IE 214 – OM 1

Sample Exam

Q1) Weekly usage of a product is 8 units. Since the plant operates 50 weeks per year, this leads to annual usage of 400 units. Setup cost is $40 and annualized carrying cost is $80. Weekly production of this product is 12 units. Lead time is four weeks, and safety stock is one week's production. What is optimal kanban size? What is the optimal number of kanbans?

Q2) Daily usage of a part is 20 in a facility that operates 250 days of the year. Setup cost is $20 and annualized carrying cost is $210. Production of this part occurs at the rate of 50 per day when production of the part is underway. Lead time is 1 day; safety stock is 1/2 day's production. What is the optimum kanban size, and number of kanbans?

Q3) Labor cost for set-up is $500/hour. If the plant plans on level material use and operates 50 days per year, determine the time it takes to setup.

Annual demand / 5000
Daily production / 1000
Lot size / 700
Holding cost / $25

Q4) Daily demand is half of daily production. If setup and holding costs are equal, determine how Q and D are related.

Q5) Jack's Pottery outlet has total end-of-year assets of $5 million. The first-of-year inventory was $375,000, with a year-end inventory of $325,000. The annual cost of goods sold was $7 million. The owner asks you to evaluate his supply chain performance by measuring his percent of assets in inventory, his inventory turnover, and his weeks of supply.