 Smith, Inc. carries six items in inventory. (6 points)
Item  Annual usage  Cost per unit 
FF  2,000  $7.00 
HH  500  $8.00 
KK  9,000  $3.00 
LL  5,000  $6.00 
PP  3,000  $4.00 
VV  6,000  $3.50 
 Using the information above, determine which one of the six items would be classified as the “A” item.
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 How would Smith use this information to manage and control the inventory? That is, what is the purpose of an ABC analysis?
 Blonde Typist is a nationwide franchise with centralized ordering of supplies. Each week the organization uses 500 cartons of Liquid Paper, which cost $12.00 per carton. Due to a contract with an office supply store, the cost of placing an order is only $5.00. The main offices are in a high rent urban area, so annual holding costs are estimated at $0.75 per carton.
Q*=
 How many cartons of Liquid Paper should the Blonde order? (6 points)
 On average how many cartons of Liquid Paper will BT have on hand? (2 points)
 I love a bargain. (4 points)
 From an operations perspective, give two reasons an organization would offer a quantity discount, besides to reduce their inventory. (Note that selling more products is a marketing issue.)
 ______________________________________________________
 ______________________________________________________
 Why would you buy at the lower quantity and not take advantage of the quantity discount?
 Since demand for products and services fluctuate, we may implement strategies for adjusting capacity to meet demand or we may have strategies to manage the demand. Give two examples of each. (4 points)
 Strategies for adjusting capacity to meet demand
i.______________________________________________________
ii.______________________________________________________
 Strategies for managing demand
i.________________________________________________________
ii.________________________________________________________
 In class we discussed five extensions or special cases for the basic linear programming model we used for homework. Name one of these extensions and briefly describe how it is applied/used or how it (3 points)
__________________________________________________________________
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 The Copperfield Mining Company owns two mines, which produce three grades of ore: high, medium, and low. The company has a contract to supply a smelting company with 12 tons of highgrade ore, 8 tons of mediumgrade ore, and 24 tons of lowgrade ore. Each mine produces a certain amount of each type of ore each hour of its operation. The company has developed the following linear programming model to determine the number of hours to operate each mine (x and y) so that contracted obligations can be met at the lowest cost.
Min 200x + 160y (cost, $)
Subject to:
6x + 2y >= 12 (highgrade ore tons)
2x + 2y >= 8 (mediumgrade ore tons)
4x + 12y >= 24 (lowgrade ore tons)
x >= 0 ; y >= 0
This problem is solved on the attached page using Solver. Answer the questions below based on the information above and the attached spreadsheet.
 Cell F11 has an equation in it. What is the equation in cell format? (2 points)
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 Is column G slack or surplus? Explain your answer. (3 points)
 In the formulation above, I have nonnegativity constraints. How would they be indicated to Solver? (3 points)
 Give the three contract constraints as they would be entered into Solver in cell format. (2 points)
Cell Relationship Cell
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____ ____ ____
____ ____ ____
 Assessment
 Define, compare, and contrast ERP (defining the acronym) and supply chain management. (7 points)
 A product structure tree for a kitchen set is on the attached sheet. We wish to ship 100 kitchen sets in 60 hours from now. (6 points)
 How many 1” screws should be ordered? __________________________
 When should we start to produce the bases? ________________________
 When an organization implements a justintime system, they reduce the number of units ordered and held in inventory, which reduces the holding cost. But according to the EOQ model, just reducing the number of units ordered will increase total cost. What other things must a company do when implementing justintime to ensure that total cost does not increase? (5 points)
 Consistent with your definition given above, briefly define three (3) of the following concepts in terms of how they apply to lean production. If the term is an acronym, also define the letters. (9 points)
Muda SMED Pokayokes
Jidoka TPM 5S
 i.
 ii.
 iii.
 The Regional Grocery Chain Pharmacy (RGCP) has three cash registers for checkout. The manger has determined that customers arrive at RGCP at the rate of one every minute. It takes two minutes on average to checkout a customer, but the variation in checkout times indicates an exponential distribution. How would you analyze the performance of this system? (8 points)
 What waiting line (queuing) model would you use for this system?
 Why would it be appropriate to assume the arrivals follow a Poisson distribution?
 If we use hours as the time unit in our mathematical model, what would you enter for the arrival rate?
 If we use hours as the time unit in our mathematical model, what would you enter for the service rate (in the mathematical models or the templates we used in class)?
______________________________
 A service system has been analyzed on the attached sheet. Answer the following questions based on these inputs and results.
 On average, how many people are waiting in line? (2 points)
_____________
 On how average, how many minutes will a person wait in line before being served? (2 points)
__________________________
 What percent of the time is the server busy? (2 points)
__________________
 What is the probability that more than 2 people are in line? (3 points)
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 Jane has six chapters on her desk that must be typed and proofed. Jane does the typing and the author does the proofing. Some chapters are easy and others are more difficult. The estimated time in minutes for each activity is given below.
Chapter 
Time 

Typing  Proofing  
1  20  45 
2  40  45 
3  75  35 
4  30  20 
5  30  25 
6  15  55 
 Use Johnson’s Rule to determine a sequence for these jobs. (4 points)
___ ___ ___ ___ ___ ___
 What is the advantage, benefit, or maximized performance objective for processing these jobs using the sequence determined by Johnson’s Rule? (2 points)
 Compare and contrast, discussing advantages and disadvantages, the SPT, FCFS, and DDATE sequencing rules. In your discussion, define the acronyms. You discussion should show that you understand various scheduling performance objectives. (6 points)