MGT310 Service Operations Management-Key Factor in Satisfying Customer

1. Use a simple moving average model to forecast the demand for the next 3 weeks. Experiment with models using five weeks and 3 weeks moving average and evaluate the models.

1. Compare all the techniques in part a and part b and explain which of these would be preferable. Explain the reasons for your choice.

Simple moving average model and the exponential smoothing model are all methods used in forecast and notable differences can be made from the two models. The major type of difference that can be noted from the two models is the sensitivity that each shows to changes in data used in its calculation .this change is what majorly differentiate the two in forecasting. The exponential smoothing model tend to give a higher weight to recent prices than the older prices while the simple moving give equal weight to all the prices both the current and the older prices.

The simple moving average model is most preferred because it yields residuals that are uncorrelated and have a zero mean. This therefore means that this technique reduces biasness thus generally recommended. It is one of the methods that yields the lowest error. Also the simple moving average can be said to be most preferred as they are not reactive to any type of data whether recent or old data but the exponential is only reactive to the current data.so most technical analyst prefer the simple moving average model.

Simple moving average also tends to be easier to understand and easier to calculate a factor that also made it to stand out. Most analysts who predated computers preferred it to the exponential which is much complex to calculate.In case you need to know the progress from the older data to the current data simple moving should be your most preferred to the exponential which is only sensitive to the current prices.

1. What are the factors to consider to draw a more accurate forecasted 

Due to the increasingly variety and complexity in managing of forecast problems different techniques and factors to be considered has been come up with to ensure success. This techniques invented have different use for a specific type of a forecast.one should therefore be able to choose the right technique to use for a certain forecast. The better the manager and the forecaster are able to know the consideration in using and coming up with a forecast, it will lead to the company to bear fruit. Some of the factors to be considered are;

The contest of the forecast-one should be able to know the outcome of the forecast and what exactly is needed from the forecast. This will help to come up with the most appropriate forecast that is relevant to the topic of study.

The degree of accuracy desired-the forecaster should be able to make use of the available data and thus most appropriate technique use .he or she should not use a very complex technique that will give more accurate results but will require extra nonexistent data and much more resources.

The time of period to be forecasted-for example if one is dealing with a certain type of products.one should be able to know the lifecycle of the product and its maturity. If it takes a long or a short period of time as this will enable one to identify the type of technique to be used in the forecast.

The cost/benefit of the forecast to the company-always a forecaster should make relevant forecast that helps to improve the company. And the type of method used should not incur any extra budget or loss to the company. Thus the choice of the right products to forecast is very important factor to consider.

Qualitative and quantitative method - the qualitative method which is based on the opinion and judgement of the experts which is very important and it can be used even without the past data and the quantitative technique which is used to relate the past and the current data in forecasting. Thus can be used to evaluate the past and current data in forecasting.

1. SB Coffee is considering simplifying the supply chain for their coffeemaker. Instead of stocking the coffeemaker in all five distribution centers, they are considering only supplying it from a single location. What are the advantages and disadvantages of aggregating demand from a forecasting view?

Are there any other factors or issues that should be considered from going from multiple DCs to a single DC?

To begin with, some of the advantages of aggregating demand form a forecasting view include;

1. It helps the company to make long term decision where overall change in a particular industry requires analysis by the company.
2. Aggregate forecasting enables the company to access total demand and market requirement for different product by helping them to determine their overall production requirement for the future.

Disadvantages;

1. Results in companies failing to tap into opportunities in the market as a result of not being able to identify potential areas that show high interest of a particular product.
2. The demand of a product across different markets is avoided by aggregate demand.

From going from multiple DCs to a single DC factors such as should be considered;

Physical location –they best physical location is important to decide on which distribution center to use. You should ensure that your product is stored in an area close to your customer in case of argent deliveries requested. Cost also applies here due to transportation costs from the production industry to the end customers. The location proximity to career facilities should also be considered so as to find a solution that offers both warehousing and transportation for more profits.

Storage requirement –many manufacturing companies produce products that have strict storage and firefighting requirements. These includes hazardous materials, flammable chemicals and food items. A question you should ask yourself is will the distribution center be enough to handle the different requirement for different products as well as other activities in the same environment?

Labor force- you should take time to consider the labor force that will be available in the new distribution center and how they will cope with the facility, taking into consideration that some workers will have to be dismissed from duty. This way you will limit frustration and ensure you have perfect match for you and your single distribution center.

Fine food restaurant vs fast food restaurant

The importance of getting a distinctive atmosphere is considered a key factor in satisfying customers (Han & Ryu, 2009). Research shows that every customer’s reaction to the physical environment of a particular place relies more on their emotion. It is a major determinant of consumer psychology and behavior. Time spent by customers in a particular environment is a large determinant of the impact they will face. Taking an example of two types of restaurants that is; a fine food restaurant and a fast food restaurant. The time spent in the two restaurants has a major difference due to the difference in the physical environment of the two which affects the customers.

A fast food restaurant is also known as a quick service restaurant. Here, food is served from the counter unlike a fine food restaurant which has specific dedicated meal courses and also offers a wider variety. In addition to food and service, a fine food restaurant has innovative interior design and décor pleasing music, appealing table setting and other qualities, unlike a fast food restaurant giving an example of McDonald’s, where you would expect to find only a few table tops and a counter with long queues of customers.

Therefore, customers may even spend two or more hours of their time at a fine food restaurant simply because of the physical environment which is friendly and appealing. This pleasant physical setting should determine greatly the degree of overall customers satisfaction (Han & Ryu, 2009).as proof of how customers perceive the physical environment, a study was carried out of man-made physical and human surrounding .this included the lighting, furniture as well as service staff. This facilities may be a critical aspect in maintaining customers and also attracting new ones. Nevertheless, the restaurant revenue can also be affected. Additionally, an appealing physical environment may act as an important tool in marketing (Berry and Wall, 2007, Ryu and Jang, 2007).

Adding on to the research that was carried out, the results stated that there is great relationship between lighting level preferences and customers’ emotions and behavior. (Areni and Kim, 1994) identified the impact of lighting inside a store on the following; the behavior of the consumer, amount of time they spend in the store and total sales of goods in the store. With reference to restaurants, lighting can be a very important stimuli. McDonald’s for example, is a fast food restaurant with bright lighting that may symbolize quick services to customers and relatively low prices of their foods thus high probability of attracting more customers. Well, this is so because most people believe that warm lighting may most of the time imply full service and high prices.

Another consideration of the physical environment is the spatial layout. This refers to the way the furnishing of a particular restaurant is arranged in a particular space. An effective layout, pleasing to the eye will definitely capture the attention of customers. Fine food restaurants for example, of an upscale standard, should provide an environment with ample space which facilitates exploration and stimulation. The way in which a table is decorated for example the presence of low lit candles, napkins, may make customers feel to be in a prestigious environment.

Nevertheless, we wouldn’t forget that restaurant employees interact directly with customers. The first thing that a customer observes once he or she walks into a restaurant is who will serve them. This thus implies that the dressing code of the employees should be taken into great consideration. A professional employee uniform coveys a great image of the restaurant in a very up-close and personal way.

In conclusion we therefore see that the physical environment or servicescapes are of great impact to customers as they affect their affective and cognitive responses and most importantly, their emotion.

37. What is the maximum number of people that can be processed in one hour?
38. A fifth volunteer will result to majorly positive implications. To begin with the local pharmacy’s volunteer will have a slight relief with the number of patients as the 5th volunteer more will also be admitting vaccines. If he or she is open to any activity, then all the other 4 will be released. Moreover, more patients will be attended to per day. The average time to administer a single vaccination will also be reduced as one volunteer will be of assistance to the other. The extra volunteer will therefore improve on the efficiency of the services offered to the patients.

Calculate the savings that the company will make if it uses the Economic Order Quantity Model. Explain your results.

We may apply the following formula in determining the company’s savings;

Economic order quantity = square root of [(2 * demand * ordering costs) / holding costs]

Economic order quantity = square root of [(2 * 1000 * $200) / 20% * $20]

Economic order quantity = square root of [($400 000) / $4]

Economic order quantity = square root of ($100 000)

Economic order quantity = 316.228

We can round this off to: Economic order quantity = 316 units

We can therefore conclude that 316 units is the ideal order level which is most appropriate for minimizing ordering and holding costs.

Information revolution is a term which is used to describe the social and technological trends beyond the industrial revolution and also the current economic activities. Which is also the development of technologies in the second half of the 20^th century which has led to reduction in the cost of obtaining, processing, storing and transmitting information in all forms. It majorly involves the digital communication microchips and computers.

On the other hand supply chain metrics are measurements in relation to production, procurement, inventory, material handling, packaging and customer service. A few supply chain metrics useful for most brands today include; inventory turnover, days’ supply, perfect order index, perfect order fulfillment and order cycle time.

An operation manager is concerned with the design and control of production and business operation and redesigning of produced goods and services. Information revolution and supply chain metrics always have an impact on the operation manager. The level of the information revolution and supply chain metric will determine the trends of a company and its innovation. Let us look at how they impact on the operation manager.

Information Revolution

The information revolution is a function of technological advances in both computing power and telecommunication .this advancement has strengthen the power of the operation manager as it has reduced the threat of;

 New entrants- in setting up a new enterprise or company the barrier has been lowered in that less capital investment is required. Therefore the operations manager experiences lowered margins from the ever increasing competitions.

Threat of new substitutes- the revolution has helped to encourage innovation as well as reducing the product life cycle and shelf life of products thus improved customer service which leads to less work on the side of the operation manager.

Threat of competition- transparency and honesty has been enhanced thus leading to the success of the company. The company is exposed to customers therefore a step ahead in marketing strategy nevertheless, this evolution has changed the face of business and opened up new avenues of conducting business.

Supply Chain Metrics

It increases the chances of success by obtaining a competitive advantage, aligning processes across firms and targeting the most profitable market. However inappropriate metrics will lead to failure in meeting the expectation of the end customer and company performance

When translating performance into shareholder value the supplying chain metric developed by a frame work focuses on managing company relationship management and customer relationship management processes at every link in the chain. This process improves profits and provides methods for developing metrics that identify opportunity for aligning objectives across the firm in the supply chain.

Supply chain metrics also results into reduced administrative costs, recovery of capital investment, increased service market share, higher achievement of set company goals and better customer service as well as higher retention levels. This is already an impact on the operation manager as it leads to its improvement.

Increased Servitisation

The servitisation of a product is the description of the strategy of adding value to products by increasing services or even replacing a product with a service.

Though servitisation is a complex process it mainly deals with the consumption of products and how different services are maintained in a certain institution. Servitisation has many relevant advantages as far as operation manager is concerned. For example in an institution of a car rental companies which go and pick cars at a certain point and drooping it at another point. From a commercial view of things there is consumption or using of a journey rather than the vehicle. This is what that used to happen before servitisation now there can be goods manufacturer service and also the maintenance as part of the rental contract.in consideration of the senior operation managers they have to put servitisation in place and ensure that they develop a good customer service teams and ensure all calls are intensively dealt with, high level of expert diagnosis and also customer services are highly met according to the terms of agreement. Thus servitisation will help simplify all this and ensure there is ease in work of the operation manager.

Although servitisation has numerous on  a company through the operation it may also impact some challenges .with all the positive impacts of servitisation it will also incur some extra costs on the company side since there will be increased pressure on the business margins to improve its services and quality to much servitisation.

Business ethics are professional ethics that is meant to look into ethical principles and also look into the moral problems or issues that may arise in a business environment. Business ethics are meant to control and regulate individuals in a certain business profession. For a smooth working in a business institution there must be rules meant to regulate individual behavior from the senior members to the juniors. Business ethics always have an impact of an operation manager in a certain company or institution. Let us look at the impacts.

In operation management ethical issues that should be put into consideration are the customer safety, employee safety, materials recyclability, restrictive company culture , waste disposal, fluctuation in working hours,  consumption of energy and their efficiency and many more other ethical issues are involved in the operation management. For all the smooth running in the company and increase of standard and success of a certain business all this ethical issues should be put into consideration by the operation manager.

Always operation manager always have problems dealing with this ethical issues due to difference in culture and also religion perspective of some individuals. You will find that may people will use their religious background as a reasoning for their moral standards. This always lead to problems since there are some who believe in certain religion and there are those who don’t believe in anything at all and they are only guided but their own reasoning and consciousness. Thus an operation should try to put a business ethical value to stand on its own and try not to lean on one side but ensure the right thing is done in the place of work and every sector and everybody is served right.

Its incorporation is very important especially in the world class operations as it will assist in incorporating responsibility. This is because most of the workings of other members in a company is based on the operation manager. If an operation manager has principle ethics it will lead to the smooth working of the company.

As day goes in and out technology is improved in the work place has an impact on the operation manager in that there is reduced manual work load. Modern technology helps reduce redundancy in tasks as it is accurate thus efficient. Days end up being less stressful. The operations manager moreover saves of costs to pay manual workers in the work place as computers are used to control all activities. 

 A few of the possible reasons as to the reasons behind the chocolate bars being under-weight include the lunch shifts in workers. This may result in inconsistency as workers coming back from shift may end up packing not-fully-developed chocolate bars. On the other hand, the chocolate bars may end up being over-weight due to the same inconsistency reason. Workers may leave for lunch break before specific chocolate bars have been packed thus spend more time being processed.

1. One of the solutions may be to stop the trend of going on lunch break in shifts but instead implement a rule of all workers leaving for lunch break at a go. Another solution to be taken into consideration may be to hire expert workers as the current workers are semi-skilled. This will reduce work inefficiency in the production of the chocolate bars. Another way may be to implement a computerized monitoring system. This way all measurements will be accurate.
2. The distributor should reduce the number of cartons to the number in which he will finish selling. This is so as to reduce the loss from discarding the remaining shrimps. Another alternative is getting at least two orders per day. When the first order is completely sold, the distributor may make the second order.

Discuss how you will be able to use the Simulation Methodology in project planning.

First simulation methodology is the process by which the real world is abstracted and mapped into a computer program.it can also be used in project planning. Project planning simulation is the process by which simulation has been used in project management training and its analysis. Which is usually used in the training of managers as training simulation. In other cases it is used for supporting decision making in real projects as what if analysis.

Project management simulation is always an interactive way to learn and group exercise is mostly used for it to be carried out. Its purpose is always for the help of the students, that is it enables them to acquire knowledge that will lead to them improving in their performances in school.it always helps and give trainees problems that arise from the real world situation that way they will easily be able to solve it, since it is their day to day problems. That way they can be able to note the outcomes of the mistakes they make from their decision making. They can then track the evolution of the project limits .that is its costs, range and also human factors that affects.

Simulation also helps the students to be able to solve problems, also in making of mistakes and be able to analyze them. Thus we can say the pedagogic goals of project management simulation can be to teach the students how to determine the goals and objectives of a project, plan resources in a project, control the process in a project, efficiently use the project management tools and also be able to correctly respond in typical project management situations.

Project planning simulation is also used in real projects analyzation. Its goal being that with a person different decisions possible outcomes should come hand in hand with the probability that each outcome of the decision made will occur. Thus project management simulation assists in reducing risks while performing a project and ensuring that an individual choose the perfect project plan. First a software tool is along with uncertain variables is first modelled in a typical simulation. After that a simulation is run to check the different possible outcomes and their probability. Is because of uncertain variables with different inputs.

Determine which of the three sites will offer a cost effective solution and the relevant breakeven point. Explain your reasoning for your decision.

Using the formula;

Breakeven point = Fixed cost = (Price – Variable cost)

Narrandera: 200 000 / (200-90) = 1818.182

Which is approximately 1818 units.

Griffith: 200 000 / (200-75) = 2000 units.

Gundagai: 200 000 / (200-60) = 2500 units.

Narrandera seems to offer a more cost effective solution as it has the lowest breaking point therefore shows that it will not be much affected by the price.

References

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Siraj-Blatchford and Manni, Waniganayake, 2010, Leadership: Contexts and complexities in Early Childhood Education, The New York Times, New York, p

James M. Lang, 2014, The Vocation of a Businessman, Harvard Business School, Cambridge, p

Jang, 2007, Business Strategies, Harvard University Press, Cambridge, p

Areni & Kim., 1994, In Mission Statements, Bizspeak and Bromides, The New York Times, New York, p

Han & Ryu, 2009, The Science of Successful Business, Harvard, Cambridge, p

Richard Feloni & Shana Lebowitz, 2010, The Business Insider, The New York Times, New York, p

Heizer, Render & Munson, Operations Management 12^th edition, Pearson, Texas Lutheran University, pp. 413

Nassim Taleb, 2007, The Black Swan, Published Online, Mexico.