THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALL
SCM030
MSc/PGDip/PGCert in Supply Chain Management and Global
Logistics
Operations and Process Management
Wednesday 4 September 2019: 10.00 – 12.00
DO NOT TURN OVER UNTIL TOLD TO BEGIN
Instructions to students:
Section A consists of 20 multiple choice questions and is worth 40% of the marks
for this paper. Section A must be answered on the multiple choice answer sheet
provided, following strictly the instructions on that form. This form must be inserted
into your answer booklet prior to handing this in. Please ensure that you enter
your candidate number in the space provided at the top of the answer sheet.
In Section A you will score 2 marks for each correct answer and 0 marks for a
question you do not answer. There is no negative marking.
Section B consists of two questions – you must answer Both Questions. Each
question is worth 30% of the total marks for this paper.
A handheld calculator may be used when answering questions on this paper and it
must comply in all respects with the specification given with your Admission Notice.
The make and type of machine must be clearly stated on the front cover of the
answer book.
Materials:
Answer booklet and multiple choice questions answer sheet.
Casio calculators FX-83 (MS, ES or GT+) or FX-85 (MS, ES or GT+)
Dictionaries are not permitted.
This examination paper may not be removed from the examination room.
This examination paper consists of 6 printed pages including the title page. A
Multiple choice answer sheet is attached to the back of this exam paper.
© University of London 2019
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Section A
Answer ALL questions. Each question in Section A is worth 2 marks. Please
use the multiple choice answer sheet provided at the back of this exam
paper.
1. What is operations management?
a. An organisational function which provides products and services
b. The management of all day-to-day activities within an organisation
c. The management of processes and resources that create and deliver
products and services
d. The process of planning and controlling operational activities
2. All operations can be classified according to their 4Vs, volume, variety,
variation and visibility. Which of the following can be considered an
advantage of low variety?
a. Low unit cost
b. High flexibility required
c. Matching customer needs
d. High complexity
3. The ability to deliver products or services exactly when promised, and when
the customer needs them is a measure of:
a. Speed
b. Quality
c. Flexibility
d. Dependability
4. The operations frontier enables organisations to:
a. Compare its critical product or service attributes across different product
offerings
b. Illustrate their current industry position with regard to critical product or
service attributes
c. Assess their operational effectiveness by comparing against the current
best practices
d. Identify the strategic direction of competitors with regard to product or
service attributes
5. Which of the following is not an essential process flow measure?
a. Average flow time
b. Average inventory
c. Throughput
d. Queuing time
6. A call centre operator can process 10 calls per hour on average. What is
the average time a customer spends in line when there are on average 4
customers in line that are either being processed or waiting to be
processed?
a. 20 minutes
b. 24 minutes
c. 32 minutes
d. 40 minutes
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7. Which of the following actions is not suitable to reduce flow time of a
process?
a. Move some work off the critical path
b. Shift of work to non-bottleneck resources
c. Eliminate non-value adding activities
d. Increase the speed of the operation
8. Given an effective unit load of 15 minutes per flow unit and a resource pool
of 3 identical resource units, what is the effective capacity?
a. 3 units per hour
b. 10 units per hour
c. 12 units per hour
d. 15 units per hour
9. A process bottleneck describes the resource pool…
a. With the smallest effective capacity
b. With the lowest capacity utilisation
c. With the smallest number of resource units
d. That is on the critical path
10. What is the difference between seasonal inventory and safety inventory?
a. Seasonal inventory is required for a level capacity strategy while safety
inventory is required for a chase-demand strategy
b. Seasonal inventory is required for coping with predictable fluctuations in
supply and demand while safety inventory is required for dealing with
unpredictable fluctuations
c. Seasonal inventory is for supply management while safety inventory is
for demand management
d. Seasonal inventory is required for dealing with supply disruptions while
safety inventory is required for dealing with surges in demand
11. Global Auto Parts (GAP) assembles interior modules for the automotive
industry. The company expects annual demand of 120,000 at a cost per
item of €500. The cost of ordering is €80, whilst the estimated annual
holding costs amount to 24% of the item cost. What is the EOQ for GAP?
a. The EOQ is 400
b. The EOQ is 1,000
c. The EOQ is 2,000
d. The EOQ is 10,000
12. Why are aggregate forecasts of demand more accurate than individual
forecasts?
a. Because standard deviation of the aggregated demand is larger than the
sum of individual standard deviations
b. Because aggregation minimises the error caused by inconsistencies in
individual forecasts
c. Because variance of aggregated demand is less than sum of individual
variances
d. Because larger than average demand values are likely to offset by
smaller than average values when we aggregate
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13. For one of its best-selling products, a retailer for electronic items faces a
weekly demand with a mean of 5000 units and a standard deviation of 1000
units. Given that the supply lead times is four weeks, how much safety
inventory should the retailer keep to achieve a service level of 95% (note
that z needs to be equal to 1.65 in this case)?
a. 1000
b. 3300
c. 5000
d. 23,300
14. Which of the following is a cause of delays and queues in make-to-order
operations?
a. Variability in processing times
b. High capacity utilization
c. High inflow rate
d. All of the above
15. A capacity management strategy that aims to align capacities and demand
by continuously adapting capacities is called:
a. Level capacity strategy
b. Chase demand strategy
c. Demand management strategy
d. Yield management strategy
16. Statistical process control is concerned with
a. Meeting internal expectations
b. Meeting external expectations
c. Minimising stochastic variability
d. Eliminating normal variability
17. Errors occurring when no action is taken as a process exhibits a measure
within the control band although it is out of control are called:
a. Type I errors
b. Sampling error
c. Type II errors
d. Control error
18. Which of the following is not one of the seven types of waste identified by
Toyota according to the lean methodology:
a. Overproduction
b. Defects
c. Waiting
d. Movement
19. Which of the following statements is correct about the Kanban system?
a. It is a method for implementing push systems
b. It is a method for managing inventory of finished products
c. It is a system of triggering production in upstream resources
d. It is a system for stopping production when there is no customer order
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20. According to the environmental bottom line, organisations should aim at
a. Improving or at least to not worsening environmental conditions
b. Creating economic value while addressing the financial demands of
stakeholders
c. Establishing fair business practices with the employees, suppliers and
customers
d. Minimising the consumption of transforming resources
Section B
Answer both of the following questions. Each question in Section B is worth
30 marks.
Question 1
At the Royal London Hospital’s emergency room, on average 20 patients show
up per hour and are processed at the same rate. Arriving patients wait in queue
till being called in for registration. Afterwards, they are assigned a bed where
they wait till an intern is ready to see them. After consultation, patients are either
identified as routine case, prescribed medication and released, or admitted to
the hospital for further tests. On average, there are 30 patients waiting for
registration and another 20 waiting to be seen by an intern. A recent study
determined that 75% of the patients simply require routine treatment.
i.
Given the current system, how long do patients spend in the emergency
room before being released or admitted? (6 marks)
After some complaints, Royal London Hospital implements a new system that
separates the emergency room into two treatment areas, one for routine care
and another for emergency cases. A nurse assigns the patient to one of the two
tracks after registration. Routine patients are afterwards seen by an intern who
either prescribes medication and releases them or moves the patient to the
emergency track in case the nurse has made a mistake. Emergency patients
are seen by an intern who either admits them for further treatment or determines
that they are routine cases, prescribes medication and releases them. It is
determined that there are, on average, 20 people waiting to be registered, 5
waiting to be seen by the nurse, 10 waiting to be seen by an intern in the
emergency area, and 10 waiting to be seen by an intern in the routine care area.
ii.
Assuming that the nurse makes no mistakes, how long do patients that
are finally admitted spend in the emergency room? (12 marks)
iii.
How long do patients spend on average in the emergency room?
(6 marks)
iv.
How could the average flow time of the process be further improved?
(6 marks)
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Question 2
Quick&Chic is an online fashion retailer for occasion wear with monthly
changing offerings. As the operations manager of the company, you are
responsible for managing the required level of inventory each month. All
fashionable cloths have to be ordered four months in advance to the selling
month from a contract manufacturer at an average purchase cost of €120 per
unit. During the promotion month, the advertised items are sold at an average
regular price of €390 each. Due to the fast changing trends in the fashion
business, outdated items that have not been sold during their intended
promotion month can only be sold at a discount price of €90 per unit in the
following months. Just as many online retailers, Quick&Chic faces a
considerable level of demand uncertainty and does not know how many
customers will order online during the promotion month. To tackle this problem,
the company has collected several months of demand data that can be
summarised as follows:
Demand
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
Frequency
1
3
2
5
1
6
7
6
8
5
4
1
3
Referring to the newsvendor approach, answer the following questions:
i.
What is the optimal level of product availability given the price and cost
structure of the fashion products? (6 marks)
ii.
Given that the demand distribution remains unchanged, how many
pieces should be ordered from the contract manufacturer in advance to
the selling month? (12 marks)
iii.
If the company was able to reduce the lead time of its fashion items, what
was the impact on forecasting, service levels and inventories? (6 marks)
iv.
Discuss what else the fashion retailer could do besides shortening the
supply lead times in order to reduce demand uncertainty and the underand overstocking risk. (6 marks)
END OF PAPER
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