Operation Management - Math Problem Example

Oреrаtiоn Mаngmеnt Student Name: Student ID: Instructor Name: Date of Submission: Question 1 a)Calculate the labour productivity (in £ per hour) and multifactorproductivity ratio (of output value to input value) for a month’smanufacture. Answer: i). X is the number of workers in the factory 160/30=5.3 hrs is the average hours per worker per day Average pay per hour = 14/y Labour of productivity per day= 5.3hrs x 14/x=74.2/x Labour of productivity per hours= 74.2/8x =9.275/x per person (assuming 8 hours makes 1 day) ii). Multifactor Productivity ratio=output/input values output values=100 x 450= £45,000 input values= 21000+2240/x Multifactor Productivity Ratio=45,000/[21,000+ 2240/x] b)After some study, Nick is considering three options to improve the multifactor productivity ratio. The option that has the greatest impact on Nick’s multifactor productivity measure is when labour, material and overhead cost is reduced by 10 per cent. This way it will have positive impact on the multifactor productivity ratio. In addition, revenue for the company will increase as a result of that. Increasing the sales pice by 10 per cent will have minimal impact but not as compared to reducing the labour, material and overhead cost. Similar to improving quality so that only 15 per cent of the finished product are defective. c)Use this example to discuss the significance of Operations Management to this (or any) business. You are likely to draw on all concepts studiedin this module so far. Operations management refers to the operation, design and control of manufacturing process that converts such resources as raw materials and labour into finished goods or services that are sold to the end users. If Nick want his company to be successful, he should recognize the importance role that operations management will play as part of the overall organizational strategiy to maintain and establish its global leadership. In Nick’s situations, operational management wplays in successuful company performance can be seen as the company moves towards managing its operations from a value chain which will mean the whole series of activities that add value at each step that will begin the process of raw materials and ending with the finished goods. Operational management is important in efficiently and effectivel y managing the productivity as Nick’s company should have high productivity which can lead to development and economic growth as well as lead to increase in company’s profits without causing inflation. Operational management will also place an important role in competitive success of the company. Question 2 a)Highlight Competitive Priorities aspects (Cost; Quality; Time; andFlexibility) of the new business activity. The competitive priority is a way in which a business will compete in the new market. a. Quality focuses on how well the sport cars will be made and how they will adheres to the designed specifications. Therefore, the sport cars that will be sold will be of high quality that are close to the specified speed, has right capacity and attractive looks. b. Flexibility will play a vital role since manufacturing technology is fast changing and is seen to be cost effective for the business. The business will invest in a system which can easily adapt to new customer needs instead of having to purchase a new manufacturing system. c. Time delivery of a finished product is the ability of a manufacturing company to deliver according to the promise schedule. A company ability to deliver its product more quickly than its rival is important. A company is not only required to deliver on products/services but maintain the same for after sale services. Therefore, sport cars will be deliverd within shortest time after customers have made order. d. Cost or price: cost or price is an important consideration for customers because differences between lower priced cars and higher priced cars do not seem justified. Therefore the the company should keep its manufacturing costs down so that the company can be able to offer “good” price for its customer and still make a profit b. Project Activities Project Plan Duration Activities Cost day 1 Order all required materials and parts $50 days 2 Received upholstery material for seat covers $1000 Day 5 Receive windshield $ 400 Day 6 Received oil pump and carburetor $600 Day 8 Removal of chrome from car body $200 Day 10 Removel body from frame $200 Day 17 Have fenders repaired by the body shop $600 Day 20 Repair doors, hood and runk $800 Day 22 Pull engine from chasis $100 Day 23 Remove rust from frame $600 Day 25 Regrind engine valves $700 Day 27 Body works $1000 Day 28 Finish $2000 Total amount $8250 c) i.Can the project be completed within the allocated budget (left afterbuying the car) of £20,000? Yes the project will be compelted within the allocated budget. As seen in the budget plan the total amount that will be used has been approximated to be $8250. ii.Determine whether the project will require more than £3,600 in anyone week? Identify how to resolve any issues found in the budget. Assume that activities B, C, and D must be paid for when the item isreceived (the earliest finish time for the activity). Assume that the costs ofall other activities that span more than one week can be spread equally.Each week contains five days. I will look for a supplier that will be a good fits for the company: right focus, right type of custoemrs, sufficient development capabilities. Question 3 Magma Digital Software Deployment Task Normal Time Crash Time Amount Save Start Finish Normal Cost (000) Start Finish Crash cost (000) (000) Activity A Week 1 Week 5 2 Week 1 Week 3 4 2 Activity B Week 6 Week 13 5 Week 4 Week 10 8 3 Activity C Week 14 Week 23 10 Week 11 Week 19 12 2 Activity D Week 24 Week 27 3 Week 20 Week 22 7 4 Activity E Week 28 Week 30 4 Week 23 Week 24 5 1 Activity F Week 31 Week 39 8 Week 25 Week 30 14 6 Activity G Week 40 Week 41 2 Week 31 Week 32 2 0 Activity H Week 42 Week 49 6 Week 33 Week 37 9 3 Activity I Week 50 Week 58 7 Week 38 Week 44 15 8 According to the table shown above. The crash time schedule should be implemented instead of normal time schedule. As per the table, with crash time schedule, the project will only take 38 weeks instead of 58 weeks if the normal time is followed. According to the project, there is a £1,000 per week penalty for each week the project is delayed beyond week 25. Because this project will run upto week 58 if normal time is implemented or week 44 if crash time is implemented. Therefore, crush time schedule will save the company £14,000 as compared to normal time schedule. In addition, when the crush time schedule is implemented the total cost that is relevant to this project will be £110,000 as compared to £145,000 if the normal schedule is used. If time crash schedule is implemented the company will save £35,000. Benefits and limitations of applying this ‘crash’ analysis to Project Management The main benefits and limitation of applying a crash analysis to project management is summarised as follows: Benefits It helps to reduce the cost and risk of complex projects. Provide managers with a usefull overview of a project. A planning tool and a decision making too all in one. Helps spot which activities have some float and resources could be better allocated. It link well with other aspects of business planning inclusing budgeting and cahs flow forecasting. Disadvantages A lot of activities might themselves have to be broken down into mini projects. Allocation of resouses might not be flexible It will not guarantee the success of the project implementation. Reliability will be largely be based on assumptions and accurate estimates made. Question 4 a)Refer to the closeness matrix and use the rectilinear distance tocalculate the weighted distance (wd) score. Department Pair Closeness Factor Distance Score 3,2 0 1 0 4,5 6 1 6 2,4 8 3 24 2,5 0 2 0 2,6 0 1 1 2,1 0 2 0 4,6 8 2 18 6,5 0 1 1 1,6 16 3 48 1,5 27 2 54 5,3 0 3 0 Total 152 b)Exchange the positions of the Tool Store and Inspection areas, and re-calculate the wd score. Department Pair Closeness Factor Distance Score 3,2 0 1 0 4,5 6 2 6 2,4 8 3 24 2,5 0 1 0 2,6 0 2 0 2,1 0 2 0 4,6 8 1 8 6,5 0 1 1 1,6 16 2 32 1,5 27 3 54 5,3 0 2 0 Total 152 c)Use trial and error to find a particularly good block plan. Due to excessiverelocation costs, Shipping and Receiving must remain in its currentlocation. Recalculate the wd score for your final version. d). Discuss the benefits of using this analysis of Layout Design. The benefit of using analysis of layout design include: System protection, since the are many machines that are available, it will not be vulnerable to to equipment failure. Flexibility, the company will be able to handle many processing requirements. Cost, this technique is less costly and easier to maintain. it can motivate employees. There is precision in analysi of layout of design. The analysis can be done by using missing plot technique. Read More