MULTI-CHOICE QUESTIONS

# Productivity can be improved by:

A. increasing inputs while holding outputs steady​

B. decreasing outputs while holding inputs steady​
C. increasing inputs and outputs in the same proportion

D. decreasing inputs while holding outputs steady.(chap 1)​

E. none of the above

# Three commonly used productivity variables are:

A. quality, external elements, and precise units of measure

B. labor, capital, and management.(chap 1)​

C. technology, raw materials, and labor​
D. education, diet, and social overhead

E. quality, efficiency, and low cost

# Which of the following product development strategies has the highest product
development risk?​
A. acquiring the developer​
B. alliances

C. joint ventures​
D. new internally developed products.

E. purchasing technology

# A restaurant kitchen contains a wall poster that shows, for each sandwich on the menu, a
sketch of the ingredients and how they are arranged to make the sandwich. This is an
example of a(n):​
A. assembly drawing.(chap 5)

B. route sheet​
C. bill of material

D. work order​
E. assembly chart

# Arnold Palmer Hospital uses which focus?

A. process.​
B. repetitive​
C. product​
D. mass customization E. Aand D

# Computer-integrated manufacturing (CIM) includes manufacturing systems that have:

A. computer-aided design, a flexible manufacturing system, inventory control, warehousing and

shipping integrated.​
B. transaction processing, management information systems, and decision support systems
integrated

C. automated guided vehicles, robots, and process control integrated​

D. robots, automated guided vehicles, and transfer equipment integrated

E. all of their computers integrated with the marketing department

# Workspace can inspire informal and productive encounters if it balances what three
physical and social aspects?​
A. proximity( su gan gui ), privacy, and persuasion​
B. privacy, persuasion, and permission

C. proximity, privacy, and permission.

D. proximity, persuasion, and permission E. proximity, persuasion, and passion

# The main goal of retail layout is:

A. minimizing material handling cost​

B. minimizing customer confusion regarding location of items C. minimizing storage costs​
D. minimizing space required​
E. maximizing profitability per square foot of floor space.

# Which of the following is a disadvantage of product-oriented layout?

A. There is a lack of flexibility necessary for handling a variety of products​

B. High volume is required because of the large investment needed to establish the process

C. Work stoppage at any one point can tie up the whole operation​
D. There is a lack of flexibility necessary for handling a variety of production rates

E. All of the above are disadvantages of product-oriented layouts.

# Activity charts help analyze: chap 9

A. movement of people or material​
B. utilization of an operator and machine. C. body movements​
D. activities that can cause injuries​
E. unnecessary micro-motions

# Which of the following is not a method used to set labor standards?

A. historical experience​
B. time studies​
C. predetermined time standards​
D. work sampling​
E. government laws and regulations. chap 10

# The tally sheet data from a work sampling study provides information regarding:

A. the number of wasted motions​

B. the level of difficulty in a motion​
C. the percent of time spent on various tasks. chap 10

D. the quality of the work environment​

E. the number of micro-motions involved

# A carpet manufacturer has delivered carpet directly to the end consumer rather than to
the carpet dealer. The carpet manufacturer is practicing which of the following?​
A. postponement​
B. cross-docking

C. channel assembly D. drop shipping. chap 11​

E. float reduction

# Hewlett-Packard delays customization of its laser printers as long as possible. This is an

example of which of the following?​
A. vendor-managed inventory​
B. standardization

C. backward integration

D. postponement. chap 7​
E. timely customization

# What are the four stages of supplier selection?

A. supplier evaluation, supplier development, negotiations, and contracting.(LO11.4 chap11)​
B. supplier evaluation, negotiations, supplier acquisition, and supplier development​
C. introduction, growth, maturity, and decline​
D. supplier evaluation, supplier development, negotiations, and centralized purchasing

E. negotiations, contracting, centralized purchasing, and E-procurement

# All EXCEPT which of the following statements about ABC analysis are true?

A. In ABC analysis, inventory may be categorized by measures other than dollar volume​
B. ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume

C. ABC analysis is an application of the Pareto principle​

D. ABC analysis suggests that all items require the same high degree of control. (chap 12)​
E. ABC analysis suggests that there are the critical few and the trivial many inventory items

# Which category of inventory holding costs has a much higher percentage than average
for rapid-change industries such as PCs and cell phones?​
A. housing costs​
B. material handling costs

C. labor cost​
D. investment costs​
E. pilferage, scrap, and obsolescence.(chap12)

# If demand is not uniform and constant, then stock-out risks can be controlled by:

A. increasing the EOQ​

B. spreading annual demand over more frequent, but smaller, orders

C. raising the selling price to reduce demand​

D. adding safety stock. ( chap12)​
E. reducing the reorder point

# What directly results from disaggregation of an aggregate plan?

A. a master production schedule. chap 13

B. priority scheduling​
C. a transportation matrix​
D. a capacity-demand matrix

E. detailed work schedules

# Which of the following aggregate planning strategies is a capacity option?

A. influencing demand by changing price​

B. counter-seasonal product mixing​
C. influencing demand by extending lead time

D. changing inventory levels.(chap 13)​

E. influencing demand by back ordering

# Which of the following aggregate planning methods does not work if hiring and layoffs
are possible?​
A. the linear decision rule​
B. simulation

C. the management coefficients model

D. the transportation method.(chap 14)​

E. graphical methods

# A grill assembly takes 20 washers. Instead of listing these washers separately, they are
grouped into a single kit for production. How is the bill of material for the washers
classified?

A. phantom bill​
B. component bill​
C. modular bill​
D. low-level bill​
E. planning bill.(chap 14)

# Which of the following is TRUE regarding the POQ lot-sizing method?

A. Each POQ interval is recalculated at the time of the order release​

B. Each order quantity and POQ interval are recalculated at the time of the order release

C. The POQ interval and all order quantities remain fixed throughout the planning horizon

D. Each order quantity is recalculated at the time of the order release.(chap 14)​
E. POQ lot sizes are always at least as large as the EOQ lot sizes would be

# The short-term scheduling activity called "loading":

A. assigns dates to specific jobs or operations steps​

B. specifies the order in which jobs should be done at each center
C. assigns jobs to work centers. ( chhap15)​
D. assigns workers to jobs​
E. assigns workers to machines

# Which of the following is a limitation of rules-based dispatching systems? ( Hệ thống điều

phối dựa trên nguyên tắc)

A. Rules need to be revised to adjust to changes in orders, product mix, and so forth

B. Rules may not recognize idle resources​

C. Rules may not recognize bottleneck resources​
D. Rules may not be able to prioritize two jobs with identical due dates

E. All of the above are limitations.( chap 15)

# Which of the following is a similarity between goods and services?

A. mass production​
B. consistency​
C. automation​
D. Both have quality standards.​
E. Both can usually be kept in inventory

# Which of the following is NOT true when explaining why productivity tends to be lower
in the service sector than in the manufacturing sector?​
A. Services are typically labor-intensive​
B. Services are often difficult to evaluate for quality

C. Services are often an intellectual task performed by professionals

D. Services are difficult to automate​

E. Service operations are typically capital intensive.

# A graphic technique for defining the relationship between customer desires and product
(or service) is:​
A. product lifecycle management​
B. the house of quality.(chap 5)

C. the moment of truth

D. the assembly drawing

E. modular design
# Which of the following products is likely to be assembled on a repetitive process line?

A. automobiles.​
B. custom personal computers

C. custom cakes​
D. steel​
E. beer

# The use of information technology to monitor and control a physical process is known as:

A. process control.( chap 7)​

B. computer-aided design​
C. information numeric control

D. numeric control​
E. IT oversight

# The main issue in designing process-oriented layouts concerns the relative positioning of:

A. safety devices​
B. departments or work centers.(Chap 9)

C. raw materials​
D. entrances, loading docks, etc

E. supervisors to their employees

# The difference between job enrichment and job enlargement is that:

A. enlarged jobs involve vertical expansion, while enriched jobs involve horizontal expansion

B. enriched jobs enable an employee to do a number of boring jobs instead of just one​
C. job enlargement is more psychologically satisfying than job enrichment​
D. job enrichment is suitable for all employees, whereas job enlargement is not

E. enriched jobs involve vertical expansion, while enlarged jobs involve horizontal
expansion.(chap 10)

# What is a technique for estimating the percent of time a worker spends on various tasks?

A. stopwatch time study​

B. simultaneous motion study​
C. work sampling.( chap 10) ​
D. standard elemental (historical) times​
E. predetermined (published) time standards

# A fried chicken fast-food chain that acquired feed mills and poultry farms has performed
which of the following?​
A. horizontal integration​
B. forward integration(chap 11)

C. backward integration.

D. current transformation

E. job expansion

# A furniture maker has delivered a dining set directly to the end consumer rather than to
the furniture store. The furniture maker is practicing which of the following?​
A. postponement​
B. drop shipping.

C. channel assembly

D. passing the buck E. float reduction

# Which of the following is NOT true about reverse logistics as compared to forward
logistics?​
A. Inventory management is not consistent​
B. Distribution costs are less directly visible

C. Pricing is dependent upon many factors

D. Speed is often very important.(chap 11)​

E. Forecasting is more uncertain

# The two most basic inventory questions answered by the typical inventory model are:

A. timing of orders and cost of orders

B. order quantity and cost of orders​

C. timing of orders and order quantity.

D. order quantity and service level

E. ordering cost and carrying cost

# When quantity discounts are allowed, the cost-minimizing order quantity:

A. is always an EOQ quantity​

B. minimizes the sum of holding and ordering costs​
C. minimizes the unit purchase price​
D. may be a quantity below that at which one qualifies for that price

E. minimizes the sum of holding, ordering, and product costs.( chap 12)

# Aggregate planning would entail which of the following production aspects at BMW for a
12-month period?

A. number of cars with a hi-fi stereo system to produce

B. number of two-door vs. four-door cars to produce

C. number of green cars to produce​

D. total number of cars to produce.(chap 13)

E. B, C, and D

# Which of the following is NOT consistent with level scheduling? lập lịch trình theo cấp
độ?

A. varying the use of subcontracting​

B. finding alternative work for employees during low-demand periods​
C. using built-up inventory to meet demand requirements​
D. varying production levels and/or work force to meet demand requirements.

E. All of the above are inconsistent with the pure level strategy. chap 13

# Dependent demand and independent demand items differ in that:

A. for any product, all components are dependent-demand items

B. the need for independent-demand items is forecast​

C. the need for dependent-demand items is calculated​
D. All of the above are true.

E. None of the above is true

# What lot-sizing technique is generally preferred when inventory holding costs are
extremely high?​
A. lot-for-lot.: This method involves ordering exactly what is needed for each period, thereby
minimizing inventory holding costs by avoiding excess stock. Items are ordered or produced in
quantities that match the exact demand, reducing the amount of inventory held over time.(chap
14)​
B. EOQ

C. POQ​
D. the Wagner-Whitin algorithm​
E. All of the above are appropriate for the situation

# For the lot-sizing technique known as lot-for-lot to be appropriate:

A. future demand should be known for several weeks

B. setup cost should be relatively small.( chap 14)​

C. annual volume should be rather low​
D. item unit cost should be relatively small

E. the independent demand rate should be very stable

# Which of the following statements regarding scheduling at Alaska Airlines is FALSE?

A. Flying into Alaska complicates scheduling​

B. Schedule changes at one airport have a ripple effect that may have impacts in many others​
C. Alaska Airlines' high-tech computer and communications system is located in Seattle​
D. Alaska Airlines' rapid rescheduling uses mathematical scheduling models​
E. Alaska Airlines' rapid rescheduling promotes air safety and limits traveler inconvenience, but
has not resulted in money savings for Alaska Airlines.( chap 15)

# Which of the following is NOT required to be known in order to schedule process-focused

facilities?​
A. the sequence of work​
B. which workers are assigned to each work center.(chap 15)

C. the time required for each item​

D. the capacity of each work center

E. the availability of each work center

# When a set of jobs must pass through two workstations whose sequence is fixed, ________
is the sequencing rule most commonly applied.​
A. critical ratio​
B. earliest due date
C. first come, first served

D. slack time remaining

E. Johnson's rule.(chap15)

# 3-D printing has proven to be particularly advantageous for:

A. prototype development and custom products.(chap 5)

B. modular design​
C. quality function deployment​
D. robust design

E. computer-aided design

# A system using an automated work cell controlled by electronic signals from a common
centralized computer facility is called:​
A. an adaptive control system​
B. robotics

C. a flexible manufacturing system.(chap 7)​

D. an automatic guided vehicle (AGV) system

E. a manufacturing cell

# The major problem addressed by the warehouse layout strategy is:

A. minimizing difficulties caused by material flow varying with each product

B. requiring frequent close contact between forklift drivers and item pickers

C. addressing trade-offs between space and material handling.(chap9)​

D. balancing product flow from one workstation to the next

E. locating the docks near a convenient access point to the closest highway

# The disadvantages of process-oriented layout come from:

A. the use of special purpose equipment​

B. machine maintenance, which tends to seriously degrade the capacity of the entire system

C. the use of specialized material handling equipment​

D. the need for stable demand​
E. the flexibility of general-purpose equipment.tính linh hoạt của thiết bị đa năng.(chap 9)
# Which of the following statements describes job rotation?

A. The job contains a larger number of similar tasks​

B. The job includes some planning and control necessary for job accomplishment​
C. The operator works on different shifts on a regular basis​
D. The operator's schedule is flexible​
E. The operator is allowed to move, for example, from one type of CNC machine to
another.(chap10)

# Normal time for a stopwatch study is equal to which of the following?

A. Average observed time × Performance rating factor.(chap 10)

B. Average observed time + Performance rating factor

C. Average observed time / Performance rating factor

D. Average observed time - Performance rating factor

E. Performance rating factor / Average observed time

# A disadvantage of work sampling is that:

A. it tends to be less accurate, particularly when task times are short.(chap 10)​
B. it observes several workers simultaneously​
C. it is more expensive than time-study methods​
D. it is more intrusive than time-study methods, and therefore generates more complaints

E. All of the above are disadvantages of work sampling

# Which of the following statements does NOT accurately explain what occurs when the
number of facilities in a distribution network increases?​
A. response time decreases​
B. profit first increases, then decreases

C. total logistics costs first decrease, then increase

D. inventory costs increase​

E. response time first decreases, then increases.

●​ A. response time decreases: As you add more facilities, they are generally closer to
customers, reducing delivery times.
 ●​ B. profit first increases, then decreases: Initially, more facilities can lead to better
service levels and potentially higher sales, increasing profit. However, as costs rise with
too many facilities, profit can start to decrease due to higher operational costs.
●​ C. total logistics costs first decrease, then increase: At first, logistics costs might
decrease due to efficiencies like reduced transportation distances. But beyond a certain
point, the costs associated with managing more facilities (like inventory, real estate, and
maintenance) start to increase total logistics costs.
●​ D. inventory costs increase: With more facilities, there's often more inventory to be held
across these locations to meet customer demand at each site, thus increasing inventory
holding costs.
The statement E suggests a reversal in response time which does not align with typical outcomes.
Generally, adding more facilities would keep or further reduce response time, not increase it,
unless there's some inefficiency or complexity introduced that outweighs the benefits of
proximity, which is not a common expectation in standard scenarios.(chap 5)

# Which of the following statements about quantity discounts is FALSE?

A. The cost-minimizing solution may or may not be where annual holding costs equal annual
ordering costs​
B. In inventory management, item cost becomes relevant to order quantity decisions when a
quantity discount is available

C. If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in
the discount schedule​
D. The larger the annual demand, the less attractive a discount schedule will be.​
E. The smaller the ordering cost, the less attractive a discount schedule will be

# Which of the following should be higher in P systems than Q systems?

A. lead time​
B. demand​
C. order size

D. order spacing

E. safety stock.(chap 12)

# An aggregate plan satisfies forecast demand by potentially adjusting all EXCEPT which
of the following?​
A. production rates​
B. labor levels

C. inventory levels

D. overtime work

E. facility capacity.sức chứa của cơ sở.

# Which of the following is NOT an advantage of level scheduling?

A. stable employment

B. lower absenteeism

C. matching production exactly with sales. (chap 13)

D. lower turnover​
E. more employee commitment

# Which of the following is NOT a key benefit of MRP?

A. increased quality.( chap 14)​

B. better response to customer orders​
C. faster response to market changes​
D. improved utilization of facilities and labo

E. reduced inventory levels

(1) bet- ter response to customer orders as the result of improved adherence to schedules, (2)
faster response to market changes, (3) improved utilization of facilities and labor, and (4)
reduced inventory levels.

# Which of the following statements regarding lot-sizing is TRUE?

A. EOQ principles should be followed whenever economical​

B. Too much concern with lot-sizing results in false accuracy. (chap 14)​
C. Lot-for-lot cannot be modified for scrap allowance or process constraints

D. The Wagner-Whitin algorithm simplifies lot size calculations​

E. All of the above are true​
CASE STUDY 1

Question: How are the 10 decisions of OM different when applied by the operations
manager of a production process such as Frito-Lay?

Solution

10 Decisions of FRITO LAY

OM

Product design Frito-Lay: Emphasis is on innovation in product design, focusing on

new flavors, healthier options, or packaging innovations. There's a strict
evaluation process before a new product hits the market, ensuring market
fit, consumer appeal, and manufacturability.

Qualtiy Frito-Lay: Quality management is integral with numerous inspection

points throughout the production process, from peeling potatoes to
packaging and shipping. This ensures that each product meets strict
quality standards in terms of taste, texture, and safety.

Process & Frito-Lay: The process is designed for mass production, aiming for high
capacity design output with efficiency. There's also an emphasis on green production,
focusing on sustainable practices, reducing waste, and minimizing
environmental impact.

Location Frito-Lay: Plants are strategically located near raw material suppliers to
reduce transportation costs and ensure freshness of ingredients like
potatoes or corn. This decision also considers labor markets and
regulatory environments.

Layout Frito-Lay: The layout of manufacturing plants is optimized to reduce

worker movement time, thereby increasing productivity. This involves
organizing the flow from raw materials to finished goods in the most
efficient manner possible.
 HR Frito-Lay: Offers high rewards for workers, likely including competitive
wages and benefits, to attract and retain skilled labor. Efficient training
programs ensure that employees are well-versed in both their specific
tasks and in safety and quality protocols.

SCM Frito-Lay: SCM focuses heavily on managing relationships with raw

material suppliers to guarantee quality and continuity of supply. This
includes long-term contracts, supplier development, and sometimes
vertical integration to control quality and cost.

Inventory Frito-Lay: With an inventory turnover rate of 200 times per year,
Frito-Lay ensures a rapid flow of fresh goods through the supply chain,
minimizing waste and ensuring product freshness. This high turnover
necessitates precise inventory management practices.

Schedule Operations run 24/7 to meet demand, especially given the perishable
nature of some products and the need for continuous supply to retailers.
High-intensity production schedules are managed to match consumer
demand peaks, promotional activities, and seasonal variatio

Maintenance Given the rapid production pace and reliance on machinery, maintenance
is critical. It involves regular, preventive maintenance schedules to keep
production lines running smoothly, quick response to any breakdowns,
and investment in technology upgrades to enhance production
capabilities.

CASE STUDY 2

Question: How are the 10 decisions of OM different when applied by the operations
manager of a production process such as Hard Rock Cafe.

Solution
10 decisions of OM

1. Design of goods and services: Defines much of what is required of operations in each of the
other OM decisions. For instance, product design usually determines the lower limits of cost and
the upper limits of quality, as well as major implications for sustainability and the human resources
required.
Hard Rock Cafe: The product design here involves a dual focus on food and music. They
continuously evolve their offerings to keep the experience fresh and engaging, aiming to
enhance customer benefits through new menu items, music performances, or themed events.
This design influences everything from menu development to the selection of music for
nightly playlists or live performances.

2. Managing quality: Determines the customer's quality expectations and establishes policies and
procedures to identify and achieve that quality.
●​ Hard Rock Cafe: Quality is measured primarily through customer surveys, which are
comprehensive enough to evaluate all aspects of the service experience, including food
quality, service, ambiance, and the entertainment component. This feedback loop helps in
maintaining and improving the quality of both tangible (food) and intangible (service,
atmosphere) aspects.

3. Process and capacity strategy: Determines how a good or service is produced (i.e., the process for
production) and commits management to specific technology, quality, human resources, and capital
investments that determine much of the firm's basic cost structure.
●​ Hard Rock Cafe: This involves designing internal business processes to ensure efficiency
in both the kitchen and service areas. Capacity design includes planning for peak times,
managing seating arrangements, and ensuring that both food preparation and service can
keep up with demand. It's about balancing the number of customers they can serve with the
quality of service provided.

4. Location strategy: Requires judgments regarding nearness to customers, suppliers, and talent,
while considering costs, infrastructure, logistics, and government.
●​ Hard Rock Cafe: Their locations are strategically chosen to be near tourist hotspots or
areas with high foot traffic, enhancing visibility and customer throughput. This decision
impacts not just customer access but also the type of clientele and the thematic fit of the
location with the rock 'n' roll brand.
5. Layout strategy: Requires integrating capacity needs, personnel levels, technology, and inventory
requirements to determine the efficient flow of materials, people, and information.
●​ Hard Rock Cafe: The layout is carefully planned to maximize the impact of the
memorabilia, which is a key attraction. Lighting, sound systems, screens for music videos or
live events, and circulation paths are all designed to showcase this aspect, ensuring that
customers are engaged with the theme while also being guided towards merchandise for
potential sales.

6. Human resources and job design: Determines how to recruit, motivate, and retain personnel with
the required talent and skills. People are an integral and expensive part of the total system design.
●​ Hard Rock Cafe: They employ a range of positions, each tailored to different aspects of the
operation, from culinary staff to musicians or entertainers. The staff is not only skilled in
their specific roles but also embodies the passion for music, contributing to the overall
atmosphere. This HR strategy ensures that employees can collaborate effectively, enhancing
the customer experience.

7. Supply chain management: Decides how to integrate the supply chain into the firm's strategy,
including decisions that determine what is to be purchased, from whom, and under what conditions.
●​ Hard Rock Cafe : SCM is influenced by market demand, the variety of suppliers for both
food and memorabilia, and inventory management costs. They manage this through a
combination of traditional approaches and modern inventory management software to
ensure timely availability of quality ingredients and thematic items.

8. Inventory management: Considers inventory ordering and holding decisions and how to optimize
them as customer satisfaction, supplier capability, and production schedules are considered.
●​ Hard Rock Cafe: Inventory includes not just food and beverages but also the memorabilia
which adds to the atmosphere. They use inventory management software to optimize stock
levels, reduce waste, particularly with perishable goods, and ensure that memorabilia items
are rotated or displayed effectively to keep the experience fresh.

9. Scheduling: Determines and implements intermediate- and short-term schedules that effectively
and efficiently utilize both personnel and facilities while meeting customer demands.

●​ Manufacturing: Scheduling production runs, maintenance, and delivery of goods.

 ●​ Hard Rock Cafe: Involves scheduling staff to ensure adequate service during peak and
off-peak times, managing kitchen staff for food preparation, and coordinating events or live
music performances.

10. Maintenance: Requires decisions that consider facility capacity, production demands, and
personnel necessary to maintain a reliable and stable process.

●​ Manufacturing: Focuses on equipment maintenance to prevent production stoppages.

●​ Hard Rock Cafe: Includes maintaining kitchen equipment, dining facilities, and preserving
memorabilia. Here, maintenance also involves ensuring the ambiance (like sound systems
for music) is always in top condition.

CASE STUDY 3

HARD ROCK

Question: LAYING OUT ARNOLD PALMER HOSPITAL’S NEW FACILITY, Identify

the many variables that a hospital needs to consider in layout design

Solution

1. Nursing efficiency:How far does a nirse have to travel, in walking time and distance, to
patients, suppliers, break rooms, etc.?​
2. Security: How to protect patients, especially babies, from being reached by people who
should not have access to them3. Privacy, serenity, and quiet: How to provide patients with space
that will help them recover quickly (service-scape)​
4. Meal and supply efficiencies: How to deliver meals warm and keep supply lines full with the
best efficiency​
5. Space for family to visit or sleep over​
6. Space for growth and capacity expansion.​
7. Where to locate service departments Where to locate service departments (e.g., x-ray,
pharmacy, laboratories, financial, management, elc.) so they are convenient to patients and staff.​
8. Areas for medical and non-medical staff to be “off-duty”.from patient/visitor flow.
 9. New mobile carts (holding both computers and supplies),that go from room to room, are
adding a new dimension to hospital layouts.

1. Nursing Efficiency

●​ Travel Minimization: The layout should feature nursing stations close to patient rooms
within a pod or similar design, reducing walking distances. This could mean:
○​ Decentralized nursing stations where each station serves fewer rooms but is in
closer proximity to those rooms.
○​ Efficient placement of supply rooms and break areas to minimize the time nurses
spend away from patient care.

2. Security

●​ Access Control: Implement:

○​ Secure entry points, especially for neonatal units, with keycard access or
biometric systems.
○​ Surveillance cameras and regular security patrols to monitor sensitive areas.
○​ Secure pathways and doors to control who can access certain parts of the hospital.

3. Privacy, Serenity, and Quiet

●​ Room Design:
○​ Use of sound-absorbing materials in construction, quiet HVAC systems, and
strategic placement of rooms away from noisy areas.
○​ Design for natural light, healing colors, and perhaps even noise-canceling
technologies in critical recovery areas.

4. Meal and Supply Efficiencies

●​ Efficient Delivery Systems:

○​ Central kitchens close to or integrated with patient care areas for quick meal
delivery.
○​ Just-in-time supply management systems to reduce clutter and ensure supplies are
delivered when needed without excess inventory.

5. Space for Family

●​ Family Accommodations:
○​ Rooms with space for family members, possibly with convertible furniture like
Murphy beds.
 ○​ Dedicated waiting areas or lounges near intensive care or pediatric units where
families can rest or spend the night.

6. Space for Growth and Capacity Expansion

●​ Scalable Design:
○​ Use of modular construction for rooms or wings that can be easily expanded.
○​ Planning for vertical or horizontal expansion, or areas where temporary structures
could be added.

7. Location of Service Departments

●​ Strategic Placement:
○​ Place service departments like labs or radiology near areas of high use (e.g.,
emergency departments).
○​ Ensure that departments like pharmacy are accessible but do not disrupt patient
flow, possibly with separate service corridors.

8. Areas for Medical and Non-Medical Staff to be “Off-Duty”

●​ Staff Retreat Areas:

○​ Staff-only areas like lounges or quiet rooms away from patient areas where staff
can relax or take breaks without interruptions.
○​ Design these spaces to be close enough to work areas for quick access but
shielded from the main hospital traffic.

9. New Mobile Carts

●​ Integration into Layout:

○​ Ensure corridors have the width and turning radius to accommodate mobile carts
easily.
○​ Designate areas for charging and storing these carts when not in use, ensuring
they do not clutter hallways but are accessible.
●​

EXERCISE 1 chap 12
Company A produces a product for which the annual demand is D units. Production averages p
units per day, while demand is d units per day. Holding costs are $H per unit per year, and setup
cost is $S. (a) If the firm wishes to produce this product in economic batches, what size batch
should be used? (b) What is the maximum inventory level? (c) How many order cycles are there
per year? (d) What are the total annual holding and setup costs?

Answer: This is a production order quantity problem.

(a) Q*p = √( 2DS)/ H*(1-d/p) ​

(b) The maximum inventory level is Q*(1-d/p)

(c) There are approximately N = D/Q​

(d) Total annual costs = N*S +1/2 Q(1-d/p) *H
EXERCISE 2
EXERCISE 2

The annual demand for an item is 10,000 units. The cost to process an order is $75 and the
annual inventory holding cost is 20% of item cost.

a. What is the optimal order quantity, given the following price breaks for purchasing the item?

b. What price should the firm pay per unit?​

c. What is the total annual cost at the optimal behavior?

Quantity Price
 1-9 $2.95 per unit

10 - 999 $2.50 per unit

1,000 - 4,999 $2.30 per unit

5,000 or more $1.85 per unit

1000 4999
Solution:

STEP 2

STEP 1

EOQ at $1.85 = 2013.47 → infeasible​

EOQ at $2.30 = 1805.79 → feasible​
So the possible best answers are 1806 and 5000

STEP 2

TC for 1806 units = $23,830.66

TC for 5000 units = $19,575.00

a)​ Order 5000 units at a time.

b)​ The price is $1.85 per unit.
c)​ Total annual purchasing, holding, and setup costs = $19,575.00.