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Operations
Management
Jun
2026 Examination
Q1. A leading
bicycle manufacturer is experiencing an unexpected surge in demand for its
newly launched electric bikes due to favorable government incentives. The
company currently produces 10,000 units daily but must increase output over the
next six months while facing limited warehouse space and constrained resources.
The operations manager must modify production schedules and allocate resources
carefully to avoid costly last-minute changes, maintain lean inventory, and
prevent shortages or overproduction.
Identify three
specific actions the operations manager should take in adjusting the production
schedule and resource allocation for the next six months. Provide justification
for each action based on operational efficiency and inventory control. (10
Marks)
Ans 1.
Introduction
The
recent surge in demand for electric bikes has presented both an opportunity and
an operational challenge for the bicycle manufacturer. As much as increased
demand may increase revenue, it also puts stress on the production capacity,
storage space and resources. The firm currently produces 10,000 units daily,
but growing without proper planning can lead to an overstocked inventory and
shortages or inefficiencies. This is why the director of operations needs to
follow a systematic approach for adjusting production schedules to plan
efficiently for the future six months. Goal is to grow output with a measured
manner by minimizing inventory and minimalizing waste and ensuring the smooth
co-ordination of the supply chain, production and manufacture
Q2(A). A startup
is finalizing sourcing decisions for its family-sized kitchen appliance. It
must choose between a single high-quality manufacturer offering reliability and
branding benefits, and multiple smaller suppliers that reduce dependency risk
but increase coordination complexity. With tight margins and strict launch
timelines, the sourcing decision is critical to both risk management and
profitability.
Choose either
single sourcing or multiple sourcing as the preferred strategy for the startup.
Provide three specific points to justify your choice based on risk management
and profitability considerations. (5 Marks)
Ans 2a.
Introduction
The
company is faced with a significant sourcing decision that will influence its
profitability, cost effectiveness, product quality and risk exposure. With
tight margins and strictly enforced timings to launch, picking an appropriate
strategy for sourcing is crucial. A decision that is based on operation ease,
efficiency, as well as reliable supply in order to make sure a smoothly and
effective market
Q2(B). A leading
pharmaceutical company has been producing drugs using an intermittent flow
system to handle varying demand and customization. With a new high-demand drug
nearing commercialization, top management is considering shifting to a
continuous flow system to improve volume and consistency. However, concerns exist
regarding flexibility, setup costs, and vulnerability to disruptions.
As an operations
consultant, recommend whether the company should shift to a continuous flow
system for this new drug. Provide three specific points to justify your
recommendation based on production efficiency, flexibility, and risk
considerations. (5 Marks)
Ans 2b.
Introduction
Pharmaceutical
companies are evaluating whether or not to move from an intermittent flow
system into one that is continuous for the production of a highly-demanding
drug. This choice is important because it could impact production efficiency
also, as will flexibility and risk. A company should select an equipment that
is able to handle large-scale production and maintains consistency and quality.
Concept and
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