LP5.2 Assignment: Final Exam

LP5.2 Assignment: Final Exam – 4 problems @ 50 points each /200 points

 

This assignment will assess all of the competencies on the course syllabus.

Directions

The Final Exam consists of four problems; each problem was custom designed to simulate real-world issues organizations face on a routine basis. These problems also reflect the key techniques/concepts taught in MA6600. Knowledge of Excel QM/POM, or any applicable software is essential for successful completion of this exam.

Carefully read each problem prompt and thoroughly study the assignment rubrics to ensure you understand how each problem will be graded.

Scenario:  In all four problem-prompts described below, you have graduated from NAU and landed a very competitive job as an Operations Manager in a small startup company. The firm is a medical device manufacturer; it develops and manufactures trans catheter aortic valve replacement systems.

Problem 1

The firm is planning on receiving a regulatory permission to sell its product in different regulated markets. The details are presented in Table 1. The marketing department conducted research and summarized the cost and duration of processing the application, the odds of a positive outcome, and the sales opportunities. Deciding what market the firm should enter is based on the potential profit generated over a 24-month period.

You need to decide which market the firm should start the regulatory approval process.

Carefully read the grading criteria on the LP5.2/Problem 1 Assignment Rubric to ensure you understand how this problem will be graded.

Table 1: Summary of Marker Research

	Agency Name	Processing Fee	Average Processing time (months)	Approval Chance	Annual Sales per market
USA	FDA	248 K	5	0.8	$1,000,000 per month
EU	MDD	300 K	1	0.85	$700,000 per month
China	CFDA	82K	3	0.9	$660,000 per month
Japan	PMDA	320K	12	0.9	$250,000 per month
India	CDSCO	47K	5	0.95	$470,00 per month

 

Problem 2

 

In order to be competitive in local markets, the firm is considering setting up operations in China.  One of factors that will impact the decision-making is the predicted sales volume in China in 2020.  It is assumed that the growth in sales volume is 100% correlated with the GDP growth in China.

 

For Problem 2, predict the annual sales in China in 2020.  Carefully read the grading criteria on the LP5.2/Problem 2 Assignment Rubric to ensure you understand how this problem will be graded.

 

 

Table 2: Estimated Sales in China in 2017

Market	Annual Sales in 2017
China	$7,920,000

 

Table 3:  GDP Growth Rate Per Market (in percent)

Year	China	EU
2005	11.4	1.9
2006	12.7	2.2
2007	14.2	1.6
2008	9.7	0.2
2009	9.4	-0.5
2010	10.6	1.7
2011	9.5	2.1
2012	7.9	-4.4
2013	7.8	0.4
2014	7.3	3.1
2015	6.9	3.3
2016	6.1	2.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Problem 3

 

As Operations Manager, you would like to estimate the cycle time of the manufacturing process.

The developed aortic valve replacement system includes an automatic tip. The tip is molded to the shaft of the delivery catheter system, utilizing an injection-molding process. There are two injection-molding machines available for this operation.

 

The shafts are being supplied to the injection molding work cell with the rate (i.e., arrival rate) of six (6) shafts per minute.

 

The injection-molding cell processes the shafts with service rate of four (4) per minute.  You are required to estimate the average time that would be required to complete molding operation for the one unit. Set up and solve the problem using Excel QM or POM.

 

Hint: Utilize queuing theory

 

 

 

Problem 4

 

As Operations Manager, you would like to know which product mix needs to be manufactured.

The firm manufactures two models of the trans catheter aortic valve replacement system: the system which is equipped with 23 mm valves and the system which is equipped 29 mm valves.

 

The expected profit for 23mm system is $300 per unit, while profit for 29mm system is $360 per unit. The firm utilizes aortic valves bought from an external supplier. There is a supply restriction for both of 23 mm and 29mm valves. The current suppler of valves cannot supply more than 300 units of 23 mm valves per week and no more than 600 units of 29 mm valves per week.

 

The manufacturing time for one 23 mm aortic valve system is 1.6 hours per week. The manufacturing time for one 29 mm aortic valve system   is 1.8 hours per week. There are 1520 hours of total manufacturing time available per week. Determine how many units of 23 mm aortic valve system and 29 mm aortic valve system the firm needs to manufacture per week to maximize profit.

 

Hint: Set up and solve the problem as Linear or Integer Programming problem using Excel QM, POM, or Solver.