AOM4801 ASSIGNMENT NO.3 YEAR 2023 SOLUTIONS

AOM4801 ASSIGNMENT 3
YEAR 2023
Advanced Operations Management

, TABLE OF CONTENTS

3.1. CAPACITY MANAGEMENT ........................................................................................................ 4
3.1.1. Should “Capacity can be viewed in two ways, as the maximum rate of output per unit of
time, or as units of resource availability”. With reference to capacity as viewed in a movie-
theatre and a hospital, demonstrate your understanding of the above statement. .......................... 4
3.1.2. Refer to case study 2: With reference to capacity expansion strategies, which type of
capacity expansion strategy should Eskom follow in order to solve their capacity-related
problem. Justify your chosen strategy in context of Eskom, by means of an analysis of that
strategy’s risks and benefits. .................................................................................................................... 5
3.1.3. “In Refer to case study 2: Eskom needs to focus on both short- and long-term capacity
planning. With reference to these two different types of capacity planning, differentiate between
the types of decisions that would typically be made by an organisation such as Eskom, in terms
of electricity generation and/or electricity distribution. .......................................................................... 6
3.2. PROCESS ANALYSIS AND RESOURCE UTILIZATION ...................................................... 8
3.2.1. What is the implied service rate at a bank teller window, if customer demand is 26
customers per hour, two bank tellers are on duty, and their labour utilisation is 90%? .................. 8
3.3. MANAGING INVENTORIES IN SUPPLY CHAINS .................................................................. 9
3.3.1. With reference to the above statement, and the new Luxwheels L-Model L-Model
production plant, discuss the typical challenges you believe operations managers might face
with regard to managing inventories. ...................................................................................................... 9
3.3.2. Differentiate between independent, dependent, static and dynamic demand. Provide
examples of typical stock items to illustrate your answer. ................................................................... 9
3.3.3. Refer to case study 1: The Luxwheels production line at Rosslyn, Pretoria involves the
fitment of numerous different parts, all of which need to be ordered from different suppliers. For
example, the production of each vehicle requires five tyres per vehicle. Differentiate between a
fixed-quantity system and a fixed-period system and, in context of ordering tyres in Luxwheels’
lean focused production plant, analyse which system you think would be more appropriate. ..... 11
3.4. SUPPLY CHAIN MANAGEMENT AND LOGISTICS ............................................................ 12
3.4.1. 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 Luxwheels L-Model will be influenced by such a phenomenon. ............................................. 12
3.4.2. “Supply chain managers typically balance customer requirements as well as internal
supply chain efficiencies”. With the aid of one internal supply chain metric and one external (i.e.
customer related) supply chain metric, justify this statement. ........................................................... 13
3.4.3. Motivate for the application of manufactured goods recovery and reverse logistics in
making a supply chain more sustainable. ............................................................................................ 14
3.5. RESOURCE MANAGEMENT .................................................................................................... 15

, 3.5.1. In “Aggregate planning and disaggregation in manufacturing organisations differ
substantially from aggregate planning and disaggregation in service organisations”. Do you
agree with this statement? Justify your answer................................................................................... 15
3.5.2. Provide an argument for adopting a chase strategy in context of a major airline call-
centre. 16
3.5.3. Refer to case study 1: Assume Luxwheels (Pty) Ltd have received an MRP schedule
detailing the Gross requirements and Scheduled receipts of “Steering Wheels” for the
Luxwheels L-Model, over the next 7 weeks. The applicable Rule, Lot size, Lead time and
Beginning on-hand inventory are provided below: .............................................................................. 17
3.6. OPERATIONS SCHEDULING AND SEQUENCING ............................................................. 18
3.6.1. Assume that you are a production supervisor tasked with the sequencing of a particular
operation. The operations manager has asked you to explore the trade-offs of using the SPT
and EDD rules, respectively. Discuss these trade-offs with reference to the advantages and
disadvantages of the two rules. ............................................................................................................. 18
3.6.2. Define the concepts of scheduling and sequencing. How do they differ and how are
they similar? .............................................................................................................................................. 19
3.6.3. A custom furniture manufacturer has five jobs waiting for processing as follows: ......... 19
3. References ........................................................................................................................................ 20