Aom4801 Assignment No.3 Year 2022 Suggested Solutions (Due Date: 05 September 2022)

AOM4801 ASSIGNMENT 3
YEAR 2022
Advanced Operations Management

, TABLE OF CONTENTS

3.1. CAPACITY MANAGEMENT ........................................................................................................ 4
3.1.1. Should the Jagsmart production plant in Rosslyn, Pretoria, be more concerned about
short-term capacity planning or long term-capacity planning? Motivate your answer..................... 4
3.1.2. At June 2020 in South Africa, as a result of the Covid-19 crisis, there had been a 25%
decline in the automotive sector. Even before this, the automotive industry had been in decline
due to environmental concerns and a reduced demand for vehicles because of services such as
Uber (Mail and Guardian, 2020). With reference to short-term capacity decisions, how could
Jagsmart respond to these occurrences? .............................................................................................. 4
3.1.3. “In developing a long-range capacity plan, an organisation must make an economic
trade-off between the cost of capacity and the opportunity cost of not having adequate
capacity”. ..................................................................................................................................................... 5
3.2. MANAGING INVENTORIES IN SUPPLY CHAINS .................................................................. 6
3.2.1. Demonstrate your understanding of the following terms by elaborating on each of them
(3 marks available in total) and then grouping/categorising them (3 marks). ................................... 6
3.2.2. With reference to the above statement, and the new Jagsmart L-Model production
plant, discuss the typical challenges you believe operations managers might face with regard to
managing inventories. ............................................................................................................................... 8
3.2.3. Differentiate between a fixed-quantity system and a fixed-period system and, in context
of ordering tyres in Jagsmart’s lean focused production plant, analyse which system you think
would be more appropriate. ...................................................................................................................... 9
3.3. SUPPLY CHAIN MANAGEMENT AND LOGISTICS ............................................................ 10
3.3.1. Order amplification occurs when each member of a supply chain “orders up” to buffer
its own inventory. Name this phenomenon and, using valid motivations, discuss whether you
think Jagsmart will be influenced by such a phenomenon. ............................................................... 10
3.3.2. “Supply chain managers typically balance customer requirements as well as internal
supply chain efficiencies”. Defend this statement in context of Jagsmart specifically, by
describing one valid internal supply chain metric and one valid external supply chain metric (i.e.
customer related), and their relationships with one another.............................................................. 10
3.3.3. With reference to the content supplied in the Jagsmart case study, motivate how the
SCOR model and/or SCOR principles have been applied in context of Jagsmart. ....................... 11
3.3.4. Motivate for the application of manufactured goods recovery and reverse logistics in
making a supply chain more sustainable. ............................................................................................ 12
3.4. RESOURCE MANAGEMENT .................................................................................................... 13
3.4.1. In context of the production of the Jagsmart L-Model, provide detailed examples of how
the following concepts would typically be applied: Aggregate planning; Master production
scheduling (MPS); Materials requirements planning (MRP); Enterprise resource planning (ERP)
and the Bill of Materials (BOM). ............................................................................................................. 13

, 3.4.2. Should Jagsmart apply a level production strategy or a chase strategy? Provide a
detailed motivation for your answer....................................................................................................... 14
3.4.3. Assume Jagsmart have received an MRP schedule detailing the Gross requirements
and Scheduled receipts of “Bumper covers” for the Jagsmart L-Model, over the next 8 weeks. 15
3.5. OPERATIONS SCHEDULING AND SEQUENCING ............................................................. 15
3.5.1. With the aid of practical examples, describe how the concepts of scheduling and
sequencing could apply in context of the Jagsmart L-Model production plant? ............................. 15
3.5.2. Collier and Evans (2017:293) refer to the prevalence of staff scheduling problems,
resulting from high variability in customer demand. Jagsmart have a network of approved
dealers across South Africa, amongst which Legacy Auto (Pty) Ltd is responsible for the highest
sale volumes. With reference to a car dealership such as Legacy Auto (Pty) Ltd, describe typical
staff scheduling challenges that they could experience. For each of the challenges you have
highlighted, describe how these challenges could potentially be resolved. .................................... 16
3.5.3. A custom furniture manufacturer has five jobs waiting for processing as follows: ......... 17
4. References ........................................................................................................................................ 18