23-CS-4 Engineering Management · December 2014
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
National Exams — December 2014 — 23-CS-4 Engineering Management (printed code 11-CS-4). Closed book; no calculators. Any five of the seven questions constitute a complete paper; all questions are of equal value. Answers are written in point form but fully, as instructed. Complete answers to all seven questions follow.
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
The balance sheet reports financial position at a point in time under the identity Assets = Liabilities + Owners' Equity. Assets are the resources the firm owns or controls that will provide future benefit, split into current assets (cash, accounts receivable, inventory—expected to become cash within a year) and fixed or non-current assets (land, buildings, equipment—used over many years). Liabilities are obligations owed to others, split into current liabilities (accounts payable, short-term debt due within a year) and long-term liabilities (bonds, long-term loans). Owners' (shareholders') equity is the residual interest after liabilities are deducted from assets, comprising contributed capital plus retained earnings. Because equity is defined as the residual, the statement necessarily balances.
To judge whether a project merits funding, engineers apply time-value-of-money techniques. Net Present Value (NPV) discounts all project cash flows to the present at the required rate and subtracts the investment; a positive NPV signals a value-adding project. Internal Rate of Return (IRR) is the discount rate at which NPV equals zero; the project is accepted if IRR exceeds the minimum acceptable rate of return. Payback period measures the time to recover the initial investment—simple but ignoring later cash flows and the time value of money. Benefit–cost ratio expresses discounted benefits per unit of cost. Annual worth converts cash flows to an equivalent uniform annual amount, useful for comparing alternatives with different lives. Applied together, these techniques give a rounded view of a project's economic merit.
(a) Just-in-Time (JIT) inventory control is a lean, demand-pull approach in which materials and components arrive exactly when needed for production, minimizing inventory and its holding cost, exposing waste, and relying on reliable suppliers and level production. (b) Materials Requirements Planning (MRP) is a computerized, push-based system that uses the master production schedule, the bill of materials, and inventory records to calculate what materials are required, in what quantity, and when, generating purchase and production orders so that components are available for assembly. (c) Manufacturing Resource Planning (MRP II) extends MRP into an integrated planning system that adds capacity planning and ties material planning to the other business functions—finance, marketing, and operations—so the whole manufacturing enterprise is coordinated from a single plan. JIT and MRP represent contrasting pull and push philosophies, and many firms blend them.
Evaluating a $400,000 automated assembly cell, the finance team would compute its NPV and IRR against the 12% hurdle rate and confirm an acceptable payback. Operationally, the plant would run MRP to schedule component orders against the master schedule, adopt JIT delivery for high-value bought-in parts to cut inventory, and use MRP II to reconcile the resulting capacity and cash-flow demands across the business.
