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**preview**shows page 1. to view the full**5 pages of the document.**MSCI 432: Production and Service Operations Management, Winter 2010

Assignment # 1

Due by Thursday, January 28, 2010 in class, individual submissions

1. [3 marks] Read the article “Russia’s Factories Shift Gears” and pay attention to Gartung’s changes at

Chelyabinsk Forge-and-Press.

a. Using a bullet-point list, briefly summarize the changes, keeping in mind terminology used in the

class. Cite the text to support your points. (try to limit your answer to 120 words)

b. Comment on Gartung’s prediction regarding the fate of his competitors.

2. [4 marks] Retrieve the income statements and balance sheets of two publicly-traded firms from the

same industry for the three most recent years (different from those already discussed in the class).

Then, generate the 6 financial ratios mentioned in the class.

a. Generate and plot the inventory related measures/ratios of these firms.

b. Assess the inventory measures/ratios of each firm.

c. Contrast the two firms. Which stock were you to choose among the two based on these

measures/ratios?

Note: since you need to submit you work independently, it is highly unlikely your choice of firms will

coincide with that of another student.

3. [3 marks] A major oil company is considering the optimal timing for the construction of new

refineries. From the past experience, each doubling of the size of a refinery at a single location results in

an increase in the construction costs of about 68%. Furthermore, a plant size of 10,000 barrels per day

costs $6 million. Assume that the demand for the oil is increasing at a rate of 2 million barrels yearly

and the discount rate for the future costs is 15 percent.

a) Find the value of k and a assuming a relationship of the form f(y) = kya. Assume that y is in units of

barrels per day.

b) Determine the optimal timing of the plant additions and the optimal size of each plant.

c) Suppose that the largest single refinery that can be built with current technology is 15000 barrels per

day. Determine the optimal timing of plant additions and the optimal size of each plant in this case. (

Year = 365 days)

4. [20 marks] Shouldice Hospital Case Analysis

Learning Objectives: To apply process analysis methods and Little’s Law

To understand how OM can be applied to healthcare management problems

Purpose of the Analysis: To determine

capacity,

throughput, and

resource utilization

of the current and the future Shouldice Hospital

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