MANAGEMENT OF MANUFACTURING SYSTEMS GBAT9102

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1 MANAGEMENT OF MANUFACTURING SYSTEMS GBAT9102 SUPERVISED OPEN-BOOK EXAMINATION Time Allowed: 2 Hours Reading Time: 10 Minutes INSTRUCTIONS 1. This is a supervised open-book examination. Course study guide, prescribed textbook, self-made notes, pens, pencils and erasers may be brought into the examination room. 2. Candidates are allowed to use electronic devices for the purpose of referring to digital course materials and notes only. These devices must not be connected to the internet, Wi-Fi must be disabled and tablets must be in flight mode. They must not be used to type exam responses. 3. Your reading time before the examination is 10 minutes and no writing may be undertaken during that period. During reading time, only the examination paper may be read. No other materials may be read during reading time. 4. Candidates may bring drawing instruments, rules and electronic calculators into the exam, but not calculators capable of storing information. 5. The examination paper contains FIVE (5) questions. You must answer all five questions. 6. All questions are of equal value. Be concise in your answers. 7. Black or blue pen is to be used. You may NOT use a red pen at all. 8. Please answer all questions in the exam booklet provided and clearly indicate if you have used more than one booklet. 9. Please ensure that you have written your name and other details on every exam booklet used and any other necessary documentation. 10. This exam paper must be returned with your answer books. No materials are to be retained at the conclusion of the exam. 11. The exam contributes 35% towards your final grading in this course. MBT MMS Exam Page 1 of 6

2 QUESTION 1 (20 Marks) Sydney Wardrobes (SW) is a Sydney company specialising in made-to-order wardrobes and cupboards. They will make wardrobes and cupboards to fit into awkward spaces as well as freestanding ones. Customers can design their own interior layout for the wardrobe and there is a choice of more than 20 different types of door finishes, and 15 door styles. The company will visit and quote on site. Salesmen take with them a laptop computer, which enables them to show animated graphics of the customer s chosen design of wardrobe. Customers are encouraged to agree to the purchase at the time of the salesman s visit. When this happens, SW guarantees to complete the installation of the finished wardrobe or cupboard in less than 2 weeks. The furniture carries a 10-year guarantee. There are many other companies offering similar services in Sydney. SW asks customers where they heard of the company and finds that about 25% are following up a number of possibilities from advertisements in local newspapers, but about 75% are contacting them on the basis of personal recommendation from an existing customer. a) Using the theories developed by Porter, discuss what generic competitive strategy you think SW is adopting? For your chosen strategy what competitive priorities do you think will give SW the maximum chance of success? (5 marks) b) Discuss the operations strategy that you think SW would need to develop and how this must be reconciled with the market requirements. What operational capabilities will be important to implement this operations strategy? (5 marks) c) Discuss the concept of order winners and order qualifiers. What do you think would be the order winners and order qualifiers for SW? (5 marks) d) Discuss how the internet could be both a blessing and a curse for SW. (5 marks) MBT MMS Exam Page 2 of 6

3 QUESTION 2 (20 Marks) a) A mobile (cell) phone manufacturer has to set an assembly line for a new type of phone. The line involves 9 work elements and must handle 6 phones per hour. The following table shows the data for the different tasks. Task A B C D E F G H I Time (minutes) Predecessors A A B C B E D, F H, G In addition to the usual precedence there is also one constraint under which tasks A and C cannot be done in the same station. (i) What is the cycle time needed to meet the requirement of the 6 phones per hour? (2 marks) (ii) What is the theoretical minimum number of stations to achieve the desired output? (2 marks) (iii) Using trial and error balance the line the best you can. (6 marks) b) Consider the following two-stage production process with a buffer between the two stages: Stage 1 Stage 2 The first stage operates on an 8-hour shift, and has a processing speed of 30 gadgets per hour. The second stage operates on a 12-hour shift, and has a processing speed of 20 gadgets per hour. Both shifts start at 8am. Answer the following questions sequentially. (i) What is the process capacity per hour? (2 marks) (ii) What is the cycle time of the process? (2 marks) (iii) Describe how the inventory level of the buffer changes during a day. When do the maximum and minimum inventory levels occur during each day? What are the maximum and the minimum levels? (2 marks) (iv) Let the average inventory level of the buffer be the mid-point of the maximum and minimum inventory levels of a day, calculated in (iii). Use Little s law to find the average time that each gadget stays in the buffer. (2 marks) (v) What is the average time that each gadget takes to go through the two-stage production process (i.e. the throughput time)? (2 marks) MBT MMS Exam Page 3 of 6

4 QUESTION 3 (20 Marks) a) Throughout the economy, organisations are constantly adding new employees to increase their workforce or laying off workers to reduce the workforce and save costs. Even within the same industry sector sometimes both of these actions can be observed at the same time. Some employers try to maintain, and even steadily build, a stable workforce at all costs and others layoff and then try to recall workers as quickly as possible. What are the differences in approach to capacity planning, markets, management, products, financial position, skills, costs and competition that could explain these two extremes in recruitment policy? (10 marks) b) You are reviewing the inventory policies on an $80 item stocked at a manufacturing plant. The current policy is to replenish inventory by ordering in lots of 360 units. Additional information is: D = 60 units per week C o = $30 per order C I = 25% per annum of selling price Should the inventory policy for this item change and if so how? (5 marks) c) The Economic Batch Quantity formula provides the lowest cost order size that a company should use in order to minimise its overall cost of inventory for a given component or product. You engaged a consultant to implement software that calculates the EBQ for all your major inventory items. Having done this, he says to you, "Lean Principles demand that your company should now implement a cast-iron policy to always order this amount". Do you agree with this statement? Justify your answer. (5 marks) MBT MMS Exam Page 4 of 6

5 QUESTION 4 (20 Marks) a) Product A is made from components B and C. Item B, in turn, is made from D and E. Item C also is an intermediate item made from F and H. Finally, intermediate Item E is made from H and G. Note that item H has two parents. The following are item lead times: Item A B C D E F G H Lead Time (Weeks) (i) Draw the Bill of Materials for Product A. (3 marks) (ii) What lead time (in weeks) is needed to respond to a customer order for Product A, assuming no existing inventory or scheduled receipts? (3 marks) (iii) What is the lead time if all purchased items are kept in inventory? (2 marks) (iv) If you were able to keep just one purchased item in inventory, which one would you keep? (2 marks) b) The partially completed inventory record for a rotor sub-assembly is shown below. Complete the last four rows of the record to determine when planned orders should be released. (10 marks) Item: Rotor assembly On Hand : 20 Order Qty: 150 Lead Time: 2 weeks Week Gross requirements Scheduled receipts 150 Projected on hand Net requirements Planned order receipt Planned order release MBT MMS Exam Page 5 of 6

6 QUESTION 5 (20 marks) a) A large manufacturer of automobiles receives and records the number of customer complaints to its telephone complaints hotline each month. The following table shows the monthly breakdown of customer complaints received over a two-year period. The total number of complaints over the 24-month period was Month Complaints Month Complaints Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec (i) Explain how to construct a control chart for these data. Calculate the central line and upper and lower control limits for the chart. (4 marks) (ii) Is there evidence that the process is unstable? (1 marks) b) ABC Inc. produces metre rulers that have a target length of 1 metre with upper and lower specification limits of +/ metres respectively. Their existing process produces metre rulers with an average length of metres and a standard deviation of metres. They are considering the purchase of a new machine that can hold a process output average exactly to target with a standard deviation of (Assume all production is normally distributed.) (i) Which machine will provide a better process capability? (10 marks) c) Statement 1: You don t inspect quality into a product; you have to build it in. Statement 2: Before you build quality into a product, you must inspect it. Which statement is right? Briefly discuss your reason. (5 marks) END OF EXAM MBT MMS Exam Page 6 of 6