Lunar International College

Megenagna Campus
Operations Management
Individual Assignment (15%)
General Instruction

A) For the questions that require calculations, specific steps must be indicated.
B) Each question carries three points. Three points are assigned for the overall
neatness of the whole presentation.
C) Legible hand-written presentations are encouraged.
D) Final submission date: August 5, 2023

1) Visit and observe three restaurants, cafés, or somewhere where food is served.
Compare them in terms of the volume of demand that they have to cope with, the
variety of menu items they serve, the variation in demand during the day, week,
and year, and the visibility you have of the preparation of the food. Discuss the
impact of volume, variety, variation, and visibility on the day-to-day management
of each of the operations and consider how each operation attempts to cope with
its volume, variety, variation, and visibility.

2) A businessman is thinking of opening a factory in one of these places in Ethiopia:

Adama, Debre Zeit, or on the outskirt of Addis Ababa to produce high-quality
electronic components for computers. He has gathered data on fixed cost and
variable cost as given in the table below.

Per Unit Cost

Location Fixed Cost/Year
Material Variable Labor Overhead
Addis Ababa $200,000 $0.20 $0.40 $0.40
Debre Zeit 180,000 0.25 0.75 0.75
Adama 170,000 1.00 1.00 1.00

(a) Represent the costs graphically.

(b) Over what range of annual volume is each location going to have a competitive
advantage?
(c) What is the volume at the intersection?

3) Write down five services that you have ‘consumed’ in the last week. Try to make
these as varied as possible. Examples could include public transport, a bank, any
shop or supermarket, attendance at an education course, a cinema, a restaurant,
etc. For each of these services, answer the following questions:
a) Did the service meet your expectations? If so, what did the management of the
service have to do well to satisfy your expectations? If not, where did they fail? Why
might they have failed?

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b) If you were in charge of managing the delivery of these services, what would you
do to improve the service?
c) If they wanted to, how could the service be delivered at a lower cost so that the
service could reduce its prices?
d) How do you think that the service copes when something goes wrong (such as a
piece of technology breaking down)?
e) How do you think the service copes with fluctuation of demand over the day, week,
month, or year?
4) The following table shows eight market locations to which a manufacturer of
wooden windows expects to ship its products. The shipment volumes and X and Y
coordinates of the locations are shown in the table. Using the center of gravity
method, find the X and Y coordinates for the new location, and suggest a possible
warehouse location.
Weekly Quantity to
Market Area X Y
be Shipped (tons)
A 8 2.5 10
B 20 3 5
C 12 6.5 8
D 10 11 10
E 30 11 8
F 20 10 4
G 40 13 3.5
H 30 12 2

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