1. When an accounting rm audits a corporation, the rst phase of the audit involves obtaining \knowledge of the business." This phase of the audit requires the activities in table
a) Draw a project network, nd the project completion time and critical path. Then, solve by using Excel Solver.
b) Assume that the project must be completed in 29 days. The duration of each activity can be reduced by incurring the costs shown in Table 2. Solve this problem by using Excel Solver.
2. Building a backyard swimming pool consists of nine activities. The activities, their immediate predecessors and the activity time estimates (in days) are as follows:
a) Draw a project network, nd the expected project completion time and critical path.
b) What is the probability that the project can be completed in 24 or fewer days?
c) What is the probability that the project can be completed in 28 or more days?
d) What is the probability that the project can be completed between 23 and 29 days?
3. TelevCo is a store that sells television sets and other television-related products. A new television set costs $550 per unit. TelevCo's annual holding cost rate is 24%. Ordering costs are estimated to be $70 per order. Demand for the television set is expected to be constant with a rate of 40 units per month. Assume there are 250 working days per year.
a) What is the recommended order quantity for the television set?
b) What are the estimated annual inventory holding cost and ordering costs associated with this product?
c) If the lead time for an order is 5 days, what is the reorder point?
d) How many orders will be placed per year? What is the cycle time?
e) Plot an Inventory Level vs. Time graph for Televco based on your ndings.
4. The production process at Father Dominic's Pizza can produce 340 pizza pies per day, and the rm operates 250 days per year. Father Dominic's has a cost of $160 per production run and annual holding cost rate is 40%. A pizza pie costs $8. Semi-annual demand is approximately constant at 21,000 pizza pies.
a) What production lot size would you recommend to meet the demand?
b) What will be the total annual cost?
c) Assume the rm operates 250 days per year. If the lead time to setup is 3 days, what is the reorder point?
d) Calculate the number of production runs per year, cycle time, time in production phase, time in non-production phase, and maximum inventory amount.
e) Plot a Inventory Level vs. Time graph for Father Dominic's Pizza based on your ndings.
5. ShoeCo carries a basic black dress shoe that sells at an approximate constant rate of 225 pairs of shoes every three months. ShoeCo's current buying policy is to order 400 pairs each time an order is placed. It costs ShoeCo $38 to place an order. The annual holding cost rate is 20%. With the order quantity of 400, ShoeCo obtains the shoes at a unit cost of $17 per pair. Other quantity discounts o ered by the manufacturer is as follows:
a) What is the recommended order quantity?
b) What are the annual savings of your inventory policy over the policy currently being used by ShoeCo?