Question 1

1. Basic functions of typical company

The three basic functions of any typical company include finance, marketing and operations. The finance functions deals with distribution of money for business operations and purchase of goods and services. The marketing function is to ensure that a business reaches the target customers. Operations deals with the creation of products for the company.

1. Issues and trends
2. Computer-aided design: All the designing and production of goods and services have been increasingly done using computers to improve efficiency of operations management
3. Reduced product life cycle: The products no longer stay longer in the market due to increased technology and rapidly changing consumer taste and preferences, which have led to new products being introduced at a faster rate.

• Workers involvement: Knowledge explosion and increased number of technical employees has forced operations managers to actively involve workers to improve the quality of products

1. Green design and manufacturing: Increased concerned about environmental degradation has forced operation managers to produce products that are environmentally and ecologically sustainable.
2. Lean Process: The operation management is turning to lean philosophy in order to enhance effective and successful operations management.

1. Primary topics
2. Assuring quality: quality is the driving force in operations management and all the goods and services must be of high quality. Apart from quality of goods and service, all the processes in a business must be of high quality.
3. Designing of products and services: products and services are designed to have features that meet the needs, designs, and expectations of customers.

• Planning the production process: this follows designing of products and services and it involves acquiring necessary materials, expertise, technology, and how to manage the process (Clemen, 1996).

1. Facility layout: the designed production process must be properly housed in a proper and effective manner to allow efficient production of goods and services. Different parts of production process should be housed properly to smooth flow to avoid time wastage.
2. Designing of jobs and task: the people to be involved must have the knowledge and skills that ensure effective and efficient production process through the use of appropriate technology.
3. Supply chain management: this involves management of facilities, function and activities involved in the production process after everything has been designed.

• Forecasting on the demand for products and services: the production of of goods and services should match the demand in the market. Forecasting, therefore, is done to determine the demand.
• Production planning and scheduling: it involves the determination of time and quantity of materials that should be ordered and the number of workers to ensure successful production.

1. Acronyms
2. MRP: (Material Management Planning) mean that operations should be kept in a in some data records in a computer so that they can be checked and updated.
3. CPR: (Capacity Planning Requirement)is a system that is used to determine the capacity of production of a company by analyzing the schedule of production planned(Russelland Taylor, 2000).

• MRPII:(Manufacturing Resource Planning) A strategy for planning, controlling and monitoring resources of a manufacturing company.

Question 2

1. Using time series model and forecasting techniques are important for many reasons

They provide valuable information that the management can use to make decisions regarding future demands.Time series is based on historical data that are reliable and they can be used to make a relatively accurate decision regarding future demands. In addition, they can help to understand characteristics and trends in the demand which can be used to predict future demands(Heizer, and Render, 1996).

1. Components of time series
2. Trend: it is a long term pattern that is shown in the time series and it can either be positive or negative. Figure Q2 shows a positive trend because it shows the increase in sale from 1997 to 2004.

Positive trend

1. Cynical: this is up and down movement in a given trend. Figure Q2 is also cynical because it shows up and down movements between the years.

• Seasonal: it occurs when the time series shows regular flow during a given period. Figure Q2 is not seasonal because it does not show any regular flow in a given period between from 1997 to 2004.

1. Irregular: This is unpredictable time series pattern. Figure Q2 has no irregular pattern because the movement is predictable.

1. Moving averages

81 + 75 + 124

3

         = 93.33

Sales for the month of July = 93.33

1. ii) F_j= 0.5 x 93.33 + 0.5 x 93.33

= 93.33

iii) MSE = (93.33 + 93.33)/2 = 93.33²

=8710.49

Mean of 6 months =91

Mean absolute deviation = (90-91) + (75-91) + (102-91) + (81-91) + (73-91) + (124-91)

                                           = 0.3333

1. iv) Exponential smooth is the most appropriate because it uses weighted averages that reduces the level of errors

Question 3

1. ERP system

Advantages

ERP system allows complete visibility of all the processes taking place in an organization. It allows smooth workflow in various departments, which helps in reducing time wastage and it enhances timely completion of processes in an organization. On the other hand, it is more secured because it utilizes a centralized security system.

Disadvantages

One of the disadvantages of ERP system is that tt is expensive to implement ERP system in an organization. On the other hand, it is time-consuming to deploy ERP system in an organization. In addition, it requires elaborative and intensive training of employees for it to be successful.

1. EPR and Supply Chain management (Russel& Taylor, 2002)

Step 1: a wholesaler uses his computer to log into an R/3 system of a company to place an order for with a car manufacturer based in the USA to supply him with 50 units of brand new cars

Step 2: Sales and marketing managers receives the order and he uses R/3 sales module in his computer to check the number of cars available, the current prices, customer’s history, and any sales promotion that a customer can get.

Step 3: R/3 inventory software confirms that 100 cares are available in the company’s main manufacturing plant in the US and are ready to be delivered anytime the client wants. It takes a day to transport 50 cars to Washington.

Step 4: R/3 manufacturing software instructs the warehouse based in the main manufacturing plant to transport 50 cars to Washington

Step5: R/3 simultaneous schedule authorizes the transportation of 50 cars from the main manufacturing plant to Washington using company truck.

Step 6:R/3 manufacturing software in alerts the production units in the main plant to manufacture 50 more cars to be replaced the ones that have been purchased.

Step 7: the company uses its R/3 system to monitor purchase trends and customer data to forecast any future demand.

1. Successful implementation of ERP
2. There should be a clear understanding of the problem being addressed, which is always to improve the business performance in order to maximize the profits, a business should have a team of expert to re-engineer the current process being used by the company.
3. Establish a clear goal of the business by developing strategies and clear guidelines to achieve them. All important stakeholders should be included in formulating goals.

• Cost benefit analysis: it is important to understand the cost of implementing ERP and how the system will help the company to achieve the set goals and objectives.

1. Consultation: a business should be in a position to choose experienced and knowledgeable experts who will train employees about the ERP system.
2. Choosing the vendor: the business should seek information from other businesses using the same systems to assess their reliability and suitability before narrowing on the vendor
3. Corporate control issues: the business should access any conflict that can arise during the implementation.

• Involve the right people: the business should involve employees in the implementation of the system
• Training: the training should be adequate and employees should be in a position to fully understand how the system will work and how it will be implemented

1. Use of rolling basis to install ERP: the business should start with small units that are likely to adopt the system faster to encourage other units and individual to have positive attitude towards the ERP.
2. Benefits of integrating artificial intelligence
3. Artificial intelligence has the ability to duplicate the function of human brains because it can overtake human workload
4. It helps in solving complex problems that may be difficult to analyze using computer devices

• It improves productivity and efficiency because of uninterrupted performance. The artificial intelligence can work 24 hours without any rest and also it does not require food to keep working like human beings.

1. It minimizes professional risks, especially health and hygienic risk that worker can face, especially in the manufacturing plant.
2. It lowers the operation cost because it can handle many tasks at the same time. Therefore, a business will not need to employ many workers.

Expert systems: It is a computer system that has the ability to solve problems and make decisions like human beings.

Fuzzy logic: It is a computing system that is based on truth because it deals with approximate values and it is able to use complex and ambiguous data to make a rational decision.

Neural networks: they are learning machines that are associated with biological brain and they have the ability to notice patterns and program themselves to solve a particular problem. They are unique because they have the ability to learn by themselves.

Question 4

1. Aggregate Production planning: It is operational activity use to establish the resources capacity that a company will need in order to meet future demand of between six months to one year.

Merits of part time workers:

They are less costly compared to full time worker because they are not entitled to benefits like health care and pension. In addition, they are most suitable in tasks that do not require any special skills, but require large number of workers.

Sub-contracting: It is appropriate when there is excess demand, which call for more labor at the time the demand is high.Subcontractors can help a business to handle larger projects leading to higher profits

Maintaining high level of resources: It ensures quality services to customers and it helps in maintain special or superior customers and customers who can pay high prices, which can enable a business to earn a profit even by maintaining high level of resources.

1. External challenges
2. Product development and innovation: Consumer taste and preferences keeps on changing a relatively faster rate leading to rapid product development and innovation. The firms needs to improve the operation to come up with the products that meet the current demand
3. Skill gap: increased technology and generation gaps has led to skill gaps this calls for constant change in the operation

• Balancing maintenance with output: manufacturing must ensure that the facilities are always in good shape to match the demand in the market.

1. Environmental concerns: the manufacturing firm must ensure that the operations is environmentally friendly and are environmentally sustainable.
2. MRP:

The system links all the departments involved in production process. The information flow is initiated by the design and marketing units and the information is then liked to other departments like accounting, human resource, and sales and production. The systems allow all departments to share information and it can be linked to employees in other distant departments (Render and Heizer, 2001)

CRP:

It helps a manufacturing firm to meet its production plan by allowing smooth movement of information between departments. The information passed between relevant department helps in determining the resources need to meet production plan.

MPR II:

It plans and coordinates all the resources in a manufacturing company and it allows the information between various departments in a company through a closed-loop system. After the production schedule has been initiated, the output data is then transferred other departments like sales and marketing to confirm whether the plan is achievable. It then sends feedback to the relevant departments (Shark, Chamber and Johnson, 2003).

1. Capacity planning refers to process used by an organization to determine the production capacity that is needed to meet the any change in demand in relations to the resources that are available.

Strategies

1. Capacity lead strategy

Capacity

Demand

Units

Time

The strategy is used to attract customers from the competitors in the market with constrained capacity or to gain a competitive advantage when the demand is increasing.

1. Capacity lag strategy

Units         demand

Capacity

Time

In the strategy, the capacity is increased after demand has increased and it is suitable in an industry with relatively weak competition. The general assumption of the strategy is that customers will return after the increase of capacity.

• Average capacity strategy: This is a strategy where the business is sure that it will make some sales of an additional output because the expanded capacity coincides with the expected increase in demand.

Reference List

Clemen, R. 1996. Making Hard Decisions (2^nd Edition). Duxbury Press

Heizer, J and Render, B. 1996.Operations Management (6^th Edition). Pearson Prentice Hall

Render, B. and Heizer, J. 2001. Operations Management (6^th Edition). Pearson Prentice Hall

Russell, R. and Taylor, B. 2000.Operations Management(3^rd Edition). Pearson Prentice Hall

Russell, R. and Taylor, B. 2002.Operations Management (4^th Edition). Pearson Prentice Hall

Shark, N.,Chamber, S. and Johnson, R. 2003. Operations Management (6^th Edition). Pearson Prentice Hall

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