Task
Question 1 - Inventory Management
Part A
Riverina Meat distributors (RMD) purchase products from a regional meat processor, Mcdonalds Meats (AM), for resale to restaurants and catering establishments in South East Australia in the form of Cryovaced meat. The Cryovaced meat is whole cuts of meat sealed in a plastic bag from which the air is removed.
This allows for long storage of the meat at an optimum temperature (below 4 degrees C, but above freezing). It also helps in maintaining the texture of the meat Whole rumps, using this method, are a popular product and are one of the mainstays of RMD. The cryovaced whole rumps are packed 5 to a carton and the average net weight of each carton is 20 kg.
There is some competition among meat processors offering cartons of cryovaced meat, and AM has ensured the quality of their product has been maintained. In addition, over the last 12 months, AM's pricing policy to RMD has been consistent, with each carton based on a price of $6.00 per kg.
Over the last few years, the average annual demand has been constant and RMD has purchased 600 cartons per month from Adrian Meats. The holding cost at RMD is 20% per unit (carton) per year and they have established that the administrative cost of each order is $200.00 per order.
- Determine the total inventory cost for RMB, with their policy of purchasing 600 cartons per month and calculate what the savings would be if RMB used the Economic Order Quantity model
Part B
A second supplier, Kellys Meats (KM), is associated with a major Queensland feed lot and has offered discounted prices dependent on the order size (for each order) as follows 5% per kg discount for each order equal to or exceeding 800 carton orders 7.5% per kg discount for each order equal to or exceeding 1200 cartons 10% per kg discount for each order equal to or exceeding 2000 cartons
Should RMD continue to purchase their Cryovaced rumps from McDon ationalds Meats or consider Keitys Meats offer? Include the rationale for your recommend.
Part C
Riverma Meats has a limited coolroom capacity of 600 cartons of rump due to its need to also carry other cuts of meat to meet their customers demand. A local cold store or$ has excess storage space and has proposed to RMD that they could hold excess inventory $1 per
carton per week Discuss how RMD should evaluate this proposal.
Part D
Explain the importance of adopting inventory control methodologies in the current business environment. Use examples of inventory control methods to support your argument.
Students need to be aware of store turnover and the issues associated with holding excess stock when conducting their analysis. Decissions should include discussion on the viability of such an action.
Question 2 - Project Management
Part A
Elaine, owner of Elaines Catering is renovating her Kitchen to increase the efficiency to better serve her small catering operation.She also wants to increase the market value of her home. Harrisons Joinery has been chosen as the company to design and construct the Kitchen and will construct the fittings off-site at their factory and transport the finished cupboards and bench-tops for instillation when the removal of existing kitchen is completed.
Items to be removed include existing cupboards and bench tops, a small section of a wall to expand the pantry, an air-conditioning unit, existing flooring and tiling around the work area. The removal of the A/C unit will require a brick layer to fill the resultant hole. The instillation will require the coordination of a number of suppliers and contractors. Elaine has requested your help as an external consultant 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 -. 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 :
DESIGN AND CONSTRUCTION
Plan and Design Kitchen
Ordering of Materials
Construction of Kitchen Cupboards and Bench Tops
PREPARATION OF SITE
B1 Removal of existing kitchen structure, oven and cook top, dishwasher, sink
B2 removal of A/C unit and laying bricks in the wall
B3 Lay in-floor power to centre work bench and to relocated power points
B4 Installation of wall oven tower and peripheral cupboards, benches and splashback
B5 Remove linoleum from floor and prepare for new flooring
B6 Lay new flooring
INSTALLATION
C1 Install centre work bench, pantry, Oven and cooktop
C2 Connect power to all points
C3 Adapt plumbing to repositioned sink and dishwasher.
C4 -Test all connections
C6 Reinstall all other appliances
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 Elaine's Catering, offering sufficient information for senior management to review and understand the implications of embarking on such a project.
Part B
You realise that the information that Elaine 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.
Students should use the Critical Path Method (CPM) as provided through POM, and then consider other oprions that provide the information necessary to complete the project.
Question 3 - Transportation problem
Part A
Esebo Bakeries supplies outlets in 4 shopping malls within the CBD. The pastries include 4 varieties of pies, vegetable pasties and sausage rolls. The outlets are restocked daily but because of the good reputation of the product and the high demand, the outlets need to restock regularly to meet demand.
the outlet needs to notify the company when stock reaches the reorder point and restocking of the outlet can be done by any of the stores that have excess stock. The cost in fuel and time is listed below
1. Find the solution that minimizes moving costs, using POM for Windows.
2. You have now been asked to act as a consultant to the company. You realise that the transportation methodology is directed only at costs, and in this case, the cost of moving product from each bakery to an outlet in a Mall.
Explain what other factors you would consider to create a more realistic mathematical model. Discuss also what technique tor techniques) you would use to draw up your recommendations to senior management of the company.
Notes
- It is a recommended that you use POM for windows (or any other software) for the calculations in part 1. Limit your discussion on the analysed data and implications to 350
- Limit your answer to 500 words for Part 2
Additional Notes
Question 1
You can use POM for Windows for thisquestion. Note that there is a different module for the Quantity Discount model. Limit your answer to 350 words for Part C and 350 words for Part D
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 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
Question 3
Use the Transportation module in POM 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 teaching 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 Operations Management, analysing them and interpreting them in support of the decision making process.
In more specific terms, this assignment aims to:
enhance understanding of key concepts and issues of 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;
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.