Subject - Operations Management

Session - June 2023

Answer 1.

Introduction:

Under pressure to achieve carbon neutrality and reduce carbon emissions, the promotion and use
of new energy vehicles, specifically electric vehicles, is gaining popularity. The location of the
Electric Vehicle Charging Station (EVCS) and the process of building it have garnered a lot of
interest in the academic world. The location of the EVCS is influenced by a wide range of
subjective and objective variables, including user preference, service radius, and the range of an
electric vehicle (EV). Making decisions is fraught with uncertainty, and it gets harder and harder
to assign precise values to the evaluation scheme. The choice of a scheme for such problems is
frequently made using the MCDM model and fuzzy set theory, which use data selected by
subjective judgment. This paper develops a systematic and thorough EVCS location evaluation
index system from the viewpoint of the location decision analysis, which includes five indexes of
traffic facilities, user preference, grid load, construction cost, and service radius. Additionally, by
developing a two-stage optimization model to determine the practical approaches for EVCS
location construction and the optimal Shapley fuzzy measure, which offers some theoretical
support, it is possible to effectively address the heterogeneity or diversity of experts as well as
the incomplete information of the weights in the evaluation.

Concept and Application:

● The Evaluation Index System of EVCS Location:
○ EV has emerged as a key player in the future development of new energy vehicles
thanks to the fast technological development that is riding on its piggyback. However,
because of the growing number of residents' charging needs and the scarcity of fast
chargers, EV charging operations may experience issues with rising costs and longer
wait times. As a result, governments all over the world are fostering various types of
preferential policies, encouraging EV enterprises to work with energy providers, and
 encouraging the development of EVCS in order to best promote the use of EVs.
Therefore, the most efficient way to encourage the popularization of EVs and resolve
the supply-demand paradox is to establish a complete and comprehensive EVCS
location evaluation index system. We would choose the following five indicators out
of a total of 10, including traffic facilities, grid load, user preference, service radius,
construction cost, EV ownership, policy support, driving mileage, elastic demand,
and regional service level, based on relevant literature review and analysis.

● Traffic Control Facilities:

○ Due to the time and energy required to travel to the charging station, the location
of EVCS directly affects the cost of driving for vehicle owners. In order to save
money on gas, users of electric vehicles will prioritize EVCS with easy access to
roads and short travel distances. This makes it clear that one important aspect that
influences EVCS location is the efficiency of regional traffic facilities, which
manifests itself in the reduction of customer travel expenses.

● The Grid Load:

○ A robust grid load capacity is a prerequisite for building an EVCS. The ability of
the local grid to withstand a voltage load is referred to as grid load. Quick
charging technology may place enormous additional demands on the power grid
and cause power loss, which may necessitate adjustments to the grid's bearing
capacity and supply level.

● Consumer Preference:
○ In other words, drivers may develop the habit of charging their battery electric
vehicles (BEVs) after every trip, depending on a number of factors, such as the
battery capacity of the electric cars they have purchased, the acceptable charging
time, the mode of travel (days between the start of the next trip and the beginning
of the current charging event), and their familiarity with public charging stations.

● Service Radius:
 ○ The smaller the Voronoi diagram area of the service area of the corresponding
charging stations is, the less the vehicle owner will pay for gas when there are
many charging stations. The service radius of the charging station should be
smaller than the actual distance between two adjacent charging stations in order to
maximize EVCS resources and EV battery cycle life under the premise of
satisfying users' charging needs.

● Cost of Construction:
○ The ideal location for the charging station aims to reduce network loss costs and
overall station costs during the planning period. Operating, capital, and
maintenance costs are included in the construction cost of the location of the
charging station. Investment cost, among other things, refers to the cost per
charging device, the cost per unit capacity of transformers, the cost per unit
capacity of other equipment besides transformers, the cost of land use, and other
equipment with a capacity other than transformers. The charging station's
operating expenses include labor costs, filtering compensation costs, charging
costs, and costs associated with the electrical equipment's electric energy
consumption. The term "maintenance cost" refers to the charging equipment, the
maintenance cost per unit capacity of transformers, the charging equipment, and
the maintenance cost per unit capacity of other equipment (aside from
transformers).

Conclusion:
If the location of the EVCS can be evaluated scientifically, it will have significant implications
and also improve the design, development, marketing, and applications of EVs. This study
develops a systematic EVCS location evaluation index system based on extensive research
findings from both domestic and international studies on the location evaluations of charging
stations and electric vehicles. This study introduces a 1–9 evaluation scale for qualitative paired
comparison, creates an interval–fuzzy quantitative evaluation matrix, converts the precise
number into the intuitionistic fuzzy set, and includes other pertinent results from theories in order
to better address the fuzziness, heterogeneity, and uncertainty of expert evaluation information.
Despite this, a two-stage optimization model has been investigated to determine the best Shapley
fuzzy measure, which was established by fully taking into account the incomplete knowledge of
weights in the actual decision-making environment. The research objects have been five
representative EVCS locations for the purposes of empirical application. Finally, by examining
the differences in evaluation outcomes between the first-order linear optimization and the
two-stage optimization, the effectiveness, practicability, evaluation method, and flexibility of the
evaluation index system have been confirmed.

Answer 2.

Introduction
According to Moore, a plant layout is "the act or plan of planning, an optimal arrangement of
facilities, that include operating equipment, staff, materials handling equipment, storage space,
and all other supporting services along with the design of the best structure to accommodate
these facilities.".

Diagram 1

Diagram 1 shows three distinct plant designs that correspond to three distinct processing
systems. Continuous, intermittent, and layout-dependent processing are all mentioned in the
layouts for products, processes, and fixed positions.

Cloud Kitchens, also referred to as ghost kitchens, dark kitchens, delivery-only eateries, and
virtual eateries, rely solely on the efficiency of their back-of-house operations to function.
However, they placed a high priority on enhancing order management and food production.
Every cloud kitchen restaurant relies on its kitchen infrastructure, so it must be well managed
and organized. Operators must make sure that all moving parts are optimized for maximum
efficiency and better service delivery. Food service operators should be aware of operational
procedures and a few necessities when setting up their cloud kitchens because cloud kitchens are
becoming more and more popular.

Diagram 2

If we take note of the differences between Diagram 1, Diagram 2, and Diagram 3 we can find a
cloud kitchen is the least clumsy in comparison to the traditional brick & mortar kitchen in
Diagram 1.

Some studies predict that the global Cloud Kitchen market will grow to USD 2.63 billion by
2026. When compared to opening a traditional restaurant, a cloud kitchen has lower startup
costs, lower maintenance costs, and lower capital expenditure requirements. It also requires less
initial infrastructure and space. A list of the fundamental operating procedures that should be
followed when opening a cloud kitchen should be compiled in order to facilitate a cloud kitchen
business' setup.

Selecting only the best raw materials is the first step in making sure that proper food delivery is
achieved in a cloud kitchen. It emphasizes the significance of heavily investing in selecting the
ideal food vendor in a virtual restaurant business where food is the main selling point. The
business owner must make sure that the quality of the raw materials is uncompromised when
buying inventory.
The product specifications of each item must also be determined, along with the quantity of stock
on hand and the precise requirements, before sending purchase orders. Any cloud kitchen
business that wants to streamline its supply chain can benefit greatly from using an inventory
management system. The business owner must ensure that centralized procedures are established
for receiving, storing, and sending purchase orders as well as for receiving and storing inventory.

Diagram 3

Keeping an estimate of inventory during initial setup can be difficult due to the frequent
difficulties in obtaining and storing raw materials. As a result, it is crucial to maintain an
accurate record of every item and a sophisticated tracking system. You must source your
inventory by allowing sufficient lead time, considering the frequency of raw material
requirements and orders. An entrepreneur must also maintain strict inventory controls by
aligning the costs of labor and food, regularly tracking the inventory, and keeping them in line
with the budget. Adopting the FIFO system, which is advantageous in ensuring proper stock
rotation and reducing the likelihood of spoilage, is one efficient way to ensure proper stock
utilization.

Staffing: A small, stand-alone cloud kitchen company can start with as few as 6 people. There
may be a head chef, two junior chefs, a housekeeper, and two helpers on staff. However, even
with a small staff running the show, employing the right staffing techniques will allow a cloud
restaurateur to manage the volume of food production at any level. You can create a perfect
staffing plan by making timely adjustments to your employees' schedules based on sales trends.
Additionally, hiring competent staff is crucial for your restaurant's long-term success. The quality
of the food, the speed of the service, and the efficiency of your operations can all be improved by
hiring employees with excellent training and skills.

Automation: Providing food of a high standard and taste, and making sure that every meal
prepared has the same flavor, are necessary to attract more customers. It is crucial to use
automated tools because they enable precise food preparation. Little manual labor is required for
faster food production thanks to automation in the cloud kitchen. When a business owner wants
to give their company features like reporting, centralized recipe management, inventory
management, etc., they must invest in cloud kitchen software. A business owner can also write
comprehensive kitchen SOPs for his kitchen staff to follow, including information on things like
inventory needs and normative recipes. The business can incorporate a Kitchen Display System
by taking into account the installation of high-quality equipment. The installation of a KDS in
your kitchen will facilitate quick order management and alert delivery personnel when an order
is actually ready for delivery.

Order Management: After setting up the food preparation process, and sourcing the right
ingredients, it is time to streamline the order-taking process. Cloud kitchen businesses depend on
receiving online orders directly from customers and from third-party food aggregators like
Swiggy and Zomato. Managing orders from multiple channels manually is the need of the hour,
and that is where a centralized ordering system comes into the picture. A smart ordering system
will help in eliminating the inefficiencies of manual order interventions and keeping track of all
orders. 

Conclusion
Major food aggregators like Door Dash, Zomato, and Swiggy have completely transformed the
food delivery industry. The key to your success is to ensure that your food delivery system is
accurate by establishing appropriate procedures for handling orders. Verify the delivery orders
that have been received in your POS system, and take care of any problems that may arise.
Answer 3A.

Introduction.

Aggregate planning in operations management determines resource allocation and production

strategies to satisfy the ambiguous and erratic future demand at the lowest possible production
cost for the Intermediate Time Horizon. Aggregate in this context refers to product lines and
families, and planning refers to the sequence of actions to be taken to satisfy the anticipated
demand.

Planning method: Planning is a process for figuring out future goals and ways to effectively
achieve them. The challenges that stand in the way of conducting business are overcome with its
assistance. Based on the type of business and its structure, this process may change. The steps in
the planning process must be followed: In the Intermediate Range, organizations create these
plans.

Forecast: Demand forecasting for capacities is done over the medium-term time horizon, which
is 3 to 18 months. Managers view these plans as the cornerstone for more minutely detailed
schedules like Master Production Scheduling. This provides information on the quantity and
duration needed to meet the anticipated demands.

Aggregate Planning, to put it simply, enables supply creation in response to the corresponding
demand. In order to achieve the intermediate-term goals, it directs organizational resources in
that direction. The process' primary focus areas are resource planning and achieving the
organization's long-term goals. In this way, businesses attempt to balance long-term profitability
by matching supply with anticipated demand.

The following are the main decisions that are handled by aggregate planning.
● Inventories decisions.
● Workforce choices.
● Rate of production.
Note: When planning, we presumptively have access to demand forecasting data. However, it
may not always be possible to have this information at hand. Consequently, this concept has both
a benefit and a drawback.

Planning and its Pre-Requirements for an Aggregate Level:

● Knowledge about the availability and scarcity of resources;

● Demand forecast for the period;
● Costs of various alternatives;
● Key decisions that are taken under Aggregate Planning; and
● Organizations’ practices and policies

Technology Selection:

● Location
● Capital Investments
● Raw Material Policies
● Personnel Policies

Aggregate Planning & its Objectives: The objective of making the strategic plans is to find
both an economical and excellent combination of resources. Some objectives of preparing an
aggregate plan are:

● Profits Maximize;
● Cost Reduction;
● Minimize Inventory Investment;
● Reducing Production Rates;
● Fewer changes in Workforce Levels;
● Improving Customer Service and Post-Purchase Experience;
● Need for Aggregate Operations Planning;
● Maximize use of Plant and Equipment.
The organizations must plan their production and services for the reasons listed below.

● Fluctuations in capacity: In addition to demand, resources and capacity also change

occasionally.
● Demand Fluctuations: For a variety of reasons, demand for goods and services is
constantly changing.

Conclusion
Consequently, organizations plan their productions by Forecasting Future Demand and Creating
a Sufficient Supply thereof.

Answer 3B.

Introduction:
A system for keeping track of the inventory's materials makes it easier to maintain organizational
structure and operating procedures. In this system, materials are ordered and received while also
being tracked in terms of what was ordered, when it was placed, how much was ordered, and
who made the order. There are two types of inventory systems:

● The system with fixed order.

● The fixed order quantity system.

Concept and Application:

In this system, a fixed quantity of materials is ordered whenever the stock on hand reaches the
reorder point. The fixed quantity of material ordered each time is known as the economic order
quantity. Whenever a new consignment arrives, the total stock is maintained within the minimum
as well as the maximum limits.
The fixed order quantity method is a method that facilitates a predetermined amount of a given
material to be ordered at a particular period. This method helps limit the reorder mistakes, and
also conserving space for the storage of the finished goods, and blocking those unnecessary
expenditures that would tie up funds that could have been utilized better elsewhere.

Fixed Order Quantity Systems Benefits Include:

Automatically, inventory management and purchasing pay attention to those items. Every
material can be bought in the smallest possible quantity. By calculating the preset minimum and
maximum values, a positive control can be easily handled to keep the inventory investment at the
desired level.

The Drawbacks of The Fixed Order Quantity System are as follows:

The orders may occasionally be placed at inconvenient times for the suppliers or the
manufacturers of the materials. The items cannot be grouped and ordered sequentially because
the reorder points happen erratically.

Economic Order Quantity (EOQ):

The system assumes predictable lead times and consistent usage. It is quite unmanageable to
have to fix a new order quantity and order point in the event of any significant change.

P System (Fixed Order Period System):

At regular intervals throughout the period, the stock position of each material used to make a
product in this system is checked. If there is not enough stock of a particular product to support
production up until the next scheduled test, a new order is placed, nullifying the supply that is
currently in place. Organizations have different review cycles. The frequencies also differ among
products within the same organization depending on the significance of the product, market
circumstances, predetermined production schedules, and so forth. For various materials, there are
various order minimums.

The Benefits of The Fixed Period Quantity System:

The suppliers will provide alluring discounts because sales are assured.
While the cost of ordering is also significantly reduced, each delivery may require additional
work in the form of follow-up. For products whose usage is erratic or seasonal and whose
purchases must be scheduled based on sales projections, the system performs well.

System for Fixed-Period Quantities and its Drawbacks:

The system requires the establishment of rigid order quantities in the interest of administrative
efficiency. The periodic testing system usually causes a peak in the amount of purchasing work
around review dates. It requires a regular examination of every item, which in and of itself
renders the system somewhat ineffective.

Conclusion:
It is compulsory to have a periodic review of all items; this might make the system to some
extent inefficient.