E1 Enterprise Operations

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1 DO NOT OPEN THIS QUSTION PAPER UNTIL YOU ARE TOLD TO DO SO Enterprise Pillar Operational Level E1 Enterprise Operations 25 February 2013 Monday Morning Session Instructions to candidates You are allowed three hours to answer this question paper. You are allowed 20 minutes reading time before the examination begins during which you should read the question paper and, if you wish, highlight and/or make notes on the question paper. However, you will not be allowed, under any circumstances, to open the answer book and start writing or use your calculator during the reading time. You are strongly advised to carefully read ALL the question requirements before attempting the question concerned (that is all parts and/or subquestions). The requirements for questions 3 and 4 are highlighted in a dotted box. ALL answers must be written in the answer book. Answers or notes written on the question paper will not be submitted for marking. ALL QUESTIONS ARE COMPULSORY. Section A comprises 10 sub-questions and is on pages 2 to 4. Section B comprises 6 sub-questions and is on page 5. Section C comprises 2 questions and is on pages 6 to 8. The list of verbs as published in the syllabus is given for reference on page 11. Write your candidate number, the paper number and examination subject title in the spaces provided on the front of the answer book. Also write your contact ID and name in the space provided in the right hand margin and seal to close. Tick the appropriate boxes on the front of the answer book to indicate the questions you have answered. E1 Enterprise Operations TURN OVER The Chartered Institute of Management Accountants 2013

2 SECTION A 20 MARKS [You are advised to spend no longer than 36 minutes on this question] ANSWER ALL TEN SUB-QUESTIONS Instructions for answering Section A The answers to the ten sub-questions in Section A should ALL be written in your answer book. Your answers should be clearly numbered with the sub-question number and ruled off so the markers know which sub-question you are answering. For multiple choice questions you need only write the sub-question number and the answer option you have chosen. You do not need to start a new page for each sub-question. Each of the sub-questions numbered from 1.1 to 1.10 inclusive, given below, has only ONE correct answer. Each is worth two marks. Question One 1.1 Which ONE of the following is an example of secondary market research? A Telephone surveys to identify purchasing intentions B Focus group meetings to identify product preferences C Online questionnaires to identify buying habits D Use of search engines to identify market growth trends 1.2 Which ONE of the following is NOT normally associated with operations management? A Supply chain management B Enterprise Resource Planning systems C Liberalisation D Continuous inventory 1.3 An approach that encourages individuals to pass on a marketing message through existing social networks is known as A B C D guerrilla marketing. viral marketing. experiential marketing. cause marketing. Enterprise Operations 2 March 2013

3 1.4 An organisational approach that involves targeting an entire market with a single marketing mix is known as which ONE of the following? A B C D Undifferentiated Differentiated Saturated Blanket 1.5 Forecasting production and inventory levels needed to meet estimated customer purchases leads to which ONE of the following? A B C D A push based system A pull based system Cohesive supply chain management Scientific management 1.6 A software management system combining all of a globally diverse organisation's sales, marketing and customer support information is known as A B C D distributed data processing (DDP). customer relationship management (CRM). a database management system (DBMS). a wide area network (WAN). 1.7 Information that takes the form of a list of debtors and creditors is by nature said to be A strategic. B tactical. C operational. D executive. 1.8 The building of a prototype model is normally associated with which ONE of the following? A Process design B Reverse engineering C Concept screening D Positioning Section A continues on the next page TURN OVER March Enterprise Operations

4 1.9 The process of ensuring employees support an organisation's marketing activities is known as A B C D performance management marketing. social marketing. autocratic management. internal marketing Which ONE of the following is NOT normally associated with an organisation's pricing mix? A B C D Payment terms Credit policy Discounts for bulk purchase Commission for a sales team (Total for Section A = 20 marks) Reminder All answers to Section A must be written in your answer book Answers or notes to Section A written on the question paper will not be submitted for marking End of Section A Section B starts on the opposite page Enterprise Operations 4 March 2013

5 SECTION B 30 MARKS [You are advised to spend no longer than 9 minutes on each sub-question in this section] ANSWER ALL SIX SUB-QUESTIONS IN THIS SECTION - 5 MARKS EACH Question Two (a) Explain the purpose of realistic and contrived tests as part of the installation of a new system. (b) Identify the ways in which Total Productive Maintenance (TPM) could be applied as part of a manufacturing organisation's quality programme. (c) Describe how Electronic Data Interchange (EDI) has helped transform Business to Business (B2B) operations. (d) Explain the concept of merit goods with reference to the formal provision of education in a country. (e) Explain the components of an organisation's place mix. (f) Cost savings is often given as a reason for an organisation investing in new information systems (IS) and information technology (IT). Identify another FIVE main reasons for making such an investment. (Total for Section B = 30 marks) End of Section B Section C starts on the next page TURN OVER March Enterprise Operations

6 SECTION C 50 MARKS [You are advised to spend no longer than 45 minutes on each question in this section] ANSWER BOTH QUESTIONS IN THIS SECTION 25 MARKS EACH Question Three MM is a market leader in the design, supply and support of power and propulsion systems in aerospace, marine, energy and nuclear industries. There are currently 100 apprentices undertaking their training across MM's many sites countrywide. The company's recruitment literature explains: 'Our apprentice scheme is seen as a route into the workforce and lays the foundation for an exciting career. We offer many different types of apprenticeships. Our apprentices gain outstanding technical, personal and employment skills through classroom training and 'on the job' experience. The facilities and talent that apprentices encounter are world-class. Apprentices gain qualifications more demanding than those attained in full-time education.' MM's Human Resource (HR) function is heavily involved in the scheme: Provision is made within the HR budget to fund the entire scheme and the HR Director decides annually how many new apprentices can be employed each year. A recruitment team from the HR department tours schools with promotional literature explaining the benefits and talks to interested pupils. The team invites pupils with potential to open days that periodically run at a number of MM's sites. At open days HR arranges tours of MM's premises and encourages potential recruits to ask questions and talk to current apprentices. If candidates are still interested, HR officers conduct interviews and draw up a short list of potential apprentices. The HR Director makes formal offers of apprenticeships. Once appointed the new recruits identify the areas of the business in which they wish to train. Senior Site Managers are informed of these choices and arrange for workplace mentors to be allocated to the new recruits. For the last three years there have been fewer potential apprentices attending open days despite a similar number of invitations being issued. In addition, a growing number of pupils have declined offers of apprenticeships deciding instead to continue in full-time education. MM has a new HR Director and during her first month in post she met Senior Site Managers throughout the company. She was surprised by unfavourable comments about the operation of the apprenticeship scheme. One manager told her that 'HR would do well to learn from the lean philosophy that operates in all other areas of the company'. Another explained that although capable apprentices had been placed at his site in the past he 'had to let them go' when their training was completed because there were no suitable permanent jobs at the site. Other managers complained that they had no say over the number of apprentices placed at their site and that finding suitable workplace mentors was sometimes a problem. The requirement for Question Three in on the opposite page Enterprise Operations 6 March 2013

7 Required: (a) Explain how the lean philosophy might help improve the operation of MM's HR department. (10 marks) (b) (c) Explain how the involvement of MM's Senior Site Managers might overcome shortcomings in current processes of recruitment and selection of apprentices. (10 marks) Identify the options available to MM to resolve the current problem of no suitable full-time posts being available at the site when an apprentice completes his or her training. (Total for Question Three = 25 marks) Section C continues on page 8 TURN OVER March Enterprise Operations

8 Question Four There is currently a global recession and the country of Cranmoor is facing mounting difficulties including a substantial balance of trade deficit and a weakening economy. The new Government has promised to be 'financially prudent, ethical, prepared to listen to and be protective of all stakeholder groups in society'. The Government recently met with some leaders of business and commerce where a number of issues were discussed. Business leaders expressed the view that there needs to be less Government regulation and a greater focus instead on dealing with the economy. The Government in return responded by saying that business needs to act more responsibly and that 'good corporate social responsibility (CSR) is good for society, good for business and good for the human resource policies of individual businesses. The Government claimed that without good CSR a number of stakeholder groups within society may feel isolated and vulnerable. Required: (a) (b) (c) Discuss the validity of the view expressed by the business leaders that Cranmoor's Government should regulate less and concentrate on dealing with economic matters. (10 marks) Explain the benefits an organisation might derive from adhering to good Corporate Social Responsibility (CSR) principles in its business activities. Explain the relationship between Corporate Social Responsibility (CSR) and an organisation's human resource policies. (10 marks) (Total for Question Four = 25 marks) (Total marks for Section C = 50 marks) End of Question Paper Enterprise Operations 8 March 2013

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11 LIST OF VERBS USED IN THE QUESTION REQUIREMENTS A list of the learning objectives and verbs that appear in the syllabus and in the question requirements for each question in this paper. It is important that you answer the question according to the definition of the verb. LEARNING OBJECTIVE VERBS USED DEFINITION Level 1 - KNOWLEDGE What you are expected to know. List Make a list of State Express, fully or clearly, the details/facts of Define Give the exact meaning of Level 2 - COMPREHENSION What you are expected to understand. Describe Communicate the key features Distinguish Highlight the differences between Explain Make clear or intelligible/state the meaning or purpose of Identify Recognise, establish or select after consideration Illustrate Use an example to describe or explain something Level 3 - APPLICATION How you are expected to apply your knowledge. Level 4 - ANALYSIS How you are expected to analyse the detail of what you have learned. Level 5 - EVALUATION How you are expected to use your learning to evaluate, make decisions or recommendations. Apply Calculate Demonstrate Prepare Reconcile Solve Tabulate Analyse Categorise Compare and contrast Construct Discuss Interpret Prioritise Produce Advise Evaluate Recommend To put to practical use Ascertain or reckon mathematically To prove with certainty or to exhibit by practical means Make or get ready for use Make or prove consistent/compatible Find an answer to Arrange in a table Examine in detail the structure of Place into a defined class or division Show the similarities and/or differences between Build up or compile Examine in detail by argument Translate into intelligible or familiar terms Place in order of priority or sequence for action Create or bring into existence Counsel, inform or notify Appraise or assess the value of Propose a course of action March Enterprise Operations

12 Enterprise Pillar Operational Level Paper E1 Enterprise Operations March 2013 Monday Morning Session Enterprise Operations 12 March 2013