14-EC-4 - Mai 2015 - Version Anglaise

ORDES DES INGNIEURS DU QUBEC
MAY 2015 SESSION
Any permitted documentation

Calculators : Authorized models only
Exam duration : 3 hours
14-EC-4 ENGINEERING MANAGEMENT
Question 1 (18 points)

Capital International Inc. (CI) is a small investment banking firm specializing in the financing of
small and medium enterprises (SMEs). CI uses a standardized project plan for each client. Only
the durations of activities could cause delays. Assistant project manager, Monica Lovato was
given the following information about the list of activities for the project network and durations
of activities:
Activity
Description
Preceding activities
Begin draft of the background of the company.
Search the client company.
Prepare a draft of the project plan.
Coordinate the list of customer needs.
Assess future demands and liquidity.
Sketch future plans for the client company.
Create and approve legal documents.
Gather all drafts in a preliminary proposal.
List the potential funding sources.
Review, approve and print the final proposal.
Sign contracts and transfer funds
I, J
Activity
A
B
C
D
E
F
G
H
I
J
K
Optimistic
4
2
2
16
6
1
4
2
5
2
17
A, B
D, F, G
G, F
Duration
Most likely
7
4
5
19
9
7
10
5
8
5
29
Pessimistic
10
8
8
28
24
13
28
14
17
8
45
The average duration of such a project is 70 days.

Draw a project network diagram showing all the activities and various paths.
Identify the critical path of the project on the network diagram.
Calculate the duration of the project using critical path method.
Using PERT techniques, calculate the probability of completing the project in 70 days.

A quality controller takes samples of 200 units each time and presents the observations in the
following table for the defective parts in each sample:
Sample:
Number of total defects
a) Determine the percentage of defects per sample.

b) What is your estimate of the percentage of defects for this process?
c) Quality managers informs you that appropriate limits (upper and lower) for this process
are 4.7% and 0.3 %.
Is the process in control, statistically speaking?
d) Several weeks later, we receive an additional information that the process produces on
average 2% defective parts. Calculate the control limits.
e) Put the above data on the control chart established earlier in part d). Is the process under
control?
For each question, please circle the correct answer (2 points for each correct answer. There is no
penalty for a wrong answer.)
I.
Most inventory models attempts to minimize

a. the likelihood of a stock-out
b. the number of items ordered
c. total inventory costs
d. the number of orders placed
e. The safety stock
II.
According to the inventory base EOQ (Economic Order Quantity), if the demand
quadruples (assume that all other values remain constant), the EOQ will :
a. decrease of about 41%
b. increase of 100%
c. will double
d. increase, but more data are needed to say how
e. increase or decrease
III.
In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per unit per month, the
economic order quantity is approximately
a. 24
b. 100
c. 141
d. 490
e. 600
IV.
In project management, PERT model designers opted for an approximation of the Poisson
distribution to represent the duration of an activity.

True
V.
The planned project duration is 75 units of time. The critical path is 1, 2, 3 and 4. The
standard deviations from these activities are presented below:
Activity
1
2
3
4
False
Standard deviation
7
5
3
1
The standard deviation of the critical path will be (show calculations): ___________
VI.
a.
b.
c.
d.
e.
The Project Manager is responsible for:

the organization and the project team
the client relationship management
the immediate supervisor of the project manager
all of the above
none of the above
Answer: ________________________
VII. A company that manufactures a product whose demand is highly variable and difficult to
predict will have no incentive to opt for a level strategy in the development of its aggregate
production planning.
True
VIII.
False
A company that increases its number of employees increases its productivity.
True
False
IX. If a company is ISO 9000 certified, does this mean that this company delivers only quality
products?
True
False
Comments :
You have just been hired as a production planner for a company specializing in the
assembly of floor lamps. The manufacturing process involves two cells, cell A (Figure 1) and
cell B (Figure 2). In each cell are performed five manual operations. Moving the work in
process is performed by a conveyor system (see Figure 1 showing the cell A). Your first
mandate is to assess the ability of these two manufacturing cells.
entrept des
produits finis
Op. 4
10%
TOM = 10.0
Jeanne
Op. 5
TOM = 0.95
lyse
90%
Cellule A
Grme
Op. 3
TOM = 6.50
Op. 3
TOM = 6.50
Op. 2
Op. 1
TOM = 2.90
TOM = 0.75
Florence
entrept des
matires
Martin
Figure 1 - Process of manufacture of the cell A

(Entrept des produits fini= Finished products warehouse)
(Entrept des matires= Raw material warehouse)
For the most common manufactured lamp model in cell A, the time you have observed and
the allowance factor assigned by a labor organization specialist are presented in the table
below.
#
Op. 1
Op. 2
Op. 3
Op. 4
Op. 5
Operation of the cell to

Assemble the brass base of
the lamp.
Glue the decorative elements
on brass base.
Insert the electrical wiring in
the brass base. Install the
lampshade.
For a lamp out of ten. Visually
inspect and test the lamp.
Put the lamp in the box, seal
the box and put it on a pallet.
Observed
Time
(minutes)
Allowance
factor
Operator
0,75
110
Florence
2,90
110
Florence
6,50
90
Grme et
Martin
10.00
110
Jeanne
90
lyse :
works 30 % of the time
on the assembly line
and 70% in the store.
0,95
Note:
The performance rating applied by the company is 20%.
TOTAL
Standard
time
4. A. Determine the standard time of each operation of the lamps assembly process in cell A
of this business. Write your answers in the table above. Show only your important
calculations. (6 points)
The B cell is designed in the same way as the cell A, but cell B produces luxury lamp model.
Employees assigned, allowance factor and standard times are different from those of the cell A.
Figure 2 and table below show the details of the operations of cell B.
Operation of cell B
Op. 1
Op. 2
Op. 3
Op. 4
Op. 5
Assemble the brass

base of the lamp.
Glue the decorative
elements on brass
base.
Insert the electrical
wiring in the brass
base. Install the
lampshade.
For a lamp out of ten.
Visually inspect and
test the lamp.
Put the lamp in the
box, seal the box and
put it on a pallet.
Operator/
Cell B
Standard
time
(minute)
10%
entrept des
produits finis
Op. 4
TS = 4.00
Ralph
Victor
Op. 5
TS = 3.65
1.05
Salim
90%
Victor
3.25
Monique
8.40
Pascale
8.40
Cellule B
Monique
Op. 3
TS = 8.40
Op. 2 Op. 1
TS = 3.25
Op. 3
Ts = 8.40
Ralph
Salim
4.00
TS = 1.05
Victor
entrept des
matires
Pascale
3.65
Figure 2 - the B cell Manufacturing

Process
4. B. What is the capacity of cell B cell manufacturing process? Justify your answer by providing
your calculations. (6 points)
4.C. The Human Resources Manager notifies you that henceforth Salim will work 100 % of the
time at the store.
Considering this new information, you plan to reorganize the workstations of the cell B in a form
where each worker would perform all five operations assembly process of the lamps, meaning
one worker doing all five operations and other worker doing the five operations as well. In this
case, what would be the weekly capacity of assembly process of the lamps of the cell B? Assume
that employees work 7 hours a day, Monday to Friday. Justify your answer and show
calculations. (6 points)

The company Boncours is a retail store that sells school and university supplies. It sells five
products which are purchased from different suppliers. The following table shows the delivery
items and related information when ordered from suppliers.
Item
Delivery time
Monthly sales
Unit purchase price
AV projector
Box of HP65 pencils
Box of acetate XFP
Paper package WX
F14 schoolbag
(weeks)
3
4
2
1
1
7
75
20
500
200
2000$
5$
20$
5$
3$
The company currently spends $ 50,000 per year cost of purchasing, ordering and inventory
carrying of WX paper packets. It believes that every time it places an order to a supplier, it costs
$50 for miscellaneous expenses. Furthermore, inventory holding cost on an annual basis is 20 %
of the purchase price of the items.
a) Assuming that the demand for WX paper package is deterministic, determine how
the company could annually save by buying WX packages of paper according to an
economic order quantity model. Show your calculations. (5 points)
An analysis of sales data recently allowed establishing the standard deviations of the monthly
demand for each of the main products as follows:
Item
AV projector
Box of HP65 pencils
Box of acetate XFP
Paper package WX
F14 schoolbag
Standard deviation
1
5
5
20
20
The company has set the policy to have a maximum of 1 unsatisfied order for 100 customer
orders (i.e. a service level of 99 %). To achieve this goal, while minimizing the total costs, she
decides to use the best inventory management stock system best suited for each item.
b) What stocks management system seems more suitable for inventory management of AV
projectors and why? (4 points)
c) Assuming that we choose to use inventory management model based on the fixed order
quantity for inventory management of AV projectors, determine the amount of each orders
and reorder point. (6 points)

I. Currently, most companies adopt both a carbon emission minimization strategy and a just-intime strategy. Several authors believe that these two strategies clash with each other. List two
conflicts between these two strategies and discuss their implications. (5 points)
II Identify three factors that contribute directly to a reduction in the cost of a supply chain in a
company. Give an example for each one of these factors. (5 points)
III a three-year project is expected to generate respective annual cash flow of $ 35,000, $ 45,000
and $ 55,000, respectively, over the next three years. The cost of its implementation will amount
to $ 60,000. If the required internal rate of return is 25%, calculate the NPV (Net Present Value)
by discounting the cash flows. (5 points)
IV Quebec City wants to get back its NHL team (Nordique). The investors are asking you to
identify the risks associated with this project about NHL hockey team expansion. Identify five
risks associated with this project.
What would you recommend to investors to manage these risks? (5 points)

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ORDES DES INGNIEURS DU QUBEC

MAY 2015 SESSION

Any permitted documentation

14-EC-4 ENGINEERING MANAGEMENT

Question 1 (18 points)

Begin draft of the background of the company.

Search the client company.

Prepare a draft of the project plan.

Coordinate the list of customer needs.

Assess future demands and liquidity.

Sketch future plans for the client company.

Create and approve legal documents.

Gather all drafts in a preliminary proposal.

List the potential funding sources.

Review, approve and print the final proposal.

Sign contracts and transfer funds

The average duration of such a project is 70 days.

Question 2 (12 points)

Number of total defects

a) Determine the percentage of defects per sample.

Most inventory models attempts to minimize

distribution to represent the duration of an activity.

The Project Manager is responsible for:

Figure 1 - Process of manufacture of the cell A

Operation of the cell to

Assemble the brass

Figure 2 - the B cell Manufacturing

Question 5 (15 points)

Unit purchase price

Question 6 (20 points)

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