1. A company uses 121,000 units a year. If the inventory carrying charge is 25%, the item costs $60 a unit, and an order costs $75, how many should be ordered at a time if they are using EOQ ordering rules? What is the total annual inventory cost?
2. A company has an order to produce 25 specially designed safes for a bank. It is estimated that the first safe will require 70 hours of shop time and a 75% learning curve is expected. How many hours will the whole order require?
3. A company is concerned about the diameter of one of its steel pipes. They took 10 daily samples with 10 observations each and obtained the following sample means: 15.0, 16.4, 13.8, 14.6, 17.2, 15.2, 15.0, 16.9, 17.9, and 16.5. If the average range for the samples was 2 inches, what are the upper and lower control limits for the X-bar chart?
4. List the seven basic quality tools.
5. In a time study of a process, the average time to complete a unit was 36.5 minutes, the performance rating of the worker observed in the study was 1.2, and the allowances were 60 minutes per eight-hour shift. What would the labor standard be for the process?
6. Name six different factors that might be important to a company deciding on a location for a new facility. For each of the factors, explain why it would be important in the location decision.
7. How would you decide what amount of quality inspection would be optimal?
8. A company has an order to produce 100 specially designed safes for a bank. It is estimated that the first safe will require 70 hours of shop time and a 75% learning curve is expected. How many hours will the whole order require?
9. You need the following to produce Product A: 1 B per each A; 1 C per A; 1 D per B; 1 E per B; 2 F per C; 1 G per C; and 2 E per G. If you have the following on hand, how many more of each would you have to produce so that you would have a total of 120 A? On hand: 30 A; 10 B; 50 C; 50 D; 125 E; 0 F; and 30 G.
10. List 8 functions of inventory.