Arab Open University

Faculty of Business Studies

B203A- Business Functions in Context I

Second Semester 2017-18- Tutor Marked Assessment

PART A: Inventory Management/ ABC analysis (50 marks)

The Dynaco Company stocks a variety of parts and materials it uses in its manufacturing
processes. Recently, as demand for its finished goods has increased, management has had
difficulty managing parts inventory; they frequently run out of some crucial parts and seem to
have an endless supply of others. In an effort to control inventory more effectively, they would
like to classify their inventory of parts according to the ABC approach. Following is a list of
selected parts and the annual usage and unit value for each:

Annual usage Annual usage

Item number (items/year) Unit cost ($) Item number (items/year) Unit cost ($)
1 36 350 16 60 $ 610
2 150 30 17 120 20
3 50 23 18 270 15
4 300 45 19 45 50
5 18 1,900 20 19 3,200
6 500 8 21 910 3
7 710 4 22 12 4,750
8 80 26 23 30 2,710
9 344 28 24 24 1,800
10 67 440 25 870 105
11 510 2 26 244 30
12 682 35 27 750 15
13 95 50 28 45 110
14 10 3 29 46 160
15 820 1 30 165 25

Required: Classify the inventory items according to the ABC approach using dollar value of
annual demand. What recommendations would you give The Dynaco Company? (150 words)

B203A – TMA –Second 2017-18 Page 1

 PART B: Supply network (50 marks, 500 words)

Taking a recent purchase as an example, write an essay to discuss the supply network of your
product from raw material until it arrives to the consumer. You are required to cover the
following points in your essay/presentation:

1. Company overview, product overview, major competitors.

2. Stages of the product supply chain or network design, location of raw material in relation
to the manufacturer, distributor, retailer and consumer, etc.
3. The relationship between suppliers and customers (first tier, second tier, etc.., horizontal
or vertical integration (if any), levels of inventory and where it’s held.
4. Explanation of any problems and suggestions for further improvements of the supply
chain.

General instructions for students:

This TMA should be written by students individually.

TMA weight: 20% of total course grade.

Cut-off date: Check LMS

Plagiarism: It’s imperative that you write your answer using your own words. Plagiarism will be
penalized depending on its severity and according to AOU plagiarism policy.

Format: you are expected to write your answer in an essay format: introduction, body
paragraph(s) and a conclusion. Failing to do so could result in the deduction of up to 4 marks
from your total TMA mark.

Word count: your answer is expected to be within the specified word count range. Not adhering
to specified word count could result in the deduction of up to 4 marks of your total TMA mark.

Referencing: You are expected to use the Harvard referencing style for in-text referencing and
list of reference at the end. Failing to do so could result in the deduction of up to 4 marks of your
total TMA mark.

E-library: You are expected to use E-library sources to support your answers. A minimum of 3
sources is required. Failing to do so could result in the deduction of up to 4 marks of your total
TMA mark.

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