BUSP023 Operations Management

Examination
Spring 2024

Time: 9am – 1pm on Monday 22nd April 2024.

Format: Online. You must submit your answers as a Word and/or Excel file (doc, docx,
xls, xlsx format).
Submission link will close at 1pm. No late submissions are allowable under any
circumstances.
This is an individual examination. It is your responsibility to ensure the University
Academic Integrity standards are observed throughout.

Instructions

Answer any 2 of the 4 questions provided.

All questions are equally weighted.
For convenience, an Excel Template file is available with the data for each question
already inserted should you wish to use it.
You can use both file formats (Word and Excel files) to answer the questions – if you use
both ensure you submit two separate documents.
Question 1

Auld Faces is a Stirling based company that makes unique clock-face designs in coloured
glass, wood, metal, enamel, and stone to customer specification, or selected from a range of
in-house options derived from antique face designs from around the world. The main markets
are in Europe for civic buildings, shop-fitting projects cruise liners and personal orders. Each
job varies greatly in complexity, with some designs in the past taking over a month to produce. In
the workshop, all designs are produced by a team of 8 craftsmen (actually, until recently the
workshop was all women) who make every component from raw materials through to final
assembly. Orders are coded alphabetically from the receipt of the order and the month, year -
currently for the month of May24 the jobs in the following table have been accepted and
capacity estimated for each process category:

May 24 JOB ROUTING AND PROCESS DUE DATE PROCESSING TIME LEFT
Jobs TIMES (days) (days)

MA24 cut(3), paint/enamel(2), Weld (1), 9 8

assemble(2)

MB24 cut(3), assemble(2), 16 6

paint/enamel(1)

MC24 cut(4), weld(3), assemble(2), 16 11

paint/enamel(2)

MD24 cut(2), paint/enamel(1), 5 4

assemble(1)

(a) Determine the sequence of jobs (e.g. A-B-C-D) for each of these priority sequencing rules:

i. Earliest due date.

ii. Shortest processing time.
iii. Longest processing time.
iv. Critical ratio (Time Remaining/Job Process Time)
(10%)

(b) Interpret the impact on customers and the workshop from each of the rules in part (a)

(10%)

c) Using the Gantt chart method, develop schedules for the May jobs into the four process
stations (each of which is capable of handling only one job at a time) using the following
scheduling rules:

i. Back schedule using shortest processing time first.

ii. Back schedule using longest processing time first
iii. Back schedule using Critical Ratio (sequence is smallest to largest ratio)
(60%)
d) Interpret the outcomes from the plans in section c). Advise the company on a planning
approach that would deliver a clear focus on customer service.

(20%)
Question 2

The Imaginative Ice Company produces small batch ice-cream making machines from an
industrial unit in Hull (England). These are sold predominantly to restaurants, hotels, and
specialist ice cream shops. They have been operating successfully in European markets for the
past 8 years and have a growing presence on cruise ships. The company trades on its reputation
for high quality products and excellent after-sales service. It has a high initial selling price
relative to its (predominantly Italian) competitors which has resulted in a few lost orders in
recent years. IIC management does not seem overly concerned with this situation since they
are often dealing with production capacity issues capacity and many more orders would be
considered a cause of more problems, especially at peak periods. Getting enough skilled
workforce has been a struggle since the company was formed. Yet, demand is strong and
predictable; they have had a good record of accurately forecasting demand within a 12-month
planning horizon. The requirement at present is to develop a production plan for the 6 months
period from January through to June 2025; the following forecast data is available:

Demand Forecast for 2025

Jan Feb Mar Apr May Jun

Beginning 200
inventory
Forecast 500 600 650 770 900 800
demand

COST DATA

 Holding cost: £40/unit/month

 Stockout cost: £100/unit/month
 Subcontracting cost/unit: £220
 Hire cost/worker: £1800
 Layo cost/worker: £2000
 Labour cost/hour- straight time: £15.50
 Labour cost/hour- overtime: £22.30
PRODUCTION DATA

 Labour hours/unit: 4
 Workdays/month: 22
 Workforce at beginning of Jan25 10

a). As an operations analyst, evaluation each of the following production strategies (assume a
starting workforce of 10), stating all assumptions and provide recommendations to
management:

i. Chase, vary workforce and overtime.

ii. Level, constant workforce, vary inventory and stockout only.
(80%)

b). Also explain to management if a hybrid plan would be worthwhile considering.

(20%)
Question 3

Small World is an ethical clothing business with three stores in the west end of London. It has
been operating for three years but seems to have stagnated with respect to the market growth
since it has the same volume of customers and only 15% more sales by value in the third year
compared to the first year of operating. The Truman’s (husband and wife owners of the
company) spend their time searching for and buying the stock for the stores and a separate
online business. They are not involved with the day-to-day operations of the stores and their
only customer information has been through observations and feedback coming from sta they
have recruited to run the three retail stores. They have preferred this personal relationship
approach with sta , but now feel they do not get the full picture of customer issues. “Why are
we not growing?” has been the topic of the past 4 sta -owner meetings. so, they have decided
to conduct a survey of customers they have on their e-mail lists. The following data illustrates
the results of the satisfaction survey carried out in August 2023 (sample size of 380).

Service Dimension Number of negative comments

Knowledge of sta 54
Range of Sizes 287
Appeal of products 45
Speed of service 114
Local Area Parking availability 233
Local Area Parking Cost 211
Helpfulness of sta 98
Friendliness of sta 113
E ectiveness of returns 203
Post purchase satisfaction 23
Range of payment options 35
Comfort of Store (temperature) 76
Cleanliness of store 55
Ease of perusing stock 78
Try On Facilities comfort 23
Try On Facilities cleanliness 34
Range of products 77
Safe environment 5
Price of products 145

Others, provided in open comments:

 12 No toilet Facilities for customers

 12 Lighting was deemed poor
 104 Too hot in summer
 119 Overcrowded when I visited.

Positive comments noted:

 43 Changing facilities can be used for nursing mothers to feed and change babies.
 289 Like the ethics of the company
 144 Like to shop here for gifts
(a) Use the following two quality tools to analyse the data and present your conclusions and
recommendations to the management:

i. Pareto Analysis (40%)

ii. Fish-Bone (40%)

Note: The Fish-Bone diagram does not need to be in a diagram format. A set of
categorized lists will be suitable.

(b) How could the survey have been made more useful and what are the next steps in
developing a quality improvement scheme?
(20%)

Question 4

The Farm Fresh Foods grocery store located in the Lakes District (a popular outdoor pursuits
tourist area) is configured for five ordinary checkout tills and one express till (12 items or less).
You are an operations analyst that has been contracted to help store management explore
capacity planning options. From a sampling study you set up you found it takes 11 minutes on
average for a customer to go through an ordinary till and 4 minutes to go through the express till.
The store is open from 9 am to 9 pm daily. You must now investigate further:

(a) Devise a capacity measure and determine the capacity of the store.

(10%)

(b) Establish the operating capacity for each day for the schedule of till openings indicated in
the table below (shown is the number of ordinary checkout tills open at designated periods
during the day, the express till is always open), and determine the percentage of capacity
the store operates each day, and for the week overall.
(20%)

HOUR/DAY MON TUE WED THUR FRI SAT SUN

9-12 1 1 1 1 3 5 2

12-4 2 2 2 2 3 5 4

4-6 3 3 3 3 5 3 2

6-9 4 4 4 4 5 3 1
(c) Provide the store management with options to respond to a 20% over-capacity demand on
Friday to Sunday inclusive during the peak tourist months of July and August. Produce three
options and advise management on the operational impact and strategic implications for
each.
(20%)

(d) The store manager has made her concerns to you.

“In the past few post-covid years, like most other businesses in the area, we have really
struggled to maintain current sta ing levels and often must operate with fewer tills than
those I have in the scheduled plan. This is a problem we must cope with most weeks,
and the e ect on customers and sta has gotten worse. This year it looks like it will
become a major challenge in a few months-time when we get the main flow of the
tourist season. Other stores in the area have adopted self-service tills to manage the
situation but I don’t like the idea of the impersonal experience customers receive.
However, we need to do something”.

Based on a further study at the company’s other stores, these Self-Service tills were found
to be slower to process each customer compared to an express till, with an average of 6.5
minutes per customer. Self-service tills also still need one store employee to monitor and
assist customers with the many scanning faults the system produces (on manned tills sta
know how to deal with error codes very quickly). You have also found that there is an
unintended consequence from introducing self-service tills; the average time it takes to go
through a remaining ordinary checkout till increases to 13 minutes per customer. The self-
service tills are always open, but often they are empty while queues form at the ordinary
checkouts.

Explore the impact on store capacity and advise management on the following change
proposals:

i. The express till and one ordinary till reconfigured as self-service tills.
ii. Another proposal from you on how self-service tills can be used for Farm
Fresh Foods.

(50%)

End of Examination