Part I Quality
Control (11 points)

Southwest keeps gate time of its planes at a minimum
in order to maximize the flying time, hence capacity utilization of its
planes. They want to achieve a turnaround time of 20 minutes on average
with a maximum of 25 minutes and a minimum of 15 minutes. (Although faster
would be fine with them, the FAA and passengers might think they are
cutting corners and not doing everything correctly).

At the Baltimore
airport (BWI), 3 gates a day were sampled over four days to determine how the
Southwest ground crew at BWI was doing on this standard. The average of the
process was 20.5 minutes and the standard deviation was 1.5 minutes.

(2 points)
Fill in the following table.

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20
minutes

USL

25
minutes

LSL

15
minutes

(5 points)
Is the process centered and capable? Why or why not?

Why?

c.
(4 points) What is the probability that a plane will
have a turnaround time of greater than 25 minutes?

Management (11 points)

2.
Southside restaurant uses a fixed
quantity (continuous replenishment) system. Daily demand for bags of coffee is
normally distributed with a mean of 36 and standard deviation of 8. The lead
time is constant at 5 days. The management wants to have a 92 percent service
level and the restaurant is open 365 days per year. Holding costs are $0.50 per
year and the ordering costs are $2.5 per order. .

a.
(3
points) Determine the order quantity at which the total inventory costs would
be minimized?

b.
(4
points) What is the reorder point and the time between orders?

c. (4 points) Illustrate the order quantity, re-order point,
safety stock and lead time on a diagram where the Y-axis represents the number
of coffee bags and the x-axis represents the time? What is the maximum possible
inventory in the system at any point of time?

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Part IV Short Answer Questions (18 points)

1.
(4 points) We have discussed in class how
service companies cope with demand variability. Please briefly describe two
techniques to adjust service demandand
two techniques to adjust service supply
that can be used to deal with this variability. Be sure to identify (label) which adjust
service demand and which adjust service supply.

2. (4 points)
What might you do in designing a two-stage process where each process had equal
average process time but with high process time variability in the first stage
and low variability in the second stage? Identify at least 2 options. Why are
these good possibilities?

3. (6 points total, 1.5 points each) Practice
your Japanese: Please fill in the appropriate English meaning as discussed in
class for the Japanese word and provide an example of the concept.

Concept

English
Meaning/Definition

Example

Poke-yoke

Kanban

Kaizen

Muda

(2
points) The best case was ________The Wal-Mart China Case________________________________because:
Part V Multiple Choice and True/False (25 points)

Multiple choice (16 points, 2 points each): Please highlight (in
yellow) the correct answer.

1. Animal
shelters tend to order Sodium Barbipentathol in large batches (e.g., enough to
last 6 months or more). Smaller quantities
would be ordered (e.g., a couple of weeks worth) except government regulations
require extensive and detailed paperwork to be submitted with each order. This example is most closely related to the
following managerial insight:
a.
the order quantity increases as the holding cost rate
decreases
b.
the order quantity increases as the cost per order increases
c.
the order quantity increases as the shortage cost rate
decreases
d.
the order quantity increases as the trade balance
decreases

2. Which one of the
following does not exemplify JIT/Lean used for competitive advantage?
a.
Acme
Foods decides to decrease the number of its suppliers to just a few.
b.
Cajun
Contractors has reduced the amount of space for inventory.
c.
Cheramie Trucking trains workers to
specialize and become very efficient in one job.
d.
Ardoyne
Builders has a scheduled preventive maintenance program.
e.
Ajax,
Inc. is proud to announce that incoming goods are delivered directly to the
point of use.

A
tennis ball manufacturer has identified several causes of variability in
the bounce and has collected data on the number of times those causes have
led to high variability over the past month. They now need to decide which
causes to try to eliminate first. Which tool should they use?

a.
5S
b.
Pareto diagram
c.
ABC Analysis
d.
R-chart
e.
PDCA

4. Which of the following offers a potential for
reducing inventory costs in a supply chain?
a. sharing POS data across the supply chain
b. sharing components across different products
c. having more warehouses
d.
a and b
e. a and c
f. b and c

5.
Another term
for a postponement strategy is
a.
Speculation
b.
delayed differentiation
c.
mass
customization
d.
decreased
differentiation
e.
None of the above

6. Which of the following phrases describes the chart below about the reasons for unsatisfying hotel
stays?
a. H is the most important problem
b.
80%
of the reasons cause 20% of the dissatisfaction.
c. A is the most important problem
d.
20% of the reasons
cause 60% of the dissatisfaction
e. None of the above.

.jpg” alt=”chart.BMP”>

7. Which of the following statements is not a
characteristic of pull supply chains?
a.
Inventory levels are
typically low
b. Ordering decisions
are based on long-term forecasts
c.
Firms respond to
specific customer orders
d.
Allows faster response
to changing markets

8. If a production process is in
statistical control , which of the following statements is incorrect
a.
There are no special
causes of variation in the process
b. The process will
always be capable of meeting the customer specifications
c.
There are common
causes of variation in the process
d.
The range of the
process is in statistical control

True/False (1 point each, 9 points)
1.
________ Variation in production systems that is
caused by factors that can be clearly identified and possibly even managed is
called assignable variation.
2.
________ EOQ
balances purchase cost and ordering cost.
The balance inventory order costs and carrying costs.
3. ____ Your
suppliers supplier is a third tier supplier.
4.
______ Under the assumptions of the Basic EOQ
model, if one increases the order quantity, then the length of the order cycle
decreases (with demand and cost parameters remaining the same).
5. ___ A high-end, customized furniture
manufacturer, would most likely employ an assembly-line type of process.
6.
________ Productivity
is the total value of outputs produced divided by the total value of all inputs
to the transformation process.
7.
_____ Under constant lead time, the key drivers of
safety stock are lead time, standard deviation of demand, and the safety
factor (or service level).
8.
_________ The
idea behind Pareto charts is that working with the majorityof possible causes is needed
to significantly improve quality. According to me this
is true
9.
_____
Under the assumptions of EOQ model, if the total optimal cost (fixed ordering
cost + holding cost) is $10,000, then the holding cost part is $5,000.

Part I Quality
Control (11 points)At the Baltimore
airport (BWI), 3 gates a day were sampled over four days to determine how the
Southwest ground crew at BWI was doing on this standard. The average of the
process was 20.5 minutes and the standard deviation was 1.5 minutes..gif”>20
minutesUSL25
minutesLSL15
minutesWhy?c.
(4 points) What is the probability that a plane will
have a turnaround time of greater than 25 minutes?Management (11 points)2.
Southside restaurant uses a fixed
quantity (continuous replenishment) system. Daily demand for bags of coffee is
normally distributed with a mean of 36 and standard deviation of 8. The lead
time is constant at 5 days. The management wants to have a 92 percent service
level and the restaurant is open 365 days per year. Holding costs are $0.50 per
year and the ordering costs are $2.5 per order. .a.
(3
points) Determine the order quantity at which the total inventory costs would
be minimized? b.
(4
points) What is the reorder point and the time between orders?c. (4 points) Illustrate the order quantity, re-order point,
safety stock and lead time on a diagram where the Y-axis represents the number
of coffee bags and the x-axis represents the time? What is the maximum possible
inventory in the system at any point of time?.gif”>.gif”>Part IV Short Answer Questions (18 points)1.
(4 points) We have discussed in class how
service companies cope with demand variability. Please briefly describe two
techniques to adjust service demandand
two techniques to adjust service supply
that can be used to deal with this variability. Be sure to identify (label) which adjust
service demand and which adjust service supply.2. (4 points)
What might you do in designing a two-stage process where each process had equal
average process time but with high process time variability in the first stage
and low variability in the second stage? Identify at least 2 options. Why are
these good possibilities? 3. (6 points total, 1.5 points each) Practice
your Japanese: Please fill in the appropriate English meaning as discussed in
class for the Japanese word and provide an example of the concept.ConceptEnglish
Meaning/DefinitionExamplePoke-yokeKanbanKaizenMudaPart V Multiple Choice and True/False (25 points)Multiple choice (16 points, 2 points each): Please highlight (in
yellow) the correct answer.1. Animal
shelters tend to order Sodium Barbipentathol in large batches (e.g., enough to
last 6 months or more). Smaller quantities
would be ordered (e.g., a couple of weeks worth) except government regulations
require extensive and detailed paperwork to be submitted with each order. This example is most closely related to the
following managerial insight:a.
the order quantity increases as the holding cost rate
decreasesb.
the order quantity increases as the cost per order increasesc.
the order quantity increases as the shortage cost rate
decreasesd.
the order quantity increases as the trade balance
decreases2. Which one of the
following does not exemplify JIT/Lean used for competitive advantage? a.
Acme
Foods decides to decrease the number of its suppliers to just a few. b.
Cajun
Contractors has reduced the amount of space for inventory. c.
Cheramie Trucking trains workers to
specialize and become very efficient in one job. d.
Ardoyne
Builders has a scheduled preventive maintenance program. e.
Ajax,
Inc. is proud to announce that incoming goods are delivered directly to the
point of use. a.
5Sb.
Pareto diagramc.
ABC Analysisd.
R-charte.
PDCA4. Which of the following offers a potential for
reducing inventory costs in a supply chain? a. sharing POS data across the supply chain b. sharing components across different products c. having more warehousesd.
a and be. a and cf. b and c5.
Another term
for a postponement strategy isa.
Speculationb.
delayed differentiationc.
mass
customizationd.
decreased
differentiatione.
None of the above6. Which of the following phrases describes the chart below about the reasons for unsatisfying hotel
stays?a. H is the most important problemb.
80%
of the reasons cause 20% of the dissatisfaction.c. A is the most important problemd.
20% of the reasons
cause 60% of the dissatisfaction e. None of the above..jpg” alt=”chart.BMP”>7. Which of the following statements is not a
characteristic of pull supply chains? a.
Inventory levels are
typically low b. Ordering decisions
are based on long-term forecasts c.
Firms respond to
specific customer orders d.
Allows faster response
to changing markets 8. If a production process is in
statistical control , which of the following statements is incorrect a.
There are no special
causes of variation in the process b. The process will
always be capable of meeting the customer specifications c.
There are common
causes of variation in the process d.
The range of the
process is in statistical control True/False (1 point each, 9 points)1.
________ Variation in production systems that is
caused by factors that can be clearly identified and possibly even managed is
called assignable variation.2.
________ EOQ
balances purchase cost and ordering cost. The balance inventory order costs and carrying costs.3. ____ Your
suppliers supplier is a third tier supplier.4.
______ Under the assumptions of the Basic EOQ
model, if one increases the order quantity, then the length of the order cycle
decreases (with demand and cost parameters remaining the same). 5. ___ A high-end, customized furniture
manufacturer, would most likely employ an assembly-line type of process. 6.
________ Productivity
is the total value of outputs produced divided by the total value of all inputs
to the transformation process.7.
_____ Under constant lead time, the key drivers of
safety stock are lead time, standard deviation of demand, and the safety
factor (or service level).8.
_________ The
idea behind Pareto charts is that working with the majorityof possible causes is needed
to significantly improve quality. According to me this
is true9.
_____
Under the assumptions of EOQ model, if the total optimal cost (fixed ordering
cost + holding cost) is $10,000, then the holding cost part is $5,000.