OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

ASSIGNMENT 1
SMITA DAYAL,
Roll No 88, MBA PT 2012 15 Section B
Solve the following questions
Question 3-3: The Commonwealth Banking Corporation issues a national credit card through its various bank branches in five
southeastern states. The bank credit card business is highly competitive and interest rates do not vary substantially, so the
company decided to attempt to retain its customers by improving customer service through a reduction in billing errors. The
credit card division monitored its billing department process by taking daily samples of 200 customer bills for 30 days and
checking their accuracy. The sample results are as follows:
Sample
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Number of
Defectives
7
12
9
6
5
8
10
11
14
10
9
6
3
2
8

Sample
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

Number of
Defectives
10
12
14
16
15
13
9
10
12
15
14
16
12
15
14

Develop a p-chart for the billing process using 3 control limits and indicate if the process is out of control.
Solution:

Sample
1
2
3
4
5
6
7
8
9
10
11
12
13

Defectives
7
12
9
6
5
8
10
11
14
10
9
6
3

Defective
0.035
0.060
0.045
0.030
0.025
0.040
0.050
0.055
0.070
0.050
0.045
0.030
0.015

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

p
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05

UCL
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003

LCL
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054

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OM ASSIGNMENT

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Total

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

2
8
10
12
14
16
15
13
9
10
12
15
14
16
12
15
14
317

0.010
0.040
0.050
0.060
0.070
0.080
0.075
0.065
0.045
0.050
0.060
0.075
0.070
0.080
0.060
0.075
0.070

0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05

0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003
0.1003

0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054
0.0054

0.120

Proportion Defective

0.100
0.080
0.060
0.040
0.020
0.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Sample Number

Answer:
p-Chart formulas:

The process is within control and random till 23rd sample. After 23rd sample, there a trend of defects staying above the
average limit.

Question 3-6: One of the stages in the process of making denim cloth at the Southern Mills Company is to spin cotton yarn
onto spindles for subsequent use in the weaving process. Occasionally the yarn breaks during the spinning process, and an
operator ties it back together. Some number of breaks is considered normal; however, too many breaks may mean that the yarn
is of poor quality. In order to monitor this process, the quality-control manager randomly selects a spinning machine each hour
and checks the number of breaks during a 15-minute period. Following is a summary of the observations for the past 20 hours:

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

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OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

Number of
Defects
5
2
8
4
2
5
6
3
4
3

Sample
1
2
3
4
5
6
7
8
9
10

Sample
11
12
13
14
15
16
17
18
19
20

Number of
Defects
5
2
6
9
5
8
10
8
11
7

Construct a c-chart using 3 limit for this process and indicate if the process was out of control at any time.
Solution:
Sample
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total

Defects
5
2
8
4
2
5
6
3
4
3
5
2
6
9
5
8
10
8
11
7
113

c-Bar
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65
5.65

UCL
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78
12.78

LCL
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Number of
Defects

14
12
10
8
6
4
2
0
1

10 11 12 13 14 15 16 17 18 19 20

Sample Number

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SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

OM ASSIGNMENT

Answer:
c-Chart Formulas:

LCL c z c

UCL c z c

The process is within control. However there's a trend of defects staying below the average of 5.65 or above the average. It
means the control used to limit the defects is either too tight or too loose.
Question 3-14: The City Square Grocery and Meat Market has a large meat locker in which a constant temperature of
approximately 40 F should be maintained. The market manager has decided to construct an R-chart to monitor the
temperature inside the locker. The manager had one of the market employees take sample temperature readings randomly five
times each day for 20 days in order to gather data for the control chart. Following are the temperature sample observations:
Temperature (F)
1
2

Sample
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

46.3
48.1
42.5
43.1
39.6
41.2
40.5
37.8
36.5
42.3
40.1
41.3
34.5
33.2
36.7
42.3
44.1
39.5
37.7
38.6
35.2
38.1
40.5
39.1
42.3
40.6
41.7
38.6
43.5
44.6
33.2
38.6
41.5
40.7
43.1
41.8
40
41.6
40.7
39.3
42.4
41.6
40.8
40.9
42.3
44.7
36.5
37.3
35.3
41.1
42.6
43.5
35.4
36.1
38.2
40.5
40.4
39.1
37.2
41.6
45.3
42
43.1
44.7
39.5
36.4
37.5
36.2
38.9
40.1
40.5
34.3
36.2
35.1
36.8
39.5
38.2
37.6
34.1
38.7
37.6
40.6
40.3
39.7
41.2
41
34.3
39.1
45.2
43.7
40.9
42.3
37.6
35.2
34.8
37.6
39.2
39.3
41.2
37.6
a) Construct an R-chart based on these data using 3 limits, and plot the 20 sample range values.
b) Does it appear that the temperature is in control according to the criteria established by management?
Solution:
Observations

Sample

Calculations

Xbar Chart

R-chart

Sample
Mean

Range

UCL

LCL

UCL

LCL

46.3

48.1

42.5

43.1

39.6

43.92

8.50

43.31

36.11

13.18

41.2

40.5

37.8

36.5

42.3

39.66

5.80

43.31

36.11

13.18

40.1

41.3

34.5

33.2

36.7

37.16

8.10

43.31

36.11

13.18

42.3

44.1

39.5

37.7

38.6

40.44

6.40

43.31

36.11

13.18

35.2

38.1

40.5

39.1

42.3

39.04

7.10

43.31

36.11

13.18

40.6

41.7

38.6

43.5

44.6

41.80

6.00

43.31

36.11

13.18

33.2

38.6

41.5

40.7

43.1

39.42

9.90

43.31

36.11

13.18

41.8

40

41.6

40.7

39.3

40.68

2.50

43.31

36.11

13.18

42.4

41.6

40.8

40.9

42.3

41.60

1.60

43.31

36.11

13.18

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SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

OM ASSIGNMENT

10

44.7

36.5

37.3

35.3

41.1

38.98

9.40

43.31

36.11

13.18

11

42.6

43.5

35.4

36.1

38.2

39.16

8.10

43.31

36.11

13.18

12

40.5

40.4

39.1

37.2

41.6

39.76

4.40

43.31

36.11

13.18

13

45.3

42

43.1

44.7

39.5

42.92

5.80

43.31

36.11

13.18

14

36.4

37.5

36.2

38.9

40.1

37.82

3.90

43.31

36.11

13.18

15

40.5

34.3

36.2

35.1

36.8

36.58

6.20

43.31

36.11

13.18

16

39.5

38.2

37.6

34.1

38.7

37.62

5.40

43.31

36.11

13.18

17

37.6

40.6

40.3

39.7

41.2

39.88

3.60

43.31

36.11

13.18

18

41

34.3

39.1

45.2

43.7

40.66

10.90

43.31

36.11

13.18

19

40.9

42.3

37.6

35.2

34.8

38.16

7.50

43.31

36.11

13.18

20

37.6

39.2

39.3

41.2

37.6

38.98

3.60

43.31

36.11

13.18

Mean

39.71

6.24

Range
14.00
12.00

Mean

10.00
8.00
6.00
4.00
2.00
0.00
1

10

11

12

13

14

15

16

17

18

19

20

Sample

Answer:
x-Chart formulas:

LCL x A R

UCL x A R

R-Chart formulas:

UCL D4 R

LCL D R
3

The process is within control. The sample ranges are within control and none of them are near to control lines.

Question 3-16: For the sample data provided in Problem 3-13, construct an x-chart in conjunction with the R-chart, plot the
sample observations, and, using both x- and R-charts, comment on the process control.
Solution:
Calculations

Xbar Chart

R-chart

Sample

Observations
1

Sample
Mean

Range

UCL

LCL

UCL

LCL

1
2

9.06
8.52

9.13
8.61

8.97
9.09

8.85
9.21

8.46
8.95

8.89
8.88

0.67
0.69

9.393
9.393

8.649
8.649

1.364
1.364

0
0

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

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OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

3
4
5
6
7
8
9
10
11
12

8.95
9.21
8.87
8.35
9.21
9.20
8.90
9.10
9.02
9.10

9.35
9.17
9.21
8.74
9.00
9.15
9.98
9.03
9.53
8.95

9.20
9.05
8.71
8.50
9.05
9.23
8.81
9.26
9.11
9.00

9.03
9.01
9.05
9.06
9.23
9.15
9.05
9.46
8.88
9.06

8.42
9.53
9.35
8.89
8.78
9.06
9.13
8.47
8.92
8.95
Mean

8.99
9.19
9.04
8.71
9.05
9.16
9.17
9.06
9.09
9.01
9.02

0.93
0.52
0.64
0.71
0.45
0.17
1.17
0.99
0.65
0.15
0.65

9.393
9.393
9.393
9.393
9.393
9.393
9.393
9.393
9.393
9.393

8.649
8.649
8.649
8.649
8.649
8.649
8.649
8.649
8.649
8.649

1.364
1.364
1.364
1.364
1.364
1.364
1.364
1.364
1.364
1.364

0
0
0
0
0
0
0
0
0
0

X-Bar
9.60
9.40

Mean

9.20
9.00
8.80
8.60
8.40
8.20
1

10

11

12

Sample

Range
1.60
1.40
1.20
Mean

1.00
0.80
0.60
0.40
0.20
0.00
1

10

11

12

Sample

Answer: Both X bar and R charts show that the process is within control.
From R chart we can see that the sample ranges are within control, however there are 2 cases where the range is very near to
lower control limit.

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

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OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

X bar chart tell us that the controls are in place and samples show us a random behavior except in one case where defect range
is very near to lower control limit (sample 6).

Question 4-6: MagTech assembles tape players from four major components arranged as follows:
B

The components can be purchased from three different vendors, who have supplied the
following reliability data:

Vendor
Component
A
B
C
D

1
.94
.90
.90
.95

2
.85
.88
.92
.93

3
.93
.86
.95
.90

a) If MagTech has decided to use only one vendor to supply all four components, which
vendor should be selected?
b) Would your decision change if all the components were assembled in series?

Solution a)
Vendor 1 Parallel arrangement
0.90

0.94

0.90

0.95

Reliability = 0.94 x (1 - (1 - 0.90)x(1 - 0.90)) x 0.95 = 0.88

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

Page 7 of 14

OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

Vendor 2 Parallel arrangement

0.88

0.85

0.92

0.93

Reliability = 0.85 x (1 - (1 - 0.88)x(1 - 0.92)) x 0.93 = 0.78

Vendor 3 Parallel arrangement

0.86

0.93

0.95

0.90

Reliability = 0.93 x (1 - (1 - 0.86)x(1 - 0.95)) x 0.90 = 0.83

Answer a: Vendor 1 offers highest reliability with .88 in parallel arrangement and hence Vendor 1
should be selected.
Solution b)
Vendor 1 Serial arrangement

0.94

0.90

0.90

0.95

0.92

0.93

Reliability = 0.94 x 0.90 x 0.90 x 0.95 = 0.72

Vendor 2 Serial arrangement

0.85

0.88

Reliability = 0.85 x 0.88 x 0.92 x 0.93 = 0.64

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

Page 8 of 14

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

OM ASSIGNMENT

Vendor 3 Serial arrangement

0.93

0.86

0.95

0.90

Reliability = 0.93 x 0.86 x 0.95 x 0.90 = 0.68

Answer b: No, our decision will not change if components were assembled in series. Vendor 1 still
offers highest reliability with .72 in serial arrangement and hence Vendor 1 should be selected.

Question 6-17: Sandra Saunders and her design team are analyzing the production costs for three
alternative monitor designs. Given the cost information below, and assuming form and function
are similar for each design, which monitor design would you recommend?
Monitor
A
B
C

Fixed Cost
$ 700,000
$1,000,000
$1,500,000

Variable Cost
$250
$125
$100

Solution:
Input
Monitor

Fixed Cost

A
B
C

$700,000.00
$1,000,000.00
$1,500,000.00

Variable
Cost
$250.00
$125.00
$100.00

Output

Pairwise Comparison
A
B
A
C
B
C

Point of
Indifference
2,400
5,333
20,000

Sample data for graph:

Volume
0
2,400
4,800
7,200

A
$700,000
1,300,000
1,900,000
2,500,000

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

B
$1,000,000
1,300,000
1,600,000
1,900,000

C
$1,500,000
$1,740,000
$1,980,000
$2,220,000

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SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

$3,000,000
$2,500,000
$2,000,000

$1,500,000

$1,000,000

$500,000
$0
0

2,400

4,800

7,200

Point of Indifference between Monitor A and Monitor B =cf1 cf2

cv 2 cv1

Answer:

Monitor design A has the lowest startup cost and is good for low volume of production.

At volume level of 2400 units, Monitor A and B reach the point of indifference.

Beyond 2400 units Monitor design B should be selected.

At volume level of 5333 units, Monitor design A and C reach the point of indifference.
Beyond this point design C should be selected as it gives lower per unit cost.

At volume level 20,000 units, Monitor design B and C reach the point of indifference.
Beyond this point design C should be used as it gives lower per unit cost.

Question 17-9: Lims Alterations has 8 jobs to be completed and only 1 sewing machine (and
sewing machine operator). Given the processing times and due dates as shown here, prioritize
the jobs by SPT, DDATE, and SLACK. Today is day 7.
Task
A
B
C
D
E
F
G
H

Process Time(in days)

9
8
6
4
11
10
7
3

Due Date
10
15
18
20
25
40
20
50

Calculate mean flow time, mean tardiness, maximum tardiness, and number of jobs tardy for
each sequence. Which sequencing rule would you recommend? Why?
Solution:

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

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OM ASSIGNMENT

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

a) Sequencing rule: SLACK; sort the given data as per Slack.

Todays date: 7th
Processing
time
9
8
6
7
11
4
10
3

Job
A
B
C
G
E
D
F
H

Duedate
10
15
18
20
25
20
40
50

Slack
-6
0
5
6
7
9
23
40

Calculations:

Job
A
B
C
G
E
D
F
H
Total
Average

Start time
7
16
24
30
37
48
52
62

Processing time
9
8
6
7
11
4
10
3

Performance Measures
Mean Flowtime
Mean Tardiness
No. of Jobs Tardy
Max Tardiness

Completion
Time
16
24
30
37
48
52
62
65
334
41.75

Due date
10
15
18
20
25
20
40
50

Tardiness
6
9
12
17
23
32
22
15
136
17.00

41.75
17.00
8
32

b) Sequencing rule: SPT; sort the given data as per processing time
Todays date: 7th

Job
H
D
C
G
B

Processing
time
3
4
6
7
8

Duedate
50
20
18
20
15

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

Slack
40
9
5
6
0

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OM ASSIGNMENT

A
F
E

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

9
10
11

10
40
25

Start time
7
10
14
20
27
35
44
54

Processing time
3
4
6
7
8
9
10
11

-6
23
7

Calculations:

Job
H
D
C
G
B
A
F
E
Total
Average

Performance Measures
Mean Flowtime
Mean Tardiness
No. of Jobs Tardy
Max Tardiness

Completion
Time
10
14
20
27
35
44
54
65
269
33.63

Duedate
50
20
18
20
15
10
40
25

Tardiness
0
0
2
7
20
34
14
40
117
14.63

33.63
14.63
6
40

c) Sequencing rule: DDATE; sort the given data as per Due date.
Todays date: 7th

Job
A
B
C
D
G
E
F
H

Processing
time
9
8
6
4
7
11
10
3

Due date
10
15
18
20
20
25
40
50

Slack
-6
0
5
9
6
7
23
40

Job
A
B
C
D
G
E
F

Start time
7
16
24
30
34
41
52

Processing time
9
8
6
4
7
11
10

Completion
Time
16
24
30
34
41
52
62

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

Due date
10
15
18
20
20
25
40

Tardiness
6
9
12
14
21
27
22

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OM ASSIGNMENT

H
Total
Average

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

62

Performance Measures
Mean Flowtime
Mean Tardiness
No. of Jobs Tardy
Max Tardiness

65
324
40.50

50

15
126
15.75

40.50
15.75
8
27

Answer: We should select SPT sequencing method as it gives lowers number of Tardy Jobs, i.e. 6
jobs. First 2 jobs complete on time with 0 tardiness and third jobs gets completed with lowest
tardiness among the 3 types of sequencing.

Question 17-14: Given that all the jobs listed below must be machined first, then polished,
determine a sequence that will minimize the time required to process all 6 jobs. Chart the
schedule on a Gantt chart and indicate the makespan.
Job
A
B
C
D
E
F

Process 1
8
1
3
8
7
7

Process 2
9
2
5
6
5
4

Solution:
Input
Job
A
B
C
D
E
F

Process 1
8
1
3
8
7
7

Process 2
9
2
5
6
5
4

Sequence
B C A D E F

Output

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

Page 13 of 14

SMITA DAYAL, ROLL - 88, SEC B, MBA PT 2012-15

OM ASSIGNMENT

B
1
3

Process 1
Process 2

C
4
9

A
12
21

D
20
27

E
27
32

F
34
38

Makespan = 38
Gantt chart

Process 2
Process 1

Idle
1

B
2
1

Idle
1

C
5
3

Idle
3

A
9
8

Idle
0

D
6
8

Idle
0

E
5
7

Idle
2

F
4
7

Process 1

Process 2
0

10

Idle

15

20
Time

25

30

35

40

*****************************************************

IIFT Delhi, MBA (PT) 2012-2015, Trimester IV

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