SECTION B (60 MARKS)

Answer ALL questions in this section.

QUESTION 3 (20 Marks)

Use the information provided below to answer the following questions. INFORMATION: A health club has three employees who work on lead generation. Each employee works 40 hours a week, and is paid R100 an hour. Each employee identifies an average of 300 possible leads a week from a list of 10 000 identified names. Approximately 30 percent of the leads become members and pay a onetime fee of R200. Material costs are R2 000 per week, and overhead costs are R16 000 per week. REQUIRED:

3.1. Calculate the multifactor productivity for this operation in terms of fees generated per Rand of input. (8 marks)

3.2. The management of the health club is considering the services of a trainer to improve the productivity of the employees. It is anticipated that an average of 500 possible leads per week will be identified by each employee after the training. The total cost of the onetime training is estimated at R3 000 per employee. Calculate the new multifactor productivity associated with this operation in fees generated per Rand of input. (8 marks)

3.3. Will the expected growth in multifactor productivity after the training exceed the 10% increase expected by the management of the club? (4 marks)

QUESTION 4 (20 Marks)

Use the information provided below to answer the following questions. INFORMATION: You are an operations management intern at a Limpopo-based company, LHK Holdings, and your role is to assist the operations analyst with the reconfiguration of a brownfield project at LHKs industrial estate in the Limpopo province, codenamed LP-CHP1. The reconfiguration involves the installation of an advanced biomass unit, which generates electrical and thermal energy by burning wood pellets produced as a by-product of the wood processing industry in the province. The process is commonly called cogeneration or CHP (combined heat and power) and it is expected to save cost and increase operational efficiency at LHK Holdings. The electrical and thermal energy generated is expected to be utilised in the operations of LHK Holdings. REQUIRED: Answer each of the following questions:

4.1. With the aid of an appropriately labelled Input-Transformation-Output diagram, comprehensively discuss the transformation process underpinning the operations of LP-CHP1. In your discussion, highlight the transformed and transforming inputs involved in the operations, as well as the output and the feedback processes. (10 marks)

4.2. On the basis of the following assumptions, answer the questions which follow: The biomass generator is designed to use 225 000 bags of wood pellets annually and it costs R24 to place an order for the wood pallets. 7 The holding cost per bag of wood pellets is 10% of the purchase price of a bag of wood pellets. Each bag of wood pellets is purchased at R12. It takes 3 days for the bags of wood pellets to arrive at the warehouse of LHK Holdings after an order has been placed. The LP-CHP1 is anticipated to work throughout the year. The ordering and holding costs are expected to remain constant for the foreseeable future.

4.2.1. Calculate the Economic Order Quantity of the wood pellets (show all calculations). (4 marks)

4.2.2. Calculate the number of orders to be placed per year (show all calculations). (3 marks)

4.2.3. Determine the re-order level of the wood pellets (show all calculations). (3 marks)

QUESTION 5 (20 Marks)

Study the information provided below and answer the following questions. The Table below shows the number of Cinco 160W solar panels sold monthly by Mfeka Enterprises during the 2022 financial year.

Table: Monthly Sales Data of Solar Panels

Monthly sales (units)
Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
238	220	195	245	345	380	270	220	280	120	110	85

REQUIRED: Based on the number of the solar panels sold over the 12 months shown above, compute the following:

5.1. The three-month moving average forecasts for the April December 2022 period (Show all calculations). (5 marks)

5.2. The four-month moving average forecasts for the May December 2022 period (Show all calculations). (5 marks)

5.3. By calculating the mean absolute percentage errors (MAPE) of the three-month moving average forecasts and the four-month moving average forecasts, comment of the comparative forecasting accuracies of the two moving average methods (Show all calculations) (10 marks)