QUESTION ONE [40]
Read the case study carefully and then answer the questions that follow:

THE COMPANY

The Lew- Mark Baking Company is located in a small town in a western New York State. The bakery is run by two brothers, Lew and Mark, who formed the company after they purchased an Archway Cookie franchise. With exclusive rights in New York and New Jersey, it is the largest Archway franchise. The company employs fewer than 200 people, mainly blue – collar workers, and the atmosphere is informal.

THE PRODUCT

The company’s only product is soft biscuits of which it makes over 50 varieties. Larger companies, such as Nabisco, Sunshine, and Keebler, have traditionally produced biscuit biscuits, in which most of the water has been baked out, resulting in crisp biscuits. Archway biscuits have no additives or preservatives. The high quality of the biscuits has enabled the company to develop a strong market niche for its products.

INVENTORY

Most biscuits are loaded immediately onto trucks and shipped to distributors. A small percentage is stored temporarily in the company’s warehouse, but they must be shipped shortly because of their limited shelf life. Other inventory includes individual cookie boxes, shipping boxes, labels, and cellophane for wrapping. Labels are recorded frequently, in small batches, because the Government label requirements are subject to change, and the company does not want to get stuck with labels it cannot use. The bulk silos are refilled two or three times a week, depending on how quickly supplies are used.

Biscuits are baked in a sequence that minimises downtime for cleaning. For instance, light – coloured biscuits [e.g. chocolate chip] are baked before dark – coloured biscuits [fudge] , and oatmeal biscuits are baked before oatmeal raisin biscuits. This permits the company to avoid having to clean the processing equipment every time a different type of cookie is produced.

QUALITY

The bakery prides itself on the quality of its biscuits. Biscuits are sampled randomly by a quality control inspector as they come off the line to assure that their taste and consistency are satisfactory, and that they have been baked to the proper degree. Also, the workers on the line are responsible for removing defective biscuits when they spot them. The company has also installed an X – ray machine on the line that can detect small bits of metal filings that may have gotten into biscuits during the production process. The use of automatic equipment for transporting raw materials and mixing batter has made it easier to maintain a sterile process.

SCRAP

The bakery is run very efficiently and has minimal amounts off scrap. For example, if a batch is mixed improperly, it is sold for dog food. Broken biscuits are used in the oatmeal biscuits. These practices reduce the cost if ingredients and save on waste disposal costs. The company also uses heat reclamation: The heat that escapes from the two ovens is captured and used to boil the water that supplies the heat to the building. Also, the use of automation in the mixing process has resulted in a reduction of waste compared with the manual methods used previously

SUPPLY CHAIN
The deliveries of raw materials mainly flour and eggs have become a problem over the last two years. The supplier of flour has relocated their operations to a neighbouring city 60 kilometers away to be closer to the rail and shipping infrastructure. This has doubled the lead times (delivery times) from 1 to 2 days. The bakery uses 2000 eggs per day with a minimum order quantity of 8 000 eggs.

Developing new products and services is a creative and innovative process. Lew Mark is considering a new product and you have been assigned the task of leading this project. Develop a new product for the Lew Mark Bakery and outline the steps involved from idea to final new product that you would need to follow. You are required to generate ideas for a new product and contextualize it to the five (5) steps. (25)

Mark Allocation:

Theoretical framework: 10 marks Application/ context specifically to Lew Mark: 15 marks

KSFs are often required, but not adequate for competitive gain. Conversely, core capabilities are the set of distinctive competencies that a business applies at a superlative level. They allow a business to distinguish itself and create a competitive advantage. Construct a set of KSF’s and core competencies for the Lew Mark Bakery. (15)

Mark Allocation:

Theoretical framework: 5 marks Application/ context specifically to Lew Mark: 10 marks

QUESTION TWO [30]
The estimated times for a project that you are working on is listed in the table below:

Using the PERT formula, calculate the time (t) value for each activity. Please round off days i.e. no decimal places. (5)
Calculate the variance (v) for each activity. Please use 2 decimal places. (5)
Construct the network diagram (Activity on Node – AON). (15)
Calculate the probability of this project being completed in 55 days. (5)

Answers to Above Questions on Project Management

Answer 1: The new product development needs to be carried out in a sequential way following each and every stage to achieve success. In the given case scenario of Lew Mark Bakery, the new product development should consider the concept initially which requires the development of new product ideas. It can be in the form of small batches of biscuits with unique flavour combinations such as dark chocolate chai, cranberry Orange zest etc.