Universiti Malaysia PAHANG Engineering Technology Creativity

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1 Universiti Malaysia PAHANG Engineering Technology Creativity FACULTY OF MANUFACTURING ENGINEERING AND TECHNOLOGY MANAGEMENT FINAL EXAMINATION COURSE : OPERATION AND PRODUCTION IN INDUSTRIAL MANAGEMENT COURSE CODE : BPT1113 LECTURER : HAMZAH BIN ZAINUDDIN DATE : 3MAY 2011 DURATION : 3 HOURS SESSION/SEMESTER : SESSION 2010/2011 SEMESTER II PROGRAMME CODE : BPT INSTRUCTIONS TO CANDIDATE: 1. This question paper consists of TWO (2) sections; Section A and B 2. Answer ALL questions. 3. All answers to a new question should start on new page. 4. Candidates are not allowed to bring any material except those allowed by the invigilator into the examination room. DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of SEVEN (7) printed pages including front page.

2 CONFiDENTIAL BPT/1O1 1IIJBPTI 113 SECTION A - (30 Marks) Answer all questions. Choose the best answer for each of the following questions. 1. Which of the following are the primary functions of all organizations? A. operations, marketing, and human resources B. marketing, human resources, and finance/accounting C. sales, quality control, and operations D. marketing, operations, and finance/accounting 2. The marketing function's main concern is with A. producing goods or providing services B. procuring materials, supplies, and equipment C. building and maintaining a positive image D. generating the demand for the organization's products or services 3. The Ten Critical Decisions of Operations Management include A. finance/accounting B. advertising C. process and capacity design D. pricing 4. Which of the following is not a typical service attribute? A. intangible product B. easy to store C. customer interaction is high D. simultaneous production and consumption 5. Which of the following is the best example of competing on low-cost leadership? A. A firm produces its product with less raw material waste than its competitors. B. A firm offers more reliable products than its competitors. C. A firm's products are introduced into the market faster than its competitors' D. A firm's research and development department generates many ideas for new 6. Which of the following is an example of competing on quick response? A. A firm produces its product with less raw material waste than its competitors. B. A firm offers more reliable products than its competitors. C. A firm's products are introduced into the market faster than its competitors' D) A firm's research and development department generates many ideas for new

3 BPT/1O11IIJBPT The three steps of the operations manager's job, in order, are A. developing the strategy, establishing the organizational structure and finding the right staff B. developing the strategy, finding the right staff and establishing the organizational structure C. finding the right staff, establishing the organizational structure and developing the strategy D. finding the right staff, developing the strategy and establishing the organizational structure 8. Which of these organizations is likely to have the most complex inventory decisions? A. a marketing research firm B. a stock brokerage firm C. a management consulting firm D. a computer manufacturing company 9. In which stage of the product life cycle should product strategy focus on process modifications? A. Introduction B. Growth C. Maturity D. Decline 10. Products are more "environmentally friendly" when they are made A. using cheaper materials B. using less energy C. where environmental regulations are lax D. more difficult to disassemble ii. Which of the following is an example of an external product development strategy? A. New internally developed products B. Enhancements to existing products C. Alliances D. Migrations of existing products 12. The dimensions, tolerances, materials, and finishes of a component are typically shown on a(n) A. assembly chart B. engineering drawing C. bill of material D. assembly drawing

4 BPT/1O1 1IIJBPT Advances in technology A. have impacted the manufacturing sector only B. have had only limited impact on services C. have failed to change the level of customer interaction with an organization D. have had dramatic impact on customer interaction with services and with products 14. Utilization will always be lower than efficiency because A. Effective capacity is less than design capacity. B. Effective capacity is greater than design capacity. C. Effective capacity equals design capacity. D. False, Utilization and efficiency are equal in value. 15. Break-even is the number of units at which A. total revenue equals price times the quantity B. total revenue equals total variable cost C. total revenue equals total fixed cost D. total revenue equals total cost 16. Which of the following costs would be incurred even if no units were produced? A. raw material costs B. direct labor costs C. transportation costs D. building rental costs 17. Basic break-even analysis typically assumes that A. revenues increase in direct proportion to the volume of production, while costs increase at a decreasing rate as production "olume increases B. variable costs and revenues increase in direct proportion to the volume of production C. both costs and revenues are made up of fixed and variable portions D. costs increase in direct proportion to the volume of production, while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts 18. The basic break-even model can be modified to handle more than one product. This extension of the basic model requires A. price and sales volume for each product B. price and variable cost for each product, and the percent of sales that each product represents C. that firm has very low fixed costs D. that the ratio of variable cost to price be the same for all products 4

5 BPT/1O11HJBPT11I3 19. A firm is seeking a new factory location, and is considering several countries worldwide. In some of these countries, child labor is prevalent; in others, working conditions and worker safety are inferior to conditions in the U.S. An operations manager paying attention to will factor these issues into the location decision. A. ethical and social responsibility issues B. key success factors C. factor-rating systems D. geographic information systems 20. The objective of a human resource strategy is to A. produce the demand forecast at lowest labor cost B. match employment levels with demand C. achieve a reasonable quality of work life at low cost D. manage labor and design jobs so people are effectively and efficiently utilized

6 BPT/1O1IIIJBPT1113 SECTION B - (70 Marks) Answer ALL Questions. QUESTION 1 An industrial plant needs to make 100,000 parts per month to meet demand. Each month contains 20 working days, each of which allows for 3 separate 8 hour shifts. a. If a worker can produce 10 parts/hour, how many workers are needed on each shift? b. If each shift has 100 workers, what is the productivity of an individual worker? c. If material costs are $1 0/part, capital costs are $100,000 and labor costs are $10/hour, what is the multifactor productivity of the plant from part A? QUESTION 2 A conference center has the physical ability to handle 1,100 participants. However, conference management personnel believe that only 1,000 participants can be handled effectively for most events. The last event, although forecasted to have 1,000 participants, resulted in the attendance of only 950 participants. a) Determine the design capacity of the conference center? b) What is the effective capacity of the conference center? c) Calculate the utilization of the conference center for the last event? d) Estimate the efficiency of the conference center for the last event? QUESTION 3 A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $200 per unit. a) Calculate the break-even point for this operation in number of unit? b) What is the profit (or loss) on a demand of 200 units per year? A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400 units to be sold. c) What is the profit (or loss) for this new scenario? d) Do you anticipate that the manager will want to change the process? Explain. (20 Marks)

7 BPT/1O11IL'BPT1113 QUESTION 4 Modern labor standard originated with the works of Frederick Taylor and Frank and Lilian Gilbreth at the beginning of the 20th Century. These efforts continue to this day. There are still many Malaysian manufacturing plants that are labor intensive, making the labor standard and work measurement important. a) Identify four (4) ways of establishing labor standard. b) List SIX (6) ways, how meaningful labor standard can help the effectiveness of Operation Management. QUESTION 5 The theory of constraint (TOC) is a systematic management approach that focuses on actively managing those constraints that impede a firm's progress toward its goal of maximizing profits and effectively utilizing its resources. a) Define bottleneck in the TOC. b) Discuss the steps should be taken in practical application of TOC. QUESTION 6 One of the most important strategic decisions made by any organization is where to locate their operations. This is because location decision will greatly has a major impact on the overall risk and profit of the organization. Identify and explain five of the seven major factors that affect location decisions. END OF QUESTION PAPER 7