.2 x .95 = 1.14 minutes
c. / ST = NT x AFday = 1.14 x 1.111 = 1.27 minutes

3. Given: A time study was conducted of a job with four elements. The observed times and performance ratings for six cycles are shown in the table below. Allowance factor = 15% of job time.

OBSERVATIONS (minutes per cycle)
Element / PR / 1 / 2 / 3 / 4 / 5 / 6
1 / .90 / 0.44 / 0.50 / 0.43 / 0.45 / 0.48 / 0.46
2 / .85 / 1.50 / 1.54 / 1.47 / 1.51 / 1.49 / 1.52
3 / 1.10 / 0.84 / 0.89 / 0.77 / 0.83 / 0.85 / 0.80
4 / 1.00 / 1.10 / 1.14 / 1.08 / 1.20 / 1.16 / 1.26

a.  Average cycle time (OT) for each element (round to 2 decimals):

OBSERVATIONS (minutes per cycle)
Element / 1 / 2 / 3 / 4 / 5 / 6 / Average (OT) (min.)
1 / 0.44 / 0.50 / 0.43 / 0.45 / 0.48 / 0.46 / 0.46
2 / 1.50 / 1.54 / 1.47 / 1.51 / 1.49 / 1.52 / 1.51
3 / 0.84 / 0.89 / 0.77 / 0.83 / 0.85 / 0.80 / 0.83
4 / 1.10 / 1.14 / 1.08 / 1.20 / 1.16 / 1.26 / 1.16

b.  Normal Time (NT) for each element (round to 2 decimals):

NT = Observed Time x Performance Rating

Element / Average (OT) / PR / NT
(OT x PR)
1 / 0.46 / .90 / 0.41
2 / 1.51 / .85 / 1.28
3 / 0.83 / 1.10 / 0.91
4 / 1.16 / 1.00 / 1.16

c.  Standard time for this job (round to 2 decimals):

Standard Time = Normal Time x Allowance Factor

ST = NT x AFjob

AFjob =1 + A = 1 + .15 = 1.15

Element / NT / AFjob / ST
1 / 0.41 / 1.15 / 0.47
2 / 1.28 / 1.15 / 1.47
3 / 0.91 / 1.15 / 1.05
4 / 1.16 / 1.15 / 1.33

Standard Time for Job: 0.47 + 1.47 + 1.05 + 1.33 = 4.32 minutes

3. / Element / PR / x / OT / = / NT / x / AFjob / = / ST
1 / .90 / .46 / .414 / 1.15 / .476
2 / .85 / 1.505 / 1.280 / 1.15 / 1.472
3 / 1.10 / .83 / .913 / 1.15 / 1.050
4 / 1.00 / 1.16 / 1.160 / 1.15 / 1.334

12. Given: An operation yielded times of 5.2, 5.5, 5.8, 5.3, 5.5, and 5.1. The goal is to estimate the mean time to within 2% of its true value with a confidence of 99%. The standard deviation is given already as 0.253 minutes per cycle.

Mean Time = (5.2 + 5.5 + 5.8 + 5.3 + 5.5 + 5.1) / 6 = 5.4 minutes per cycle