QUESTIONS (50% of the total mark)
(It is recommended that you use Excel to produce plans and perform calculations.)
1. Evaluate Gillian’s proposal to increase the number of farm visitors in 2015 by 35 per cent. You may wish to:
• analyse the demand for farm visits in 2014 and 2015 with a focus on the peak-time demand and its impact on farm visit operations.
• analyse the capacities and identify the capacity constraints for the farm visit side of the business.
10% (300 words)
2. Explore capacity plans for the ice-cream production business by:
• Analysing and comparing the ice cream sales for 2014 and expected demand in 2015.
• Identifying (do not calculate) the level capacity plan (monthly) which had been used in 2014 for the ice cream factory and the final goods inventory at the end of the year.
• Producing (calculate the monthly production rate) an effective level capacity plan, which satisfies all the monthly demands in 2015, based on the Gillian’s farm visitor increase proposal.
• Identifying the capacity constraints of this level capacity plan. Producing a chase demand plan to solve the problem.
• Evaluating the efficiency and utilisation of the equipment over these two years.
• Exploring the implications of different capacity plans in terms of the impact on the business
20% (700 words)
3. What factors should Gillian consider when deciding to increase the number of flavours from 4 to 10? Identify advantages and disadvantages of this proposal. (You also need external reading on relevant topics from different operation management books, in addition to the core text and contents covered in lectures and seminars.)
10% (350 words)
4. Make recommendations to Gillian for her to manage capacity/demand more smoothly without further investment in capital?
10% (350 words)
Note: For any calculations, assume that each month consists of four weeks. The effects of public and Bank Holidays should be ignored for the purpose of this level of analysis.
PART 2: THE DEVA CONSTRUCTION CORPORATION
The Deva Construction Corporation has been awarded a contract for the construction of a 20,000 seat stadium. The construction must start by Monday 2nd February, 2015 and be completed within one year. A penalty clause of £150,000 per week of delay beyond the week starting from Monday 1st February, 2016 is written into the contract.
Jim Brown, the president of the company, called a planning meeting. In the meeting he expressed great satisfaction at obtaining the contract and revealed that the company could net as much as £3 million on the project. He was confident that the project could be completed on time with an allowance made for the usual delays anticipated in such a large project.
Bonnie Green, the director of personnel, agreed that in a normal year only slight delays might develop due to a shortage of labour. However, she reminded the president that for such a large project, the company would have to use unionised employees and that the construction industry labour agreements were to expire at the end of Friday, November 20th, 2015. Past experience indicated a 50-50 chance of a strike.
Jim Brown agreed that a strike might cause a problem. Unfortunately, there was no way to change the contract. He enquired about the prospective length of a strike. Bonnie figured that such a strike would last either 8 weeks (70 per cent chance) or 12 weeks (30 per cent chance).
Jim was not pleased with these prospects. However, before he had a chance to discuss contingency plans he was interrupted by Jack White, the vice-present for engineering. Jack commented that a colder December in 2015 than had been assumed was now being predicted. This factor had not been taken into consideration during earlier estimates since previous forecasts called for milder weather. Any concrete pouring in December might thus require special heating at a cost of £5000 per week.
This additional information did not please Jim at all. The chances for delay were mounting. And an overhead expense of £5000 per week would carry on being incurred in case of any delay. The technical details of the project are given in the appendix to this case.
The management team was asked to consider alternatives for coping with the situation. At the end of the week four proposals were submitted.
1. Expedite the pouring of seat gallery supports. This would cost £200,000 and cut the duration of the activity to 6 weeks.
2. The same as proposal 1, but in addition, put a double shift on the filling of the field. A cost of £100,000 would result in a 5-week time reduction of this activity.
3. The roof is very important since it precedes several activities. The use of three shifts and some overtime could cut 6 weeks off the roofing at an additional cost of only £80,000.
4. Do nothing special until November 20th, 2015. Then, if December is indeed colder than normal and no strike occurs, defer the pouring of the seats until the cold wave breaks if the schedule permits; otherwise heat whenever necessary. If a strike occurs, wait until it is over (no other choice) and then expedite all remaining activities. In that case, a two-third of the normal duration of any activity could be cut in maximum. The additional cost per activity for any week which is cut would be £30,000.
Appendix: Technical Details of the Stadium
The stadium is an indoor structure with a seating capacity of 20,000. The project begins with clearing the site, an activity that lasts 8 weeks. Once the site is clear, the work can start simultaneously on the structure itself and on the field.
The work in the field involves subsurface drainage which lasts 8 weeks, followed by filling for the playing field and track. Only with the completion of the filling (14 weeks), can the installation of the artificial playing turf take place, an activity that consumes 12 weeks.
The work on the structure itself starts with excavation followed by the pouring of concrete footings. Each of these activities takes 4 weeks. Next comes the pouring of supports for seat galleries (12 weeks), followed by erecting pre-cast galleries (13 weeks). The seats can then be poured (4 weeks) and are ready for painting. However, the painting (3 weeks) cannot begin until the dressing rooms are completed (4 weeks). The dressing rooms can be completed only after the roof is erected (8 weeks). The roof must be erected on a steel structure which takes 4 weeks to install. This activity can start only after the concrete footings are poured.
Once the roof is erected, work can start simultaneously on the lights (5 weeks) and on the scoreboard and other facilities (4 weeks).
Note: Always keep the unit of the task duration in weeks, NOT in days. Therefore you do not need to consider whether they work 5 days or 7 days in a week. As in the Ringinglow case above you can ignore the impact of public and Bank Holidays. Make sure your project tasks are “Auto-Scheduled”. You may use 1/2 or 1/3 week in calculations if this is necessary.
QUESTIONS (40 % of the total mark)
5. Produce a project plan (in Network Diagram and in Gantt chart form) using MS project software based on the details given in the appendix and attach both the diagram and the Gantt chart as appendices to your report. Explain the plan regarding its duration, critical activities and critical path. Identify the plan’s limitations in your report.
15% (500 words)
6. Analyse the four proposals in terms of their validity to the total project duration based on project management knowledge. Based on the analysis calculate Expected Costs (EC) for each valid proposal, and propose a decision using EC as the sole criterion. Discuss the strengths and weaknesses of each proposal.
15% (500 words)
What other factors might enter into the decision? For example would behavioural, organisational and/or cultural factors play a part? You should make reference to external reading when covering this point. What decision would you recommend to the president of the Deva Corporation? Please support your arguments with reasons (this is applied to all points in this question).
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