Reference no: EM133626546

Assignment: Supply Chain Planning and Management

Section I

Question A. Answer all four parts of this question. Use diagrams to illustrate your answers where appropriate. There is no word limit for parts (1) and (2). The word limit for parts (3) and (4) is 250 words each. Do not copy text or diagrams from books, articles or the lecture materials. Rephrase using your own words.

1. A high-tech manufacturing company produces advanced smartphones. The smartphone is a complex product with various components and subassemblies. The lead times for each component and subassembly are as follows:

Case and Housing: 6 weeks
Lithium-ion Battery: 2 weeks
Display Screen: 3 weeks
Printed Circuit Board (PCB): 3 weeks
Microprocessor: 4 weeks
Charger and Accessories: 2 weeks
Camera Module: 2 weeks

The company plans to produce 5,000 smartphones over the next 12 weeks. The bill of materials (BOM) for the smartphone is highly detailed, with multiple levels of components and subassemblies. Three individual subassemblies are required to produce the final product smartphone. The screen assembly takes 2 weeks and includes one display screen and four microprocessors. The battery assembly takes one week and requires one lithium-ion battery. The camera assembly takes 3 weeks and includes two camera modules. The main assembly of the smartphone takes one week and includes the three subassemblies above and one printed circuit board, two case and housing units, and one unit of charger and accessories. Draw the product structure diagram of the smartphone with lead times and indicate very briefly why this provides vital information for MRP calculations.

2. A local bicycle company stocks repair kits in its warehouse. The monthly demand for repair kits follows a normal distribution with an expected demand of 180 units and a standard deviation of 40 units. The holding cost of each repair kit is £4 per unit per month. The cost of placing an order is £250. Procurement lead time is 1.5 months. The company implements an (R,Q) inventory management policy. The management wants to achieve a service level such that the probability of not stocking out during the lead time is 0.97. Calculate the reorder quantity and reorder point for repair kits for this company.

3. Why are flow shops generally easier to plan and manage than job shops? Provide an example of each to illustrate your answer.

4. A food company has three main processing stages - mixing, baking, and packaging. The company makes many different products and employs many people for the mixing, baking, and packaging operations. It is experiencing problems with its capacity management. Explain very briefly to the company how it should estimate its effective capacity for the next three months and what factors it should consider in doing so.

Section II

Answer EITHER Question B OR Question C. There is no word limit for Section II questions. Excel screenshots are allowed but make sure that you explain how everything is calculated.

Question B. Trent Homes is a furniture retailer. The quarterly sales in hundred units of furniture for the last three years are given in the table below:

Year	Quarter	Sales
1	1	30
	2	42
	3	48
	4	34
2	5	43
	6	65
	7	61
	8	47
3	9	50
	10	80
	11	85
	12	62

1. By inspecting the sales data of the last three years, briefly comment on the suitability or not of applying simple moving average and exponential smoothing methods to forecast this time series.

2. Trent Homes uses Holt's method for forecasting its quarterly sales. Calculate the one-step ahead forecasts for quarters 6 to 10 using the following parameter values: S4 = 35 and G4 = 6 (in units of a hundred) α = 0.3 and β = 0.1. Show your calculations.

3. Compute the MAD and MAPE based on the forecasts and sales data in quarters 6 to 10. Show your calculations.

4. Calculate the sales forecast for quarter 13 at the end of quarter 10. Show your calculations.

5. Comment on why the forecast you obtained in part (4) might be inaccurate and suggest a possible way to improve it (no calculations are needed).

Question C. A luxury bag manufacturer has two major bag designs D1 and D2. The predicted monthly demand for D1 in 2025 is shown in the table below. The demand for D2 is expected to exceed the demand for D1 by 20% in January, March, May and November. However, D2 demand is expected to be 60% of D1 demand in April, August, September, and December, and 70% of D1 demand in February, June, July, and October. One D1 bag takes 1.5 labour hours to make, while a D2 bag takes 2 labour hours to make. The manufacturer currently has 50 workers in their factory and each worker works 8 hours per day. The number of days per month for 2025 is as follows: 21, 19, 22, 24, 21, 23, 22, 24, 23, 20, 23, 20.

The initial inventory available at the beginning of January 2025 for D1 is 300 and for D2 is 250. The ending inventory requirements for D1 is 400 and for D2 is 500 by the end of December 2025. The cost of hiring and training a new worker is £800, and the cost to lay off one worker is £1000. The manufacturer estimates a cost of £2.4 to store each product for a month.

Month	Forecasted demand (D1)	Month	Forecasted demand (D1)
January	2000	July	4600
February	3200	August	3000
March	2700	September	2700
April	4100	October	2000
May	2500	November	3300
June	3400	December	3100

1. Describe the aggregate unit of production in aggregate planning and define the most appropriate aggregate unit of production to use in this problem.

2. Using the minimum constant workforce strategy, develop a spreadsheet to find an aggregate plan and determine the total cost of this plan. Explain your approach.

3. Using the zero-inventory strategy, develop a spreadsheet to find a plan that hires and fires workers monthly in order to minimize inventory costs, and determine the total cost of this plan. Explain your approach.

4. The manufacturer needs to plan five days of factory closure for essential maintenance. The manufacturer can do this maintenance in February or October. Using the minimum constant workforce strategy in (2), which month would be best for maintenance? Explain your approach.

Section III

Answer EITHER Question D OR Question E. The total word limit for Section III questions is 1000 words.

Question D. Company A builds large-scale refrigeration systems for food and pharmaceutical companies around the world. Most of the systems it builds are high cost and must be designed and manufactured to meet the specific refrigeration requirements of the customer including fitting into the customer's existing premises. Company B manufactures sofas, armchairs and three-piece suites in many design variants, colours, and material types. These are sold through many retail outlets in the UK. Company C is a high-volume producer mainly of flavoured milk drinks in different sizes and a range of flavours, which are sold in all the major UK supermarkets. It also produces a range of energy-enhancing flavoured specialist drinks made in smaller volumes for specialist health food stores.
All three companies have their main production facilities in Nottingham.

1. Advise companies A, B and C on whether they should use a Make-to-Stock (MTS), Assemble-to-Order (ATO), Make-to-Order (MTO), or Engineer-to-Order (ETO) approach or some combination of these to meet their orders and manage their operations. In your answer, use the information given above but also note any assumptions you make and what other information you might seek from each company. (Word limit: 750 words)

2. How will the Customer Order Decoupling Point (CODP) differ for these three companies? Illustrate this with a diagram you draw yourself for each of the three companies. (Word limit: 250 words)

Question E. Specialty Materials UK produces many different specialist material products and is experiencing very high demand for its products. It needs to ensure that it produces the maximum volume of products possible from its Nottingham production site to meet the high demand. All its products go through specific pre¬processing stages and are then baked in a large industrial oven for a period of time. The pre-processing stages and processing times depend on the recipe for that product. Pre-mixed products do not deteriorate - they can wait for any length of time until the oven is available. A small proportion of its products need a further processing stage to apply specialist coatings.

The company has conducted an analysis which has shown that its products can take one of five pre-processing routes before baking in the oven (e.g., A-B, C-D, A-C-D, etc) as illustrated in the Figure below. Products may take the same route but require different times in pre-processing, in the oven, and in coating, depending on the product recipe. The company has just one machine at each processing stage and only one oven. Although only a small proportion of products require coating after baking, coated products generate a very high profit margin.
The company has analyzed the demand for its products over the previous 12 months and its future demand forecasts. The major capacity constraint it has is the baking oven. The analysis has shown that the oven has insufficient capacity to meet all the forecast demand.

Speciality Materials UK Processing Routes

1. Advise Speciality Materials UK how to apply a Theory of Constraints (TOC) approach using Drum-Buffer-Rope (DBR) principles to maximise throughput from its Nottingham production facility to meet demand. (Word limit: 800 words)

2. Speciality Materials UK is also experiencing very erratic demand (i.e., sometimes very high, then very low or no demand) for its highly profitable coated products, which are purchased by some of its customers for specific applications. It is losing orders because it cannot supply quickly enough for these customers. Advise Speciality Materials UK on how it should work with these customers to ensure demand for coated products is more stable.