FINAL EXAM

MM5004 Operations Management PT Berau Coal

Lecture: Ir. Gatot Yudoko MASC.,Ph.D.
Student: Saeful Aziz (29118389)
NUMBER 1: Questions

• Solve the forecasting problem in the case study “Specialty

Packaging Corporation”
• Which method should Julie choose?
• How demand Black and Clear Plastic in Y6 – Y8 (Periode 21 – 32) ?
Demand Plastic
Periode (t) Year Quarter Black Clear
Black Clear
1 1 2,250.00 3,200.00
2
1
2 1,737.00 7,658.00 18,000.00
3 3 2,412.00 4,420.00
4 4 7,269.00 2,384.00 16,000.00
5 1 3,514.00 3,654.00
14,000.00
6 2 2,143.00 8,680.00
2
7 3 3,459.00 5,695.00 12,000.00
8 4 7,056.00 1,953.00
9 1 4,120.00 4,742.00
10,000.00
10 2 2,766.00 13,673.00 8,000.00
3
11 3 2,556.00 6,640.00
12 4 8,253.00 2,737.00 6,000.00
13 1 5,491.00 3,486.00
4,000.00
14 2 4,382.00 13,186.00
4
15 3 4,315.00 5,448.00 2,000.00
16 4 12,035.00 3,485.00
17 1 5,648.00 7,728.00 -
18 2 3,696.00 16,591.00 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
5
19 3 4,843.00 8,236.00
1 2 3 4 5
20 4 13,097.00 3,316.00
NUMBER 1: Answers

Forecasting Method Amount of Historical Data Data Pattern Forecast Horizon

Simple moving average 6 to 12 months; weekly data are often Stationary (i.e., no trend or Short
used seasonality)
Weighted moving average and 5 to 10 observations needed to start Stationary Short
simple exponential smoothing
Exponential smoothing with trend 5 to 10 observations needed to start Stationary and trend Short

Linear regression 10 to 20 observations Stationary, trend, and Short to medium

seasonality

The Forecasting data method choose in Liner Regression, because:

• The data provide in medium forecast horizon/period
• The data show the seasonality pattern
NUMBER 1: Answers
Demand Plastic average Quarter Seasional Factor Deseasonalized_Dem (Yd)
Periode (t) Year Quarter Black Clear Black Clear Black Clear Black Clear
1 1 2,250.00 3,200.00 4,204.60 4,562.00 0.83 0.72 2,703.52 4,451.10
2 2 1,737.00 7,658.00 2,944.80 11,957.60 0.58 1.88 2,980.00 4,063.91
1
3 3 2,412.00 4,420.00 3,517.00 6,087.80 0.70 0.96 3,464.79 4,607.17
4 4 7,269.00 2,384.00 9,542.00 2,775.00 1.89 0.44 3,848.64 5,451.50
5 1 3,514.00 3,654.00 0.83 0.72 4,222.30 5,082.60
6 2 2,143.00 8,680.00 0.58 1.88 3,676.53 4,606.26
2
7 3 3,459.00 5,695.00 0.70 0.96 4,968.78 5,936.17
8 4 7,056.00 1,953.00 1.89 0.44 3,735.86 4,465.93
9 1 4,120.00 4,742.00 0.83 0.72 4,950.45 6,595.97
10 2 2,766.00 13,673.00 0.58 1.88 4,745.35 7,255.92
3
11 3 2,556.00 6,640.00 0.70 0.96 3,671.64 6,921.18
12 4 8,253.00 2,737.00 1.89 0.44 4,369.63 6,258.71
13 1 5,491.00 3,486.00 0.83 0.72 6,597.79 4,848.92
14 2 4,382.00 13,186.00 0.58 1.88 7,517.76 6,997.48
4
15 3 4,315.00 5,448.00 0.70 0.96 6,198.41 5,678.71
16 4 12,035.00 3,485.00 1.89 0.44 6,372.04 7,969.16
17 1 5,648.00 7,728.00 0.83 0.72 6,786.44 10,749.41
18 2 3,696.00 16,591.00 0.58 1.88 6,340.86 8,804.43
5
19 3 4,843.00 8,236.00 0.70 0.96 6,956.87 8,584.77
20 4 13,097.00 3,316.00 1.89 0.44 6,934.33 7,582.71
10.5 5,052 6,346 20.00 20.00 101,042.00 126,912.00
AVERAGE SUM
NUMBER 1: Answers

SUMMARY OUTPUT Black

Regression Statistics
Multiple R 0.89
R Square 0.80
Adjusted R Square 0.78 data can be defined 𝑦 = 2,644.17 + 229.33𝑡
Standard Error 705.73
Observations 20

ANOVA
df SS MS F Significance F
Regression 1.00 34972955.89 34972955.89 70.22 0.00
Residual 18.00 8965077.47 498059.86
Total 19.00 43938033.36

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 2644.17 327.84 8.07 0.00 1955.41 3332.92 1955.41 3332.92
X Variable 1 229.33 27.37 8.38 0.00 171.83 286.82 171.83 286.82
Significant
SUMMARY OUTPUT Clear

Regression Statistics
Multiple R 0.80
R Square 0.63
Adjusted R Square 0.61 data can be defined 𝑦 = 3,838.32 + 238.79𝑡
Standard Error 1105.02
Observations 20.00

ANOVA
df SS MS F Significance F
Regression 1.00 37918227.75 37918227.75 31.05 0.00
Residual 18.00 21979415.23 1221078.62
Total 19.00 59897642.97

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 3838.32 513.32 7.48 0.00 2759.88 4916.76 2759.88 4916.76
X Variable 1 238.79 42.85 5.57 0.00 148.76 328.81 148.76 328.81
Significant
NUMBER 1: Answers

Demand deseasonal Demand seasonal

Black Clear
Periode (t) Year Quarter Black Clear Seasonal
21 1 7,460.03 8,852.88 6,208.60 6,364.54 25,000.00
22 2 7,689.36 9,091.67 4,482.02 17,132.27
5
23 3 7,918.69 9,330.45 5,512.56 8,951.39 20,000.00
24 4 8,148.02 9,569.24 15,389.32 4,184.73
25 1 8,377.34 9,808.03 6,972.03 7,051.22
26 2 8,606.67 10,046.82 5,016.71 18,932.15 15,000.00
6
27 3 8,836.00 10,285.61 6,151.15 9,867.74
28 4 9,065.32 10,524.40 17,121.85 4,602.43 10,000.00
29 1 9,294.65 10,763.19 7,735.45 7,737.91
30 2 9,523.98 11,001.97 5,551.40 20,732.03
7
31 3 9,753.31 11,240.76 6,789.73 10,784.09 5,000.00
32 4 9,982.63 11,479.55 18,854.39 5,020.13
33 1 10,211.96 11,718.34 8,498.88 8,424.59 -
34 2 10,441.29 11,957.13 6,086.08 22,531.92 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
8
35 3 10,670.61 12,195.92 7,428.31 11,700.44
5 6 7 8
36 4 10,899.94 12,434.70 20,586.93 5,437.83
NUMBER 2: Questions

• A craft company in Bali exports its products to foreign markets. Forecasted demands and cost
data are as follows:
a. Develop an aggregate plan for the period of May-August using pure chase strategy (produce to
exact monthly production requirements using a regular eight-hour day by varying workforce size)
b. Develop an aggregate plan for the period of May-August using pure level strategy (produce to
meet expected average demand over the next four months by maintaining a constant workforce).
c. What is your recommendation?.

May June July August

Demand forecast (units) 2,500 2,500 2,200 2,300
Working days (per month) 22 22 22 20
Costs
Material cost $100/unit
Inventory holding cost $5/unit-month
Marginal stockout cost $20/unit/month
Hiring and training cost $500/worker
Layoff cost $750/worker
Labor required per unit 5 hours
Labor cost (first 8 hours each day) $10/hour
Inventory
Beginning inventory 500 units
Workforce
Number of workers currently employed 50
NUMBER 2: Answers (a) Demand forecast (units) May June July August
2,500 2,500 2,200 2,300
Working days (per month) 22 22 22 20
Costs
Material cost $100/unit
Inventory holding cost $5/unit-month
Marginal stockout cost $20/unit/month
Hiring and training cost $500/worker
Layoff cost $750/worker
Labor required per unit 5hours
Labor cost (first 8 hours each day) $10/hour
Inventory
Beginning inventory 500units
Safety Stock 0%
Workforce
Number of workers currently employed 50

a May June July August Total

Beginning Inventory 500 - - -
prod. Requirement (demand forecast+safety stock-beginning inventory) 2,000.00 2,500.00 2,200.00 2,300.00
Ending inventory (beginning inventory+prod. Req.-demand forecast) - - - -

prod. Requirement 2,000 2,500 2,200 2,300

prod. Hour requirement (prod. Requirement *5hr/unit) 10,000 12,500 11,000 11,500
working days per month 22 22 22 20
hours per month per worker (working days*8hour/days) 176 176 176 160
Worker required (prod. Hour Requirement/hours per month per worker) 57.00 72.00 63.00 72.00
New Worker hire (assuming opening workforce = first month requirement of 50 workers) 7 15 0 9
hiring cost (new work hired x $500) $ 3,500.00 $ 7,500.00 $ - $ 4,500.00 $ 15,500.00
workers laidoff 0 0 9 0
layoff cost (worker laidoffx$750) $ - $ - $ 6,750.00 $ - $ 6,750.00
straigeht time -timecost(prod hour require x $10) $ 100,000.00 $ 125,000.00 $ 110,000.00 $ 115,000.00 $ 450,000.00
material cost $ 200,000.00 $ 250,000.00 $ 220,000.00 $ 230,000.00 $ 900,000.00
total cost $ 1,372,250.00
NUMBER 2: Answer (b)

Total Averge
prod. Requirement 9,000.00 2,250.00
prod. Hour requirement 45,000.00 11,250.00
working days 86.00 21.50
Working Hour 688.00 172.00
Worker required (prod. Hour requirement/Working Hour) 66

b May June July August Total

prod. Hour available (Working days per month*8 hr/day*66 worker) 11,616.00 11,616.00 11,616.00 10,560.00
Actual Prod (prod hour available/ 5 hr/unit) 2,323.20 2,323.20 2,323.20 2,112.00
Demand Forecast 2,500 2,500 2,200 2,300
Ending Inventory (Beginning inventory+actual prod-demand forecast) 323.20 146.40 269.60 81.60
Shortage cost (unit shortx $20) $ - $ - $ - $ - $ -
Safety Stock (in this case safety stock not must require) 0 0 0 0
Unit Excess (ending inventory - safety tock) only if positif ammount 323.20 146.40 269.60 81.60
Inventory cost (unit excess*$5) $ 1,616.00 $ 732.00 $ 1,348.00 $ 408.00 $ 4,104.00
Worker required Constant 66.00 66.00 66.00 66.00
New Worker hire (assuming opening workforce = first month requirement of 50 workers) 16.00 0 0 0
hiring cost (new work hired x $500) $ 8,000.00 $ - $ - $ - $ 8,000.00
straigeht time -timecost(prod hour require x $4) $ 116,160.00 $ 116,160.00 $ 116,160.00 $ 105,600.00 $ 454,080.00
material cost $ 232,320.00 $ 232,320.00 $ 232,320.00 $ 211,200.00 $ 908,160.00
total cost $ 1,374,344.00
NUMBER 2: Answers (c)

a b
Total Cost $ 1,372,250.00 $ 1,374,344.00

The Recommendation is “a” scheme, because:

1. Lower cost
2. Assumption that the customer wouldn’t to wait, so must be
add/reduce the worker. On the other sides, safety stock must
be 0% so that no excess unit, no inventory holding cost.
 NUMBER 3: Question and Answer
• A small-scale company currently has 5 part-time (PT) employees on staff and 15 full-time (FT) employees. The part-time
employees can be hired when needed and can be used as needed, whereas the full-time employees must be paid
whether they are needed or not. Each full-time employee can produce 200 units per month, while each part-time
employee can produce 150 units per month. Demand for clothes for the next four months is as follows: March (3,250
suits); April (3,750 suits); May (4,000 units); and, June (4,000 units). Beginning inventory is 500 units. Each unit of suit
costs $75 to produce and carrying cost is $5 per unit per month. Develop an aggregate plan using the transportation
method of linear programming if the company does not allow any backorder (stockout) and calculate the total costs.
Production Periods March April May June Unused Capacity Capacity Remain Cap.
Employee
Beginning Inventory 500.00 $ - $ 5.00 $ 10.00 $ 15.00 500.00 -
1 PT 5 $ 75.00 $ 80.00 $ 85.00 250.00 $ 90.00 500.00 750.00 500.00
FT 15 2,750.00 $ 75.00 $ 80.00 250.00 $ 85.00 $ 90.00 3,000.00 -
2 PT 5 750.00 $ 75.00 $ 80.00 $ 85.00 750.00 -
Clothes FT 15 3,000.00 $ 75.00 $ 80.00 $ 85.00 3,000.00 -
prod. 3 PT 5 750.00 $ 75.00 $ 80.00 750.00 -
FT 15 3,000.00 $ 75.00 $ 80.00 3,000.00 -
4 PT 5 750.00 $ 75.00 750.00 -
FT 15 3,000.00 $ 75.00 3,000.00 -
Total Requirements 3,250.00 3,750.00 4,000.00 4,000.00 500.00 15,500.00

Total Cost $ 206,250.00 $ 281,250.00 $ 302,500.00 $ 303,750.00 $ 1,093,750.00

NUMBER 4: Questions
• A cookie producer wants to figure out the number cookies should be produced daily. He
has historical demand as the following
• Easch dozen sells for $0.70 and costs $0.50, which includes handling and transportation.
Cookies that are not solt at the end of the day are reduced to $0.30 and sold the following
day as day-old merchandise.
a. What is the optimal number of cookies to make?
b. Solve this problem by using marginal analysis.

Demand (in dozen) Probability of Demand

1,800 0.05
2,000 0.10
2,200 0.20
2,400 0.30
2,600 0.20
2,800 0.10
3,00 0.05
 NUMBER 4: Answers (a,b)
Demand (in dozen) Probability of Demand Cum. Prob. sales $ 0.70 Cu
P
1,800 0.05 0.05 cost $ 0.50 Co  Cu
Where :
2,000 0.1 0.15 not sold $ 0.30
Co  Cost per unit of demand over estimated
2,200 0.2 0.35 Cu $ 0.20 Cu  Cost per unit of demand under estimated
2,400 0.3 0.65 Co $ 0.40 P  Probability that the unit will be sold
2,600 0.2 0.85 P 0.33
Z = NORMSINV(P)
2,800 0.1 0.95 Z -0.43
3,000 0.05 1
average 2,400 -186.10
SD 432 Optiimal Number Of Cookies to make (X) 2,214

a
b
Unsold (Co)
Sold (Cu) prob cum prob 1800 2000 2200 2400 2600 2800 3000
1,800 0.05 0.05 $ - $ 80.00 $ 160.00 $ 240.00 $ 320.00 $ 400.00 $ 480.00
2,000 0.10 0.15 $ 40.00 $ - $ 80.00 $ 160.00 $ 240.00 $ 320.00 $ 400.00
2,200 0.20 0.35 $ 80.00 $ 40.00 $ - $ 80.00 $ 160.00 $ 240.00 $ 320.00
2,400 0.30 0.65 $ 120.00 $ 80.00 $ 40.00 $ - $ 80.00 $ 160.00 $ 240.00
2,600 0.20 0.85 $ 160.00 $ 120.00 $ 80.00 $ 40.00 $ - $ 80.00 $ 160.00
2,800 0.10 0.95 $ 200.00 $ 160.00 $ 120.00 $ 80.00 $ 40.00 $ - $ 80.00
3,000 0.05 1.00 $ 240.00 $ 200.00 $ 160.00 $ 120.00 $ 80.00 $ 40.00 $ -
total cost 120 86 64 66 104 166 240
NUMBER 5: Question
• Annual demand for detergent at a supermarket is
10,000 boxes. The supermarket incurs a fixed order
cost of $20 to place each order. The supermarket
incurs a holding cost of 20 percent. The price for
each box of detergent from the supplier varies with
the size of the order as follows.
• Evaluate the number of boxes that the supermarket
should order in each lot.
Order quantity Unit Price
1 - 499 $5.00
500 - 999 $4.50
1000 and more $3.90
NUMBER 5: Answer
Price Break Models
• Price varies with the order size
• To find the lowest-cost, need to calculate the order quantity for each price and
see if the quantity is feasible
1. Sort prices from lowest to highest and calculate the order quantity for each price until a
feasible order quantity is found
2. If the first feasible order quantity is the lowest price, this is best, otherwise, calculate the
total cost for the first feasible quantity and calculate total cost at each price lower than
the first feasible order quantity
• The number of boxes that the supermarket should order in each lot are in Price
Break Models Range (1000 and more) because it’s the lowest total cost. The
second option is Q2 (667 boxes) that feasible to order.

D= 10000 Q1= 633 Q2= 667 Q3= 717 Price Break= 1000

2 DS S= $ 20.00 Holding Cost $ 300.15 $ 390.00

Q
i= 20% Ordering Cost Not feasible $ 299.85 Not feasible $ 200.00
Holding & Ordering Cost $ 600.00 $ 590.00

iC Cost per unit

1 - 499 $ 5.00
Item Cost
Total Cost
$ 45,000.00
45,600.00
$ 39,000.00
39,590.00
500 - 999 $ 4.50
1000 and more $ 3.90

Q1= 633 not feasible (Q>max order)

Q2= 667 Feasible (Q order in range)
Q3= 717 not feasible (Q<max order)
NUMBER 6: Questions
• Weekly demand for Lego at a toy store is normally
distributed, with a mean of 4,000 units and standard
deviation of 650. The replenishment time is two weeks and
the store manager has decided to review inventory every
four weeks. Assuming a periodic-review replenishment
policy.
a. Evaluate the safety inventory that the store should carry to
achieve a CSL of 95 percent.
b. Evaluate the Order-Up-to-Level for such a policy.
c. For instance, in a review, the remaining inventory on hand was
500 units. How many units are the number of the order?
NUMBER 6: Answers (a,b,c)

• Fixed–Order Quantity Model with Safety Stock (SS)

d bar Mean 4000
σd STD 650
SS  z L
L

L Replenish Time 2
R  d L  z L
R  Reorder point in units
Z = NORMSINV(P) L  
i 1
2
d  L   d2
T Review Inventory 4 d  Average daily demand
P CSL 0.95 L  Lead time in days
z  Number of standard deviations for a service probability
 L  Standard deviation of usage during lead time
σL 919.24
z 1.64
a SS 1512.01

b R 9512.01

c R when remian 500 9012.01

NUMBER 7: Questions
• There are three organic fertilizer plants (A,B, dan C) that distribute their
products to two regional warehouse (D dan E). From these two regional
warehouses, the products will be sent to three major distributors (F, G,
dan H). Capacities of the organic fertilizer plants are 2.000 bags in Plant
A; 2.500 bags in Plants B; and 3.000 bags in Plant C. Demand for each
major distributor is 3.000 bags for Distributor F; 1.500 bags for
Distributor G; and 2.500 bags for Distributor H. Shipping costs per bag
(in rupiahs) are shown in the following table.
a. Suppose the management wants to minimize the toal distribution costs, how
should the shipments be done? What is the total shipping cost?
b. Suppose the management has received a new report, mentioning that the
capacity of Warehouse D is 3.500 bags dan the capacity of Warehouse E is
4.000 bags, what is your new shipment recommendation?
Data To Warehouse D Warehouse E To Distributor F Distributor G Distributor H
From From
Plant A 50000 40000 Warehouse D 100000 80000 120000
Plant B 70000 60000 Warehouse E 90000 150000 100000
Plant C 80000 90000
 NUMBER 7: Answers (a)
a
To Warehouse D Warehouse E
From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A IDR 150,000 IDR 130,000 IDR 170,000 IDR 130,000 IDR 190,000 IDR 140,000
Plant B IDR 170,000 IDR 150,000 IDR 190,000 IDR 150,000 IDR 210,000 IDR 160,000
Plant C IDR 180,000 IDR 160,000 IDR 200,000 IDR 180,000 IDR 240,000 IDR 190,000

To Warehouse D Warehouse E Total Capacity

From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A - - - 500 - 1,500 2,000 2,000
Plant B - - - 2,500 - - 2,500 2,500
Plant C - 1,500 - - - 1,000 2,500 3,000
Total - 1,500 - 3,000 - 2,500

Distributor F Distributor G Distributor H

3,000 1,500 2,500
Demand 3,000 1,500 2,500

To Warehouse D Warehouse E
From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A - - - 65,000,000 - 210,000,000
Plant B - - - 375,000,000 - -
Plant C - 240,000,000 - - - 190,000,000
Total 1,080,000,000

From/To Warehouse D Warehouse E

Plant A - 2,000
Plant B - 2,500
Plant C 1,500 1,000

From/To Distributor F Distributor G Distributor H

Warehouse D - 1,500 -
Warehouse E 3,000 - 2,500
 NUMBER 7: Answers (b)
a
To Warehouse D Warehouse E
From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A IDR 150,000 IDR 130,000 IDR 170,000 IDR 130,000 IDR 190,000 IDR 140,000
Plant B IDR 170,000 IDR 150,000 IDR 190,000 IDR 150,000 IDR 210,000 IDR 160,000
Plant C IDR 180,000 IDR 160,000 IDR 200,000 IDR 180,000 IDR 240,000 IDR 190,000

To Warehouse D Warehouse E Total Capacity

From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A - - - - - 2,000 2,000 2,000
Plant B - 500 - 1,500 - 500 2,500 2,500
Plant C 1,500 1,000 - - - - 2,500 3,000
Total 1,500 1,500 - 1,500 - 2,500

Distributor F Distributor G Distributor H Warehouse D Warehouse E

3,000 1,500 2,500 3,000 4,000
Demand 3,000 1,500 2,500 3500 4000

To Warehouse D Warehouse E
From Distributor F Distributor G Distributor H Distributor F Distributor G Distributor H
Plant A - - - - - 280,000,000
Plant B - 75,000,000 - 225,000,000 - 80,000,000
Plant C 270,000,000 160,000,000 - - - -
Total 1,090,000,000

From/To Warehouse D Warehouse E

Plant A - 2,000
Plant B 500 2,000
Plant C 2,500 -

From/To Distributor F Distributor G Distributor H

Warehouse D 1,500 1,500 -
Warehouse E 1,500 - 2,500
NUMBER 8: Question

• BFI produces two kinds of desks, namely luxury desks and

luxury table for offices. Both products are made using three
kinds of woods, namely pine, cedar, and maple. Each unit of
luxury desk requires 4 square feet of pine, 2 square feet of
cedar, and 2 square feet of maple. Each unit of luxury table
requires 6 square feet of pine, 2 square feet of cedar, and 1
square feet of maple. Each unit of luxury desk yields $150
profit and each unit of luxury table yields $125 profit.
Currently BFI has available 48 square feet of pine, 18 feet of
cedar, and 16 square feet of maple. How many each product
should be produced to maximize profit?
NUMBER 8: Answer

ft2
Input data Luxury desks Luxury Table Available
Pine 4 6 48
Cedar 2 2 18
Maple 2 1 16
Profit $ 150.00 $ 125.00

Dec. Var 7 2

Obj. Func. $150*d+$125*t $ 1,300.00

Constraint Available Production excess cap.

4d+6t < 48 48 40 8
2d+2t < 18 18 18 0
2d+t < 16 16 16 0

Input data Luxury desks Luxury Table

Pine 28 12
Cedar 14 4
Maple 14 2