Critically evaluate the main strategic issues of Operations Management explaining why each issue is important for a business

( MGT6046: Operations and Supply Chain Management 1 Save and back up your work )

Answer ANY FOUR questions

Question 1

Part (a) Critically evaluate the main strategic issues of Operations Management explaining why each issue is important for a business.

[12 marks]

Part (b) What effect does innovation, growth, diversification and product proliferation have on Operations and Operations Management?

[13 marks]

[Total 25 marks]

Question 2

Part (a) Why are Operations Managers interested in costs?

[12 marks]

Part (b) A company produces 1 million (i.e. 1,000,000) frozen pizzas per annum on a continuous production line and sells the pizzas for £5.00 each.

The company has fixed costs of £250,000 per annum. The variable cost per pizza is £3.75.

You are required to:

(i) Calculate the Break-even points as follows:

(a) In pounds Sterling (£s)

(b) In number of pizzas

(c) As a percentage of total sales per annum.

(ii) Calculate the expected profit for the year.

(iii) Calculate the margin of safety.

(iv) What would the unit variable costs need to be for each pizza for the company to make £1.5 million profit? Comment on your answer.

Note: The variable costs per pizza are given in this question.

[13 marks]

[Total 25 marks]

Question 3

Part (a) Discuss the concepts used in measuring the operational performance of a company and explain why they are important for managing operations.

[10 marks]

Part (b) A small electronics company operates a single production line producing dashboard cameras for the automotive market. The production line has 5 employees, working 5 days a week for 8 hours a day at £12 per hour and the production line produces 30 dashboard cameras per hour.

The company sells the dashboard cameras for £35 each.

Assume the company sells everything it makes and retains zero finished goods stock.

Table 1. Dashboard Camera Manufacturing Information

Item	Details
Number of Employees	5 employees
Working days per week	5 days per week
Working day length (hours)	8 hours per day
Pay rate (£s per hour) per employee	£12 per hour
Production rate (dashboard cameras per hour)	30 dash cameras per hour
Sales price per Dashboard camera (£s)	£35 per dashboard camera
Raw materials & assemblies cost (£s per week)	£20,000 per week
Overheads costs (£s per week)	£4,000 per week
Energy cost (£s per week)	£200 per week
Planned Downtime (hours per week)	11 hours per week
Unplanned downtime (hours per week)	7 hours per week

Note: all calculations should be per week. Calculate the following:

(i) The Design Capacity of the dashboard camera production line.

(ii) The Effective Capacity of the dashboard camera production line.

(iii) The Achieved Capacity of the dashboard camera production line.

(iv) The Single Factor Productivity:

(a) In dashboard cameras produced per Labour hour and;

(b) In dashboard cameras produced per pound of labour costs.

(v) The Multifactor Productivity for the production line.

(vi) Comment on the Profitability of this business and the sensitivity of the business to improved downtime.

[15 marks]

[Total 25 marks]

Question 4

Part (a) Critically evaluate the major differences between manufacturing operations and service operations. [10 marks]

Part (b) Discuss the concepts and ideas about Service Sabotage. [15 marks]

[Total 25 marks]

Question 5

Part (a) Identify and explain some of the major factors (not models) that affect location decisions. Use examples to illustrate your answer. [10 marks]

Part (b)

A distribution company delivers parcels for online shopping web sites. They have just been approached by one company to deal with distribution in South Yorkshire and West Yorkshire. The distribution company would like to set up a warehouse and distribution centre and have gathered the data in the table below. The data shows the town locations and the weekly delivery demand in van loads. Your job as the Operations Manager is to carry out the following:

(i) Draw a graph with all the locations in the table clearly shown. Label each point with their coordinates.

(ii) From the data in the table determine the current most suitable location for the new distribution centre using the Centre of Gravity Method and add this point to your graph.

(iii) Determine the most suitable location for the new distribution centre if the weekly demand for location A, Huddersfield, increases to 35 van loads to be delivered. Comment on your answer.

(iv) What would you recommend the company do? Comment on your answers.

Table 1 Van Loads Delivered to each town per week.

Location in South Yorkshire	x coordinate (xi)	y coordinate (yi)	Weekly demand (van loads) (Qi)
A Huddersfield	2	30	17
B Barnsley	10	20	12
C Sheffield	10	11	26
D Chesterfield	5	5	12
E Doncaster	25	4	11

[15 marks]

[Total 25 marks]

Question 6

Part (a) A company manufactures a device for household security using a five stage process shown in the table below:

Stage	Processing time (minutes)
1	3
2	10
3	15
4	8
5	6

(i) Which stage in the process is the bottleneck?

(ii) What is the overall processing time for the item being manufactured?

(iii) What is the Idle Time on each stage of the process?

(iv) What is the Balancing Loss for this manufacturing process?

(v) If you could invest in another machine at the bottleneck stage in the process with a processing time of 10minutes, what would be the new balancing loss for this manufacturing process?

(vi) Comment on your answer to question (v) above.

[12 marks]

Part (b)

A mail-order clothing company in Sheffield receives order forms; types in the customer details; checks the information provided from the customers and checks that the products are in stock; confirms payment and processes the order. The exact process can be listed as follows:

Order Processing in the Office

· The order arrives by post and is opened by an operative in the office.

· The operative completes the company electronic order form with the customer’s details and makes sure that all the details are correct and updates the company database

· The operative then looks into the stock information kept on a database

· If the item(s) are in stock then the order is processed through to the next stage with a debit or credit card payment system.

· If the item is not in stock then the operative checks the delay from the suppliers which is held on another database and generates a message sent by email to the customer advising of any delay in receiving the stock items. The operative then goes on to process another order.

Suggest some improvements to the process flow diagram and the Operations Management at the company. Comment on your answer.

[13 marks]

[Total 25 marks]

( Start/Stop )Symbols which may be used

( Document name )A Terminator/boundary

( Decision/ Decide ) ( Inspection ) ( Delay ) ( To file ) ( Operation/Activity )Single Document

Database or records

( Move )

Flow

( Store Storage ) ( Documents ) ( B )Same page Connector

Multi-document

( Go to page )Different page connector

Question 7

Part (a) A company manufactures a hand-held blending machine for domestic kitchen use and sells 11,000 units per annum, given the following information about the hand-held blending machine should the company make or buy the hand-held blending machine. Please show all your workings in calculations and comment on your answer.

Variable cost/unit if produced by the manufacturing company = £22.00 per unit Purchase Price/unit, if purchased from a supplier = £25.00 per unit

Fixed costs associated with producing the part or item = £120,000

Quantity produced per annum (forecast) = 11,000 units per annum

[8 marks]

Part (b) A manufacturer produces three types of outdoor walking boots in its factory: Weekend Walker, Westwood and Peak Walker (see the table of data below). There are 900 assembly hours available each week. Note: a unit is a pair of boots.

(i) How long does it take to assemble 14 pairs (units) of boots?

(ii) How many pairs (units) in total are produced each week?

(iii) How many pairs (units) of each type of boot (i.e. Weekend Walker, Westwood and Peak Walker) are made each week?

(iv) Comment on your answer.

Boot Type	Assembly Time (minutes)	Current Demand Ratio
Weekend Walker	3	7
Westwood	4	4
Peak Walker	5	3

[9 marks] Part (c) A manager of a company providing a printing and copying service for local businesses has collected the following data:

Utilisation (U) = 70%

Service Rate (SR) = 8 printing jobs per hour per employee Demand Rate (DR) = 30 jobs per hour

Calculate the following:

(i) The number of employees required to achieve a utilisation of 70%.

(ii) The number of employees required to achieve a utilisation of 80%.

(iii) If the number of print jobs required per hour increases to 50 jobs per hour during the busiest time of year and the utilisation remains at 80% how many employees are required?

(iv) Comment on your answer.

[8 marks]

[Total 25 marks]

Question 8

Part (a) Why are some projects regarded as failures?

[10 marks]

Part (b) A Project has been proposed according to the following table.

Table of activities, durations and resources required.

Activity	Duration (days)	Predecessors	People required for each activity per day
A	3	Start	2
B	5	A	4
C	4	A, B	5
D	2	B	6
E	7	C, D	2

Given the information in Table (above) carry out the following:

(i) Draw a precedence diagram for the project and list all the paths through the project.

(ii) Using the activity on node method calculate the earliest start, earliest finish, latest start, latest finish and the total float on each activity. What is the overall duration of the project?

(iii) Determine the critical path(s) for the project.

(iv) Draw a Gantt chart with activities starting as late as possible.

(v) Draw a resources (manpower) histogram for the project.

(vi) Comment on your answer.

Note:

EF = ES + D (Forward Pass through the network) LS = LF – D (Backward Pass through the network)

TF = (LF-ES) – D or alternatively TF = LF – EF or alternatively TF = LS – ES

[15 marks]

[Total 25 marks]

END OF QUESTION PAPER.

Please ensure you present your work on the answer paper provided, found in the same folder as this question paper was downloaded.

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