Q1: Saudi company for the production of soap wants to create a factory, if provided with three alternatives for the establishment of the
plant in three cities:
1- . Create a small factory in Al-Kharj production capacity amounting / 100 / thousand units annually and fixed cost estimates /$ 50
thousand and the variable cost estimates /$2.5/ per unit.
2- Set up medium factory in Riyadh production capacity amounting / 200 / thousand units per year and fixed cost estimates / $80 thousand /
and the variable cost estimates /$3.1/ per unit.
3- . Create a large factory in Hail production capacity amounting / 300 thousand units annually and fixed cost estimates / $120 thousand /
and the variable cost estimates /$3.6/ per unit.
And you have the following information:
1- The production of each factory is constant, (the production levels does not vary with demand)
2- The unit that are not sold according to demand, it price becomes zero
3- . The demand is expected / 60 /, / 85 /, / 133 /, thousand units respectively, with probability 25%, 40%, 35% respectivly.
4- Selling price per unit = $ 12
The required:
A – Identify a group of possible alternatives and a group of states of nature
B – Build a table of results (profits).
C – Determine the optimal alternative using E-MV.
D – By Using a decision Tree , what is your decision?
E- Calculate the EVPE? And explain what it means?
F- Suppose that the probability of the occurring the state of nature are unknown, use the suitable method to evaluate the alternative,
what is your decision?
Q2: A Hamburger industry collects the data for forecasting. Sales (in millions of dollars) is related to Promotion (in thousands of
dollars): (7 marks)
Sales Promotion
($ millions) ($thousands)
2.0 20
3.0 60
2.5 80
2.0 40
2.0 20
3.5 14
Calculate:
1) The Trend Line Using least square method? and what it means?
2) If Promotion next year is estimated to be $12thousands, then what shall be the Sales?
3) Calculate the Correlation Coefficient? and what it means?
4) Calculate the Correlation of Determination? and what it means?
1)
r = Correlation Coefficient =
r2 = Coefficient of Determination
Q3:What is the approximate forecast for May using a four-month moving average?
Nov. Dec. Jan. Feb. Mar. April
39 36 40 42 48 46
Q4: From the given information:
1- Draw the network ?
2- Calculate theoretical minimum number of workstations?
3- Balance the line by assigning specific tasks to workstations?
4- Calculate the efficiency?
5- Determine cycle time?
Available minutes per day = 960 and
Required units = 40
Task Performance Time
(minutes) Task Must Follow
Task Listed Below
A 20 ————
B 22 A
C 10 B
D 8 B
E 24 A
F 6 C,D
G 14 F
H 22 E
I 6 G,H
Total time 132
Q5: Given as follows: Assuming eight hours of work a day
A B C D E F G H Iactivites
4 1.5 1.5 3.5 1.5 2.5 2 1.5 4 1time
(min)
Required:
1) required time for all activites?
2) the highest production?
3) min No of work station?
4) Balance the line by assigning specific tasks to workstations?
5) Calculate the efficiency?
6) Determine cycle time?
Q6: One of the industrial companies in front of three alternatives to choose one of them to its new site and fixed cost was associated
with these sites have been estimated as follows:
60 thousand dollars, 30 thousand dollars, 100 thousand dollars, respectively. Also estimated the variable cost per unit $ 65, $ 40, $ 30,
respectively. The selling price per unit was estimated at $ 150.
A) Using the break-even point in the quantities, what is the best location?
B) What is the best location if the production volume equal 2000 unit?
Q7: A company with factories in three areas, it need to raw materials, where is currently supplied from two sources, but the company needs
to other sources in order to meet the needs of factories of this material, the company thinking in finding sources of another was found in
front of two alternatives ” new sources of raw materials “can choose one of them as the site provides plants with the necessary raw
materials. The following table represents the needs of the factories of raw materials as well as available of these raw materials in the
old centers and then add one of the two new centers with the cost associated with it.
Source Factory no1 Factory no2 Factory no3 supply
Old 1st source for raw materials
2nd source for raw materials $200
$100 $300
$100 $200
$300 300
400
New 3rd source for raw materials
4th source for raw materials $300
$100 $200
$300 $100
$400 200
200
Demand 200 300 400
Required: choosing the optimal alternative “third and fourth”, which is accompanied less costly.
Q8: One of the industrial companies in front of three alternatives to choose one of them to its new site, and you have the following
information.
Site No Fixed cost$ /year Variable cost $/units
materials work other total
1st 200000$ 0.2 0.4 0.4 1
2nd 180000 0.25 0.75 0.75 1.750
3rd 170000 1.0 1.0 1.0 3.0
Required: Determine production levels (production volume) that a specific location better than others?
Q9:
A) Define mission and strategy
B) Identify and explain three strategic approaches to competitive advantage
C) Identify and define the 10 decisions of operations management