Practise Operations Management through transformation, inventory, capacity, lean production, projects, quality, location and sustainability, applying decisions to case constraints.
Analyse two ways in which operations contributes to added value in a business.
'Supply chain management has the most significant impact on the effectiveness of a hospital.' Evaluate this view.
Samira's Whiteboards (SW)
Samira left school at the age of 18 in country H . She had a small amount of savings and an idea to create a flexible, removable and reusable whiteboard. Samira created a prototype and received small orders from local retailers.
A local manufacturer batch produces stock when required. There is a two-week lead time for a minimum order of 500 units. Samira started to sell her whiteboards on her website and at trade shows. She has been trading for seven months. She has good cashflow but little working capital as production costs are high.
Samira has heard that OS, a large business that sells office equipment, is planning to sell their own version of Samira's whiteboard. She is keen to increase production quickly to take advantage of being first to market. However, Samira's manufacturer cannot supply enough product to meet the growth in potential demand for whiteboards.
Fig. 1.1 shows an inventory control chart for the first seven months of trade.
Lara, a venture capitalist with experience of manufacturing, has approached Samira about making an investment. She would invest $ 100000 to build a local mass production facility for SW. The facility would have a maximum output of 50000 units per month. Lara wants to own 40% of the business.
Explain one cost for SW of holding inventory.
Analyse one possible impact on a business of operating over maximum capacity.
Post Scent (PS)
PS is a private limited company operating in country H . It sells perfume for men and women using its own website. PS purchases the perfume in large quantities from various manufacturers and then sells it in smaller quantities to its customers. Most of the perfumes are sold in glass bottles.
PS has two main ways in which it sells perfume:
- A website where customers can purchase a range of perfumes. The perfumes are priced to be lower than high street competitors.
- A subscription service where customers pay a monthly fee for a mystery perfume to be delivered each month.
All of PS's products are delivered to customers' homes using the postal service. The packages can be left in a mailbox or in a safe place outside of the home. PS has an aim to improve the sustainability of its operations.
PS uses incremental budgeting. Table 1.1 shows the budgeted and actual cost and revenue data for 2023.
Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)
The directors of PS have decided that the business needs a Marketing Manager. The role
The directors have shortlisted five suitable applicants and plan to invite them all to an assessment centre as part of the recruitment process.
Explain the term sustainability.