Operational and Project Management Coursework Report FINAL

This report provides consultancy to Snowham International airport (SIA) on problems faced by airlines and recommendations for 6 tasks. Includes analysis of cost reduction strategies for Harvey Talbot restaurant, staff planning for Turista call centre, and baggage handling problems at Snowham.

Operational and Project
Management Coursework Report
FINAL

EXECUTIVE SUMMARY
This report is based on the providing consultancy report to the Snowham
International airport (SIA) which incorporates the problems which are being faced by all the
airlines and which results into posing as opportunities for the businesses. In this report, six
potential tasks are being resolved for meeting with the desired objectives of the company.
Based upon the findings from the various tasks, a recommendation is being given which the
company can adopt.

INTRODUCTION
Snowham Internal Airport (SIA) is looking to extend the airport in south of England
and it has a good connection and is also surrounded by hotels and parking places. This airline
offers services to other set of airlines as well. Apart from tis, the airlines is looking for
launching its new service on a daily basis to New York as the other airlines makes use of
airport in order to provide offer charter flights to its clients mainly for the popular holiday
places while others offers airfreight only from terminal 1. This report provides undertake
analysis of the various problems pertaining to airport operations and projects in relation to its
expansion. Based upon this, certain recommendations are being drawn upon for each 6 tasks.
MAIN BODY
Task 4: Harvey Talbot-coffee procurement
As there are two suggestions given pertaining to how Harvey Talbot could reduce
and minimise its cost in respect to purchasing of coffee from KCS Ltd. The main objective of
every business organization is to make profits for which it is essential for the organization to
formulate strategies which will help in accomplishing the same by minimising its costs of
production. With respect to the case of Harvey Talbot restaurant, there are 2 recommendation
beings made in regard to cost of procuring their coffee which is seemed to be high might be
minimised.
On making use of the given data, both the suggestions are being analysed in order to
know whether they are being able to minimise the cost of procuring coffee. The following
calculations shall be made.
1. Recommendation 1: It involves the adoption of the EOQ which is an inventory
management tool used to regulate the amount of stock level an organization should
maintain in its inventory for each of the particular batch order which will assist in
reducing its cost of inventory (Nobil, Sedigh and Cárdenas-Barrón, 2019). This
method also helps in ensuring that the right amount of stock is being ordered each
batch so that the firm does not make orders too quickly and helps in overcoming the

situation of excess inventory on hand. The formula for calculating EOQ is given
below.
With respect to the information provided in the given case scenario pertaining to
Harvey Talbot Restaurant, the provided data is stated below.
S £14.50
D (200 x 26) 5200
H £9.00
EOQ 129. 45 or 130
The current yearly cost of procurement is £94,000.
Based upon the above, it can be stated that company should be ordering 130
containers every week so as to avoid the situation of excess supply along with the
wastage of the coffee.
Thus, the yearly cost is:
= (130 x 26 x 14.50) + (40 x 26) + (7,500)
= £57,550.
The application and implementation of this method will help in reducing cost of the
procurement.
2. Recommendation 2: According to this, the restaurant is required to order at least 2500
containers at the rate of £12.75 each, every year. Basically, the restaurant orders 200
containers in each two weeks which results into 5200 containers every year. It costs
the company nearly £94,000 to make their coffee procurement. Thus, through making
an adoption to this recommendation, the organization can place the order twice in
order to meet with the in total yearly demand of 5200 containers. Thus,
Total cost = (5200 x 12.75) + (2 x 40) + (£7500)
= £73,880.00.
On comparison to the total yearly cost of £94,000, this recommendation is seemed to
more effective in dropping the cost to £73,880.
Task 5: The new juice master outlet
A diagram showing an empty floor layout has been given below.

also, the market research provided the following data pertaining to the number of customers
that could be expected make use of the new outlet when it opens.
In respect to the above given layout plan, the layout in respect to queueing, ordering,
delivering and payment process can be designed as illustrated underneath.

The opening hours is already provided which is good but opening the outlets at “0600” will
be more proper as only very few customers visits the outlet any time before then. It will be
the responsibility of the senior member of staffs to handle the selling of the products but in
regard to the operation management, an operation manager is required to be hired who will be
having experience in this. These aspects might be changed as per the requirement or from
shift to shift. The operation manager is required to take into account the various aspect which
will help in avoiding unnecessary cost resulting into reduced cost. This is the main role of
operation manager.
Task 6: Staff planning for the Turista call centre
Key points in respect to call centre:
 The call centre works 250 days every year (50 weeks x 5 days a week)
 it handles around 26000 calls which varies in demand
 5200 calls are managed between day 0 to 100,
 15000 calls in day 100 to 150
 6000 calls is demanded after 150 days.

 The company is having 2 full time employees who can process 30 calls each day per
person and on the other hand, the temporary staff can manage only 20 calls each day.
Number of extra temporary staff that Turista need to recruit during each period next
year
For the starting 0 to 100 days, a total of 5200 calls are being demanded. Thus, in 100 days,
permanent staff can handle (30 x 100) + (30 x100) = 6000 calls while 5200 calls are required.
Thus, there is no requirement of temporary staff at this point.
Between 100 to 150 days, calls demanded is 15000, the two permanent staffs can handle (30
x 50) + (30 x 50) = 3000 calls, therefore, it requires to employ temporary employees for the
remaining 12000 calls. Each temporary staff can handle 20 calls each day. Thus, the number
of temporary staffs needed for this period will be 12000/20 x 50 = 12 workers.
The last period is between 150 to 250 days where 6000 calls are required. Under this, the
permanent staff can handle (30 x 100) + (30 x100) = 6000 calls. Thus, there is no need of
hiring temporary staff for this period.
Thus, only 600 temporary staff is needed during the peak period and it costs £60 per day to
hire the temporal staff. Thus, the company is required to follow the given budget:
= 12 x 50 x 60 = £72,000.
The developed new web-based call handling system
This system helps in rising the calling capacity of permanent and temporary staff. As from
the above, during peak period temporary staff is needed. But with this new system, the
permanent staff can now manage 50 calls each, thus in 50 days, they can manage (50 x 50) +
(50 x 50) = 5000 calls. In respect to temporary staff, it will require only 50 x 50 = 4 temporal
workers.
The cost of hiring the 4
workers
4 x 50 x 60 £12,000.
The total cost £24000 + 12,000 36,000
The cost saving for hiring (72,000-36,000) £36,000
Thus, it is suggested to employ the new web-based call handling system as it reduces the
temporary staff from 12 to 4 resulting into decreasing the cost by £36,000.

Task 7: Sycamore Security Systems
The cost of installing a CCTV system is £160,000. The total unit cost which
involves both staff and material is £128, 000 per system (Qu and Niu, 2021). In addition to
this, the overhead cost is £90,000 per week and an individual works 8 hours a day and
company works 50 weeks per year.
Maximum production capacity of the company each week
The full process of the CCTV installation process is given below:
 From the above, it takes about 63 hours (5hours + 16 hours + 20 hours + 22 hours) for
designing and installing a CCTV.
 The number of staffs needed involves 2 salesmen, 3 surveyors, 5 team manufacturers,
6 team’s installers.
Number of site survey per
week will be
(8x5)/16 2.5.
Number of sales visits per
week will be
(8 x 5)/5 8.
Number of manufactured
products per week will be
(8x5)/20 2.
Number of installations per
week will be
(8x5)/22 1.8 = 2.
The bottleneck associated with this process is over staffed in 1 sector while under staffed in
some sectors.
The annual gross profit made by the company for the previous year can be computed as.
 Charge per CCTV = £160,000
 Total units’ costs (cost of materials and staff costs) = £128, 000 per system
 All other fixed overheads cost = £90,000 per week (90000 x 50) = 4500000
 The company develops and install 8 to 9 systems a week and for further calculations 9
systems per week is taken.
Thus, the annual gross profit generated by the company previous can be calculated as.

= (160000 x 9 x 50) – (128000 x 9 x 50) – (90000 x 50) = 9900000
Thus, the gross profit generates is £9900000.
Assessing the staff to be recruited
If the company is looking to hire temporary staff from an agency, then the cost for the year
will be:
Salesman £300 x 5 x 50 £75000
Surveyor £400 x 5 x 50 £100,000
Manufacturing team £1000 x 5 x 50 250000
Installation team £1500 x 5 x 50 £375000
The total extra cost of staff (75000 + 100,000 +
250,000 + 375,000)
£800000
Along with this, the number of systems developed each week will increase from 9 to 11
systems, thus, the new expected profit will be:
= (160000 x 11 x 50) – (128000 x 11 x 50) – (90000 x 50) – (800000) = £12300000
The extra profit will be £12300000 - £9900000 = £2400000.
Task 8: Baggage handling problems at Snowham
The baggage handling issue is at the verge of being improved in order to avoid the
issues of loading passenger’s bags into the wrong ones.
Total quality costs of the baggage handling at the moment
The total bags handled each year will be 2000 bags per day x 365 = 730,000 bags
Of this, 0.5% of these bags are being loaded on the wrong flight and thus, the number of
wrong loaded bags will be 0.5/100 x 730000 = 3650 bags. Also, the 70% of the bags detected
and reloaded on the right aircraft, the total number of bags detected and reloaded are 70/100 x
3650 = 2555 bags while the remaining 1095 bags were not detected. The cost in respect to
this is £40 per bag which leads to total cost of detecting and reloading to be £40 x 2555 =
£102,200.
Along with this, the cost of compensating passengers of the undetected bags is £125
per bag. Therefore, the total cost of compensation for undetected mistakes is £125 x 1095 =
£136875. Thus, all together, the total cost of resolving the problem of baggage handling is
£102,200 + £136,875 = £238875.
Proposals made to reduce handling defects and costs

Proposal 1: The estimated budget is £800,000 for the purpose of improving baggage
handling technology along with reducing the defects by 50%.
The cost of resolving the mistake will be £238875/2 =£119437.5
Thus, it is not advisable to spend £800,000 for enhancing baggage handling and reducing
defect by 50%.
Proposal 2: Recruiting 4 more baggage inspectors at the cost of £58,000 per year to rise the
probability of determining the errors from 70% to 90%.
On the implementation of this, the number of bags detected and reloaded will be 90/100 x
3650 = 3285 bags, while 365 bags are not detected.
Total cost of it will be £40 x 3285 £131,400
The cost of compensating passengers
for undetected and unloaded bag
£125 x 365 £45625.
Thus, total cost for baggage handling
will be
£131400 +
£45625
£177025.
On comparing the cost before and after implementation is £238875 - £177025 = £61, 850.
Considering this it is suggested to spend £58,000 on recruiting the baggage inspector which
will help in reducing the baggage handling errors by £61,850.
Proposal 3: Offering training to staff to minimise total errors from 0.5% to 0.1% (80%
reduction)
= 80% cost reduction will be 80/100 x £238875 = £191,100
It is advisable to adopt this proposal as the training cost does not exceed £191,100.
Thus, from the above, the proposal 2 seems to more appropriate in comparison to others.
Task 9: A new fire engine for the airport
There are three candidate vehicles which are listed and the vehicle is tested by the
team of the airport authority along with this, the decision factors are stated below.

Along with this, the price of each vehicle is being quoted by each company as given below.
Apart from this, every vehicle is expected to last for 4 years after which its release value
would be approximately 25% of the actual purchase price.
Recommendation on the best option
On the basis of the analysis, the McDougal vehicle seem to be the best option. Even if the
price is £347, 000. As for GVX is £289,000 along with the annual maintenance cost of
£18,000 every year while that of Scheillinger is £295,000 with £15,000 annual maintain costs
(Khaled and et.al., 2018). On the basis of weighing scoring system, McDougal vehicles have
met with all the weighing’s except the compatibility with the existing airport equipment,
durability and performance in fire-fighting. Thus, except these two, McDougal meets with all
other weighing in contrast to other vehicles. Its higher cost of procurement is mainly justified
on the given below computations:
Total procurement and maintenance cost after 4 years
McDougal: £347000 + 0 £347000
GVX: £289,000 + (18,000 x 4) £361,000
Schellinger: £295,000+(15000 x4) £355 000

Therefore, McDougal seems to be cheaper. If GVX offers 3-year leasing option at a
cost of £129,000 per year for three years along with free servicing and maintenance. At the
end, airport would either return the vehicle or buy it at £129,000. On accepting this, it will
cost £129,000 x 4 = £516000 which is much higher in contrast to other options, GVX
vehicles does not meet the agreed rating also. Thus, the most appropriate vehicle option is
McDougal because it helps in decreasing the cost and assist in enabling better performance.
CONCLUSION
This report analyses the possibility of 6 different operations at Snowham airport.
The first consultancy report explored the recommendations made by HT finance Directors for
reducing the cost of procurement of coffee. The second consultancy report provided the
design of layout of the new juicemasters outlet by highlighting the entire process along with
suggestions about the right opening hours. The 3rd report states the information about the
additional temporary staff required during different period of the year. The fourth report
states about the maximum production capacity of Sycamore along with determining the
information pertaining to the gross annual profit. The fifth report determines the quality costs
of the baggage handling operations and analyses different proposals. The last report analyses
the given information using the weighted scoring system and stating the best vehicle for
airport along with justification.

REFERENCES
Books and Journals
Khaled, O., and et.al., 2018. A multi-criteria repair/recovery framework for the tail
assignment problem in airlines. Journal of Air Transport Management. 68. pp.137-
151.
Nobil, A. H., Sedigh, A. H. A. and Cárdenas-Barrón, L. E., 2019. A generalized economic
order quantity inventory model with shortage: case study of a poultry
farmer. Arabian Journal for Science and Engineering. 44(3). pp.2653-2663.
Qu, W. and Niu, H., 2021. Research on the establishment and operation management of
flexible organization. In E3S Web of Conferences (Vol. 253, p. 03070). EDP
Sciences.