# Operation management – student paper – calculations

Question 1

1. Calculation

 A B C D A. Demographics 14 14 12 18 B. Visitor market 16 12 18 15 C. Transportation 20 10 15 18 D. Restaurants/nightclubs 8 9 6.5 6.5 E. Low political risk 9 6 5 7 F. Real estate market 6.5 7.5 8.5 7 G. Comparable market analysis 7 6 6.5 8 Total score 80.5 64.5 71.5 79.5

(70*0.2)+(80*0.2)+(100*0.2)+(80*0.1)+(90*0.1)+(65*0.1)+(70*0.1)=80.5

(70*0.2)+(60*0.2)+(50*0.2)+(90*0.1)+(60*0.1)+(75*0.1)+(60*0.1)=64.5

(60*0.2)+(90*0.2)+(75*0.2)+(65*0.1)+(50*0.1)+(85*0.1)+(65*0.1)=71.5

(90*0.2)+(75*0.2)+(90*0.2)+(65*0.1)+(70*0.1)+(70*0.1)+(80*0.1)=79.5

A is the highest rated of the four European cities under consideration.

2. Analysis

When franchising can maximize the benefit, I think Hank Rock prefers to franchise a café. In fact, franchising can provide a lot of advantages. Firstly, franchising helps enterprises expand, increase market share and build brand equity, which upgrades the comprehensive competitiveness. Secondly, it is easier to achieve more rapid market penetration at a lower capital cost. Thirdly, the franchisee shares the risk of expanding the market share of the franchisor. Fourthly, use the power of franchising as a system to get and keep more and more customers — building customer loyalty.

In some countries where corruption is endemic, Hard Rock should consider regional protectionism and bribery. Many Government officers often set up obstacles under the pretext of regional protectionism for the franchising. Actually, they want to get benefits from franchising. Bribery is inevitable in these places. If Hard Rock did not comply with the regulations, there would be a lot of subtle things constraints the enterprise.

Question 2

A.

 Task Early Start Early Finish Late Start Late Finish Slack A 0 5 0 5 0 B 0 3 6 9 6 C 5 16 5 16 0 D 0 4 9 13 9 E 3 10 9 16 6 F 4 10 15 21 11 G 3 7 17 21 14 H 4 7 13 16 9 I 10 15 21 26 11 J 16 22 16 22 0 K 22 26 22 26 0

B. The critical path that is A→C→J→K.

C. The project needs 26 days.

D. No impact.

E. This operational tool is useful in an industry because it can provide some significant information. For example, my company intends to develop a project. Firstly, we will use critical path analysis method to assess this project. Step 1: What tasks must be carried out. Step 2: Where parallel activity can be performed. Step 3: How long is the shortest time to complete the project. Step 4: What kinds of resources will be needed to execute the project. Step 5: How to arrange the sequence of activities, scheduling and timings involved. Step 6: which task should be done fist and which should be last–task priorities. Step 7: The most efficient way of shortening time on urgent projects. Secondly, we can use the tool to make an activity scheduling. For instant, when is the expected project completion time, whether the probability of completion exists before a specified date and the dates of the project start and end.

Question 3

JIT partnership exists when a supplier and buyer work together to remove waste and drive down costs. There are four goals of JIT partnerships:

Elimination of unnecessary activities

Such as orders, modify orders, receiving, handling, billing, quality inspection, counting, storage and operation, a large amount of time, effort and money spent on these activities are waste. JIT partnership can streamline the process and remove the waste, which improves work efficiency. For example, a material processing factory and its suppliers are long-term relationship, with JIT, when the plant needs raw materials, the system gives orders to supplier, and then the supplier directly delivers the goods to production lines. Because quality is guaranteed by the supplier, so the factory does not require inspection. The whole process simplified is just like only a transport, as an internal operation of factory.

Elimination of in-plant inventory

With JIT, the supplier sends the specific number of goods to the designated location in time according to the demand side of the instruction. The goods will be processed immediately without checking and others unnecessary steps, which effectively eliminates in-plant inventory. For example, Sanyo requires suppliers to place the parts directly next to the production process. If the parts do not arrive at specified process on time, the supplier is responsible for the consequences.

Elimination of in-transit inventory

In-transit inventory depends on demand and production – distribution cycle. The way to reduce the cost of in-transit inventory in the proportion of total assets is to transport in small-volume and high-frequency. Reliable suppliers can reduce the transport between the various warehouses and storage time. For example, by Haier requirements, the supplier only transports a batch of parts which is immediately needed every time, and such transport at least 10 times a day.

Elimination of poor supplier

The JIT firm only chooses one or few supplier for each raw material or component. As supplier and firm are long-term relationship, the ability of supplier will affect the economic benefits to the firm. The firm should help supplier to find ways to reduce costs. Supplier should be involved in the product design process; also the firm should help suppliers improve technical capability and management level. For example, the relationship between IBM and Great Wall is buyer and supplier. By helping improve the technical level of the Great Wall Company, IBM is provided higher quality products and better services.

Question4

A. comparing line balancing and project management, two similarities between them are both of them use network diagram to indicate the progress of the project activities and their inter-relationship; also, they can estimate the longest operation time and the shortest operation time. They also have many differences. First, line balancing designs product layouts and the product assembly line. Project management is the discipline of planning, organizing and managing resources that brings about the successful completion of specific project goals and objectives. Second, project management can get the earliest start/finish time of an activity and latest start/finish time of an activity but line balancing can not.

B. C= (24hours*60mins/hour)/96units=15mins/unit

C. (24hours*60mins/hour)/10mins/unit=144unit

D. (3+6+7+5+2+4+5+7+1+6+4)/10=5workstations

E. (3+6+7+5+2+4+5+7+1+6+4)/ (6*10) =83.3%

F. 1-83.3% =16.7%