FMPA21A
Activity Planning
and
Control Module
Table of Contents
1. Question 1,
page 2
GROUP ASSIGNMENT 01
2. Question 2,
page 5
Due date: 7 May 2016
3. Question 3,
page 7
4. References,
page 11
Team Members
Theuns Botha
Jean Aucamp
Rozanne De Beer
Jacqueline Naidoo
Laiken Bruwer
Page Count: 11
Word Count: 2307
Referencing: Harvard method
Page 1 of 11
Question 1
Introduction:
Internal environment refers to events, factors, people systems, structures, and conditions inside
the organization that are under the control of the company
The company`s mission statement, organizational culture and the leadership style are factors most
associated with the internal environment of a company.
It is the internal environment that will influence the organizations activities, decision`s and
behaviour and employee attitudes
Changes in the leadership style and qualities, the mission and culture have the most considerable
impact on the organization.1
Question 1
A. The increased use of local and wide area Networks (LANs and WANs)

LAN
Pro`s
-
Easy programming and assembling
-
The speed will be much faster when the PC is connected through the internal network cable
-
Management on the pcs are also a lot easier as each pc is managed individually.
-
The cost of LAN is much cheaper as it can be managed through one domain
-
Faster data transfer rate from an individual onto the server
-
Data gets stored centrally on the server
-
Increased security on the intranet
Con`s
-
Distributed data sharing in LAN gets stored locally on each pc and if a specific machine is
turned off, other pcs cannot navigate on shared files
-
Investment in higher costs due to servers that are required
-
Poor scalability the large number of computers will cause management navigational
difficulties
-
The ability the prevent attacks from the internet no less by the firewall system in specific.
Page 2 of 11

-
WAN
Easy to lose connection, most of the time it is suitable for online applications like emails, web
browsing etc
-
Internet activities is not limited or
-
Multiple area networks are required to be connected with each other so one complexed
network and the organization can stand out and manage regulation
-
Costs for equipment and technology to get the WAN up and running is very expensive. 2
B. An increased emphasis on service
-
Loss of current customers
Poor service can lead to loss of the most loyal and forgiving customers
-
Loss of potential customers
Poor service can lead to loss of growing the company`s customer base before they even consume
or purchase a product, First impressions always count, the way an employee greets, speaks, the
knowledge of the product that is being offered or even arrogance from staff can lead to a potential
customer walking away
-
Loss of future customers
Consumers easily spread their negative experience, very few time are they publish their good
experience, family members, friends and colleagues are most likely to be a company’s biggest form
of advertising whether it is good or bad.
-
Loss of reputation
Reputation is one of the key elements of a business being kept stable or alive; a company doesn’t
just lose customers but also potential investors or business partnering.
-
Loss of employees or potential highly skilled new employees
The possibility of hiring new qualified staff can also be at stake because no individual wants to work
for a bad company, the way an employer treats customers is a reflection of how the employees are
being treated.
-
Loss of Profits
Page 3 of 11
Poor service typically means a decline is customers, which means that sales reduce and ultimately
so does profits, this brings the company right down to the ground because a company needs those
profits to maintain the business and its customers, Any company that cannot keep up with financial
demands will never be a success
C. The increased role of woman in the workplace
The increased role of woman in the workplace could require an increased emphasis on diversity,
performance drivers and creating of appropriate human resource policies. The ‘double burden’
syndrome (work and domestic responsibility) still has a big impact on woman in the workplace.
Woman in general are caregivers, so this could require more time off work for ‘family responsibility’
leave, maternity leave, adjusted working hours, as well as telecommuting / working remotely. As per
a study done by *McKinsey & Company – a management consulting firm, maternity leave and
reduced mobility are seen as serious handicaps: in the US, 62% of woman perceive family or
personal obligations as an obstacle to promotion. There are companies in France who believe that
having children, or being of child-bearing age, is a real or perceived barrier for employers. Woman
are more diverse and unique in their own way, preferring to work in a safe and positive environment,
where this would usually not effect men as much. Woman tend to have difficulty identifying with
success, usually because of the lack of female role models and even have lower ambitions than
men. Woman tend to rate their performances lower to that of their co-workers, where men rate
themselves higher than their co-workers.
D. The seemingly increasing rate at which both internal and external environments
change
“If there is anything that is steadfast and unchanging, it is change itself” 3
Change is inevitable, and if you are an organization that does not accept change or make
adjustments based on changes in the organization, you could be setting yourself up to fail.
Internal factors affect the organization directly / internally. They are; management changes,
employee morale, cultural changes & financial changes / issues. Generally they are not that hard to
control and some can be predicted.
External factors that can have an effect on operational management strategy, consist of; changes
to the economy, treats from competition and the industry itself. External changes can be hard to
prepare for and sometimes unpredictable.
With all these environmental factors, companies need constantly adapt and change perspective,
focus on main problems as opposed to specific process or products.
Page 4 of 11
Question 2
You wish to compete in the super premium ice cream market. The task is to determine the wants of
the super-premium market and the attributes/how’s to be met by their firm. Use the house of quality
concept.
Market research has revealed that customers feel four factors are significant in making a buying
decision. A “rich” taste is most important followed by smooth texture, distinct flavour, and a sweet
taste. From a production standpoint, important factors are the sugar content, the amount of butterfat,
low air content, and natural flavours.
Answer
We need to understand the term super premium to realise in what kind of market we wish to
compete.
Dictionary.com defines premium: of exceptional quality or greater value than others of its kind;
superior; of higher price or cost.
Collins Dictionary defines the word super premium as an adjective meaning higher in price or value
than a premium product.
Clearly we are dealing with a market that demands only the best. Luckily the market is vast and in
a country like South Africa the super-premium ice cream market is a broad, extensive one.
But it is also a unique market with many small enterprises offering a product of premium quality. On
12 December 2015 traveller24.news24.com4 reported on the 20 most popular ice cream parlours in
South Africa, and it is interesting to see that all of these manufacturers are unknown and not your
everyday household names.
Times Live5 reported in their Food column that a Cape Town based manufacturer called The Nice
Company makes South Africa’s best ice cream. The Nice Company’s Cherylle Cowley says that
they don't use any mass-produced or processed ingredients and absolutely no artificial flavourings.
They only use real ingredients that create the lovely flavours, which according to her produces “an
honest ice cream”.
She said at first people hesitated to pay a premium price for fresh dairy ice cream, but that it is
changing. The Nice Company only makes use of local, nearby suppliers — the frozen berries come
from Hillcrest Farm in Franschhoek, the cream from a dairy in Darling, and the milk and yoghurt
from Fair Cape. The chocolate however is imported, as the 70% Belgian coverture has simply been
better than the rest.
Page 5 of 11
Häagen-Dazs, a famous ice cream brand made in the USA, also has franchises in other countries
around the world. It holds the distinction of being one of the few ice cream brands not to use
stabilizers such as guar gum, xanthan gum, or carrageenan. It is quite dense — very little air is
mixed in during the manufacture process — no emulsifiers or stabilizers other than egg yolks are
used, and it has a high butterfat content. Consumers are also advised to store their ice cream at
−18 °C in order to keep its intended firmness.
More commonly known in South Africa, is Nestlé. It is an ice cream that can be purchased in various
quantities and flavours, and it sells is most retail outlets across the world. Nestlé was judged to be
no. 2 on Grab List’s6 survey of the world’s 10 best ice creams in 2015, while Häagen-Dazs, also
available in selected stores, was in fourth place.
Page 6 of 11
Question 3
What techniques would you use and what conclusions can you draw about defects in the accounts
receivable department?
Category
Frequency
Percent
Cumulative
108
54%
54%
Check (payment) not received on time
30
15%
69%
Invoice not on record (not found)
24
12%
81%
No formal invoice issued
18
9%
90%
Invoice number and invoice referenced do not agree
12
6%
96%
8
4%
100%
Invoice amount does not agree with the check amount
Check not signed
200
Fa i lure to cross reference
27% of errors appear
to be result of
procedural problems
100%
A Pareto chart is utilised to break down the defects into the relevant contributions:
1. The most obvious problem, 54% of the checked sample relates to the failure of cross
referencing the invoice with the company records
2. 15% relates to late payments, a ostensible invoice-filing problem or late issuing of invoices
or combination thereof
3. 27% of the defects appears to be a result of routine glitches which in more common terms
are referred to as procedural problems
4. 4% of the defects are pure lack of attention to detail from the issuing party.
Page 7 of 11
Question 4
Moses Engineering has a contract for 130,000 units of a new product. Enoch Jumper, the
owner, has calculated the cost for three process alternatives. Fixed costs will be: for general purpose equipment (GPE), R150,000; flexible manufacturing (FMS), R350,000; and dedicated
automation (DA), R950,000. Variable costs will be: GPE, R10; FMS, R8; and DA, R6.
Which should he choose?
Calculations
Variable cost for 130 000 units
To manufacture 130 000 units on GPE
= Fixed cost + (variable cost/unit x 130 000 units)
=R
150 000 + (R10/unit x 130 000 units)
=R
150 000 + R1 300 000
= R 1 450 000
To manufacture 130 000 units on FMS
= Fixed cost + (variable cost/unit x 130 000 units)
=R
350 000 + (R8/unit x 130 000 units)
=R
350 000 + R1 040 000
= R 1 390 000
To manufacture 130 000 units on DA
= Fixed cost + (variable cost/unit x 130 000 units)
=R
950 000 + (R6/unit x 130 000 units)
=R
950 000 + R780 000
= R 1 730 000
Page 8 of 11
Graph
Visual Illustration (Synopsis of Situation)
2 000 000
1 800 000
R1 730 000
1 600 000
R1 450 000
1 400 000
R1 390 000
Rand
1 200 000
R950 000
1 000 000
800 000
600 000
R350 000
400 000
200 000
R150 000
0
0
130 000
Units
GPE
FMS
DA
Page 9 of 11
“Whether we approach the solution to this problem as cost maximization really makes no difference
as long as the relationships remain linear: that is, variable costs and revenue are the same for each
incremental unit.” (Jacobs, n.d.)
General-Purpose Equipment (GPE)
Definition: “Less specialized equipment is referred to as “general-purpose,” meaning that it can be
used easily in many different ways if it is set up in the proper way.” (Jacobs, n.d.)
GPE options are cheaper for smaller contracts but might not be time efficient and create more
labour.
However, Moses Engineering has a bigger contract and GPE will be the 2nd most expensive option
out of the 3 as seen on the graph.
Dedicated Automation (DA)
Definition: “Automated manufacturing is a manufacturing method that relies on the use of
computerized control systems to run equipment in a facility where products are produced. Human
operators are not needed on the assembly line or manufacturing floor because the system is able
to handle both the mechanical work and the scheduling of manufacturing tasks.” (Anon., n.d.)
http://www.wisegeek.com/what-is-automated-manufacturing.htm
Automated manufacturing systems is the most expensive option out of the three but would be the
ideal choice if the contract was bigger.
Flexible Manufacturing systems (FMS)
Definition: “An FMS is a totally automated manufacturing system that consists of machining centers
with automated loading and unloading of parts, an automated guided vehicle system for moving
parts between machines, and other automated elements to allow unattended production of parts. In
an FMS, a comprehensive computer control system is used to run the entire system.” (Jacobs, n.d.)
The machines are a commitment and need quality checks other than that, they can be left for long
periods of times. They are time efficient once set up properly. There’s also a considerably less
amount of labour needed, saving money.
Moses Engineering should invest in FMS for the practical reasons stated above and it’s the cheapest
option out of the three when evaluated on the graph.
Conclusion: To manufacture 130 000 units, the most cost effective process to use for Moses
Engineering would be Flexible manufacturing (FMS).
Page 10 of 11
References:
1. http://yourbusiness.azcentral.com/poor-customer-service-affect-business-3062.html
,
Accessed 02 May 2016
2. https://sites.google.com/site/vandangcdth10/introduction/advantages-and-disadvantages
,
Accessed 01 May 2016
3. http://study.com/academy/lesson/internal-and-external-environments-of-business-lessonquiz.html, Accessed 01 May 2016
4. http://traveller24.news24.com/Explore/SAHolidayGuide/20-best-ice-cream-shops-in-sa20151212 , Accessed 01 May 2016
5. http://www.timeslive.co.za/food/2012/02/05/sas-best-ice-cream , Accessed 03 May 2016
6. Grab List’s7 survey of the world’s 10 best ice creams in 2015 , Accessed 01 May 2016
7. Anon., n.d. http://www.wisegeek.com/what-is-automated-manufacturing.htm. , Accessed 03
May 2016
8. Anon., n.d.
https://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&
ved=0ahUKEwjv3OnD6rjMAhULI8AKHXqZANIQFggfMAE&url=http%3A%2F%2Fwps.pren
hall.com%2Fwps%2Fmedia%2Fobjects%2F9434%2F9660836%2Fprac_prob%2Fheizer10f
lex_ch07_pp.doc&usg=AFQjCNGi6jL. , Accessed 02 May 2016
9. Jacobs, C., n.d. Operations and Supply Chain Management. In: s.l.:McGraw-Hill/Irwin, p. 200,
Accessed 02 May 2016
10. Jacobs, C., n.d. Operations and Supply Chain Management. In: s.l.:McGraw-Hill/Irwin, p. 774.
, Accessed 04 May 2016
11. http://www.raeng.org.uk/publications/other/women-matter-oct-2007 , Accessed 04 May 2016
12. http://www.123HelpMe.com/view.asp?id=156795&gt, Accessed 04 May 2016
13. www.thersagroup.com/woman/ , Accessed 03 May 2016
14. http://study.com/academy/lesson/internal-and-external-environments-of-business-lessonquiz.html , Accessed 03 May 2016
Page 11 of 11