Answer ALL 3 questions in the question paper-answer booklet file.

Question 1 (Total 30 marks)

Tommy is the operations manager of ABC Co. Ltd. producing various electric appliances; and with recent trend of cost increase, he wishes to look into the productivity of his company. He would like to know if his company is having a 18% increase in productivity with ALL factors considered, in order to be qualified for a productivity improvement bonus. Please see the annual figures below:

	Year 2019/20	Year 2020/21
Unit Produced	5,000,000	5,000,000
Labour (hours)	900,000	710,000
Capital Invested ($)	90,000,000	110,000,000
Materials (Ton)	2,400	2,080

The details of the various cost items are: $42 per labour hour and $17 per kg of materials (1 Ton = 1,000 kgs). While for the capital expense, it is at 0.9% per month of capital investment.

a) Calculate the missing data and productivity percentage change (correct to 1 decimal place) for each category in the table below, a1 to a9. (9 marks) Some answers have been shown for your reference.

	Yr 2019/20	Yr 2020/21	Unit Cost or Rate	Monthly Cost 2019/20	Monthly Cost 2020/21	Productivity Change (%) [state + or -]
Unit Produced	5,000,000	5,000,000
Labour (hours)	900,000	710,000	42	3,150,000	(a1)	(a2)
Capital Invested ($)	90,000,000	110,000,000	0.9%	(a3)	990,000	(a4)
Materials (Ton)	2,400	2,080	17	3,400,000	(a5)	(a6)
Sub-total				(a7)	(a8)	(a9)

Please make sure you are having all figures compared to the same unit of measure.

b) Will Tommy get his productivity improvement bonus for Year 2020/21? Why? (2 marks)

c) The following table shows three product lines contribution in ABC Co. Ltd. as well as their position in the product life cycle:

Product	Position in Life Cycle	Product Contribution*	Percent Contribution to the Company**
Turbo Vacuum	Introduction	30%	40%
Smart Oven	Growth	30%	50%
Fast Rice Cooker	Decline	50%	10%

Note: * Product contribution = 1- Cost of Goods/ Selling Price

** Portion of that products contribution to the total contribution gained by the Company

Identify and explain a reasonable marketing or operational strategy for each of the above three products. (9 marks)

d) ABC Co. Ltd. would like to expand the oven product line by adding Oven type A and type B by outsourcing. Oven type A and B are manufactured by two different suppliers. Tommy, operations manager of ABC Co. Ltd., talked with both suppliers for more details before outsourcing. Below is the additional information given by two suppliers:

Oven type A supplier: We would provide some varieties in selection and customers would pick the components selection from our available list for faster assembly and production. We would help customers to assembly of what they selected. Our cost and delivery lead time would be acceptable in the market.

Oven type B supplier: Our oven is manufactured under a specific method in a job shop. We would support what customers requested flexibly and thats why our product is much more expensive and longer production lead time is needed. There are a lot of different steps in production. However, most of our customers are happy with our highly tailor-made ovens.

If you were the operation manager, please comment what are the production process strategies under Oven type A and B? Justify your answer with comment (5 marks) and compare the characteristics of processes you selected. (5 marks)