These are the past paper calculation questions for Year 2 Operations Strategy and Management. Thank you 1. You are a high-end artisan coffee roaster….

(c) Due to the difference in break-even amount between the two processes (current coffee and exclusive new coffee) you are slightly concerned you could be operating at a loss. You manage to reduce your variable costs for the new exclusive coffee to £30. What is the minimum number of units that you need to produce to justify the fixed cost investment of £46,000 for the Exclusive New Coffee (i.e., in order to not operate at a loss)? [7 marks][50%]

2.A company makes bicycles. It produces 450 bicycles a month. It buys the tyres for bicycles from a supplier at a cost of £20 per tyre. The company’s inventory carrying cost is estimated to be £3 per tyre per year and the order cost is £50 per order.

(a) Calculate the economic order quantity (Q*). [5 marks][33%]

(b) What are the number of orders per year and the average inventory? [5 marks][33%]

(c) What is the total annual cost? [5 marks][34%]

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