Operations and supply chain
Operations and Supply Chain Management
Question 1:
A manager of a company wants to evaluate if the new software they bought last year has produced the goal of 25% gain in productivity for the year. Employees went from servicing 400 customers per month to 600 customers per month with the new software. Monthly training costs went from 10,000 AED to 15,000 AED for all employees. Employees were reduced from 20 to 18 in the year. The software cost 70,000 AED for the year. Suppose each worker earns 8,000 AED/month.
a) Evaluate the multifactory productivity using quantitative analysis
b) Analyze the validity of your answer in a) by considering the quality of the service in each year, and the precision of measuring output and inputs.
Question 2:
a) Discuss how the using the tool “House of Quality” makes the product design process more effective and efficient. Make sure to address the purpose of this tool and the various components used to arrive at a product design strategy.
b) If a company’s goal is to offer a product with a wide variety of options without increasing prices and delivery delays too much, describe two success factors for the product design process.
Question 3:
A production manager would like to determine which technology to purchase for the production of a new product that will be competing on price. The table below shows the fixed and variable cost for each technology available.
a) While the production manager is waiting for final sales forecasts from upper management, evaluate for which production volumes each technology is more favorable (calculate crossover points).
b) If the sales forecast is 2000 units, which technology would give you the highest profit?
c) If the sales price of the product is 200$, what is the breakeven point for technology B?
Technology A 
Technology B 
Technology C 

Fixed cost ($) 
50,000 
70,000 
100,000 
Variable cost ($) 
100 
80 
40 
Question 4:
A company would like to know where to locate its’ distribution center in a country in order to minimize its cost of deliveries. It has grouped the demand of all its customers in four regions.
a) Given the data below, determine the location coordinates for its distribution center?
b) Explain three other factors that can influence where to locate the distribution center in a country
Region 1 
Region 2 
Region 3 
Region 4 

location coordinates 
(200,100) 
(30, 500) 
(400, 300) 
(60, 50) 
trips/week 
10 
20 
30 
10 
Question 5:
Suppose a company has a monthly demand of 300 units, an ordering cost of $50 per order, and a holding cost of $10 per unit per year. There are 12 working months per year, and 20 working days a month.
a) Propose an ordering policy and determine the total cost of this policy.
b) If your supplier requires minimum ordering quantity of 600 units, how will this have an impact on your decision in a)?
c) If your supplier delivers takes 4 to 5 days to deliver, and your company follows a reliable response strategy, find the reordering