CAPITULAR CAPITULO I
CENTROS PENITENCIARIOS PARA MUJERES
A.3 Personal Penitenciario
The number of occupied cells is 5, that is equal to the value of (m+n-1), i.e. (3+3-1). So, the solution obtained is a feasible solution.
Therefore, the cost associated with the solution is
= (8x200) + (9x100) + (11x150) + (11x250) + (16x200)
= 1,600 + 900 + 1,650 + 2,750 + 3,200
= Rs.10,100
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81. (c) Rs.25,000
Annual order cost = fixed cost per order (Co) x number of orders in the year
= Co x (annual demand/units ordered per order)
= 5,000 x (1,000,000 /200,000)
= 5,000 x 5
= Rs. 25,000.
82. (d) Rs.50,000
Holding cost per order is calculated as the product of holding cost per unit and average inventory.
Average inventory is the average of lowest inventory level and highest inventory level. Lowest inventory level in EOQ model is zero and highest is quantity order (Q).
Holding cost per order = holding cost per unit x [(Q+0)/2]
= 10 x (10,000/2)
= 10 x 5,000
= Rs.50,000
83. (b) Rs.250,000 and Rs.100,000
Total cost of making the product is equal to the unit variable cost (V) times the number of units demanded (Q) plus the fixed costs.
Total Cost make = Variable cost + Fixed cost = VQ + F = 25 x 2,000 + 200,000
= Rs. 250,000
Total cost of buying is the product of price per unit (P) and the number of units procured (Q), i.e.
Total Cost buy = P × Q = 50 x 2,000 = Rs. 100,000 84. (a) Rs.550,000 and Rs.700,000
Demand at the end of first year = 2,000 units Demand at the end of second year = 4,000 units Demand at the end of third year = 8,000 units
Total demand for the next three years = 2,000 + 4,000 + 8,000 = 14,000 units
Total cost of making the product is equal to the unit variable cost (V) times the number of units demanded (Q) plus the fixed costs.
Total Cost make = Variable cost + Fixed cost = VQ + F Total cost to make 14000 units = (25 x 14,000) + 200,000
= Rs.550,000
Total cost of buying is the product of price per unit (P) and the number of units procured (Q), i.e.
Total Cost buy = P × Q.
Total cost to buy 14000 units = 14,000 x 50
= Rs. 700,000
Hence, it is profitable to make this component in-house in the long run.
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85. (b) Make
Option A: Buy the components for all the five years
The cost incurred for buying the components = 25,000 × 50 = Rs.1,250,000 Option B: Make the components in-house for all the five years
The cost incurred in making the components in-house = (25,000 × 30) + 200,000 = 750,000 + 200,000 = Rs.950,000.
Option C: Buy the components for the first two years and make for the remaining three years The given situation can also be represented algebraically as follows:
Let n be the demand for the first two years during which the company has decided to buy the components. Then, the number of units for the remaining 3 years would be (25,000-n) units.
The total cost would be = One-time Fixed Cost + Variable Cost of buying n units + Variable Cost of producing (25,000-n) units
i.e., Total Cost = 200,000 + (n × 50) + [(25,000 – n) × 30]
= 200,000 + 50n + 750,000 – 30n
= Rs.950,000 + 20n
Therefore, the total cost of (Rs.950,000 + 20n) is more than the cost of making the components in-house which is Rs.950,000.
Option D (cannot decide) is irrelevant in the given context as one can calculate the costs under different conditions and select the best one.
Conclusion:
In the given situation, the fixed cost is a one-time fixed cost, which would be incurred even if one unit of the component is made in-house. Once this fixed cost is incurred, every unit that is bought with a variable cost of Rs.50 per unit adds (Rs.50 – Rs.30) = Rs.20 to the total cost, as compared to the option of making that unit in-house. So, there is no benefit in switching to in-house production at any interim point of time.
Over the five-year period, it is clear that Option B costs less than Option A or Option C. Hence, making the components in-house is the best decision.
86. (b) 10.75, 9.06 Distribution
Center X Y Quantity
(in tons) (Q) QX QY
A 5.5 7 60 330 420
B 8 12 90 720 1080
C 12 6 110 1320 660
D 15 11 100 1500 1100
Total 360 3870 3260
Xc = ∑QX/∑Q = 3870/360 = 10.75 Yc = ∑QY/∑Q = 3260/360 = 9.06
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Answers and Explanations
1. (a) Conveyance authorization card
A Kanban system uses three types of cards to initiate material transactions: production authorization card, vendor authorization card, and conveyance authorization card. A conveyance authorization card authorizes a materials handling agent to move the tray to a specified destination.
This specifies the product’s name, its identification number, and delivery destination.
2. (a) Checking the quantity and quality of the incoming material and generating receiving reports
Checking the quantity and quality of the incoming material and generating receiving reports is a function of the purchasing/receiving department which falls under the production control. The other three options are associated with inventory control. Inventory control is used to minimize the overall cost of production.
3. (d) Quality of material
Some factors that influence the materials handling function are - type of plant layout, type of production process used, nature of materials and the material handling equipment used. Quality of material used can be a factor affecting the quality of finished product but it does not directly influence the material handling function.
4. (a) Playback robots
Playback robots can store a sequence of operations in the memory. Initially, an operator performs operations using a robot. The robot stores all those activities (in the same sequence) in its memory and repeats them to produce similar types of products on its own subsequently.
5. (b) A vendor immediately fills up the inventory with the required quantity
A conveyance card only authorizes the material handling agents to fill material trays with required material from the inventory and bring it back to the production worker. It does not authorize the vendor to replenish inventory. A vendor authorization card is used to signal the vendor to replenish inventory.
6. (a) The Kanban system follows the open loop system
Kanbans operate in closed loops and they continue to operate until the materials manager withdraws them.
7. (b) Demand rate of a product
The number of Kanbans can be altered according to the estimated demand for a product. If the demand for the product increases, a larger number of Kanbans are used to meet the increased demand. Similarly, the number of Kanbans can be reduced if the demand for the product decreases.
8. (a) ii and iv
Trucks, forklifts, mobile cranes, and industrial tractors are examples of variable-path materials-handling equipment. A conveyor is an example of fixed path equipment.
9. (d) Bill of materials
Bill of materials is associated with the inputs of an MRP system.
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10. (a) Required quantities and delivery dates of final products
The Master Production Schedule (MPS) file contains information about when and how many units of finished products are required. It also gives the available cumulative lead-time for purchasing, receiving, fabricating, and assembling.
11. (b) Planning report
While master production schedule, bill of materials, and inventory records file are inputs to a MRP system, planning report is an output.
12. (a) Explosion
The first step in the MRP information processing is explosion where the end product is disassembled into components. Explosion starts from the time a product is required and proceeds backward to determine each production or purchasing activity that is necessary to make each higher-level item in the product structure chart.
13. (d) i, ii, iii
The list of materials along with the quantity required to produce one unit of a product is part of the Bill of Materials (BOM). The other three alternatives are part of the master production schedule.
14. (a) i, ii, and iii
The success of an MRP system usually depends on the product environment. The system is useful only when an organization needs to purchase many items, a majority of which are components and parts. The demand pattern of these items should be dependent in nature and irregular in timing.
Moreover, the lead times for purchase of these items should be consistent (not inconsistent).
15. (a) Flextime approach
Under the flextime approach, employees are given the option of choosing their work timings, provided a specific number of hours are completed in a time period, say a week.
16. (a) Helps manage demand by adjusting the price for services
Flexibility in setting price for services is not a characteristic of reservation systems. Strategic product pricing is a scheduling approach that helps a firm respond to shifts in demand.
17. (b) Loading
The activity of loading aims at minimizing costs by reducing machine idle time, the amount of work-in-process inventory, etc. Loading includes the task of sequencing jobs so that the machine idle times are minimized and jobs are completed within the least time possible.
18. (c) Service operations are scheduled according to inventory requirements
Service operations are scheduled according to demand rather than inventory requirements. Hence, they follow the first in, first serve rule of scheduling. The appointment system is one such method using this rule.
19. (c) Strategic product pricing
Strategic product pricing is a method that helps firms adjust to shifts in demand. The reservation system allows many customers to use the service at a time by dedicating multiple resources to provide the service. Appointment systems are used to control customer flow at the individual level.
Routing is a scheduling activity that explains the sequence of operations and processes to be followed to produce a particular product.
20. (a) Only i
In an n-job and three-machine sequencing problem, three machines; A, B and C, are involved, and each job is processed in the order ABC. In this procedure, we should ensure that -- the smallest processing time on machine A should be greater than or equal to the largest processing time on machine B or the smallest processing time on machine C should be greater than or equal to the largest processing time on machine B.
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21. (a) Loading
Loading is the process of assigning specific jobs to each work center depending on its capacities.
22. (d) Staggered times approach
Staggered times indicate that employees can choose their work hours from a list of available shifts.
23. (c) Dispatching
Dispatching is the process of releasing job orders to workers to go ahead with the production process. In this activity, an operations manager releases job orders in accordance with the planned sequence.
24. (c) Systems, Application and Products
The expansion of SAP is Systems, Application and Products in data processing.
25. (c) ii, iii, iv
Integration of data across departments helps in better connectivity and smooth flow of information.
It reduces data redundancy and ensures availability of right information to the concerned department or personnel.
26. (d) Steering committee
The key activity of the steering committee is to monitor the implementation process continuously in order to identify deviations, cost overruns, resource requirements, etc, during ERP implementation.
27. (d) i and iv
ERP extends the functionality of MRP and MRP II systems to provide complete business solutions. MRP systems are used in manufacturing to automate inventory management and production processes. MRP II is an extension of MRP providing an interface with other functional domains. As a result, it is able to achieve a high degree of integration with other automated processes.
28. (b) Evaluate the ‘as–is’ situation of the business
The listing of processes in business transactions is done while evaluating the ‘as-is’ situation of the business. Hence, process mapping is done in this stage of ERP implementation.
29. (a) Compensation and benefits
The six enablers of SCM are: Customer-supplier focus, design, measurement, participation/involvement, periodic review, and alignment.
30. (c) SCM strategy
SCM strategy forms a blueprint for supply chain operations that support and are consistent with the manufacturing and marketing objectives of the organization.
31. (a) Develop policies that reward low cost purchases and intense negotiations
Good alignment is achieved through effective planning and execution in conjunction with cross-functional interaction, effective information systems and organization-wide continuous communication systems. Besides, the company leadership should strive to set goals, objectives and strategies that support successful supplier relationships. For example, if the management rewards the purchasing department for obtaining products at low prices from suppliers, it might hamper the development of long-term relationships or partnerships with suppliers.
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32. (d) The players in a demand chain are different from those in the traditional supply chain
In a demand chain, meeting customer demand in time is given paramount importance. Alliances are made between demand chain partners who can best meet customer requirements. The players in today’s emerging demand chains are the same as those in traditional chains, but their respective roles and responsibilities have changed.
33. (d) ii, iii, and iv
The advantages of ESCM are many, including timely order-processing, improved inventory tracking and management, more accuracy in order fulfillment, support for JIT manufacturing, cost savings, reduction in cycle time, reduction in procurement costs, etc. ESCM results in an
“extended organization” that encapsulates suppliers’ activities. The extended organization structure provides instant information about the status of inventory levels to suppliers. Therefore, there is no need to carry high inventory.
34. (a) Operational planning
The operational planning component defines the operational requirements for maintaining a supply chain. These requirements are specified in terms of tasks, resource requirements and measurements. The functions under operational planning include commodity planning, supplier capacity planning, planning for supplier evaluation, certification processes, etc.
35. (c) Many suppliers for a given part/component with short-term contracts JIT encourages a firm to maintain fewer suppliers with long-term relationships
36. (c) Suggestions of workers are collected, evaluated, tested, and implemented by the management
The open management style should not imply that workers are free to implement whatever methods they like. Instead, existing procedures should be continued until a better way is suggested, tested and approved. Suggestions by workers to improve processes are first collected and evaluated by the management. The selected suggestions are tested practically to determine how much better they are compared to the existing process. If the suggested process proves better than the existing one, the management approves it for implementation.
37. (b) i, ii, and iv
Building effective partnerships in a JIT system depends on four elements - trust, communication, linearity of production, and time to make changes. The design of a product has no direct bearing on the extent of relationship with the suppliers.
38. (a) JIT firms select suppliers located away from the plant
Firms practicing JIT systems should have suppliers at close proximity. This enables easy transportation and consistent delivery in the face of frequent purchases of material.
39. (a) Eliminating external demand variations
External demand variations cannot be eliminated by using the JIT system. By using JIT principles, firms can reduce wastage that arises during the production process such as the waste of overproduction, of time spent in waiting, in transportation and movement, in processing, in keeping excess inventory and in defective parts.
40. (a) Collection – evaluation – selection – testing – approval – implementation
Suggestions made by workers for improving processes are first collected and evaluated by a firm’s management. The suggestions selected are tested practically to determine how much better the new process is, compared to the existing process. If the suggested process proves better than the existing one, the management approves it for implementation.
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41. (c) Quality training
Prevention costs include investments made in machinery, technology and education/training programs to reduce defects. It also includes costs to administer the firm’s quality program, data collection and analysis, and vendor certification. Equipment maintenance is a detection or appraisal cost. Disposition of defective items is an internal failure cost and warranty charges are an external failure cost.
42. (d) ii and iv
‘Goods produced /man hours spent’ indicate the number of goods produced by a worker in an hour, which is a measure of labor productivity in manufacturing concerns. Similarly ‘customer’s handled /number of attendants’ indicates average number of customers handled per attendant, which is a measure of labor productivity in service industries.
43. (a) i/q, ii/s, iii/r, iv/p
Durability is the operational life of a product. Serviceability is concerned with how readily a product can be serviced back into operational mode. Performance indicates the ability of a product’s primary operating characteristics. Reliability is the probability of a product failing in a time period.
44. (a) Prevention costs
Prevention costs are costs incurred by a company to prevent defective goods and services from being produced and/or delivered to customers. This category includes investments made in machinery, technology, and education/training programs to reduce defects. It also includes costs to administer the firm’s quality program, data collection and analysis, and vendor certification.
45. (b) Sample 3 is outside the control limits. Further investigation is warranted
Range of Sample 3 is 1.2, which is more than the upper control limit of 1.00. Hence, sample 3 is outside the upper limit and requires further investigation.
46. (b) Reliability
Reliability is usually measured as the mean time between failures (MTBF) or the failure rate per unit of time or any other measure of use.
47. (b) Facilities management
The primary objective of facilities management is to provide a clean and conducive work environment and enable efficient and effective progress of the core functions of an organization, be it manufacturing, distribution, or research. Maintenance management is a primary function associated with facilities management.
48. (b) Outsource different tasks to different vendors
It is important to outsource as well as out-task activities to retain control over vendors. Total dependence on a single vendor is not advised. The basic objective of outsourcing is to enable a company to focus on core competencies.
49. (a) Irregular preventive maintenance
Irregular preventive maintenance includes tasks like repairs, overhauls, and cleaning of spills.
These activities are carried out when a casual inspection of a machine reveals the need for servicing before the next periodic preventive maintenance.
50. (c) Maintenance carried out when a machine is idle and waiting for the next job
Opportunity maintenance is carried out when the equipment is idle or it has been stopped. These maintenance activities are not scheduled beforehand. If the equipment is idle, it is inspected, and requisite repair or maintenance tasks are carried out.
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51. (a) Janitor’s services
Janitor’s services involve housekeeping in the interior and exterior of buildings and manufacturing facilities.
52. (d) i, ii, and iv
The functions of maintenance management are: preserve the value of the firm’s machinery and other assets, use maintenance personnel and equipment efficiently, maximize the availability of machinery for production process, eliminate or reduce accidents by regular inspection and plan and schedule maintenance work to reduce breakdowns.
53. (b) Event
An event is the outcome of an activity or group of activities. It represents the completion of some activities and the beginning of some others in the network.
54. (c) FMS
FMS (flexible manufacturing system) is a form of flexible automation in which several machine tools are linked to a material-handling system. A central computer controls all aspects of the system which is effective in producing different items that have similar processing requirements.
55. (a) Comparative advantage
The comparative advantage of a country can be defined as its ability to produce goods and services cheaper than other countries. Organizations generally globalize their operations to take advantage of these opportunities.
56. (d)
( )
6 tp 4tm to
te + +
=
Expected time represents the mean activity time of the optimistic, pessimistic, and most likely times. Expected time is calculated by using the equation,
( )
6 tp 4tm to
te + +
=
Option ‘a’ gives the formula for mean time between failures. Option ‘b’ gives the formula for the probability of completing the project within the desired completion period. Option ‘c’ represents activity time variances.
57. (b) Different products with similar components and manufacturing processes can be manufactured
In comparison with traditional automated systems, the flexible manufacturing system (FMS) offers many advantages such as reduced direct labor, shorter response time, consistent product and better
In comparison with traditional automated systems, the flexible manufacturing system (FMS) offers many advantages such as reduced direct labor, shorter response time, consistent product and better