Busn 6110

Chapter 4 – Objective question 5

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b.   Critical path = A-C-D-E-G

c.    26 weeks = 6+7+2+4+7

d.    6 weeks,  15-9

Chapter 4 - Objective question 20

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BCWS (Budget cost of work scheduled)

Activity 1:   100% of 1,420,000 = $1,420,000

Activity 2:   100% of 10,500,000= $10,500,000

Activity 3:   50% of 8,500,000 =    $4,250,000

Total = $16,170,000

BCWP (Budget cost of work performed)

Activity 1:   100% of 1,420,000 = $1,420,000

Activity 2:   100% of 10,500,000 =$10,500,000

Activity 3:   60% of 8,500,000 = $5,100,000

Total = $17,020,000

Actual cost of the project (AC) to date is: 1,300,000 + 9,000,000 + 5,000,000 = $15,300,000

Schedule variance = 17,020,000 – 16,170,000 = $850,000

Schedule performance index = 17,020,000/16,170,000 = 1.052

Cost performance index = 17,020,000/15,300,000 = 1.052

The project looks good since it is both ahead of schedule and below budgeted cost.

Chapter 5 – Objective question 2

Capacity utilization rate = (capacity used/best operating level) *100 = (10,925/15,000)*100 = 72.83%

Chapter 5 – Objective question 8

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Expected net present value for small facility = (0.60 * $12m) + (0.40 * $10m) - $6m = $5.2m

Expected net present value for doing nothing = $0

Expected net present value for large facility = (0.60 * $10m) + (0.40 * $14m) - $9m = $2.6m

Based on this calculation the company must build the small facility.

Chapter 6 – Objective question 6

1. Learning rate 70%
2. $145,956,000
3. Cost = .0851 *$12 = $1,021,200

Chapter 6 – Objective question 11

Labor intensive

Chapter 7 – Objective question 7

1. During the manufacturing process which is considered as the work center that usually involves a specialist who does a specific job or set of similar jobs. In this phase, a product generally undergoes a lesser number of changes over time, thus taking more throughput time in the work center. In this case the finished product is not produces during this stage, but specific jobs are performed with minimum time requirement before reaching the assembly line phase, the throughput time is usually much higher as it assembles all the components to make the finished product.

1. During the manufacturing process, labor intervention is somewhat limited, in that case a specific job is done, but only those that require manual labor units are at work. However in an assembly line environment, the capital tends to be high granted that the number of machineries that are being installed are also high when performing specific tasks.

1. During the manufacturing process, bottleneck points are somewhat limited in the work center environment since performance is limited to specific task allocated to them. However, in an assembly line environment, performance is limited as per the process or the method of producing a final product.

Chapter 7 – Objective question 12

1. We should calculate the weighted average gross margin percentage.

The chair has a gross margin of 50%    (50-25)/50

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