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Bmt5118 - Operations Management Digital Assignment-1: 0.625 Loan/labour Hours

The document analyzes different options for locating a new manufacturing plant for Rajasthan Toys. It calculates: 1) Locating the plant at one of the four existing distribution centers, finding center D to have the lowest total load-distance score. 2) The coordinates of the center of gravity between the four distribution centers, calculated to be (178.21, 242.31). 3) The load-distance score if the new plant is located at the center of gravity, calculated to be 20648.2.

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Anusha Ravi
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36 views5 pages

Bmt5118 - Operations Management Digital Assignment-1: 0.625 Loan/labour Hours

The document analyzes different options for locating a new manufacturing plant for Rajasthan Toys. It calculates: 1) Locating the plant at one of the four existing distribution centers, finding center D to have the lowest total load-distance score. 2) The coordinates of the center of gravity between the four distribution centers, calculated to be (178.21, 242.31). 3) The load-distance score if the new plant is located at the center of gravity, calculated to be 20648.2.

Uploaded by

Anusha Ravi
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BMT5118 - OPERATIONS MANAGEMENT

DIGITAL ASSIGNMENT-1
ANUSHA R [20MBA0126]

QUESTION 1: Karnataka Union Bank employs three loan officers, each working eight hours
per day. Each officer processes an average of five loans per day. The bank’s payroll cost for the
officers is Rs. 8000 per day, and there is a daily overhead expense of Rs.6000.
A). Calculate the labour productivity:

Output [loans] 3 Officers×5 loans/day


Input [labour hrs] =
3 Officers×8 hrs/day

= 0.625 loan/labour hours


B). Calculate the multifactor productivity, using loans per rupee cost as the measure.
The bank is considering the purchase of new computer software for the loan operation. The
software will enable each loan officer to process eight loans per day, and the overhead expense
will increase to Rs. 7500.

Output [loans] 3 Officers×5 loans/day


=
Input [labour cost+overhead] Rs.8000+Rs.6000

= Rs. 0.0010 /loans


C). Calculate the new labour productivity.

Output [loans] 3 Officers×8 loans/day


=
Input [labour hrs] 3 Officers×8 hrs/day

= 1.0 loans/ labour hours


D). Calculate the new multifactor productivity.

Output [loans] 3 Officers×8 loans/day


=
Input [labour cost+overhead] Rs.8000+Rs.7500

= Rs. 0.0015 /loans


E). Should the bank proceed with the purchase of the new software? Explain.

 Buying new software would increase the labour productivity by


60% → {[1.0−0.625]/0.625}

 It would increase the multifactor productivity by


50% → {[0.0015 − 0.0010]/0.0010}

 So, it’s worth purchasing a new software for the bank proceedings.

QUESTION 2: Rajasthan Toys has four distribution centres located at the location coordinates
given. The monthly demand at each centre is also given.
Distribution Co-ordinates Monthly
Centre (Km) Demand
A (100, 150) 50
B (250, 250) 30
C (150, 150) 15
D (200, 300) 100

A). Management is considering locating a new plant at the site of one of the four
distribution centres. Which Location should be selected (Use rectilinear distance)?
Rectilinear Distance = 𝐝 (𝐢, 𝐣) = [𝐗𝐢 − 𝐗𝐣] + [Yi – Yj]

1) DISTRIBUTION CENTRE A (∆ 𝑨𝑩𝑪𝑫 = 𝑨𝑩, 𝑨𝑪, 𝑨𝑫)

d (A, B) = [100 − 250] + [150 − 250] = 250

d (A, C) = [100 − 150] + [150 − 150] = 50

d (A, D) = [100 − 100] + [150 − 300] = 250

Distribution Load(L) Distance (D) Load


centre distance(L*D)
B 30 250 7500
C 15 50 750
D 100 250 25000
Total 33250
2) DISTRIBUTION CENTRE B (∆𝑩𝑪𝑫𝑨 = 𝑩𝑪, 𝑩𝑫, 𝑩𝑨)

d (B, C) = [250 − 150] + [250 − 150] = 250

d (B, D) = [250 − 200] + [250 − 300] = 200

d (B, A) = [250 − 100] + [250 − 150] = 100

Distribution Load(L) Distance (D) Load


centre distance(L*D)
A 50 250 12500
C 15 200 3000
D 100 100 10000
Total 25500

3) DISTRIBUTION CENTRE C (∆𝑪𝑫𝑨𝑩 = 𝑪𝑫, 𝑪𝑨, 𝑪𝑩)

d (C, D) = [150 − 200] + [150 − 300] = 200

d (C, A) = [150 − 100] + [150 − 150] = 50

d (C, B) = [150 − 250] + [150 − 250] = 200

Distribution Load(L) Distance Load distance(L*D)


centre (D)

A 50 200 10000
B 30 50 1500
D 100 200 20000
Total 31500

4) DISTRIBUTION CENTRE D (∆𝑫𝑨𝑩𝑪 = 𝑫𝑨, 𝑫𝑩, 𝑫𝑪)

d (D, A) = [200 − 100] + [300 − 150] = 250

d (D, B) = [200 − 250] + [300 − 250] = 100

d (D, C) = [200 − 150] + [300 − 150] = 200


Distribution Load(L) Distance Load
centre (D) distance(L*D)

A 50 250 12500
B 30 100 3000
C 15 200 3000
Total 18500

The load distance score table of distribution center, A, B, C are higher compared to D,
Distribution centre D (200, 300) can be considered for new plant location.

350
300 200, 300
250 250, 250
Axis Title

200
150 100, 150 150, 150
100
50
0
0 50 100 150 200 250 300
Axis Title

B). If the management decides to locate the new plant at the centre of gravity what
would be the co-ordinates of the new facility?

Distribution Co-ordinates Monthly Lx Ly


Centre (Km) Demand (load) L

A (100, 150) 50 5000 7500


B (250, 250) 30 7500 7500
C (150, 150) 15 2250 2250
D (200, 300) 100 20000 30000
Total 195 34750 47250

𝑳𝒐𝒂𝒅 𝒅𝒊𝒔𝒕𝒂𝒏𝒄𝒆/𝒎𝒐𝒏𝒕𝒉𝒍𝒚 𝒅𝒆𝒎𝒂𝒏𝒅 [𝑳𝒙/𝑳]


∑ 34750
𝐶𝑥 =
∑ 195
= 178. 21
∑ 47250
𝐶𝑦 =
∑ 195
= 242.31
Therefore, if the management decides to locate the new plant at the center of gravity the co-
ordinates of the new facility would be (178.21, 242.31) respectively.

C). Also determine the load-distance score if the new facility is located at COG.

Location COG (178.21, 242.31)

centre coordinates demand Distance (d) Load distance


A (100, 150) 50 78.21+92.31 = 170.52 8526
B (250, 250) 30 71.19+7.69 = 78.88 2366.4
C (150, 150) 15 28.21+92.31 = 120.52 1807.8
D (200, 100) 100 21.79+57.69 = 79.48 7948
Total 20648.2

If the new facility is located at COG point the load-distance score will be as 20648.2.

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