MEKELLE UNIVERSITY

Ethiopian Institute of Technology-Mekelle

School of electrical and computer Engineering
Dead line date TWO DAY before final exam
Contact 0985786365 (Ephrem T)
Email: epheremtadesse2017@gmail.com

 Individual assignment; 1,3,5,7,8,10, 12,14,16,18,21,23,25,27,29

 Group Assignment;2,4,6,7,9,11,13,15, 17,19, 22, 24,26,28,30(Max of 5 students)
1. A furniture manufacturing company has provided the following data. Compare the labor, raw
materials and supplies and total productivity of 2016 and 2017
2016 2017

1. Output (sales in Birr) 22,000 35,000

2. Labor 10,000 15,000
3. Raw materials
and Supplies 8,000 12,500
4. Capital equipment
depreciation 700 1,200
5. Other 2,200 4,800

2. Amen Textile Factory is compiling the monthly productivity report for its BOD. The average
labor rate is Birr 15 an hour, and the average machine usage rate is Birr 10 an hour.

(a) Labor productivity=output/labor

(b) Machine productivity
(c) Multifactor Productivity
3. Tried and True Clothing has opened four new stores in college towns across the state.
Data on monthly sales volume and labor hours are given below. Which store location has
the highest labor productivity?

4. Jake and his friends sell newspaper ads for the Campus Times to supplement their
income each year. From the data below, determine which person is the most productive.

5. Merrifield Post Office is evaluating the productivity of its mail processing centers. The
centers differ in the degree of automation, the type of work that can be performed, and
the skill of the workers.

a. Calculate the multifactor productivity for each center.

b. Workers in Center 1 are scheduled to receive a 10% pay raise next month. How will
that affect productivity?
c. A new processing machine is available for Center 3 that would increase the output to
5000 pieces an hour at an additional overhead rate of $30 an hour. Should
Merrifield install the new processing machine?
6. Production Manager at Amen textile and garment factory, can currently expect his
operation to produce 1000 square yards of fabric for each ton of raw cotton. Each ton of
raw cotton requires 5 labor hours to process. He believes that he can buy better quality
raw cotton, which will enable him to produce 1200 square yards per ton of raw cotton
with the same labor hours. What will be the impact on productivity (measured in square
yards per labor-hour) if he purchases the higher quality raw cotton? Show
a) current productivity,
b) new productivity, and
c) The percent change
7. In garment industry one line produces around 400 units of product per day, which is sold
in the market 200 birr for each. But after improving the layout of the production line the
output of the line is increasing to 600 units. The accounting department reports that the
costs for the existing system is 400 birr for labor, 1000 birr for material, 300 birr for
overhead and improved system is 600 birr for labor, 1100 birr for material and 300 birr
for overhead.
a. Determine the productivity of the existing system
b. Calculate the productivity of the improved system
c. Is the improved system acceptable? Why?

8. AV City stocks and sells a particular brand of laptop. It costs the firm $625 each time it
places an order with the manufacturer for the laptops. The cost of carrying one laptop
in inventory for a year is $130. The store manager estimates that total annual demand for
the laptops will be 1500 units, with a constant demand rate throughout the year. Orders
are received within minutes after placement from a local warehouse maintained by the
manufacturer. The store policy is never to have stock outs of the laptops. The store is
open for business every day of the year except Christmas Day. Determine the following:
a. Optimal order quantity per order
b. Minimum total annual inventory costs
c. The number of orders per year
 9. The Olde Town Microbrewery makes Townside beer, which it bottles and sells in its
adjoining restaurant and by the case. It costs $1700 to set up, brew, and bottle a batch

of the beer. The annual cost to store the beer in inventory is $1.25 per bottle. The annual demand
for the beer is 21,000 bottles and the brewery has the capacity to produce 30,000 bottles
annually.

a. Determine the optimal order quantity, total annual inventory cost, the number of
production runs per year, and the maximum inventory level.
b. If the microbrewery has only enough storage space to hold a maximum of 2500 bottles
of beer in inventory, how will that affect total inventory costs?

10. County Hospital orders syringes from a hospital supply firm. The hospital expects to use
40,000 per year. The cost to order and have the syringes delivered is $800. The annual
carrying cost is $1.90 per syringe because of security and theft. The hospital supply firm
offers the following

quantity discount pricing schedule. Determine the order size for the hospital.

11. A local company produces an erasable programmable read-only memory (EPROM) for
several industrial clients. It has experienced a relatively flat demand of 2,500 units per
year for the product. The EPROM is produced at a rate of 10,000 units per year. The
accounting department has estimated that it costs $50 to initiate a production run, each
unit costs the company $2 to manufacture, and the cost of holding is based on a 30
percent annual interest rate.
a) Determine the optimal size of a production run, and the average annual cost of
holding and setup.
 b) What is the maximum level of the on-hand inventory of the EPROMs?

12. Suppose the XYZ Company has a demand of 2000 units per week and they open 48
weeks per year. The annual holding cost is 10 birr per unit and the ordering cost is 70
birr. Having that, the company opens 6 days per week and the lead time is 2 days.
a. Determine the EOQ, number of orders per year, time between order, reorder point and
total annual cost
b. If the XYZ Company produces 2400 units per week, what would be the EPQ and
maximum inventory?
13. A specialty coffeehouse sells Colombian coffee at a fairly steady rate of 280 pounds
annually. The beans are purchased from a local supplier for $2.40 per pound. The
coffeehouse estimates that it costs $45 in paperwork and labor to place an order for the
coffee, and holding costs are based on a 20 percent annual interest rate.
a) Determine the optimal order quantity for Colombian coffee.
b) What is the time between placement of orders?
c) What is the average annual cost of holding and setup due to this item?
d) If replenishment lead time is three weeks, determine the reorder level based on the
on-hand inventory.

14. Hawassa University Purchases T-shirts for a conference from Nile garment. Previously,
Hawassa University ordered from Nile garment 800 T-shirts each time, to meet an annual
need (demand) for 9600 T-shirts. Purchase cost was 25.00 birr per T-shirt. Now, Nile
garment is offering quantity discounts. Below is the published all unit’s discount
schedule for cases of Nile garment T-shirts:
Strategy Discount quantity Unit price
1 < 500 T-shirts 25.00/case
2 500-999 T-shirts 24.75/case
3 1000-1999 T-shirts 24.50/case
4 > =2000 T-shirts 24.25/case

Orders are placed and filled at a cost of 50 birr per order. Inventory holding cost is estimated
at 20% of purchase cost, per item, per year. Under the new discount plan, which strategy is
your best strategy?

15. The maintenance department of a large hospital uses about 900 cases of liquid cleanser
annually. Ordering costs are $14, carrying costs are $6 per case per year, and the new
price schedule indicates that orders of less than 60 cases will cost $30 per case, 60 to 80
cases will cost $25 per case, 81 to 105 cases will cost $20 per case, 106 to 120 cases will
 cost $15and larger orders will cost $12 per case. Determine the optimal order quantity
and the total cost for individual orders/strategies.
16. Cell phone sales for a California-based firm over the last 10 weeks are shown in the table
below. Plot the data, and visually check to see if a linear trend line would be appropriate.
Then determine the equation of the trend line, and predict sales for weeks 11 and 12 and
forecast using time series method given below.
a. A five-period moving average.
b. A weighted average using weights of 0.50 (most recent), 0.30, and 0.20.
c. Exponential smoothing with a smoothing constant of 0.40
d. Calculates forecasting error MAD, CFE, RMS and TS

Weeks 1 2 3 4 5 6 7 8 9 10
Units Sales 700 724 720 728 740 742 758 750 770 775

17. The Hartley-Davis motorcycle dealer in the Minneapolis– St. Paul area wants to be able
to forecast accurately the demand for the Roadhog Super motorcycle during the next
month. From sales records, the dealer has accumulated the data in the following table for
the past year

a. Compute a three-month moving average forecast of demand for April through January (of the
next year).
b. Compute a five-month moving average forecast for June through January.
c. Compare the two forecasts computed in parts (a) and (b) using MAD. Which one should the
dealer use for January of the next year?
D. Develop an exponential smoothing forecast with a smoothing constant of 0.20 Compare this
forecast with the three-month moving average computed in(a) using MAD and indicate which
forecast seems to be most accurate.
 18. Mr X is the production manager at a company that manufactures T-shirt. Mr. X
wants to forecast the amount of T-shirt sale for the given months. The T-shirt sales
history from January-May is shown in the table below.

Period Actual sales Naïve Simple(n=3) Weighted (n=3) Exponential(α=0.8)

January 420 410
February 400
March 470
April 510
May 360
June ?

Considering the above information determine the following points:

a. Calculate the forecast from February-June using naïve forecasting method.

b. Determine the forecast of April, May and June using simple moving average (n=3)
c. Determine the forecast of May and June using weighted moving average (0.6, 0.3, 0.1)
d. Determine the forecast of June using Exponential smoothing at α=0.8
e. Measure the forecast error for each method using mean absolute deviation (MAD)
f. Which forecasting method do you propose to the company?

19. The demand for electric power at Habesh cenmtnt factory over the period 2005 to 2011 is
shown in the following table in megawatts.The firm want to forcast 2012 demand by
fitting a straight line trend of the data and correlation between demand and time
period.What will be the demand for the year 2012?

Year Time period (x) Demand(y)

2005 1 74
2006 2 79
2007 3 80
2008 4 90
2009 5 105
2010 6 142
2011 7 122
 20. Construct a network from the information in the following table and identify all the paths
in the network, compute the length of each, and indicate the critical path.

21. Draw a network for a house construction project. The sequence of activities with
their predecessors is given in the following table, below. Sequence of Activities for
House Construction Project is given below [Hint using AOA and AON ]

22. Suppose you are a manager of Electric Motor Company and your company has just
received an order from a good customer for a specially designed electric motor. The
contract states that, if the project lasts beyond 13 days your firm will experience a penalty
of $1000 per day until the job is completed. Indirect project costs amount is$2600 per
day. The data on direct costs and activity precedent relationships are given in the table
below. (All durations are given in day)

Activity Predecessor Duration time Normal cost Crashing Crashing Worker

 (NT) (NC) time (CT) cost (CC) needed
A - 2 10000 1 14000 4
B - 8 15000 5 21000 2
C A 4 20000 3 22500 3
D B 3 3500 2 8000 5
E B 2 8000 1 13000 3
F C, D 5 10000 3 17000 4
G E 8 12000 2 30000 1

Considering the above information determine the following points:

a. Draw the project network diagram using AON.
b. Determine the ES, EF, LS, LF and floating time for each activity.
c. Find the normal completion time, cost and the critical path.
d. Determine the schedule that minimizes your total cost for this project.
e. What will be the total cost and duration time after crashing?
f. Construct the initial Gantt chart.
g. Level the resource taking into consideration the maximum units of resources
available is 6units.
N.B: The crashing time is used only for crashing (d, e) and the amounts of workers are used only
for resource leveling.

23. Considering the following project data, determine the probability of completing the
project within 24 weeks?
 24. A project consists of SIX activities A to F. The interdependencies, normal durations,
crash durations and cost slopes for all the activities are shown in Table 1. Table 1:
Activities, their respective predecessors, normal and crash durations, and cost slopes.

Activity PRECEDENCE Normal Duration Crashed Duration [Days] Cost Slop [Birr/Day]
[Days]
A - 18 14 4000
B - 23 22 2000
C A 8 5 6000
D A 10 6 4000
E B,C 3 2 8000
F E,D 8 6 5000

You may also note the following information regarding this project: The total normal DIRECT
cost (if durations of all the activities are their respective normal durations) is 100,000 birrs. The
indirect cost for the project is 8000 birr/day.

a) What is the minimum time in which the project can be completed considering maximum
possible crashing?
b) What would be the total project cost (in birr) if the schedule is crashed to the maximum
possible extent?
25. Consider the following project data to answer questions that follows. There are only 22
units of resources available during the entire project duration.
Activities Predecessor Duration(Months) Resource Requirement
(Units)
A - 2 20
B - 2 5
C A 4 15
D A 2 4
E B 4 6
F B 3 5
G C 5 5
H D 3 6
I E,G,H 1 3
J F 5 4

i. Construct AOA network, determine the critical path and project duration.
ii. Compute the earliest and latest times of all activities.
iii.Construct initial Gantt chart.
 iv.Level the resource taking into consideration the maximum units of resources available
22 units
26. Develop the network diagram and evaluate the time needed to complete this project.
Estimate the different slack times (floats). What is the effect of delaying activity D by 2
days?

27.A new project contains the following activities and relationships. In consultation with experts’
estimates were given for each activity. What is the expected length of the project? What is the l
atest occurrence time for the ending node of activity “E”? What is the slackness for activity “H”?
What is the probability that the project will be completed in 30 days?

27. A sum of money Q will be received 6years from now. At 5% annual interest. the present
worth now of Q is $60. At the same interest rate, what would be the value of Q in 10
years?
28. A company deposits $2000 in a bank at the end of every year for 10 years. The company
makes no deposits during the subsequent 5 years. If the bank pays 8% interest, how much
would be in the account at end of 15 years?

29. A young engineer wishes to become a millionaire by the time he is 60 years old. He
believes that by careful investment he can obtain a 15% rate of return. He plans to add a
uniform sum of money to his investment program each year, beginning on his 20th
birthday and continuing through his 59th birthday. How much money must the engineer
set aside in this project each year?

30. A firm is trying to decide which of two weighing scales it should install to check a
package-filling operation in the plant. The ideal scale would allow better control of the
filling operation and result in less overfilling. If both scales have lives equal to the 6-year
analysis period, which on~ should be selected? Assume an 8% interest rate.