2 production and operation problems. MSD 340

• Please provide detailed steps (intermediate formula and final result) for each answer.

• Late homework will receive NO credits.

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Chapter 2: Productivity

Question 1 (1 point):

A company that makes shopping carts for supermarkets and other stores recently purchased new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 10 workers, and produced an average of 60 carts per hour. The machine cost was $20 per hour. With the new equipment, it was possible to transfer 2 of the workers to another department, and equipment cost increased by $6 per hour while output increased by 3 carts per hour. Each worker continues to receive $8 per hour.

a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (0.4 point)

b. Compute the multifactor (labor plus equipment) productivity under each system. Use carts per dollars cost as the measure. (0.4 point)

c. Which productivity measure you believe is the more pertinent for this situation? Why? (0.2 point)

Chapter 3: Forecasting

Question 2 (1 point):

An electrical contractor’s records during the last five weeks indicate the number of job requests:

Predict the number of requests for Week 6 using each of these methods:

a. Naïve. (0.2 point)

b. Four-period moving average. (0.2 point)

c. Four-period weighted moving average using weights (0.2 point)

d. Exponential smoothing with α=0.20. Use 20 for Week 3 forecast. (0.4 point)

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