s
Brighton Business School
Undergraduate Programmes
BA (Hons) Business Management
BA (Hons) Business Management with Marketing
BA (Hons) International Business
American Exchange
Level Two Examination
May/June 2013
OP214: Operations and Process Management
___
Instructions to candidates:
Time allowed: 2½ Hours
Answer FOUR questions from a total of seven
All questions carry equal marks
Nature of Examination: unseen/closed book
Allowable Material: none
Supplied
Formula Sheet
Table of Probabilities for the Normal Distribution
Graph Paper
Question 1
a) A large supermarket wishes to streamline its in-store operations for the benefit of
customers.
Describe the role of process-mapping as a performance improvement
technique in this respect.
(9 marks)
b) The supermarket then wishes to optimise the number of checkouts (tills and staff) it makes
available at different times of the day. Explain the use of simulation modelling (e.g. with
‘Simul8’) as a method for analysing and testing the performance of the check-out process.
(8 marks)
c) Draw a diagram to outline the general form of queuing analysis. Indicate, on the diagram,
the behaviour of checkout queues in the supermarket, above.
(8 marks)
Question 2
a) The Blunsdon House Hotel in Wiltshire offers a range of beauty treatments and other
therapies to its hotel guests, leisure club members and day visitors. The table below shows
the monthly demand (no. clients) for this service in 2012.
Jan.
Feb.
Mar.
Apr.
May
Jun.
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
528
475
520
469
497
480
465
483
440
460
384
432
Plot these data on a graph (using the graph paper, provided). Then, develop a demand
forecast for Jan. 2013 using EACH of the following methods:




NaÏve seasonal
Simple 6-month moving average
Weighted 4-month moving average (using weights of 0.1, 0.2, 0.3 and 0.4, and
attaching the highest importance to the most recent data)
Simple exponential smoothing (assuming the hotel’s forecast for Nov. 2012 had been
424, and using 0.3 as the value of the smoothing parameter, )
(13 marks)
b) Comment on the merits and/or drawbacks of using these forecasting techniques in this
example, given the historical demand data provided.
(6 marks)
c) Why do organisations try to predict future demand? Identify THREE typical decisions firms
have to make, that are supported by demand forecasts.
(6 marks)
OP214: O&PM (May 13)
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Question 3
a) Downland Catering Services Ltd (DCS) supplies ready meals and related support services to
many in-company and external business events in Sussex. Recently, competition has
increased, so DCS’s management team is keen to improve the level of service the company
provides to its customers. DCS has researched the factors its target customers regard as
most important, and has assessed its own performance against that of its main competitors
(see table below).
Factor
Price
Range of Menu Options
Quality of Food
Quality of Service
Courtesy of Staff
Ability to Cater for Special Needs
Documentation Accuracy
Special Discounts
Flexibility
Importance to
Target Customers
(1 = high priority)
1
2
1
3
3
4
7
8
5
Performance Against
Main Competitors
(1 = much better)
7
1
4
5
3
1
2
1
9
Plot this data on a fully labelled ‘Performance-Importance’ chart. Then, comment on what
the results mean for DCS’s operations management agenda.
Give TWO reasons why carrying out this exercise would be useful to the company.
(15 marks)
b) Explain what is meant by the term ‘Process Improvement’? Describe TWO of the main
improvement techniques (excluding the ‘Performance-Importance’ matrix, above) and how
their use by firms can impact business performance over time.
(10 marks)
Question 4
a) Explain what the term ‘Capacity Management’ means for the following operations, and
indicate how capacity could be measured in each case.



A city centre hotel
A newspaper or magazine printing operation
A telephone call centre
(9 marks)
b) Select ONE of the operations above, and provide an example of a short-term capacity
planning decision, a medium-term capacity planning decision, and a long-term capacity
planning decision that the operation would need to consider.
How would you expect short-term, medium-term and long-term capacity planning horizons
to be defined in the industry sector of your chosen operation?
(7 marks)
c) Outline THREE alternative strategies an organisation could adopt to reconcile the
anticipated fluctuations in market demand with its ability to supply the goods and services
it sells to customers. Provide an example for each strategy.
(9 marks)
OP214: O&PM (May 13)
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Question 5
a) Slack et al (2010) assert that the notion of total quality management (TQM) “has probably
been the most significant approach to managing operations improvement”. They also state
that, whilst its popularity may have diminished slightly since the 1980s and 1990s, “TQM is
still the dominant mode of organising operations improvement”.
What is total quality management? Explain how approaches to the management of quality
have evolved over time. Use a real or case example to highlight the major differences
between traditional quality management and TQM.
(13 marks)
b) Ricoh UK Ltd supplies photocopiers and provides back-up technical support to many
businesses in Sussex. Over the past few years, when its call-out service has been working
properly, the overall mean time for Ricoh’s service engineers to respond to customer
requests for assistance has been 180 minutes, and the mean difference between the
fastest and slowest response times has been 30 minutes. The company regards these as
acceptable long-term averages for this process.
Every week, Ricoh’s South-East Area Manager monitors his engineer’s response times in a
random sample of four service calls (A-D) received from customers. The response times
from the calls sampled recently are shown in the table below.
Service Call Response Times (minutes)
Sampled
Calls
A
B
C
D
25
Mar.
150
175
210
165
th
1
Apr.
180
205
160
195
st
8
Apr.
195
180
160
145
th
Week Commencing
15th
22nd
Apr.
Apr.
175
205
175
170
215
195
175
190
29th
Apr.
195
210
190
185
6th
May
180
210
210
210
13th
May
215
195
195
215
Construct a fully-annotated statistical process control (SPC) chart for the sample means
(on the graph paper, provided), and use this to analyse Ricoh’s customer service
performance during this 8-week period.
(12 marks)
c) What other type of SPC-chart could be constructed from the data above, and how could it
help Ricoh’s area managers monitor and control process variability?
(5 marks)
OP214: O&PM (May 13)
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Question 6
a) Toys Now is a competitor to Toys’R’Us. The company buys many of its products from lowcost countries, such as China and Vietnam, in the Far-East. Identify and comment on TWO
different purchasing, logistics or supply chain management issues the company is likely to
face as a result of this policy.
(10 marks)
b) The UK supply planner for Toys Now is responsible for setting stock-holding and reordering parameters within the warehouses and at the retail stores. The company aims to
offer a better service level on its promoted lines than on its regular lines. Toys Now’s
current store service-level target is 99.5% for its promoted lines, and 96.5% for its regular
lines.

The traditional ‘Barbie’ doll is classified as a regular line. The standard deviation of
weekly demand for this item is 6 units, and the supply lead-time is 1 week. What level
of safety-stock should Toys Now carry for this item?

The ‘Lightning McQueen’ car is classified as a promoted line. Average weekly demand
is 25 units, with a standard deviation of 8 units, and the usual re-supply lead-time is 4
weeks. Calculate the re-order level for this item.

If the fixed order quantity for the ‘Lightning McQueen’ car is 150 units, what would be
the average inventory of this item during the year?
(8 marks)
c) Toys Now conducted an inventory analysis at one of its stores, and a representative subset of this (encompassing fewer items) is shown in the table.
Item
Code
X2
Y9
Y7
X3
Z4
X4
Z3
X1
W5
W4
Unit
Cost
(£)
8
10
2
2
4
4
5
3
1
3
Annual
Demand
(no.)
3,000
1,000
2,500
1,000
300
300
200
200
500
100
Annual
Demand
Value (£)
24,000
10,000
5,000
2,000
2,000
1,200
1,000
600
500
300
Cumulative
Annual
Demand (£)
24,000
34,000
39,000
41,000
43,000
44,200
45,200
45,800
46,300
46,600
Cumulative
% of Annual
Demand
52
73
84
88
92
95
97
98
99
100
Cumulative
% of Items
10
20
30
40
50
60
70
80
90
100
The company’s Pareto ABC classification system is shown in the table below.
Class
A
B
C
% Demand (by Value)
70
20
10
Cumulative % Demand (by Value)
70
90
100
Assign the appropriate inventory class for each of the 10 items. Then, draw and label a
Pareto-chart (on the graph paper, provided) for these inventory items.
(7 marks)
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Question 7
a) Describe ONE example of a large and complex business project, and ONE (different)
example of a project that could be expected to contain a relatively high level of risk or
uncertainty. In EACH case, outline TWO project management factors that you consider
would be critical to the overall success of the project you have described.
(12 marks)
b) The following table shows the activities required to complete a project.
Activity
A
Depends on
completion of:
-
Normal
Duration
(no. weeks)
2
Crash
Duration
(no. weeks)
1
Crash Cost
(£ per week)
750
B
-
3
1
2,000
C
A
2
1
1,000
D
A,B
4
3
1,000
E
C
4
2
1,000
F
C
3
2
500
G
D,E
5
2
1,500
H
D,E
5
4
500
I
F,G
2
1
3,000
Using the ‘Activity-on-Node’ convention, draw and clearly label the network diagram for the
project. Then, use the normal activity durations to determine the total project duration
and its critical path.
(7 marks)
c) Penalty costs of £1,750 per week are incurred for each week the project takes to complete
after week 12. Crash the project, to complete by week 12, and calculate the additional
costs incurred.
(6 marks)
OP214: O&PM (May 13)
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