operation management

Student Name: _____________________

California State University San Marcos College of Business Administration

OM 305: Operations Management Instructor: Dr. Robert Aboolian

Fall 2020 Exam # 1 Time: 110 minutes October 29, 2020 Maximum: 200 points _ _

1 Please remember to identify yourself on the top of this page.

2 You may use a ”crib sheet”, Excel and a calculator.

3 You are strictly prohibited to communicate with others or to use search engines during the exam.

4 Read the problems carefully, time yourself, and show your work to get

credit. Do your work in this set, and mark clearly where your final answer is to be found.

5 There are three problems on nine pages.

6 Please Submit all your answer files (word or PDF and Excel) in the

submission folder provided in Cougar Courses. Good Luck! _ _

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Problem 1 (70 points: a to c) Consider Figure 1, a network that provides the sequential relationship for a specific

project.

Figure1: Network for a Specific Project

Table 1 contains the necessary information on normal and crash times and their

associated direct costs for this project. The indirect cost of this project is $700 per

day.

Table 1: Normal and Crash Data for the project

Normal Normal M aximum Crash Cost

Time (day s) Cost Crash Time (day s) Per Day

A 3 800$ 1 600$ B 2 1,200$ 1 700$ C 5 2,000$ 1 300$ D 5 1,500$ 2 400$ E 6 1,800$ 1 450$ F 2 600$ 1 400$ G 2 500$ 1 500$

Activity

B

C

A

D

F

E

G

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a) (20 points) Using Critical Path Method find the critical path and project’s

completion time with normal times? (You will lose 15 points if you fid the

solution by counting the paths)

b) (10 points) What is the total cost of project using the normal times?

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c) (40 points) If we are to complete the project with the minimum total cost and

the optimal time, which activity(ies) need(s) to be crashed and by how many

days? What will be the associated total cost and optimal time of the project?

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Problem 2: (70 points: a to c) Garfield Financial invests primarily in energy stocks. The price of the fund at the end of each month for the 12 months of 2019 and the first two months of 2020 is shown in Table below. Use Excel and answer the following questions:

a) Find the forecast value of the mutual fund for each month by using a naïve model. The value for December 2018 was 20.

b) Use a two-month moving average to forecast the mutual fund price for March 2020.

c) Use a four-month moving average to forecast the mutual fund price for March 2020.

d) Use a five-month weighted moving average to forecast the mutual fund price for March 2020.

e) Use a six-month weighted moving average to forecast the mutual fund price for March 2020.

f) Use exponential smoothing with a smoothing constant of 0.2 and an initial forecast value of 20 for January 2019 to forecast the price for March 2020.

g) Use exponential smoothing with a smoothing constant of 0.1 and an initial forecast value of 20 for January 2019 to forecast the price for March 2020.

h) Based on a- g what is your forecast for the mutual fund price for March 2020? Explain.

Month Mutual Fund Price Jan-19 21 Feb-19 22 Mar-19 20 Apr-19 19 May-19 24 Jun-19 21 Jul-19 18

Aug-19 22 Sep-19 20 Oct-19 20 Nov-19 17 Dec-19 23 Jan-20 21 Feb-20 18

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Problem 3: (60 points)

Ten samples of size four were taken from a process, and their weights measured. The sample averages and sample ranges are in the following table. Construct and plot an �̅�-chart and R-chart using these data. Is the process in control?

Sample Mean Range 1 20.01 0.45 2 19.98 0.67 3 20.25 0.30 4 19.90 0.30 5 20.35 0.36 6 19.23 0.49 7 20.01 0.53 8 19.98 0.40 9 20.56 0.95

10 19.97 0.79

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Factors for Computing Control Chart Limits (3 sigma)

SAMPLE SIZE, n

MEAN FACTOR,

A2

UPPER RANGE, D4

LOWER RANGE,

D3

2 1.880 3.268 0

3 1.023 2.574 0

4 0.729 2.282 0

5 0.577 2.115 0

6 0.483 2.004 0

7 0.419 1.924 0.076

8 0.373 1.864 0.136

9 0.337 1.816 0.184

10 0.308 1.777 0.223