MBA 812 Final Exam Spring 2024
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MBA 812 Final Examination
Spring 2024 Pace University Lubin School of Business
Prof. Christian N Madu
Answer all questions. All work must be shown to qualify for partial credit. Each answer must provide a managerial explanation of the outcomes.
1.
Office Automation Inc., has developed a proposal for introducing a new computerized office system that will improve word processing and interoffice communications for a particular company. Contained in the proposal is a list of activities that must be accomplished in order to complete the new office system project. Information about the activities is shown in the table below. Times are in weeks.
Data for Office Automation, Inc.
Activity
Description
Immediate
Predecessors
Normal
Time
Crash
Time
Normal
Cost ($)
Crash
Cost ($)
A
Plan needs
-----------
10
8
30
70
B
Order equipment
A
8
6
120
150
C
Install equipment
B
10
7
100
160
D
Set up training lab
A
7
6
40
50
E
Training course
D
10
8
50
75
F
Testing system
C, E
3
3
60
-------
a). Show the network for the project.
b). Develop an activity schedule for the project using normal times.
c). What are the critical path activities and what is the expected project completion time?
2.
Use the Trial and Error Method to solve this problem and crash off two weeks from the project. What is the Total Cost of Crashing including the Normal Cost?
3.
Suppose that 15 components are sampled (n = 15) from a very large lot of components that have just been received. Assume that management decides to accept the lot only if no more than two nonconforming items are found in the sample; that is,
c = 2. Although we do not have the actual percentage of nonconforming components in the lot, let us assume that this value is 5%. What is the probability that the lot will be accepted using this particular sampling plan? What happens if c = 4?
b). Use the information above and develop the OC curve for the sampling plans (n=15, c=2) and (n=15, c=4) in the same chart. If AQL is 3% and LTPD is 15%, what will be the
producer and consumer risks for the two sampling plans (n=15, c=2) and (n=15, c=4) to be appropriate?
4.
A product is ordered once each year, and the reorder point without safety stock (dL) is 100 units. Inventory carrying cost is $10 per unit per year, and the cost of a stockout is $50 per year. Given the following demand probabilities during the reorder period, how much safety stock should be carried?
DEMAND DURING REORDER PERIOD
PROBABILITY
0
.1
50
.2
ROP 100
.4
150
.2
200
.1
5.
Tom Jones, the mechanic at Golden Muffler Shop, is able to install new mufflers at an
average rate of 5 per hour (or about 1 every 15 minute), according to a negative exponential distribution. Customers seeking this service arrive at the shop on the average of 3 per hour, following a Poisson distribution. They are served on a first-in, first-out basis and come from a very large (almost infinite) population of possible buyers. Calculate the operating characteristics of Golden Muffler’s queuing system. Make sure to calculate all the operating characteristics.
b. Develop a probability table to calculate f(x), F(x), for x = 0, 1, 2, …, 10.
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