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The assignment consists of 3 exercises. Explanation of the POM-QM solutions must be originals.

problem 1 - Inventory Management

 Part A

Riverina Industrial Electronics Distrbutors (RIED) is involved in distributing electronic components to the range of commercial customers. 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. 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 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 minimum order quantity for each order is 10,000 units. Must this item be bought from InfoSys Parts or Regional Computing Components?
(Assume a 5-day working week, and 50 working weeks a year)

Part B

Describe how such a basic mathematical model used in this problem (the EOQ or Quantity Discount modes) could be altered to make it more realistic to include features of safety stock and re-order points.

Part C

There are a various modern inventory control methodologies. Though, not many organizations have adopted them. Describe the reasons that modern inventory control methods and systems are not in popular usage. Discuss also how organisations could be persuaded to adopt modern inventory control methodologies.

problem 2 - Project Management

Part A

Intekma AutoParts (IAP) are planning to expand their factory to cope with extra demand for their products and have requested your help as an external consultant. IAP wants to find what is involved in the project and how soon it could be completed. They have asked for a plan in the form of a Gantt Chart and Critical Path Network with appropriate activity times, project duration and identification of the critical path. In the early planning stages, you have decided that there are three main 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 main components. Details of these are as follows :


A1 Design Building
A2 Ordering of Materials
A3 Construction of Building


B1 In house Design of Equipment
B2 Detailed Design by Consultant
B3 Tender Exercise for Equipment
B4 Installation and Commissioning of Equipment


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 client have helped you to draw up a table of estimated durations for the activities and the relationships among them as indicated below.

prepare a report on project plan to senior management of IAP, offering enough 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

Part B

You realise that information that IAP has requested is insufficient and appropriate for only basic planning purposes. In a second section of the report, present your recommendations on what other information is significant and what techniques and systems must be used to plan, monitor and control the project.

problem 3 - Transportation problem

 Part A

In the past, shipments of blood for 4 hospitals in rural Victoria are co-ordinated from a central office. The office draws up periodic delivery schedules for 4 main hospitals in the region from the blood banks. Blood is shipped from 3 major blood banks. Auditor has found that manual technique involved in deriving schedules is not cost efficient, and the central office has decided to make use of mathematical modelling for minimising costs involved.
First step involved 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. In addition listed, in the table, are the numbers of containers available in each blood bank, and number of containers needed 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 needed to find 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.

Part B

Describe what other factors you will consider to create a more realistic mathematical model. In your answer, discuss whether you will use a different mathematical modelling technique, or modify the transportation model to include new parameters.

a. problem 1

You could use POM-QM for Windows for this problem. 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

b. problem 2

For Part 1 of this problem, precedence diagram must 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 find outd the activity times, project duration, etc). The diagram could be drawn manually, or by using some software like MS PowerPoint. Limit your answer to 350 words for Part A and 500 words for Part B.

c. problem 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
In more specific terms, this assignment aims to:

• improve understanding of main concepts and issues of Service Operations Management;

• develop analytical skills needed 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;

• acknowledge the advantages, disadvantages and limitations of these tools; and

• offer insights into how theoretical concepts, models and systems can be modified and applied in practical or realistic situations.

1. The assignment must answer the problem set i.e. it should cover all aspects of the topic without omissions or additions.

2. The assignment must concentrate on the issues raised in the specific units/topics listed in the headings at the beginning of the assignment details.

3. The assignment must 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.

4. Word limits: Students must observe the word limits indicated for assignments.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M91710

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