FACULTY OF BUSINESS AND MANAGEMENT BACHELOR OF

BUSINESS ADMINISTRATION (HONS.) OPERATION

MANAGEMENT
OPM549 – OPERATION MANAGEMENT

INDIVIDUAL ASSIGNMENT – ASSIGNMENT 1

PREPARED BY:

NAME STUDENT ID

NADZRATUL KAMALIA BINTI MUHAMAD 2021440616

HILAL

CLASS:

NBO5A

PREPARED FOR:

MADAM ARLIZA ABDULLAH

DATE OF SUBMISSION:

18th December 2023

1.
a. A government manufacturer produces fashionable garments. During a particular week,
employees work 360 hours to produce a batch of 132 garments of which 52 were
seconds because of some defects. Seconds are sold for RM90 each at the factory outlet
store. The remaining 80 garments are sold to retail distribution at RM200 each. What is
the labor productivity ratio of this manufacturing process?

Value of output =
(52 defective x 90/defectives) + (80 garments x 200/garment)

A government manufacturer produces fashionable garments. During a particular week =

RM20,680
Labor hours of input =
360 hours
Labor productivity =
RM20,680 / 360 hours
RM 57.44 in sales per hour

b. Compare and contrast two (2) ways a company can globalize and provide examples.

i. Foreign Direct Investment (FDI)

FDI occurs when a corporation makes a direct investment in facilities or activities
in another country, such as setting up subsidiaries, acquiring existing enterprises,
or forming joint ventures. As in, a technology firm based in the United Kingdom
decides to establish a subsidiary in the United States in order to grow its
operations. This includes investing in local infrastructure, recruiting a team, and
potentially acquiring a local tech business to acquire a presence in the US
market.

In comparison, FDI entails more control because the company creates a physical
presence in the foreign market, directly influencing operations, marketing, and
customer engagement. It also entails a larger initial capital investment, but the
business gains a more secure and direct link to the foreign market, which might
mitigate risks associated with exportation.

FDI, on the other hand, can have a significant impact on the local marketplace in
the foreign market, helping to create jobs, develop infrastructure, and potentially
influence local supply chains. Furthermore, FDI entails a more inflexible
structure, and changes may necessitate significant alterations to existing
operations due to investment directly in foreign facilities.

ii. Export
Exportation is the sale of goods or services manufactured in one country to
buyers in another. For example, a British premium fashion brand may export
apparel and accessories to numerous worldwide markets. The products are made
 in the United Kingdom and distributed to retail partners or directly to consumers
globally.

In comparison, Exportation offers restricted control over the distribution process.

The British luxury fashion firm may rely on intermediary organisations for the
distribution in international countries, limiting its direct influence over the
consumer experience. Furthermore, the British luxury fashion firm concentrates
on manufacturing domestically and selling products internationally, resulting in a
lower initial cost. However, there is danger of currency fluctuations and changes
in market conditions.

For contrast, Exportation, on the other hand, has a limited impact on the UK
economy after the manufacturing phase. The principal role is in the
manufacturing of commodities. Furthermore, provides greater flexibility because
the British luxury fashion firm can respond to shifting market conditions or tweak
product offerings without making significant changes to its manufacturing
method.

In conclusion, while exportation allows a British luxury fashion business to

expand its global reach with a smaller initial investment, it also comes with
restricted control and significant risks. Foreign direct investment, on the other
hand, gives a company more control and a direct presence in a foreign market,
but it needs a larger initial expenditure and could make a company less flexible in
responding to urgent market developments. The decision between these
techniques is determined by the company's aims, risk tolerance, and the nature
of the industry.

2. Kiko Teddy Bear is a manufacturer of stuffed teddy bears. Kiko would like to be able to produce
40 teddy bears per hour on its assembly line. Use the information provided to answer the
following.

a. Draw the precedence diagram for the line above.

20

D
90 75 50
15

A B C E
35
15 F
G 40

H
 b. What should be the line’s cycle time?

= Production time available per hour

Unit required per hour
= 60
40
= 1.5 minutes per unit
= 90 seconds per unit

c. Construct the line layout of the operation.

Minimum number of workstation

= Time for task
Cycle Time
= 3.777 / 4 workstation

d. What would be the line’s efficiency?

= 340X 100
(4 workstations X 90 seconds)
= 94.44 %

3. The company intends to develop a forecasting method for the demand of its products for the
coming years. You are required to develop sales forecasts for the company for the last six
months of the year by using the following methods:

a. Three-month weighted moving average. Use a weightage scale of 0.5, 0.3 and 0.2 to
reflect the level of influence the previous month’s figures may have on the forecasted
months' figures.

b. Exponential smoothing with a smoothing constant, a = 0.2, where forecasted sales for
June this year was 240 units.

c. Based on the forecasted demand in question (a) and (b) above, develop sales forecast
using Mean Squared Error (MSE). Which method would you recommend the company to
use? Justify your answer.
 Actual Forecast = Ft – 1 + α (Actual – 1 – Forecast – MSE (Actual – Forecast) ^ 2
1)
3 MONTH 3 MONTH EXPONENTIAL
MONTH SALES 3 MONTH 3 month EXPONENTIAL MA WEIGHTED SMOOTHING α
(UNIT) MA (weightag SMOOTHING α = (0.2)
e: 0.5, 0.3, = (0.2)
0.2)
April 320
May 150
June 220 240
July 410 220 +150 220(0.5) 240 + 0.2 x (410- 230) (410- (410 – 236) ^2
+320 / 3 +150(0.3) (220 – 240) ^2 = 32400 249)^2 = = 30276
= 230 +320(0.2) = 236 25921
/ 0.5+
0.3+ 0.2 =
249
August 425 260 223 270.8 27225 40804 23777.64
Septemb 190 351.66666 318 301.64 26136.1111 16384 12463.4896
er 67 1
October 200 341.66666 370.5 279.312 200.69.444 29070.25 6290.393344
67 44
Novemb 170 271.66666 309.5 263.4496 10336.1111 19460.25 8732.82774
er 67 1
Decembe 316 186.66666 189 244.75968 16727.1111 16129 5075.183194
r 67 1
22148.9629 24628.0833 14435.92231
6 3

The best forecasting method while using MSE is exponential smoothing because the error is
the minimum at 14435.92231

4.

a. Product life cycle consists of four phases. Differentiate OM strategies applied in growth
and maturity phase.

The product life cycle is divided into four stages: introduction, growth, maturity, and
decline. Various operations management (OM) methods are implemented to meet
changing demands and barriers during different phases. There is a distinction between
OM techniques used in the growth and maturity phases.

Growth Phase

1. Capacity Planning
● Increase capacity to satisfy increased demand.
 ● The product is in a growth phase, with demand increasing rapidly. Operations
must expand capacity to ensure that output can meet market demand without
experiencing delays or shortages.

2. Focus on Quality
● Maintain product quality to establish a solid reputation.
● As the market expands, preserving and enhancing product quality becomes more
crucial. Satisfied customers can promote brand loyalty and customer retention
during the expansion stage.

3. Supply Chian Agility

● Develop the a supply chain that is adaptable and responsive.
● Flexible supply chain in light of increased demand and perhaps fluctuating
market conditions. Effective logistics and a quick response to changes in demand
are critical.

4. Innovation and Product Development

● Invest in ongoing innovation.
● The growth phase provides an opportunity to add new features, types, or
enhancements in order to stay a step ahead of other businesses and maintain
client interest.

Maturity Phase

1. Cost Reduction
● Concentrate on cost-cutting and operational efficiency.
● Profit margins may suffer pressure from greater competition throughout the
mature period. The goal of operations management should be to decrease costs
without losing quality.

2. Process Optimization
● Improve the efficiency of production processes.
● To remain competitive in a crowded market, optimise production techniques,
eliminate waste, and increase efficiency.

3. Diversification and Market Segmentation

● Explore new markets or sectors.
● Consider entering new markets or expanding your product line to combat market
saturation. This may include segmenting the marketplace and designing products
to fit the needs of various client segments.

4. After Sales Service

● After-sales and client service.
 ● As the market matures, customer service becomes increasingly important.
Delivering excellent post-purchase service can increase client satisfaction and
loyalty.

5. Strategic Partnerships
● Form strategic alliances or collaborations.
● Partnership with distributors and vendors, along with other businesses may help
you minimise money, identify new markets, and remain competitive.

b. The objective of product decision is to develop and implement a product strategy that
meets the demands of the marketplace with a competitive advantage. Explain any three
(3) factors to generate new product and example of the products that meet these
factors.

The goal of product decision is, without a doubt, to develop and implement a product
strategy that matches market demands while also providing a competitive advantage.
Staying relevant and addressing changing consumer needs necessitates the
development of new products. Here are three elements that influence the development
of new products, along with examples:

1. Market needs and trends:

● Identifying and dealing with unmet market demands or emerging market
trends is an important aspect in developing new goods. Understanding
consumer preferences, trouble concerns, and staying on top of industry
changes are all part of this. The surge in health-conscious consumers, for
example, has resulted in the creation of plant-based protein products.
● Companies such as Beyond Meat have produced novel plant-based burgers
and sausages to meet the growing demand for sustainable and plant-based
foods.
2. Technological Enhancement:
● By leveraging technological improvements, businesses can build goods that
are more efficient, inventive, or offer new capabilities. Technology-driven
products frequently have a competitive advantage and can draw market
attention.
● As an example, the advancement of smartphones with improved camera
technology highlights this factor. Companies such as Apple and Samsung are
constantly releasing new models with improved camera features in order to
meet the growing consumer demand for high-quality mobile photography.

3. Competitive positioning:
● Assessing the competitive landscape assists in discovering gaps or
possibilities where a new product could provide an original selling point or
differ from existing offers.
● Electric vehicles (EVs), for example, are a competitive to the demand for
sustainable mobility. Companies like as Tesla have taken use of EV
technology's competitive edge, introducing novel features and positioning
themselves as industry leaders in the electric vehicle market.