Operations Management DEC 2026
Dec 2026 Examination
Q1 A fashion entrepreneur has sketched an innovative line of athleisure wear and is preparing for a national roll-out. Past small-batch launches suffered from material shortages and unreliable single-source vendors, resulting in lost sales and brand reputation damage. The business aims to diversify its material sourcing using trade shows, online supplier directories, and local contacts, while building negotiation leverage and mitigating supply disruptions. The owner has asked for a sourcing strategy that goes beyond previous efforts and supports scalable growth. How should the supply chain lead apply best practices from the sourcing phase to build a resilient production network for the new product? (10 Marks)
Ans 1.
Introduction
The sourcing stage is where companies decide on the supplier to be the supplier of its goods but if it is done incorrectly, it could undermine a previously solid business idea. The earlier batch launches slowed down because the company relied on just one source for key materials, so any delays or disruptions to the one vendor directly resulted in reduced sales and damaged the image of the brand. As the company moves to an international roll-out, the company will require a sourcing plan based with multiple channels, genuine ability to negotiate and proactive control of risk, not the one-source strategy that was unsuccessful before. Utilizing proven sourcing
shortages or reputational harm that affected their earlier smaller-batch launches.
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Q2 (A) A fast-growing online retailer is assessing potential sites for its new distribution warehouse. The short-listed options include a location near a major transport hub with higher rent, a rural site with tax grants but limited transit infrastructure, and an industrial park offering service provider external economies. The management team must balance cost, efficiency, and future scalability, while also addressing employee commuting needs and environmental regulations. Critically evaluate the trade-offs involved in selecting among these warehouse locations. Which option should the retailer choose to maximize operational effectiveness and long-term business success? Justify your answer by addressing the diverse factors outlined in the scenario. (5 Marks)
Ans 2(A).
Introduction
Picking a site for a distribution warehouse can be a long-term decision that is not just a property choice as it provides the cost of transportation, speed of service and accessibility to workers for a long time. There are three choices for the retailer, one that is a hub for transport as well as a rural tax incentive location and an industrial park, each one weighs costs against performance and
Q2 (B) An organisation changed its facility layout and achieved higher productivity and reduced non-value-added activities. However, a post-implementation review revealed new bottlenecks caused by unexpected interactions between departments. Evaluate the adequacy of its layout planning process in anticipating such challenges and recommend improvements to proactively address similar bottlenecks in future. (5 Marks)
Ans 2(B).
Introduction
Enhancing productivity while reducing non-value-added operations shows the layout plan has succeeded on its main goals. But new bottlenecks appearing only following implementation, due to the unexpected interaction between departments show a gap in the extent to which the initial