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ITECH1100 Automation of Business and Its Impact Assignment 1 Answer

Assignment 1 - Sock Scenario

Overview

For this individual assignment, you will use skills acquired through practical laboratory exercises to automate a business process, and to visualize the impact of the automation.

You should use Microsoft Excel (or equivalent open-source software) for this assessment task.

Important: This assignment specification is generated just for you. Do not distribute this specification. If your personal specification is made publicly available online, academic misconduct charges may be applied.

Timelines and Expectations

Percentage value of task: 20%

Learning Outcomes Assessed

The following course learning outcomes are assessed by completing this assessment:

A1. Prepare a basic solution to a business problem;

A2. Select appropriate IT solutions for business functions;

A3. Apply business information software for data visualization and analysis purposes.

S1. Write basic programming logic;

S3. Interpret and construct representations of business data flow and processes; K8. Outline the basic principles of programming.

Assessment Details

For this assignment, you will complete the following set of tasks using Excel, and build an ePortfolio page to describe your work.

Task 0 - Setting up

Create an ePortfolio page for your assignment. You will submit this page to Moodle as per the lab tasks.

You may call it whatever you like, for example ITECH1100 Assignment 1 - 30364631.

Scenario details

Sock Scenario is a small clothing manufacturer, specializing in creating custom, one-of-a-kind socks. They exclusively sell their product through their online store.

Sock Scenario is run by a team of three staff members: Angus, Barry, and Christina.

Angus and Barry work together to manufacture socks. Christina manages orders, sales and delivery.

Team hours

Most of the time, team members work the following shifts:

Angus works 7.5 hours on Mondays, Tuesdays and Wednesdays; Barry works 7.5 hours on Thursdays and Fridays; and Christina works 4.5 hours every weekday.

Additionally, Angus and Christina share responsibility for managing the Sock Scenario social media presence, with Angus working one extra hour in the evenings on Monday, Tuesday and Wednesday, and Christina doing the same on Thursday, Friday and Saturday.

Costs

Angus and Barry, as skilled manufacturing staff, cost $26 per hour to employ.

Christina, a part-time employee, costs $24 per hour to employ.

All staff are also entitled to four weeks of paid annual leave, during which a casual replacement is required at a cost of $39 per hour.

Fixed costs such as rent and insurance are $9100 per year, and utilities costs are $260 per month.

Task 1 - Costs of operating the business

Using Excel, create a spreadsheet called operating_costs.xlsx that calculates the projected annual outgoing costs of running Sock Scenario.

Your spreadsheet should be configured such that the working hours, hourly rates, and fixed and utility costs can be varied easily.

Document your findings in your ePortfolio page (approximately 100 words).

Manufacturing socks

Sock Scenario receive requests through their online store, and Christina responds with a quote, after consulting with a member of the manufacturing team. If the customer confirms their order, Angus and Barry manufacture the ordered products, and Christina organizes delivery.

Currently, the process for generating a quote is entirely subjective, based on the requested material and sock size. Staff members quote an amount based on their personal experience.

For several months, staff have been keeping track of the quote date, material, size, quote amount, and manufacturing cost for each order in a spreadsheet. As each product is hand-made, the manufacturing cost may vary between similar orders.

If a quote was not accepted by the customer, then manufacturing cost is not included.

This spreadsheet is available for download on Moodle.

Task 2 - Order information

Using Excel, process the history of orders spreadsheet and use appropriate charts to visualize:

How some aspect of quoting or manufacturing has changed over time; and How the quote amount differed for each staff member.

You will need to find a way to use Excel to associate each quote with a staff member.

Describe your approach and your findings in your ePortfolio (approximately 250-400 words), and attach the Excel file to your page.

Task 3 - Price consistency

Using Excel, analyse the historical data you have available, and create a spreadsheet that allows a member of the Sock Scenario team to enter the sock material and size, and gives a quote amount.

Ensure that you include enough text and formatting to make your spreadsheet usable by a member of the Sock Scenario team (or by a University lecturer).

You may base your quote amount either on historical averages, or to ensure that Sock Scenario makes a profit.

Validate your quoting approach by applying your formula to historical data.

Justify your approach in your ePortfolio (approximately 150 words), and attach your Excel file to your ePortfolio.

Process improvement

The team want to improve their quoting process to reduce time spent waiting for customers to approve quotes.

They would like to start manufacturing immediately for orders that they might be able to sell in future, even if the customer does not go ahead with the order.

That is, they would like to change to the processes indicated in the following swimlane diagrams:

Task 4 - Process improvement

Extend your spreadsheet page from task 3 to automate the above processes, allowing a member of the team to enter the sock material and size, and in addition to the quote amount indicate whether to start manufacturing immediately.

It is up to you do determine how to determine which items are popular.

Justify your approach in your ePortfolio (approximately 150 words), and attach your Excel file to your ePortfolio.

Bonus challenge task (optional!)

Disclaimer: This task is 100% optional, and you can receive full marks without attempting or completing it. It is intended to be a challenge if you are interested in such things, and the marks available do not reflect the significant research and effort required to implement it correctly. Tutors will not provide significant assistance for this challenge task.

Optional task 5

Reimplement Tasks 1, 3 and 4 using either Python or HTML+JavaScript.

Write a brief overview of how to run your solution, and attach a zip file containing your code to your ePortfolio page.

There are no partial marks awarded for this bonus task - you must complete all features to attain the bonus marks.

It is possible to attain full marks for this assignment without completing this challenge task.

Answer

Task 1

Following is the screenshot of Operating Costs spread sheet:

Operating Costs spread sheet

  • As can be seen above, various columns have been created for hourly rates and weekly hours so that any changes can be reflected easily. The amount column will reflect revised numbers automatically due to formula linkages.
  • The revenue and costs numbers have been annualised basis 4 month data provided for the assignment. Revenue is based on ‘quote’.
  • Salary accounts for almost two thirds of the total costs and indicates scope for reduction.
  • It can be seen that at current scenario, the company is incurring losses ($20,104). It needs to increase revenue and/or decrease costs so as to make it a profitable venture.

Task 2

Since they are mainly involved in manufacturing, the employees, Angus and Barry were assigned to various days basis their shift timings. Christina, a part-time employee takes care of sales and delivery and hence, was not assigned to any particular day (she works every weekday for a few hours). 

The screenshots and graphs below indicate average manufacturing costs and quotes categorized basis employees:

average manufacturing cost

average quote

It can be seen that the highest manufacturing cost is for silk socks and the least is for cotton socks. Further, the manufacturing cost does not differ much in case of Angus or Barry except that it is slightly lower in case of Barry. 

It is obvious that when manufacturing cost is highest for silk socks, the quote will also be the highest. The logic holds true for cotton socks where both cost and quote are the least. However, since there is no set procedure for giving quotes, a huge difference can be seen in quotes from Angus and Barry. While Angus tends to quote a little above the overall average quote, Barry tends to quote lower than the average. The difference is rather glaring in case of leather and silk socks where he quotes vary by almost 100%.

The following graphs provide information about volume, sizes and gross profit with respect to variety of socks:

socks variety

It can be seen that maximum quotes are for wool socks while they are minimum for tweed.

average gross profit gross profit

It can be seen that maximum average gross profit (average quote minus average manufacturing cost) is from Silk socks, followed by tweed socks. The gross profit is minimal from cotton or wool socks. Further, it can be seen that the gross profit does not vary much between various sizes of socks. 

Seeing the manufacturing and gross profit pattern, it can be said that efforts should be made to increase sales of silk socks as they yield maximum margin. Also, there should be a process to streamline quote process so as to ensure consistent pricing.

Task 3

achieving pricing consistency

The above is a screenshot of automation done for achieving pricing consistency:

  • The automation has been done using a combination of formula such as, ‘Vlookup’, ‘Concatenate’, ‘Data Validation, ‘Pivot’, etc.
  • Orange cells need input from employees. Some of the fields have dropdowns to achieve consistency in records.
  • Grey Cells are automated cells and should not be plugged with any data.
  • Once orange cells are filled in a row, ‘Historical Average Cost’ and ‘Historical Average Quote’ will get populated. The quote can be used for current order also. While, the historical cost is shown for convenience and a reference point.
  • Once the rows are exhausted, the previous row can be copied and pasted so as to further extend the automation.

Task 4

‘Popularity column added

As can be seen in the above screenshot, automation has an added column, indicating ‘Popularity’. Basis provided data; number of quotes for different socks material and sizes was calculated through pivot. If the number is less than 5, item is deemed to be ‘Less Popular’ and if it is more than 5, then item is deemed to be ‘Popular’. This is a automatic field which will be generated as soon as orange fields are plugged in. The output of this column can be utilized to see whether the item should be manufactured immediately or post quote confirmation.

This will help the company to attain desired improvement whereby the popular items can be immediately manufactured so as to shorten the wait time. Even if a particular quote does not get confirmed, the inventory can be created for next quote which should be soon as the item is popular. If the above model provides output as ‘Less popular’, then it is advisable to wait for quote confirmation and then only go ahead with the manufacturing the items so as to avoid piling up of stock.

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