Faculty of Business & Economic
Sciences
Managing tomorrow
Study Guide 2024
Department of Management Practice
2nd Avenue Campus
Business Management 2 / Business Operations 2
EBM2010 / EBM2020
Qualification Codes: 4543 / 4524 / 4617 / 4614
Date of Implementation
: September 2010
Revision
: February 2024
Compiled by
: Dr RJ Muller
EBM2010/EBM2020
VALUES ESPOUSED IN THE DEPARTMENT: MANAGEMENT PRACTICE
Staff and students affiliated to the Department Management Practice at the NMU
pledge to be guided in their actions and behaviours by the following Six Core Values:
Respect for Diversity - means understanding that each person is unique, recognising
peoples differences and understanding people, embracing and celebrating the rich
dimensions of diversity in NMU.
Ubuntu - means respecting fellow human beings, treat them fairly, disagree honestly,
enjoy their fellowship and work together for a common goal and help each other
achieve it. We commit ourselves to the tenets of ubuntu by recognising that “we are,
because others are”. We therefore treat one another with dignity and respect, and do
not entertain harassment, discrimination or incivility of any sort. We will interact with
our fellow students and with our staff in a timely, professional and responsible manner.
We expect the same supportive conduct from staff in their relations with students and
colleagues, both in the classroom and in any other area of interaction.
Excellence - means an individual's highest level of quality and his will to win, his
personal excellence. We commit ourselves to excellence in our academic work by
fulfilling and exceeding course requirements. We will make the time commitment
necessary to prepare properly, make meaningful contributions and participate in group
and class activities with thoroughness and dedication. We will be on time for all classes
and formal activities, and will turn all work in on time. We realise that the programmes
involve teamwork and accept the responsibilities associated with team membership.
We recognise that we are quantitatively judged by grades and minimum requirements.
We commit ourselves to consistently demonstrate excellence throughout our
academic studies, and to take the personal initiative to show comprehensive
development by graduation.
EBM2010/EBM2020
Environmental stewardship - means being more environmentally conscious in and
around our beautiful campus for the sake of our own health and enjoyment. We commit
ourselves to contributing to the sustainable economic, social and environmental
creation of value through our business and professional activities.
Integrity - means doing the right thing, even if nobody is watching, having courage to
say no and courage to face the truth. We commit ourselves to academic integrity in
all our work, respecting the specific policies of the NMU and the broad concept of
academic honesty. Our work, whether done individually or through group activities, will
be accomplished through honest means. We therefore will not partake in plagiarism,
wilful misrepresentation of sources, and unethical assistance or input from unapproved
parties. We will not rob ourselves, or past, present and future graduates of the honour
and integrity that we all subscribe to. We support students and staff who fulfil their duty
by alerting the department and the School as well as the faculty to incidences of
academic dishonesty.
Social justice and equality - means being dedicated to the realisation of a socially
just, democratic society that promotes equality for all irrespective of race, gender, sex,
pregnancy, marital status, ethnic or social origin, sexual orientation, age, physical and
learning abilities, national origins, religion, conscience, belief, culture and language.
By cultivate living, learning and work environments that enable students and staff to
realise their full potential, without fear of discrimination or harassment. And by
developing our graduates as globally competent citizens who generate, apply and
transfer knowledge to contribute actively to advancing social justice, inclusion and
equality.
EBM2010/EBM2020
SECTION 1
TOPIC
PAGE NO
1. INTRODUCTION
4
2. PURPOSE OF THE MODULE
4
3. MODULE LEARNING OUTCOMES
4
4. CRITICAL CROSSFIELD OUTCOMES
5
5. LECTURER CONTACT DETAILS AND CONSULTATION TIMES
9
6. MODULE METHODOLOGY AND PRESCRIBED MATERIALS
9
7. ASSESSMENTS AND GRADING
10
8. STUDENT EXPECTED BEHAVIOUR
11
9. SYLLABUS GUIDE
12
SECTION 2
PART 1
PAGE NO
STUDY UNIT 1
15
STUDY UNIT 2
17
STUDY UNIT 3
19
STUDY UNIT 4
21
STUDY UNIT 5
23
PART 2
PAGE NO
STUDY UNIT 1
25
STUDY UNIT 2
29
STUDY UNIT 3
32
STUDY UNIT 4
34
STUDY UNIT 5
37
STUDY UNIT 6
40
STUDY UNIT 7
44
STUDY UNIT 8
46
SECTION 3
TOPIC
PAGE NO
1. INFORMATION ON PLAGIARISM
48
2. ASSIGNMENT INSTRUCTIONS
48
3. ASSIGNMENT LEARNING OUTCOMES
49
4. ASSIGNMENT EVALUATION RUBRIC
50
EBM2010/EBM2020
SECTION 1
1
INTRODUCTION
Welcome to Business Management 2. This course encapsulates both the corporate
finance and operations management functions of organisations. The financial function
is a key business functions, primarily focussed on the flow of capital to and from the
business. During this module you will learn to make financial decisions related to the
procurement of various types of capital (financing decisions), the application of capital
(investment decisions), as well as the relationship between these decisions.
Operations management is an exciting area of management that has a profound
impact on productivity. This section of the module will help you understand how
operations management benefits society and our personal lives.
This study guide will assist you prepare for lectures, tests and examinations. Important
information regarding this module, such as the purpose of the module, units of learning
dealt with in the module, your lecturer’s contact details, prescribed materials, useful
academic journals that can be consulted in the field of business management will be
provided. The criteria for assessments are also provided and to enable you plan your
studying effectively for this module, a course programme is also provided in this study
guide.
2
PURPOSE OF THE MODULE
•
•
3
The overall purpose of the Financial Management unit is to provide a basic
understanding of the various elements that form part of the Financial
Management function, and to assist the manager in making financial decisions.
To prepare learners to understand the Operations Management function, as
well as create an awareness of the various disciplines that constitute the
Production process.
MODULE LEARNING OUTCOMES
After completing this module students will be able to:
•
Understand and apply the theoretical and quantitative principles to make effective
managerial decisions.
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4.
CRITICAL CROSS-FIELD OUTCOMES
CCFO reflected in this
Sort description of
Who will be
How will the demonstration
module/unit/theme of
how CCFO will be
responsible for
of this CCFO be assessed
work
addressed/integrate
helping the students
d into the
to develop the skills
programme
needed to
demonstrate the
CCFO
1. Problem solving /
critical thinking
By means of case
Lecturer / Tutor
By evaluating to which extent
studies and practical
the learner has addressed
problems to analyse
each of the critical elements
and solve as part of
in the problem area.
the formal course
material
2. Team and group
work
By means of
Lecturer / Tutor
By evaluating which extent of
integrating 1) above
team and group participation
into team based and
in generating alternatives to
group scenarios for
the stated problems.
critical analysis and
problem solving
3. Self-management
skills
By means of self
Lecturer / Tutor
study assignments
By evaluating how the
learner copes with the
workload (ie formal testing
and informal class
discussion)
4. Informal literacy:
By means of
Lecturer / Tutor
By evaluating the completed
especially
assignments (either
assignments in terms of
research literacy,
individually or group
layout, content, presentation,
ability to find, use
based)
etc.
and apply
information
5. Communication
skills: especially
By combining (1), (2)
Lecturer / Tutor
and (4) above.
By combining the evaluations
of (1), (2) and (4) above.
verbal, written
and listening
skills
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6. Life skills
During the complete
Lecturer / Tutor
In assessing any form of
course the
evaluation, ie team/group
importance and
assignments, informal class
applicability of the
discussions, etc reference
various skills to
must be made to the
everyday life must be
usefulness of the skills
highlighted.
acquired to everyday life.
CCFO reflected in this
Sort description of
Who will be
How will the demonstration
module/unit/theme of
how CCFO will be
responsible for
of this CCFO be assessed
work
addressed/integrate
helping the students
d into the
to develop the skills
programme
needed to
demonstrate the
CCFO
7. Business skills
By means of
Lecturer / Tutor
Evaluate t he project
simulations where the
periodically to assess how
learner should for
“successful” such a business
example set up
would be in terms of the
his/her own business
strategies applied.
concern and manage
it according to the
principles taught.
8. Organisation
By allowing the
By means of “scenario”
culture:
learner to understand
sketches the understanding
especially work
what the term ethics
of the learner can be
ethics
entails and to assess
assessed and evaluated.
their understanding in
terms of case studies,
either through role
play or through
audiovisual media.
9. HIV/AIDS
By addressing the
By integrating the issues of
secondary issues of
HIV/AIDS into team/group
HIV/AIDS as they
discussions and practical
relate to the place of
assignments.
work, the workforce,
the economy in
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general, productivity,
etc.
The critical cross field outcomes will be implemented, tested and evaluated during the full
duration of this module. In every unit, provision should be made by the lecturer for individual,
group, class, as well as tutorial activities. These activities will be used in a manner that will
endorse the critical cross field outcomes for the module. Therefore, an activity, whether
individual or group, will be used to assess the learner’s various skills, ranging from written, to
verbal, to group and teamwork, as well as other critical cross field outcomes. Individual and
group assignments are also scheduled during this module. By means of such information into
either a written and / or verbal presentation, contemporary issues such as HIV / AIDS will also
be assessed.
With regard to each study unit, you should be able to:
a) understand and state the essential content by naming and/or explaining the relevant
content (where possible with the aid of diagrammatic representations);
b) identify the meaning reflected in the content by indicating the most acceptable or correct
possibility from various given alternatives (for example by answering multiple-choice
statements and identifying the meaning of key terms);
c) demonstrate the capability of establishing direct relationships, for example between theory
and practice, inter alia, by completing worksheets and finding solutions to practical
problems, answering direct questions on case particulars; and
d) generate solutions for any relevant extensive problems, inter alia, by gathering new
information, completing work assignments, analysing case studies or performing critical
analyses.
The activities indicated for each study unit are intended to cover the above outcomes. Note that
the bold-typed verbs, i.e., so-called capability verbs, reflect a hierarchy in the learning process.
Therefore, stating essential content represents the most basic or most simple required
performance and generating solutions to the most advanced or most complex performance
(See also Table 1).
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TABLE 1: OUTCOME (CAPABILITY AND ACTION) VERBS AND MEANING
Capability
Action
Meaning
Understand
Define
Demonstrate understanding of facts and ideas by organising,
Describe
comparing, translating, interpreting, giving descriptions and
Explain
stating main ideas or important facts.
List
Name
Differentiate
Differentiate
This is the simplest form of intellectual skill requirement that
Distinguish
demands insight and practice.
Identify
Identify
Indicate
This is a somewhat more advanced intellectual skill that
Motivate
requires recognition and identification of facts or concepts.
Select
Knowledge is required both of the item to be identified and the
other items from which a choice has to be made, e.g., “To
identify the tasks of managers.” Requires insight and practice.
Analyse
Evaluate
Contrast
A somewhat more advanced intellectual skill that intends to
Categorise
examine and break information into parts by identifying motives
Examine
or causes. This includes making inferences (conclusions) and
Motivate
finding evidence to support generalisation.
Appraise
This deals with presenting and defending opinions by making
Compare
judgments about information, validity of ideas, or quality of work
Criticise
based on a set of criteria. This requires insights and practice.
Interpret
Determine
Generate
Design
The most advanced form of intellectual skill. It is a form of
Formulate
higher-order-rule-application. It involves compiling information
Compose
together in a different way by combining elements in a new
Compile
pattern or proposing alternative solution. Certain principles or
Build
procedures are known but new data is such that problem
Construct
solution is necessary.
Develop
Adapted from Quick Flip Questions for the Revised Bloom’s Taxonomy
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5.
LECTURER CONTACT DETAILS AND CONSULTATION TIMES
Module Co-ordinator and Lecturer
Dr R. Muller
Academic administration block,
2nd Floor, Room 247, 2nd Avenue Campus.
Tel:
(041) 504 3862
Email:
roger.muller@mandela.ac.za
Consultation times by appointment.
Should you require any assistance or additional information, please speak to your lecturer.
Make sure you know the name of your lecturer for the module(s) in question and his/her relevant
consultation hours.
Students are also reminded to consult the Moodle site on a regular basis as module information
is continuously uploaded. The details are as follows:
Business Management 2 enrolment key: 2024AY
6
MODULE METHODOLOGY AND PRESCRIBED MATERIALS
The Business Management 2 course is presented at 2nd Avenue campus. An overall learning
outcome is stated in this module. The module consists of a number of study units, each with
specific learning outcomes.
CREDITS AND NQF LEVEL
The credits and NQF level for this module are as follows:
Credits:
24
NQF level:
6
Module codes: EBM2010/EBM2020
Title: Business Management 2 / Business Operations 2
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EBM2010/EBM2020
Part 1 Financial Management
Study unit
1
2
3
4
5
Title of study unit
Introduction to financial management
Ratio analysis
Time value of money
Investment appraisal methods
Managing Inventory
Part 2 Operations Management
Study unit
1
2
3
4
5
6
7
8
Title of study unit
Operations and productivity
Operations strategy in a global environment
Product Design
Managing Quality
Waiting lines and queueing theory
Capacity Planning
Layout Strategies
Job Design and Work Measurement
The particulars of the prescribed textbooks are:
1. Corporate Finance: A South African Perspective (3rd ed.) by G.Els (Ed.).
2. Principles of Operations Management by J. Heizer, B. Render & C. Munson 10th edition.
7
ASSESSMENTS AND GRADING
This module will be graded according to continuous evaluation. Any student, who has missed
a test, with a valid reason, will be given a second chance to write a make-up test at the end
of the course.
Note that there is no formal examination at the end of the study period and students are required
to monitor their own progress throughout the semester.
The evaluation will only contain questions on the learning material contained in this module guide. The
evaluation will be structured as a combination of discussion questions with problem solving as the main
theme. On passing the evaluation, the learner receives credits for the unit and does not have to write
it again.
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EBM2010/EBM2020
There will be 4 evaluation tests in this module with the weights as listed in the Module Pace as
follows:
•
Test 1= 15 %,
•
Test 2= 30%,
•
Test 3= 15%,
•
Test 4= 30%,
•
Tutorial quizzes 5 x 2% = 10%
Test 1 to Test 4 is the official tests for the module. The supplementary test (Test 5 = 30%) is a makeup test that allows students who scored less than 50% overall to improve their marks. This test is also
the sick test for any student who missed tests 1- 4 with valid proof of absence. Only four of the five
test marks will count towards the final course mark. The supplementary test mark will replace the
lowest mark scored for either test 2 OR test 4.
The following rules are applicable in cases where a student does not write an evaluation test:
•
If valid documentation is submitted by the due date (within three working days of missing
the test), that is, medical certificate/organised sport letterhead/religious objection:
Ø Consideration will be given to writing a make-up test under exceptional
circumstances only;
Ø No other ‘special tests’ are written – no exceptions.
•
If no medical certificate/organised sport/religious body’s letterhead is submitted, or the
sick test is not written:
Ø Get ‘0’ for the missed test.
Ø A second make-up test WILL NOT be arranged.
It MUST be noted that it is the policy of the university that where Continuous
Assessment is used, then NO LAST OUTSTANDING MODULE
ASSESSMENT or special re-assessment opportunities are provided.
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8
STUDENT EXPECTED BEHAVIOUR
It is mandatory for students to acquaint themselves with the university’s General Rules that can
be found in the General Prospectus of the NMU. Satisfactory attendance of a minimum of 80%
of normal lectures is required for this module. A student may be excluded from an
assessment or examination in a Module on the basis of unsatisfactory attendance
Punctuality for classes must be strictly adhered to. Mobile phones should be set to silent during
lectures. Note should be taken that deadlines regarding handing in of assignments should be
adhered to and regarded in a serious light. A penalty of 10% per day shall be implemented on
all assignments handed in after the due date.
Students are expected to abide by the values of Nelson Mandela University outlined in the front
matter of this study guide.
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9
SYLLABUS GUIDE
The syllabus guide is shared as a separate document on Moodle.
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SECTION 2
PART 1 – FINANCIAL MANAGEMENT
UNITS OF LEARNING
STUDY UNIT 1:
INTRODUCTION TO FINANCIAL MANAGEMENT
STUDY UNIT 2:
RATIO ANALYSIS
STUDY UNIT 3:
TIME VALUE OF MONEY
STUDY UNIT 4:
INVESTMENT APPRAISAL METHODS
STUDY UNIT 5:
WORKING CAPITAL MANAGEMENT
PART 2 – OPERATIONS MANAGEMENT
UNITS OF LEARNING
STUDY UNIT 1:
OPERATIONS AND PRODUCTIVITY
STUDY UNIT 2:
OPERATIONS STRATEGY IN A GLOBAL ENVIRONMENT
STUDY UNIT 3:
PRODUCT DESIGN
STUDY UNIT 4:
QUALITY MANAGEMENT & INTERNATIONAL STANDARDS
STUDY UNIT 5:
WAITING LINES & QUEUEING THEORY
STUDY UNIT 6:
CAPACITY MANAGEMENT
STUDY UNIT 7:
LAYOUT DECISIONS
STUDY UNIT 8:
HUMAN RESOURCES, JOB DESIGN & WORK MEASUREMENT
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PART 1: FINANCIAL MANAGEMENT
UNIT 1
INTRODUCTION TO
FINANCIAL
MANAGEMENT
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 1
•
Corporate financial management
p.4
•
The financial manager
p.5
•
The goals of financial management
p.9
•
Forms of business ownership in South
p.11
Africa
•
The agency problem and agency costs
p.13
•
Financial markets and institutions
p.14
PRESCRIBED READING:
Chapter 1: pp. 1 – 27
15
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EBM2010/EBM2020
Learning Objectives
By the end of this chapter you should be able to:
1. Explain and reflect on the meaning of the terms ‘corporate finance’ and ‘financial
management’;
2. Explain the role and responsibilities of the financial manager;
3. Discuss three types of financial-management decisions and identify the main goals of
financial management;
4. Describe the different corporate forms of business that can operate in South Africa;
5. Discuss the agency problem and agency costs;
6. Understand the functions of financial markets and institutions
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UNIT 2
RATIO ANALYSIS
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 3
•
Requirements for financial ratios
p.74
•
Norms of comparison
p.75
•
Types of ratios
p.76
•
Profitability ratios
p.77
•
Profit margins
p.79
•
Turnover ratios
p.81
•
Liquidity ratios
p.83
•
Solvency ratios
p.85
•
Investment ratios
p.90
PRESCRIBED READING:
Chapter 3: pp.70 - 107
17
2
EBM2010/EBM2020
Learning Objectives
By the end of this chapter you should be able to:
1. Discuss the requirements for financial ratios
2. Identify the norms of comparison used to evaluate ratios
3. Identify the different types of ratios
4. Define, calculate and interpret profitability, liquidity, solvency, and investor ratios
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UNIT 3
TIME VALUE OF
MONEY
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 4
•
Interest rates
p.113
•
Future value and compounding of lump
p.114
sums
•
Compounding interest more frequently
p.118
than annually
•
Present value and discounting
p.124
•
Determining an interest rate
p.126
•
Valuing annuities
p.128
•
Amortising a loan
p.143
PRESCRIBED READING:
Chapter 4: pp.110 - 159
19
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Learning Objectives
By the end of this chapter you should be able to:
1. Use various computation tools to analyse the role of time value in finance
2. Calculate, interpret and explain the future value and present value of single amounts or
lump sums, and investigate the relationship between
3. Calculate, interpret and explain the future value and present value of annuities
(ordinary annuities)
4. Determine the instalments needed to amortise a loan
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UNIT 4
INVESTMENT
APPRAISAL
METHODS
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 5
•
Importance of efficient investment
p.165
appraisal
•
Types of investment projects
p.166
•
Average return method
p.169
•
Payback period method
p.171
•
Net present value method
p.175
•
Profitability index method
p.186
PRESCRIBED READING:
Chapter 5: pp.162 - 198
21
2
EBM2010/EBM2020
Learning Objectives
By the end of this chapter you should be able to:
1. Understand the importance of the investment appraisal process
2. Distinguish between the different types of investment decisions
3. Calculate, interpret and evaluate the average return method
4. Calculate, interpret and evaluate the payback period method
5. Calculate, interpret and evaluate the net present value method
6. Calculate, interpret and evaluate the profitability index method
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UNIT 5
WORKING CAPITAL
MANAGEMENT
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 14
•
The importance of inventory
p.463
management
•
Methods of managing inventory
PRESCRIBED READING:
Chapter 14: pp. 465 - 467
23
p.464
2
EBM2010/EBM2020
Learning Objectives
By the end of this chapter you should be able to:
1. Understand the importance of managing inventory
2. Understand the different costs associated with inventory
3. Calculate and interpret economic order quantities
4. Calculate and interpret the re-order point
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EBM2010/EBM2020
PART 2: OPERATIONS MANAGEMENT
UNIT 1
OPERATIONS AND
PRODUCTIVITY
DETAIL
After completing this unit, the learner
REFERENCE
should be able to identify or define the
WEEKS
ESTIMATE
following:
Chapter 1
•
Define production & operations
p.41
management
•
Explain the distinction between
p.49
goods and services
•
Explain the difference between
p.49
production and operations
management
•
Compute single-factor productivity
PRESCRIBED READING:
Chapter 1: p.40 - 64
25
p.52
1
EBM2010/EBM2020
Learning Objectives
1.
Define the term, “Production” and “Operations Management”.
2.
Explain the three functions performed by all organizations in order to create goods
and services.
3.
Why should the subject of Operations Management be studied?
4.
Define the ten critical decision areas of Operations Managers.
5.
Tabulate the differences between goods and services.
6.
Define the term, “Productivity”.
7.
Discuss some new challenges in Operations Management.
TUTORIAL:
Additional problems
1. Mabel’s Ceramics spent R4000 on a new kiln last year, in the belief that it would cut
energy usage 25% over the old kiln. This kiln is an oven that turns “greenware” into
finished pottery. Mabel is concerned that the new kiln requires extra labour hours for its
operations. Mabel wants to check the energy savings of the new oven, and also to look
over the other inputs in order to check whether the changes were beneficial. Mabel has
the following data to work with: (next page)
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EBM2010/EBM2020
LAST YEAR
THIS YEAR
Production (Finished Units)
4000
4000
Greenware (kg)
5000
5000
Labour (hours)
350
375
Capital (Rands)
15 000
19 000
3000
2600
Energy (kWh)
2.
A company has asked you to evaluate the firm’s productivity by comparing this
year’s performance with last year’s. You are required to calculate the productivity
for each input. The following data is available:
Last Year
This Year
Output (units)
10 500
12 100
Labour (hours)
12 000
13 200
Utilities (Rands)
7600
8250
Capital (Rands)
83 000
88 000
3. Art and Sandy Bidley make apple crates for resale to local growers. They and their
three employees invest 50 hours per day making 150 crates.
3.1
What is their productivity?
3.2
They have discussed reassigning work so the flow through the shop is
smoother. If they are correct and can do the necessary training, they think they
can increase crate production to 155 per day. What would be their new
productivity?
3.3
What would be their increase in productivity?
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EBM2010/EBM2020
4.
Joanna produces Christmas tree ornaments for resale at local craft fairs and
Christmas bazaars. She is currently working a total of 15 hours per day to produce
300 ornaments.
(a) What is Joanna’s productivity?
(b) Joanna thinks that by redesigning the ornament and switching from contact
cement to a hot glue gun, she can increase her total production to 400
ornaments per day. What would be her new productivity?
(c)
What would be the increase in productivity?
ADDITIONAL PROBLEMS
End-of-chapter problems (Heizer & Render 10th ed.; p.60) 1.1 – 1.5 & 1.11
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UNIT 2
OPERATIONS
STRATEGY IN A
GLOBAL
ENVIRONMENT
DETAIL
After studying this unit, the learner will
REFERENCE
understand the following:
Chapter 2
ESTIMATE
•
Global view of operations.
p.70
•
Cultural and Ethical issues
p.73
•
Developing missions & strategies.
p.73
•
Achieving competitive advantage
p.74
through operations
PRESCRIBED READING:
Prescribed textbook – Chapter 2; pp. 63- 92
29
WEEKS
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EBM2010/EBM2020
Learning Objectives:
1. Introduction – The main objective of this unit is to introduce the learner to the concept
of operations in a global environment. The importance of undertaking a global
operation and the impact of culture and ethics on such an undertaking will be reviewed
in detail in this unit.
2. Discuss the importance of global operations.
3. Explain the impact of culture and ethics on global operations.
4. Differentiate between a mission and a strategy.
5. Provide a discussion outlining how a business could achieve competitive advantage
through its operations.
6. Define the ten strategic operation management decisions.
Tutorials:
1. Within the food industry (restaurants that serve meals to customers, but not just fast
food), find examples of firms that have sustained competitive advantage by competing
on the basis of:
(a) cost leadership
(b) response
(c) differentiation
Cite one example in each category; provide a sentence or two in support of each
choice. Do not use fast food chains for all categories.
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EBM2010/EBM2020
2. Identify how changes in the external environment affect the Operations Management
strategy for a company. For example, discuss what impact the following external
factors might have on Operations Management strategy:
(a) major increases in oil prices
(b) water and air quality legislation
(c) fewer young prospective employees entering the labour market
(d) inflation versus stable prices
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EBM2010/EBM2020
UNIT 3
PRODUCT DESIGN
DETAIL
Chapter 5
After completing this unit, the learner will REFERENCE
WEEKS
understand the following:
ESTIMATE
•
Goods and services selection
p. 200
•
Generating products
p. 203
•
Product development
p. 204
•
Issues for product design
p. 209
•
Documents for production
p. 216
PRESCRIBED READING:
Prescribed textbook – Chapter 5: pp. 197 - 228
32
1
EBM2010/EBM2020
Learning Objectives:
1. Introduction – The main objective of this unit is to introduce the learner to the
concepts of designing goods and services. The product life cycle as well as the steps
in the design process is of tantamount importance in this unit.
2. Discuss the product life cycle in detail.
3. Define the various opportunities that could give rise to new products.
4. Explain the product development system.
5. Define the term, “Quality Function Deployment.”
6. Define the term, “House of Quality”.
7. Name the seven basic steps that need to be performed in order to build a house of
quality.
8. Name and define the various techniques important to the design of a product.
9. Name and define the various documents that can assist in the production of goods and
service after the design phase.
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EBM2010/EBM2020
UNIT 4
QUALITY MANAGEMENT DETAIL
After studying this module, the learner
& INTERNATIONAL
will understand the following:
REFERENCE
WEEKS
ESTIMATE
STANDARDS
Chapter 6
•
Quality & strategy
•
Total Quality Management (TQM) p.257
•
Tools of TQM
p.264
•
The role of inspection
p.268
PRESCRIBED READING:
Prescribed textbook; Chapter 6; pp. 251 - 280
34
p.254
1
EBM2010/EBM2020
Learning Objectives:
1.
Introduction
The main objective of this unit is to introduce the learner to the concept of Quality, and
the import role this concept plays in the manufacturing of various goods and services.
2.
Defining Quality
2.1 What is quality?
2.2
3.
4.
Discuss the various implications of quality, as well as the associated costs.
Total Quality Management
3.1
Define the term, “Total Quality Management”
3.2
Mention Deming’s 14 Points for implementing quality improvement.
3.3
Define the various concepts available to Total quality Management.
3.4
Define the terms, “ISO 9000” and “ISO 14000”.
Tools of TQM
4.1 Discuss the various tools available to implement TQM.
5.
The role of Inspection
5.1
Define the term, “Inspection”
5.2
When and where should one inspect goods?
5.3
Define the term, “Source of inspection”
5.4
Define the term, “poka-yoke”
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EBM2010/EBM2020
Tutorials:
1. You are required to approach any manufacturing business in the Nelson Mandela
Metropole. Investigate the various quality management instruments that are practised
in the business. Is Total Quality Management practised here? If not, what are the
reasons cited by the business for ignoring this practice. Does the business have an
ISO accreditation? If not, why has the business not yet pursued such an accreditation?
You are required to present your findings during the lecture to the class.
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EBM2010/EBM2020
UNIT 5
WAITING LINES &
DETAIL
QUEUEING THEORY
After studying this module, the learner
REFERENCE
will understand the following:
•
•
ESTIMATE
Understand the three parts of a
Powerpoint
queuing system.
slides
Describe & calculate the basic
queuing system configurations
PRESCRIBED READING:
Addional Notes: Powerpoint Slides
37
WEEKS
1
EBM2010/EBM2020
Tutorials:
a) From historical data, Harry’s Car Wash estimates that dirty cars arrive at the rate of 10
per hour all day on Saturday. With a crew working the wash line, Harry figures that
cars can be cleaned at rate of one every 5 minutes. One car at a time is cleaned in this
example of a single channel waiting line.
You are required to calculate the following:
(a)
Average number of cars in line.
(b)
Average time a car waits before it is washed.
(c)
Average time a car spends in the service system.
(d)
Utilization rate of the car wash.
(e)
Profitability that there are no cars in the system.
b) A university cafeteria line in the students center is a self – serve facility in which
students select the food items they want and then form a single line to pay the cashier.
Students arrive at a rate of abort four per minute according to a Poisson distribution.
The single cashier ringing up sales takes about 12 seconds per customers, following
an exponential distribution.
(a) What is the probability that there are more than two students in the system?
(b) What is the probability that the system is empty?
(c) How long will the average student have to wait before reaching the cashier?
(d) What is the expected number of students in the queue?
(e) What is the average number of students in the system?
c) Automobiles arrive at the drive through window at a post office at the rate of 4 every 10
minutes. The average service time is 2 minutes. The Poisson distribution is appropriate
for the arrival rate and service times are exponentially distributed. Compute the
information for all studied equations.
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EBM2010/EBM2020
a. What is the average time a car is in the system?
b. What is the average number of cars in the system?
c. What are the average time cars spend waiting to receive service?
d. What is the average number of cars in line behind the customer receiving
service?
e. What is the probability that there are no cars at the window?
f. What percentage of time is the postal clerk busy?
g. What is the probability that there are exactly two cars in the system?
39
EBM2010/EBM2020
UNIT 6
CAPACITY
DETAIL
MANAGEMENT
After studying this module, the
REFERENCE
learner will understand the following:
Chapter 7s
•
(Supplement)
Define and determine:
ESTIMATE
p. 346 - 348
Ø Design capacity
Ø Effective capacity
Ø Utilization
Ø Efficiency
•
Capacity considerations
p. 349
•
Managing demand.
p. 350
•
Break-Even analysis.
p. 356
PRESCRIBED READING:
Prescribed textbook, Chapter 7 Supplement; pp. 346 - 372
40
WEEKS
1
EBM2010/EBM2020
Learning Objectives:
1. Define, calculate & interpret the following terms:
•
Design capacity
•
Effective capacity
•
Utilisation
•
Efficiency
2. Name and explain the four special considerations that need to be taken into account in
order to make a good capacity decision.
3. Explain how a business would be able to manage demand when faced with a poor match
between actual demand and available capacity.
4. Define the following terms:
•
Break – even analysis
•
Fixed cost
•
Variable costs
•
Contribution
5. Conduct break-even analysis based on cost and volume.
41
EBM2010/EBM2020
Capacity Planning Tutorials:
1.
Huge University’s Executive MBA has the facilities and faculty to handle an enrollment
of 2000 students per semester. However, in an effort to limit class sizes to a
“reasonable” level (under 200, generally), they placed a ceiling on enrollment to 1500
students. Although there was ample demand for business courses last semester,
conflicting schedules allowed only 1450 students to take business courses. What are
the utilization and efficiency of this system?
2.
A fleet repair facility has the capacity to repair 800 trucks per month. However, due to
scheduled maintenance of their equipment, management feels that they can repair no
more than 500 trucks per month. Last month, two of the employees were absent
several days each and only 300 trucks were repaired. What are the utilization and
efficiency of the repair shop?
3.
The owner of Pizza Palace is considering a new oven in which to bake the firm’s
signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed
cost associated with oven A are R20 000 and the variable costs are R2.00 per pizza.
Oven B is larger and can handle 40 pizzas an hour. The fixed costs associated with
oven B are R30 000 and the variable costs are R1.25 per pizza. The pizzas sell for
R14 each.
Calculate the break-even point in both units and Rand value.
a) If the owner expects to sell 9 000 pizzas, which oven should she purchase?
b) If the owner expects to sell 12 000 pizzas, which oven should she purchase?
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EBM2010/EBM2020
4.
A manufacturer is currently producing an item which has a variable cost of R0.75 per
unit and a selling price of R2.00 per unit. Fixed costs are R20 000. Current volume is
40 000 units. The firm can produce what they believe is a better product by adding a
new piece of equipment to the process line. This equipment represents an increase of
R5 000 in fixed cost. The variable cost would decrease R0.25 per unit. Volume for the
new and improved product should rise to 50 000 units. Should the company invest in
the equipment?
5.
Willows is a popular resort, but regularly face a shortage of fresh water. Marie Bain has
the entrepreneurial spirit and plans to open a business shipping barges of fresh water
to the town. They estimate their fixed costs to be R2 500 000, and their variable costs
(water, labour, fuel) to be R50 000 per barge load. Selling price is expected to average
R75 000 per barge load.
a) What is her break-even point in units?
b) What is her break-even point in rand?
c) If she anticipates demand for 20 barges during the next year, should she enter this
business?
Additional Textbook Exercises
Problems 7.2 – 7.6 (p. 353)
Problem 7.15; 7.17; 7.20
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EBM2010/EBM2020
UNIT 7
LAYOUT DECISIONS
DETAIL
After studying this module, the learner
REFERENCE
will understand the following:
Chapter 9
•
The Strategic Importance of Layout
ESTIMATE
p.405
Decisions
•
Types of Layout
PRESCRIBED READING:
Prescribed textbook- Chapter 9; pp. 405 - 442
44
WEEKS
p. 408
1
EBM2010/EBM2020
Learning Objectives:
1.What are the objectives of a good layout design?
2. What are the considerations that need to be taken into account when implementing a
good layout?
3. Define the following terminology:
•
Fixed position layout.
•
Process oriented layout
•
Work cells
•
Focused work centers.
•
Office layout
•
Retail layout
•
Warehouse layout
•
Production- oriented layout
•
Assembly line.
4. Provide an outline of the advantages of utilizing a work cell.
5. Name five ideas that could prove helpful for determining the overall arrangement of a
retail store.
6. Define the terms –
•
Cross docking, and
•
Random stocking.
45
EBM2010/EBM2020
UNIT 8
HUMAN
RESOURCES, DETAIL
JOB DESIGN & WORK
After studying this module, the learner
REFERENCE
will understand the following:
WEEKS
ESTIMATE
MEASUREMENT
Chapter 10
•
Human Resource Strategy for
p. 448
Competitive Advantage
•
Labor Planning
p. 449
•
Job Design
p. 450
•
Ergonomics and the Work
p. 453
Environment
•
Methods Analysis
p. 455
•
The Visual Workplace
p. 458
•
Labor Standards
PRESCRIBED READING:
Prescribed textbook; Chapter 10; pp. 445 - 476.
46
p. 458
1
EBM2010/EBM2020
Learning Objectives:
1.
Introduction
The main objective of this unit is to place into perspective, the role of the Human Resource
function in Operation Management.
2.
Labour Planning
2.1
What is labour planning?
2.2
Elaborate on the staffing policy of employment stability.
2.3
Elaborate on the staffing policy of the various work schedules at the disposal of
Human / Operations Manager.
3.
Job Design
3.1
Define the concept of job design.
3.2
Define the concept of labour specialization.
3.3
Define the concept of job expansion.
3.4
Discuss the limitations of job expansion.
3.5
Discuss the various incentive schemes available to the Human resources /
operations manager.
3.6
4.
5.
What is “ergonomics”?
Methods Analysis
4.1
Define the term, “Methods Analysis”.
4.2
Discuss the various tools available in order to conduct a methods analysis.
The Visual Workplace
5.1
Define the term, “Labour Standards.”
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EBM2010/EBM2020
SECTION 3
1
INFORMATION ON PLAGIARISM
It is extremely important that you understand the importance of avoiding plagiarism in
any of the work submitted in fulfilment of your course requirements. Disciplinary action
will be taken against any student who plagiarises the work of another.
The following extract on plagiarism is taken directly from the official NMU Copyright
services website from an article entitled Copyright and Plagiarism: Short guide for
students. Students must familiarise themselves with this document:
WHAT IS PLAGIARISM?
Plagiarism is similar to copyright infringement in that one is unlawfully using the work of
another person. Plagiarism occurs when an individual uses the words or ideas of another
person as if it were his/her own and without giving acknowledgement of the actual
source. Even if the source is mentioned it must be made clear when the work is being
quoted and what your own contribution is. The work that was plagiarised does not even need
to be a copyright protected work to amount to plagiarism.
R. D. Mawdsley, in an article Academic Misconduct: Cheating and Plagiarism, 1994
(Topeka: NOLPE) defined plagiarism as follows: “Plagiarism: This consists of offering as
one’s own work the words, ideas or arguments of another person, without appropriate
attribution by quotation, reference or footnote. Plagiarism occurs both when the words of
another are reproduced without acknowledgement, and when the ideas or arguments of
another are paraphrased in such a way as to lead the reader to believe that they originated
with the writer.”
2
ASSIGNMENT INSTRUCTIONS
PRODUCTIVITY ASSIGNMENT FRITO-LAYS
In this activity, you're asked to submit your case study answers and later assess TWO
submissions from fellow students.
After submitting your work, you need to check back here to peer-assess other students'
work.
PLEASE NOTE THIS IS AN INDIVIDUAL ASSIGNMENT
INSTRUCTIONS
You are required to read the case study on p.63 of your prescribed textbook (Heizer &
Render 10th ed.) In addition, you are required to watch the video entitled: "Frito-Lay:
Operations Management in Manufacturing" which can be found through the following
link http://nmmutube.nmmu.ac.za/video.aspx?watch=865009a4-cda4-4f13-bb2de47b934888de. You are further required to study a business' process of your choice
to answer question 4.
Please answer the following questions:
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EBM2010/EBM2020
1. From your knowledge of production processes and from the case and video,
identify how each of the ten decisions of OM is applied at Frito-Lay [Minimum
300 words]
2. How would you determine the productivity of the production process at FritoLay? [Minimum 100 words]
3. How are the 10 decisions of OM different when applied by the operations
manager of a production process such as Frito-Lay versus a service organisation
such as Hard Rock Cafe (Read Hard Rock case study on pp. 40-41 of
your textbook).[Minimum 200 words]
4. In your workplace/university/home, identify any process that has inputs,
processing, and outputs. Calculate the single factor productivity for at least two
variables (e.g labour/hour; trolleys packed/shift etc.). Show all your workings.
•
•
3
Briefly discuss the background/nature of the business and the process you
are studying. Include the type of products/service and how else they measure
productivity [100 words].
Recommend and discuss ways in which the business can improve
productivity based on your findings and the productivity variables identified
on pp.53-55 [200 words].
ASSIGNMENT LEARNING OUTCOMES
After completing the project, the learner will be able to •
Identify how the ten decisions of operations management are applied to a
manufacturing process
•
Differentiate how the ten decisions of operations management are applied in
service versus production environments
•
Apply productivity measures to a process in their workplace/university/home
•
Compute single-factor productivity for a process and make improvement
recommendations based on the three productivity variables.
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EBM2010/EBM2020
4
ASSIGNMENT EVALUATION RUBRIC
50