# Service operations management

Assessment Task 1: Assignment Value:30% Due date:06-May-2013 Return date: 27-May-2013 Submission method options Hand delivery (option applies to Internal only)
Alternative submission method
Task The assignment consists of 3 exercises, and the marks for each question varies. Printouts provided with the prose solutions and explanation of the POM-QM solutions must be originals. A maximum of 4 printout pages may be included in the form of POM-QM reports. Students should note that the material explaining them is more important than the printouts themselves. This assignment will be marked out of 50 marks but will constitute 30% of the overall marks for the subject. Question 1 – Inventory Management Part A Riverina Industrial Electronics Distrbutors (RIED) is involved in distributing electronic components to a range of commercial customers. The average demand for a particular item of inventory is 640 units per day. The item is sold at a cost of \$20.00 a unit from Regional Computing Components. The holding cost is 20% per unit per year. It has been established that the cost of each order in the organisation is \$200.00 per order. What is the economic order quantity and the total cost for this policy? A second supplier, InfoSys Parts, intends to sell this item at a cost that is lower (\$19.00 per unit). But the minimum order quantity for each order is 10,000 units. Should this item be bought from InfoSys Parts or Regional Computing Components? (Assume a 5-day working week, and 50 working weeks a year) (8 marks) Part B Explain how such a basic mathematical model used in this question (the EOQ or Quantity Discount modes) can be altered to make it more realistic to include features of safety stock and re-order points. (5 marks) Part C There are a number of modern inventory control methodologies. However, not many organizations have adopted them. Explain the reasons that modern inventory control methods and systems are not in popular usage. Discuss also how organisations can be persuaded to adopt modern inventory control methodologies. (5 marks) Question 2 – Project Management Part A Intekma AutoParts (IAP) are planning to expand their factory to cope with the additional demand for their products and have requested your help as an external consultant. IAP wants to determine what is involved in the project and how soon it can be completed. They have asked for a plan in the form of a Gantt Chart and Critical Path Network with relevant activity times, project duration and identification of the critical path. In the initial planning stages, you have decided that there are three major components (or sub-projects) in this expansion project – building, processing equipment and material handling system. After spending a few weeks in scoping the work, you have established a list of activities according to the three major components. Details of these are as follows : BUILDING A1 Design Building A2 Ordering of Materials A3 Construction of Building PROCESS EQUIPMENT B1 In house Design of Equipment B2 Detailed Design by Consultant B3 Tender Exercise for Equipment B4 Installation and Commissioning of Equipment MATERIAL HANDLING SYSTEM C1 Study of Processing Equipment by Consultant C2 Design of Material handling Equipment C3 Purchase of Equipment C4 Installation and Commissioning Discussions with contractors and the client have helped you to draw up a table of estimated durations for the activities and the relationships among them as indicated below. Write a report on the project plan to senior management of IAP, offering sufficient information for senior management to review and understand the implications of embarking on such a project.

 Activity Preceding Activity Duration (in weeks) A1 None 6 A2 A1 5 A3 A2 1 B1 A1 2 B2 B1 8 B3 B2 4 B4 B3 4 C1 B2 2 C2 C1 4 C3 C2 4 C4 C3 4

(10 marks) Part B You realise that the information that IAP has requested is inadequate and suitable for only basic planning purposes. In a second section of the report, present your recommendations on what other information is relevant and what techniques and systems should be used to plan, monitor and control the project. (10 marks) Question 3 – Transportation problem Part A In the past, shipments of blood for 4 hospitals in rural Victoria are co-ordinated from a cental office. The office draws up periodic delivery schedules for 4 major hospitals in the region from the blood banks. The blood is shipped from 3 major blood banks. An auditor has found that the manual technique involved in deriving the schedules is not cost effective, and the central office has decided to use mathematical modelling for minimising the costs involved. The first step involved the central office collecting data on average costs, demand and supply. Costs to ship a standard container of blood from each bank to each hospital have been collated and these are provided below. Also listed, in the table, are the numbers of containers available in each blood bank, and the number of containers required by each hospital. All these figures have been based on average weekly requirements and supply.

 Hospital 1 Hospital 2 Hospital 3 Hospital 4 Supply Bank 1 \$8.00 \$9.00 \$11.00 \$16.00 100 Bank 2 \$12.00 \$7.00 \$5.00 \$8.00 80 Bank3 \$14.00 \$10.00 \$6.00 \$7.00 40 Demand 80 80 40 30

As the consultant to the regional blood bank, you are required to determine the number of weekly shipments from each blood bank to each hospital. Direct your answers in an attempt to minimise the total costs involved. Discuss the implications of the solution. (6 marks) Part B Explain what other factors you would consider to create a more realistic mathematical model. In your answer, discuss whether you would use a different mathematical modelling technique, or modify the transportation model to include new parameters. (6 marks) Additional Notes

1. Question 1

You can use POM-QM for Windows for this question. Note that there is a different module for the Quantity Discount Model. Limit your answer to 350 words for Part B and 350 words for Part C

1. Question 2

For Part 1 of this question, the precedence diagram should be drawn using the methodology illustrated in the Interact site for this subject. Use the POM-QM for Windows software only to confirm your calculations (i.e. to check your answers after you have drawn the network and calculated the activity times, project duration, etc). The diagram can be drawn manually, or by using some software such as MS PowerPoint. Limit your answer to 350 words for Part A and 500 words for Part B. This word count will not include any tables and figures that are incorporated in your answer

1. Question 3

Use the Transportation module in POM-QM for Windows. Limit your answer to 200 words in Part A, and 350 words for Part B Rationale

This assignment is based on topics scheduled for the first 6 weeks and involves the application theoretical concepts and both quantitative and qualitative techniques. The objective is to develop skills in creating frameworks and models of typical problems and issues faced in Service Operations Management, analysing them and interpreting them as part of the decision making process.
In more specific terms, this assignment aims to:

• enhance understanding of key concepts and issues of Service Operations Management;
• develop analytical skills required for drawing up models based on information gleaned from short case studies and other data describing various situations;
• offer experience in applying contemporary and evolving operations management tools, concepts and models to a variety of situations;
• develop skills in analysing models and interpreting the results for improving operations performance and for other decision making processes;
• offer insights into how theoretical concepts, models and systems can be modified and applied in practical or realistic situations.

Marking criteria

Your assignment will be evaluated on the following criteria:

• critical and analytical thinking in addition to logical reasoning
• adequate use of the resources for this subject
• evidence of a good understanding of the concepts, systems and models in Service Operations Management
• evidence of the ability to apply the tools and models studied.

Presentation Assessment criteria for content

1. The assignment should answer the question set i.e. it should cover all aspects of the topic without omissions or additions. (If you are in doubt about the requirements, contact the subject coordinator).
2. The assignment should focus on the issues raised in the specific units/topics listed in the headings at the beginning of the assignment details.
3. The assignment should provide evidence of breadth and depth of reading and that you have read the relevant parts of the set text(s) and supplied readings with references based on different sources. Assignments not adequately referenced will not achieve a pass grade. The Author/Date style of referencing is preferred e.g. (Jones 1989, p. 123).
4. A bibliography of the books, journal articles and other sources cited must be included at the end of the assignment. This should be an alphabetical listing by author of the sources cited with full details in the format recommended by the University’s Division of Library Services (see details below). Note that references to subject mail packages should be cited by the name of the author, not the package code or name, as should readings within mail packages. This applies both to references/citations in the body of the assignment as well as in the bibliography.
5. Word limits:Students mustobserve the word limits indicated for assignments. Over length assignments willbe penalised. Considerably over length assignments will not be marked.

Assessment criteria for presentation

1. The assignment should be written in a report style of writing making use of headings and sub-headings as well as short concise paragraphs. Point format should be used within a paragraph structure where appropriate. A systematic approach should be taken in the use of headings e.g. lower case bold for section headings lower case italics bold for sub-headings, lower case italics for further sub-divisions etc.
2. The style of writing should be clear and concise, paying attention to sentence structure to ensure clarity of meaning. Attention should also be paid to punctuation, including the correct use of commas and the apostrophe.
3. Assignments should not be typed using double spacing, as it is difficult to read. Single or 1.5 spacing should be used and a line should be left between paragraphs. A plain font such as Times New Roman no less than size 12 should be used and the print should be reasonably dark.
4. A 5cm margin should be left on the left-hand side of each page for comments and each page should be numbered. If being posted, pages should be fastened securely in the top left-hand corner. Assignments should not be secured any other way or enclosed in folders, binders etc