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Midterm

# Management and Organizational Studies 3330A/B Study Guide - Midterm Guide: 5,6,7,8, Indian Railways, Manufacturing Resource Planning

by OC25488

School

Western UniversityDepartment

Management and Organizational StudiesCourse Code

MOS 3330A/BProfessor

Rick BurjawStudy Guide

MidtermThis

**preview**shows pages 1-3. to view the full**12 pages of the document.**Test 2 Review Problems and Solutions

A. Computational Questions

(i) Review computational examples in the lecture notes.

(ii) Study questions from the old exams – more straightforward than the textbook

questions.

(iii) Study end-of-chapter problems in the textbook.

Note on rounding:

• General rule #1: In most cases, just use “normal” rounding. For example, 32.15 should be

rounded down to 32 if the final answer has to be an integer (e.g., order quantity). This

works for EOQ, EPQ and forecasting.

• General rule #2: For all intermediate calculations, use the decimal numbers (2 or 3

decimal places will suffice). For example, one question asks you to calculate EOQ and

the total cost. Let’s say that EOQ = 32.15. Then 32.15 will be rounded down to 32 in

your final statement of what the order quantity is. In order to calculate the total cost,

however, use 32.15 in the TC formula.

• Exception: For example, EOQ = 32.15 and rounded down to 32. Let’s say that the annual

demand is 1000. Based on these numbers, the number of orders = D/Q = 1000/32.15 =

31.1. Now, in the final statement, the optimal order quantity is 32, and if the number of

orders is 31, then the total demand satisfied = 31×32 = 992, which is less than 1000. Only

in this kind of situation, the number of orders may be rounded up to 32 from 31.1, and

state in the final answer that 32 orders are necessary to satisfy all of demand based on

EOQ = 32.

A1. Textbook Computational Problems

Topic Textbook End-of-Chapter Problems

Aggregate

Planning USE THE SAME TABLE FORMAT AND COLUMN HEADINGS AS THE

LECTURE NOTE EXAMPLES.

#1

#2 – textbook refers to it as level but it really is hybrid

#3

#4

#5 – textbook refers to it as chase but it really is hybrid

#6 – solution different from the textbook is provided

#7 – solution different from the textbook is provided

#9 – textbook refers to it as level but it really is hybrid

#11 – textbook refers to it as chase but it really is hybrid

#13

1

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Topic Textbook End-of-Chapter Problems

Resource

Planning (MRP) #1

#2

#3

#4

Scheduling #5

#7

#8

A2. Computational Questions from Old Exams

1. University Press publishes textbooks for the academic market. The relevant cost and printing

equipment-related capacity information are given below.

Regular production cost = $20 per book Regular production capacity = 10 000 books per quarter

Overtime production cost = $30 per book Overtime production capacity = 5000 books per quarter

Subcontracting cost = $35 per book Subcontracting capacity = unlimited

Holding cost = $2 per book Beginning inventory = 0

a) Fill all blank spaces in the following table so that it represents an initial aggregate production plan

using a pure level approach with average demand. What is the total cost of the initial plan?

Quarter Demand Total

Production Workforce Inventory Regular

Production Overtime

Production Subcontract Hire Fire

1 5000

2 10000

3 30000

4 25000

b) Fill all blank spaces in the following table so that it represents an initial aggregate production plan

using a pure chase approach. For this question, we will ignore workforce-related costs. What is

the total cost of the initial plan? Compared to the level approach in part a), which approach seems

better? Justify your answer briefly.

Quarter Demand Total

Production Workforce Inventory Regular

Production Overtime

Production Subcontract Hire Fire

1 5000

2 10000

3 30000

4 25000

c) Based on parts a) and b), develop an improved aggregate production plan in terms of the total

cost. The plan may deviate from a pure level or a pure chase approach. Assume that no other

information or objective will be considered. Provide the total cost of the improved plan and

explain briefly how you came up with your improved plan.

Quarter Demand Total

Production Workforce Inventory Regular

Production Overtime

Production Subcontract Hire Fire

1 5000

2 10000

3 30000

4 25000

2

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2. Wetski currently maintains a steady production level at the average demand all year around and does

not hire or fire workers. Fill all blank spaces in the following table so that it represents an aggregate

production plan based on Wetski’s current production and hiring policy. What is the total cost of this

plan?

Regular production cost = $55 per unit Production rate = 750 units/worker/quarter

Overtime production cost = $82 per unit Holding cost = $4 per unit per quarter

Subcontracting cost = $77 per unit Backorder cost = $80 per unit per quarter

Opening workforce level = 11 Hiring cost = $140 per worker

Overtime capacity = 2500 units per quarter Firing cost = $550 per worker

Subcontracting capacity = 1000 units per quarter Opening inventory = 0

Quarter Demand

(units) Total

Prod. Workforce Inventory Regular

Prod. Overtime

Prod. Subcontract Hiring Firing

Fall 3700

Winter 4600

Spring 14500

Summer 21000

3

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