MBA576 Unit 6 Homework

Unit 6: Homework

Quality and Inventory Management

The CEO sends you, the operations manager, a memo that customer complaints are up the past couple of months, and her directions are, “check into where quality is breaking down and tell me how we can fix it.”  

You start your investigation by speaking to customer services, and they say customers are complaining that stitching is unraveling around the sleeves and bottoms of “The Beast”, your company’s top of the line athletic t-shirt marketed to high schools and colleges for their men’s and women’s competitive sports teams.   The chief of customer service tells you, “these t-shirts are worn every day in practice and they go through a lot of washings…the teams are really rough on them.”  He provides you with the specific orders and production lot #s for the majority of the defects.  You ask to see samples of defective t-shirts returned by customers and you notice the thread weight is way too light for “The Beast”.   The thread in the defects is used on low-end casual t-shirts, and would not withstand the harsh abuse of competitive sports teams.

As you delve into the production lot #s provided, you find most of the defective shirts are being stitched on the grave yard shift (10pm – 6am).  Then you remember back to the days when you were production manager on the grave yard shift and start asking yourself, “what processes could be breaking down on that shift to cause the problem?”  Then it comes to you; swing shift (2 – 10pm) is responsible for positioning precut t-shirt fabric and bulk thread for sewing on the grave yard shift because “grave yards” only has one forklift operator and “swings” has three, so the fabric and bulk thread required by grave yards has to be in place when swings leaves.

You talk to the grave yard shift production supervisor, and he says, “most of the time swings prepositions enough fabric and bulk thread for our production run that night, but occasionally they short us fabric or bulk thread so I have my forklift driver get some from stock.”  Your gut sinks because you know the fork lift driver probably does not know “The Beast” shirt requires the heaviest thread in the warehouse. 

Are you starting to “put two and two together”?  Yes, the forklift driver was pulling the wrong thread from the warehouse, and since he was doing this toward the end of the shift it was not being caught by the sewing machine operator.  As a result, the wrong thread was being used to stitch some of the shirts.  In the assignments below, students get the opportunity to explore quality issues in organizations, conduct analysis of data to determine if quality is being compromised, and then formulate recommendations to improve quality in a process.

Unit Learning Outcomes

1. Formulate a plan to manage quality in an organization’s products and services, and incorporate quality improvement. (CLO 2, 3, 4, 5, 6 and 7)

2. Prepare a Pareto diagram for evaluating quality improvement measures into an organization. (CLO 1, 3, 4, 5, and 6)

3. Identify whether quality management metrics are adequate to ensure organizational goals are met. (CLO 1, 4 and 7)

4. Develop a data collection plan that will permit the appropriate application of statistical process control (SPC) to investigate inefficiencies and or ineffective processes. (CLO 3 and 4)

5. Calculate critical inventory management metrics such as economic order quantity and economic production quantity. (CLO 2, 4, and 5)

 

Directions

End of Chapter Problems (60 points):  Answer the following end of chapter problems from the textbook:

Chapter 9 – problems 2, 3, and 8 (pages 412-413, 10 points each).

View the following example videos before working the problems:

https://canvas.park.edu/courses/62827/files/8248199/download?download_frd=1

https://canvas.park.edu/courses/62827/files/8248200/download?download_frd=1

Chapter 12 – problems 1, 3, and 8 (pages 546-547, 10 points each).

View the following example videos before working the problems:

https://canvas.park.edu/courses/62827/files/8248172/download?download_frd=1

https://canvas.park.edu/courses/62827/files/8248173/download?download_frd=1

Chapter 9 – problems 2, 3, and 8 (pages 412-413, 10 points each).

View the following example videos before working the problems:

2. An air-conditioning repair department manager has compiled data on the primary reason for 41 service calls for the previous week, as shown in the table. Using the data, make a check sheet for the problem types for each customer type, and then construct a Pareto diagram for each type of customer.

Key Problem type:

N = Noisy

F = Equipment failure

W = Runs warm

O = Odor

Customer type:

C = Commercial customer

R = Residential customer

Job Number	Problem / Customer Type
301	F/R
302	O/R
303	N/C
304	N/R
305	W/C
306	N/R
307	F/R
308	N/C
309	W/R
310	N/R
311	N/R
312	F/C
313	N/R
314	W/C
315	F/C
316	O/C
317	W/C
318	N/R
319	O/C
320	F/R
321	F/R
322	O/R
323	F/R
324	N/C
325	F/R
326	O/R
327	W/C
328	O/C
329	O/C
330	N/R
331	N/R
332	W/R
333	O/R
334	O/C
335	N/R
336	W/R
337	O/C
338	O/R
339	F/R
340	N/R
341	O/C

3. Page 413Prepare a run chart similar to  Figure 9.11  for the occurrences of defective computer monitors based on the following data, which an analyst obtained from the process for making the monitors. Workers are given a 15-minute break at 10:15 a.m. and 3:15 p.m., and a lunch break at noon. What can you conclude?

Interval Start Time	Number of Defects
8:00	1
8:15	0
8:30	0
8:45	1
9:00	0
9:15	1
9:30	1
9:45	2
10:00	3
10:30	1
10:45	0
11:00	0
11:15	0
11:30	1
11:45	3
1:00	1
1:15	0
1:30	0
1:45	1
2:00	1
2:15	0
2:30	2
2:45	2
3:00	3
3:30	0
3:45	1
4:00	0
4:15	0
4:30	1
4:45	3

8. Prepare a scatter diagram for each of these data sets and then express in words the apparent relationship between the two variables. Put the first variable on the horizontal axis and the second variable on the vertical axis.

a.

Age	24	30	22	25	33	27	36	58	37	47	54	28	42	55
Absenteeism rate	6	5	7	6	4	5	4	1	3	2	2	5	3	1

b.

Temperature (°F)	65	63	72	66	82	58	75	86	77	65	79
Error rate	1	2	0	0	3	3	1	5	2	1	3

Chapter 12 – problems 1, 3, and 8 (pages 546-547, 10 points each).

View the following example videos before working the problems:

1.

a. Page 546Determine an A-B-C classification for these items:

Item	Unit Cost	Annual Volume (00)
1	$100	25
2	80	30
3	15	60
4	50	10
5	11	70
6	60	85
7	10	60

b. Find the EOQ given this information: D = 4,500 units/year, S = $36, and H = $10 per unit per year.

c. Find the economic production quantity given this information.

D = 18,000 units/year, S = $100, H = $40 per unit per year, p = 120 units per day, and u = 90 units/day

3. A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag.

d. Determine the economic order quantity.

e. What is the average number of bags on hand?

f. How many orders per year will there be?

g. Compute the total cost of ordering and carrying flour.

h. If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?

8. A food processor uses approximately 27,000 glass jars a month for its fruit juice product. Because of storage limitations, a lot size of 4,000 jars has been used. Monthly holding cost is 18 cents per jar, and reordering cost is $60 per order. The company operates an average of 20 days a month.

a. What penalty is the company incurring by its present order size?

b. The manager would prefer ordering 10 times each month but would have to justify any change in order size. One possibility is to simplify order processing to reduce the ordering cost. What ordering cost would enable the manager to justify ordering every other day (i.e., 10 times a month)?