Operational and Project Management Practical Report

Operational and Project Management-
Practical report

Table of Contents
TASKS.............................................................................................................................................3
4. Harvey Talbot – coffee procurement...........................................................................................3
Exploring two suggestions...........................................................................................................3
Merits and demerits of the restaurant manager’s suggestion.......................................................4
5. The new Juice masters outlet.......................................................................................................5
6. Staff planning for the Turista call centre.....................................................................................7
Total annual budget.....................................................................................................................7
Cost savings after equipping web based call handling system....................................................8
7. Sycamore Security Systems.........................................................................................................8
Maximum Production capacity and gross annual profit..............................................................8
Updated annual profit..................................................................................................................9
8. Baggage handling problems at Snowham Airport.....................................................................10
Total quality costs......................................................................................................................10
Assessing the business value of each proposal..........................................................................10
9. A new fire engine for the airport...............................................................................................12

Executive Summary
This report covers five questions from question 4 to question 9. In question 4; the optimization of
inventory has been done by implementation of EOQ method; the result shows that total annual
cost in case of bulk purchase will be £88,920; which is less than present annual cost of £94,000.
The difference lies under £5,080. Merits and demerits of manager’s suggestion will highlight the
loop holes in management method to optimize the cost of acquiring the inventory. Question 5
discusses about the juice masters outlet. This section includes recommended design of outlet so
that enough place is available for customer to sit and wait for their turn. Question 6 is about staff
planning for the Turista call centre. The result shows that the total cost after acquiring new
system will be £39,000 which is higher than previous cost £36,000. So, it is advised in this
section to not to proceed with the system. Question 7 discusses about Sycamore security systems
tackle customer complaints in pick period. The situation is about suggesting optimum employees
required to manage in pick time with optimized cost. The result shows that the new annual profit
is greater than previous profit when SSS was producing 9 systems only. The COGS has also
been increased by £750 due to additional surveyors. Question 8 is about baggage handling
problems at Snowhow Airport; the result from this section recommends that the subsequent to
breaking down every one of the three proposals; it was recognized that greatest expense spared
in third recommendation which was given by Dougie McDonald. Consequently, choice third
should be chosen via Airport. Question 9 is about choosing the best alternative to hire new fire
engine for the airport. So, based on the result it is prescribed to proceed with McDougal's
alternative since this producer has most elevated score and accessible at least expense to the
business toward the finish of fourth year.

TASKS
4. Harvey Talbot – coffee procurement
Exploring two suggestions
Suggestion 1 (EOQ):
Total demand in units (D) = 200 containers per 2 weeks
= 200 × 26 Weeks (52 weeks / 2 weeks = 26 weeks)
= 5,200 containers annually
Cost of placing order (O) = £40 per order
Holding cost (H) = £9 per container per year
EOQ = √ 2 DO
H
= √ 2 ×5,200 × 40
9
= Approx. 215 container per order
The result shows that company can order container at minimum cost if it orders 215 containers
per order.
Number of order to be placed in a year = 5,200 / 215 = Approx. 24
Total procuring cost = Total purchasing cost + Total cost of placing order + Total holding cost
= (5,200 × £14.50) + (£40 × 24) + (215 × £9)
= £75,400 + £960 + £1,935
= £78,295
If HT adopts EOQ method for placing order than its procurement cost will be £78,295 which is
much less than £94,000. The difference in both the cost is £15,705.
Suggestion 2 (Placing bulk order at discount)
Size of order = 2,500 containers
No. of order in a year = 5,200 / 2,500 = Approx. 3
Cost per container = £12.75