Diploma in Business Management Exam

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Diploma in Business Management (DBM)
Specializations: - Operation Management

N.B.: 1) Attempt any Five Questions
       2) All questions carry equal marks.

Case Study 1 :-
Read the case carefully and answer the questions at the end of the case. Good Shepherd Home
The Good Shepherd Home is a long-term care facility with an 80-bed capacity located in San Mateo, California. Mr. Scott, the administrator is concerned bout rising food costs. He questions whether administration is efficient as it might be and realizes that food, a "raw material" for his food services, has increases in price significantly. Mr. Scott decides to investigate food services more closely. Analyzing last month's purchased items, Mr. Scott summarizes a random selection of items. Mr. Scott wonders what interpretation he should make about these typical items. He has looked at 100 stock items and is considering tighter controls (dozens, cases, pounds, etc.) have been ordered. Typical Inventory Items

|Number of Stock Items |Quantity Ordered (in units) |Total Cost (in $) |Average Inventory (in $) | |3 |50 |3,500 |1,200 | |12 |150 |2,500 |900 | |20 |200 |1,500 |600 | |40 |400 |2,000 |200 | |25 |200 |500 |200 |

Of particular interest is a problem with a perishable good. Since the home has residents in independent living units and eating at the home irregularly, bread demand is uneven. Bread is delivered daily and is used that day for table meal service only; the day-old bread is salvaged for dressing and similar dishes. Scott estimates the cost of bread to be $0.75% loaf and the cost of day-old bread to be $0.25%loaf, Scott says, "We should not be out of fresh bread at the table. Although man cannot live by bread alone, it is very important to our residents. I put a high cost on being out of bread -- considerably more than the cost of a loaf, In fact, I think every time we run out of bread, it costs a dollar per loaf short in goodwill last from our residents." Knowing how Mr. Scott feels, the food services supervisor has a standing order for 30 loaves/day and twice that amount on Sunday. The demand for bread for the last two weeks is shown below: Bread Demand (in loaves)

|Day |Week 1 |Week 2 | |Mon |20 |19 | |Tue |15 |27 | |Wed |21 |20 | |Thu |30 |32 | |Fri |31 |27 | |Sat |19 |16 | |Sun |42 |39 |

In conversation with Mr. Scott, the supervisor...
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