Professional Documents
Culture Documents
FinalExamination
TotalmarksinFinalExam100marks
MME40001Engineering
Management2
Finalexamcontributesto30%ofsubjectmarks
Topassthesubject
Achieve45marks inthefinalexam
+Achieve35%inassessmentsworth15%ormore+
Aggregatemarkof50%(Coursework+FinalExam)
FinalSubjectReview
Sem1,2015
ONLYSELECTEDFORMULAEareincludedintheFORMULA
SHEET,andthattoonotadirectone
FinalExamination
FinalExamination
Contains10sections
1st
sectionMCQs 10questions
2nd to6th section(5sections) Operations
Managementquestions
7th section Legalconceptsquestions
8th to10th section(3sections) Financeand
Accountingquestions
Overalldivisionofmarksbytopics
10%
~50%
~10%
~30%
TotalmarksinFinalExam100%
Achieve45%inthefinalexamtopassthesubject
Achieve35%inallassessmentsworth15%ormore
Aggregatemarktopassthesubjectis50%(Coursework+FinalExam)
OperationsManagement
Legalconcepts
Micro&MacroEconomics,Innovation&
creativity,Entrepreneurship,Marketing
FinanceandAccounting
~55%
~10%
~5%
~30%
Overalldivisionofmarksbytype
Theorybasedvs.Calculationbased
~20%
~80%
27/5/2015
FinanceandAccounting
ConcentrateonTutorials
FinanceandAccounting
BalanceSheetandIncomeStatement
IdentifytherelevantitemstoincludeinBalanceSheetand
IncomeStatement.
Transactionsoftheyearifgiven revisetheappropriate
itemsinbalancesheetandincomestatement.
Owingsthatarestillduebytheendoftheyear include
thoseintothebalancesheet(accruals)andIncome
statement(expenses).
FinallyprepareaVerticalFormatBalanceSheetanda
IncomeStatementfortheyearending.
PreparationofBalanceSheetandIncome
Statement
ProjectInvestmentDecisions(capitalinvestment
decisions)
BreakevenanalysisandFullCosting
FinanceandAccounting
Liabilities
Assets
BalanceSheet(statementoffinancialposition)
FORMULArelatingtothiswillnotbeprovidedintheFINALEXAM
FinanceandAccounting
Eg
TRANSACTION
Cashpurchaseofcomputer
(a)
Purchasedinventoryoncredit
(b)
Receivedpaymentfromdebtors
(c)
Paidcreditors
(d)
Withdrewcashforpersonaluse
ASSET
Equipment
CashatBank
LIABILITY
OWNERSCAPITAL*
Inventory Creditors
CashatBank
Debtors
CashatBank Creditors
CashatBank Ownersequity
(e)
Paidrentsandratesinadvance
CashatBank
Prepayments
(f)
Purchasedfurnitureoncredit
Furniture Creditors
(g)
Soldinventoryoncredit
Debtors
Inventory
(h)
Barrowedmoneyfromlenders
orbankforbusinessuse
CashatBank longtermloan
27/5/2015
FinanceandAccounting
BalanceSheet(verticalformat)
FinanceandAccounting
FinanceandAccounting
BalanceSheet(horizontalformat)
FinanceandAccounting
IncomeStatement(statementoffinancial
performance)
CurrentLiability
Sales CostofSales=GrossProfit
Grossprofit+otherincome otherexpenses=Netprofit
CurrentAsset
Netprofitfigureisalwaysafterinterestexpensesandincometaxexpenses(if
informationareavailable)
CurrentAsset
Note:onlyrevenuesearnedandexpensesincurredfortherelevantperiodare
showninanincomestatement(notnecessarilycashreceivedandcashpaid)
CurrentLiability
Depreciationperyear=(assetcost residualvalue)/usefullifeinyears
Accumulateddepreciation=totaldepreciatedamountoftheasset
FORMULArelatingtothiswillnotbeprovidedintheFINALEXAM
27/5/2015
FinanceandAccounting
FinanceandAccounting
Transactions
Salesoncredittotaled$179,000(cost$89,000).
Format
ofan
Income
Statement
Cashsalestotaled$54,000(cost$25,000).
Inventorytotaling$67,000wasboughtoncredit.
Inventorytotaling$8,000wasboughtoncash.
Theownerswithdrewcapitalintheformofcashof$20,000.
Receiptsfromtradedebtorstotaled$178,000
Paymentstotradecreditorstotaled$71,000.
Assets
Inventory89k
Debtors179k
Inventory25k
Cash54k
Inventory67k
Inventory8k
cash8k
Cash20k
Cash178k
Debtors178k
Cash71k
Cash25k
Prepayments
5k
Ratesonthepremiseswerepaidduringtheyearfortheperiod1January Cash1.7k
2006to31March2006,$500andfortheperiod1April2006to31March Prepayments
0.3k
2007,$1,200.
Premiseswererentedatanannualrentalof$20,000.Duringtheyear,
rentof$25,000waspaidtotheownerofpremises.
Adeliveryvehiclewasboughton1January2006for$13,000.Thisis
expectedtobeusedinthebusinessforfouryearsandthentobesoldfor
$3,000.
FinanceandAccounting
Transactions
Premiseswererentedatanannualrentalof$20,000.Duringtheyear,
rentof$25,000waspaidtotheownerofpremises.
Liabilities/OE
rateexpense
1.4k
Adeliveryvehiclewasboughton1January2006for$13,000.Thisis
expectedtobeusedinthebusinessforfouryearsandthentobesoldfor
$3,000.
Deprecia on
expense2.5k
Wagestotaling$36,700werepaidduringtheyear.Attheendoftheyear, Cash36.7k
thebusinessowed$860ofwagesforthelastweekoftheyear.
Accruals
0.86k
Wages
(36.7+0.86)k
Electricitybillsforthefirstthreequartersoftheyearwerepaidtotaling$ Cash1.82k
1,820.After31December2006,butbeforetheaccountshadbeen
finalizedfortheyear,thebillforthelastquarterarrivedshowingacharge
of$690.
Accruals
0.69k
Electricity
(1.82+0.69)k
Vehiclerunningexpensespaidtotaled$16,200.
Cash16.2k
Income
sales179k
Expenses
costof sales89k
sales54k
costof sales25k
Creditors
67k
OE20k
(withdrawal)
Creditors
71k
rentexpense
20k
rateexpense
1.4k
Deprecia on
expense2.5k
FinanceandAccounting
Assets
Cash25k
Prepayments
5k
Ratesonthepremiseswerepaidduringtheyearfortheperiod1January Cash1.7k
2006to31March2006,$500andfortheperiod1April2006to31March Prepayments
2007,$1,200.
0.3k
Cash13k
vehicle 13k
depreciation2.5k
Income
Cash13k
vehicle 13k
depreciation2.5k
Liabilities/OE
Expenses
rentexpense
20k
expense 16.2k
ProjectInvestmentDecisions(capitalinvestment
decisions)
Identifyrelevantcashinflowsandoutflowsi.e.initial
outlayofmoney,profitseachyears,expenseseach
year,etc.
Understandthedifferencebetweenannualnetcashflows
andnetprofits
DonotconsiderPASTandFUTUREcosts.Onlyinclude
coststhatoccurduringtheconcernedperiod.
Taxinformation,ifgiven,mustbeincluded
27/5/2015
FinanceandAccounting
ProjectInvestmentDecisions(capital
investmentdecisions)
CalculatingNPVwiththediscountfactortable.
CalculatingIRRusinginterpolation
Alwaysincludeadescriptivedecisionbasedon
calculatedNPVandIRRasthefinalNotetoyour
answer.i.e.Whethertotakeuptheproject,Isit
goingtobeprofitable,etc.
FinanceandAccounting
Breakevenanalysis
FinanceandAccounting
BreakevenanalysisandFullCosting
Fixedcostvs.Variablecost
CalculatingBreakevenPointandContribution
MarginofsafetyandLevelofactivitytogaintarget
profits
Directcostvs.Indirectcost(overheads)
JobCosting Apportioningafairshareofindirect
costtoeachjob.
OperationsManagement
IntroductiontoOM&Productivity:
Majorfunctionsofanyorganization
DifferencebetweenGoods&Services.
ProductivityVariables
CalculatingProductivity
SingleFactorProductivityorLaborproductivity
MultiFactorProductivity(expressedinunits/dollar)
Ex.contributionperlaborhour
contributionpermachinehour
Alwaysremember outputinthenumerator
Denominator eithertotallaborhour(singlefactor)or
labor+material+energy+etc intermsofdollars(multifactor)
Matchtheunitoftime(perhourorperdayorperweek)
NewtrendsandchallengesinOM
IndirectderivationFORMULAwillbeprovidedintheFINALEXAM
27/5/2015
OperationsManagement
OperationStrategyinGlobalEnvironment:
TangibleandIntangiblereasonstoglobalize
StrategiesforCompetitiveAdvantage
StrategicdifferencesofGoodsvs.Servicesbased
on10decisionareas
Issuesinoperationstrategies,productlifecycle,
keysuccessfactor(KSF)andcorecompetencies
FourInternationalOperationStrategies
OperationsManagement
DesignofGoodsandServices:
Productlifecycleandstrategies,productbyvalue
analysis
Newproductopportunitiesandproductdevelopment
system
IssuesforProductDevelopment
TimeBasedCompetition
Internalvs.Externaldevelopmentstrategiesfornew
productdevelopment
Documentsforproductdefinitionandproduction
ServiceDesignandDocuments
Developingadecisiontree EMVcalculations
Costbased minofEMVs
Revenuebased maxofEMVs
OperationsManagement
Process,LocationandLayout:
FOCUSONTUTORIALS
FourProcessStrategies
CrossOverCharts
Processanalysisanddesigntools
MethodsforEvaluatingLocationAlternatives
Factorratingmethod,locationalbreakevenanalysis,
centerofgravitymethod.
Layoutstrategies Types&Objectives
Improving/designingprocesslayout(tutorial)
Processlayoutdesign,workcellbalancing,assemblyline
balancing
OperationsManagement
Processstrategies:
Processfocusvs.productfocusvs.repetitive(modular)
vs.masscustomization
Crossoverpoints(breakevenanalysis):
Pointatwhichtotalcostequalsbetweentwodifferent
process/locationstrategies
Settingimaginaryvolume(v)equatingtotalcost>>fixedcost+
(vx variablecostperunit)
Ifvolumeisgiven,thencalculatingthetotalcostfordifferent
process/locationstrategiesandselectingtheleastcostoption.
Abletosolvetheproblembothgraphicallyand
analytically
IndirectderivationFORMULAwillbeprovidedintheFINALEXAM
27/5/2015
OperationsManagement
OperationsManagement
Locationstrategies:
MethodsforEvaluatingLocationAlternatives
1000+5.X=500+15.X
10X=500
X=50
Whichprocessischeapforactivitiesbelow50?
ANS:Theonewithlowfixedcost
Theprocesswithhighfixedcostwillalwaysbecheaper
forlargervolumes
OperationsManagement
LayoutStrategy:
OperationsManagement
SupplychainandInventoryManagement:
Designinganoptimumlayout>>costoflayout>>
volumeofactivityxtraveldistance(expressedindollars)
Checkforimportantproximitiesandplacethemadjacent
improvedlayout>>reducedcostoflayout
AssemblylinebalancingandWorkcellbalancing
Takt timeandcycletimes>>totalavailabletime/totalunitsto
produce
AONnetworks
NumberofworkersorNumberofworkstations>>total
operationtimeperunit/takt timeorcycletime
Theoreticalefficiencyvs.achievedefficiency
Efficiency =
Locationalbreakevenanalysis totalcost>>fixed
cost+(volumex variablecostperunit)
Factorratingmethod>>weightsandscoresaregiven,
calculateweightedscore(weightxscore)>sumof
weightedscoreforalocation>selectmaxvalue.
Centerofgravitymethod>>expectedvolumeof
activityand(X,Y)coordinatearegiven.Numeratoris
coordinatesmultipliedbyrespectivevolumeof
activityandDenominatorissumofvolumeof
activities
SupplyChaindecisions Impactonthethree
strategiesforcompetitiveadvantage
SupplychainRisks andsupplychainStrategies
VenderevaluationandEvaluatingshipping
alternatives
FunctionsofInventoryORreasonstohold
inventory
InventoryModelsforIndependentdemand
BasicEconomicorderquantitymodel(EOQ),Productionorder
quantitymodel(POQ),andQuantityDiscountmodel(QD)
Probabilisticmodel&Safetystock
27/5/2015
OperationsManagement
InventoryManagement:
OperationsManagement
InventoryManagement:
InventoryModelsforIndependentdemand
EOQ
Optimalorder
quantity
BasicEOQ(EconomicorderQuantity)Model
ReorderPoint(ROP)=dxL(dailydemandxLeadtime)
Numberoforders(N)=D/Q*
Numberofdaysbetweenorders=365daysornumberof
workingdays/N
Averageinventory=Max.Inventory/2
Dailydemand(d)=annualdemand(D)/numberofworking
daysor365days
Q* =
2DS
H
POQ
2DS
Q*p = H (1- d/p)
Maximum
Inventory
Q*
Q*p(1 d/p)
Average
Inventory
Q*/2
Q*p(1 d/p)
2
(D/Q*p)S
SetupCost
(D/Q*)S
Numberoforders(orsetups)*setupcost
HoldingCost
(Q*/2)H
TotalCost of
Inventory
management
=
Setupcost+
Holdingcost
+(product
costforQD)
(Q*p(1d/p)/2)H
Q* =
AverageInventory*Holdingcostperunitperyear
IndirectderivationFORMULAwillbeprovidedintheFINALEXAM
FOCUSONTUTORIALS
Developingproductstructure,Timephased
productstructure,BOM,Grossmaterial
requirementplanandNetmaterialrequirement
plan
Improvingreliabilityandenhancingmaintenance
Determiningsystemsreliability(inseriesorwith
redundantcomponents)
Preventivevs.breakdown(repair)maintenance
H = IP
IndirectderivationFORMULAwillnotbeprovidedintheFINALEXAM
OperationsManagement
MaterialRequirementPlanandMaintenance:
2DS
IP
OperationsManagement
ManagingQualityandJIT,TPS&lean
operations:
CostsofQualityandTQMconcepts
ToolsforTQM FOCUSONDIAGRAMS
Paretocharts,Fishbone(fourMs)diagram,Histogram
JITanditsrelationtoQuality
DefineJIT,concernsandimplications
DefineTPSandLeanoperations
CalculatingKanban's sizeandnumber
27/5/2015
LegalConcepts
Creativity,Innovationand
Entrepreneurship
ContractsandTenderprocess:
Essentialelementsofacontract
Requirementsofanenforceablecontract
Classificationofcontracts(impliedvs.explicit,
unilateralvs.bilateral,void,voidable,etc)
PromissoryEstoppel,EquitableEstoppeland
QuantumMeruit.
CreativityTechniques
Incrementalvs.RadicalInnovation.Typeswithin
eachcategory
Processmodelofcreativity,innovationand
entrepreneurship
Resourcebasedtheoryonentrepreneurship.
Attributesoftheseresourcesforcompetitive
advantage.
MicroandMacroEconomics
Marketing
Microvs.MacroEconomics
DemandandSupply MarketEquilibrium
Macroeconomy concerns.Inflation,Recession
andDepression
PoliciestoinfluenceMacroeconomy
NicheandTargetMarketing
IdentifyingCustomersandCustomerloyalty
programs