GU Planning and Facility Location Jackson Medical Diagnostics Lab Case Study Please view the assessments and complete them BOTH…Please SEPARATE each asse

GU Planning and Facility Location Jackson Medical Diagnostics Lab Case Study Please view the assessments and complete them BOTH…Please SEPARATE each assessment in its own word documentTHERE CAN BE NO PLAGIARISM AT ALL…PLEASE SUBMIT WITH A TURNITIN REPORTPlease follow all instructions and the rubric very closely 2/27/2020
Assessment 5 – BUS-FP4014 – Winter 2020 – Section 01
Assessment 5
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Inventory and Ordering Decisions
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Overview
Analyze an operations management issue in a hypothetical company and provide answers to five algebraic
equations.
Operations management is the core of any business. Understanding the basics of operations management and
the associated best practices allows you to understand the importance of eliminating waste, while improving
quality and customer service. Inventory is no longer simply a necessary evil, but a means by which companies
have found ways to gain competitive advantage.
By successfully completing this assessment, you will demonstrate your proficiency in the following course
competencies and assessment criteria:
Competency 1: Assess the role of operations management within organizations.
Analyze a production decision using an aggregate production rate approach.
Analyze a labor related production decision.
Competency 2: Apply the tools and technology used in Operations Management.
Analyze an inventory decision using an economic order quantity approach.
Analyze an inventory decision using a reorder point approach.
Describe key forecasting methods.
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Context
The old management philosophy was to have enough inventories ahead in the system to make sure the customer
received the product. This required massive warehouses, tons of raw materials, and a waste of time and
efficiency.
All businesses are affected by their operations—how they transform inputs into useable outputs. Most companies
do not have all the best practices in place, but are striving to incorporate some of them into their culture.
The Assessment 5 Context document contains important information related to the following topics:
Aggregate Planning.
Sales Forecasting.
Scheduling.
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Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a
fellow learner, a work associate, an interested friend, or a member of the business community.
How are inventory management and aggregate planning similar? How do they differ?
Resources
Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a
helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left
navigation menu of your courseroom.
Capella Resources
Click the links provided to view the following resources:
Assessment 5 Context.
Library Resources
The following e-books or articles from the Capella University Library are linked directly in this course:
Muller, M. (2011). Essentials of inventory management (2nd ed.). Saranac Lake, NY: AMACOM Books.
Lowe, D. (2002). The dictionary of transport and logistics. London, GBR: Kogan Page.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to
refer to the resources in the BUS-FP4014 Operations Management for Competitive Advantage Library Guide to
help direct your research.
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required. Unless
noted otherwise, these materials are available for purchase from the Capella University Bookstore. When
searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.
Reid, R. D., & Sanders, N. R. (2016). Operations management: An integrated approach (6th ed.). Hoboken,
NJ: Wiley.
Chapter 8, “Forecasting.”
Chapter 13, “Aggregate Planning.”
Chapter 15, “Scheduling.”
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Assessment Instructions
Scenario
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Assessment 5 – BUS-FP4014 – Winter 2020 – Section 01
For this assessment, suppose that you are the operations manager for ABC Manufacturing, a small
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manufacturing company founded three years Tutorials
ago. ABC has
been manufacturing
and selling an
electric
motor
for the past year, but the company has not always had sufficient workers assigned to manufacturing this
electric motor in order to satisfy demand. ABC’s president asked you to plan for the production of this motor
for the next six months.
You have decided you will use a level aggregate plan for the electric motor, meaning that you will
manufacture the same number of units each month. ABC’s president has told you that some customers order
this motor well in advance of when needed, and thus it is allowable to have backorders, if needed. You know
there are currently 150 units in inventory (starting inventory = SI), and ABC’s marketing manager estimates
that the demand for the motor (in units) for each of the next six months (M = 6) will be 240, 225, 265, 270,
260, and 275 (D1, D2, D3, D4, and D5 respectively). You have decided you would like to reduce average
inventory level of several products (including this one), and you want to have 50 units in inventory six months
from now (ending inventory = EI).
Directions
Briefly describe the operations management issue in the ABC Manufacturing scenario and describe how you
would approach an analysis. Then complete the following problems based on the scenario and provide
answers to the algebraic equations.
Question 1. Refer to the ABC Manufacturing scenario to complete the following:
Provide the algebraic equation for the monthly aggregate production rate (APR, using SI, EI, D1, D2,
D3, D4, D5, and M as variables).
Calculate and provide the numerical monthly aggregate production rate rounded to a whole number.
Question 2. Production employees at ABC work an average of 168 hours per month (HPM), and
manufacturing the electric motor involves 3.5 total hours of work per unit (HPU).
Provide the algebraic equation for the number of workers (W) needed to meet the above aggregate
production rate (using W, APR, HPM, and HPU as variables).
Calculate and provide the numerical number of workers needed.
Question 3. One subcomponent in this electric motor is also used in two other products manufactured by
ABC. ABC’s president has told you that the company expects to use 5,400 (annual quantity = AQ) of these
subcomponents during the next 12 months, with a consistent demand for them month-to-month (and a
consistent demand during each month, with the business day daily demand, DQ, being 22). He has further
told you that it costs $10 to place an order (order cost = OC) for this subcomponent (regardless of the
quantity ordered), that the annual holding cost is $2 per unit (unit holding cost = UHC). Finally, he has stated
that out of 21 business days per month, there is a five business day lead time (LT = 5) associated with ordering
this subcomponent.
Provide the algebraic equation for the economic order quantity (EOQ, using AQ, OC, and UHC as
variables).
Calculate and provide the numerical economic order quantity rounded to the closest whole number.
Question 4. Refer to the ABC Manufacturing scenario to complete the following:
Provide the algebraic equation for the reorder point (RP, using DQ and LT as variables).
Calculate and provide the numerical EOQ, rounded to the closest whole number.
Question 5. Historically, ABC has based its production on estimates from the company’s marketing manager.
While that has generally been successful, you have decided you would like to factor in an operations
management approach to estimating demand.
Describe the following forecasting methods. Provide the math associated with each method and
identify the pros and cons of using it:
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Naïve.
Simple mean.
Simple moving average.
Weighted moving average.
Exponential smoothing.
Linear trend line.
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Additional Requirements
Written communication: Written communication should be free of errors that detract from the overall
message.
APA formatting: Any references and citations should be formatted according to APA (6th edition) style
and formatting.
Font and font size: Times New Roman, 12-point.
Inventory and Ordering Decisions Scoring Guide
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Assessment 4 – BUS-FP4014 – Winter 2020 – Section 01
Assessment 4
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Planning and Facility Location
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Attempt 3
Overview
Write a description of an operations management issue based on a provided scenario and draw or outline a
decision tree showing possible decisions for addressing the issue. In addition, complete a load-distance analysis
for the scenario and describe your calculations.
The focus in this assessment is on the factors in layout planning and facility layout. Companies realize that the
costs of a product are inherent in how they transform their inputs into outputs. Transformation costs correlate
directly to how well the facility is laid out and how well that layout translates to the delivery of a high-quality, ontime product. Operational decisions also have substantive impact on sustainability; for example, layout can affect
how much electric power, heating, and cooling resources are expended.
By successfully completing this assessment, you will demonstrate your proficiency in the following course
competencies and assessment criteria:
Competency 2: Apply the tools and technology used in operations management.
Analyze capacity planning using a decision tree approach.
Analyze a facility layout using a load-distance approach.
Competency Map
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progress through your course.
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Context
In the current business reality, we find many forces that affect a company’s decision on where to do business and
how to design capacity. Though factors can vary, a key component for all companies is to determine how they
can best serve their customers. Many operation managers today consider how planning and facility location can
impact the organization’s sustainability. For example, logistics, such as the distance between suppliers and
warehouses, may have an impact on organizational costs and ecosystems.
Breakeven Analysis
A tool used by managers to help with capacity planning and plant location is the breakeven analysis. This process
weighs the factors and allows managers to quantitatively evaluate a decision. Capacity planning takes into
consideration the maximum output each facility can produce. Decision trees are used to help analyze the choices.
It is important to make sure that all choices are evaluated and related to future forecasts. This will help ensure
that facilities are efficient and located in the right area, and lead to correct volume output. Technology has had a
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tremendous impact on these decisions and competitors are constantly evaluating their best practices to ensure
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they stay ahead of the competition.
Basic Layouts
Layout planning and facility layout are important components in organization management. The four basic layouts
are process, product, hybrid, and fixed position. Each layout is critical to delivering a low-cost, high-quality
product, while being flexible enough to meet the needs of the customer. The type of layout a company uses is
based on volume, product type, and the customer needs. It is extremely important to recognize that costs and
efficiency help to deliver a low-cost product.
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Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a
fellow learner, a work associate, an interested friend, or a member of the business community.
Consider your own business specialty. What is the best city in your state in which to open a new business in
this specialty? Why?
How do the layout for a product and the layout for a process differ?
How is the design for a product similar to the design for a process?
Resources
Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a
helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left
navigation menu of your courseroom.
Library Resources
The following e-books or articles from the Capella University Library are linked directly in this course:
Trent, R. J. (2008). End-to-end lean management: A guide to complete supply chain improvement. Fort
Lauderdale, FL: J. Ross Publishing.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to
refer to the resources in the BUS-FP4014 Operations Management for Competitive Advantage Library Guide to
help direct your research.
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required. Unless
noted otherwise, these materials are available for purchase from the Capella University Bookstore. When
searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.
Reid, R. D., & Sanders, N. R. (2016). Operations management: An integrated approach (6th ed.). Hoboken,
NJ: Wiley.
Chapter 4, “Supply Chain Management.”
Chapter 7, “Just-In-Time and Lean Systems.”
Chapter 10, “Facility Layout.”
Chapter 12, “Inventory Management.”
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Assessment Instructions
Scenario
Jackson Medical Diagnostics Lab is a small lab providing medical testing for doctors and hospitals. It was
founded 10 years ago, has a good reputation among local doctors, and has been experiencing strong growth
the past two years. Jackson’s general manager knows from a relatively recent operations management
analysis that the lab’s design capacity is 340 patients per day, its effective capacity is 310 patients per day, and
the lab currently processes 295 patients per day. The general manager is concerned that the lab will not have
the capacity to meet future demand unless the lab is expanded. She has hired a market research firm to study
the demand for the lab’s services in the area.
After completing its study, the market research firm predicted that there is a .60 probability of continued high
demand (PH) for the lab’s services over the next five years, and a .40 probability of low demand (PL). Based on
that, Jackson’s general manager has decided to move forward with an expansion. However, she is not sure
whether she should do a small expansion (SE) by taking over some adjacent vacant office space that has
recently become available, or do a large expansion (LE) by moving the lab to a different floor of the same
building.
The general manager has worked with the lab’s finance manager to come up with an estimate that a small
expansion would have a profitability of $35,000 if the demand for the lab’s services is low (ProfitSmallLow). If
the lab undertakes a small expansion and the demand for the lab’s services is high, the lab would likely have
to undertake a second small expansion (assuming appropriate space was available), and the profitability of the
two expansions would be $55,000 (ProfitSmallHigh). If the lab undertakes a large expansion, the profit would
be $90,000 if the demand for its services is high (ProfitLargeHigh), but only a $52,000 profit is the demand is
low (ProfitLargeLow).
Directions
Complete all of the following three components of this assessment:
Component 1. First, briefly describe the operations management issue in the scenario above, and describe
how you would approach an analysis.
Component 2. Draw or outline a decision tree showing the possible decisions, the probability of each, and
the profitability of each. Based on those probabilities and profits, determine the probabilistic profitability of
each, and thus the best expansion decision for Jackson to pursue.
Component 3. As part of considering these two expansions, Jackson’s general manager is looking into how
they might best lay out the lab areas if they do the large expansion. The new larger space they would be
using is already divided into several rooms connected by doors. Plumbing is available in each area, and thus
the bathrooms (which are not yet built) could be located in any area. Jackson’s general manager would like to
design a layout that minimizes the number of trips employees must make between rooms each day.
Her preliminary layout involves a 3×2 equal size room arrangement. One set of three rooms in that preliminary
layout consists of the reception (R) room, the office (O), and the private patient stations (P) room. The other
set of three rooms in that preliminary layout consists of the employee break area (E), the bathrooms (B), and
the storage area (S). (Refer to the Preliminary Layout Diagram.)
Preliminary Layout Diagram
Reception
(R)
Office (O)
Private
patient
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stations (P)
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Employee
break area
(E)
Bathrooms
(B)
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Storage
area (S)
Jackson’s general manager has asked each employee to fill out a form logging how many times they currently
walk from one area to the next (in their current location). Refer to the Data Table for the resulting data.
Data Table
(R)
Reception
(R)
–
Office (O)
Patient
stations (P)
(O)
(P)
(E)
(B)
(S)
350
30
40
28
5
–
410
76
42
23
–
15
295
2
–
37
8
–
3
Employee
area (E)
Bathrooms
(B)
Storage (S)
–
Complete a load-distance (LD) analysis for the preliminary layout by assigning a load of 15 feet for each
room-to-adjacent-room movement (assume there is a door between all adjacent rooms).
Describe your calculations associated with that analysis, and calculate and provide the final LD numeric
value.
Additional Requirements
Written communication: Written communication should be free of errors that detract from the overall
message.
APA formatting: Any references and citations should be formatted according to APA (6th edition) style
and formatting.
Font and font size: Times New Roman, 12-point.
Planning and Facility Location Scoring Guide
Use the scoring guide to enhance your learning.
VIEW SCORING
GUIDE
How to use the scoring guide
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