POM-QM for Windows software LINK(http://wps.prenhall.com/bp_heizer_opsmgmt_10/147/37741/9661929.cw/index.html )

For this part of this project, you will need to use the POM software:

1. Read Appendix IV of the Operations Management (Heizer and Render, 2014) textbook.

2. Review the linear programming section from the POM manual:  Weiss, H.J. (2013) POM-QM for Windows manual. Upper Saddle River, NJ: Prentice Hall. Available from the ‘Help’ menu in the POM-QM Windows software. (Accessed: 30 December 2014). You may also wish to research and review online tutorials regarding the linear programming module and/or view the following resource.

Valverde, R. (2014) QM for Windows linear programming [Online] YouTube. Available from:  https://www.youtube.com/watch?v=uHsQSG75sPk  (Accessed 23 April 2015).

3. Install and launch the POM-QM for Windows software. From the main menu, select Module and then Linear Programming.

4. Program the linear programming formulation for the problem below and solve it with the use of POM. Refer to Appendix IV from the Heizer and Render (2014) textbook.

Note: Do not program the non-negativity constraint, as this is already assumed by the software.

For additional support, please reference the POM-QM for Windows manual available from the ‘Help’ menu in the POM-QM Windows software.

Individual Project, part 1

A firm uses three machines in the manufacturing of three products:

· Each unit of product 1 requires three hours on machine 1, two hours on machine 2 and one hour on machine 3.

· Each unit of product 2 requires four hours on machine 1, one hour on machine 2 and three hours on machine 3.

· Each unit of product 3 requires two hours on machine 1, two hours on machine 2 and two hours on machine 3.

The contribution margin of the three products is £30, £40 and £35 per unit, respectively.

The following are available for scheduling:

· 90 hours of machine 1 time

· 54 hours of machine 2 time

· 93 hours of machine 3 time

The linear programming formulation of this problem is as follows:

Maximise Z = 30X1 + 40X2 + 35X3

3X1 + 4X2 + 2X3 <= 90

2X1 + 1X2 + 2X3 <=54

X1 + 3X2 + 2X3 <=93

With X1, X2, X3 >= 0

To answer this question:

Answer each question and explain your reasoning or show your calculations.

1. What is the optimal production schedule for this firm? What is the profit contribution of each of these products?

2. What is the marginal value of an additional hour of time on machine 1? Over what range of time is this marginal value valid?

3. What is the opportunity cost associated with product 1? What interpretation should be given to this opportunity cost?

4. How many hours are used for machine 3 with the optimal solution?

5. How much can the contribution margin for product 2 change before the current optimal solution is no longer optimal?

Individual Project, part 2

For this part of this project, you will need to use the POM software:

1. Review the linear programming section from the POM manual:  Weiss, H.J. (2013) POM-QM for Windows manual. Upper Saddle River, NJ: Prentice Hall. Available from the ‘Help’ menu in the POM-QM Windows software. You may also wish to research and review online tutorials regarding the linear programming module.

2. Program the project management problem below and solve it with the use of POM. Select Project Management(PERT/CPM) module, and then select the option File->New->Mean, Std dev given items.

Table 1: Activity, duration and standard deviation

To answer this question:

Answer each question and explain your reasoning or show your calculations.

1. Calculate the project completion time.

2. Indicate the critical path activities.

3. What is the probability of completing this project between 38 and 40 days?

4. What are the slack values for activities C and F? Interpret the meaning of their slack values.

Marketing Excellence Red Bull

Red Bull’s integrated marketing communications mix has been so successful that the company has created an entirely new billion-dollar drink category—energy drinks. In addition, Red Bull has become a multibillion-dollar beverage brand among fierce competition from beverage kings like Coca-Cola, Pepsi, and Anheuser-Busch. To date, the company has sold more than 40 billion cans of energy drinks across 166 countries. How? Red Bull became the energy drink market leader by skillfully connecting with youth around the globe and doing it differently than anyone else.

Dietrich Mateschitz founded Red Bull with a single product in Austria in 1987. By 1997, the slender silver-and-blue can was available in 25 markets globally, including Western and Eastern Europe, New Zealand, and South Africa. Its size and style immediately signaled to consumers that its contents were different from traditional soft drinks. Red Bull’s ingredients—amino acid taurine, B-complex vitamins, caffeine, and carbohydrates—were specifically formulated to make the drink highly caffeinated and energizing. In fact, some users have referred to it as “liquid cocaine” or “speed in a can.” Over the past decade, the company introduced other products and flavors, many of which did not succeed. Today, Red Bull offers the original Red Bull Energy Drink, Red Bull Total Zero, Red Bull Sugar Free, and special editions infused with berry, lime, and cranberry flavors.

As the company continued to expand worldwide, it developed an integrated marketing communications plan that reached its target audience on many different levels and built its brand image of authenticity, originality, and community. First, Red Bull focused on pre-marketing, sponsoring events like the Red Bull Snowthrill of Chamonix ski contest in France to help build word-of-mouth excitement around the brand. Once the company entered a new market, it built buzz through its “seeding program,” micro-targeting trendy shops, clubs, bars, and stores. This enabled the cultural elite to access Red Bull’s product first and influence other consumers. As one Red Bull executive explained, “We go to on-premise accounts first, because the product gets a lot of visibility and attention. It goes faster to deal with individual accounts, not big chains and their authorization process.” The company also targeted opinion leaders likely to influence consumers’ purchases, including action sports athletes and entertainment celebrities.

Once Red Bull gained some momentum in bars, it moved into gyms, health food stores, restaurants, convenience stores near colleges, and eventually supermarkets. The company’s primary point-of-purchase tool has always been its refrigerated sales units, prominently displaying the Red Bull logo. These set the brand apart from other beverages and ensure a prominent location in every retail environment. To guarantee consistency and quality in its point-of-purchase displays, the company hired teams of delivery van drivers whose sole responsibility was stocking Red Bull.

Another essential aspect of Red Bull’s marketing communication mix is product trial. Whereas traditional beverage marketers attempt to reach the maximum number of consumers with sampling, the company seeks to reach consumers only in ideal usage occasions, namely when they feel fatigue and need a boost of energy. As a result, its sampling campaigns take place at concerts, parties, festivals, sporting events, beaches, highway rest areas (for tired drivers), and college libraries and in limos before award shows.

Red Bull also aligns itself with a wide variety of extreme sports, athletes, and teams and artists in music, dance, and film. From motor sports to mountain biking, snowboarding to surfing, rock concerts to extreme sailing, there is no limit to the craziness of a Red Bull event or sponsorship. A few company-sponsored events are notorious for taking originality and extreme sporting to the limit. For example, at the annual Flugtag, contestants build homemade flying machines that must weigh less than 450 pounds, including the pilot. Teams launch their contraptions off a specially designed Red Bull–branded ramp, 30 feet above a body of water. Crowds of as many as 300,000 young consumers cheer as the contestants and their craft try to stay true to the brand’s slogan: “Red Bull gives you wings!”

Red Bull uses traditional advertising once the market has grown mature and the company needs to reinforce the brand to its consumers. As one executive explained, “Media is not a tool that we use to establish the market. It is a critical part. It’s just later in the development.”

Red Bull’s “anti-marketing” marketing communications strategy has been extremely successful connecting with its young consumers. It falls directly in line with the company’s mission to be seen as unique, original, and rebellious—just as its Generation Y consumers want to be viewed.

Kotler, P., & Keller, K. L. (2016). Marketing management [VitalSource Bookshelf version] (15th ed.). Retrieved from https://online.vitalsource.com/#/books/9781323591512