Operation Management ISBM
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Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
1. Ilhan’s, a local bakery, is worried about increased costs – particularly energy. Last year’s
records can provide a fairly good estimate of the parameters for this year. Ilhan Balci,
the owner, does not believe things have changed much, but he did invest an additional 3
000 MU for modifications to the bakery’s ovens to make them more energy efficient. The
modifications were supposed to make the ovens at least 15 % more efficient. I. Balci has
asked you, as a brilliant graduate of EMU, to check the energy savings of the new ovens
and also look over other measures of the bakery’s productivity to see if the
modifications were beneficial. You have the following data to work with:
2. Serra’s Ceramics spent 3 000 MU on a new kiln last year, in the belief that it would cut
energy usage 25 % over the old kiln. This kiln is an oven that turns “greenware” into
finished pottery. Serra is concerned that the new kiln requires extra labour hours for its
operation. Serra wants to check the energy saving of the new oven, and also to look over
other measures of their productivity to see if the change really was beneficial.
Serra has the following data to work with:
Were the modifications BENEFICIAL?
Last Year Now
Production (dozen) 1500 1500
Labour (hours) 350 325
Capital Investment (MU) 15 000 18 000
Energy (kw-hrs) 3 000 2 750
Last Year This Year
Production (finished units) 4000 4000
Greenware (pounds) 5000 5000
Labour (hrs) 350 375
Capital (MU) 15000 18000
Energy (kWh) 3000 2600
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3. Suzan has a part-time “cottage-industry” producing seasonal plywood yard ornaments
for resale at local craft fairs and bazaars. She currently works a total of 4 hours per day
to produce 10 ornaments.
a. What is her productivity?
b. She thinks that by redesigning the ornaments and switching from use of a wood glue to a
hot-glue gun she can increase her production to 20 ornaments per day. What is her new
productivity?
c. What is her percentage increase (or decrease) in productivity?
4. A company has asked YOU to evaluate the firm’s productivity by comparing this year’s
performance with last year’s. The following data are available:
Last Year This Year
OUTPUT 10500
units
12100
units
Labour Hours 12000 13200
Utilities 7600 MU 8250 MU
Capital 8300 MU 88000 MU
Has the company improved its PRODUCTIVITY during the past year?
5. Mr. Ilhan DALCI makes billiard balls in his Beyarmudu plant. With a recent increase in
taxes, his costs have gone up and he has a newfound interest in efficiency. Mr.Dalci is
interested in determining the productivity of his organisation. He would like to know if
his organisation is maintaining the manufacturing average of 3% increase in
productivity. He has the following data representing a month from last year and an
equivalent month this year.
__________________Last year Now
Units produced 1 000 1 000
Labour (hours) 300 275
Resin (kg.s) 50 45
Capital invested (MU) 10 000 11 000
Energy (BTU) 3 000 2 850
Show the productivity change for each category and then determine the IMPROVEMENT for
labour- hrs, the typical standard for comparison.
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6. Haldun LOP, the production manager of LOP Chemicals, in Gazimagusa, TRNC, is preparing
his quarterly report which is to include a productivity analysis for his department. One of the
inputs is production data prepared by Meltem SERIN, his operation analyst. The report,
which she gave him this morning, showed the following:
2005 2006
Production (units) 4500 6000
Raw Material Used (barrels ofPetroleum byproducts)
700 900
Labour Hours 22000 28000
Capital Cost applied to the Department (MU) 375000 620000
Haldun LOP wondered if his productivity had increased at all. He called Meltem into his office
and conveyed the above information to her and asked her to proceed with preparing this part
of the report. (Include your interpretations for each productivity figure)
7. Ahmet Uslu makes wooden boxes in which to ship motorcycles. Ahmet and his three
employees invest 40 hours per day making the 120 boxes.
a. What is their productivity?
b. Ahmet and his employees have discussed redesigning the process to
improve efficiency. If they can increase the rate to 125 per day, what
would be their new productivity?
c. What would be their increase in productivity?
8. The manager of a local firm says “the forecasting techniques are more trouble than they
are worth. I don`t forecast at all, and I`m doing 25% more business than last year”.
Comment.
Page 1 Out of 1
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
1. Ilhan’s, a local bakery, is worried about increased costs – particularly energy. Last year’s
records can provide a fairly good estimate of the parameters for this year. Ilhan Balci,
the owner, does not believe things have changed much, but he did invest an additional 3
000 MU for modifications to the bakery’s ovens to make them more energy efficient. The
modifications were supposed to make the ovens at least 15 % more efficient. I. Balci has
asked you, as a brilliant graduate of EMU, to check the energy savings of the new ovens
and also look over other measures of the bakery’s productivity to see if the
modifications were beneficial. You have the following data to work with:
2. Serra’s Ceramics spent 3 000 MU on a new kiln last year, in the belief that it would cut
energy usage 25 % over the old kiln. This kiln is an oven that turns “greenware” into
finished pottery. Serra is concerned that the new kiln requires extra labour hours for its
operation. Serra wants to check the energy saving of the new oven, and also to look over
other measures of their productivity to see if the change really was beneficial.
Serra has the following data to work with:
Were the modifications BENEFICIAL?
Last Year Now
Production (dozen) 1500 1500
Labour (hours) 350 325
Capital Investment (MU) 15 000 18 000
Energy (kw-hrs) 3 000 2 750
Last Year This Year
Production (finished units) 4000 4000
Greenware (pounds) 5000 5000
Labour (hrs) 350 375
Capital (MU) 15000 18000
Energy (kWh) 3000 2600
Page 1 Out of 1
3. Suzan has a part-time “cottage-industry” producing seasonal plywood yard ornaments
for resale at local craft fairs and bazaars. She currently works a total of 4 hours per day
to produce 10 ornaments.
a. What is her productivity?
b. She thinks that by redesigning the ornaments and switching from use of a wood glue to a
hot-glue gun she can increase her production to 20 ornaments per day. What is her new
productivity?
c. What is her percentage increase (or decrease) in productivity?
4. A company has asked YOU to evaluate the firm’s productivity by comparing this year’s
performance with last year’s. The following data are available:
Last Year This Year
OUTPUT 10500
units
12100
units
Labour Hours 12000 13200
Utilities 7600 MU 8250 MU
Capital 8300 MU 88000 MU
Has the company improved its PRODUCTIVITY during the past year?
5. Mr. Ilhan DALCI makes billiard balls in his Beyarmudu plant. With a recent increase in
taxes, his costs have gone up and he has a newfound interest in efficiency. Mr.Dalci is
interested in determining the productivity of his organisation. He would like to know if
his organisation is maintaining the manufacturing average of 3% increase in
productivity. He has the following data representing a month from last year and an
equivalent month this year.
__________________Last year Now
Units produced 1 000 1 000
Labour (hours) 300 275
Resin (kg.s) 50 45
Capital invested (MU) 10 000 11 000
Energy (BTU) 3 000 2 850
Show the productivity change for each category and then determine the IMPROVEMENT for
labour- hrs, the typical standard for comparison.
Page 1 Out of 1
6. Haldun LOP, the production manager of LOP Chemicals, in Gazimagusa, TRNC, is preparing
his quarterly report which is to include a productivity analysis for his department. One of the
inputs is production data prepared by Meltem SERIN, his operation analyst. The report,
which she gave him this morning, showed the following:
2005 2006
Production (units) 4500 6000
Raw Material Used (barrels ofPetroleum byproducts)
700 900
Labour Hours 22000 28000
Capital Cost applied to the Department (MU) 375000 620000
Haldun LOP wondered if his productivity had increased at all. He called Meltem into his office
and conveyed the above information to her and asked her to proceed with preparing this part
of the report. (Include your interpretations for each productivity figure)
7. Ahmet Uslu makes wooden boxes in which to ship motorcycles. Ahmet and his three
employees invest 40 hours per day making the 120 boxes.
a. What is their productivity?
b. Ahmet and his employees have discussed redesigning the process to
improve efficiency. If they can increase the rate to 125 per day, what
would be their new productivity?
c. What would be their increase in productivity?
8. The manager of a local firm says “the forecasting techniques are more trouble than they
are worth. I don`t forecast at all, and I`m doing 25% more business than last year”.
Comment.
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