MME40001 Engineering Management II

Minor Activity Report 9

Name: S M Shagor Tutorial Group: Tuesday
Student ID: 102427517 Date:01/09/2021

Assume that you are running a coffee shop that provide savoury/sweet snacks.
I. What challenges do you have in determining your product range?
Customer requires variety of coffee and snack, cake
Needs to choose the brand of coffee
Build in house or purchase from outside (make or buy decisions)

With increasing the variety of products:

Need to think about their storage (different equipment, different,..
Need to think about their particular required process
If you build in house, you need to have consistency
Different prices

With increasing variety of the products, the complexity of managing such a coffee shop will
increase exponentially

II. As a producer, what concepts could help you to have a wider product
range in running a coffee shop business?

Low range of the products

Make or buy (delegate aspect pf your production system)

Modular design

III. Why understating supply chain for your product is important?

Cost – realates the cost your raw materials, supplier could provide competitive cost
advantage

1|Page
Quality/focus – unique/ environmentally friendly, if your business is aligned with a good
supplier

Responsive- Performance of a business is depends on the responsiveness of its suppliers

Forecasting

“You need a good supplier”

IV. What are the issues that supply chain management helps to explore?

Three types of flows:

Money
The system pays services that the business gets
The system gets money for the services/goods that provide
The system need to be sustained
Cash flow
Information flow

Material flow

V. Why is essential to have a good forecasting system?

To manage an organisation you need to plan properly for resources, lead time that requires
for its operations

VI. What are the basic forecasting methods?

Technical analysis ( looks at historical data) and based on mathematical models predict
future changes

Fundamental analysis looks at deriving factors that influences an outcome

2|Page
Example 1. Moving Average
Given the following data, calculate the three-year moving averages for years 8 through 10.
(MOVING AVERAGE=total demand in previous n periods/n)
Year Demand 3-Year Moving Ave.
1 74
2 90
3 59
4 91 74.33
5 140 80
6 98 96.67
7 110 109.67
8 123 ?
9 99 ?
10 ?

Example 2. Exponential smoothing

Use exponential smoothing with = 0.2 to calculate smoothed averages and a forecast for
period 7 from the data below. Assume the forecast for the initial period is 7.

Period Demand Forecast

1 10
2 8
3 7
4 10
5 12
6 9
7

3|Page