Jimma University

Continuing and Distance Education

Assignment for the course operations management (Course Code MGMT)
Weight: 30 %

Name __________________________________________________
Id.no____________________________________________________
Department_______________________________________________
Term___________________________________________________
Center_________________________________________________-

General instructions:
1. Write all the necessary information both on the question paper and
answer sheet and do the questions depending on the specific instructions
provided in each part.
2. Shows all the necessary steps clearly and vividly and do it in the answer
sheet. Neat works do have credits!!!
3. Make sure that the booklet contains 40 multiple questions,3 discussion
questions and 4 workout questions.
4. Do not use red pen and pencil.

Part one- Multiple Choice Questions

 Choose the best answer and write the correct letter of your choice on the
answer sheet paper (1.5 point each)
1. All of the following statement is incorrect about intermittent production system except
one.
a. Large product mix
b. Standardized product
c. High volume of product
d. Capital intensive operation
e. Made to store products
2. Manufacturing systems present more uncertainty with respect to both capacity and costs
than service systems
a. true
b. false
4. --------------is a layout system in which equipment or work processes are arranged
according to progressive steps by which the product is made?
a. functional layout
b. flow shop layout
c. hybrid layout
d. cellular layout
5. One of the following may not be a sound reason for the emergency of operations
management
a. The application of operations management concepts on manufacturing
b. The application of operations management concepts and techniques on all
functional areas of an organization
c. An extended definition of quality
d. The realization that operations management functions can add value to the end
product
e. All
6. Batch production process is employed when a highly uniform product or service is
produced or rendered.
a. True
b. False
7. Which one of the following statements is incorrect about the role of operations
management?
a. It can enable the organization to measure and control the quality and quantity of
outputs
b. It can add value for the organization rather than for its customers through the
transformation process
c. It can provide consumers with more discretionary income, which contribute to
their higher standard of living.
d. It helps firms no longer have large amount of waste and rework to deal with.
e. None

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 ABC Company wants to add a new factory. Three alternative locations-A, B, and C-have
been identified by the company. The following table summarizes the estimated variable
and fixed costs of the three locations:

Location Fixed cost per year (Birr) Variable cost/unit (Birr)

A 400,000 8
B 600,000 6
C 900,000 4

8. For which of the following ranges of annual units of output is location C the best
location?

A. Below 65,000
B. 50,000-75,000
C. Below 100,000
D. Above 100,000
E. Above 150,000

9. For which of the following ranges of annual units of output is location B the best
location?

A. Below 65,000
B. 50,000-75,000
C. 100,000-150,000
D. 100,000-125,000
E. Above 150,000

10. If the company planned to produce 80,000 units this year, what will be the minimum total
cost?

A. Birr 1,220,000
B. Birr 1,080,000
C. Birr 1,000,000
D. Birr 1,040,000
E. Birr 1,300,000
F. None of the above

11. Holland Car Manufacturing Company has started a new product design process since
September, 2010. Now the company’s design engineers are in the verge of translating
specifications into specific processing instructions to manufacture the newly designed car
product. So, in which stage the design engineers of Holland car manufacturing Company
are found by keeping in mind the information given above.
a. Preliminary design and testing stage
b. Final design stage
c. Product idea development stage
d. Product idea screening stage

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 e. Concept testing stage
12. Quality at the point of creation is typically more important for manufacturing than for
service businesses
a. true b. false
13. All but one of the following is not the benefit of good factory layout system
a. Can minimize material handling cost
b. Can provide real competitive advantage
c. Can enhance employees work life
d. Can facilitate production
e. None
14. XYZ is a service business which has started its operation since October, 2010 to serve the
Jimma Community by providing high quality services. However, by its very nature the
quality of service will never be perceived through our sense organs before consumption.
So, what do you suggest to the owner/manager of XYZ to control the problem of the
intangible nature of services at the time of new service design to meet out its objectives?
a. incorporating psychological dimensions
b. creating peace of mind
c. creating calm atmosphere around the world
d. flexible capacity design
e. all but d
15. One of the following statements is not correct concerning to product layout system
a. is a format in which materials move to another machine sequentially without any
backtracking or deviation?
b. It is used for mass production of standardized products
c. It relatively results lower manufacturing cost per unit
d. Production scheduling is difficult with this type of arrangement
e. None
16. _____________ layout system involves the movement of manpower and machines to the
product which remains stationary
a. functional
b. product
c. hybrid
d. combination
e. none
17. In a market survey conducted by Commercial Bank of Ethiopia in two different locations
for the purpose of determining the cost to be incurred and the return to be earned by the
to be introduced subsidiary, the following results are found. The first Location would
result in an annual fixed cost of 300,000-birr, variable costs of 60 birr per unit and
revenues of 65 birr per unit. Annual fixed cost at the second location is 400,000-birr,
variable cost 58 birr per unit and revenue 63 birr per unit. Sales volume is estimated to be
25,000 units per year. So which location do you suggest for Commercial Bank of
Ethiopia by keeping in mind the information given above?
a. Location A
b. Location B
c. Both
d. none

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 Based on the information given below answer question No. 8, 9 and 10
Observations Samples
1 2 3 4
1 15.85 16.02 15.83 15.93
2 16.12 16.00 15.85 16.01
3 16.00 15.91 15.94 15.83
4 16.20 15.85 15.74 15.93
5 15.74 15.86 16.21 16.10

18. what will be the value of the centre line of the control limit by using mean chart?
a. 15.95 ounces
b. 15.59
c. 15.93
d. 15.96

19. The upper control limit of the chart is

a. 16.14
b. 16.16
c. 16.37
d. 16.35
e. 16.01

20. Lower control limit of the chart is

a. 15.53
b. 15.72
c. 15.74
d. 15.51
e. 15.17
21. One of the following statements is not true pertaining to functional layout
a. production scheduling is difficult with this type of arrangement
b. it is appropriate when there are many different products
c. it is very sensitive to failures that cause the entire system to shut down
d. machines are grouped according to function into machine centers

22. _____ is the process of keeping capacity utilization at desired levels and to test the feasibility
of planned output against existing capacity
a. master production scheduling
b. rough cut capacity planning
c. aggregate capacity planning
d. detailed capacity planning
e. material requirement planning
23. Ato Ali has started a service business in Jimma Town and he has keen interest to offer high
quality service without any defect. But as consumption and production of service take place at
the same time, there is no time gap for Ato Ali to inspect and identify the prevalence of defect on
his services before its consumption. Therefore, all strategies should help Ato Ali to handle this
kind of problem except one.

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 a. Employee training
b. Process design
c. Good Customer relation
d. Capacity design

24. One of the following statements is not true pertaining to functional layout
a. production scheduling is difficult with this type of arrangement
b. it is appropriate when there are many different products
c. it is very sensitive to failures that cause the entire system to shut down
d. machines are grouped according to function into machine centers

25. --------------is a layout system in which equipment or work processes are arranged according
to progressive steps by which the product is made?
a. functional layout
b. flow shop layout
c. hybrid layout
d. cellular layout
26. Which one of the following could not be a benefit of a good factory layout system
a. it can provide real competitive advantage by facilitating material and information
flow
b. it can enhance employees work life
c. it can minimize material handling cost
d. it facilitates production
e. none

27. Which one of the following points could be adopted as a strategy by a company at the time of
new service design in order to control the problem of no inventory of service?
a. training
b. process design
c. customer relationships
d. flexible capacity design

28. What do you suggest a company to control the problem of the intangible nature of services at
the time of new service design?
a. creating peace of mind
b. creating calm atmosphere around the service areas
c. flexible capacity design
d. incorporating psychological dimensions
e. all but C
29. ------------is a step in the production planning and controlling which translates the aggregate
plan into production schedules for individual products
a. aggregate capacity planning
b. rough cut capacity planning
c. master production schedule
d. detailed capacity plan

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30. Which one of the following is true about assignable variations?
a. it is unavoidable
b. is commonly caused by a slight difference in materials, workers, machines, tools, and
other factors
c. is caused by random factors that we cannot identify
d. The causes can be precisely identified and eliminated

31. The production of small batches of a large quantity of different products requiring different
sets of processing steps generally results in a
a. Job shop process
b. Mass production process
c. Assembly line
d. Flow shop process
32. Which priority rule could be considered as a ‘fair play’ from the customers view point
a. FCFS
b. LCFS
c. LS
d. EDD

33. All of the following control charts are used to measure quality characteristics that are counted
except one
a. R - chart
b. P- chart
c. C - chart
d. None
34. ___________is the process of testing the feasibility of master production schedule in terms
of capacity
a. aggregate capacity planning
b. detailed capacity planning
c. rough cut capacity planning
d. short term rescheduling, prioritizing, and controlling
35. Which one of the following statements is false about product plant strategy?

a. is designed to serve a specific market segment

b. is a strategy that results in economies of scale
c. is a strategy in which entire products produced on separate plan?
d. is best suited to reduce operating costs than transportation cost

36. Of the following one may be a sound reason for a company not to adopt continuous operation
system
a. high material handling costs
c. challenges when scheduling resources.
d. efficiency
e. inflexible
e. none

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37. A product design process in which design engineers translate general performance specifications into
technical specifications.
a. Preliminary Design and Testing
b. Final Design
c. product idea development
d. product idea screening

38. Product design is the act of defining all the features and characteristics of just about anything
you can think of.
a. True b. false

39. Intermittent operations are used when products with different characteristics are being
produced in smaller volumes.
a. True b. false

40. Procedures we use in manufacturing to ensure high quality, such as standardization and
simplification, are used in services as well
a. True b. false

Part II: Discussion questions (5 points each)

1. Write some of the unique attributes of service system

e. ____________________________________________________________
f. ____________________________________________________________
g. ____________________________________________________________
h. ____________________________________________________________
i. ____________________________________________________________
2. What are the two primary objectives of operation management?
a. ____________________________________________________________
b. ____________________________________________________________
3. Write at least three reasons that forces an organization to introduce new product
or service design
a. ___________________________________________________________
b. ____________________________________________________________
c. ____________________________________________________________

3. Explain the three categories of statistical quality control (SQC). How are they
different, and what different information do they provide?

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 Part three: Work out questions
Answer the following questions accordingly
(Try to show the necessary steps clearly)
1. Suppose a book binder in Jimma town has one printing press, one binding machine and a
manuscript of five different books. The times required for performing printing and binding
operations for different books are shown below:
Book 1 2 3 4 5
Printing time 45 90 80 50 120
in hours
Binding time 60 60 75 30 90
in hours
a. find the sequence that minimizes the total elapsed time to complete both printing
and binding activities (5 points)
b. compute the minimum flow time and the idle time of the operation system (5
points)

2. Suppose the manager of XYZ Company wants to assign 5 elemental tasks to work stations as
efficiently as possible to achieve a daily output rate of 480 units. And the factory will operate
600 minutes per day. The tasks and task time is given in the table below:

Tasks Time (in minute)

A 0.1

B 0.7

C 1.0

D 0.5

E 0.2

Based on the information given above answer the following questions:

a. Compute the required cycle time in minutes and number of work stations (5 points)

b. Draw the precedence diagram using the most following task method (5 points)

C. Compute the efficiency of the line and percent of idle time (5 points)

3. Suppose Mugger Cement Factory is searching for a site for a temporary plant to supply
cement to three existing construction sites: Ayer tena, at Arat kilo and Bole. the location
of the existing sites and the loads to be delivered to each are as follows:

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Delivery site (S) Coordinate location Loads Li to new Cost Ci to move one
(xi,yi)in kilometers plant kilometer
Ayer tena (10,5) 10 5
Arat kilo (5,20) 21 5
Bole (20,10) 18 5

a. Find the best site for the cement plant

b. What total shipping cost will result?
4. The number of monthly customer complaints is monitored at a large hotel using a C-chart.
Complaints have been recorded over the past 12 months as follows.

Months No of complaints
1 5
2 2
3 5
4 6
5 4
6 3
7 4
8 5
9 4
10 3
11 3
12 4

Based on the information given above compute:

i. the value of the centre line of the chart
ii. The upper control limit of the chart at 95.47% confidence level
iii. The lower control limit of the chart at 95. 47% confidence level

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