New Zealand Institute of Management Diploma in Management Diploma in Management (Advanced) NZDipBus

632 Operations Management

Assessments and Marking Guides Student

PRESCRIPTION:

632 OPERATIONS MANAGEMENT

This prescription replaces 232 Operations Management. ELECTIVE PRESCRIPTION Level CREDIT VERSION INTRODUCED AIM 6 20 1 2007 Students will understand functions of operations management and apply techniques to ensure efficient and effective production of goods and services. Recommended 530 Organisation and Management or equivalent knowledge and skills.

PREREQUISITES

ASSESSMENT WEIGHTINGS Learning outcomes 1. Students will appraise the nature of operations management in a given situation. 2. Students will explain quality management, and apply quality management techniques to improve operations in a given situation. 3. Students will select and justify appropriate facilities to ensure efficient provision of a product. 4. Students will discuss the role of project management, and apply appropriate project management techniques in a given situation. 5. Students will discuss performance management and determine appropriate performance measures for an operations system(s). 6. Students will understand capacity management, apply techniques relating to resource planning, and recommend appropriate actions in a given situation. 7. Students will apply an understanding of supply chain management, inventory management and materials management to given situations. TOTAL Assessment weighting % 15 25 12 8

10

15

15 100

All learning outcomes must be evidenced; a 10% aggregate variance is allowed.

SBG

Page 2 of 16

632 Operations Management

ASSESSMENT NOTES 1. 2. Learning outcome three: The term product encompasses goods and services. Integrating assessment of various learning outcomes is viewed as beneficial to the subject matter.

LEARNING OUTCOME ONE Students will appraise the nature of operations management in a given situation. Key elements a) Operations management: role: o relationship to other main organisational functions o importance types, at least one of: o job o batch o mass o continuous environmental factors: o strategic options, at least one of: cost quality responsiveness.

LEARNING OUTCOME TWO Students will explain quality management, and apply quality management techniques to improve operations in a given situation. Key elements a) Quality management: definition(s) of quality, at least one of but not limited to: o fitness for purpose o compliance o value importance, at least one of but not limited to: o costs o benefits o productivity o quality management features approach(es), at least one (for example, TQM). b) Quality management techniques: the seven tools, including Statistical Process Control and at least one other benchmarking.

SBG

Page 3 of 16

632 Operations Management

LEARNING OUTCOME THREE Students will select and justify appropriate facilities to ensure efficient provision of a product. Key elements a) Facility location, at least one technique. b) Design: product: o multi-disciplinary approach o development process layout, at least one of: o process o repetitive o product job. LEARNING OUTCOME FOUR Students will discuss the role of project management, and apply appropriate project management techniques in a given situation. Key elements a) Project management: role: o project manager o project techniques: o work breakdown structure o network analysis (for example, PERT/CPM): completion date float/slack critical path.

LEARNING OUTCOME FIVE Students will discuss performance management and determine appropriate performance measures for an operations system(s). Key elements a) Performance management: management controls strategic objectives. b) Performance measure(s), at least one but not limited to: standard times costs quality productivity.
SBG Page 4 of 16 632 Operations Management

LEARNING OUTCOME SIX Students will understand capacity management, apply techniques relating to resource planning, and recommend appropriate actions in a given situation. Key elements a) Capacity management: capacity calculation: o design o effective o utilisation strategies, at least one of: o influencing the demand o level o chase o sub-contract o casual labour. b) Techniques: forecasting: o models, at least one of: simple moving average weighted moving average regression exponential smoothing o errors, at least one of: MAD MSE MFE MAPE production planning, including Master Production Schedule and at least one of: o MRP o EDD o Johnsons rule o services: activity scheduling.

LEARNING OUTCOME SEVEN Students will apply an understanding of supply chain management, inventory management and materials management to given situations. Key elements a) Supply chain management: planning purchasing processing distribution.
SBG Page 5 of 16 632 Operations Management

b) Inventory management: order quantity: o fixed period o variable period o fixed quantity o production. c) Materials management, including but not limited to: Kanban JIT.

SBG

Page 6 of 16

632 Operations Management

Assessment Grid 632 Operations Management

Learning Outcome One Students will appraise the nature of operations management in a given situation. Key elements b) Operations management: role: o relationship to other main organisational functions o importance types, at least one of: o job o batch o mass o continuous environmental factors: o strategic options, at least one of: cost quality responsiveness. Learning Outcome Two Students will explain quality management, and apply quality management techniques to improve operations in a given situation. Key elements c) Quality management: definition(s) of quality, at least one of but not limited to: o fitness for purpose o compliance o value importance, at least one of but not limited to: o costs o benefits o productivity o quality management features approach(es), at least one (for example, TQM). d) Quality management techniques: the seven tools, including Statistical Process Control and at least one other benchmarking. Learning Outcome Three Students will select and justify appropriate facilities to ensure efficient provision of a product. Key elements c) Facility location, at least one technique. d) Design: product: o multi-disciplinary approach o development process layout, at least one of: o process o repetitive o product job. LEARNING OUTCOME FOUR Students will discuss the role of project management, and apply appropriate project management techniques in a given situation. Key elements a) Project management: role: o project manager o project techniques: o work breakdown structure o network analysis (for example, PERT/CPM): completion date float/slack critical path LEARNING OUTCOME FIVE Students will discuss performance management and determine appropriate performance measures for an operations system(s). Key elements

Assignment 1 (100 Marks) 40%

Question Marks

Assignment 2 (50 Marks) 20%

Question Marks

Assignment 3 (100 Marks) 40%

Question Marks

1 2

10 10

3 4

10 10

15

25

20

1 2 3 4

6 8 8 8

12

SBG

Page 7 of 16

632 Operations Management

Performance management: management controls strategic objectives. d) Performance measure(s), at least one but not limited to: standard times costs quality productivity. LEARNING OUTCOME SIX Students will understand capacity management, apply techniques relating to resource planning, and recommend appropriate actions in a given situation. Key elements c) Capacity management: capacity calculation: o design o effective o utilisation strategies, at least one of: o influencing the demand o level o chase o sub-contract o casual labour. d) Techniques: forecasting: o models, at least one of: simple moving average weighted moving average regression exponential smoothing o errors, at least one of: MAD MSE MFE MAPE production planning, including Master Production Schedule and at least one of: o MRP o EDD o Johnsons rule o services: activity scheduling. LEARNING OUTCOME SEVEN Students will apply an understanding of supply chain management, inventory management and materials management to given situations. Key elements d) Supply chain management: planning purchasing processing distribution. e) Inventory management: order quantity: o fixed period o variable period o fixed quantity o production. f) Materials management, including but not limited to: Kanban JIT.

c)

5 6

15 10

9b 9c 9d 9a 10a

3 2 3 2

15 10b

1 2 3

6 8 6

4 4
100 40% 50 20%

15 5
100 40%

TOTAL MARKS

SBG

Page 8 of 16

632 Operations Management

632 Operations Management - ASSESSMENT OVERVIEW

There are three assessments in this paper, each with a different weighting.

Assessment 1: Assessment 2: Assessment 3:

100 marks - 40% weighting 50 marks - 20% weighting 100 marks - 40% weighting

Regulations Students will receive one overall grade for the paper. The overall grade comprises their course work. Students must attempt all assessments and are required to achieve a 50% average for all course work. Total Assessment The grading system used for New Zealand Diploma in Business papers is: A+ = 85 100% A = 75 84% B+ = 70 74% B = 60 69% C = 50 59% D = 40 49% E = 0 39% A C grade or better is a pass.

SBG

Page 9 of 16

632 Operations Management

632 Operations Management - Assignment One: Report

100 marks - 40% Final Mark
Michael owns a business that manufacturers chocolate and has come to you to get some ideas about business improvement. You see this as an opportunity to share some of the principles you are learning in operations management. Required Write a business report (2000 words) that includes the following: 1. A discussion on the key characteristics of operations management with comments on why it is an area that can be a source of advantage or disadvantage to the business.
(10 Marks)

2. A description on what operations management is in a general sense, its relationship to other organisational functions and its importance to ensure business sustainability.
(10 Marks)

3. An outline of the different types of production and which one is best suited to Michaels business and how it is different to the others i.e. job, batch, mass, and continuous.
(10 Marks)

Michaels business strategy has up to this point has been to compete directly on the basis of price. You have a different view and are going to suggest that a business strategy with a focus on quality is far more sustainable. Include in the report: 4. An outline on the differences between the two strategic options and why quality presents a better opportunity in the current market environment. (10 Marks) 5. A discussion on what quality management is and some comments on whether the focus will need be fitness for purpose, compliance, or value with a reason why. (15 Marks) 6. Some clear reasons why quality management is important and how it impacts on costs and outline how it will benefit the organisation in the long term. You will need to provide some examples from other organisations that have applied the principles of Total Quality Management and the difference it has made to them. (25 Marks)
7. An outline of the seven tools (including Statistical Process Control) and one other quality

management technique that will assist in the change. Suggest in your report that benchmarking might be a good technique to use and provide a definition of that.
(20 Marks) The use of appropriate diagrams is encouraged, where you feel these support your discussion. While the scenario is fictitious you should use real organisation examples to support the comments you have made. Content clarity of discussion, ability to link theory and practical aspects together, coherency of discussion, consistency of argument.

SBG

Page 10 of 16

632 Operations Management

632 Operations Management Assessment 1: Report - Marking Guide Your Name: Tutors Name:
Topic 1 A clear discussion on key characteristics of OM Identifies specific advantages or disadvantages A clear description on what operations management is Discussion on its relationship to other functions Outline key points as to why its important to ensure business sustainability. Different types of production are discussed Comparisons are made with i.e. job, batch, mass, and continuous. Clear differences between the two strategic options outlined Explanation why quality presents a better opportunity Quality management discussed Clear direction as to where focus should be fitness for purpose, compliance, or value Reasons why quality management is important are clear Impacts on costs Benefits to the organisation Examples provided Max marks Marks Comments obtained

10

10

10

10

15

6 7

25

Outline of the seven tools (including Statistical Process Control) 20 Discussion on one other quality management technique Definition of benchmarking Total Marks 100 Weighted Mark 40%

SBG

Page 11 of 16

632 Operations Management

632 Operations Management Assignment Two

50 marks - 20% Final Mark
You have decided to go into the automobile manufacturing business and you need to find a suitable location to put the factory. Required 1. Discuss the important considerations for locating the automobile plant and the technique that you would use to assess the locations suitability (50 -100 Words). (6 Marks) 2. Outline the approach you have used to design and develop the vehicle you are going to manufacture (100 - 200 Words). (8 Marks) 3. Decide on the type of process you will use to build the vehicle and provide a layout plan for it. Support your plan with 2 examples from other organisations undertaking a similar activity (100 - 200 Words). (8 Marks) 4. Describe the importance of job design when putting together a production line and developing layout plans and processes (100 - 200 Words). (8 Marks) 5. The development of the plant is a big project and will require the services of an experienced project manager. Conduct a job analysis of the role and right out a brief job description for a project manager outlining the key tasks required for the role (100 - 200 Words). (8 Marks) 6. Provide a further breakdown of the different techniques that you believe should be used to get the project done. Be sure to describe each technique in detail including work breakdown structure network analysis (for example, PERT/CPM) o completion date o float/slack o critical path (200 - 300 Words) (12 Marks)

SBG

Page 12 of 16

632 Operations Management

632 Operations Management Assessment 2: - Marking Guide Your Name: Tutors Name:

Topic 1 2 Considerations for location Discussion on a suitable technique Outline of an approach to product design is clear Process to build is outlined Layout plan provided 2 examples from other organisations undertaking a similar activity Discussion on the importance of job design Job description for a project manager Key tasks required for the role are outlined

Max marks 6 8

Marks Comments obtained

4 5

8 8

Techniques are described in detail and include o work breakdown structure o network analysis (for example, 12 PERT/CPM) o completion date o float/slack o critical path Total Marks 50 Weighted Mark 20%

SBG

Page 13 of 16

632 Operations Management

632 Operations Management Assignment Three

100 marks - 40% Final Mark

Supply Chain Management 40 marks 1. Explore how a person would go about purchasing a computer online through the Dell website or some other website and draw a diagram/flowchart of the supply chain from the creation of the product by the supplier to the consumer. (300 words) (6 Marks) 2. In addition to the diagram/flowchart provide an explanation of the planning purchasing, processing and distribution functions that are a part of the chain and ensure its integrity. (400 words) (8 Marks) 3. Compare the process with that of buying the same product through a retail store. (200 words) (6 Marks) 4. Dick Smith has a problem with a number of its stores being overstocked and the regional manager has invited you to their regional managers meeting to provide some training on inventory management. Produce a 1-2 page handout that summarises the presentation that you will give to them. The handout will need to include inventory management techniques such as fixed period, variable period and fixed quantity. You will also need to discuss the principle of JIT and some materials management tools that will assist this including Kanban. (600 words) (20 Marks) Performance Management 25 marks 5. You have been invited to provide some consulting work for DSE. You understand a little about the nature of their business and they have asked you to provide them with some strategic objectives relating to performance management along with some controls that will evaluate performance. (400 words) (15 Marks) 6. Discuss in approx 200 words the following statement as it relates to performance management. Productivity is all the actions that bring a company closer to its goals. (10 Marks) Capacity Management 35 marks 7. The computer manufacturer wants to know what its optimum level for production is. Describe how this might be measured and what technique they could use to measure it, provide a working example with the description. (5 Marks) 8. In no more than 200 words explain how using sub-contractors and casual employees can positively impact when managing capacity. (5 Marks)
SBG Page 14 of 16 632 Operations Management

9. Dick Smith Electronics have asked you to help them with forecasting computer sales for the month of July 2010. The table below provides the sales data for the previous 6 months. Dick Smith Electronics Computer Sales Month January February March April May June Forecast 950 1000 1200 1000 1000 1100 Actual 1050 1250 1025 1130 875 873

a) They have asked that you analyse the results of their forecasting model and test its validity. Calculate using Mean Absolute Deviation (MAD) the degree of error over the 6 month period in the table. (2 Marks) b) Is their model giving the best results? (3 Marks) c) Using the Simple Moving Average (SMA) method, find the July forecast. (2 Marks) d) Compare the SMA method with the result you get from the Weighted Moving Average (WMA). (3 Marks) 10. The computer manufacturer who supplies the hardware for DSE have no real inventory planning system and are in need of your advice. a) Provide a memo to the operations manager (no more than 500 words) that discusses the following the importance of production planning including Master Production Schedule and Materials Requirements Planning (MRP). Be sure to outline the advantages and disadvantages of MRP. (10 Marks) b) Explain the impact of IT in Master Production Scheduling and describe the software that is being used in Master Production Scheduling. (5 Marks)

SBG

Page 15 of 16

632 Operations Management

632 Operations Management Assessment 3: - Marking Guide Your Name: Tutors Name:
Topic 1 2 Diagram/flowchart attached Clear outline of process with good discussion Explanation of the following components o planning o purchasing o processing o distribution functions Comparison made of the process 1-2 page handout produced and covers Inventory management techniques o fixed period o variable period o fixed quantity o JIT o Kanban Clear strategic objectives outlined Controls relating to objectives are clear and measurable Discussion made with up to 5 valid points made Description of how to attain optimum level for production Example included Explanation identifies the advantages of flexibility when using casual and contract workers Correct answer given with workings Feasible explanation as to why it is or isnt giving good results Correct answer given with workings Comparison made with workings for WMA Max marks 6 Marks Comments obtained

20

5 6 7

15 10 5

8 a. b. 9 c. d.

5 2 3 2 3

10

a. Memo outlines the importance of production 10 planning Refers to Master Production Schedule and Materials Requirements Planning (MRP) Outlines advantages and disadvantages of MRP 5 b. Explanation of IT impact is outlined Total Marks 100 Weighted Mark 40%

SBG

Page 16 of 16

632 Operations Management