Question

Final Case Study Ahmed is a motivated young man with experience in operations management in field of gardening and lawns (Wu Yll). He decided to start his own company in that field and started with neighbor gardens and yards. By the end of first year, Ahmed knew his business in growing and started performing other services such as fertilizing, weeding gardens and trimming and believe he could expand further in the future. The company currently consists of two employees in marketing, to employees in finance and three workers in field of gardening. 1. If Ahmed targets differentiability in his competitiveness through quality, flexibility and time. In your opinion, can Ahmed satisfy all these points and if not which point is more important and why? 2. Ahmed responsibility is forecasting, productivity measures and capacity planning. a. What method of forecasting should Ahmed use and give reasons b. Give an example of how to measure total factor productivity for fertilizing work and give some recommendations on how to enhance such productivity C. What could be the total cost and variable cost of Ahmed business and how to relate it to capacity planning d. If Ahmed wishes to open another administrative office in another governorate what would be the relevant key success factors for choosing such governorate

to define varaiable cost is required such as materials

Answer 1

1) Yes these qualities are very much importent for nay business to function smoothly

Having a detailed note about the specifications:

Competitive Priorities

In 1984 Hayes and Wheelwright suggested that companies compete in the marketplace by virtue of one or more of the following competitive priorities:-

• Quality
• Lead-time
• Cost
• Flexibility

Dimensions of quality:

• Performance - the primary operating characteristics.
• Features - optional extras (the "bells" and "whistles").
• Reliability - likelihood of breakdown.
• Conformance - conformance to specification.
• Technical durability - length of time before the product becomes obsolete.
• Serviceability - ease of service
• Aesthetics - look, smell, feel, taste.
• Perceived quality - reputation.
• Value for money.

Dimensions of time:

• Manufacturing lead time.
• Due date performance.
• Rate of product introduction.
• Delivery lead time.
• Frequency of delivery.

Dimensions of price and cost:

• Manufacturing cost.
• Value added.
• Selling price.
• Running cost - cost of keeping the product running.
• Service cost - cost of servicing the product.
• Profit.

Dimensions of flexibility

• Material quality - ability to cope with incoming materials of varying quality.
• Output quality - ability to satisfy demand for products of varying quality.
• New product - ability to cope with the introduction of new products.
• Modification - ability to modify existing products.
• Deliverability - ability to change delivery schedules.
• Volume - ability to accept varying demand volumes.
• Product mix - ability to cope with changes in the product mix.
• Resource mix - ability to cope with changes in the resource mix.

2)

a) Time series analysis

A time series analysis is the most accurate way to create forecasts for different time periods.

Time series analysis is a statistical technique that deals with time series data, or trend analysis. Time series data means that data is in a series of particular time periods or intervals.

b)Total Factor Productivity. Total factor productivity (TFP) is a measure of productivity calculated by dividing economy-wide total production by the weighted average of inputs i.e. labor and capital. It represents growth in real output which is in excess of the growth in inputs such as labor and capital.

Productivity is a measure of the relationship between outputs (total product) and inputs i.e. factors of production (primarily labor and capital). It equals output divided by input. There are two measures of productivity: (a) labor productivity, which equals total output divided by units of labor and (b) total factor productivity, which equals total output divided by weighted average of the inputs.

TFP=Total Product / Weighted Average of Input

Example

Consider the following production function for mining industry in Andalusia:

$Q=A*K^{0.70}*L^{0.45}$

If the growth in total output is 3% in a period in which capital and labor grew by 1.5% and 2%, determine the growth that is attributable to total factor productivity.

We need to isolate the increase in total product that is not explained by the increase in inputs i.e. capital and labor. Let’s just punch the available data in the growth accounting equation above:

c) TOTAL COST:

This is also known as the marginal unit variable cost. If one assumes that the unit variable cost is constant, as in cost-volume-profit analysis developed and used in cost accounting, then total cost is linear in volume, and given by total cost = fixed cost + unit variable cost × amount of variable input used.

FORMULA:

Your total variable cost is equal to the variable cost per unit, multiplied by the number of units produced. Your average variable cost is equal to your total variable cost, divided by the number of units produced.

VARIABLE COST

Variable costs are costs that change as the quantity of the good or service that a business produces changes. Variable costs are the sum of marginal costs over all units produced. They can also be considered normal costs. Fixed costs and variable costs make up the two components of total cost.

Variable Cost Formula

Your total variable cost is equal to the variable cost per unit, multiplied by the number of units produced. Your average variable cost is equal to your total variable cost, divided by the number of units produced. ... So, you'll need to produce more units to actually turn a profit.

d)

the 5 Key Success Factors are:

• Strategic Focus (Leadership, Management, Planning)
• People (Personnel, Staff, Learning, Development)
• Operations (Processes, Work)
• Marketing (Customer Relations, Sales, Responsiveness)
• Finances (Assets, Facilities, Equipment)