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Category: Business and Industry
Date Submitted: 03/15/2011 05:29 PM
REVIEW QUESTIONS FOR THE MIDTERM EXAM
In the midterm review class, we will solve the following questions and, if time permits, solve questions from the 1st assignment.
QUESTION 1 (PRODUCTIVITY)
A company has introduced a process improvement that reduces processing time for each unit so that output is increased by 25%, but one additional worker is required. Under the old process, five workers could produce 60 units per hour and material input was $16/unit. For the new process, material input is now $10/unit. Overhead is charged at 1.6 times direct labor cost. Finished units sell for $31 each and labor costs are $12/hour. What increase in total productivity is associated with the process improvement?
QUESTION 2 (FORECASTING: DOUBLE EXPONENTIAL SMOOTHING, MAD, MSE)
A manager has been using a qualitative technique to forecast demand for word processing units for the past six periods. Actual and predicted amounts are shown below. Would double-exponential smoothing forecasts with ( = 0.4 and ( = 0.1 have produced better results with respect to MAD and MSE? (Assume that F1 = 85 and T1 = 2).
Period 1 2 3 4 5 6
Demand 80 85 91 92 95 90
Forecast 87 80 85 91 92 95
Calculate forecast for periods 7, 8, and 9 by using double exponential technique.
QUESTION 3 (PROJECT MANAGEMENT)
Consider the following data of a project.
|Activity |Predecessor |Normal Time |Expedited Time |Normal cost |Expedited cost (in $) |
| | |(weeks) |(weeks) |In $ | |
|A |- |12 |10 |8,000 |10,000 |
|B |- |14 |10 |5,000 |7,500 |
|C |- |8 |8...