Practice Questions for Final – OM726 Spring 2012

1. Week 1 2 3 4 5 6
Gross Requirements 100 150
Scheduled Receipts 25
Projected On-Hand 10
Net Requirements
Planned Order Receipt
Planned Order Release

a. What is the Projected On-Hand Inventory at the end of week 6 if the order quantity is 100 and lead time is 1 week? (3 points)

85 items on hand b. What does a Bill of Material provide? (2 points)

Parts required to make the Finished Good, the required number of each part to make the part above it, and the order the parts are put together

2. A disability insurance claims reviewer evaluates three types of claims:

Minor: 60% 2 hours Intermediate: 30% 4 hours Major: 10% 6 hours
Type Percent Time (hours) Contribution to Weighted Average Contribution to Weighted Average
Minor: 60% 2 1.2
Intermediate: 30% 4 1.2
Major: 10% 6 0.6 3

If he works 36 hours each week (actual worked time):

a. What is his weekly capacity in claims reviews? 12 reviews

b. If he does 12 reviews per week on average, what is his capacity utilization? 100%

c. What factors would you consider to determine whether this is an appropriate CU
Quality performance.
How long customers had to wait.
How much variability there is in demand.

d. What is the optimal capacity utilization for any process? (5 points)

As high as it can be to meet the organization’s performance objectives.
3. LM Financial Services
LM Financial Services would like to expand its website to include an online trading service. Vice-President of Information Systems, Justin Thyme, has been charged with overseeing the project and he has pared a list of ten candidates down to two finalists, Pat