OPERATIONS MANAGEMENT – ASSESSMENT 1

IN-CLASS QUIZ – (Assessment Weight: 10%)

 

1. This is an in-class online quiz.

2. You have 1 hour and 30 minutes to complete this quiz.

3. The quiz will commence at 13:15 and conclude at 14:45am on Tuesday 28 September
2021.

4. You must upload your responses at the indicated Moodle link by 14:45, otherwise you
will not be able to submit for grading. Use this word document to complete your tasks.

5. There are five tasks in this quiz. Attempt all tasks. The weighting for each task is indicated
at that task.
Task 1: Forecasting (15%)

Describe the three forecasting time horizons and their use. Use an example for each time
horizons to illustrate your answer. (approximately 150 words)

Ans: There are three types of forecasting time horizons:

1. Short range forecast: Such forecast is generally less than 3 months but It can ne
expanded to 1 year. This type of forecasting is utilized for several job assignments,
buying job schedules etc.
2. Medium range forecast: This forecasting ranges from 3 months to 1 year but can be
expanded till 3 years. Such forecasting is generally utilized for cash budgeting or
production planning.
3. Long range forecast: This forecasting has the timeframe of 3 years or more. It is utilized
for capital expenditures or other research and development programs.
4.
Task 2: Weighted Moving Average Forecast (15%)

A shed supplier records the following sales from September one year through to December
the following year as shown below. Based on the weights provided, show a 4-month
weighted moving average forecast for sales in the subsequent year by completing the table
below.

Weights 4.9 last month

  3.5 2 months ago
  1.8 3 months ago
  1.2 4 months ago

Previous Sales Forecast Sales

Sep 62  
Oct 28  
Nov 42  
Dec 71  
Jan 15  
Feb 26  
Mar 33  
Apr 22  
May 18  
Jun 37  
Jul 49  
Aug 48  
Sep 64  
Oct 21  
Nov 36  
Dec 81  

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Task 3: Organisational and Operations Strategy (15%)

(i) Outline the three operations strategies that may implemented (5 marks).

(ii) Explain how each of these strategies may be implemented using an example in
each case (approximately 150 words) (10 marks)

Ans: a. Customer driven strategy: It is a strategy when the companies produce the products as
per the needs and expectations of the customers. They become flexible and adopt advanced
technologies in order to gain competitive advantage and to attract more customers.

b. Corporate strategy: Under this strategy, every department within the company is dependent
upon each other. Effective coordination among each other is the key.

c. Development of core competencies: It includes the strengths of the company such as the
resources and the human management. It is important to develop them and provide
appropriate training wherever its needed.

b. a. Customer driven strategy can be implemented when the company gives first preference
to its customers. They should provide products and services to their customers with effective
quality and quantity at a competitive price.

b. Under corporate strategy the top-level management must ensure that all other levels are
coordinating with each other. The goals of the company must be clear to every team member
so that they all work towards the common goal.

c. Under the core competencies strategy it is important to identify the strengths and the
resources of the company and must make sure to utilize them in order to gain success.
Task 4: Supplier Selection (20%)

A company is choosing an outside firm to provide its payroll services. It has chosen four
comparative categories of interest: client reviews, financial condition, IT capabilities, and
government stability. These categories have been assigned weights as indicated in the table
below. Three potential providers were scored on each of those factors as a percentage with
100% being the best.

(i) Using the factor-rating method, which provider should be chosen? (14 marks)
(ii) Based on determination, outline any limitations using this method and what you
would do as a result. (6 marks)

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  Weight Provider Provider Provider Provider Provider Provider

A B C A B C
WEIGHTED INDEX

Client 30% 80 90 75 24 27 22.5

reviews
Financial 20% 60 96 75 12 12 15
condition
IT 38% 50 80 76 19 30.4 28.88
capabilities
Government 12% 75 10 95 9 1.2 11.4
stability
TOTAL 100% 64 70.6 77.78

Provider C should be chosen.

b. Under factor rating method, it is actually just the numbers and it is hard to interpret the actual
meaning of the factors. It do not give the actual or true result because the variables are
correlated with no reason.

The result tells which provider will be chosen on the basis of the data set given.
Task 5: Productivity (35%)

(a) BBQ Fun, a BBQ manufacturer, has found that it takes 1.5 hours for two people
to assessable their leading four-burner BBQ. BBQ currently employs 18 people in
its assembly plant. Each worker works from 8:30am to 5:00pm five days a week.
There is a lunch break of half an hour each day.

Determine the current daily labour productivity of BBQ Fun’s plant.

(b) BBQ Fun believes they can purchase a new tool press for each employee, which
will allow them to assemble a typical BBQ in two hours with one person only.
Each employee will, however, have to spend an extra 60 minutes each morning
preparing the new equipment.

Determine the impact on the labour productivity rate if BBQ Fun purchases the
new equipment?

(c) The forecast demand for BBQ Fun’s four burner BBQ shows a sharp increase and
BBQ intends to retain all existing employees so it can meet demand.

What is the new annual productive capacity of the plant (assume 48 available
weeks per year and no public holidays)?

(d) If the original labour rate allocation was $45 per hour and each machine press
costs $1,750, calculate the new required hourly labour rate allocation if BBQ Fun
requires a payback period of 26 weeks.

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(a.)Daily labour productivity = 8 hours per day / 1.5 hours = 5.34
(b.) Productivity with faulty tool = 6 hours per day/1 hour per equipment = 6 BBQ per
day

Productivity improves = 6 – 5.34 = 0.66

(c.)