## Darren is operations manager of a company producing Christmas decorations.

### management

##### Description

QUESTION 1

Darren is operations manager of a company producing Christmas decorations.  As a result, he is concerned about making enough of the decorations in time to get them in the time for the ever-earlier Christmas season.  He has just been given the following production report.   His necessary monthly average productivity is 12 units per machine hour.  Has he met that average each month?  Calculate each monthly average to show me your rationale for your answer.

 Jan Feb March April Units produced 3600 4500 5700 7200 Hours per machine 120 120 120 120 Number of machines 3 3 4 6

QUESTION 2

Carmen sells customized gingerbread houses.  She has sold the following number over the past 8 years.  Calculate the models for the time period shown and generate a forecast for 2017. Which of the models (Moving average, weighted moving average (she’s using 3-1-1) or  exponential smoothing) would best predict how many she should produce next year?  Hint:  show me all of the models.  Use alpha=.2. and presume, for purposes of the Exponential Smoothing Forecast, that the prior model had forecast 180 units in 2009.

2009       180

2010       210

2011       195

2012       220

2013       250

2014       280

2015       230

2016       275

QUESTION 3

Clarence is thinking of creating a bakery specializing in gingerbread cookies.  He has three options:  a face to face bakery where customers can come in and customize their gingerbread, a kiosk where the gingerbread is already decorated but customers can choose the color and style of decoration or internet only, where customers can specify which shape they want, but the decoration color and style cannot be requested.  The cost of the face to face bakery would be \$15,000 for the two months between Halloween and New Years, and has a 50% chance of generating  \$16000 in income and a 50% chance of generating \$10000 in income.  The kiosk would be \$3000 per month for the two months, and has a 50% chance of generating \$8000 in income, and a 50% chance of generating \$5000 in income.  The internet option would cost only \$5000 for the two months, and has a 50% chance of generating an income of \$10000 and a 50% chance of generating a \$8000 income.   Which one has the highest profit potential?  Show your calculations.

QUESTION 4

Carmen’s gingerbread houses have the following process times.  Construct a critical path diagram to show the process and determine how long each house will take and identify the critical path and amount of slack on the other paths.

 Time Predecessor A.      Assemble ingredients 5 min -- B.      Bake gingerbread 30 min A C.      Cool gingerbread 45 min B D.      Make icing 10 min A E.       Build house 30 min C, D F.       Let house assembly cure 45 min E G.      Assemble decorations 5 min -- H.      Decorate house 50 min D, F, G

QUESTION 5

Using the critical path diagram from the prior problem, what is the theoretical minimum number of stations required to meet a forecast demand of 150 units per month?  Create a line balance chart for the process as well.

QUESTION 6

Carmen’s fruitcakes must be baked, must be drowned in brandy and sit for four weeks before being drowned again in brandy a second time before it is sold.  Each fruitcake requires a cup of brandy for each marination.  If brandy comes in gallon jugs, what is the economic order quantity if Carmen sells 233 fruitcakes every 4 weeks?  The cakes sell for \$40 each, and have a holding cost of 2% per 4 weeks.  Setup costs are \$30 per batch.  Answer in whole units and show your calculations.

QUESTION 7

Petra’s custom ornaments personalizes ornaments on the spot.  She has a small kiosk at the mall, where customers walk up, select the ornament and specify the personalization.  Petra can have up to three employees.  An inexperienced employee takes 5 minutes to personalize each ornament is paid \$12/hour and works 6 hour days each.  She can hire an experienced personalizer who can produce the personalization in 2 minutes per ornament for \$18/hour for a 6 hour day.  If she has a request for 40 ornaments to be personalized each hour,  calculate a) waiting time for each ornament, using the various combinations of employees, and b) identify what option gives the best utilization of employee time.