# Iscom 305 week 5 operations management problem exercised

undefined Iscom 305 week 5 operations management problem exercises.docx Question 11-1

Describe in general terms, how you think the distribution system, for Mcdonald’s works?

Problem 12-1

The Hartley-Davis motorcycle dealer in the Minneapolis–

St. Paul area wants to be able to forecast accurately the demand

for the Roadhog Super motorcycle during the next

month. From sales records, the dealer has accumulated the

data in the following table for the past year.

 Month Motorcycle sales January 9 February 7 March 10 April 8 May 7 June 12 July 10 August 11 September 12 October 10 November 14 December 16

a. Compute a three-month moving average forecast of

demand for April through January (of the next year).

b. Compute a five-month moving average forecast for

June through January.

c. Compare the two forecasts computed in parts (a) and

(b) using MAD. Which one should the dealer use for

January of the next year?

Problem 14-26

Fun ’n Games is a large discount toy store in Fashion City

Mall. The store typically has slow sales in the summer

months that increase dramatically and rise to a peak at Christmas.

However, during the summer and fall, the store must

build up its inventory to have enough stock for the Christmas

season. In order to purchase and build up its stock during the

months when its revenues are low, the store borrows money.

Following is the store’s projected revenue and liabilities

schedule for July through December (where revenues

are received and bills are paid at the first of each month).

 Month Revenues Liabilities July \$20,000 \$60,000 August 30,000 60,000 September 40,000 80,000 October 50,000 30,000 November 80,000 30,000 December 100,000 20,000

At the beginning of July the store can take out a sixmonth

loan that carries an 11% interest rate and must be

paid back at the end of December. (The store cannot reduce

its interest payment by paying back the loan early.)

The store can also borrow money monthly at a rate of 5%

interest per month. Money borrowed on a monthly basis

must be paid back at the beginning of the next month.

The store wants to borrow enough money to meet its cash

flow needs while minimizing its cost of borrowing.

a. Formulate and solve a linear programming model for

this problem.

b. What would be the effect on the optimal solution if

the store could secure a 9% interest rate for a 6-month

loan from another bank?

Question 15-1

Describe a production environment in which MRP would

be useful. Describe a production environment in which

MRP would not be useful.

Question 15-2

Explain with an example the difference between dependent

and independent demand.

Question 15-3

What are the objectives, inputs, and outputs of an MRP

system?