• Post:By Admin
• February 21, 2025

Month

Unit sales figure

June

28

July

37

August

34

September

35

October

39

Table 1: Unit sales figures

1. Make a forecast for November using a three-period moving average and a four-period moving average. (Clearly show all formulas and calculations and round to two decimal places). [5 marks]

2. Using the data presented in Table 1, what will be the forecast for December (using both the three-period moving average and four-period moving average) if the actual unit sales figure for November turns out to be 43? (Clearly show all formulas and calculations and round to two decimal places). [5 marks]

3. Using the data presented in Table 1, what will be the forecasts for November and

December using the exponential smoothing method?

Use alpha values of 0.2 and 0.4 and a forecast value for October of 35. Actual sales for November would be 43. (Clearly show all formulas and calculations and round to two decimal places). [9 marks]

4. Forecasting methods can be classified into two groups: qualitative and quantitative. Discuss in detail the characteristics, strengths and weaknesses of both groups.

[6 marks]

Question 2

1. The owners of the Swansea Organic Milk Dairy have determined that they need to expand their facility in order to meet the projected increased demand for locally sourced, organic milk. The decision is whether to expand now with a large facility or expand small, with the possibility of having to expand again in three years. The owners have estimated the following chances for demand:

• The likelihood of demand being high is 0.65

• The likelihood of demand being low is 0.35

Profits for each alternative have been estimated as follows:

• Large expansion has an estimated profitability of either £100,000 or £70,000, depending on whether demand turns out to be high or low, respectively.

• Small expansion has a profitability of £60,000, assuming demand is low.

• Small expansion with an occurrence of high demand would require considering whether to expand further. If the processing plant expands at this point, the profitability will be £80,000. If it does not expand further, the profitability is expected to be £62,000 (you should assume that the company is pursuing a policy of profit maximisation).

Draw a decision tree showing the decisions, chance events and their probabilities, the profitability of outcomes. Calculate the expected values and recommend which alternative the dairy should pursue, explaining your rationale.

(All calculations must be clearly shown). [13 marks]

2. Different facility sizes have different best operating levels - a very important consideration when making long-term capacity decisions. Discuss the risks and rewards in relation to choosing between the following alternatives:

Alternative 1 - Purchase one large facility, requiring one large initial investment. Alternative 2 - Add capacity incrementally in smaller chunks as needed.

[5 marks]

Question 2 continues on the next page…

Question 2 (continued)

3. The owners of a private language school, University English are considering where to locate their new school in Swansea. They have narrowed their search down to two locations (in West Swansea and Central Swansea) and have decided to use the factor rating method to make their decision. They have listed the factors they consider important and assigned a factor score to each location based on a 5-point scale. The information is shown in Table 2.

Table 2: Factor scores for both locations

Using the procedure for factor rating, decide which alternative offers the more suitable location. [7 marks]

Question 3

1. Aside from holding and ordering costs, there are various other costs associated with managing inventory. Discuss two of these other costs in detail. [4 marks]

2. In the following sawtooth inventory profile diagram (figure 1), two inventory plans with different order quantities (Q) and different frequencies of delivery are shown; order quantity for Plan A = 200 units and Plan B = 50 units.

Figure 1:

Total demand (D) is 350 units, the holding cost per unit (Ch) is equal to (£0.6) and the ordering cost per order (Co) is (£11.5). Calculate the total costs for each plan and state which one is more preferable along with the reason why. [4 marks]

3. There is a stark difference in the composition of the total costs of Plans A and B. Explain this difference and why it occurs. Use the breakdown of costs for each plan to help illustrate your answer. [4 marks]

4. Neither plan provides the economic order quantity (EOQ). Calculate two new plans (C and D) with order quantities of 150 and 100 respectively. [3 marks]

Question 3 continues on the next page…

Question 3 (continued)

5. The results of your four plans will provide an indicative EOQ value. State this value and discuss in a precise manner, why it is not the exact, true value.

Your answer should include reference to the salient points identified on the graph, which was used in the lecture and seminar, to map out holding costs, order costs and total costs; (NOT figure 1).

You may find sketching this graph using the data from your plans will assist you in the process of answering the question, but you DO NOT need to submit the graph as part of your answer.

Additional calculations in the form of plans E, F etc. may also assist your explanation of the EOQ and can be included in your answer if you deem this helpful.

[10 marks]

Question 4

1. Table 3 shows the demand figures for a product over a six-month period. Complete the table assuming a Level production plan.

[6 marks]

Table 3:

2. Comment on your results and explain whether you consider a Level plan is a suitable approach for this particular business. Your comment should include reference to the ‘fill rate’. [4 marks]

3. Using Table 3 again, this time complete for a Chase production plan. [3 marks]

Question 4 continues on the next page…

Question 4 (continued)

4. Explain whether a Level or Chase plan is more suitable for the demand pattern experienced by this business. You should support your answer with numerical data derived from Table 4. In comparing the costs, state any assumptions made. Assume a starting workforce of 8 and that fractional workers are permissible.

[12 marks]

Table 4

Question 5

1. Using appropriate examples, discuss in detail the issues of ‘waste’ and ‘value-added’ activities in a ‘Lean’ approach to manufacturing/provision of services.

[12.5 marks]

2. Using appropriate examples, discuss in detail how ‘Lean’ production differs from traditional approaches. [12.5 marks]
   

Question 6

1. Designing a process requires consideration of the production strategy to be employed, for example ‘Make-to-Stock’. Discuss and provide detailed examples of all three common production strategies. [9 marks]

2. The City of London Helicopter Repair Centre has six helicopters waiting to be processed. All helicopters are currently on site and awaiting the repair schedule. The job information is shown in Table 5.

Table 5: Information pertaining to jobs

1. Determine the sequence the City of London Helicopter Repair Centre should follow if it uses the following two priority rules - EDD (Earliest Due Date) and SPT (Shortest Processing Time). [2 marks]

2. Based on the sequence developed for SPT in part i), calculate the following performance measures (NOTE: Please round your calculations to two decimal places).

[9 marks]

• Make-span

• Mean job flow-time

• Average number of jobs in the system

• Mean job lateness

• Mean job tardiness

3. The company’s advertising literature claims their helicopters are always repaired earlier than the agreed time (on average). Based on the results from this exercise, is this claim true and why might this claim, not be so pertinent anyway to the average customer. [5 marks]

End of Paper