MGT1128E B05E

Question 2
Column1 Cooperate Manufacture
Fixed costs USD 300,000 USD 200,000
Variable costs USD 20 USD 25
2.a) At the Break-even Point, Total cost of cooperate (TCc) = Total cost of manufacture (TCm)
<=> $300,000+$20*Qbe=$200,000+$25*Qbe <=> Qbe = ($400,000-$300,000)/($35-$25)
Qbe = 20,000 (units)
TCbe = USD 700,000
2.b) When Q=250,000, we have:
TCc = USD 5,300,000
TCm = USD 6,450,000
Cost saving = USD 1,150,000
Since TCm>TCc, to conclude, this firm should choose cooperate option.

Question 3: Forecast the number of products to be produced for July (F7)

Month 1 2 3 4
Number of products 4,800 5,600 6,000 4,400

3.a) Using the 5-period moving average method.

F7 = (5,600+6,000+4,400+4,000+5,200)/5 = 5,040 (Shoes)
3.b) Using the 4-period weighted moving average method.
F7 = 0.3*5,200+0.25*4,000+0.25*4,400+0.2*6,000 = 4,860 (Shoes)
3.b) Using the exponential smoothing method with α = 0.8 and F1=4,400.
F2 = F1+α(A1-F1) = 4,400+0.75*(4,800-4,400) = 4,720 (Shoes)
F3 = 5,424.0 (Shoes)
F4 = 5,884.8 (Shoes)
F5 = 4,697.0 (Shoes)
F6 = 4,139.4 (Shoes)
F7 = 4,987.9 (Shoes)

Question 4
Chase strategy
Month 1 2 3 4
Demand 13,000 5,000 10,000 11,000
B.I 1,000 1,000 1,000 1,000
Production 13,000 5,000 10,000 11,000
E.I 1000 1000 1000 1000
Workforce 109 42 84 92
APP1 = F1 = 13,000
W1 = 13,000/120 = 109
E.I1 = APP1-F1+B.I1 = 13,000-13,000+1,000 = 1,000
APP2 = F2 = 5,000
W2 = 5,000/120 = 42
E.I2 = APP2-F2+B.I2 = 5,000-5,000+500 = 1,000
APP6 = F6+(E.I6-B.I6) = 15,000+(500-1,000) 14,500
W6 = 14,500/120 = 121

Level strategy
Month 1 2 3 4
Demand 13,000 5,000 10,000 11,000
B.I 1,000 (416) 6,169 7,753
Production 11,584 11,584 11,584 11,584
E.I (416) 6,169 7,753 8,337
Workforce 96 96 96 96
APP = APP1 = APP2 = (F1+F2+F3+F4+F5+F6+E.I-B.I)/6 = 11,584
W= W1 = W2 = 11,583/120 = 96
E.I1 = APP1-F1+B.I1 = 11,584-13,000+1,000 = (416)
E.I2 = APP2-F2+B.I2 = 11,584-5,000+500 = 6,169
APP6 = F6+(E.I6-B.I6) = 15,000+(500-1,000) = 11,578
W6 = APP6/120 = 96.00
Question 5
ATP1 = BI+MPS1-CCO1-CCO2 = 100+80-50-60 = 70
ATP2 = 0 (No scheduled MPS)
ATP3 = MPS3-CCO3 = 100-40 = 60
ATP4 = MPS4-CCO4-CCO5 = 80-70-40 = -30
(Revising ATP3 = 60-30 = 30 and ATP4 = -30+30 = 0)
ATP5 = 0 (No scheduled MPS)
ATP6 = MPS6-CCO6 = 100-0 = 100
ATP7 = MPS7-CCO7 = 80-0 = 80
ATP8 = MPS8-CCO8 = 60-80 = -20
(Revising ATP7 = 80-20 = 60 and ATP4 = -20+20 = 0)

Question 6
6.a) Using NNA method:
Route Formula Distance (km)
Start from Hub1 Hub1;2;5;4;3;1 = 160+65+130+480+255 = 1,090
Start from Hub 2 Hub2;5;4;1;3;2 = 65+130+185+255+245 = 880
Start from Hub 3 Hub3;2;5;4;1;3 = 245+65+130+185+255 = 880
Start from Hub 4 Hub4;5;2;1;3;4 = 130+65+160+255+480 = 1,090
Start from Hub 5 Hub5;2;1;4;3;5 = 65+160+185+480+295 = 1,185
By using NNA method, the shortest routes start from Hub 2 and Hub3 (880km).

6.a) Using CLA method:

Route Distance (km)
Hub2;5 65
Hub4;5 130
Hub1;2 160
Hub1;4 185
Hub2;4 190
Hub5;2;1;3;4;5 = 65+160+255+480+130 = 1090
Hub5;4;3;1;2;5 = 130+480+255+160+65 = 1090
By using CLA method, the shortest routes are Hub5;2;1;3;4;5 and Hub5;4;3;1;2;5 (1065km).

6.c) The minimum fuel cost t if the unit price of a km of gasoline is VND 10,000:
The minimum fuel cost = 880*10,000 = VND 8,800,000
m)

5 6
4,000 5,200

5 6
16,000 15,000
1,000 1,000
16,000 14,500
1000 500
134 121
(units)
(workers)
(units)
(units)
(workers)
(units)
(units)
(workers)

5 6
16,000 15,000
8,337 3,922
11,584 11,578
3,922 500
96 96
(units)
(workers)
(units)
(units)
(units)
(workers)