SOP720 midterm

Comprehensive Midterm
Assignment – Version 2
Your Name:
________________ Course
Session: ___________________
Answer the following four questions. Be sure to answer all parts of
the questions thoroughly. (25 points each)

1. Alyssa’s
Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each
month for $50, $150, and $100 each, respectively. It takes 90 minutes to
produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes
to produce a specialty cake. Alyssa’s current multifactor productivity ratio is
1.25.
a) Use
the multifactor productivity ratio provided to calculate the average cost of
the cakes produced.
b) Calculate
Alyssa’s labor productivity ratio in dollars per hour for each type of cake.
c) Based
solely on the labor productivity ratio which cake should Alyssa try to sell the
most.
d) Based
on your answer in part (a), is there a type of cake Alyssa should stop selling?

2. Consider
the following data for a project never before attempted by your company:
a) Draw the network diagram
for this project.
b) Identify the
critical path and estimate the project’s duration.
c) Calculate the slack
for each activity.

Activity

Expected Time (weeks)

Immediate Predecessor(s)

A

5

—–

B

3

—–

C

z2

A

D

5

B

E

4

C, D

F

7

D

3. Suppose
you are in charge of a large mailing to the alumni of your college, inviting
them to contribute to a scholarship fund. The letters and envelopes have been
individually addressed (mailing labels were not used). The letters are to be
processed (matched with correct envelope, time estimated to be 0.2 minutes
each), folded (0.12 minutes each), and stuffed into the correct envelope (0.10
minutes each). The envelopes are to be sealed (0.05 minutes each), and a large
commemorative stamp is to be placed in the upper right hand corner of each
envelope (0.10 minutes each).
a) Make
a process chart for this activity, assuming that it is a one person operation.
b) Estimate
how long it will take to stuff, seal, and stamp 2,000 envelopes. Assume that
the person doing this work is paid $8 per hour. How much will it cost to
process 2,000 letters?
c) Consider
each of the following process changes. Which changes would reduce the time and
cost of the current process?
· Each
letter has the same greeting “Dear Alumnus or Alumna,” instead of the person’s
name.
· Mailing
labels are used and have to be put on the envelopes (0.10 minutes each).
· Pre-stamped
envelopes are used.
· Envelopes
are stamped by postage meter which can stamp 200 letter per minute.
· Window
envelopes are used.
· A
pre-addressed envelope is included with each letter for contributions (adds
0.05 minutes to stuffing step)
d) Would
any of these changes be likely to reduce the effectiveness of the mailing? If
so, which ones? Why?
e) Would
the changes that increase time and cost be likely to increase the effectiveness
of the mailing? Why or why not?

4. Jim’s
Outfitters, Inc., makes custom fancy shirts for cowboys. The shirts could be
flawed in cautious ways, including flaws in the weave or color of the fabric,
loose buttons or decorations, wrong dimensions, and uneven stitches. Jim
randomly examined 10 shirts, with the following results:

Shirt

Defects

1

8

2

0

3

7

4

12

5

5

6

10

7

2

8

4

9

6

10

6

a) Assuming
that 10 observations are adequate for these purposes, determine the three sigma
control limits for defects per shirt.
b) Suppose
that the next shirt has 13 flaws. What can you say about the process now?