BUSI4401 OPERATIONS AND SUPPLY CHAIN STRATEGY AND PRACTICE 2019-2020
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BUSI4401
A LEVEL 4 MODULE, SPRING SEMESTER 2019-2020
OPERATIONS AND SUPPLY CHAIN STRATEGY AND PRACTICE
SECTION A
Compulsory
1. (a) An operations strategy like “Quick Response” could provide firms with a competitive edge. Discuss the impact of operations strategy with respect to different performance objectives, and the procedure to implement an operations strategy.
[50 marks]
(b) Explain why outsourcing has become an important element of competitive strategy. How might a firm decide to outsource?
[50 marks]
SECTION B
Answer two questions
2. Discuss how new product or service development relates to process management. Use an input-transformation-output diagram to aid you in your discussion. How can new product or service development be improved from an operations management perspective?
[100 marks]
3. Describe the main types of Process Technology, giving examples. What are the dimensions of IT-rich process technology? How do these dimensions help to overcome some of the traditional trade-offs in cost and flexibility? Give examples.
[100 marks]
4. (a) Discuss an example of process standardization that achieves a balance between the advantages of the pull- and the push-based systems.
[50 marks]
(b) Under what circumstances the business is more likely to operate with many small sites than with fewer larger sites? Illustrate your points for an example product.
[50 marks]
5. Suppose a garment factory supplies a certain type of winter jackets for a local shopping mall. The mall predicted two scenarios of the demand for the winter jackets: high demand of 400 units with probability 0.4 and low demand of 200 units with probability 0.6. The production cost of the jackets is 30 pounds per unit. The wholesale price and the selling price of the jackets are 50 pounds and 100 pounds per unit, respectively. Any jacket that is not purchased in the winter can be sold to the discount store at 10 pounds.
(a) Is this supplier-buyer system a make-to-order (MTO) system or a make-to-stock (MTS) system, and why?
[10 marks]
(b) What is the optimal ordering quantity of the jacket from the shopping mall to the garment factory for the incoming selling season?
[25 marks]
(c) Suppose this year the garment factory decides to use a return policy that allows the mall to return its unsold jackets with a price of 20 pounds per unit after the selling season. What will be the optimal purchase quantity of the mall considering this return policy?
[25 marks]
(d) Compute the expected profit of the mall and the profit of the garment factory for both case (b) and case (c). Discuss whether the mall has an incentive to accept the return policy, and whether the garment factory will keep using this policy if the mall accepts it.
[40 marks]
6. A company has an annual demand for a product of 2600 units. The weekly demand follows a normal distribution with mean of 50 units and standard deviation of 40 units. The cost to place an order is 1300 pounds, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is 4 pounds per unit. This company aims to satisfy a 95%
probability of not stocking out during lead time.
(a) Find the reorder point for this product.
[30 marks]
(b) What is annual cost for storing this product?
[25 marks]
(c) If the safety stock is reduced by 50%, what will the new service probability be?
[20 marks]
(d) Based on your result for (c), what do you observe regarding the relationship between safety stock and service level? What is the implication of this for inventory management?
[25 marks]
2022-08-16