Managing Operations and Projects

This study material covers the concepts of managing operations and projects. It includes topics such as critical path, risk mitigation, demand management, project life cycle, and the four Vs framework in operations management. The material provides insights and explanations for each topic, making it a valuable resource for students studying operations and project management.

Managing Operations and
Projects

Table of Contents
Section A..........................................................................................................................................1
Section B..........................................................................................................................................2
Question 1...................................................................................................................................2
Question 4...................................................................................................................................2
Section C..........................................................................................................................................3
Question. 1 Four Vs Framework.................................................................................................3
Question 2 Project Life Cycle.....................................................................................................4

Section A
Questions Solution
1 Activity is on the critical path
2 A husband preparing a special dinner for his
wife
3 Risk mitigation
4 Sunk cost
5 Develop partnership
6 13
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8 Work can be repetitive
9 Lower visibility is linked to lower cost per unit
10 The 20% of high-value items that account for
around 80% the total stock value
11 Demand management
12 All answers are right
13 London Tube
14 A steel manufacturer
15 103
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Section B
Question 1
(1) How long the project will take until completion:
Number of days: 15/12*30
= 37.5 days
2. How much it will cost:
= 14500/12*30
= 36250
Question 2
A. Highest NPV
years CF PV factor CF*PV
1 130000 0.9091 118183
2 130000 0.8116 105508
3 130000 0.7312 95056
4 130000 0.6587 85631
-400000
NPV Project A 4378
years CF PV factor CF*PV
1 72000 0.9091 65455.2
2 72000 0.8116 58435.2
3 72000 0.7312 52646.4
4 72000 0.6587 47426.4
-250000
NPV Project B -26036.8
Project A has positive and higher NPV and thus, shall be selected.
B. Payback period for Project A
2

Years Cash Flow Cumulative cash flow
0 400000 400000
1 130000 270000
2 130000 140000
3 130000 10000
4 130000 -120000 0.0769230769
Payback period of project A is 3.08 years
Question 4
(a) Number of markers needed: Work content/cycle time
= 400/35
= 11.43 Markers
(b) Through Put efficiency:
Through put time: WIP*Cycle time
= 400*35
= 14000
Through Put efficiency: Work content/ Through put time*100
= 400/14000*100
= 2.86%
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Section C
Question. 1 Four Vs Framework
Four Vs in operations management stand for volume, variety, variation and visibility.
Below mentioned is the comparative analysis of the four Vs framework of a fine dining
restaurant and McDonalds.
Particulars Fine Dining Restaurant McDonalds
Volume In comparison to Mcdonalds,
local fine dining restaurant,
produces lesser volume
because of lesser footfall in
their restaurant. Accordingly,
they have lesser labour and
lesser systematisation which
increases unit cost.
They produce low cost
hamburgers and other fast
food products in high volume
in their fast food chains all
over the world in multiple
countries. High turnover helps
it have lesser unit cost.
Variety Usually a fine dining
restaurant offers lot more
variety and cuisines to its
customers to eat.
McDonalds has limited
products offerings. However,
in order to increase demand for
its products, it offers variety
and multiple products to its
customers according to their
local taste.
Variation Local dining restaurants have
multiple variety and therefore,
they focus lot less on varying
their dishes and products.
McDonalds has limited variety
and therefore, they focus on
variations i.e. they offer
different hamburgers around
same theme.
Visibility It has local presence hence has
limited visibility and can be
tracked lesser by customers.
It is a global chain and hence,
has a lot more better visibility
for its customers to track, see
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and order.
Question 2 Project Life Cycle
Main stages in a project life cycle are initiation, planning, implementation and closure. Below
mentioned are the project life cycle stages of university graduation ceremony:
 Initiation: This is the phase in which project need is identified. Under this phase, the need
to plan university graduation ceremony is ascertained. Accordingly, a feasibility study
has to be conducted.
 Planning: This is the phase where project planning is developed further according to the
objectives identified in the initiation phase. Under it, a detailed plan is for graduation
ceremony is to created with a detailed outline of the activities, tasks, time-frames and
dependencies.
 Implementation: This is the execution phase of the project planning. Under this phase,
plan is put into motion. Also, monitoring and control parameters for the project duration
and cost of the graduation ceremony event has also to be implemented in this phase.
 Closure: This is the final phase of the project life cycle. Under it, all the deliverables
related to the graduation ceremony event is to be surrendered to the organisers by the
project planning team. Further, closure communication shall also be provided to all
stakeholders.
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