Assessment: 2. Quantitative Analysis

Value: 30%

Due date: 17-Apr-2014

Return date: 15-May-2014

Submission method options

Alternative submission method

Task

Please note that if you intend to hand in this assignment through Turnitin, you need to scan or “copy and paste” the POM-QM for Windows into your MS Word document.

The assignment consists of 3 problems with multiple parts, and the marks for each problem varies. Printouts provided with the prose solutions and explanation of the POM-QM solutions must be originals. A maximum of 4 printout pages may be included in the form of POM-QM reports. Students should note that the material explaining them is more important than the printouts themselves.

This assignment will be marked out of 50 marks but will constitute 30% of the overall marks for the subject.

Question 1 – Inventory Management

Part A

Wagga Industrial Electronics Distributors (WIED) is involved in distributing electronic components to a range of commercial customers. The average demand for a particular item of inventory is 720 units per day. The item is sold at a cost of $20.00 a unit from Regional Computing Components. The holding cost is 22% per unit per year. It has been established that the cost of each order in the organisation is $250.00 per order. What is the economic order quantity and the total cost for this policy?

A second supplier, Regional Computer Bits, (RBC) intends to sell this item at a cost that is lower ($19.00 per unit). But the minimum order quantity for each order is 10,000 units. Should this item be bought from RCB or WIED (Assume a 5-day working week, and 50 working weeks a year)
(8 marks)

Part B

Explain how such a basic mathematical model used in this question (the EOQ or Quantity Discount modes) can be altered to make it more realistic to include features of safety stock and re-order points.
(5 marks)

Part C

There are a number of modern inventory control methodologies. However, not many organizations have adopted them. Explain the reasons that modern inventory control methods and systems are not in popular usage. Discuss also how organisations can be persuaded to adopt modern inventory control methodologies.
(5 marks)

Additional Notes

You can use POM-QM for Windows or excel for this question. Note that there is a different module for the Quantity Discount Model. Limit your answer to 350 words for Part B and 350 words for Part C For students with Apple computers and cannot access POM for Windows Excel is available using MyOM Lab. The textbook provides details on accessing MyOMLab and Excel with addons- necessary to complete tasks. Excel is adaptable to most topics covered in the subject.

Question 2 – Project Management

Part A

Junee Auto Parts (JAP) are planning to expand their factory to cope with the additional demand for their products and have requested your help as an external consultant. IAP wants to determine what is involved in the project and how soon it can be completed. They have asked for a plan in the form of a Gantt Chart and Critical Path Network with relevant activity times, project duration and identification of the critical path. In the initial planning stages, you have decided that there are three major components (or sub-projects) in this expansion project – building, processing equipment and material handling system. After spending a few weeks in scoping the work, you have established a list of activities according to the three major components. Details of these are as follows:

BUILDING
A1 Design Building
A2 Ordering of Materials
A3 Construction of Building

PROCESS EQUIPMENT
B1 In house Design of Equipment
B2 Detailed Design by Consultant
B3 Tender Exercise for Equipment
B4 Installation and Commissioning of Equipment

MATERIAL HANDLING SYSTEM
C1 Study of Processing Equipment by Consultant
C2 Design of Material handling Equipment
C3 Purchase of Equipment
C4 Installation and Commissioning

Discussions with contractors and the client have helped you to draw up a table of estimated durations for the activities and the relationships among them as indicated below.

Write a report on the project plan to senior management of JAP, offering sufficient information for senior management to review and understand the implications of embarking on such a project.

(10 marks)

Part B

You realise that the information that JAP has requested is inadequate and suitable for only basic planning purposes. In a second section of the report, present your recommendations on what other information is relevant and what techniques and systems should be used to plan, monitor and control the project.
(10 marks)

Additional notes

For Part 1 of this question, the precedence diagram should be drawn using the methodology illustrated in the Interact site for this subject. Use the POM-QM for Windows software only to confirm your calculations (i.e. to check your answers after you have drawn the network and calculated the activity times, project duration, etc). The diagram can be drawn manually, or by using some software such as MS PowerPoint. Limit your answer to 350 words for Part A and 500 words for Part B. This word count will not include any tables and figures that are incorporated in your answer. Students can use Microsoft Project if experienced.

Question 3 Transportation Problem

Kelly’s Garden Supplies provides tan bark to centres through Southern NSW. There are 3 supply centres at Cobram, Deniliquin and Narrandera. The distribution centres are located at Griffith, Wagga Wagga, Albury and Canberra. The cost to transport these 100 kg bags to each distribution centre is set out in the table below Figures supplied are based on average monthly demand.

Destination

Part A

As the transport manager to Kelly’s Garden supplies, Tan Bark division you are required to determine the number of weekly shipments from each distribution centre. Direct your answers in an attempt to minimise the total costs involved.
Discuss the implications of the solution. ( 6 marks)

Part B

Explain what other factors you would consider to create a more realistic mathematical model. In your answer, discuss whether you would use a different mathematical modelling technique, or modify the transportation model to include new parameters.
(6 marks)

Additional notes

Use the Transportation module in POM-QM for Windows. Limit your answer to 200 words in Part A, and 350 words for Part B

Rationale

This assignment is based on topics scheduled for the first 6 weeks and involves the application theoretical concepts and both quantitative and qualitative techniques. The objective is to develop skills in creating frameworks and models of typical problems and issues faced in Operations Management, analysing them and interpreting them in support of the decision making process.

In more specific terms, this assignment aims to:

enhance understanding of key concepts and issues of Operations Management;
develop analytical skills required for drawing up models based on information gleaned from short case studies and other data describing various situations;
offer experience in applying contemporary and evolving operations management tools, concepts and models to a variety of situations;
develop skills in analysing models and interpreting the results for improving operations performance and for other decision making processes;
acknowledge the advantages, disadvantages and limitations of these tools; and
offer insights into how theoretical concepts, models and systems can be modified and applied in practical or realistic situations.

Marking criteria

A detailed marking criteria will be provided in the resources section of interact.

Presentation

The assignment should be written in a report style making use of headings and sub-headings as well as short concise paragraphs. A systematic approach should be taken in the use of headings e.g. lower case bold for section headings, lower case italics bold for sub-headings, lower case italics for further sub-divisions etc.

The style of writing should be clear and concise, paying attention to sentence structure to ensure clarity of meaning. Attention should also be paid to punctuation, including the correct use of commas and the apostrophe.

Assignments should be word processed using double spacing; a line should be left between paragraphs. Use a plain font such as Times New Roman in Size 12

A 5cm margin should be left on the left-hand side of each page for comments and each page should be numbered