Question 1 :

Learning Objective:

The purpose of this part of the assignment is to assess your understanding of how spreadsheets can be used for capacity planning, and the role that it plays in different types of organisations.

Capacity Planning for Always Healthy:

Always Healthy manufactures a variety of medical products such as vaccines, injections, and medicines. They own a subsidiary company that employs specialist nurses who run flu vaccination pop-up clinics at Community Centres and at large companies across the Greater Auckland region.

Always Healthy faces variable demand for this flu vaccination service. They have prepared the following annual forecast of service units for the demand they expect each month for the next calendar year for the flu vaccination pop-up clinics. Assume, the company will employ 60 specialist vaccination nurses before Month 1.

The management of Always Healthy needs to decide for the next year how many specialist vaccination nurses to hire and fire at the start of each month, based on the following demand forecast:

Assume that one nurse working for one month can provide a total of 10 vaccination service units during that period. Each nurse is paid $\$ 4100$ per month and can work up to 175 hours/month. Only at the beginning of each month nurses can be hired or fired; no part-time employment is possible. Hiring each nurse costs $\$ 3900$ and firing each nurse costs $\$ 7250$.

1. Develop the least-cost plan that fully satisfies the forecast demand. Present this plan to the management of Always Healthy in a report that summarises your findings, your capacity plans, and gives a detailed recommendation based on your findings.
2. The manager has also asked you to discuss in the report the following questions:

- How much money does the company save using this plan rather than a level capacity plan (also fully satisfying demand)? Show you calculation details (reasoning) to support (explain) your answer.

- What TWO methods could the company feasibly use in order to smooth demand? Which ONE of those would you recommend here and why?

- Reworking your least-cost plan - what savings could be made if the company outsourced the HR function which would half the cost for hiring and firing of specialist vaccination nurses? What drawbacks would need to be considered in this specific business situation?

the firm will be affected.

Question 2:

The purpose of this part of the assignment is to assess your understanding of how spreadsheets can be used in optimisation to find a lowest cost answer to a common operations problem. You must also be able to demonstrate the ability to adjust the spreadsheet to account for changes in situations and understand how to analyse a changing situation.

Optimising transportation for Always Healthy:

Currently, Always Healthy operates THREE factories (Auckland, Wellington, and Christchurch). One of the items they are making is a special diabetes test kit which they supply to healthcare retail outlets around New Zealand via 9 distribution centres (DCs). Table 2 shows the amount of weekly demand at each DC. Table 3 contains information about the weekly supply capacity from each factory. Table 4 shows shipping costs for Always Healthy between each factory and the 9 DCs.

1. Using this information, find the lowest total cost for Always Healthy to meet the demand for diabetes test kit in the DCs using the three factories.
   Report to management on the total cost for the shipping and present in a table how many units from each factory are allocated to be shipped to each DC.
2. Assume that Always Healthy plans to close their Christchurch factory (Factory 3). All of the capacity is shifted to the other factories. Table 5 lists the new levels of capacity at each factory. Report on the new total cost for the shipping and present in a table how many units of the diabetes test kit from each factory are now allocated to be shipped to each DC.

Question 3:

Learning Objective:

The purpose of this part of the assignment is to assess your understanding of process control tools and their role in an organisation.

Process Control Charts for Always Healthy:

The performance of front desk staff at the Always Healthy office was assessed. Six receptionists were selected and the customer service they provided was observed seven times. The activities that the receptionists were performing were identified and the times (in seconds) to service a customer were recorded as noted below.

1. What value of \(n\) (number of observations) should be used for computing the X-bar and \(R\) control charts?
2. Calculate the 3 -sigma control limits for the X-bar and the \(R\) charts. Create charts for the X-bar and the \(R\) charts based on the values you calculated and the ones provided above.
3. After the control limits were established, another sample was taken and the following times were recorded (in seconds): 238,165,145,83,206, and 323 . Is the process in control? Explain why or why not. Show calculations where applicable.

Question 4 :

Learning Objective:

The purpose of this part of the assignment is to assess your understanding of inventory management and the role that it plays in an organisation.

Inventory Management for Always Healthy:

1. The Inventory Holding cost is a major factor in the EOQ model. Describe to management the relationship between Inventory Holding Cost and the EOQ so that you can explain what is likely to happen to EOQ when the Inventory Holding Cost changes.
   Use a chart (which you must make yourself using an EXCEL spreadsheet) to demonstrate to management the general relationship between Inventory Holding Costs and order size.
   (Word limit: approximately 100 words)
2. Always Healthy not only sells the vaccines and other injections they manufacture, they also buy related consumables and on-sell those to their customers. An inventory of product 'Syringe A' has to be maintained at Always Healthy using the EOQ model, based upon the following information:

The supplier has offered quantity discounts for bulk orders of the syringe product. The price brackets are as follows:

Under this pricing offer, what is the optimal order quantity for product 'Syringe A' that minimises annual total inventory costs for Always Healthy? Present your workings in a table format and also explain to management how you reached your solution.

Price: $32.35

Solution: The downloadable solution consists of 14 pages, 1835 words and 17 charts.
Deliverable: Word Document