Production and Operations Management

Instructor: Dr. Sherine Badawi Type of Assessment: Assignment 3
Student Name: Student ID:
Section Number: 1 Due Date: 15th of July 2020

Instructions – Please read carefully!

  1. Write your name; student ID number and section number at the top of this cover sheet and rename the file by your (ID number and name).
  2. You have 1 week to complete and submit your assignment in Word file through Moodle.
  3. Don’t remove this cover page when you submit your answers.

Instructions – Please
Questions Q1 Q2 Q3 Q4 Total
ILOs A1, D1 B1, C2 B1, C1, C2 B1, C3, D3
Maximum marks 10 10 10 10 40
Marks Earned

Question (1): Answer the following questions: ( 10 marks)
Part 1. Multiple- Choice Questions (6 marks)
1- Production & Operations strategic thinking is used to help find the best product line for the marketplace and then to make these products at the_____________.
a- Lowest cost.
b- Highest quality.
c- Maximum productivity level.
d- All of the above.

2- Decisions related to the production process are __.
a- Structure.
b- Infrastructure.
c- Product Technology.
d- Process Technology.

3- When managers Focus on specific day-to-day issues like resource needs, schedules, & quantities to produce, this indicates_____________ Decisions.
a- Strategic.
b- Tactical.
c- Trade-offs.
d- Competitive.

Part 2. Short answer questions: ( 4 marks)
Inventory comes in many shapes and sizes, explain two types of inventory.
Question (2): Answer the following problem: (10 marks)
Given five months of average monthly temperatures and corresponding monthly attendance, compute a linear regression equation of the relationship between the two. If next month’s average temperature is forecast to be 45 degrees, use the linear regression equation to develop a forecast.
Month Average Temperature Resort Attendance
(In Thousands)
1 24 43
2 41 31
3 32 39
4 30 38
5 38 35

Question (3): Answer the following problem: ( 10 marks)
The owners of sweet tooth bakery have determined that they need to expand their facility in order to meet their increased demand for baked goods. The decision has come down whether to expand now with a large facility or to undertake small expansion.
Management has estimated the following:

  • The demand when being high is 0.70
  • The demand when being Low is 0.30
    Profits for each alternative have been estimated:
  • Large expansion has an estimated profitability of either $80 000 or $50 000, depending on whether demand turns out to be high or low.
  • Small expansion has a profitability of $40 000 assuming that demand is low.
  • Small expansion with an occurrence of high demand would require considering whether to expand further. If the bakery expands at this point, the profitability is expected to be $70 000. If it does not expand further, the profitability is expected to be $50 000.
    a- Draw a decision tree diagram and add the information that you are given.(5 marks)
    b- Compute the (EV) of the small and large expansion and determine what decision should the software developing corporation make? (5 marks)
    Question (4): Answer the following problem: ( 10 marks)

Find the Economic Order Quantity (EOQ) and the reorder point, given the following information:
Annual Demand = 20 000 units.
Ordering cost = 150$ per order.
Annual holding cost = $ 12 per unit.
Lead time = 10 days.
The company operates 250 days /year.
Daily demand = 40 units/day.

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