Submit a report to address the questions
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Submit a report to address the questions
Introduction
In the era of machines, then bottom line of any operations is optimality. The focus of operation management is to oversee, design and redesign business operations in order to optimize the production of goods or services. Optimality is achievable through efficient usage of resources and effective management of customer requirement. In the light of the requirement of operations management, it is advisable to minimize expenses and resource usage (inputs), and maximize output. The holly farm is one such example with optimality problem. The farm managers are facing seasonality in their services and profitability. Integer programming can help solve their problem, but the chase demand plan or aggregate planning can do. Chase demand requires that the company adjust the capacity to meet the demand. While aggregate planning requires the company to determine the resource-capacity that the company will require to meet the future demand.
Figure SEQ Figure * ARABIC 1: operations management in practice.
PART 1: HOLLY FARM
Gillian’s proposal to increase the number of farm visitors in 2011 by 40 percent may be within the reach of the company, however the company need to analyze a number of factors such as demand for service and seasonality of their services. First the company must determine if the proposal is realizable by making a hypothetical statement.If the proposal by Gillian to increase the number of farm visitors in 2011 by 40 percent is the null hypothesis, we can find the t test for the hypothesis:
Ho: the company can increase the number of farm visitors by 40% in 2011.
H1: the company cannot increase the number of farm visitors by 40% in 2011.
t-Test 1-sample Test Mean 1757.25 Confidence Level 0.95 N 12 Average 1757.25 Test Stdev p 1-sample Stdev Stdev 1848.895 1848.895 0.887 SE Mean 533.7299 T 0.000 TINV 1.795885 p – One sided 0.5 Accept Null Hypothesis because p > 0.05 (Means are the same)
p – two sided 1 Accept Null Hypothesis because p > 0.05 (Means are the same)
From the t-test, and the regression analysis, it is healthy to accept the null hypothesis stating that the company can increase the number of farm visitors by 40% in 2011 (Abdel, Stuart, (1991). The trend of the number of farm visitors as it tends to 2011 is as shown by the linear trend line bellow:
The company must also analyze the capacities and identify the capacity constraints for the farm visit side of the business.
The capacity constraint for the farm visitors include, the working hours that the farm allows for visits. This cannot exceed the three hours set for viewing. Additionally, the capacity constraints such as the number of people allowed per session and the number of explanatory tapes and headphones is only 15 per session. This is the number of visitors per session. However, the Company can increase the number of visitors per session by either availing more headphones, or creating a stream for extra visitors to go to, when then current stream is busy. On the other hand, the company can increase the number of visiting hours from the present 3 to five. This is because, not all visitors to the farm are interested in milking, and some have interest in knowing real farming.• analyze the ice cream sales for 2010 and 2011
Jan 2855
Feb 2964
Mar 5819
Apr 3733
May 4831
Jun 6257
Jul 6038
Aug 5490
Sep 5380
Oct 3513
Nov 2524
Dec 5490
A-Squared 0.581
p 0.103
95% Critical Value 0.787
99% Critical Value 1.092
Mean 4574.500
Mode 5490.000
Standard Deviation 1365.223
Variance 1863833.364
Skewedness -0.333
Kurtosis -1.686
N 12.000
Minimum 2524.000
1st Quartile 3375.750
Median 5105.500
3rd Quartile 5572.250
Maximum 6257.000
Confidence Interval 867.421
for Mean (Mu) 3707.079
0.95 5441.921
For Stdev (sigma) 967.117
for Median 2964.000
Capacity plans
The from the above results we realize that the company need to determine the level capacity plans used in 2010 for the ice cream factory and the final goods inventory at the end of the year. The level capacity plan per month, which had been used by the company in 2010 for the ice cream factory, is approximately 70 percent, and the final goods inventory at the end of the year is approximately 50, this are the percentages arrived at considering he sudden drop in the number of sales. The drop in the sales volume, can be attributed to the aggressive sales and marketing activities adopted by the competitors. This may also be attributed to the sudden change in the priorities or perceptions of the buyers. While this is true, the company might record even more worrying results unless they implement turn key solution to their system and increase the profitability of their key profit contributors (Abdel, & Stuart, 1991).
The monthly production rate that satisfies all the monthly demands in 2011, is as shown below based on the Gillian’s forecasts/attempts. We use the statistical quality control and statistical process control to determine the upper, lower and the average limits. The company can determine the monthly production rate that can satisfy all the monthly demands in the year 2011. This is possible by getting the average of sales as it corresponds to the general demand for goods. From the Control chart, it is clear that the process is unstable because the Cpk>Ppk.
Other statistics are as shown below:
Cp 1.42 Decimal Points 2.00
Cpk 1.42 Unit of Measure 0.01
CpU 1.42 Number of Entries 12
CpL 1.42 Average 6477.58
Cpm 1.00 Stdev 2394.57
Cr 0.71 Median 6677.50
ZTarget/Z 0.00 Mode 6477.58
Pp 1.00 Minimum Value 3356.00
Ppk 1.00 Maximum Value 9688.00
PpU 1.00 Range 6332.00
PpL 1.00 LSL -706.20
Skewness 0.07 USL 13661.40
Stdev 2394.57 Number of Bars 3.00
Min 3356.00 Number of Classes 3.00
Max 9688.00 Class Width 2110.70
Z Bench 4.09 Beginning Point -2816.90
% Defects 0.0% Stdev Est 1692.21
PPM 0.00 d2/c4 1.13
Expected 21.84 Target 6477.6
Sigma 5.59 However, the capacity constraints of this level capacity plan are based on the availability of two key factors. The capacity constraint for this level capacity plan includes time and man power; the company can overcome these constraints by increasing the duration for working or increasing the work force. The company can increase labor to optimize the output during the production time by acquiring extra casual laborers during the peak time. Additionally, the company can determine and implement an optimal way to introduce overtime. Overtime will result into longer working hours during the peak season to maximize the output.
By varying the production with the general demand, the loss factors are minimal as the cost of storage is also reduced. The company can exploit the advantages of aggregate planning to equalize the demand and production and further utilize the equipment efficiently. This approach is multi-thronged and therefore, is more advantageous because the company meets the demands of the customer, achieve its goals as well as lower the total cost of production.
Considerations
It is important to note that Gillian must consider a number of economic factors that affect the demand for goods before deciding to increase the number of flavors from four to ten for example:
Customer specific factors such as: population demographics, population density, and the demand for goods.
Psychographics, such as components of the population, the perception and references of the buyers, consumer behavior, the overall household income and finally the total seasonality of the products
The production factors such as production capacity, cost of acquisition new equipment, the lifespan of the equipment, and the number of years for the company to break-even, the ability of the company to finance the purchasing of the new equipment, cost of capital and finally the projected revenue from the proposed expansion.
Recommendation for smooth operations without investing further capital:
Yes, the Gillian can manage the capacity/demand more smoothly without investing further capital by analyzing the buyer behavior and seasonality. In this way, he can vary the production capacity with the predetermined demand and offsetting the seasonality by increasing the production level or leasing put the unused capacity during the low seasons. He can earn revenue with the leases even during the low seasons. On the other hand, he can products goods on demand, just like just in time, where goods are only producing or supplied when need arises.
Part 2: the Sharon construction corporation
The project in at hand is a large sale project that requires the company to consider all the steps in project management and operations planning. This includes project scheduling and project planning and programming. The project plans for the stadium will like that the one shown below:
Explanation
The plan as it stands, will take longer than the committee expected it to take; it is therefore, advisable to look for projects that the project team can crash to reduce the duration on f the project. In this way, the clients can be having their projects complete within the set time and budget while the project team can complete their project within the set time. Early completion of project helps the project team to limit project cost overruns and other problem inherent with such large scale project. On the other hand, the project team can increase the project duration to accommodate for late delivery of materials and other problem associated with the supply chain. However, the company must notes that any delay in any of the project elements would affect the project schedule and lead to project cost overruns.
Critical activities and critical path
The critical activities in the project include clearing the site, excavation, subsurface drainage, pouring the concrete footing, pouring support for seat galleries, working on light, painting seatbelts, erecting the roof, and paining the scoreboard.
Identify the plan’s limitations
Lack of flexibility
The project plan at this stage views the project as a rigid set of the project that is interconnected. This might lead to project failure as it does not allow for project crashing, and accommodation of new technicalities and adjustment realized along the way. Project should be flexible to allow w for the achievement of the original thought and innovation, which are pertinent to the life of the project (Bamberger, Rugh, Church, & Fort, 24).
Externalities
Project is time bound and resource based meaning that any project scheduled must be achieved within the set time and within budget. However, as the project managers are focused on managing the budget and time, they may fail to address, the externalities that arise along the way. Setting the dates before the start of the project makes the plan extremely rigid and externalities might arise, this lowers the sustainability of the project.
Limiting of the broader development goals
Turner (28), argues that the project schedule only focuses on the basis phases of the project such as clearing sites, excavation, sub surface drainage, erection of the roofs etc. This removes the focus from the overall project goals as the project teams are only interested in the successful completion of the project and not the long terms sustainability of the whole stadium
Proposal for completing the project in time and within the budget:
The company is facing problems with resource allocation and timing; it is therefore important for the company to analyze the proposal provided by the stakeholder and determine the optimal solution to the pending problem that might cost the company reputation and money. The proposals and analysis based on the expected costs (EC) are as shown below:
First proposal: Expedite the pouring of seat gallery supports. This would cost £20,000 and cut the duration of the activity to six weeks.
The cost benefits analysis of expediting the pouring of the seat gallery support makes it the best option, because the cost of losing the project or the penalty for failing to deliver the project within the deadlines is much high when summed up. It is therefore, advisable to incurs the additional cost and limit the possibilities of the losing the project. The pouring of the seat gallery is also a critical project. Consequently crashing it makes it an extremely beneficial activity (William, 103).
Second proposal: The same as proposal 1, but in addition, put a double shift on the filling of the field. A cost of £10,000 would result in a five-week time reduction of this activity.
This is an augmented activity geared at reducing the number of days taken to complete the project. However, it increases the cost of the project in addition to the original cost of expediting the pouring of the seat gallery support. This is more than the original expected cost, and might reduce the profits of the company and may affect the budget of the whole project. The potential hazard includes inability to compete the project due to project cost overrun.
Third proposal: the roof is extremely valuable since it precedes several activities. The use of three shifts and some overtime could cut six weeks off the roofing at an additional cost of only £9,000.
The roof is a critical project, crushing it is also a tremendously exciting opportunity for the company to reduce the cost of the project overrun in terms of fines. Introduction of the overtimes and the three shifts can be remarkably effective in completing the project. However, there is a project cost overrun, which translates to unnecessary expenses for the whole project, which the company did not project for initially.
Fourth proposal: Do nothing remarkable until November 23, 2012. Then, if December is indeed colder than normal and no strike occurs, defer the pouring of the seats until the cold wave breaks if the schedule permits; otherwise, heat whenever necessary. If a strike occurs, wait until it is over (no other choice) and then expedite all remaining activities. In that case, a two-third of the normal duration of any activity could be cut in maximum. The additional cost per activity for any week, which is cut, would be £3,000.
This is also a tremendously exciting proposal; however, there are a number of pitfalls to this than other proposal. For one, company has a extremely poor way of determining what is necessary; they cannot tell the weather in advance. This means that if the weather does not occur as the company had expected, the expected cost cannot hold and there shall be cost overruns related to the project. On the other hand, if the weather occurs as the company had expected the company would gain from the windfall from the expected cost (Russell, &, Taylor, 212; Louw, 199). The amount of money saved during the project (3000 per week) does not justify the additional cost incurred while trying to crash the project. The saving would mean increasing the duration taken while executing some parts of the project plan and making up in the project. It is therefore, not advisable to adopt this measure because it may not be able to determine the most prestigious projects that it can crash to remain within the loop. If the company could develop a way by which it can combine a number of proposals for the final benefits of the project team and the clients, then the company can implement. However as it stands, the company does not consider integrating two proposals. This leaves the company with the proposal number two as the most optimal proposal that the company can adopt to overcome the looming project failure.
Apart from the EC, it is also important to consider some other factors when evaluating then proposals. These factors are:
The practicability and the operational efficiency related to the projected proposal are extremely significant factors to consider when making such decision, if the proposed activity is not practicable, it might end in project failure or large project cost overruns and failure to deliver the project within the expected period. The company would have to work out other ways of beating the deadline leading to failure in other aspect of the project such as social and ecological feasibility. This is the other organizational or behavioral factors that the company must consider project management. Additionally the company might have to consider factors such as morale.
Dilworth, (92) states that it is essential as the president of the of the company, to address the organizational and behavioral problems that might affect the success full completion of the project by emphasizing on Motivating the diverse workforce while at the same time trying to facilitate team decision. This synergy is much valuable especially when the whole project is facing a crisis. The interpersonal conflicts occurring within the project team can be resolved amicably to increase the level of interpersonal understanding and in interaction. This is one of the best ways to increase the success rate of a brainstorming session with the aim of solving the looming project failures. Harrison, &, Dennis, (120), argue that the president should also strengthen the team’s accountability and create informal power within the project team. If the company implements these recommendations, they can realize real synergy and, increased rate of project success. This is not only, the best recipe for project planning and execution but also for operational excellence (Dinsmore et al, 205)
Conclusion
The two scenarios in the report are manageable in the context of operations management. The management only needs to ensure that their practices are optimized to meet their requirement. This involves the analysis and implementation of the most efficient method to arrange the factors of production effectively.
Works cited
Dilworth, J. Production and Operations Management: Manufacturing andServices. The Fifth Editionn. McGraw-Hill, Inc. (1993).
Russell, R. &, W. Taylor, Operations Management. New Jersey: Prentice Hall. (2000).
William J. Production / Operations Management. Massachusetts: Irwin. (1993).
Bamberger, M., Rugh, J., Church, M., & Fort, L. Shoestring evaluation: Designing impact evaluations under budget, time and data constraints. American Journal of Evaluation, 25,5 – 37. (2004).
Louw, J. Improving practice through evaluation. In D. Donald, A. Dawes & J. Louw (Eds.), Addressing childhood adversity (pp. 60-73). Cape Town: David Philip. (1999).
Abdel T, &Stuart M Software project dynamics, an integrated approach . Prentice- Hall Upper Saddle River, (1991).
Turner J. The handbook of project-based management. London : Mc Gro Hill. (1998).
Harrison, L, &, Dennis L Advanced project management: a structured approach. Gower Publishing, Ltd., (2004)
Paul C. Dinsmore et al. The right projects done right!. John Wiley and Sons, (2005)
Lewis R. Project Management. McGraw-Hill Professional, (2006).
