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2011 WINTER EXAMINATION

Module Code: OM Programme: MBA


Student ID:

Module Name: Operations Management

Seat Number:

Exam Date: Exam Duration:

04 January 2011 3 hours

No. of Pages (including cover sheet): 3

ALLOWABLE MATERIALS
Open Book Examination Electronic dictionaries and personal organisers are NOT allowed

INSTRUCTIONS TO CANDIDATES
1. Section A: Question 1 is compulsory Marks: 20 marks Section B: Answer any 3 questions out of 5. Marks: 30 marks, each question carries 10 marks 2. Marks for each question are given in brackets 3. This exam is worth 50% of the final marks for this module. You are required to achieve a minimum of 40% in this examination to pass. 4. All answers must be written in the answer booklet provided

This paper MUST NOT BE REMOVED from the examination venue

SECTION A : COMPULSORY
QUESTION 1: CASE STUDY Needle&Thread produces and sells a range of fashionable clothing ranging from T-shirts, jackets, dresses, trousers and shirts. Needle&Thread has a long-standing relationship with ShopTop, which sells directly to the public from its chain of stores. Needle&Thread sells approximately 90% of its production to ShopTop whose approach has been to sell clothing in large volumes at lower prices than most of its competitors. ShopTop expect all its suppliers to take account of fashion trends and manufacture at competitive prices. ShopTop is planning to change its strategy by introducing a better top quality clothing range, which it believes its customers will be prepared to pay a little more for. Already Needle&Thread has noticed that ShopTop is more demanding and in recent months, it has sent back batches of supplied clothing it deemed unacceptable. ShopTop wants to work with fewer suppliers but develop better relationship with each of them. Recently it sent Needle&Thread a notification for contract renegotiation. The notification indicated that Shop Top is prepared to talk with Needle&Thread about the need to improve the quality of its products and if it receives the right assurances, it would pay higher unit price per item. It also proposes to work closer with designers at Needle&Thread to maximise the production of merchandise that will satisfy its potential customers. Needle&Thread is aware that ShopTop has tried a few trusted overseas suppliers reputable for relatively low prices and superior quality through the adoption of total quality management (TQM) techniques. To stay competitive and maintain its relationship with ShopTop, Needle&Thread is aware it must change its current low-cost low-price operational priority to one that includes quality. As appointed operational consultant for Needle&Thread, you are required to evaluate the way ShopTop is proposing to manage its suppliers as part of a value system and arrange a meeting for the management board to discuss the requirements for achieving total quality with Needle&Thread. (20 marks) SECTION B: Any 3 out of 5 QUESTION 2 The transformation processes of private sector companies have multiple stakeholders who may have divergent interests Identify FIVE stakeholder groups for a private sector company of your choice and discuss their financial as well as other objectives. (10 marks)

UOW OM / MBA/ Level 7

Winter 2011 Exam Page 2 of 3

QUESTION 3 At a recent technology conference, a guest speaker discussed the view that many international organisations will operate as virtual organisations. He argued that outsourcing, supply chain management and global sourcing were all that was necessary to create an effective operation. Critically evaluate the use of outsourcing, supply chain management and global sourcing to make consumer durable products. (10 marks) QUESTION 4 A recently appointed CEO of a growing premium brand supermarket believes cost leadership, i.e. competition through low prices is an appropriate corporate strategy to help gain market share. Describe FIVE different types of theoretical principles that may contribute to achieving a lowcost operation in the supermarket. Explain (briefly) the reasons why a supermarket may consider business ethics and social responsibility as part of its operations management. (10 marks) QUESTION 5 Inventory management can present two conflicting objectives provide maximum item availability while keeping inventory investment low. The main goal of an effective inventory system is to provide items at the right time and place at the best cost. To achieve such goal, you always work within strict requirements: I. II. Provide item(s) when customer(s) need it/them Control the amount of capital invested in inventory item(s)

You are required to explain to a board of directors, the main purpose of holding inventory and the differing views on inventory levels. They also expect you to describe the common techniques (operations best practice) used to manage inventory. (10 marks) QUESTION 6 The managing director of a well known business school would like to open more schools, but he believes that before he can do this, various aspects of the current school needs to improve and managed more efficiently and effectively. He is interested in the idea of benchmarking. Explain how benchmarking might be used to help improve performance, and Identify the potential problems and limitations associated with benchmarking. (10 marks)

END OF QUESTION PAPER

UOW OM / MBA/ Level 7

Winter 2011 Exam Page 3 of 3