SCM
For each question with a numerical answer, state your answer clearly and briefly explain it in words as if you
were communicating the result to a business colleague.

1. Ch 6 Problem # 1 [2 points] Suppose that the specifications for a part (in inches) are
6.00 ? 0.15, and that the Taguchi loss function is estimated to be L(x) = 6,500 (x ? T)2.
Determine the total estimated loss if the quality characteristic under study takes on a
value of 6.20 inches and 10 parts are produced.

 
2. Ch 6 Problem #3 [2 points] The service center for a brokerage company provides three
functions to callers: account status, order confirmations, and stock quotes. The reliability
was measured for each of these services over one month with these results: 90 percent, 70
percent and 80 percent, respectively. What is the overall reliability of the call center?

 
3. Ch 6. Problem #4 [4 points] Given the following diagram, determine the total system
reliability if the individual component reliabilities are: RA = 0.70, RB = 0.88, Rc = 0.72,
and RD = 0.96. (Hint: Use equations 6.2 and 6.3 and note that the reliabilities of the
parallel components are different.)
A C

 
B D

 
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4. Ch 7. #6 [4 points] An accounts payable manager processes 200 checks per day with
an average processing time of 15 working days. What is the average number of accounts
payable checks being processed in her office? What if through information technology
she reduces the processing time from 15 to 10 days to 5 days? What are the advantages of
adopting this technology? Explain.
5. Read these reviews of the Chevy Volt:

http://www.edmunds.com/chevrolet/volt/2013/#fullreview

http://www.businessweek.com/lifestyle/content/may2011/bw2011052_182710.htm

Then, write a short essay as follows: Rank the five competitive priorities discussed in the
text and in class, in order of importance to General Motors (as you perceive them from
these reviews) with regard to the Chevy Volt. Explain the relevance of each priority to
GMs’s operational strategy; please write one paragraph for each priority. Then describe
any trade-offs among these priorities and how GM is managing them in terms of the Volt.