REVIEW PROBLEMS

COMM 225: POM
REVIEW PROBLEMS – TUTORIAL QUESTIONS
Week
Q1 (Ref: Q. 9-23, p413 of (Operation management: creating value along the Supply Chain)): The following table provides the information necessary to construct a project network and project crash data:
Activity
a b c d e f g h Predecessor a a b b c d, e

Normal
Times
(Weeks)
16
14
8
5
4
6
10
15

Crash
Times
(Weeks)
8
9
6
4
2
4
7
10

Normal
Costs

Crash
Costs

$2000
$1000
$500
$600
$1500
$800
$3000
$5000

$4400
$1800
$700
$1300
$3000
$1600
$4500
$8000

Construct project network and crash the network the maximum amount possible.
Q2 (Ref: Q. 9-13, p410 of (Operation management: creating value along the Supply Chain): The Farmer’s
American Bank of Leesburg is planning to install a new computerized accounts system. Bank management has determined the activities required to complete the project, the precedence relationships of the activities, and activity time estimates as follows:
Activity

Predecessor

a b c d e f g h i j k

a a b, c b, c d, e d, e h f, g g, i

Time Estimates (Weeks) a m b 5
8
17
3
12
15
4
7
10
5
8
23
1
1
1
1
4
13
3
6
9
1
2.5
7
1
1
1
2
2
2
5
8
11

Determine the earliest and latest activity times, the expected completion time and standard deviation, and the probability that the project will be completed in 40 weeks or less.
Q3 (Ref: Q.3-11, p105 of the text book): A gift shop in a tourist center is open only on weekends (Friday,
Saturday, and Sunday). The owner—manager hopes to improve scheduling of part-time employees by determining seasonal relatives for each of these days.
Data on recent activity at the store (sales transactions per day) are shown in the following table:

Friday
Saturday
Sunday

1

2

3

4

5

149
250
166

154
255
162

152
260
171

150
268
173

159
273
176

(a) Develop seasonal relatives for each day using the centred moving average method.
(b) Deseasonalize the data, fit an appropriate model to the deseasonalized data, project three days ahead, and reseasonalize the projections to forecast the sales transactions for each day, Fa1tulay, of next week.
Q4 (Ref: Q. 3-33, p112 of the text book): A manager has just received an evaluation from an analyst on two potential forecasting methods. The analyst is indifferent between the two methods, saying that they should be equally accurate and in control. The demand and the forecasts using the two methods for nine periods follow: (LO7)
Period
Demand

1
37

2
39

3
37

4
39

5
45

6
49

7
47

8
49

9
51

Method1
Method2

36
36

38
37

40
38

42
38

46
41

46
52

46
47

48
48

52
52

a.
b.

Calculate the MSE for each method and compare the two methods.
Construct a 2s control chart for each method and interpret them. Do you agree with the analyst? Explain.

Q5 (Operation management: creating value along the
Supply Chain): The bookstore at Tech purchases jackets emblazoned with the school name and logo from a vendor. The vendor sells the jackets to the store for $38 apiece. The cost to the bookstore for placing an order is $120, and the annual carrying cost is 25% of the cost of jacket. The bookstore manager estimates that 1700 jackets will be sold during the year. The vendor has offered the bookstore the following volume discount schedule:

Order
Size
1-299
300-499
500-799
800+

Discount
0%
2%
4%
5%

2
What is the bookstore optimal order quantity, give this quantity discount information?

Q6 (Ref: Q. 12-30, p456 of the text book): A school bus depot operates 250 days a year. Daily demand for diesel fuel at the depot is Normal with an average of 250 liters and a standard deviation of 14 liters. Holding cost for the fuel is $.30 per liter per year, and it costs SlO in administrative time to submit an order for more fuel. It takes one day to receive a delivery of diesel fuel.
a. Calculate the EOQ.
b. Determine the amount of ROP that would be needed if the manager wants an annual service level of 99.5 percent.