Exam 1: Operations Management: Quality and Productivity

Kick Scooters Metal frames for kick scooters are manufactured in two steps: Stamping and assembly. Each frame is made up of three pieces: one unit of part A and two units of part B. The parts are fabricated by a single stamping machine that requires a set up time of 90 minutes switching between two part types. Once the machine is set up, the activity time for parts, regardless of type, is 30 seconds each piece. Currently, the stamping machine rotates its production between one batch of 120 part A's and 240 part B's. Completed parts move only when the entire batch is produced. At assembly, parts are assembled manually to form the finished products. The three parts and a number of small purchased components are required for each unit of final product. Each product requires 30 minutes of labor time to assemble. There are 12 workers in assembly. There is sufficient demand to sell every scooter the system can make -Which batch size for the stamping machine would minimize inventory without decreasing the current flow rate? Circle the answer below that is closest to the correct answer.

Airport Massage Station A small company just opened a new massage station at Philadelphia airport. The company has a stand that offers massages to travelers. Customers can select a length of massage between 5 and 20 minutes and there is a unique rate of $30 independently of the length selected by customers. The average length of massage requested by customers is of 15 minutes with standard deviation of 10 minutes. There are four employees delivering massages. The average number of potential customers requesting a massage is of 20 per hour. The inter-arrival times are assumed to be exponentially distributed. If no spot is available when the customer arrives, s/he leaves in order not to risk missing her/his flight. -The station manager is considering the option of hiring additional employees to deliver massages.The hourly wage of an employee is $50/hr.How many ADDITIONAL employees should s/he hire if s/he wants to maximize profits? [Profit = revenues from customers - labor cost] Suppose that there exists sufficient equipment to accommodate as many new employees as needed.

Old City Photographics Located alongside a cobblestoned street in Old City, Old City Photographics (OCP) specializes in the processing of the traditional $35 \mathrm{~mm}$ negative film, a once dominant photographic medium now in decline due to the popularity of digital photography. OCP offers three packages to their customers. With the standard package, the customer gets a set of $6 " \mathrm{x} 4$ " prints for $\$ 19.99$ . The deluxe package adds to the standard package a CDROM of high resolution scans of the pictures for $\$ 29.99$ . Finally, the $\$ 39.99$ pro package is similar to the deluxe package in that it comes with a CD-ROM, although the customer gets a contact print rather than a set of prints. (A contact print is an $8 " \times 10^{\prime \prime}$ sheet of photographic paper that has all pictures on the roll of film printed next to each other at reduced dimensions and is used as an index.) The workflow for OCP is shown below (s=standard, d=deluxe, $p=$ pro): OCP is operated by one person at every station. -On average, OCP receive 13 jobs per hour consisted of 44% standard, 37% deluxe and 19% pro.Which of the following statement best describes OCP's process?

The right to vote (and not to wait) In the past decade, two presidential elections in the United States have witnessed very long wait times at precincts (voting stations) in states that ultimately decided the election (Florida in 2000 and Ohio in 2004). In Philadelphia as well, some voters complained about the long lines in some precincts, with most complaints coming from precinct A. In 2004, the average number of voters arriving at Precinct $A$ was of 35 per hour and the arrivals of voters was random with inter-arrival times that had a coefficient of variation of $1(\mathrm{CVa}=1)$ . Philadelphia had deployed 1 voting machine in Precinct A. Suppose that each voter spent on average 100 seconds in the voting booth (this is the time needed to cast her/his vote using a voting machine), with a standard deviation of 120 seconds. -How long on average a voter had to wait in line precinct at A in 2004 before entering in a booth to cast her/his vote.Circle the closest answer.

Old City Photographics Located alongside a cobblestoned street in Old City, Old City Photographics (OCP) specializes in the processing of the traditional $35 \mathrm{~mm}$ negative film, a once dominant photographic medium now in decline due to the popularity of digital photography. OCP offers three packages to their customers. With the standard package, the customer gets a set of $6 " \mathrm{x} 4$ " prints for $\$ 19.99$ . The deluxe package adds to the standard package a CDROM of high resolution scans of the pictures for $\$ 29.99$ . Finally, the $\$ 39.99$ pro package is similar to the deluxe package in that it comes with a CD-ROM, although the customer gets a contact print rather than a set of prints. (A contact print is an $8 " \times 10^{\prime \prime}$ sheet of photographic paper that has all pictures on the roll of film printed next to each other at reduced dimensions and is used as an index.) The workflow for OCP is shown below (s=standard, d=deluxe, $p=$ pro): OCP is operated by one person at every station. -What is the implied utilization (ratio of workload relative to capacity) at "Scan Film"

Airport Massage Station A small company just opened a new massage station at Philadelphia airport. The company has a stand that offers massages to travelers. Customers can select a length of massage between 5 and 20 minutes and there is a unique rate of $30 independently of the length selected by customers. The average length of massage requested by customers is of 15 minutes with standard deviation of 10 minutes. There are four employees delivering massages. The average number of potential customers requesting a massage is of 20 per hour. The inter-arrival times are assumed to be exponentially distributed. If no spot is available when the customer arrives, s/he leaves in order not to risk missing her/his flight. -What is average number of customers being serviced per hour at the massage station? Circle the closest answer.

Penne Pesto Penne Pesto is a small restaurant in the financial district of San Francisco. Customers order from a variety of pasta dishes. The restaurant has 50 seats and is always full during the four hours in the evening. It is not possible to make reservations at Penne, most guests show up spontaneously on their way home from work. If there is no available seat, guests simply move on to another place. On average, a guest spends 50 minutes in the restaurant, which includes 5 minutes until the waiter has taken the order, an additional 10 minutes until the food is served, 30 minutes to eat, and 5 minutes to handle the check-out (including waiting for the check, paying, and leaving). It takes the restaurant another 10 minutes to clean the table and have it be ready for the next guests (of which there are always plenty).The average guest leaves $20 at Penne, including food, drink, and tip (all tips are collected by the restaurant, employees get a fixed salary). The restaurant has 10 waiters and 10 kitchen employees, each earning $90 per evening (including any preparation, the 4 hours the restaurant is open, and clean-up). The average order costs $5.50 in materials, including $4.50 for the food and $1 for the average drink. In addition to labor costs, fixed costs for the restaurant include $500 per day of rent and $500 per day for other overhead costs. The restaurant is open 365 days in the year and is full to the last seat even on week-ends and holidays. There are about $200k of capital tied up in the restaurant, largely consisting of furniture, decoration, and equipment. -Assume that you could improve the productivity of the kitchen employees and free up one person who would be helping cleaning up the table.This would reduce the clean- up to 5 minutes instead of 10 minutes.What would be the new ROIC?

Toyota and Capital One Cases -Which of the following statements accurately describe the Toyota Production System? I.The entire production is shut down every time the on cord is pulled II.There is zero idle time at each production step III.The TPS uses no buffers IV.TPS uses buffer inventories between line segments to avoid blocking and starving of the production line

Kick Scooters Metal frames for kick scooters are manufactured in two steps: Stamping and assembly. Each frame is made up of three pieces: one unit of part A and two units of part B. The parts are fabricated by a single stamping machine that requires a set up time of 90 minutes switching between two part types. Once the machine is set up, the activity time for parts, regardless of type, is 30 seconds each piece. Currently, the stamping machine rotates its production between one batch of 120 part A's and 240 part B's. Completed parts move only when the entire batch is produced. At assembly, parts are assembled manually to form the finished products. The three parts and a number of small purchased components are required for each unit of final product. Each product requires 30 minutes of labor time to assemble. There are 12 workers in assembly. There is sufficient demand to sell every scooter the system can make -One way to increase process capacity is to