Sample Paper 1

Exam Questions, GMBA, 2010

(Question 1) – The manager of Sugar Hams wants to organize the tasks involved in the preparation and delivery of hams. The manager plans to produce 60 hams per 10-hour workday. The table shows work-element times and precedence relationships

· Construct a precedence diagram for this process.

· What cycle time corresponds to the desired output rate

· Allocate work elements to work stations to maximize efficiency

· Compute the line’s efficiency

Work Element	Time in minutes	Immediate Predecessor(s)
A	3	None
B	5	A
C	2	B
D	7	B
E	7	C,D
F	6	E
G	2	D,E
H	3	F
I	8	G
J	6	H
K	3	I,J
L	8	K

(Question 2) - The operations Manager of a firm receives the sales forecast for the next year. Demand is projected to be 600 units for the first half and 900 units for the second half. The monthly holding cost is $2 per unit and it costs an estimated $55 to process an order

1. Assuming that monthly demand will be level during each of the two halves of the year (100 units per month for the first half and 150 units per month for the second half), determine an order size that would minimize the sum of ordering and carrying costs of each of the halves of the year

2. Compute, the annual cost of managing inventory using the order size computed for Q1, taking into considerations ordering and holding costs