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# Management of Service Operations MGMT 3100

GPA 3.8

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This 11 page Class Notes was uploaded by Porter Bednar Jr. on Friday October 30, 2015. The Class Notes belongs to MGMT 3100 at University of Colorado at Boulder taught by Lori Seward in Fall. Since its upload, it has received 19 views. For similar materials see /class/232196/mgmt-3100-university-of-colorado-at-boulder in Business, management at University of Colorado at Boulder.

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Date Created: 10/30/15

13 Chapter 2 1 point each for parts a b and c for Total 3 pts a The AON diagram for the product design project is The critical path is BiDiEiGiH and the project duration is 21 days b Direct cost and time data for the activities Maximum Crash Activity Crash CostDay Time days A 1 B 600 2 C 300 1 D 500 1 E 150 2 F 100 1 G 0 0 H 200 2 A summary of the cost analysis follows The recommended completion date is day 17 by crashing actiVity E by 2 days and actiVity H by 2 days Resulting Reduce Project Costs Crash Total Total Total Crash Critical tion Duration Last Co st Indirect Penalty Project Trial Activity Paths days days Trial Added Costs Costs Costs 0 7 BiDiEiGiH i 21 7500 7 5250 700 13450 1 E BiDiEiGiH 2 19 7500 300 4750 500 13050 2 H BiDiEiGiH 2 17 7800 400 4250 300 12750 Further reductions will cost more than the savings in indirect costs and penalties c The critical path is BiDiEiGiH for minimum cost schedule 16 Chapter 2 1 point each for parts a b and c for Total 3 pts Gumfull Foods a Calculation of the activity statistics Activity Expected Time Variance A 4 044 B 8 100 C 10 277 D 2 01 1 E 5 277 F 4 000 G 1 000 H 2 000 The AON diagram for the hiring project is The critical path is CiFiH and the project is expected to take 16 weeks T TE14 16 2 loZ v277 166 Using the normal distribution table the probability that the project can be completed in only 14 weeks is l 7 08849 or 01151 bz l20 Problem 3 1 point each for the triangularized matrix the layout and the net ow score Total 3 pts HMO Layout A B C D E F A X 40 15 10 0 2 B x 60 28 4 0 C X 23 6 5 D X 8 3 E X 5 F x Triangularized matrix Departments B and E cannot be adjacent FlowDistance Calculation AF 2X2 4 0 0 9 BE 4X2 8 G o AE 0x2 0 BF 0X 2 0 72 Final layout Problem 4 Total 3 pts must have all parts labeled Service Blueprint of Bookstore will vary 20 Chapter 4 2 points for the Pareto and 2 pts for the CampE diagram Total 4 pts Perrotti s Pizza Pareto chart a Although the frequency of partly eaten pizza is low it is a serious quality problem because it is deliberate rather than accidental It is likely to cause extreme loss of goodwill A common root cause of many of these problems could be miscommunication between the customer and the order taker between the order taker and production and between 1 J quot and distribution This chart was created using OM Explorer Pareto Chart 40 g 1000 35 000 000 SD 700 g E 25 000 t g 20 500 3 391 15 4009 o E m 300 3 200 5 100 0 00 Pinalate Topping Wrong Wr0ng Przza n0 Wr0ng le Piua st 0 t0pplng crust 500w eaten FailureName Chart f om Excel Perrotti39s Pizza Customer Complaints 40 12000 35 10000 Y 530 Ky cc 5 25 8000 0 E 20 6000 L 2 15 4000 E a 10 5 2000 4 0 000 b Causeandeffect diagram Machines Materials Car trouble Late nroductiOu Lost invoice Late Not familiar with service areaService area too large Ivehver Misunderstood address Scheduling too many Person de11ver1es on one tr1 Methods 28 Chapter 4 2 points for the histogram and 2 pts for palt b Total 4 pts Histogram Shampoo Bottle Volume Q 390 1 539 v3quot 395 r3quot 393quot V39 b b Nbquot 0quot 339 xb bQ39beb bQ Bottle Volume ounces b out of spec for the process cannot just look at the sample above upper spec use Excel lNORMDIST148513755308l 019 or 19 below lower spec use Excel NORMDIST1285137553081 0452 or 452 Total 19452 652 Chapter 1 3 Compact disc players Value of Output 300 Value of Input Labor Materials Overhead Ouput 300 Input 30 70 50 10 productivity improvement gt 200 X 110 2200 Given productivity 220 and the value of output 300 we solve for the cost of inputs Ouput 300 Input Input Productivity 2000 Productivity 220 Input 23 20 13636 or 136 The cost of inputs must decrease by 150 136 14 a A 14 reduction in material costs is 1470 2000 b A 14 reduction in labor costs is 1430 4667 c A 14 reduction in overhead is 1450 2800 Chapter 1 7 Mack s Guitar Company a Labor productivity outputinput Output 100 guitars X 80 completion rate X price guitar 80 guitars month X 250guitar 20000 Input Labor 10hours per guitar X 100 guitars 1000 hours Labor productivity is 200001000 20hour Multifactor productivity ratio output input Output 100 guitars X 80 completion rate X price guitar 80 guitars month X 250guitar 20000 Input Labor 10hour X 10hours per guitar X 100 guitars 10 000 Material 40 guitar X 100 guitars 4 000 Overhead 4000 Multifactor productivity ratio 20 000 18 000 111 b Option 1 Increase sales price by 10 Output 100 guitars X 80 completion rate X 250 X 11 22000 Input Labor is same as in part a 10000 Material is same as in part a 4000 Overhead is same as in part a 4000 Multifactor productivity ratio 22000 18000 122 Option 2 Improve Quality Output 100 guitars X 90 completion rate X 250 guitar 22500 Input Labor is same as in part a 10000 Material is same as in part a 4000 Overhead is same as in part a 4000 Multifactor productivity ratio 22500 18000 125 Option 3 Reduce costs by 10 Output same as in part a 20000 Input Reduce costs by 10 yields 90 of the input costs from part a 18000 X 090 16200 Multifactor productivity ratio 2000016200 123 Darren should choose Option 2 and improve quality because it yields the greatest improvement in multifactor productivity Supplement A 5 Gabriel Manufacturing a Total cost Fixed cost Variable cost TC F cQ TCf1rst process 300 00 600Q TCsecond process 120 000 900Q At the breakeven quantity 300000 600Q 120000 900Q 300Q 180000 Q 600 units Beyond 600 units the first process becomes more attractive b At Q 800 units TC first process 300000 600800 780000 TC second process 120000 900800 840000 The difference in total cost 840 000 780 000 60 000 Supplement A 8 Current Profit Price Variable costAnnual Volume Annual Fixed Costs 1000 50030000 140000 10 000 a Pro t with new equipment 1000 60050000 200000 0 Because the profit decreases Techno should not buy the new equipment b Pro t with new equipment 1100 60045000 200000 25000 Because the profit increases Techno should buy the new equipment if they also raise the selling price Supplement A 14 Accel Express Inc The weighted score for Location A 108 107104 207 204 307 620 The weighted score for Location B 105 107 107204 208 306 610 Location A must be chosen If equal weights are placed on the criteria the two locations will be tied because the sum ofthe scores is 37 for both A and B E Fquot Supplement A 16 Altemative l Work from right to left Here we begin with Decision Node 2 although Decis on Node 3 would be an equally good starting point The key concept is that we cannot begin analysis of Decision Node 1 until we know the expected payoffs for Decision Nodes 2 and 3 Decision Node 2 1 Its first alternative in the upper right portion of the tree leads to an event node with an expected payoff of 2250 or 0515 0530 2 Its second alternative leading downward reaches an event node with an expected payoff of 2060 or 0420 0318 0324 3 Thus the expected payoff for decision node 2 is 2250 because the first alternative has the better expected payoff Prune the second alternative Decision Node 3 4 Its second alternative leads to an event node has an expected payoff of 24 or 0620 0430 5 Thus the payoff for decision node 3 is 25 because the first alternative 25 is better than the expected payoff for the second alternative 24 Prune the second alternative Decision Node 1 6 The second alternative leads to an event node has an expected payoff of 24 or 0225 0526 0320 7 Thus the expected payoff for decision node 1 is 24 because the second alternative 24 is better than the expected payoff for the second alternative 2250 Prune the first alternative Thus the best initial choice Decision 1 is to select the lower branch Alternative 2 If the top branch of the subsequent event occurs a 20 probability then Decision 3 must be made Select its rst alternative Conclusion Select the lower branch with an expected payoff of 24 Chapter 2 2 a AON diagram b The critical path is AiCiDiEiG with a completion time of 24 days Earliest Latest Earliest Latest On Critical Activity Duration Start Start Finish Finish Slack Path A 7 0 0 7 7 0 Yes B 2 7 9 9 1 1 2 No C 4 7 7 1 1 1 1 0 Yes D 4 11 1 1 15 15 0 Yes E 4 15 15 19 19 0 Yes F 3 19 21 22 24 2 No G 5 19 19 24 24 0 Yes c Activities B and F are the only ones to have slack Chapter 2 24 a AON diagram for the fundraising project Activity slacks for the project Results Solver Project Budgeting Project time 25 Project Budget 2125 Total Early Early Late Late Activity Activity Start Finish Start Finish Slack A 0 3 2 5 2 B 0 4 0 4 0 C 3 5 5 7 2 D 4 9 4 9 0 E 4 7 7 10 3 F 9 13 9 13 0 G 5 11 7 13 2 H 9 11 15 17 6 7 8 13 14 6 J 9 13 10 14 1 K 13 16 13 16 0 L 11 14 17 20 6 M 13 15 14 16 1 N 16 20 16 20 0 O 15 16 19 20 4 P 20 25 20 25 0 The critical path is BiDiFiKiNiP and the expected completion time is 25 days

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