OP218: Operations & Enterprise Resource Planning O&PM 2 (Task A)
This task is based on the following text:.
The ‘London Eye’
The ‘London Eye’ is the world’s largest observation wheel and one of the UK’s most spectacular tourist attractions. Its height is over twice that of the famous Prater Wheel in Vienna, but has three key design differences compared with any such conventional Ferris wheel: firstly, the passenger capsules are fully enclosed and air conditioned; secondly, they are positioned on the outside of the wheel structure and do not hang down; thirdly, the entire structure is supported on an A-frame from one side only, so it can be cantilevered out over the River Thames.
Each of the 32 passenger capsules, fixed on the perimeter of the 135-metre diameter rim, can hold25 people. The wheel rotates continuously, so, to enter, customers have to step into the capsules,which are moving at 0.26 metres per second, which is a quarter of the normal walking speed. One complete 360-degree rotation takes 30 minutes, at the end of which the doors open and passengersdisembark. Boarding and disembarkation are separated on the specially designed platform that is built over the river.
This tourist attraction is operated by the Tussauds Group, and it is their only attraction that uses a ‘timed admissions booking system’ (TABS) for both individual and group bookings. This allocates requests for ‘flights’ on the basis of half-hour time slots. At the time of writing, the London Eye is open every day except Christmas Day. Admission is from 10.00 a.m. to 9.30 p.m. (for the 9.30–10.00 p.m. slot) in the summer, from the beginning of April to mid-September. For the rest of the year, the winter season, admission begins at 10.00 a.m., and the last admissions are for the 5.30–6.00 p.m. slot.
Prices were set initially at £7.45 for adults, £4.95 for children and £5.85 for senior citizens. There is a 10% discount for groups of 10 or more, plus one free flight for every 16 paid admissions. For credit card pre-booking, there is a charge of £0.50 per person, and these tickets must be collected from the adjacent ticketing office, where purchases can be made in person. Prices were set to rise by £0.50 for the period from June to December 2000.
The London Eye forecasts anticipated that 2.2 million passengers would fly the London Eye in 2000, excluding January, which was reserved for final testing and admission of invited guests only. An early press release informed journalists that the London Eye would rotate at an average rate of 6,000 revolutions per year.
The Task: Using the data provided in the text above, develop a detailed analysis of
theoretical andplanned capacity, and of anticipated demand for the
London Eye in its first year ofoperation. Then, stating your assumptions,
develop an estimate of the revenue that might be earned during this period.
Weighting This assignment represents one quarter of the assessment within the O&PM strand of the module. It therefore counts towards 12.5% of the overall mark for the module
O&PM 2 (Task B)
This task requires the use of some of the materials requirements planning techniques covered in lecture 18 (MRP & ERP) and in chapter 14 of the core textbook, Slack et al (2010), “Operations Management”, 6th Ed.
The diagram below shows the component structure for a product (item A), which is comprised of seven different base components and sub-assemblies (items B – H).
Note: The figures in brackets show the number
of parts needed to make 1 item at the next level
up in the product structure (e.g. Every Item E is
comprised of 2 of Item C and 5 of Item H).
Customer demand for the product is seasonal and normally follows a symmetrical growth and decline pattern over a period of six or seven months. This year, demand for the product is expected to be as shown in the table below.
Time Period Weekly Demand
(week nos.) (no. units)
1 – 6 0
7 – 9 100
10 – 12 200
13 – 15 300
16 – 18 400
19 – 22 500
23 – 25 400
26 – 28 300
29 – 31 200
32 – 34 100
35 0
The levels of inventory available to the product assembly process at the start of week 1 (i.e. at the end of week 0), plus other standard data relating to each of the components is contained in the table below.
Stock Batch/Order Order
Item On-Hand Quantity Lead-Time Cost per
Code(no. units)(no. units)(no. weeks)Unit (£)
A 80 320 1 108.00
B 0 500 1 28.00
C 1,200 800 2 1.20
D 3,200 4,000 5 2.00
E 1,040 1,200 2 11.20
F 2,000 1,600 1 1.60
G 0 2,000 2 9.40
H 280 1,280 3 0.80
Additional Notes:
a) Items may be assembled (or ordered) and supplied only in fixed multiples of their standard batch (or order) quantity. For example, Item E may only be assembled and supplied in batches of 1,200 (i.e. 1,200 or 2,400 or 3,600 or …, etc.).
b) You should assume that inventories are received at the start of the week they are due, and that they are therefore available for use (or sale) in that week.
The Task: Use ‘Excel’ to create MRP records for all eight stock-holding items, A-H.
(Part 1) You should create a separate worksheet (all within the same file) for each
item.
The Task: If the supplier of Item D doubled its standard order quantity (from 4,000
(Part 2) units)to8,000 units what impact would this have on the overall average
value of inventoryheld during the time period of the exercise (weeks 1–
35)? Expressyour answer invalue terms and also as a percentage.
Your answer to this part should be entered (along with any workings) into a
further worksheet within the same file as you created for part 1.
Weighting This assignment represents one quarter of the assessment within the O&PM strand of the module. It therefore counts towards 12.5% of the overall mark for the module.
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