Question $1[20$ marks$]$

You have just been appointed as a Operations Director at a company respecting that you have

a MBA degree and to lead the operations in a very bad economy. You have decided to present

to the board on how you hope to drive some of the operations management indicators shown

below. Indicate for each of them if you will be increasing, decreasing, or not changing the set

standard for the indicator. Include the motivation for this and how you will do it considering the

factors that contribute to it$.[$This should not be more than $10$ sentences per item below and

record any assumptions you make$]$

$($a$)$ Break$-$even volume is set at $5000$ tons of product

$($b$)$ The economic batch quantity of the major raw material is $500$ tons placed at $10$ times

per year.

$($c$)$ Productivity is presently at $0\mathrm{.}5$ tons per hour $($based on labour hours$)$

$($d$)$ Quality indicators as total of quality costs:

Prevention cost$/$total quality cost $0,755$

Appraisal cost$/$total quality cost $0,753$

Failure cost$/$total of quality cost $0,8492$