APPENDIX 4 – SAMPLE PREVIOUS EXAM
NOTE: the exam paper may differ from this format.
SUMMER TRIMESTER EXAMINATION - 2021
Academic Year - 2020/21
Bachelor of Business Studies (Singapore)
BMGT3009S
OPERATIONS MANAGEMENT
Time Allowed: 2 Hours
Instructions for Candidates
Answer any FOUR (4) out of six (6) questions.
All questions carry equal marks.
Non-programmable calculators permitted.
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QUESTION 1
a. Describe the difference between a top-down (directed) and a bottom-up (emergent)
view of operations strategy, with reference to a specific example.
(10 marks)
A top-down view of operations strategy will align the operations with what the
whole group or business aims to achieve through implementing the corporate
strategy, business strategy and functional strategy in a hierarchy manner from
the higher to lower level whereas a bottom-down view of operations strategy will
consider the circumstances and the capabilities gained from the bottom level, its
functions’ day-to-day experiences in reviewing its business and corporate
strategy at the higher level.
An example of this top-down view of operations strategy is per following:
A German manufacturer supplying industrial cooking equipment being one of the
top leaders in Europe would like to expand its market to Asia regions ahead of its
competitors to gain a significant market share and set up its corporate strategy to
be one of the leading market players for Asia regions through establishing a
Singapore office as its expansion plans into gaining market shares in Asia. Its
business strategy in Singapore office will be aligned with this corporate strategy
to forming its missions and objectives such as gaining market share rapidly in
compared to its competitors through lower price with high quality equipment,
providing competitive advantages over its competitors through fast delivery by
fulfilment of orders through establishing of a distribution centre in Singapore.
Lastly, its functional strategy will be set up per following to meet the business
strategic objectives: having the sales department to hitting monthly set sales
targets and having its purchasing department to maintaining sufficient levels of
inventories stocked in Singapore distribution centre to fulfil orders in short lead
times for the Asian customers.
An example of this bottom-down view of operations strategy is as above
mentioned German manufacturer started to gain significant market share in Asia
markets and built up its network of the customers through their reputable service
and fast delivery, upon reviewing with its sales and technical departments, it
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realised that some of the existing customers have plan to open new chain
restaurants in different Asia regions therefore it decides to review its corporate
and business strategy to develop these customers as key account focus group
towards developing long-term businesses with them in generation of higher and
more stable sales in the next 5 years through providing fast delivery, quality sales
and service support.
b. Compare a low-cost and a full-service airlines in terms of their operations strategy
and the operations decisions they make to implement the strategy.
(15 marks)
The operation strategy for low-cost airlines are focusing to provide affordable air
travel options by operating with a lean, efficient business model through incorporating costs
minimisation while maintaining the satisfactory service level through the following:
1) maintain simplified operations by streamlining their operations offering point-to-point
flights rather than hub-and-spoke systems to reduce turnaround time and maximise utilisation
of the aircraft.
2) reducing cost through operating a single type of aircraft to reducing training and
maintenance expenses.
3) Deploying high seat density by minimising each seat’s allowance to maximise revenue per
flights.
Whereas the operation strategy for full-service airlines are to providing a wider and
distinctive range of services and amenities to passengers and focusing on delivering a
superior customer experience while offering various flight options and additional services
through the following:
1) Providing extensive route networks by operating hub-and-spoke systems through
connecting multiple destinations with major hubs, offering a wide range of flight options to
passengers.
2) Providing high service levels by emphasizing on passenger’s convenience and comfort
through additional available amenities such as in-flight entertainment, complimentary meals
and more baggage allowances.
3) Investing in customer loyalty programs to retain and reward frequent flyers to retain
customers by offering benefits such as upgrades and exclusive services.
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The operation decisions made by low-cost airlines to implement the strategy are per
the following:




Adoption of dynamic pricing strategies such as adjusting fares based on demand, time
of booking and available seats to optimise revenue and fill flights to their maximum
capacity.
Selection of fleet by choosing aircraft models that offer fuel efficiency, lower
maintenance costs and higher seat capacity.
Maintaining quick turnaround times between flights to optimize operations and
utilisation of the flights’ available capacity to generate revenue.
Using direct sales and distribution channel to avoid paying commissions to 3rd parties
agents to reduce distribution costs.
The operation decisions made by full-service airlines to implement the strategy are
per the following:




Planning of network to design their routing of flights to focus on key business and
leisure destinations while evaluating demand, competition and profitability of
different routes to maximise their revenue.
Providing service differentiation by investing in onboard services such as in-flight
meals, entertainment, comfortable seating and high service levels from their cabin
crews.
Employing revenue management systems to optimise pricing and seat allocation
across different fare classes to maximise revenue for each flight.
Forming alliances and codeshare agreements with other carriers to expand their
network reach and provide seamless travel options to passengers.
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QUESTION 2
a. Describe the effects of demand and supply uncertainty on supply chains and how
they can be mitigated. Give an example of an industry which shows both demand
and supply uncertainty and outline those uncertainties.
(15 marks)
Demand and supply uncertainties are likely to pose significant impact on
supply chains and leads to various challenges and disruptions.
The effects of demand uncertainty are per the following:
 Stockouts and excess inventory: If demand exceeds supply, fluctuating
demand can lead to stockouts. If demand falls short, fluctuating demand
can lead to excess inventory.
 Bluewhip effect: Demand fluctuations can amplify and cause inefficiencies
to supply chain partners if they overreact to the situation.
 Inaccurate forecasting: Demand uncertainty can lead to forecast errors
and suboptimal inventory management.
 Delay in replenishment: Demand fluctuations may need adjustments in
production or procurement which lead to delays and inefficiencies.
 Higher costs: Demand fluctuations may cause the need for expedited
shipments, production inefficiencies thus increasing overall costs.
The effects of supply uncertainty are per the following:
 Disrupted production: Unreliable supply of inputs may disrupt production
schedules, leading to delays, idle capacity and reduced output.
 Quality and consistency issues: Inconsistent supply may lead to variations
in quality and reduction in customer satisfaction.
 Increased costs: Disruption in supply may cause the need to use
alternative suppliers, expedited shipping, or higher cost materials, resulting
in increased costs.
 Supplier relationships: Supply uncertainty may worsen the relationships
with suppliers, causing reduced trust and may impact future collaboration.
Supply chains may apply the following strategies to mitigate the effects of demand
and supply uncertainty:
Implement collaborative planning to share information with supply chain partners to
improve visibility and reduce uncertainty.
Build flexibility in the operations such as adopting lean manufacturing to be able to
respond quickly to demand or supply fluctuations.
Maintain safety stock levels and extra production to handle unexpected demand or
supply disruptions.
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An example of an industry that faces demand and supply uncertainties is the
fashion industry per the following elaborated points.
1) Fashion trends could be highly volatile and may face dynamic or quick change for
its demand levels, thus making it difficult to provide accurate forecast of demand for
specific items in terms of different designs, colours and styles.
2) The fashion industry relies on global sourcing and production thus could be
vulnerable to supply disruptions caused by varying factors such as trade restrictions
and natural disasters.
b. Explain the difference between reorder point and order-up-to inventory systems.
How do the two systems compare in terms of inventory costs and management of
risk?
(10 marks)
Reorder point systems involve continuous review approach, whenever the
inventory reach the pre-set level which is often the Economic order quantity set up for
the item, a replenishment order of constant order size will be triggered and timing of
placing the replenishment order usually vary whereas the order-up-to inventory
systems involve a periodic review approach, which will place replenishment orders at
a fixed, regular time interval with varying order quantity to bring up the inventory level
up to the pre-determined level.
At times of sudden surge of abnormal high demand, there will be stock-out
costs incurred for order-up-to inventory systems as it orders stock at a fixed time
interval where stock could be depleted before the fixed time interval to place
replenishment order while reorder point systems will be able to capture this surge of
demand faster to place replenishment order once the inventory level falls to the preset level. When faced with sudden huge drop in demand, there will be higher storage,
operating inefficiency and obsolescence costs incurred for reorder point systems as it
places the replenishment order at the pre-set order size once inventory reached the
reorder point thus resulting in excess stock whereas order-up-to inventory systems
could be able to adjust its order size by lowering the pre-determined level when it
realize excess inventory during review at the fixed time interval.
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QUESTION 3
a. Think about the last time you went to a restaurant, coffee shop, or similar service.
Draw a process flow diagram of your experience identifying the 6 or 7 main steps
in the process.
(10 marks)
The following process flow diagram is what I had drawn based on my
experience in visiting a casual dining restaurant.
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b. If you were the manager of the establishment, what data would you measure
regarding the process and how would you think about improving the system?
(15 marks)
If I was the manager of the establishment of this casual dining restaurant, I
would measure the following on a regular time basis to monitor on its performance
levels based on the key objectives it should achieve towards generating sales and
also monitor on the costs and revenues which are vital to the sustainability of this
business.
1) Revenues, net income and profits after deduction of expenses to measure the
sustainability and financial health of the business.
2) Total costs incurred including operating costs, purchases expenses, utilities costs
and spoiled foods which had to be discarded to understand and analyse to work out
on costs which could be reduced.
3) Speed performance objectives by below measures to understand the current
performance levels and work on improvements.
-throughput time of the whole process for each customer from queuing for seat to
making payment after the dining;
-queuing time before being seated;
-waiting time from placing order to getting the food served to them.
4) Quality performance objectives measure through online surveys to gather customer
feedback on their satisfaction levels in terms of the quality of food, service they
received to understand what are the areas of improvements required to maintaining
or improving on this performance objectives.
5) Peak hour traffic: To understand the customer’s flow at different times of the day to
allocate the most possible adequate levels of manpower to manage costs and
maintain the required service levels.
I would also improve the current process by increasing the turnaround time for tables
by reducing the time customer takes up the seat through the following which will speed
up the waiting time for food too for the customer and also help to reduce the waiting
time for new customers in the queue waiting for seats.
1) providing customer the QR code first to browse the menu online at our ordering site
and add the items into cart while queuing for seats.
2) once seated, they can enter the seat number at our online ordering site and place
order straight away.
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QUESTION 4
a. Explain six (6) seasonalities of demand in capacity management. Illustrate how a
hotel or similar service may be affect by any 3 of the seasonalities of demand.
(10 marks)
The six seasonalities of demand in capacity management are per the following:
1) Climatic: Changes in demand are affected by the climate, weather changes
such as winter, summer, autumn seasons impacting human activity and their
purchasing choices.
2) Festive: Changes in demand are affected by festivals such as Christmas,
Chinese new year impacting the demand level of products and services
during these periods.
3) Financial: The days where most people receive their paycheck, earnings such
as end of the month or early in the month may increase their purchasing
powers and cause increase in demand for products and services.
4) Social: Social interaction can also play a part in creating surge of demands by
influencing the consumers towards increasing their purchasing impulses.
5) Political: Political events which happen in cycles based around elections could
also impact human activities and cause demand level to change.
6) Behavioral: Individuals will usually have their own behavioral patterns formed
towards their purchasing activities which could create certain patterns or
change in demand.
A hotel service may be affected in following ways from below listed three
seasonalities of demand:
Festive: Surge in demand during festive seasons such as Christmas and New year
as more people take leaves for overseas trips and cause a peak period to form for
hotels with the increased tourists’ bookings of rooms.
Climatic: Asia tourists may increase for overseas countries such as Japan or Korea
during winter periods to experience the snow and cooling weathers and these could
cause surge in demands for hotels operating in these countries.
Behavioral: In some Chinese practices, there are some auspicious dates for wedding
events and the hotels may receive higher demand in these dates from customers to
booking for their services and rooms for wedding events.
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b. Explain how the undermentioned 3 operations may reconcile capacity and demand
in capacity management based on the 3 strategies “Absorb Demand”, “Adjust
output to match demand” and “Change demand”.
i.

A university in student admissions.
Absorb demand: By implementing fixed capacity regardless of forecast
demand’s fluctuations, it could maintain the list of available courses and start
them at fixed date no matter of how many students enrolled for each course
before the course’s start date.
Adjust output to match demand: By changing the capacity levels as closely to
match up to the demand patterns, it could have employ staff or contracted
staff to work overtime when there is increase of administrative works due to
higher enrollments of students.
Change demand: Changing the pattern of demand to bring it closer to
available capacity, it could deploy price differentials by adjusting price higher
for the courses with limited slots for students intake and at the same time,
offer students with alternatives of courses which are lacking for students
intake.


ii.
A restaurant based on customers dining in.
iii.
A public train transportation in passengers commuting.
(15 marks)
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QUESTION 5
Based on service-related company (e.g. restaurant, airline, hospitals etc.), explain the
following with examples of the management action required to achieve them:
a. The ‘involvement of everyone’ principle in lean operations.
(10 marks)
The “involvement of everyone” principle in lean operations is important for
service-related company as all the staffs from front-line workers to management
are one of the key resources that play a part towards delivering quality service to
customers or carrying in mind and driving the concept of continuous
improvements to implement them at the operation-wide, group or process and
individual level.
Based on example of a restaurant, the management could apply the following
actions to implement this principle:

Maintaining the discipline of work standards which are critical for the safety
of staff, providing quality services in terms of high levels of hygiene and
serving of customers towards delivering of consistent service levels,
minimize disruptions to operations flow.

Delegating responsibility to the staffs who are the ones executing the tasks
for each operation such as providing them the rights to trigger stop of
processes for certain events when issues or deviations are detected
(example: stop using certain batch of food ingredients in cases of
customer complaints’ on its quality) and encouraging them to provide
feedbacks on regular basis on improvement suggestions. This will
encourage the staff to feel higher sense of ownership and responsibility for
their work towards contributing to the company and promote continuous
improvement mindset.

Providing training to team leads and managers on incorporating lean
operations and management for them to implement lean management and
conduct the right practices towards maintaining and driving all their team
members in the right culture of continuous improvement in the daily
operations.
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b. Elimination of seven (7) types of waste in its lean operations
(15 marks)
The 7 types of waste in the lean operations for a restaurant are explained with
examples per the following :

Over-production: Producing more than that is required by the customer
which would lead to waste. To be aligned to lean practice, output should
be triggered based on a pull system in line with the actual customer
demand. Example of this could be the chefs making dishes in advance
based on rough estimation without receiving actual order.

Waiting: Time spent in waiting impedes the flow of service and is not
value-adding to the customer. Example of this could be having customer to
wait for the servers to take their orders.

Transport: The movement of products, customers or information from one
location to another which does not add value to the customer and
decrease efficiency. Example of this is inappropriate placement of food
ingredients causing the chefs, kitchen helpers having to walk around more
to get the food ingredients for preparation of dishes.

Overprocessing: More work is done to a product or process than is
required by the customer which are not valued by the customer. Example
of this is having customer to take a new queue number after their original
queue number is missed.

Inventory: Incur expenses that has not yet generated any revenue for the
business and could impact the problems to be detected early. Example of
this is placing orders for food ingredients more than usual or required just
to take on bulk discounts.

Motion: Excess motion waste time and could pose safety issues to the
workers or damage to the equipment. Example of this could be
disorganised placement of knives away from the food preparation desk
causing chef requiring to search and bring the knives from further places
to the food preparation desk.
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
Defect/rework: Extra costs and delays to the operation caused by defects
which could reduce the quality levels of services. Food ingredient which is
not fresh being used could cause the change in food quality and taste
causing customer to complain and incurs extra costs, time to resolve the
complaint by replacing a new dish to customer and or making
compensations to the customer.
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QUESTION 6
Through scenarios and examples, write short notes on the following operations
improvement:
a. Breakthrough, continuous & combined improvement patterns.
(5 marks)
b. PDCA Cycle.
(5 marks)
c. Business Process Re-engineering (BPR).
(5 marks)
d. Six Sigma.
(5 marks)
e. Balanced Score Card.
(5 marks)
oOo
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