Contents
This paper provides solution to the below 4 case studies - - Case 1: City Logistics [25 marks]
- Sustainable Last Mile Ltd is starting a new distribution service that delivers auto parts to the service departments of auto dealerships in Milton Keynes. Sustainable Last Mile Ltd has found two light-duty trucks that would do the job well, so now it needs to pick one to perform this new service. The Nissan TriVan costs £43,000 to buy and uses regular unleaded petrol, with an average fuel efficiency of 28 miles per gallon. The TriVan has an operating cost of £.27 per mile. The Chrysler CityVan, a hybrid truck, costs £57,000 to buy and uses regular unleaded petrol and battery power; it gets an average of 41 miles per gallon. The CityVan has an operating cost of £.24 per mile. The distance traveled annually is estimated to be 25,000 miles, with the life of either truck expected to be 10 years. The average gas price is £4.75 per gallon.
- a. Based on life cycle cost, which model truck is the best choice? [6 marks]
- b. How many miles does Sustainable Last Mile Ltd need to put on a truck for the costs
- to be equal? [6 marks]
- c. What is the crossover point in years? [5 marks]
- d. What are the limitations of this approach and what other factors could have been
- considered in the analysis? (References expected) [8 marks]
- Case 2: Record Store’s Goals [25 marks]
- Jane’s Record Store employs full-time employees and part-time employees. The normal workload is 7 hours per day for full-time and 4 hours per day for part-time employees. Each full-time employee is paid £20.75 per hour and can sell 6 records per hour. Each part-time employee is paid £8.50 per hour and can sell 4 records per hour. It costs Jane £26 to buy a record, and each record sells for £35. Jane has fixed expenses which is the rent of the store at £24,000 per month and the utilities at £840 per month (assume 30 days / month). She has established the following daily goals, listed in order of priority:
- Goal 1: Sell at least 542 records per day.
- Goal 2: Earn a profit of at least £2,200 per day.
- Goal 3: Employ at least five part-time staff to support students studying at
- the university near the store.
- Goal 4: The number of full-time employees should be at least twice as many as part-
- time employees to ensure job ownership.
- The data are given in Sheet ‘Record Store’ of ‘ATS Assignment Data v1 2019-05.xlsx’. Formulate a preemptive goal programming model that could be used to determine how many hours per week each employee should work. Please state clearly a. the decision variables [4 marks]
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- b. the goal constraints [4 marks]
- c. the objective function [4 marks]
- d. the solution, stating the values of all your decision variables, including the deviational
- variables [4 marks]
- e. Goal programming can prove useful to businesses in planning their operations with
- conflicting objectives. Please identify two recent academic papers that used goal programming as a methodology to address a business problem (References expected). Critique these papers in achieving the research objective communicated in the paper. [9 marks]
- Case 3: Consumer Electronics [25 marks]
- The production team of a consumer electronics manufacturer proposed two different procedures for installing a hardware component. To evaluate the two proposed methods, it was decided to conduct a time and motion study. The company took two random samples, the first one using the first procedure for installing the hardware and the second one using the second procedure. The observations of each sample is given in the ‘ATS Assignment Data v1 2019-05.xlsx’ file.
- Is there a statistically significant difference in mean installation times for the two procedures? (Assume measurements in each population have the same variance σ2)
- a. State the null and the alternative hypotheses [4 marks].
- b. Undertake an appropriate test with a plausible significance level, stating the
- assumptions applicable to your analysis [7 marks].
- c. Interpret the results and comment on the sensitivity of the decision to the chosen
- significance level [5 marks].
- d. Choose three examples of the application of statistical inference in either logistics or
- supply chain management. How might knowledge of statistics in each of the examples aid the management of the system? (References expected.) [9 marks].
- Case 4: A Fashion Retailer’s Sales Forecast [25 marks]
- A fashion retailer has 600 stores across the country. Some of these stores are on high streets and some are located inside shopping malls. The fashion retailer collected sales data on a Friday last month for each store they had. They suspect that the daily sales can be explained by the number of customers arriving at the store per day, the store area in square meters, store type, and the number of sales staff in the store helping customers to find what they are looking for. Luckily, they have a system to record the number of customers arriving
- at the store and they can pull the sales data from the ERP system. Human Resources Department provided the number of sales staff on the floor for that Friday and the Accounting Department sent the store area data. See the Sheet ‘Fashion Retailer’ of ‘ATS Assignment Data v1 2019-05.xlsx’ for these data.
- a. Develop a multiple regression model to explain the variability in net sales. State the null and the alternative hypothesis of the regression. [5 marks]
- b. Interpret the regression analysis results results. [5 marks]
- c. The company is expecting to open a new, 100 square-meters store on a high street
- to to be staffed with 5 sales people. Assuming they will expect 250 customers to visit
- the store per day, what net sales can they expect? [4 marks]
- d. Check whether the assumptions of multiple linear regression are met. [4 marks]
- e. Is multiple regression an appropriate approach to address the fashion retailer’s
- problem? Explain why or why not? (References expected.) [7 marks]
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