Operations and Supply Chain Management

Option 1. Apply marketing strategy to increase sales (and costs) by 50%.

Option 2. Apply supplier management to decrease 10% of the cost of inputs.

Option 3. Apply operations management to reduce production costs by 18%.

If you were the manager of AMYML, which option will you apply based on the following information? (9 points)

In addition, comment on the feasibility of each option. (1 points)

3. (10 points) In Auckland Milford Yacht Manufacturing Ltd (AMYML) the operations manager's staff has compiled the information below for four manufacturing alternatives (A, B, C and D) that vary by production technology and the capacity of the machinery. All choices enable the same level of total production and have the same lifetime. The four states of nature represent four levels of consumer acceptance of the firm's products. Values in the table are net present value of future profits in millions of dollars. Forecasts indicate that there is a 0.1 probability of acceptance level 1, 0.2 chance of acceptance level 2, 0.4 chance of acceptance level 3, and 0.3 change of acceptance level 4.

Using the criterion of expected monetary value, which production alternative should be chosen?

4. (10 points) Auckland Milford Yacht Manufacturing Ltd (AMYML) needs to us the following items for its production. The operations manager needs you to help him to do an ABC analysis based on the given information below. You need to (1) clarify which items can be classified into A, or B, or C (each 2 points); (2) explain why you classified them into A, B, or C (4 points)

5. (15 points) Auckland Milford Yacht Manufacturing Ltd (AMYML) has a daily demand of 400 units of item GS707 for its production, a setup cost per production run of $100, a daily holding cost per unit of $0.20, and an annual production rate of 219,000 units. AMYML operates and experiences demand 365 days per year.

Suppose that management mistakenly used the basic EOQ model to calculate the batch size instead of using the production order quantity model.

How much money per year has that mistake cost AMYML?

6. (20 points) Auckland Milford Yacht Manufacturing Ltd (AMYML) sells yachts to a European customer at $57,000 each. The monthly sales of yachts for 2019 were:

1) Compute a 3-month moving average demand forecast for each month from June through December. (Round all forecasts to the nearest whole unit.) (5 points)

2) Compute a 5-month moving average demand forecast for each month from June through December. (Round all forecasts to the nearest whole unit.) (5 points)

3) Calculate the MSE covering June through December for both methods. (4 points for each MSE)

4) Which method is more likely to have a better forecast performance? (2 points)

7. (25 points) Auckland Milford Yacht Manufacturing Ltd (AMYML) needs to shorten 8 hours from its project (refer to the information below).

1) Draw the critical path of the project (5 points)

2) Using the information below work out the crash cost for 8 hours of time-savings. (10 points)

3) Suppose AMYML has a $45 crash budget. Is the budget enough to crash 5 hours of time? (10 points)

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