Operations Management Assignment.docx

Question 1: What are the current trends in operations management? Answer: In the global market, companies are right to focus on trends in operations management and strategies for getting ahead in their respective industries. While technology almost seems to change too quickly to pinpoint at times, modern developments mean more ways to enhance business operations and increase profits. Whether one is aiming for an organizational overhaul to become more competitive in market or merely seeking to cut down on costs of everyday business, these 5 trends may deliver the results one needs to meet the operations management goals: 1. Internal Communications: Satisfied employees work harder and invest more in the company, but how can business owners encourage employee satisfaction? Promoting internal communication is a helpful first step. Peer to peer communication can enhance workplace morale and improve project outcomes, regardless of your industry. 2. Mobile Accessibility: Whether one is in the technology industry and rely on mobile devices to achieve sales targets, or one is in the hospitality business and need client portals to reach your target market, mobile accessibility is vital to the future of operations management. Apart from today’s reliance on mobile devices for communication, consumers also turn to their smart devices for everything from household goods to travel accommodations to job applications. 3. Automatization: Automating processes throughout your business can save money and increase efficiency when it comes to all areas of operations management. Online reservation services, automated chatbots, inline translation functions, and mobile hotel check-in features are only a handful of examples of business dependency on technology. 4. Performance Measurement: Detailed analytics give companies a baseline for implementing changes in areas from development and production to customer service. With metrics solutions that deliver comprehensive measurements, business owners can make informed decisions regarding business practices moving forward. Not only are companies able to track website performance and on-site sales, they can also zero in on employee productivity and communication. 5. Outsourcing: When it comes to reducing costs, outsourcing is often on the top of companies’ lists. Contracting with outside agencies or individuals can help companies save money and ensure each task receives the appropriate attention. In cases where outsourcing is cheaper than hiring additional staff, or when no staff is available to tackle extra projects, companies should have no qualms about accepting outside assistance.

Question 2: Mention the recent technologies used in product and process design Answer: Technology plays an important part in in design and production settings. The use of appropriate technology can improve the quality and profit for the designer and manufacturer. By using technology costs can be reduced through using less time and staff to perform tasks and electronic storage tools can allow things to be manufactured quicker and more accurately. The recent technologies used in product and process design process are: Research and communication The increase in technology in research- The Internet, Scanners, Digital Cameras, Softwareword, publisher, excel etc. The increase in technology in communication- The Internet, Mobile Phones, SMS, Digital Cameras, E-Mail, Software- word, publisher, excel etc. Management and Marketing Software such as, Software- e-mail word, publisher, excel etc. allow managers to keep track of projects, costs and employees. Products can be marketed more quickly and effectively using technology, TV, the Internet, Radio, Spam Email etc. Engineering Materials, suppliers, appropriate forms of storage and transportation are searched, such as connecting parts and benefiting inputs, defining which professionals will need to be hired and trained, among other measures. Continuous improvement Once launched, both the product or service and the process flows used to produce and deliver them to end customers are constantly measured and analyzed, with the aim of looking for ways to improve them even more, adding even more perceived value to the final customers.

CAD- Computer-aided design is the use of computer systems to aid in the creation, modification, analysis, or of a design. CAD software is used to increase the productivity of the designer, improve the quality of design, improve communications through documentation, and to create a database for manufacturing.

CAM (computer aided manufacturing) - Computer-aided manufacturing (CAM) is an application technology that uses computer software and machinery to facilitate and automate manufacturing processes. CAM is the successor of computer-aided engineering (CAE) and is often used in tandem with computer-aided design (CAD).

N/C Machine (numerically controlled) - Numerical control, popularly known as the NC is very commonly used in the machine tools. Numerical control is defined as the form of programmable automation, in which the process is controlled by the number, letters, and symbols. In case of the machine tools this programmable automation is used for the operation of the machines. FMS (Flexible manufacturing systems) - A flexible manufacturing system (FMS) is a method for producing goods that is readily adaptable to changes in the product being manufactured, both in type and quantity.

Question3. Medanalysis, Inc., provides medical laboratory services to patients of Health Providers, a group of 10 family practice doctors associated with a new health maintenance program. Managers are interested in forecasting the number of blood analysis requests per week. Recent publicity about the damaging effects of cholesterol on the heart has caused a national increase in requests for standard blood tests. The arrivals over the last 16 weeks are given below. What is the forecasting demand for the next three periods? Calculate the forecast accuracy (MAD, MAPE, MSE and Tracking signal)

Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Arrivals 28 27 44 37 35 53 38 57 61 39 55 54 52 60 60 75

Linear Trend Intercept

Slope

28.50

2.35

MAD

6

MSE

61 Period 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Actual 28 27 44 37 35 53 38 57 61 39 55 54 52 60 60 75

CFE MAPE

13.53%

Forecast 31 33 36 38 40 43 45 47 50 52 54 57 59 61 64 66 68 71 73

Error 3 6 8 1 5 10 7 10 11 13 1 3 7 1 4 9

Linear Trend

80 70 60 50 40 30 20 10 0 1

6

Actual

11

Forecast

16

Period

0

Error^2 9 36 64 1 25 100 49 100 121 169 1 9 49 1 16 81

Forecasting demand for next three period are 68, 71 & 73. Using the below formulas, MAD, MSE, MAPE are calculated as: MAD = ∑ |Actual|t – |Forecast|t / n = 6 MSE = ∑ (|Actual|t – |Forecast|t)2 / n = 61 MAPE = ∑ |Actual|t – |Forecast|t/Actualt * 100 / n = 13.53% Tracking Signal = 8

Question4. A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision of two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines were purchased at the same time. The estimated probability of low demand is 0.30 and the estimated probability of high demand is 0.70. The net present value associated with the purchase of two machines initially is $75000 if demand is low and $130000 if demand is high. The net present value for one machine and low demand is $90000. If demand is high, there are three options. One option is to do nothing, which would have a net present value of $90000. A second option is to subcontract; that would have a net present value of $110000. The third option is to purchase a second machine. This option would have a net present value of $100000. How many machines should the manager purchase initially? Use a decision tree to analyse this problem.

Answer

Ev (node 4) = Max {90000, 110000, 100000} = $110,000 (Sub contract) Ev (node 3) = Max {(0.3*75000) + (0.7*130000)} = $113,500 Ev (node 2) = Max {(0.3*90000) + (0.7*110000)} = $104,000 Ev (node 1) = Max {113500, 104000} = $113,500 Hence the best option is to buy 2 machines and the expected payoff is $113,500.