Mid-term Practice_solution

Mid-term Practice_solution - Production and Operations...

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Production and Operations Management (70-371) Professor Soo-Haeng Cho Practice Mid-term Exam P ROBLEM 1 State whether you agree or disagree with the following statements and briefly explain your reasoning: (a) [2 points] The most important goal of the operations function is to minimize manufacturing costs. Disagree: The goal of operations function depends on a firm’s objective. If maximizing ROA or profits is a firm’s objective, this entails significantly improving revenues by focusing on lead time, quality, and/or variety. Depending on how a firm competes, profit maximization does not necessarily lead to cost minimization. (b) [2 points] A batch process should be chosen if a firm wants to compete on cost. Disagree: A batched process is better suited for producing customized products. Often, these products command a price premium because of their higher degree of customization. An assembly process is better suited for producing standardized, low-cost products. P ROBLEM 2 Kick Flip Inc. makes skateboard decks for specialty skateboard stores. The demand for decks placed on this company is much greater than its production capacity. The production process of the skateboard decks consists of the 3 steps as shown in the figure below. In the first stage the raw material is sanded. This step takes 3 minutes per deck. After this step, the decks are painted using a Lithography machine. There are typically five patterns that can be painted on this machine and each deck has one pattern. It takes 15 minutes to set up this machine for a particular pattern and 2 minutes of production time per deck. The decks are then loaded onto a pallet and dried quickly using an ultraviolet lamp. The pallet is not placed under the lamp until all decks in a batch have been painted. The lamp can dry up to 50 decks at one time. Drying takes 30 minutes regardless of batch size. Sanding, painting, and drying each have one operator. There is an inventory buffer between the first and second stage.
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Consider a batch size of 50 decks. (a)
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This note was uploaded on 01/20/2012 for the course INVESTMENT 101 taught by Professor Unknown during the Spring '08 term at Carnegie Mellon.

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Mid-term Practice_solution - Production and Operations...

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