BEMM462 OPERATIONS ANALYTICS REASSESSMENT - 2020/21

Instructor: Prof. Konstantinos (Kostas) Nikolopoulos

Summative Assessment 2: Individual Coursework

Length: 3000 words (±10%)

Weight: 70% of the overall module mark

Deadline: BEFORE 12.00pm (noon) 10th August 2021, submission via eBART

Please answer all questions. Neatly type your answers on a Word document and convert it to PDF before submitting. This is to ensure that all diagrams drawn, equations or outputs of analysis from any software used (e.g., Excel/R etc) used remain intact. Ensure that you include detailed explanations, examples, and workings on how you derive the answers to justify the marks allocated for each question. You must also supply the working files (spreadsheet screenshot, R script, etc) that you used to construct your analysis as an appendix in that word file that is converted to PDF.

Question 1. [40%]

(each sub-question carries equal weights)

(We are in the summer of 2021…) Dr. S. Shady manages the product innovation department of “M&M Technology Innovations Ltd.”. On 1/7/2021 Dr Shady has available funds of £1.000.000 and a 5-year product development horizon. “M. Mathers Innovation Space Ltd.” can offer the following patents for new products to Dr. Shady with promised returns from the development of prototypes after Patent Acquisition (PA) as follows:

Stan Bank offers to Dr Shady an annual interest rate of 4.99% for any cash deposit in 2021-2026. Dr Shady want to maximise his return on 1/7/2026. Dr Shady wants to use all the available initial funds on 1/7/2021 and reuse all available monies at the start of every year either in one of the new products or just deposit the returns in the bank for a year; however everything needs to be reused (that is, Dr Shady keeps no money sleeping under his pillow!). In order to diversify his risk, Dr. Shady does not want more than £200K to be used in any product.

a) Formulate this problem as an LP

b) Solve this LP in MS Excel

c) Solve this LP in R

d) Morgan Stanley estimates that 2022 will be a high-risk year and as such the returns from new product prototype developments could be deviating ±2.MM% from the aforementioned returns. How can this information influence your solution? Solve the new LPs in R [DD/MM/YY is your birth date].

Question 2. [40%]

Think of the logistics challenges Amazon UK is facing: they are sourcing from thousands of bookstores and through a few distributions centres they are delivering in millions of customers. Think now of the alternative setup that they just started implementing a few months ago where they have added another layer in this transportations network in-between the end customers and the distribution centres: that of collection points in local shops.

(a) Give a generic formulation of a logistics cost minimisation LP problem for Amazon UK before the layer with the collection points was added, (b) give a generic formulation of a logistics cost minimisation LP problem for Amazon UK with the collection points, (c) expand the latter so as to allow for transhipments in between the distributions centres and provide both a graphical network and an LP formulation, (d) Why did they decide to go for the introduction of collection points and under what conditions is this a sensible move?

Question 3. [20%]

Forecast the sales of iPhone 13 (in millions of units) on the quarter of its launch… (assuming this will be on Sep 2021 as is the case for Apple historically)

Some data to start with but do find much much more…

https://www.statista.com/statistics/263401/global-apple-iphone-sales-since-3rd-quarter-2007/

Any method(s) is allowed, however you are strongly advised to use a combination of expert opinions (as found in the internet) and regression approaches implemented in Excel (so as to account for the hundreds of influencing variables).