# MGMT 3306 Operations and Supply Chain Management Fall 2015

January 30, 2017

Question
MGMT 3306
Operations and Supply Chain Management
Fall 2015
1. In 2013, Gibison’s Auto Repair invested in a computer diagnostic machine that reads codes on a car’s
computer, thereby shortening the time it takes to determine what is wrong with a car. Consider the figures
below:
Year Sales (\$000s) Labor costs (\$000s) Machine costs (\$000s)
2010 \$2,468 \$987 \$0
2011 \$2,838 \$1,192 \$0
2012 \$3,085 \$1,172 \$0
2013 \$3,702 \$1,074 \$150
2014 \$4,072 \$1,140 \$150
2015 \$4,319 \$1,166 \$150
a. Calculate the labor productivity for each of the six years. How much has labor productivity improved
since the diagnostic machine was brought in?
b. Calculate the multi-factor productivity score for each year, where the “input” is the total amount spent on labor and the diagnostic machine.
Next, calculate the average multi-factor productivity score for years 2010 – 2012, and years 2013 – 2015. According to the results, was it worthwhile for Gibson to invest in the diagnostic machine? Why or why not?

2. To earn money while he is in school, Scott has decided to clean carpets on the side. Scott can
either rent, lease, or buy the equipment. The costs associated with each of the three capacity
options are shown below:
Variable
Yearly cost per
Option fixed cost job
Rent \$1,050.00 \$210.00
Lease \$3,150.00 \$189.00
Scott estimates that the revenue for each job will be, on average, \$231.0.
Calculate the break-even point for each capacity option.

3. The following information relates to a project (in weeks).
A None 8 9 10
B None 5 9 12
C A 3 5 7
D B 8 14 19
E C,D 7 12 16
F E 10 14 18
G F 6 10 15
a. Draw the network diagram.
b. Calculate slack for each activity using either ES, EF or LS, LF.
c. Based on the slack, determine the critical path and project duration.
d. Calculate the variance of critical path.
e. What is the projectâ€™s completion time for which we are 95% sure of success?

4. You have been hired as VP of Operations for a new venture. One of the immediate agenda for you is
to develop overall strategy for your unit. Discuss strategic planning process you will use. How does
operational performance measures can contribute to overall organizational strategy of cost