MME40001 Engineering Management II

Minor Activity Sheet 1

Date:13/3

Continental Deli Subway

Examples:
Continental Deli 676 Glenferrie Rd, Hawthorn. Subway: 678 Glenferrie Rd, Hawthorn.
Similarities

Products
Employees

Differences

Target audience
Marketing Process
Franchise
Quality

I. List processes that are involved in business based on the following stages:
Attract/accept order

Advertising
Promotion
 Create/design/produce

Meets customer needs

Plan produictions

Delivery/transact
Payment method
Inventory
Money handling

II. Who is a business manager? And who is a better manager?

A business manager is the person who handles the process and all the steps

III. What are the two basic dimensions of a product?

goods
services

IV. From operations management perspective, what are the important issues that should
be addressed?
design
location
layout
quality
supply chain
V. What tools can help us to get a better understanding of a business?
Flow chart, gant

VI. What are three basic flow types in a business system?

Cash flow
Flow of material
Information

VII. Why managing information is important?

Observe environment, evaluatemaje decisions

VIII. What are the challenges in managing information?
 Quality of information:
 Collecting information
 Processing info

IX. What is performance measurement?
 Wfficiency/effectiveness
quality
X. What is productivity?
Output/input

Problem 1. Mark's Ceramics spent $4000 on a new kiln last year, in the belief that it would cut
energy usage 25% over the old kiln. This kiln is an oven that turns "greenware" into finished
pottery. Mark is concerned that the new kiln requires extra labor hours for its operation. Mark
wants to check the energy savings of the new oven, and also to look over other measures of their
productivity to see if the change really was beneficial. Mark has the following data to work with:
Last This
Year Year
Production (finished units) 4000 5000
Greenware (pounds) 5000 5500
Labor (hrs) 400 450
Capital ($) 15000 19000

Energy (kWh) 3000 2800

Table 1
I. Calculate change(in percentage) in labour productivity, raw material productivity, energy
productivity and capital productivity based on Table 1 information?

Labour productivity: 11.1-10/10=.11 11%

Raw material productivity:5000/5500=10%

Energy productivity:45%

Capital productivity:1%

Following table shows sales and expenses for last year and this year.

Last Year This Year

Sales($) 120000 165000
Greenware (cost $) 10000 22000
Labor (cost $) 6000 8100
Capital ($)
15000 19000
Energy (cost $) 40500 40600
Table 2
II. What is the change (percentage) on labour productivity, and multifactor productivity based on
Table 2?
16%
III. Discuss why we might have different labour productivities and how we should explain these
differences?

overtime
attitude/ moral
turnover

IV. Discuss the advantages and limitations of measuring productivity for a business.

Problem 2. Xfun Machinery is designed to produce 1600 brackets in its peak performance within 8
hours of continuous operation. On Tuesday, the workshop manager has collected following
information:
o 45 minutes was taken due workshop’s standard breaktime
o 30 minutes was taken due a setup change over
o 25 minutes was taken due a breakdown
o 1000 brackets have been produced
o 5 % of brackets are faulty
Determine
I. Availability (OEE factor)

87.36%

II. Performance(OEE factor)

16%

III. Quality factor

95%

What is the OEE in this case? And what is the benefit of knowing this factor?

0.13%