SCOM305 Week 4 Homework Problems

Solution is available here for U$25.00

1. Click on the "Problems tab" to review the 5 homework problems.  These are due on Saturday. 

2. Create a new work sheet tab for each problem.

3. Solve your problem on the worksheet.  Some problems have auxiliary questions to be answered.

Highlight your answers in RED. 

4. Post to your Assignments Link. 

1. An analysis of customer complaints at a large mail order house revealed the following data:
Billing Errors	4500
Picking Errors	9800
Long Delays	1353
Unclear Charges	1800
Delivery Errors	900
Shipping Errors	7300
Out of Stock	2700
Construct a Pareto Diagram in Excel to show this data.  What area(s) should the focus be on?
2.  Carpet City recorded the following data on carpet installations over the past week. Use the data to calculate the average rate at which carpet can be installed.
Installation	1	2	3
Square yards	1225	1435	2500
No. of workers	4	3	5
No. of hours per worker	3	5	6
3. House Max Builders constructs modular homes, and last year their cost of goods sold was $18,500,000. It operates 50 weeks per year. The company has the following inventory of raw materials, work-in-process, and finished goods.
Raw Materials	Average Inventory	Unit Cost
1	7200	$8.50
2	4500	7.2
3	3200	15.4
4	4800	13.7
5	6900	10.5
Work-in-Process	Average Inventory	Unit Cost
A	100	$16,200
B	70	13,500
C	60	6,100
D	35	14,400
Finished Goods	Average Inventory	Unit Cost
Model X	20	$78,700
Model Y	10	65,300
Model Z	10	86,000
Determine the number of inventory turns and the days of supply for House Max.
4.  Mary Hernandez has invested in a stock mutual fund and she is considering liquidating and investing in a bond fund. She would like to forecast the price of the stock fund for the next month before making a decision.  She has collected the following data on the average price of the fund during the past 20 months.
Month	Fund Price
1	63 1/4
2	60 1/8
3	61 3/4
4	64 1/4
5	59 3/8
6	57 7/8
7	62 1/4
8	65 1/8
9	68 1/4
10	65 1/2
11	68 1/8
12	63 1/4
13	64 3/8
14	68 5/8
15	70 1/8
16	72 3/4
17	74 1/8
18	71 3/4
19	75 1/2
20	76 3/4
A. Using a three-month moving average, forecast the fund price for month 21.
B.  Using a three-month weighted average with the most recent month weighted 0.60, the next most recent month weighted 0.30, and the third month weighted 0.10, forecast the fund price for month 21.
C. Compute an exponentially smoothed forecast using α= 0.40 and forecast the fund price for month 21.
D.  Compare the forecasts in (a), (b), and (c) using MAD and indicate the most accurate.
5.  The Wallace Stationary Company purchases paper from the Seaboard Paper Company. Wallace produces stationary that require 1,415,000 sq. yards of stationary per year. The cost per order for the company is $2,200; the cost of holding 1 yard of paper in inventory is $0.08 per year. Determine the following:
a. Economic order quantity
b. Minimum total annual cost
c. Optimal number of orders per year
d.  Optimal time between orders

Example 1.1 - Osborne Industries
INPUT
Units produced	100,000
Labor hours	10,000
Machine hours	5,000
Labor rate	$15
Machine usage rate	$10
Cost of materials	$35,000
Cost of energy	$15,000
Cost of labor	$150,000
Cost of machines	$50,000
Total cost	$250,000
OUTPUT
Labor productivity	10	units / hour
Machine productivity	20	units / hour
Multifactor productivity	0.40	units / $