Operational Management Jit

810 Words May 6th, 2013 4 Pages
Question One - Prime Bank of Massachusetts
Part 1
The operations function is important in implementing the strategy of an organisation because the business strategy only defines the long term plans for the company, whereas the operations function focuses on specific competitive priorities in order to meet the organisations long term plan. Prime Bank of Massachusetts had decided on a long term plan for the bank focusing on customer services and they needed the operations function to implement this long term plan through planning & control systems, workers and quality. Problems such as not having enough phone lines for the 24 hours customer service could cause customers to become irritated if they cannot get through on the phone and
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Part 3
If the banks strategy was cost cutting instead of supporting customer service the banks whole strategy would be very different. The bank would try to cut cost everywhere such as the tellers in the drive through lanes may be replaced with automatic machines. Customers would be encouraged to use banking on line as again the bank could reduce the number of workers which would cut the staffing costs. When competing on cost organisations my invest in automation to reduce unit costs, use lower skill labour and limit product range and offer little customisation. (Class Notes – Chapter 2, Operations Management)

Question Two
Part 1
Total Costs

D=15600
Q=1300
S=40
H=13.75

= = =

Total annual costs of the present ordering policy for part no 650810/ss/R9/0 is €9417.50
Part 2 Economic Order Quantity (EOQ)

EOQ = D=15600
S=40
H=13.75

=

=

=

= 301.27 EOQ = 300

Part 3

Total Costs using EOQ

D=15600…