Operations & Process Mgt

Project description

InstructionTo undertake this assignment you need to download two additional files from Studentcentral, both of which are related to specific digits in your student number.

1.OPM2 Component DataXThis is a Word file. You must download the file where X matchesthe last-but-onedigit ofyourstudent number.

2.OPM2 Weekly Usage Data YThis is an Excel file. You must download the file where Y matches the last digit of your student number.

Example:Student no. 13857264 would download OPM2 Component Data6

andOPM2 Weekly Usage Data4.

The TaskThe supporting Excel and Word files (see above) provide Normally distributed usage data and other key information relating to the inventory management and replenishment of components within a furniture assembly operation.Your task is to analyse and evaluate these data, using your choice of the methods covered in the lectures delivered since Reading Week. Specifically, you are required to:

a)Work out the key replenishment parameters for Item H1.Then, produce a fully-labelled graph of the expected inventory levelfor this component over the first 20 weeks of 2015.

b)Calculate the expected average inventory level (no. units) and value () for each component, during the whole of 2015.

c)Propose a detailed alternative inventory management policy that would help the company reduce its total annual stockholding costsby at least 20%, and quantify the expected savings.

d)Use the weekly usage data for Item H1, along with any other relevant parameters from your work on part a (above), to develop the MRP records for Items H1, K3 and M4over the first 26 weeks of 2015.

NotesAll of the analysis required to achieve the tasks above may be undertaken in Excel. However, you maycarry out theassignment by hand if you wish.You are not

required to provide any more than just briefwritten notes to support your analysis

and results, so no word-count guide or limitapplies.

You must submit your assignment as an Excel spreadsheet, or a Word document,

ora Powerpoint file, or a .pdf file, or as a combination of these things.

WeightingThis assignment represents one half of the assessment within the O&PM strand of the module.It therefore counts towards 25% of the overall mark for themodule.

CriteriaYou will be assessed on the analytical approachadopted,as well as onthecompetencedemonstrated inthe use of relevant techniques.

GuidanceThe materials relating to the teaching sessions in Theme 2(Deliver: Planning &

Control)encompassthe learning required to undertake this assignment. Further

guidance from the tutors will be limited only to clarification of the task.

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Assessment Weightings

Inventory profile chart35% of marks

Average inventory levels and values10% of marks

Alternative safety stock policy25% of marks

MRP records30% of marks

Learning Outcomes Being Assessed

Subject Specific:

Demonstrate an understanding of the issues, techniques and strategies involved in balancing demand and supply.

Demonstrate an understanding of the role and major issues involved in inventory control in organisations.

Cognitive:

Apply a range of qualitative and quantitative techniques in the analysis and evaluation of common problems within the core, value adding functions of a business.

Demonstrate the ability to think critically about a subject, and the ability to interpret quantitative data and qualitative information in context, in order to support business planning and decision processes.

Demonstrate numeracy, analytical and problem-solving skills, and the ability to use spreadsheets to tackle business problems.

OS201 (2014-15):    O&PM Assignment 2

File:  OPM2 Component Data 4

A furniture manufacturer aims to provide a 98% service-level to its customers.  Over time, as components are used within the finished-goods assembly process, the company orders new stock from its component suppliers with the specific aim of finding the best balance between the cost advantages and disadvantages of holding stock.  The company uses a Continuous Review approach to managing its inventory of components within its final assembly operation.

Based on previous analysis, the company believes the average costs associated with placing, processing and receiving a replenishment order for any component amount to £40.  It also estimates the average cost of holding a single unit of each component in stock for a whole year at 6% of the unit cost of the item.

Selected data relating to 40 of the components used in the furniture assembly process are contained in the table, below.  Each component is identified by a unique item code and the other parameters are defined as follows:

•    Unit Cost:                The cost per single unit of the item, to the company.

•    Standard Order Lead-time:    The normal duration between placing a re-supply order on

the supplier, and delivery of the item to the company.

•    Stock On-Hand:            The quantity of the item in stock at the start of 2015.

Item Code

Unit Cost

(£)    Standard Order

Lead-time

(No. Weeks)

Stock

On-Hand

(No. Units)

Item Code

Unit Cost

(£)    Standard Order

Lead-time

(No. Weeks)

Stock

On-Hand

(No. Units)

A1    10.50    2    400        E1    6.50    2    600

A2    2.70    3    840        E2    36.50    3    1,040

A3    95.00    4    1,280        E3    2.20    4    1,480

A4    2.80    5    1,720        E4    2.00    5    1,920

A5    1.60    6    2,160        E5    4.80    6    2,360

B1    3.60    2    800        F1    4.00    2    1,000

B2    2.00    3    1,240        F2    1.00    3    1,440

B3    57.00    4    1,680        F3    1.20    4    1,880

B4    0.90    5    2,120        F4    2.30    5    2,320

B5    6.70    6    560        F5    3.10    6    760

C1    2.50    2    1,200        G1    4.60    2    1,400

C2    10.40    3    1,640        G2    1.80    3    1,840

C3    36.00    4    2,080        G3    1.30    4    2,280

C4    3.80    5    520        G4    2.70    5    720

C5    2.70    6    960        G5    3.20    6    1,160

D1    2.50    2    1,600        H1    2.80    2    1,800

D2    1.50    3    2,040        H2    15.70    3    2,240

D3    3.30    4    480        H3    5.00    4    680

D4    3.30    5    920        H4    2.70    5    1,120

D5    19.00    6    1,360        H5    2.20    6    1,560

The weekly usage (no. units) of each of these 40 components is Normally distributed, and the expected quantities for 2015 are detailed in your supporting Excel spreadsheet.

The diagram below shows the component structure for one of the items listed above – Item H1.

The figures in brackets indicate the number of units of each item that are required in the assembly of the component at the next level above in the product structure.

Some key data relating to components K3 and M4 are provided below.

Standard       Order

Stock          Order        Lead-time

Component      On-Hand    Quantity     (Weeks)

Item K3        5,000          4,000               2

Item M4        5,000          5,000               1

Item H1              Use data from part ‘a’ of the assignment

Additional Notes:

a)    Items H1, K3 and M4 may only be ordered and assembled in fixed multiples of their standard order quantity.

b)    All deliveries are received at the start of the week they are due.  They are therefore available to the assembly process in that week.

4

OS201 (2014-15):    O&PM Assignment 2

Tutors’ Answers to the Most Frequently Asked Questions

Q:    Please could you clarify the deliverables for this assignment?  What do I need to submit?

A:    The task sheet asks you to submit the following things:

a)    A graph of the expected inventory level (known as an inventory profile) for Item H1, covering weeks 1 – 20 of 2015.  You may produce this graph in Excel, or construct it in Powerpoint, or draw it by hand and submit it as a .pdf file.  You will have to carry out some intermediate steps before you will be able to construct the graph, so please make sure that any key replenishment parameters are highlighted.

b)    The average quantity (no. units) and value (£) of stock expected to be held for each of the 40 components (items A1 – H5), during the 52 weeks of 2015.

c)    Details of a lower cost inventory management/replenishment policy, covering all of the 40 components (items A1 – H5), along with the total value (£) of the savings.  Please show how you arrived at this figure.

d)    Three full MRP records (one for each of items, H1, K3 and M4), covering weeks 1 – 26 of 2015.  Items K3 and M4 are not included among the 40 components listed in the weekly usage file, but this should not prevent you from developing their respective MRP records.

Q:    Which lectures/seminars cover the learning required to do this assignment?

A:    All of the learning required for this assignment was covered in lectures 8 – 10 (i.e. the two inventory management lectures and the ERP/MRP lecture) and their related seminars.  All of the materials used during these three weeks are posted on Studentcentral, and all are relevant to this assignment in one way or another.  Please study these materials, along with the relevant chapters in the textbook and your own notes from the teaching sessions.

Q:    I have read all of the relevant learning materials, but I still don’t know what to do.  Please

will you help me get started?

A:    We are willing to help you clarify your understanding of the assignment task, but one of

the things being assessed is the “ability to interpret quantitative data in context, in order to

support business planning and decision processes”.  It’s a problem-solving assignment, so

part of the challenge for students is to work out how to tackle the problem.

One tip you may find helpful in tackling problems of this nature is to start at the point you

are trying to reach (i.e. the deliverable), and then to work back towards the start (i.e. the

data and other information you are provided with).  Ask yourself questions, such as “What

information do I need to enable me to construct the inventory profile for Item H1?”.  If

some of the information you require has not been provided, you will then need to work out

how to derive that information.  Keep working backwards until you need nothing more than

the data provided in your ‘Component Data’ and ‘Weekly Usage Data’ files.  Then, if you

execute the intermediate steps correctly, you should reach the solution.

Other than these comments, however, the provision of further guidance is not appropriate.

Q:    Will you look at what I have done, to check that I’m on the right track?

A:    Given the problem-solving nature of the assignment, and with approximately 300 students

on the module, it is neither appropriate, nor feasible for the tutors to look at draft work, or

to provide 1:1 guidance in this case.  Also, we must remain fair to all students.

Item    Week No. (2015)

Code    1    2    3    4    5    6    7    8    9    10    11    12    13    14    15    16    17    18    19    20    21    22    23    24    25    26    27    28    29    30    31    32    33    34    35    36    37    38    39    40    41    42    43    44    45    46    47    48    49    50    51    52

A1    140    100    120    133    189    139    131    84    95    112    95    109    119    53    138    149    121    74    149    121    114    97    153    111    93    130    78    84    84    92    42    106    88    141    127    152    99    136    78    81    47    93    13    120    143    125    78    101    54    106    74    156

A2    222    153    134    323    90    268    252    100    138    124    71    166    265    102    126    152    229    177    200    166    288    162    113    184    142    239    257    367    137    184    155    289    204    163    192    91    175    168    222    174    208    315    152    253    176    297    229    186    229    168    197    225

A3    266    433    298    387    379    417    316    430    403    380    251    390    438    293    187    273    210    383    473    216    293    237    249    358    226    216    407    285    371    265    302    338    223    280    251    232    330    263    503    292    372    339    539    379    347    325    315    241    429    475    381    249

A4    570    212    348    484    335    356    392    516    387    535    428    672    690    276    302    417    542    336    560    184    314    391    337    493    231    393    306    337    820    467    60    338    831    462    521    278    366    349    388    543    527    540    594    542    759    530    499    537    116    460    329    227

A5    559    393    561    654    186    324    236    564    579    480    628    502    527    673    730    485    460    508    628    446    469    545    653    401    473    560    680    749    524    763    650    704    540    676    642    689    662    681    490    684    450    611    566    592    593    826    496    442    491    367    623    722

B1    325    220    228    122    213    269    182    113    171    111    210    250    242    258    207    106    225    251    217    241    202    142    158    147    309    142    225    217    228    279    199    271    238    243    174    274    204    167    262    234    115    349    241    193    166    234    205    108    140    279    210    272

B2    338    334    444    194    154    310    390    255    366    277    358    406    103    478    325    196    232    204    484    328    264    338    283    220    283    238    286    327    150    479    320    296    373    314    201    414    441    345    319    127    310    342    198    329    268    221    232    288    161    400    215    310

B3    423    532    466    323    486    445    423    401    380    516    301    249    669    379    321    262    384    417    251    381    589    323    282    329    181    222    447    288    512    646    334    423    430    500    653    452    397    320    382    224    439    360    324    464    618    406    641    461    367    430    320    279

B4    536    939    626    160    569    459    304    636    319    632    768    627    661    455    326    676    496    587    377    543    440    611    568    576    500    585    270    911    309    749    717    330    406    565    629    515    829    589    637    730    488    456    744    435    485    330    462    250    545    574    197    748

B5    24    140    65    154    145    224    131    168    114    117    155    144    75    107    93    94    161    185    131    137    94    93    117    174    126    160    112    139    124    117    92    98    97    159    124    78    145    125    175    137    150    127    125    126    134    177    196    98    229    77    46    122

C1    177    398    249    244    291    386    401    208    301    373    272    235    192    425    342    206    263    394    311    385    383    197    291    154    351    421    294    225    343    105    330    283    266    561    270    335    307    382    242    350    385    263    431    284    249    198    266    185    168    258    410    193

C2    277    433    365    367    286    301    318    517    248    405    441    201    378    642    327    352    109    477    346    50    503    294    335    308    469    150    416    360    259    89    496    276    441    346    526    612    373    346    595    392    430    548    456    488    565    315    607    381    456    441    463    450

C3    393    555    511    480    568    353    547    530    553    298    336    282    381    702    677    585    581    268    627    671    287    841    451    422    530    468    667    308    539    340    271    788    477    555    719    588    518    396    378    459    515    362    346    631    607    488    498    662    618    336    555    487

C4    104    179    159    72    62    136    138    160    168    95    137    123    119    53    134    114    74    161    133    27    116    129    126    150    107    134    145    182    145    192    109    150    187    71    28    173    153    94    73    136    148    96    110    39    192    83    132    157    197    189    192    142

C5    116    159    132    265    172    294    205    316    379    271    202    147    92 &nbs