Operations Managment

The Security National Bank is considering two locations for a new branch.  The two choices are a major mall and a strip mall.  The site selection team is evaluating two sites, and they have scored the critical success factors for each as shown below.  The weights reflect the same relative importance as we have used in class.  They want to use these ratings to compare the locations.

The non-economic scores are on a 0 to 3.0 basis with 3.0 being best and it is possible to achieve the 3.0 score. 

a) Using the factor scoring (rating) method as we learned in class, which site should Security National Bank use based on the above information? 

b)  Suppose the 3.0 value for the Customer Service for the Strip Mall Site is questionable.  At what Customer Service score for the Strip Mall Site would the bank change its decision from what it found in a)?   

8. (20 points)

The registrar at State University believes that decreases in the number of freshman applications that have been experienced are directly and linearly related to tuition increases.  They have collected the following enrollment and tuition data for the past ten years:

Your work must reflect the correct independent and dependent variables based on the problem statements.  This is part of the solution that is required.

a) Evaluate the registrar’s belief that there is a direct relationship between the number of freshman applications as the tuition increases.  What is this regression relationship and how strong is this relationship?

b) What is the expected number of applications if tuition increases to $10,000 per year?

c) Looking at the annual tuition for the past ten years, the Levy family believes that there is only a relationship between time (expressed as the Year) and the tuition.  They want to plan on the total tuition for a four year college degree for their son who will be applying and if accepted enrolling beginning in year 12.  What should they budget for the tuition by year for each of the four years?  How strong is the relationship you are using?   

9.  (20 points)

ABC Insurance Company tracks absenteeism by weekly random samples.  Based on historical experience and data, the company expects about 250 employs to be absent from its workforce of 5,000 on the average. 

For a variety of financial reasons, the company has eliminated its flex time option for its employees.  It has tracked absences over the past fifteen days.   The size of each sample is 450.  The numbers of absences per sample for the last 15 days are as follows:

Assume that these 15 days are sufficient to perform this analysis.

a)  Construct a 2σ control chart for the proportion absent and plot the sample data

points.  Base the center line and control limits using the historical absentee rate prior to the elimination of the flex time. 

b)  Has there been a change in the absenteeism rate?  Explain why or why not and base it on the control chart results.

c)  Suppose the insurance industry’s standard for absenteeism is 4% (lower limit) to 8% (upper limit).  What would you conclude about ABC’s performance compared to the industry standard? Explain your reason and base it on the control chart results.