Midterm Exam Operations Management The mid-term exam consists of two parts. Both parts shall completed using the midterm examination template. The completed examination shall be submitted via Blackboard for grading. Students must show their work for full credit. Answer all the questions. Case Study Questions: There is no set length for answers; students may be as verbose or brief as they feel necessary to cover the question. Use this same exam document for your answers, placing them below each question. This portion of the exam is worth 75 points. Problem Questions: Make sure to show all your work to get full credit. The instructor needs to know the formulas and calculations you used to get to your final answer. You can do part of the exam in Excel and Paste your Excel work into this document. This portion of the exam is worth 75 points. File Convention: File name for the exam attachment to be studentlastname-finalexam (Be sure there are no spaces) Be sure to put your name on the exam paper. Note: You may use the text and any other materials. You are NOT to work with anyone else including other students in completing the exam nor discuss it with them. Question 1: You are designing a grocery delivery business. Via the internet, your company will offer staples and frozen foods in a large metropolitan area and then deliver them within a customer-defined window of time. You plan to partner with two major food stores in the area. What should your competitive priorities be and what capabilities do you want to develop in your own core and support processes? Is it possible for a project to have more than one critical path? Discuss the implications of such a situation with respect to each of the following aspects: a. Project risk b. Total available slack c. Resource dependencies d. Responsibilities of the project manager Question 2: A flowchart helps us see all of the steps in a process, which in turn helps us improve the process. It also helps us identify and eliminate any redundant steps in a process. Using Word tools (SmartArt under the Insert tab), design a process flow chart for the grocery delivery business in Question 1 above. In the discussion element of your response, clearly define the steps within the process and provide a rationale for each step. Include all elements that you feel are necessary and appropriate to the process of a singular customer. The assumption is that the process is repeatable for every customer using the service. Think of the elements that you will be addressing or answering in the succeeding questions. Question 3: For the grocery delivery business addressed in Question 1, the grocery chains that you are planning to partner with use differing inventory control models. Company A utilizes the Just-in-Time (JIT) inventory control model and Company B uses an Economic Order Quantity model. In reviewing your business plan, the bank loan officer has noticed this. As the loan officer is not overly familia ...

1. Midterm Exam
Operations Management
The mid-term exam consists of two parts. Both parts shall
completed using the midterm examination template. The
completed examination shall be submitted via Blackboard for
grading. Students must show their work for full credit. Answer
all the questions.
Case Study Questions:
There is no set length for answers; students may be as verbose
or brief as they feel necessary to cover the question. Use this
same exam document for your answers, placing them below
each question. This portion of the exam is worth 75 points.
Problem Questions:
Make sure to show all your work to get full credit. The
instructor needs to know the formulas and calculations you used
to get to your final answer. You can do part of the exam in
Excel and Paste your Excel work into this document. This
portion of the exam is worth 75 points.
File Convention:
File name for the exam attachment to be
studentlastname-finalexam (Be sure there are no spaces)
Be sure to put your name on the exam paper.
Note: You may use the text and any other materials. You are
NOT to work with anyone else including other students in
completing the exam nor discuss it with them.
Question 1: You are designing a grocery delivery business. Via
the internet, your company will offer staples and frozen foods in

2. a large metropolitan area and then deliver them within a
customer-defined window of time. You plan to partner with two
major food stores in the area. What should your competitive
priorities be and what capabilities do you want to develop in
your own core and support processes?
Is it possible for a project to have more than one critical path?
Discuss the implications of such a situation with respect to each
of the following aspects:
a. Project risk
b. Total available slack
c. Resource dependencies
d. Responsibilities of the project manager
Question 2: A flowchart helps us see all of the steps in a
process, which in turn helps us improve the process. It also
helps us identify and eliminate any redundant steps in a process.
Using Word tools (SmartArt under the Insert tab), design a
process flow chart for the grocery delivery business in Question
1 above. In the discussion element of your response, clearly
define the steps within the process and provide a rationale for
each step. Include all elements that you feel are necessary and
appropriate to the process of a singular customer. The
assumption is that the process is repeatable for every customer
using the service. Think of the elements that you will be
addressing or answering in the succeeding questions.
Question 3: For the grocery delivery business addressed in
Question 1, the grocery chains that you are planning to partner
with use differing inventory control models. Company A
utilizes the Just-in-Time (JIT) inventory control model and
Company B uses an Economic Order Quantity model. In
reviewing your business plan, the bank loan officer has noticed
this. As the loan officer is not overly familiar with either
model, a request has been made of you to provide a description

3. of each model and an explanation of why partnering with these
companies would or would not create a conflict within your
operations. Provide a detailed analysis of the situation in your
business model.
Question 4: A Quality Assurance (QA) Program is essential to
the success of any business.In establishing your grocery
delivery business, what are some of the Quality Control (QC)
processes that you envision employing? Why? Provide examples
of potential metrics. Justify your choices.
Question 5: Efficiency is a critical element both in terms of
individuals and machinery in any business. Describe some
efficiency measures that you would implement in your grocery
delivery business. What are the analysis tools that you would
utilize to determine the effectiveness of these efficiency
measures?
QSO 600 Midterm Exam Problem Questions
Problem 1.
The Bureau of Labor Statistics collects input and output data
from various countries for comparison purposes. Labor hours
are the standard measure of input. Calculate the output per hour
from the following data. Which country is most productive?
Labor Hours
Units of Output
United States
89.5
136
Germany
83.6
100
Japan
72.7

4. 102
Problem 2.
Construct a network from the information in the following table
and identify all the paths in the network, compute the length of
each, and indicate the critical path. Determine the earliest start
and finish times, latest start and finish times, and slack for each
activity. Indicate how the critical path would be determined
from this information.
Activity
Activity Predecessor
Time (weeks)
1
—
7
2
—
10
3
1
6

5. 4
2
5
5
2
4
6
3, 4
3
7
5, 6
2
Problem 3.
Burger Doodle is a fast-food restaurant that processes an
average of 680 food orders each day. The average cost of each
order is $6.15. Four percent of the orders are incorrect, and only
10% of the defective orders can be corrected with additional
food items at an average cost of $1.75. The remaining defective
orders have to be thrown out.
a. Compute the average product cost.
b. In order to reduce the number of wrong orders, Burger
Doodle is going to invest in a computerized ordering and cash
register system. The cost of the system will increase the average
order cost by $0.05 and will reduce defective orders to 1%.
What is the annual net effect of this quality improvement
initiative?
c. What other indirect effects on quality might be realized by
the new computerized order system?

6. Problem 4.
A firm is faced with the attractive situation in which it can
obtain immediate delivery of an item it stocks for retail sale.
The firm has therefore not bothered to order the item in any
systematic way. However, recently profits have been squeezed
due to increasing competitive pressures, and the firm has
retained a management consultant to study its inventory
management. The consultant has determined that the various
costs associated with making an order for the item stocked are
approximately $70 per order. She has also determined that the
costs of carrying the item in inventory amount to approximately
$27 per unit per year (primarily direct storage costs and forgone
profit on investment in inventory). Demand for the item is
reasonably constant over time, and the forecast is for 16,500
units per year. When an order is placed for the item, the entire
order is immediately delivered to the firm by the supplier. The
firm operates 6 days a week plus a few Sundays, or
approximately 320 days per year. Determine the following:
a. Optimal order quantity per order
b. Total annual inventory costs
c. Optimal number of orders to place per year
d. Number of operating days between orders, based on the
optimal ordering.

7. Problem 5.
The Commonwealth Banking Corporation issues a national
credit card through its various bank branches in five
southeastern states. The bank credit card business is highly
competitive and interest rates do not vary substantially, so the
company decided to attempt to retain its customers by
improving customer service through a reduction in billing
errors. The credit card division monitored its billing department
process by taking daily samples of 200 customer bills for 30
days and checking their accuracy. The sample results are as
follows:
Sample
Number of Defectives
Sample
Number of Defectives
1
7
16
10
2
12
17
12
3
9
18

8. 14
4
6
19
16
5
5
20
15
6
8
21
13
7
10
22
9
8
11
23
10
9
14
24
12
10
10
25
15
11
9
26
14
12
6
27

9. 16
13
3
28
12
14
2
29
15
15
8
30
14
Develop a -chart for the billing process using control limits and
indicate if the process is out of control.
Problem 13-06.
The Ambrosia Bakery makes cakes for freezing and subsequent
sale. The bakery, which operates five days a week, 52 weeks a
year, can produce cakes at the rate of 116 cakes per day. The
bakery sets up the cake-production operation and produces until
a predetermined number has been produced. When not
producing cakes, the bakery uses its personnel and facilities for
producing other bakery items. The setup cost for a production
run of cakes is $700. The cost of holding frozen cakes in
storage is $9 per cake per year. The annual demand for frozen
cakes, which is constant over time, is 6000 cakes. Determine the
following:
a. Optimal production run quantity (Q)
b. Total annual inventory costs
c. Optimal number of production runs per year

10. d. Optimal cycle time (time between run starts)
e. Run length in working days.
Problem 13-20.
Southwood Furniture Company is a U.S.-based furniture
manufacturer that offshored all of its actual manufacturing
operations to China about a decade ago. It set up a distribution
center in Hong Kong from which the company ships its items to
the United States on container ships. The company learned early
on that it could not rely on local Chinese freight forwarders to
arrange for sufficient containers for the company's shipments,
so it contracted to purchase containers from a Taiwanese
manufacturer and then sell them to shipping companies at the
U.S. ports the containers are shipped to. Southwood needs 715
containers each year. It costs $1200 to hold a container at its
distribution center, and it costs $6000 to receive an order for
the containers. Determine the optimal order size, minimum total
annual inventory cost, number of annual orders, and time
between orders.
Mid
term
Exam
Operations Management
The
mid
-
term
exam consists of
two parts. Both parts shall completed using the midterm

11. examination template. The completed examination shall be
submitted via Blackboard
for grading.
Students must show their work for full credit.
A
nswer all
the
questions.
Case Study Questions
:
There is no s
et length for answers; students may be as verbose or brief as
they feel
necessary to cover the question. Use this same exam document
for your answers,
placing them below each question.
Thi
s portion of the exam is worth
75
points
.
Problem Questions:
Make sure to show all your work to get full credit. The
instructor needs to know the
formulas and calculations you used to get to your final answer.
You can do part of the
exam in Excel and Paste your Excel work into this document.
This portion of the ex

12. am is
worth
75
points.
File Convention:
File name for the exam attachment to be
s
tudent
last
name
-
f
inalexam (Be sure there are no spaces)
Be sure to put your name on the exam paper
.
Note:
You may use the text an
d any other materials. You are NOT
to work
with
anyone
else including other
students in completing the exam nor discuss it with them.
Midterm Exam

13. Operations Management
The mid-term exam consists of two parts. Both parts shall
completed using the midterm
examination template. The completed examination shall be
submitted via Blackboard
for grading. Students must show their work for full credit.
Answer all the questions.
Case Study Questions:
There is no set length for answers; students may be as verbose
or brief as they feel
necessary to cover the question. Use this same exam document
for your answers,
placing them below each question. This portion of the exam is
worth 75 points.
Problem Questions:
Make sure to show all your work to get full credit. The
instructor needs to know the
formulas and calculations you used to get to your final answer.
You can do part of the
exam in Excel and Paste your Excel work into this document.
This portion of the exam is
worth 75 points.
File Convention:
File name for the exam attachment to be
studentlastname-finalexam (Be sure there are no spaces)
Be sure to put your name on the exam paper.
Note: You may use the text and any other materials. You are
NOT to work with anyone
else including other students in completing the exam nor discuss
it with them.