CONFIDENTIAL UNIVERSITI KUALA LUMPUR Institute of Product Design and Manufacturing FINAL EXAMINATION JANUARY 2014 SESSION SUBJECT CODE : PBB23203/ PPB26304 SUBJECT TITLE : PRODUCTION AND OPERATION MANAGEMENT LEVEL : DEGREE TIME / DURATION : 9.00 am - 12.00 pm (3 HOURS ) DATE : 04JUNE 2014 INSTRUCTIONS TO CANDIDATES 4. Please read the instructions given in the question paper CAREFULLY 2. This question paper is printed on both sides of the paper 3. This question paper consists of THREE (3) sections; Section A, B and C. 4, Answer ALL questions. 5. Please write your answer on the answer booklet provided. ‘THERE ARE 8 PRINTED PAGES OF QUESTIONS, EXCLUDING THIS PAGE.JANUARY 2014 CONFIDENTIA! SECTION A (Total: 20 marks) INSTRUCTION: Answer ALL questions. Please use the OMR form provided. 1. Operations management is concerned with A. the design of the firm’s production systems, B. the operation of the firm’s production systems. C. the improvement of the firm's production systems. D. the tidiness of the firm's production systems. 2. Potential risk associated with globalization includes ‘A. supply chain logistic. B. cultural differences, C. loss of capabilities. D. cost competitiveness. 3. If a firm produced 5000 units of product last month using RM15000 Of energy and RM35000 of labor then its multifactor productivity measure for energy and labor inputs would be ‘A. 10.000 units per RM spent B. 0.333 units per RM spent C. 0.143 units per RM spent D. 0.100 units per RM spent 4, Characteristics of a product or service that allows it to be considered for purchase are known as A. Order qualifiers B. Order winners C. Core competencies D. Competitive priorities PBB23203/ PPE26304 PRODUCTION AND OPERATIONS MANAGEMENTJANUARY 2014 5. Product and services that are made to customer specification in response to customer orders are called A. mass produced items B. make-to-stock items. C. batch production items. D. make-to-order items. 6 What can organization do to decrease the breakeven point? ‘A. Increase the selling price of the end items. B. Decrease the selling price of the end items. C. Increase the variable cost D, Increase the fixed cost. 7. The following are reasons for ERP failures EXCEPT ‘A. Lack of top management commitment. B. Lack of proper training. C. Lack of advertisement. D Lack of customer order. 8, The following are the elements of a process flow chart A. Operation B. Storage C. Outsourcing D. Decision class companies or competitors. The key measurement criterion is A. Goods and services. B. Equipment. C, Factory size. D. Storage capacity. 10. Which of the following is NOT a major trade agreement? A. WTO. B. AFTA C. APEC D. MATTA PBB23203/ PPR26304 PRODUCTION AND OPERATIONS MANAGEMENT CONFIDENTIAL Benchmarking is a comparison of company's performance in certain areas with world-JANUARY 2014 ‘CONFIDENTIAL " 12. 13. 14. 15. \Value Chain is referred to relationship and the transformation process to add value to the product among A. Supplier-Customer-Competitor B. Supplier-Company-Government C. Customer-Company-Competitor D. Customer-Company-Supplier JIT system is becoming more popular in service sector. The best example of JIT in service industry can be observed in A. Supermarket chain. B. Grocery shop. . School D. Banking Which of the following is NOT a mark of a good layout in manufacturing? A. Straight line flow pattem. B. Predictable production line, C. Botteleneck operations D. Work stations close together ‘A layout which groups dissimilar machines into a work center to process a variety of parts is referred to as A. Process layout. B, Product layout C. Cellular layout D. Fixed-position product. Which of the following change is NOT a major production strategy variable associated with production planning and smoothing? A. Production rate. B. Inventory level. C. Work force size. D. Product price. PBB23203/ PPE26304 PRODUCTION AND OPERATIONS MANAGEMENT 3JANUARY 2014 CONFIDENTIAL 16. Which of the following is a mixed strategy for absorbing demand fluctuations? A. Altering the production rate by changing the size of the labor force. B. Using subcontracting to meet peak fluctuations in demand C. Using overtime, inventory and subcontracting, | D. Keeping the work force and production rate constant 17. Inventory is used to serve the following EXCEPT ‘A. Maintain independence of operations. B. Meet variation in product demand. : €. Allow flexibility in production scheduling, D. Ensure that the product quality is guaranteed 18. The reason for low level coding in MRP is to A. Show the relative importance of component items. B. Make it easier for the computer to search. C. Show the offset lead times in perspective. D. Facilitate updating transaction easily. 19. One of the key requirements for installing MRP system is | A. €0Q B. Low cost items C. Accurate forecasts. D. Identifiable dependent demand in-process inventory. 20. The three major inputs to an MRP system are the ‘A. MPS, inventory status record, and the BOM. B. BOM, inventory status record, and production structure record, C. Shop order, work orders, and reschedule notice D. On hand, on order, and lead time. 'PBB23203/ PPB26304 PRODUCTION AND OPERATIONS MANAGEMENT 4JANUARY 2014 CONFIDENTIAL, SECTION B (Total: 50 marks) INSTRUCTION: Answer ALL questions. Please use the answer booklet provided. Question 1 a) ‘As manager of The Gorgeous Fitness, Dania is constantly trying new initiatives to keep. her clients fit, Recent studies show that using several different cardio regimens for short periods of time is more effective than an extended period of time on one type of equipment: Dania has taken some of existing cardio equipment and arranged them in a line as follow: stationary bike, treadmill, stair stepper. Clients would select this part of the gym for cardio “circuit training’, spending 1 minutes at each piece of equipment for a total cardio workout time of 45 minutes. i. If the realibitity of the bike is 96%, the treadmill is 95%, and the stair stepper is 92%, what is the probability that a client can complete his/her workout uninterrupted by faulty equipment? (2 marks) ji, Dania has added a second cardio “line” for circuit training with the same type of equipment as the first ine. This equipment, however, is older with reliability of 80% each, If only one client were using the cardio circuit training section of the gym, the second line could be used as a backup for faulty equipment. What is the revised probability of completing a workout uninterrupted? (4 marks) The Subang Airport serves private aircraft. It has a single runway and one air traffic controller to land planes. It takes an airplane 8 minutes to land and clear the runway (exponentially distributed). Planes arrive at the airport at the rate of 6 per hour (Poisson distributed) i. Determine the average number of planes that will stack up waiting to land, (2 marks) iii, Find the average time a plane must wait in line before it can land, (2 marks) _PBB23203/ PPB26304 PRODUCTION AND OPERATIONS MANAGEMENTJANUARY 2014 CONFIDENTIAL ©) iv. Calculate the average time a plane takes to clear the runway once it has notified the airport that it is in vicinity and wants to land, (2 marks) v. International air traffic controller rules say an air traffic controller can on average, land planes at maximum of 45 minutes out of every hour. There must be 15 minutes of idle time available to relieve the tension. Will this airport have to hire an extra air traffic controller? (2 marks) Nisa, a chain of cash and carry supermarket, wants to expand operations in Malaysia. ‘The management is proposing 4 locations for the new supermarkets. After several studies made, they finally decided to build the supermarket at locations indicated by X and Y coordinates and the estimated annual sales for these 4 locations are presented in Table 1 Table 1: X and Y Coordinates Ty 2 Forecasted sales | Location X coordinate Y coordinate (Millions) K 125 700 128 B 250 75 3.00 HC “4500 300 TS D 200 350 160 Assuming the volume of product to be delivered is proportionate to sales; propose the coordinates for central distribution warehouse to minimize the transportation costs. (11 marks) PBB23203/ PPB26304 PRODUCTION AND OPERATIONS MANAGEMENT.JANUARY 2014 CONFIDENTIAL Question 2 ‘Complete the following MRP matrix for item X. Wem: X tLe Period Lot size: i172 73 ]4 [5 [6 [7 1/8 Gross requirement 20 | 30 40/60 ‘Scheduled receipts Projected on hand [40 Net requirements Planned order receipts Planned order releases Ordering cost: RM100 Holding cost: RM1 a) Compute in what periods should orders be released and what should be the size of those orders? (15 marks) b) Evaluate how would your answer change if the cost of ordering item X were RM 100, the cost of carrying were RM2 a week and the POQ lot si used? g technique were (8 marks) ¢) Determine which lot sizing technique yields the lowest total cost? (2 marks) 'PBE23203V/ PPB2G304 PRODUCTION AND OPERATIONS MANAGEMENTJANUARY 2014 CONFIDENTIAL SECTION C (Total: 30 marks) INSTRUCTION: Answer ALL questions. Please use the answer booklet provided. CASE STUDY ‘Amir is opening a new sport outlet at Taman Maluri, Demand for a newly designed sport shoes ate overwhelming, and the sales figures are expected to reach 6000 pairs per year. Each order placed cost RM25; the annual cost to carry the items in inventory is RM 6 each. The outlet operates 50 weeks per year. The order lead-time for the shoes from the factory is, 2 weeks. Develop the company's plan for the optimal order size, total inventory cost, number of orders, per year and time between orders per year. (15 marks) A few weeks ago, the company has been offered a particular material it uses according to the following discount pricing schedule provided by the supplier. The company uses 700 of the components annually, the annual carrying cost is RM14 per unit and the ordering cost is RM275. +99 RM65 200-599 RMs9 600+ RM56 Determine the amount the firm should order. (15 marks) END OF QUESTION PBH23203/ PPB26304 PRODUCTION AND OPERATIONS MANAGEMENT