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 92 332 221 155 124 294 275 253 209 247 186 292 169 190 241 334 344 324 125 241 275 314 329 184 268 280 271 108 212 239 167 93 318 232 232 277 164 242 140 194
D1 256 306 415 199 648 547 358 748 260 350 420 411 327 447 436 488 521 143 369 329 510 568 342 366 466 473 389 352 355 371 407 548 493 401 428 359 462 502 263 230 538 365 324 310 563 478 379 223 503 224 281 366
D2 680 703 429 466 210 586 282 531 546 619 548 551 461 389 550 414 347 511 483 595 537 700 189 679 629 415 647 447 643 329 477 389 590 548 393 440 891 724 633 541 622 337 793 898 592 469 471 360 496 270 503 523
D3 105 88 106 118 156 112 92 154 114 59 131 137 88 153 75 106 89 111 137 79 71 129 87 82 152 116 97 163 101 99 27 94 166 99 126 117 90 167 175 127 108 88 100 102 150 168 180 63 148 135 106 74
D4 213 184 219 267 370 94 369 376 354 72 103 345 299 201 300 429 348 399 246 296 143 114 211 226 208 223 248 221 172 248 262 291 230 335 281 320 354 164 287 252 247 282 190 276 237 208 217 325 0 39 82 379
D5 224 437 193 311 502 424 313 269 383 508 354 411 221 500 352 434 334 221 393 293 319 371 402 441 355 406 283 396 329 395 421 379 374 488 294 442 348 140 554 432 283 550 371 313 265 362 311 230 398 360 321 408
E1 113 79 83 212 172 235 223 206 243 90 246 184 160 211 138 71 116 123 149 192 132 176 69 125 67 242 179 136 163 104 150 86 107 241 193 93 153 188 136 174 225 78 183 76 109 35 169 166 70 131 197 73
E2 300 215 184 203 358 281 141 340 309 350 105 179 349 135 197 115 196 187 288 310 249 279 408 201 236 90 354 286 211 243 283 269 334 273 154 204 339 15 344 333 160 351 311 328 200 303 252 321 212 217 251 96
E3 501 438 375 419 301 474 313 140 309 327 381 237 451 310 264 516 382 295 393 468 557 380 302 224 295 208 360 375 474 398 446 419 321 292 418 551 313 495 325 438 491 349 321 529 392 450 253 384 521 270 359 223
E4 500 609 240 762 494 371 367 422 424 545 451 354 456 657 323 600 455 279 516 382 329 566 394 463 533 474 599 399 222 707 553 476 505 216 511 180 349 479 419 161 544 375 419 424 394 788 342 526 419 546 442 719
E5 793 623 384 688 798 580 612 480 587 751 480 551 696 541 667 425 825 637 758 911 590 473 604 567 607 471 322 590 337 745 679 737 506 744 819 731 548 674 466 1006 657 563 406 217 600 801 591 536 584 361 426 699
F1 120 301 203 211 212 308 291 344 268 185 143 339 165 256 252 158 268 248 280 421 338 220 345 183 261 301 167 409 189 248 197 169 243 52 233 290 374 309 159 223 225 191 196 188 164 366 272 495 183 295 119 262
F2 545 334 219 349 343 112 306 522 311 305 429 596 428 330 487 92 363 364 571 472 286 408 672 516 327 378 217 289 144 310 575 581 512 421 380 400 367 464 358 368 414 521 417 315 453 233 270 279 640 471 210 523
F3 488 436 327 526 793 464 223 480 148 616 649 256 405 545 363 342 483 768 597 771 489 468 351 535 205 505 455 566 272 368 323 651 464 530 587 492 620 352 564 308 759 484 410 428 479 421 319 548 337 601 217 481
F4 416 510 363 654 462 496 781 711 586 552 365 664 488 814 55 778 665 725 520 590 501 352 297 270 220 538 906 490 181 768 680 433 573 207 274 907 622 154 616 542 545 791 533 499 659 760 467 592 640 482 872 824
F5 179 155 203 216 206 200 163 228 118 175 232 229 245 147 225 132 158 174 190 219 168 171 185 196 213 188 173 176 191 265 172 212 207 304 101 220 269 244 96 237 242 135 213 232 176 156 116 296 119 212 174 201
G1 225 350 374 409 383 267 411 314 355 400 396 416 398 491 125 298 395 465 259 430 270 274 281 445 356 518 361 381 487 382 522 328 337 321 359 86 267 320 456 337 313 336 325 294 287 404 303 304 286 436 358 296
G2 212 381 560 395 486 363 556 505 276 338 330 647 565 560 324 564 385 511 310 478 261 362 499 537 471 696 336 529 565 334 367 364 437 243 639 827 577 457 363 479 556 88 627 497 427 536 587 472 555 413 595 250
G3 631 539 706 441 768 668 644 609 731 546 406 700 435 565 560 314 361 928 686 640 307 791 208 430 292 534 397 505 780 673 738 581 520 558 422 510 628 542 706 563 507 224 328 639 418 355 764 540 536 622 730 714
G4 149 34 276 178 229 103 200 236 325 252 219 159 206 21 189 149 218 214 149 222 302 170 197 107 128 158 126 133 202 258 214 98 124 226 234 152 204 306 249 153 264 214 194 182 185 143 195 141 147 213 187 167
G5 260 238 104 307 295 245 268 328 337 371 428 334 233 250 189 289 139 329 287 278 323 281 289 245 257 354 380 400 294 272 383 336 231 251 250 230 353 271 338 310 218 396 321 331 397 293 202 311 172 325 466 244
H1 620 444 629 552 473 212 632 383 338 615 724 593 571 587 301 275 411 317 420 200 376 498 259 689 578 432 527 200 504 345 422 332 239 296 291 566 403 415 357 430 547 360 374 670 347 698 498 532 471 535 306 311
H2 424 470 650 656 871 593 676 569 738 486 878 58 821 303 659 361 570 269 198 715 793 978 818 660 798 533 264 610 550 435 627 353 481 711 678 720 519 625 460 454 642 526 673 388 342 636 564 299 510 737 731 1014
H3 99 146 157 169 163 199 175 201 53 169 152 124 165 191 217 176 188 157 164 174 184 145 180 101 134 198 243 144 145 110 245 169 82 207 149 197 203 168 227 162 188 140 144 207 247 130 202 226 167 144 179 140
H4 284 299 365 125 277 348 312 125 286 312 378 371 230 353 365 235 237 61 192 399 294 426 197 253 392 305 324 189 208 285 390 176 155 277 372 306 286 339 174 308 281 325 103 152 469 416 317 311 372 201 356 417
H5 552 477 238 375 382 313 413 366 300 396 231 434 441 453 224 494 302 253 213 396 194 382 506 332 442 350 522 476 496 500 464 468 446 510 441 265 362 239 404 433 372 434 391 404 346 433 285 337 464 351 517 510
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