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Operations Management Final Exam Answer 26 DEC 2020 1
Advance Operations Management (Lahore University of Management Sciences)
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Graduate School of Business
ANSWER BOOK
Department: MBA English Section
Course / Code: Operation Management :Final Exam Answer
Start Time: ……………………………………………………………………………
Exam Time: …………………………………………………………………………...
Lecturer name: Prof. Dr. Mohamed Khedr
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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Question 1
Q1- Alshorouk Inc. is a small but growing company and is currently
looking for to add a new site to its existing one.
The factors for three locations are stated in the following table with a
total sum of weights 100 and maximum score of 5
a- If Ashbrook Inc. is targeting excess capacity, which location would
be preferred if the weight of third factor is triple that of the fourth factor
100-(15+20+15+10)=40
Factor
weight
Proximity to ports
15
Proximity to supplier
20
Facility with excess capacity
30
Facility with potential to expend
10
Close to highway
15
Environmental issues
10
Total
Best location is 3
factor
Loc 1
Loc 2
Loc 3
0.45
0.8
0.3
0.5
0.6
0.3
2.95
0.6
0.4
0.6
0.2
0.45
0.4
2.65
0.6
1
1.5
0.1
0.45
0.3
3.95
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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b- If shourok Inc is targeting future expansion, what would be the ratio
between third and fourth factor to make loc1 preferable.
B:100-(15+20+15+10)=40
Factor
Loc 1 Loc 2
weight
Proximity to ports
15
0.45
0.6
Proximity to supplier
20
0.8
0.4
Facility with excess capacity
10
0.1
0.2
Facility with potential to expend
30
1.5
0.6
Close to highway
15
0.6
0.45
Environmental issues
10
0.3
0.4
Total
3.75
2.65
The fourth factor must be trible of the third factor
factor
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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Loc 3
0.6
1
0.5
0.3
0.45
0.3
3.15
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Question 2
Udesign is a plant producing mass production dresses. The following
table shows the tasks needed to be performed, their task times and
proceeding tasks. It is required to produce 30 dresses per hour.
a- Compute the cycle time and minimum number of workstations
required
3600
cycle time =
=120 unit per sec
30
30+40+20+100+25+50+50+90=405
405/120=3.3 or 4
b- Draw the precedence diagram
stat
sta
sta
sta
ion
tio
tio
tio
1
n2
n3
n4
A
B
F
D
H
C
G
E
c- What is the maximum output for this line
120
capacity of
bottleneck =
4
= 30
d- Assign tasks to workstations using most number of followers
station 1 (A, B,C,E)
e- Compute efficiency of such line
Efficiency = 405 =84.3%
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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480
Question 3
In the following table, demand for heart transplant surgery at
Washington General Hospital has increased steadily in the past few
years:
a) Use a 3-year moving average to forecast demand in years 4, 5, and 6.
year
Demand
Forecast
Absolute
1
45
2
50
3
52
4
56
49
7
5
58
52.7
5.3
6
?
55.3
12.3
MAD=12.3/2=6.2
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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b) Use the trend-projection method to forecast demand in years
1through 6.
Year
Y
X2
XY
1
45
1
45
2
50
4
100
3
52
9
156
4
56
16
224
5
58
25
290
15
261
55
815
X =15/5=3
Y=261/5=52.2
B=3.2
A=52.2-3.2(3)=42.6
y=42.6+3.2x
Year
Y
Trend projection Error
1
45
45.8
0.8
2
50
49
1
3
52
52.2
0.2
4
56
55.4
0.6
5
58
58.6
0.6
15
261
61.8
61.8
65
MAD=3.2/5=0.64
c) With MAD as the criterion, which of the four forecasting methods is
best?
Forecast methodology
MAD
Exponential a=0.6
5.06
Exponential a=0.9
3.7
3year moving average
6.2
Trend projection
0.6
Trend projection method is the best
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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d) using the 3-year moving average, forecast the demand for year 7 also
year
Demand Forecast
Absolute
1
45
2
50
3
52
4
56
51
5
5
58
54
4
6
57
57
7
58
58
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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Case Study Question
ABC Bank is thinking of opening a new branch in a certain city besides
its existing branches due to customers’ complaints of long waiting lines
and distant of existing branches from them. As an expert in field of
banking operations, you were asked to put the criteria of choosing the
new location
a- What are the main success key factors for choosing the location
of the new branch in the city stating the reason for being relevant
The new location must provide comparative advantage for the bank
central- hub concept
Central: Enables services to more people with fewer transport
Hub.: Enables matching the client with the most government agencies
Region community decision
Factors
Environmental regulations
Cost and availability of
utilities
Government regulations
proximity to customer
Reason
Respect the rules
and not to
violate
To rationalize
costs
To rationalize
costs
To attract a high
market share
Land/construction costs
To reducing
fixed costs
Attractive of region
To attract
customers
Sit decision
Factors
Reason
Size and cost
To rationalize costs
Proximity to
Government
agencies
Environmental
impact issues
Proximity to
electronic facilities
Culture and
education
living standard
Rail, highway
Demographic
distribution
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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Matching services
Respect the rules and
not to violate
For cable supplies and
so
Recruitment, handling,
development, and
technology,
For easy transportation,
whether for employees
or customers
To know the market
share
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b- Arrange the factors in a descending order according to their
 importance
 Demographic distribution
 Proximity to government agencies
 proximity to customer
 Proximity to electronic facilities
 Rail, highway
 Culture and education living standard
 Attractive of region
 factors for each location alternative
 Government regulations
 Environmental impact issues
 Land/construction costs
 Cost and availability of utilities
 Size and cost
c- What are the sources that will be used to define the score of
these
There are two sources for determining the score of factors that
relevant to location decision
 Previous experience in banking
 Hiring an expert in such fields
d- Give examples of the fixed costs and variable costs of
establishing such new branch
Fixed costs
Variable costs
Rent
Training
Maintenance
recruitment
Salaries
Facilities., utilities
health insurance
.Furniture
Social insurance
Petty cash
Taxes
Advertising
.Meals
Respirators, masks, alcohol (Covid 19)
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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e- What and why would be the type of the quantity used in the
break even analysis and what would be the suitable methods to use
to achieve faster break even
Department
Quantity
customers service
Number of sales from deposits and credit
accounts
Treasury Department
Number of transactions
.Credit. Department
The number of loans granted to clients
Operations department
The number of checks and bills collected
The quantity used in break-even analysis is the quantity of
transactions
and services provided to clients per day
Because the more transactions, it’s mean more profit
the suitable methods to use to achieve faster break even
Increase the number of transactions and services to customers
Because increasing the price of the transaction or service will
generate profit in the short term, but it will affect the competitive
advantage of the bank compared to other banks in the long term
f- If you were asked to choose a mechanism for forecasting the
number of transactions per day, what would be the methodology
that you will use to decide such forecasting method and what do
you think this method may be?
There are no previous readings that can be relied upon, so we will use
the qualitative method that depends on :
 experience
 Market studies
 Survey the market and its trends to find out the extent of its
acceptance of the new service
Student Name: Mahmoud Mohamed Al-Mostafa Ahmed
Registration Number: 19125933
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