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Operations Management Assignment

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Operations Management Assignment
OPERATIONS MANAGEMENT MGCR 472
ASSIGNMENT # 1 (Total 100 points)
Due on 7th October (Thursday) by 5pm
Make sure to write the name, student # and section # for each student in the group on the cover page of the assignment
1. Suppose you/your group is the owner of a company that produces e-readers. The present production rate is 1000 e-readers /day and the selling price is $210/unit. It requires 200 workers working 8 hours/day to produce the e-readers and they are paid $20/hour. The material cost is $100/unit and overhead cost is $50,000/day.
a) What is the unitless multi-factor (labor + material + overhead) productivity ratio?
b) What is the labor productivity ratio (both unitless and in terms of units/labor hour)?

You/your group is thinking about buying a new expensive machine that is quite complex to handle but will improve the quality of the product. The production rate will increase to 1200 e-readers /day, material cost will reduce to $90/unit and the overhead cost will increase to $100,000/day (to pay for the depreciation of the machine). It will still require 200 workers working 8 hours per day (now to produce 1200 units); however the labor rate will be $30/hour.
c) What will be the unitless multi-factor (labor + material + overhead) productivity ratio with the new machine?

2. An e-retailer of energy saving devices is able to collect the data for customer demand (in mil $) from its website for a new product. However, due to shortage in inventory, it is not able to fulfill all the requests. Demand and actual sales for the first nine months of 2009 are given below.

Month Demand (in mil $) Sales (in mil $)
Jan 60 54
Feb 86 80
March 96 83
April 111 83
May 150 107
June 139 113
July 157 150
August 164 159
September 171 165

a) Which data, sales or demand, should
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