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UN IVERSITI
IEKNOLO-GI
PETRONAS

COURSE GAB4013_ OPERATIONS

MANAGEMENT
DATE 15 MAY2008{THURSDAY}
TIM E 2.30PM* 5.30PM (3 hours)

I N ST R UC T IOW

1. AnswerFlVf {5) out of SfX i6} questionsfrsm the OuestionBookl+t

z BeginEACH answeron a new page in the AnstverSooklet
2
Indicateclearlyanst/ersthat are cancelled,if any
+. Whereapplicable,
showclearlystepstakenin arrivingat the solutionsand
indicateALL assumptions.
Do not open ihis QuestionBookletuntilinstructed

Note T h e rea re F 0 U R T E EN{ 14} pagesin thr sQuestionBookletinclucjinq

th e co ve rp a g ea n d appendix

-*+-._
 -''-:' , {" iI GAB4013
1..\

a. Quantitativeforecastingmethods are categorisedinto time-

;;
seriesmodelsand causalmodels-UsingappropriateexamPles,
discuss the use of each model in forecastingdemand for
consumerProducts-
[6 marksJ

b. A companyuses exponentialsmoothingto forecastdemandfor

microwaveovens. The data indicate an increasingtrend as
shownin TABLEQ1b.

d= 0' 3tp:0,24
TABLE Q1b
-frerrd p1T
I c'rotqJ'l

February L\ A
'-t zg
March L3' 9 3.+ Lb'1

APril

The forecastand trend for Februarywas 21 units and 4 units

Usingsmoothingconstants,d = 0.3 and fr = O-4,
respectively.
deterrninethe {ollowingforthe monthsof Apriland May:

The smoothedforecast-
F,nar.h{ hgeu
" t ( l-<)fftea + T1e5] [2 marks]
(zoX o.T)( zr ++)
- L o ,t)
z 2 7 ,i
ll. The smoothedtrend. t-6 J lfeb
= 8(Fmar.\ - Fgeb)+ [
-Trnqroh
9;
= o '4 ( rl.:'-2'l) f CO't"16 [2 marks]
: 3'1

Iri- The smoothedforecastincludingsmoothedtrend.

Fllmqrch = L7'5 r7'4
[2 marksf
= LL.7
 GAB4013

The forecastsusing exponentialsmoothingand the actualsales

of carsare shownin TABLE Q1c.

TABLE Q1c
Rounded i nounCeOl- nctuat
I
P e ri o d i Forecast I Forecast
I
a=0.1 | a =0.9
I

1 165 165
2 166 170
3 166 174 159
4 166 161 165
166 165 -l
L" _ I

Deteiminethe forecastsfor periods4 and5 usinga two-

periodmovingaverage.
[2 marksJ

ia, Evaluatethe mean absolute deviationiMAD) for the

exponentialforecastswith a = 0.1, a = 0.g and the two-
periodmovingaverage.Discussthe resultswithregardto
the accuracyof the forecasts.
[4 marks]

iii, Discussthe effecton the exponentialforecast

datari
a=1.

[2 marksJ
 _T-i-
r
. ,.
r;. ''
ft: \{ it'
1; I
GAB4013
r,.6ivht

a. Using appropriate industrial examples, describe the

layout and the product-
of the process-oriented
characteristics
orientedlaYoutresPectivelY.
[6 marks]

FIGUREQ2b showsthe layoutof a factorywhichconsistsof six

equal sections.The numbersof loads of materialthat are
requiredto be movedfrom one sectionper week are shownin
TABLE Q2b. The cost of moving one load betweenadjacent
Sectionsis estimatedto be RMl*However,the costof movinga
' toadbetweennonadjacentsectionsis RM2-

Section6
Section4 (Assembly)
(cNc
Machining
Center)

FIGUREQzb

TABLE Qzb
Nurnberof LoadsPerWeek
Section 1 Section 2 Section3 Section4 Section5 Section6

Section 1 100 100 0 0 0

Section 2 iiii . a : ' -. l 50 0 0 50
Section3 100 0 50
Section4
r j ::

:. i-+'
50 CA

Section5 50
Sebtion6
 GAB4013

Develop an initial precedencediagram showing the

sequence of sections through which parts must be
moved.
3 marksl

il- Determinethe costof the materialhandlingfor the layout

basedon initialprecedencediagramin part {b}ti).
[6 marks]

1fi" Suggeststeps to improvethe layoutof the factorysuch

thatthe materialhandlingcostcan be reduced.
[5 marks]
 'I -i ,.u i
't
vr^( 69 '."' GAB4013 3

Discusshow Statistical Precess Cantrof{SPC} can be used to fi.

improveproeessperforrnances. is ;;

[6 marks]

A companyprcduces computer power supply units. The mean --1

and the range 6f me output voltagefor 10 sample group of the
productsare shown in TABLE Q3b. The samplesize, n for each
sample!grcupis 5.
-lI
t
l

!i
TABLE Q3b I
s
) Samplegroup Mean{Votts} Rahge (Volts)
e
1 144 4
,r
2 102 5
lf
I 3 104 2
g
4 106 7
0
5 1fr4 4
6 103 3
7 104 I
I 105 1 rf
I 106 4 5

10 105 3
o--
i. Cafculatethe controllimitsfor X -chartand ^R-chart.
[6 marks]
It, ls the process in part (bXi) in control? Justify your
answer
[2 marks]

Assuming the process specificationis 103 + 5 Votts,

calculatethe processcapability,Cp*.Discussyour ansWer
with respecilto industriafbest practices.
[6 marks]
 GAB 4013

reliabilitv
HighlightFOUR (a) imprtant strategiesfor improving
and maintenanceof a Pfant'
o rrn
r r nppl or ve
oVel nndOtvl d uaCo
i vclt 'tral l mP,nr t'ernr +
comysr .[4mar ks] r-
, *raining bc'rke|s to opgFt s pn'cnl'''5
tmo|nl'ett.n {heir ouin ryncV|,\L
r;ti';in'qn g pn" cltF
f:?'#"
,^ -raeqse
, incf .T
YfpX:f -?'r'un'n
dBi'ffiTl
(a pqbr
rp o o (i 'cq
!.n teParr r i Ite) + r r our i.n.i:j:' l
lLtvttt hes kld
.Plqn
rnf g F
n^JAytx
" r den}fg g.,s:.
."t-.::i1f,t,^ ^^*^-m, Ah^^oh,a*o
battery
E;JJ" il;;hd Jaimslr'"t m* companv
rurruirl finone
to t-hree;lays Bre P^\
can vrfrhstandthe phone life (on standby)of up
employeeof the
with standarddeviationof five hours.when the 7)-t 5
companytestedl0ofthesebatteriestorT?hgurs,itwasfound
thatonefai|dat4t}lours,onefailedat62hoursandonefailed
'n Tg_;;;*ln
*. others completed the test. Calculate the
followingforthe PhonebatterP
?(LL(fu),: 3 v t a > ' 3 o - / ,
lo
ra16) ',, =12YlD
i. latrur* , T o l-a lf ime
+ bqr' \i + ba* tJ - = 1>o hr
non ogerO*itgt m g :b a * | 3
[2 rnarksJ
) ,'-
(/ I
= (l :- ao) 1 ( 12- ( ' r ) r L7z' 10
lan Cr.t) : 3
c lzo- 4+
44hn
\
Numberof failuresPertmtcd hour' = e..43g x tO- 3
p oirrr re/h r
[4 marKsj

I
Meantime betweenfailures'
[2 marks]
l'nTAP c I
4.4 3 e Y 1 0 '

: 2.: ! i, 3 h l-

4-+38 >l o - 3 ; o ilu r e a4hr uJug

Fu i ru re rqtg
hr dog
 GAB4013

its plant'
a power generatorto operate
The companyemploys
Recordofbreakdownsofthegeneratorforthepast24rnonthsis
Q4c'
as shownin TABLE

in whichbreakdown
II *;
.
- _.- - ^J

*_€_]*--J*--r---=j**= o r J q o ,\ o ,l
[-"j1"""
o\ 6't o'r5 o'l
i {{equnnc J estimates
breaks down' the company
generator
Each tirnelhe
of
that it rosesan averase ty10i9 ':::,:^'::#Tt
purchasea seruce
is to
expenses-One aftemative for
Even if the company contracts
preventive*'int*n'n'"'
preventivemaintenance,therewilt-stillbebreakdownsaveraging
RM500
The pricefor this serviceis
p91mg-$h'
one blei1(Q-oyn
p e rmoff[i u'" . r- ^ - .rt) / n . ] y ? r ++( c(c':
.t"sx+) +fo't]<g)
+ Lat na*rrpe : o'l + Co'r9 . ] \ , + (o'zr'3)
lotql fioiffie i'
: ?'? \' rcrli'r\ rtr'l) f mCrl'l or
number
tl'"e*pu'ted
; ,:r1ilil[':iiJ"']tl' .- --,:+l,r^r,*
Based service
theSgfViCe
t-
asis,without
continues
thA

:ffiffi;;;;nrm
I
contract-
[3 marks]

p"' with
breakdo*n Ttt Tolth
ii_ Determinethe expected
contract'
no preventivemaintenance
-Total c-o5f ='l-' l
3CoCI [2 marks]
X Rm
i'
,'Ci., /l',r,',''i

to
oPtion the cornpany should select
Suggest the youranswer'
cost'Justify
themaintenance
ilil;-
| -1\ c r is l - = f lli:l i '" t n " 'f o [3 marksl
coltr o cl-
- i, , , , ' ' l^ o n lS
 GAB4013

anditsadvantages-
theAQp.!ipr.fg$i?n,:yrtg.Il
Exptain
[3 marksJ
-"1
. '/'i . , y f u L t r *^ 7
la)
of the basic EOQ model and the
of the nrodel.
limitthe usefulness
extenttheseassumptions
..-n( I " rlt|t "'.'r1
.f I;; r:'"i(
[4 marks]
" col 5{r,h{ cl
cc iJ
,^tr)t^ofctg c.,51 { }ifr'1;

c. Kimia TechnologySdn. Bhd. uses a highlytoxicchernical[n one

product
of its manufacturingprocesses. lt must have the
deliveredby special cargo trucks designedfor safe shipmentof
pay
chemicals. with this arrangement,the company has to
s
RM5000 Jer order and this is relatively high. The chemical
product is packaged in 1-litre plastic containers.The cost of

S = R r n 5 0 OO holdingthe chemicalin storageis RM200 per litre per year' The

annualdemandfor the chemical, which is constantover time,-is -"--
P - err'zoo
q3E' per year.The lead time from time of order placement
7500 litres
D =l5oo
until receipt is 15 days. The company operates 300 working
L = Ifdogs
days per Year.Determine:

The optimalorderquqn!{Y.
? Y15c) 0 ) ( 5000
a=_ t- Ds aoo [2 marks]
t+
= - C,l) 3
X. GIL
ii. The minimumtotalinventorycost-
-Tc = 99+ Q p
ql [3 marks]
: 75oo = P rh lz ) +14 s-c)
6 t.r
csooo). !](l'o)
|il. The reorderPoint.
. r XLeodtr r ng
RoP 3 d a i l g d e rn o nq [2 marks]
dxL d : Bnnual dqm nnd
?sxre \\JorKllt
$ clag I
: Y50O
s{5 unif
? c,0
I
= :15
 GAB4013

A i rtec S dn.B hd.s to c k s a v a r ie t y o f p a r t s a n d m a t e r ia ls it u s e s

as demand fsr its
in its manufacturingprocesses'Recently
fi ni s hedgoods has in c r e a s e d , m a n a g e m e n t h a s h a d d if f ic u lty
managi ngparts i nv e n t o r y . T h e r e we r e c a s e s t h e c o m p a n y r u n s
which are in
out of some crucialparts and there were farts
more effectively,the
excess.rn an effort to controrinventory
c ompany managem e n t d e c id e d t o c | a s s if y t h e in v e n t o r y p a rts
to the ABC aPProach'
according
parts,the annua|usage
TABLE Q5d showsthe |istof se|ected
andthe unitvaluefor each'

TABLEQsd

Annual Unit Item Annual Unit

Item
Cost
Number Usage Cost(RM) Number Usage
(RM)
'14
1 '{6 14 I 80
I

510
L-l 124 I

2 J

? qn 4
I
4A
t\J 270 1

'4 a 11 45 2
300 z-

76
1a 10 128
E 18 tz _

.l

50tt 1 13 750 I

,'I 4A
12 1C n
7
, 710 L+

to the ABC approach

Classify the inventory items according
u si n gR M va l u eo f a nnualO**und' .' .,,, ,i i, ,i, ? .:. , i ,,{,-','1
't,
' ' "I ' ' . i[6 mar ks]
') / 72 6l,' 1
alqsg A ', lLn tt r ) { V t86ia
{." ta g l l t; l tem l r4 r ,Q77't r6'i l)) ' ;S.Z{ ,;

Act69 c ' llewl 3,'

t 98"/. . la

,tn
 GAB4013

Explainthe principlesof a linearprogramming (LP) problem. ,'

GiveTWO{2} exampleson industrialapplications of LP-
O o\e chve{vnc-ttrno.,cLP <rvr^rm|@ pto{rr"
' \ nripin ize ceg* [4 marksJ

.a LFrc nrty ai r'rk-r e s t n ' . ! o . n* h o i t im if * h e d e g r e € il p u r st,s.

"lhr c' bI
h Consider the following LP froblem of maximizing profit for
productsP and Q. Unit profit for productsP and Q are RM4 and
RM10 respectivelY.

Objectivefunction:Maximise4P + 10Q

? = o . r Q : l? - o Q.orP = lf " o
Subjectto: 3 p +4 Qs480 J

4 P +3 Q< 360 P= tr Q , = lr o ' q"o, p = 70

The feasiblecorner points obtainedfr:om a graphicatsolution

a re (4 8 ,8 4 ),(0 ,1 2 0 ),(0,0)and ( 90,0) '

PIotthe graphand indicatethe feasibleregion.

14nrarksl

il. Calculatethe maximumprofitthat couldbe obtainedfrom

the oroductsP and Q.

[2 marks]
1,crni-
(! y rol i t = Q (+ a lt r a ( . s + )
Gr1 g 4 1 = R rnl 0 3 " l
t

poi nl €
P ' r t i+ 4b) t to [lzoi
(D rlzn) = l i r,1i 2OO { ltl..xi' i\ ur i'
Pr r ;r I
u,'hc n q = 110, 1';--
y-.nf 6) piaqif + c b) t lo cD/
C o1o ) ll

,1,r.tgi i q (qo) + lofo

p cirri S
: [.]r]136 O
Cqora)

11
 GAB4013

A companyis planningto constructa warehousewhichrequires

10 metrictonsof fabricatedstructuralrailingsX, to be fabricated
from s,ieelqng3lyllllum. The cost of steel is RM2 per kg and
the costof aluminumis RMOper kg- Dueto supplyconstraints,
the maximumtonnagethe companycouid secure from the
market for steel and aluminumare I and 4 metric tons
respectively, t., 7rl '

i. Formulatethe problemas an LP problem.

1 t',

[5 marksJ

ii- UsinggtAphicalmethod, calculatethe quantitiesIn metric

/'\
tonsof X and V.lif'atshouldbe usedto minimizethe cost
of *nrHcrtn.

[5 marksJ

. END OF PAPER-
I
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