Practice Exam
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School
Georgia Institute Of Technology *
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Course
3103
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
Pages
7
Uploaded by quinwaldrop
ISyE 3103-A Practice Final Exam
Spring 2020
J. Vande Vate
April 20, 2020
Instructions
You have
2 hours and 50 minutes
to complete the exam. Watch your time. If you are having
difficulty with a question, you might wish to “peel the onion”: outline the main ideas and explain
what you would calculate (so I can award partial credit) or pass over it entirely (but there’s no
partial credit) and return to it later if you have time at the end of the exam.
•
Show your work and be sure to upload it in the places provided
•
Make sure your work is reasonably well organized and clearly explained so I can understand
your thinking well enough to award partial credic.
The exam is open-book, open-notes: you may use any notes or text material. You may use a
computer or calculator
The exam is to be done
individually, without collaboration
with anyone else.
You may
NOT
search the internet or communicate electronically with anyone else during the exam.
By
submitting your exam, you attest that you have not collaborated on this exam.
1
Question 1
Fairmount Bagels in Montreal starts the day with a large production run. Throughout the morning,
additional bagels are produced as needed. The last bake is completed at 3 PM and the store closes
at 8 PM. Production costs are approximately
$
0.40 per bagel. Fresh bagels sell for
$
1.40 each and
bagels not sold by the end of the day are sold the next day as “day old” bagels in bags of six for
$
0.99 a bag.
About 2/3
rds
of the day-old bagels are sold; the remainder are just thrown away.
The store manager estimates that demand for cinnamon raisin bagels from 3 PM until closing is
normally distributed with mean of 100 and standard deviation of 40.
a. How many cinnamon raisin bagels should the store have at 3 PM (after the last bake comes
out) to maximize the expected profit from sales between 3 PM until closing?
Answer:
Fairmount should target a stock of
cinnamon raisin bagels at 3PM
b.
Suppose that the store manager is concerned that stockouts might cause a loss of future
business. The store manager estimates that it is appropriate to assign a stockout cost of
$
5
per bagel that is demanded but not available. Given the additional stockout cost, how many
cinnamon raisin bagels should the store have at 3 PM (after the last bake)?
Answer:
With the
$
5 stockout fee, Fairmount should target a stock of
cin-
namon raisin bagels at 3PM
c. If the store manager incorporates the
$
5 stockout cost into her calculations and successfully
hits the target stocking level at 3 PM (after the last bake), how many cinnamon raisin bagels
should she expect to throw away each day?
Answer:
With the
$
5 stockout fee, Fairmount should expect to throw way
cinammon raisin bagels each day
2
d. Fairmount’s automated bagel process makes production lots of 100 bagels at a time. It has the
capability to make mixed lots consisting of bagels of different flavors, but only makes
exactly
100 bagels at a time, no more, no fewer. For simplicity, we will ignore the time required to
make a lot and focus on both the number of lots and their compositions to approximate the
target 3PM stock levels. The store manager estimates demand for each of the four flavors of
bagel (Cinnamon Raisin, Sesame Seed, Poppy Seed and Plain) from 3 PM until closing to be
Normally distributed with mean 80 and standard deviation 50. She has 100 of each flavor in
stock just prior to beginning the final run of the day – to complete at 3 PM (ignore the fact
that the run takes time to complete).
Given this information, how many lots should Fairmount produce and how many bagels of
each flavor should Fairmount make in its final production run of the day in order to maximize
expected profits, while considering the
$
5/bagel stockout cost? Note: All bagels enjoy the
same costs and selling prices and show no measurable differences in how they sell as “day old
bagels”.
Answer:
The manager should produce
lots in the last production run.
Answer:
Those lots should produce:
Cinnamon Raisin bagels,
Sesame bagels,
Poppy Seed bagels and
Plain bagels.
Answer:
Briefly explain your reasoning
3
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