2. CHAPTER 1 –POM INTRODUCTION
1. What is Production?
Production is the creation of products/goods and services.
2. What is Operations Management?
It is the set of activities (input – transformation – output) that creates value in the form of products/goods and
services. For examples; SONY produces SMART LED TV, and SAMSUNG creates TABLET GALAXY NOTE. 10.1
3. Hard Rock Café in Orlando USS, Florida uses Likert scale to evaluate its quality of food and service at the café. In
what scales number the food and service is considered failed?
The scores are rated on a 1 to 7 scale, and if the score is not a 7, the food and service is a failure.
4. Based on the figure below, list down all the (i), (ii) and (iii) by taking private hospital services as an example.
(i) Input:
_________________________________________________________________
Beds, Patients, Doctors, Nurses, Medical Assistances
_________________________________________________________________
Surgery Equipment, Management/Administrative
Capital/Investment
_________________________________________________________________
_________________________________________________________________
(ii) Transformation:
_________________________________________________________________
Operations, Surgery
_________________________________________________________________
Consultation, Medication, Therapy
_________________________________________________________________
(iii) Output:
Recovery Patients, Good Health
_________________________________________________________________
Good Emotion, Physically
1
3. 5. Changloon Truck Wash cleaned 65 trucks in November 2012, consuming the following resources:
Labour 520 hours at $13 per hour
Water 100 litres at $5 per litres
Machine Rental 20 days at $50 per day
(a) What is the labour productivity per dollar?
= 65/(520 x $13)
= 65/$6,750
= 0.0096 trucks per labour $
(b) What is the multifactor productivity?
= 65/(520 x $13) + (100 x $5) + (20 x $50)
= 65/($8, 260)
= 0.00787 trucks per $
6. Changloon Pizza Enterprise produced 6,600 customised pizzas in November 2012. The labour productivity is
known to have been 0.10 pizzas per labour-hour during that month. There are 45 laboured were employed.
(a) How many hours did the average labourer work in that month?
= 6,600 pizzas/x labour hours = 0.10
= x = 66,000 labour hours, there 45 labourers, thus
= 66, 000 labour hours/45 labourers
= 14, 66.68 labour hours/labourer on average per month
(b) If productivity can be increased to 0.12 pizzas per hour, how many hours would the average labourer work that
month?
= 6, 600 pizzas/x labor hours = 0.12
= x = 55,000 labor hour
So,
= 55, 000 labor hours/300 laborers
= 183.33 labor hours/laborer on average, per month
~~END OF CHAPTER ONE~~
2
4. CHAPTER 2 –PROCESS, TECHNOLOGY & CAPACITY
1. What is process strategy?
A process strategy (or transformation) is an organization’s approach to transforming resources into goods and
services. The objective of a process strategy is to build a production process that meets customer requirements
and products specifications within cost and other managerial constraints.
2. Match each of the product with the suitable process strategy:
Product Process Focus
(a) Coca-Cola Product Focus
(b) Samsung Galaxy Note 10.1 Mass Customization
(c) Wedding Invitation Cards Process Focus/Job Shop
(d) Proton Inspira Repetitive Focus
(d) A4 Paper Product Focus
(e)Sofware/Apps Mass Customization
(f) Whooper Burgers Repetitive Focus
(g) Custom Homes Product Focus/Job Shop
(h) Modenas KRISS II Repetitive Focus
(i) Hard-drive Western Digital Mass Customization
(j) Cakes Product Focus
3. A single MP4 (song) production cost is $5500 and the conversion process is $8 per song. The MP4 can be sold for
$20. How many MP4 units must be sold to breakeven point? How much $ for the breakeven point?
v = cf/p – cv v = 458.33units =458.3 x 20
= $ 9166
v = 5500/20 - 8
4. Based on question 5, the new process of recording becomes $7800. However the conversion cost is cheaper by $2.
What is the new breakeven point and breakeven in $?
v = cf/p – cv v = 7800/20 – 6 v = 557.14 units
v = 557.14 x $20 = $11142.8
5. Central computer provides a lot of instructions to each workstation and to the material-handling equipment –
this system is known as an automated work cell or __________________________________.
6. Define what is a capacity?
Capacity – something that totally “throughput” or number of units a facility (e.g. cinema, stadium, mosque,
classroom, car, airplane, etc.) can hold, receive, store, or produce in a period of time. E.g. Stadium Shah Alam can
hold 100,000 audiences.
3
5. Problems:
(i) Bakery – The company is closed a day in a week and it’s operate in 24-hour basis. The employees work in three
shifts and each shift can produces about 200 cakes per hour.
(ii) Factory – Changloon Tires Sdn. Bhd is a small factory that produces motorcycle tires. The factory operates five
days a week with two 12-hour shift. In every shift, the workers can produce about 1,500 units.
(iii) Classroom (BJMP2033): Mr. Zane is a lecturer who works two days in a week. He teaches only two classes and
each class takes about three hours with approximately 160 students.
7. Based on above statement, calculate the design capacity for the cakes, tires and students.
(i) The design capacity for bakery is:
= (6-day business) x (3 shifts) x (8 hours) x (200 cakes per hour) = 28,800 cakes
(ii) The design capacity for factory is:
= (5-day business) x (2 shift) x (12 hours) x (1,500 tires) = 180, 000 tires
(iii) The design capacity for classroom is:
= (2-day teaching) x (2 shift) x (3 hours) x (160 students) = 1,920 students
8. Read the statement and answer all the questions:
Ahmad BilisSdn. Bhd is a factory produces “SambalBelacan Dari Sarawak”
for Mydin and Giant in East Malaysia. The company only closed it
operations in Friday and approximately produces about 185,000 packets.
The effective capacity is 240,500 packets. The production line operates with
8 hours in a shift and there were two shifts per day. The line was designed
to process the SambalBelacan with seafood fillings – alga, squids, prawns,
and blue anchovy at a rate of 2,100 per half an hour.
(i) Calculate the design capacity for the company?
= (6-day workings) X (2 shifts) X (8-hour) X (2,100 bottles x 2 per hour)
= 403,200 bottles
(ii) What is the utilization for the company?
= Actual Output/Design Capacity
= 185,000/403,200
= 45.88%
(iii) What is the efficiency for the company?
= Actual Output/Effective Capacity
= 185,000/240,500
= 76.92%
~~END OF CHAPTER TWO~~
4
6. CHAPTER 3 – QUALITY MANAGEMENT & SPC
1. What is Statistical Process Control?
SPC is a process that uses to monitor the standards by taking measurements and corrective action as a product or
service is being produced. It is also use to measure the performance of a process.
2. What is an assignable variation?
Assignable variation is related to some causes or factors that occur in the production process which can be traced
to its specific causes. For example, the wedges serve for the customers become oily and grease - maybe because of
the wedges are not cook proper standard – cold oils.
3. Briefly explain THREE (3) implications of quality.
(i) Organization Reputation
(ii) Product Liability
(iii) Global Consequence
4. Illustrate and briefly explain the PDCA cycle.
(i) Plan - identify the problem and make a plan
(ii) Do - test the plan
(iii) Check – is the plan is working?
(iv) Act – implement the plan and make documentation
5. Briefly illustrate THREE (3) tools of TQM.
(i) Check Sheets
(ii) Scatter Diagram
(iii) Cause and Effect Diagrams
(iv) Pareto Charts
(v) Histogram
(vi) Flowcharts
(vii) SPC
6. List THREE (3) concepts to Taguchi’s approach.
(i) Quality Robustness
(ii) Quality Loss Function
(iii) Target-Oriented Quality
5
7. 7. What is Poke-Yoke?
A technique or a tool or a device that ensures production of good units in
every time when needed.Example. Scoop for Ice-Cream Baskin Robins. 1
scoop for RM3.90 and three scoops for RM10.00.
Advantages:
(i) Provide an accurate value (gram, kilogram or others measurements)
for an exchange for money and goods.
(ii) Provide a good value of quality for products tastes, volumes and others.
8. Dapur Gas Reloaded Enterprise is a supplier that provides a delivery service of kitchen’s gas. They are now
having anreflection the lateness of pick-up, servicethe gas, and arrivals of worker. The company wants to
construct an X-chart and an R-chart to monitor the time of those activities is in control. Construct the charts with
3σ control limits; plot the sample range values and comments on process control.
Sample k 1 2 R
1 9.06 9.13 9.10 0.07
2 8.52 8.61 8.57 0.09
3 9.35 8.95 9.15 0.40
4 9.17 9.21 9.19 0.04
5 9.21 8.87 9.04 0.34
6 9.14 8.99 9.07 0.15
7 9.15 9.01 9.08 0.14
TOTAL 63.19 1.23
R = the highest point – lowest point. X = x/n
R = Total R/k = 63.19/7
R = 1.23/7 = 0.18 = 9.03
To find A2 = 1.88 from Table above, n = 2 (the bar) *THE TABLE IS IN PAGE 13*
UCL = X + A2R LCL = X – A2R
= 9.03 + (1.88)(0.18) = 9.03 – (1.88)(0.18)
= 9.37 = 8.69
6
8. The Range (R-Chart)
Sample k 1 2 R
1 9.06 9.13 9.10 0.07
2 8.52 8.61 8.57 0.09
3 9.35 8.95 9.15 0.40
4 9.17 9.21 9.19 0.04
5 9.21 8.87 9.04 0.34
6 9.14 8.99 9.07 0.15
7 9.15 9.01 9.08 0.14
TOTAL 63.19 1.23
R = total of R/k from the Table, n = 2, therefore, D3 = 0 and D4 = 3.27 *THE TABLE IS IN PAGE 13*
R = 1.23/7
R = 0.18
UCL = D4R LCL = D3R
= (3.27) (0.18) = (0) (0.18)
= 0.589 =0
The R- chart
~~END OF CHAPTER THREE~~
7
9. CHAPTER 4 – SUPPLY CHAINS MANAGEMENT
1. Ubi&Kayu Plantation has total end-of-year assets of $4.3 million. First six months (1st term) of the year inventory
was $235,000 and second six months of the year was increased 20% from the first term. The annual cost of goods
sold was $5.5 million. The farm only closed for four weeks a year. Calculate the followings:
Solutions:
Total Inventory = $235 000 + $235 000 x 1.2 = $517 000
Total assets = $4.3 million
COGS = $5.5 million
Business Days = 48 x 7.019 = 337 days
a) TURNS
= COGS/AAVI
= 5, 500, 000/517 000
= 10.64 times
b) Day of Supply
= AAVI
(COGS)/ (Business Days)
= 517 000
5, 500, 000/ (337 days)
= 31.68 days
c) Week of Supply
= AAVI
(COGS)/(Weeks)
= 517 000
5, 500, 000/(48)
= 4.512 weeks
d) PIII - Percentage Invested In Inventory
= 517 000/4300 000 x 100%
= 12.02%
The firm is kept its money in term of goods investment (inventory) which is about 12%.
8
10. 2. NoLa Bakery Sdn. Bhd is a factory produces “Avenger’s Sandwich” for Tesco in Kedah and Pulau Pinang. A
week, the factory produces about 258,000 packets. The effective capacity is 300,500 packets. The production line
operates seven days a week, with quarterly shifts per day. The line was designed to process the sandwich with
chicken fillets, tomatoes, BBQ cheese sauces, grill beef, salads, and some mixed mayonnaise, tartar sauces and
cucumbers at a rate of 2,500 per hour.
(a) Calculate the design capacity for the company?
= (7 days) x (4 shifts) x (6 hours) x (2,500 per hour)
= 420,000 packets
(b) What is the utilization for the company?
= Actual Output/Design Capacity
= 258, 000/420,000
= 61.14%
(c) What is the efficiency for the company?
= Actual Output/Effective Capacity
= 258, 000/300,500
= 85.86%
3. Zane & Sega Enterprise decided to open a burger kiosk in Tesco Arau
Jaya, Perlis. They have invested $8,000 which acted as fixed costs.
Other costs involve are material and ingredients for $1.20, a couple of
workers cost about $1.00 each and processing costs around $0.90. If
they managed to sell approximately 6,923 units of Wedding Burgers,
how much the selling price for the burger?
Solutions:
Breakeven Point = F/Sp – Vc
6923 = $8000/(Sp - $4.10)
6923(Sp - $4.10) = $8000
6923Sp – $28,384.30 = $8000
6923Sp = $36,384.3
Sp = $5.26
Based on answer in above, how much money in total for Zane & Sega Enterprise to touch the break-even point?
= 6923 units x $5.26
= $36,414.98
4. What means by Keiretsu networks?
A Japanese word that describes suppliers who become part of company alliance.Members of the keiretsu are
assured long-term relationships and are therefore expected to collaborate as partners, providing technical
expertise and stable quality production to the manufacturer.
~~END OF CHAPTER FOUR~~
9
11. CHAPTER 5 – INVENTORY MANAGEMENT
1. Slim SokmoSdn. Bhd is a small enterprise that produces Collagen Green-Jelly bottles for Macau-HongKong
markets. They receive orders about 16000 units in the first term and 40% more in the second term. The enterprise
operates six days a week. Regularly they produce the products at daily rate of 2.5% from yearly demand. The
production run is RM350 quarterly and they have a holding cost about RM4 which be paid twice a year.
(i) How much the optimal size order quantity?
First Term = 16000 Second Term =22,400 D = 38,400
Daily rate (p) = 2.5% x 38,400 = 960 units
Cc = RM8 Co = RM350 x 4 = RM1400
d = 38400/312 = 123.08 units per day Operating Days = 6 x 52 weeks = 312 days
Q = √ 2 (1400) (38,400)
8(1 – 123.08/960)
Q = √107,520,000/6.974333333
Q = 3,926.39 units
(ii) What will be the annual inventory costs?
TCmin = CoD/Q + CcQ/2 (1 – d/p)
TCmin = (1400)(38,400)/3,926.39 + 8(3,926.39)/2 (1 – 123.08/960)
TCmin = 13,691.96641+ 15,705.56 (0.871791666)
TCmin = 13161.62589 + 13691.97632
TCmin = RM 27,383.94
10
12. (iii) The optimal number of production runs (orders) per year?
D/Q = 38,400/3,914.41
D/Q = 9.81 production runs a year (production is running when orders are being placed)
(iv) The optimum cycle time?
Working days = 6 days x 52 weeks = 312 days
Optimal Cycle Time = Working days
D/Q
Optimal Cycle Time = 312/(38,400/3,926.39)
= 312/9.779976009
= 31.90 days
(v) The maximum inventory level?
Inventory Max = Q (1 – d/p)
= 3,926.39 (1 – 123.08/960)
= 3,926.39 (0.871791666)
= 3,422.99 units
11
13. 2. Semporna JellySdn. Bhd is popular manufacturer of sea-grass based product in Sabah. Last year, they have
exported the Sea-Grass Emas lotion for South American markets. They have received the orders; 26000 units in 1st
quarter, 32000 units in 2nd quarter, increased by 40% in 3rd quarter (from 1st quarter) and declined 20% in 4 th
quarter (from 3rd quarter). The manufacturer operates 49 weeks in a year. The ordering cost was RM350 quarterly
and they have a transportation cost about RM40 which be paid twice a year.
Workings:
1st = 26000, 2nd = 32000, 3rd = 1.4 x 26000 = 36400, 4th = 0.8 x 36400 = 29100, D = 123,520
Cc = RM50 Co = RM350 x 4 = RM1400
Operating Days = 49 weeks x 7.019 = 344 days
(i) How much the optimal size order quantity?
Q = √ 2 (1400) (123520)
50
Q = √103,040,000/50
Q = 1435.55 units
(ii) What will be the annual inventory costs?
TCmin = CoD/Q + CcQ/2
TCmin = (1400)(123,520)/1435.55+ (50)(1435.55)/2
TCmin = 120,461.1473 + 35,888.75
TCmin = RM 156,349.897
(iii) Number of orders received per year?
D/Q = 123,520/1435.55
D/Q = 86.04 times
(iv) Order cycle time per year?
Working days = 49 weeks x 7.019 = 344 days
Optimal Cycle Time = Working days
D/Q
Optimal Cycle Time = 344/86.04
= 3.99 days
12
14. (v) Given the lead time is 14 days, determine the reorder point?
R = dL
R = (123,520/344) x (14 days)
R = 5,026.98 units
TABLE: FACTORS FOR DETERMINING CONTROL LIMITS FOR X AND RCHARTS
~~END OF CHAPTER FIVE~~
13
15. CHAPTER 6 – AGGREGATE PLANNING
1. Complete the tables (a) and (b) based on given information respectively:
March Apr May June July Aug Sept Oct Nov Dec Jan Feb
1500 1200 1000 900 800 1500 2000 2500 8500 7000 4000 3000
Beg. Wkrs 10 Beg. Inv 0 OT Prod $40 Hired $500 BkO $60
Unit/Wkr 200 Reg Prod $30 SubK $50 Fired $800 Holding $2
Prod
(a) Produce to meet demand using hiring/firing with no OT and S/k
Mth = Month Reg = Regular Production OT = Overtime S/k = Subcontract
Inv = Inventory BkO = Backorders Wkr = Workers H = Hired F = Fired
Mth Demand Reg OT S/k Inv BkO Wkr H F
Jan 4000 4000 0 20 10
Feb 3000 3000 0 15 5
Mac 1500 1500 0 8 7
Apr 1200 1200 0 6 2
May 1000 1000 0 5 1
June 900 1000 0 5
July 800 800 0 4 1
Aug 1500 1500 0 8 4
Sep 2000 2000 0 10 2
Oct 2500 2500 0 13 3
Nov 8600 8600 0 43 30
Dec 7000 7000 0 35 8
Total 33900 33900 0 49 24
Cost: 33900 x RM30 + 49 x RM500 + 24 x RM800 = 103200 + 24500 + 19200 = RM 1060700
14
16. March Apr May June July Aug Sept Oct Nov Dec Jan Feb
1500 1200 1000 900 800 1500 2000 2500 8500 7000 4000 3000
Beg. Wkrs 10 Beg. Inv 0 OT Prod $40 Hired $500 BkO $60
Unit/Wkr 200 Reg Prod $30 SubK $50 Fired $800 Holding $2
Prod
(b) Constant workforce of 8 workers (using S/k, inventory, OT which same to Reg)
Mth = Month Reg = Regular Production OT = Overtime S/k = Subcontract
Inv = Inventory BkO = Backorders Wkr = Workers H = Hired F = Fired
Mth Demand Reg OT S/k Inv BkO Wkr H F
Jan 4000 1600 1600 800 0 8 2
Feb 3000 1600 1600 200 8
Mac 1500 1600 300 8
Apr 1200 1600 700 8
May 1000 1600 1300 8
June 900 1600 2000 8
July 800 1600 2800 8
Aug 1500 1600 2900 8
Sep 2000 1600 2500 8
Oct 2500 1600 1600 8
Nov 8500 1600 1600 3700 0 8
Dec 7000 1600 1600 3800 0 8
Total 33900 19200 6400 8300 14300 96 2
Cost: 19200 x RM30 + 6400 x RM40 + 8300 x RM50 + 14300 x RM2 + 2 X RM800
= RM1, 277, 200
Chase demand
Which strategy can save some money? ____________________________
15
17. 2. Complete the questions (a) and (b) based on information provided;
(a) Super-Size Pizza Sdn. Bhd. prepares a lot of pizzas
based on international nation’s menu. One of its famous is
Viking Salmons Pizza (shown in the picture). Based on
information given, you are required to come out with one
effective planning based on transportation method for its 4-
month future operations. Given the demand units for
February and March are 900 and 300 respectively.
Demand
Month
April 50% more from a total of February and March
May Increased 300 units from April
June Decreased 400 units from May
July 200 units less than a total of February and March
Pengeluaranbiasa 1000 unit/bulan
Regular production 1000 units/month
Pengeluaranlebihmasa 400 unit/bulan
Overtime production 400 units/month
Subkontrakmaksimum ½ daripengeluaranbiasa
Maximum subcontracting ½ of regular production
Kos pengeluaranbiasa $15 unit/bulan
Regular production costs $15 unit/month
Kos pengeluaranlebihmasa Lebih 60%
Overtime production costs darikospengeluaranbiasa
60% more than regular production
costs
Kos subkontrak Lebih 75%
Subcontracting costs darikospengeluaranlebihbiasa
75% more than overtime production
costs
Kos peganganinventori $5 seunitsesuatumasa
Inventory holding costs $5 per unit per period
Inventory awalan 100 unit/bulan
Beginning inventory 100 units/month
16
18. (i)Complete the Transportation Tableau.
TempohPengeluaran TempohPenggunaan
Period of Production Period of Use
KapasitiTidakGuna Kapasiti
April Mei/May Jun/June Julai/July
Unused Capacity Capacity
5 1 15 - 100
Inv. Awalan 0
Beg. Inventory 0
100
MasaBiasa 1000 15 20 25 30 - 1000
Regular
Apr 400
LebihMasa 24 29 34 39
400
Overtime
42 47 52 57 - 500
Sub Kontrak
300 200
Subcontract
15 20 25 - 1000
MasaBiasa
1000
Regular
29 34 - 400
LebihMasa 24
May 400
Overtime
47 52 - 500
Sub Kontrak 42
500
Subcontract
15 20 - 1000
MasaBiasa
1000
Regular
29 - 400
LebihMasa 24
June 400
Overtime
300 47 200 500
Sub Kontrak 42
Subcontract
1000 15 - 1000
MasaBiasa
Regular
- 25 400 400
LebihMasa
Overtime
July - 42 500 500
Sub Kontrak
Subcontract
Permintaan
1800 2100 1700 1000 1100 7700
Demand
(ii) Develop an optimal production plan.
17
19. PELAN PENGELUARAN
PRODUCTION PLAN
Pengeluaran
Masa Permintaan Biasa LebihMasa Subkontrak InventoriAkhir
Period Demand Regular Overtime Subcontract Ending Inventory
Production
1800 1000 400 500 100+1000+400+500-
April 1800 = 200
2100 1000 400 500 200+1000+400+500-
Mei/May 2100 = 0
1700 1000 400 300 0 +1000+400 +300-
Jun/June 1700 = 0
1000 1000 - - 0 +1000-1000=0
Julai/July
JUMLAH 6600 4000 1200 1300 200
TOTAL
Total production costs: 4000 x $15 + 1200 x $24 + 1300 x $42 + 200 x $5 = $144, 400
3. What is chase demand strategy?
Chase demand strategy is happening when company production rates or work force levels are adjusted to match
demand requirements over the planning horizon. For example, 12 months.
4. How does aggregate planning in service differ from aggregate planning in manufacturing?
Aggregate planning in services differs from aggregate planning in manufacturing in the following ways:
Most services are perishable and cannot be inventoried.
It is virtually impossible to produce the service early in anticipation of higher demand at a later time.
Demand for services is often difficult to predict. Demand variations may be more severe and more frequent.
Services are more customized than manufactured goods and can be offered in many different forms. This
variability makes it difficult to allocate capacity. Units of capacity may also be hard to define.
Because most services cannot be transported, service capacity must be available at the appropriate place as well
as at the appropriate time.
Service capacity is generally altered by changes in labor, rather than by equipment or space, and labor is a highly
flexible resource.
5. What is level strategy?
Level strategy or level scheduling is an aggregate plan in which production is uniform from period to period. Two
reasons why this strategy is applied. (i) let the finished-goods inventory vary to buffer the difference between
demand and production, and (ii) find the alternative work for employees.
6. Organization usually has three demand options, list down three of them.
(i) Influencing Demand
(ii) Back ordering during high-demand periods.
(iii) Counter seasonal product and service mixing.
CHAPTER 7 – MATERIAL RESOURCE PLANNING
18
20. 1. Kitty & Hello Sdn. Bhd. produces 2 products for European markets; A & B which made from components C,
D, & E. The ordering cost is $78 and the holding cost is $3. Given the following product structures, master
scheduling requirements, and inventory information, determine when orders should be released for A, B, C,
D & E and the size of those orders (planned order report).
Item On Hand Scheduled Receipts Lot Size MPS
A 50 20, PERIOD 4 L4L 300, PERIOD 7
B 30 50, PERIOD 5 L4L 40, PERIOD 4, 550, PERIOD 8
C 150 50, PERIOD 1 MIN 150 -
D 60 50, PERIOD 2 MULT 100 -
E 70 100, PERIOD 4 MULT 150 -
Item: A LLC:0
Period
Lot Size:L4L LT:3
1 2 3 4 5 6 7 8
Gross Requirements 300
Schedule Receipts 20
Projected On Hand50 50 50 50 70 70 70 0 0
Net Requirements 230
Planned Order Receipts 230
Planned Order Releases 230
Costs: [(50 + 50 + 50 + 70 + 70 + 70)]X $ 3) + (1 X 78) = $
Item: B LLC:0
Period
Lot Size:L4L LT:2
19
21. 1 2 3 4 5 6 7 8
Gross Requirements 40 550
Schedule Receipts 50
Projected On Hand30 30 30 30 10 60 60 60 0
Net Requirements 490
Planned Order Receipts 490
Planned Order Releases 490
Cost: [(30 + 30 + 30 + 10 + 60 + 60 + 60) X $3] + (1 X $78) =
Item: C LLC:1
Period
Lot Size: MIN150LT:3
1 2 3 4 5 6 7 8
Gross Requirements 690
Schedule Receipts 50
Projected On Hand150 200 200 200 0 0 0 0 0
Net Requirements 490
Planned Order Receipts
Planned Order Releases 490
Cost:
Item: D LLC:1
Period
Lot Size:MULT100LT:2
1 2 3 4 5 6 7 8
Gross Requirements 460 1470
Schedule Receipts 50
Projected On Hand60 60 110 110 50 50 80 80 80
Net Requirements 350 1420
Planned Order Receipts 400 1500
Planned Order Releases 400 1500
Cost: [(60 + 110 + 110 + 50 + 50 + 80 + 80 + 80) X $3)] + (2 X $78) =
Item: E LLC:1
Period
Lot Size:MULT150LT:3
20
22. 1 2 3 4 5 6 7 8
Gross Requirements 980
Schedule Receipts 100
Projected On Hand70 70 70 70 170 170 90 90 90
Net Requirements 810
Planned Order Receipts 900
Planned Order Releases 900
Cost: [(70 + 70 + 70 + 70 + 170 + 170 + 90 + 90 + 90)] X $3) + (1 X $78) =
Planned Order Report
( a summary of planned order releases from above tables)
Item Period
1 2 3 4 5 6 7 8
A
B
C
D
E
TOTAL
2. Given the following information, calculate each cost:
21
23. c. Beg Inventory = 0
Co $200 Exact Rounded
Cc $2.00 EOQ 77.46 78
d 30.00 POQ 2.58 3
d = daily demand = 50 + 50 + 10 + 10/4 = 30 units
Q = √2. Co. D/Cc
Q = √2. $200 . 30/ $2
Q = 77.46 (78) units
POQ = Q/d
= (77.46)/(30)
= 2.582 or 3
Item: A LLC: 0 Period
Lot Size: L4L 1 LT: 0 1 2 3 4
Gross Requirements 50 50 10 10
Scheduled Receipts
Projected on Hand 0 0 0 0 0
Net Requirements 50 50 10 10
Planned Order Receipts 50 50 10 10
Planned Order Releases 50 50 10 10
Cost of L4L $800.00
Item: A LLC: 0 Period
Lot Size:EOQ 78 LT: 0 1 2 3 4
Gross Requirements 50 50 10 10
Scheduled Receipts
Projected on Hand 0 28 56 46 36
Net Requirements 50 22
Planned Order Receipts 78 78
Planned Order Releases 78 78
Cost of EOQ $732.00
Item: A LLC: 0 Period
Lot Size: POQ 3 LT: 0 1 2 3 4
Gross Requirements 50 50 10 10
Scheduled Receipts
Projected on Hand 0 60 10 0 0
Net Requirements 50 10
Planned Order Receipts 110 10
Planned Order Releases 110 0 0 10
Cost of POQ $540.00 &Choose POQ
~~END OF CHAPTER SEVEN~~
CHAPTER 8 – LEAN MANUFACTURING
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24. 1. Define the Just-In-Time and what is main objective?
Just-in-time (JIT) is a production strategy that strives to improve a business' return on investment by reducing in-
process inventory and associated carrying costs.
2. What is the JIT’s philosophy?
Philosophy of JIT is simple: inventory is waste.
3. List down FIVE (5) types of waste (according to JIT’s philosophy)
a) Waste from overproduction - forecasting
b) Waste of waiting time – scheduling, Gantt Chart
c) Transportation waste – route analysis, GPS
d) Processing waste - automation
e) Inventory waste – recycle, reuse,
f) Waste of motion – space arrangement
g) Waste from product defects – scrap, resell
4. What is Kanban?
Kanban as literally means the “signboard” or “billboard”. It is a scheduling system that tells the company what to
produce, when to produce it, and how much to produce.
5. Naira Lopez is a staff at White Coffee Ipoh Sdn. Bhd. Her daily work is related to filling, capping and labelling the
packets of a few of white coffee flavours. Usually she can manage to process about 1550 packets per hour. If one
Kanbancan holds 250 packets, it takes about a quarter minutes to one hour before receiving a kanbansfrom previous
workstation. As pre-caution procedure, the company uses a safety stock factor of 15%, and how many kanbans are
needed for the packaging process?
Solution:
d = 1550packets per hour
L = 0.75hour (45/60 minutes) = 0.75 hour
S = 0.15 (1550 x 0.75hour) = 174.375
C = 250 packets
Then,
N = dL + S/C
N = 1550 (0.75) + 174.375
250
N = 5.35 kanbans (or 6 kanbans)
6. Pak Wan Satay is one of famous satay stalls at PekanJandaBaik. Usually Pak Wan takes half an hour to grille about
1500 sticks. Then the satays are stored in a warm-up container before he himself or his son drives it to the stall which
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25. takes about 15 minutes. At his stall, he takes about 5 minutes to upload the satay into the grille place. As a pre-
caution, Pak Wan uses about 20% as a safety factor. During the driving, there are about seven warm-up containers
rotate between Pak Rahim and his son, Ahmad. What is the demand for the pizzas?
Kitchen Pizza
Solution:
d= ?
L = 0.83 hour (30 minutes + 15 minutes + 5 minute = 50 minutes) 50/60 = 0.83
S = 0.20(d x 0.83hour)
C = 1500
N=7
Then,
N = dL + S
C
7 = d(0.83) + 0.2(d x 0.83)
1500
7 = 0.83d + 0.166d
1500
10,500 = 0.996d
d = 10, 542.17 sticks
Recalculate:
Solution:
d = 11,666.67 sticks
L = 45 minutes = 0.75 hour
S = 0.20(11,666.67 x 0.75hour) = 1750.0125
C = 1500
Then,
N = dL + S
C
N = 11,666.67 (0.75) + 1750.0125
1500
N =7 Kanbans
~~END OF CHAPTER EIGHT~~
CHAPTER 9 – PROJECT MANAGEMENT
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26. 1. What is project crashing?
(a) The process by which the project is being shorten the duration of a project in the cheapest manner.
(b) Crashing is also shortening activity time in a network to reduce time on the critical path so total completion time
is reduced.
2. Determine the critical path and completion days for the following AON:
(a) Critical Path: A-C-F-H
(b) Completion Days: 21 days
3. Determine the critical paths and completion hours for the following AON (in the table provided):
Critical Path Hours
a) A-C-E-G 19.5
b) B-D-F-G 24.9
c) A-C-D-F-G 28.7 (CP)
d) B-E-G 15.7
e)
4. Gantt Chart is a tool that can help project manager to make sure that:
(a) Activities are planned,
(b) Order of performance is documented,
(c) Activity time estimates are recorded, and
(d) Overall project time is developed
5. Construct an AON network for these activities:
25
27. Activity Predecessor(s) Activity Predecessor(s)
A - E B
B - F B
C A G C, E
D A H D, F
The answer:
6. Based on above (Question 5), determine the ES, EF, LS, LF and slack for each activity. Find also the total project
completion time and the CP.
Activity Week(s) Activity Week(s)
A 6 E 4
B 7 F 6
C 3 G 10
D 2 H 7
The answers:
Activity Time ES EF LS LF Slack Critical
A 6 0 6 2 8 2 No
B 7 0 7 0 7 0 Yes
C 3 6 9 8 11 2 No
D 2 6 8 12 14 6 No
E 4 7 11 7 11 0 Yes
F 6 7 13 8 14 1 No
G 10 11 21 11 21 0 Yes
H 7 13 20 14 21 1 No
Total project completion time = 21 weeks
The CP = B-E-G
7. The activities necessary for the completion of this project are listed in the following table:
26
28. Activity Normal Time Crash Time Normal Cost $ Crash Cost $ Predecessor(s)
(weeks) (weeks)
A 4 3 2,000 2,600 -
B 2 1 2,200 2,800 -
C 3 3 500 500 -
D 8 4 2,300 2,600 A
E 6 3 900 1,200 B
F 3 2 3,000 4,200 C
G 4 2 1,400 2,000 D, E
(a) What is the project completion date?
= A-D-G = 4 + 8 + 4 = 16 WEEKS
(b) What is the total cost required for completing this project on normal time?
= A-D-G = $2,000 + $2,300 + $1,400
(c) If you wish to reduce the time required to complete this project by 1 week, which activity should be crashed, and
how much will this increase the total cost?
Norm. Time–
Activity Crash Time Crash $–Normal $ $/time
A 1 $600 $600
B 1 600 600
C 0 0 —
D 4 300 75
E 3 300 100
F 1 1,200 1,200
G 2 600 300
(d) What is the maximum time can be crashed? How much would costs increase?
8. What would a project manager have to do to crash an activity?
To crash an activity, the project manager would pay money to add resources; more employees, overtime, new
equipment and other things.
9. What are the three phases involved in the management of a large project?
The three phases involved in managing a large project are;
Planning –
Scheduling –
Controlling –
~~END OF CHAPTER 9~~
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