PM Final

UNIT-I
UNIT-II
UNIT-III
UNIT-IV
Meaning, nature, scope and major decision areas of production
management; production system: meaning and types (production to
order & production to stock); facilities location; facilities layout and
materials handling; line balancing.
Product and process planning and selection; capacity planning;
aggregate planning and master production scheduling; materials
requirement planning.
Planning & control in mass production; shop floor and batch
production; line of balance; work study; objectives, pre-requisites and
procedure, method study &work measurement.
Materials Management- meaning, importance and functions;
purchasing management; stores management and Inventory
management; quality assurance-acceptance sampling, statistical
quality control; maintenance management
Note : The question paper will be set by the external examiners. The
external examiner will set 8 questions in all, selecting not more than two
questions fromeach unit. The candidates will be required to attempt five
questions inall, selecting atleast one questionfromeachunit.
PRODUCTION & OPERATIONS MANAGEMENT
MBA2nd SEMESTER, M.D.U., ROHTAK
SYLLABUS
175
External Marks : 70
Time : 3 hrs.
Internal Marks : 30
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Q. Define production Management. Also Explain its Scope.
:
:
Diagram :
SYSTEM ASPECTS OF PRODCUTION/OPERATIONS FUNCTION
Asample list of corrections is presented below:
Ans. Production may be defined as
conversion of inputs-men, machine, materials, money, methods and
management (6Ms) into output through a transformation process. Output may
be goods produced or services rendered.
This figure explains the systems aspect of production/operations function
of an organization. The organization received several inputs as indicated on the
left hand side and converts theminto useful products and/or services using its
facilities. In the process of conversion, definitely, there will be some deviation in
the products attributes like quality, size, shape and number of units produced.
Just to cope up with the pre determined plans and policies, it is highly essential
to communicate these deviation to the input stage in the form of feedback for
making necessary corrections.
a) Tight quality check onthe incoming rawmaterial
b) Adjustment of machine settings
Meaning and Definition of Production
Systems Aspects of Production Function
Goods
Produced
OR
Services
Rendered
OUTPUT
Men
Machines
Material
Money
Methods
Mangement
INPUTS
Feedback Information/Control
TRANSFORMATION
(CONVERSION)
PROCESS
UNIT I
PRODUCTIONS & OPERATIONS MANAGEMENT
MBA 2nd Semester (DDE)
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c) Change of tools
d) Change in the production plans, like increase or decrease in volume of
production.
Production management is a branch
of management which is related to the production function. Production
management is the management which by scientific planning and regulation
sets into motion the part of an enterprise to which it has been entrusted the
task of actual transformationof inputs into outputs.
Production/Operations management is the process which combines and
transforms various resources used in the Production/Operations subsystemof
the organization into value added products/services in a controlled manner as
per the policies of the organization.
Thus production management is concerned with the decision making
regarding the production of goods and services at minimum cost according to
the demands of the customers through the management process of planning,
organizing and controlling.
(1) Specifying and accumulating the input resources i.e.
Management
Men
Materials
Machine
Money
Methods
(2) Designing and installing the assembly or conversion process to transform
the inputs into output, and
(3) Co-ordinating and operating the production process so that the desired
goods and services may be produced efficiently and at a minimumcost.
Production management mainly
associated with the factory management as the problem of production can be
removed with the development of factory system. Before the evolution of factory
system, manufacturing activities are carried on by single person that pose no
problem or very insignificant problem of production and therefore question of
productionmanagement did not arise. But withthe inceptionof factory system,
the situation changed and now production management is necessary. Thus,
the scope of production management began to develop. Scope of production
management are:
(1) Decision relating to
the production system design is the firm and fore-most activity of the
productionmanagement. This activity concerns the :
Meaning of Production Management
Definitionof Production Management
Production management is thus assigned withthe following task
Scope of Production Management
:
:
:
:
Activities relating to Production system Design :
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(i) Productionengineering.
(ii) Problems regarding designof tools and jigs.
(iii)Design, development and installationof equipment
(iv) Selectionof the optimumsize of the firm.
(v) The selection of an optimum plant location very much depends upon
the decisiontakenregarding productionengineering.
(vi) Decision regarding production system design concerns the use of
those techniques which are concerned with work environment and
work measurement and includes problem like motion study process
analyses.
(vii) Layout of the plant.
(viii) Material Handling
(ix) Time Study.
(2) The next
problem arises after the designing of the production system. In includes
all decision regarding production administration and therefore all
functions of the management so far as they are applicable to the
production system from the subject matter of the production
management. These activities are:
a) The first decision in this regarding is
production planning. It includes preparation of short term
production schedules etc. Various major decisions required in
productionmanagement are as follows:
(i) To lead in research and engineering
competitions in all areas of our primary business, designing and
producing products and services with outstanding quality and
inherent customer value.
(ii) To determine and
design the production process and equipment that will be
compatible withlowcost and highquality.
(iii) To achieve production efficiency and effectiveness
through skills, imagination and resourcefulness in plan layout and
work method.
(iv) To locate, design and build
efficiency and economic facilities that will yield high value to the
company.
(v) To provide good quality of work
life with well designed, safe rewarding jobs, Stable employment and
equitable pay in exchange for outstanding individual contribution
fromemployees at all levels.
(vi) To achieve highutilizationof equipment.
(vii) To attain exceptional quality that is
consistent withcompany policy and marketing objective.
(viii) To cooperate with supplies and sale
control to develop stable, effective and efficient sources of supply for
those components that are to be processed fromoutside sources.
Activities relating to analysis and control of activities :
Production Planning :
Production Design :
Process designing and equipment selection :
Layout :
Location and Facility Engineering :
Human Resource Management :
Maintenance :
Quality Assurance Control :
Material Management :
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(ix) To achieve low investment through scientific
inventory control suchas:
ABCAnalysis
VEDAnalysis
Economic Order Quantity
Inventory Turnover Ratio etc.
And through appropriate customer service levels and high facility
utilization.
b) After planning the next step is production control
because production plan cannot be activated unless they are properly
guided and controlled. For this purpose, production manager has to
regulate work assignment, service work progress and check and remove
discrepancies, if any, in the actual and planned performances of
production manager has to look after the production control activity
through:
(i) Control on inventory such as raw materials purchased parts, finished
goods etc.
(ii) Control onwork-in-progress throughproductioncontrol.
(iii) Control of quality throughprocess control.
Ans: Production management is a
branch of management which is related to the production function. Production
management is the management which by scientific planning and regulation
sets into motion the part of an enterprise to which it has been entrusted the
task of actual transformationof inputs into outputs.
Production/Operations management is the process which combines and
transforms various resources used in the Production/Operations subsystemof
the organization into value added products/services in a controlled manner as
per the policies of the organization.
Production
management involves the following major decisions:
1) Strategic decisions are taken at top level
management. Some example of strategic decisions are:
(i) Warehouse Location.
(ii) Distributionsystems
(iii)Building a newplant
(iv) Mergers and Acquisitions
Inventory Control :
Production Control :
Q. Define Production Management. Also explain the major decision
areas of Production Management?
:
:
:
Strategic Decisions :
Meaning of Production Management

Definitionof Production Management
Major Decision Areas of Production Management
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(v) NewProduct Planning.
(vi) Compensationplanning
(vii) Quality assurance planning
(viii) R&Dplanning
(ix) Forming newtechnology department
(x) Dropping a product fromthe existing product mix.
(xi) Social Responsibility planning, etc.
The type of decisiontakenat this level is oftenhighly unstructured innature.
2) Tactical decisions are taken at middle level
management. Some examples of tactical decisions are:
(i) Pricing a product
(ii) Product improvement throughvalue analysis.
(iii)Preventive maintenance policy
(iv) Budget analysis
(v) Short termforecasting
(vi) Make or buy Analysis
(vii) Credit evaluation
(viii) Plant layout
(ix) Project scheduling
(x) Reward systemdesign.
(xi) Buying equipments etc.
The type of decisiontakenat this level is mostly semi-structured innature.
3) Operational decisions are taken at bottomlevel
management. Some examples of operational level decisions are:
(i) Designing sampling plan to inspect the raw materials at stores while
receiving materials fromvendors
(ii) Deciding price discount at salesmanlevel inthe field
(iii)Scheduling of maintenance manpower.
(iv) Machine loading
(v) Daily operator scheduling
(vi) Order Entry
(vii) Productionscheduling
(viii) Inventory Control
(ix) Buying software
(x) Approving loans etc.
Ans. The production system is the framework in which
the conversion of input into output occurs. At the one end of the production
system are the inputs and at the other end, outputs, input and output are
Tactical Decisions :
Operational Decisions :
Q. Define Production System. Discuss different types of production
systems withsuitable examples.
: Production System
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linked by certain operations or processes which impact to the inputs and are
called transformationprocess.
This figure explains the systems aspect of production/operations function
of an organization. The organization received several inputs as indicated on the
left hand side and converts theminto useful products and/or services using its
facilities. In the process of conversion, definitely, there will be some deviation in
the products attributes like quality, size, shape and number of units produced.
Just to cope up with the predetermined plans and policies, it is highly essential
to communicate these deviation to the input stage in the form of feedback for
making necessary corrections
There are mainly two main production
systems:
(A) It involves a continuous or almost
continuous physical flowof material. It makes use of special purpose machines
and produces standardized items in large quantities. Such processes are
Systems Aspects of Production Function
Types of Production System
Continuous Production System
:
:
:
Goods
Produced
OR
Services
Rendered
OUTPUT
Men
Machines
Material
Money
Methods
Mangement
INPUTS
Feedback Information/Control
TRANSFORMATION
(CONVERSION)
PROCESS
Mass Production
System Production
Process Production
System
Job
Production
Batch
Production
Types of Production System
Continuous Production System
(Production to Stock)
Intermittent Production System
(Production to Order)
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adopted by concern which produce goods or services continuously by putting
them through a series of successive connected operations in anticipation of
customer demand and rather thaninresponse to customer orders.
Examples of industry using suchtechnology are:
PetroleumIndustry
Chemicals Industry
Steel and Sugar Industry
(i) An analytical industry like oil industry breaks
up their materials into several parts along with its process of
production.
(ii) A Synthetical industry like current industry
uses several rawmaterials, mixes themup and manufacture a product
throughthe process of production.
(1) This systemof production is used by concerns where
manufacturing is carried on continuously in anticipation of demand
though demand of the product may not be uniform throughout the year.
Standardization is the keynote of mass production. This system may also
be called Flow Production System. This system is useful on single
purpose type of machines and where standardized products are
manufactured through standardized plant machineries and processes.
Moreover this system requires huge investments in machines are
equipment.
(2) This system is an extended form of mass
production where production is carried on continuously through a
uniform predetermined sequence of operations. Generally under this
system finished product of once process is used in the next process as a
raw material till the last process. Large industries like petroleumrefining,
heavy chemical industries generally use this systemof production. Under
this system, generally one principal raw material is transformed into
several product (may be called by products) at different stages of
operations. For example crude oil is processed into Kerosene, gasoline and
other products.
(B) Intermittent production system
situations are those where the facilities must be flexible enough to handle
a wide variety of products and sizes or where the basic nature of activity
imposes change of important characteristics the input. Under this system
no single sequence of operations is appropriate and therefore
standardized materials or machines cannot be used. Under this systemof
manufacturing productionis done inlots rather thanona continuous flow
Examples :
Classificationof Continuous Production Industries :
Analytical Industry :
Synthetical Industry :
Classificationof Continuous Production System:
Mass Production :
Process Production :
: Intermittent Production System
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basis. It is done more often on the basis of customer orders. The finished
product is heterogeneous but with in a range of standardized options
assembled by the producers. Since production is partly for stock and
partly for customer demand, there are problems to be met in scheduling,
forecasting control and co-ordination.
Auto-mobile Industry
Electrical Goods
Manufacturing plants Printing press etc.
Intermittent
productionsystemmay be divided into two types, namely
(1) In this system, goods are produced according to the
orders of the customers. Continuous demand of such items is not assured
and therefore production is done only when the orders for the
manufacturing of items are produced from the customers. As the need of
each customer differs the materials, plants and equipments to be used
also differ and therefore each product is a class by itself a constitutes a
distinct and separate job for productionpurposes.
(2) Under this system, the manufacturing is done in
Batches or groups or lots either on the basis of customers order or with a
hope of a continuous demand of the product. Under this system, medium
scale production is warranted. The best example of this type of production
system is chemical industry where different medicines are produced in
batches.
Both job or batch production are similar in nature and almost have the same
feature except inregard to the quantity of production.
Ans: Business systems utilize facilities like, plant and
machineries, warehouses, etc, while performing the task of producing
products/services. A proper planning of these facilities would definitely reduce
their cost of operationand maintenance.
Facilities location may be defined as
selection of suitable location or site or plan or place where the factory or plant
or facilities to be installed, where plant will start functioning.
The problemof location is to
be tackled by the entrepreneur not only at the time of starting a business unit
but throughout the life of an undertaking. The problemarises under one or the
other of the following conditions:
1. At the time of starting a business unit.
Examples of such industries are :
Classification of Intermittent Production System :
Job Production :
Batch Production :
Q. Explain Facilities Location.
:
:
:
Introduction
Meaning of Facilities Location
Situation give rise to the problemof Location
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2. The increase volume of its business and the extent of its market
requirement.
3. The facilities provided for in the original location plan are no longer
sufficient for the expanding business and therefore expansion of the
existing plant or a newlocationis necessary.
4. The lease for the site has expired, owner of the property is not prepared
to renewthe lease agreement.
5. The existing power or water supply at the site is no longer sufficient for
the purpose of production.
Ideal location means that location which ensures the
optimumresults in relation to costs. Ideal location is one that permits the lower
unit cost inthe productionand distributionof a product or service.
(1) Minimumcosts of transporting the materials and products.
(2) Easy availability of rawmaterials and other factors of production.
(3) Convenience inaccessibility to markets
(4) Availability of adequate space for the site of the enterprise.
(5) Sufficient scope for further expansion
(6) Integration of the enterprise with the economic, social and cultural
traits of the community of the region.
The various types of facilities are discussed below:
(1) Heavy manufacturing facilities are primarily
plants that are relatively large and require a lot of space and as a result,
are expensive to construct.
Automobile Plants, Steel Mills and Oil Refineries. Sites for
manufacturing plants are normally selected where construction and land
cost can be kept at minimum and raw material sources are near by in
order to reduce transportationcosts.
(2) Light industry facilities are typically perceives as
smaller, cleaner plants that produce electronic equipment as
components, parts used in assemblies or assembled products.
Environmental issues are less important in light industry. Important
factors effecting these types of industries are:
Labour Pool
Especially the availability of skilled workers
The Community Environment
Government regulation
Land Use Requirements.
Examples might include plants making stereos, TVs or
Computers etc.
Ideal Location
Factors of Ideal Location
Types of Facilities
:
:
:
Heavy Manufacturing :
Examples :
Light Industry :
Examples :
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(3) Warehouses are a category of
their own. Products are not manufactured or assembled with in their
confines, nor are they sold from them. They represent an intermediate
point inthe logistical inventory systemwhere products are held instorage.
(4) Retail and service operations generally require the
smallest and least costly facilities.
Examples : It includes such service facilities as restaurants, banks, hotel
cleaners, clinics and law offices ad retail facilities such as groceries and
department stores.
Ans. Facilities payout is a floor plan of the physical
facilities which are used in production. Layout planning refers to the
generation of several possible plans for the spatial arrangement of physical
facilities and selects the one which minimizes the distance between the
departments.
The objectives of facilities layout are:
(1) Minimize investment inequipment
(2) Minimize overall productiontime.
(3) Utilize existing space most effectively.
(4) Provide for employee convenience, safety and comfort.
(5) Maintainflexibility of arrangement and operations
(6) Minimize materials handling cost
(7) Facilitate the manufacturing process
(8) Facilitate the organizational structure.
Layouts can be classified into the following four
categories:
(1) Process Layout
(2) Product Layout
(3) Group Layout (Combinationlayout)
(4) Fixed positionlayout.
(1) In a process layout, similar machines and services are
located together. Therefore, all drills will be located in one area of the
plant. Process layout is normally used when the production volume is not
sufficient to justify a product layout.
a. Machines are better utilized, fewer machines are required.
b. A high degree of flexibility in terms of task allocation to machines
exists.
c. Comparatively lowinvestment inmachines is required.
Warehouses and Distribution Centres :
Retail and Service :
Q. Define Facilities Layout. What are the types of Facilities layout?
:
:
:
Process Layout :
Advantages of Process Layout :
Facilities Layout
Objectives of Facilities Layout
Classification of Layout
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d. The diversity of tasks offers a more interesting and satisfying
occupationfor the operation.
a. Materials handling cost will be high
b. Productionplanning and control systems are more involved.
c. Large amount of in-process inventory will results
d. Space and capital are tied up by work inprocess
e. Higher grades of skill are required.
(2) Product layout is used when machines and auxiliary
services are located according to the processing sequence of the product.
The product layout is selected when the volume of production of a
product is high such that a separate production line to manufacture it
can be justified. In a strict product layout, machines are not shared by
different products. Therefore the production volume must be sufficient to
achieve satisfactory utilizationof the equipment.
(i) The flowof product will be smoothand logical inflowlines.
(ii) In-process inventory is less.
(iii)Throughput time is less.
(iv) Material handling cost is minimum
(v) Operators need not be skilled
(vi) Simple productionplanning and control systems are possible
(vii) Less space is occupied by work intransit and for temporary storage.
(i) A breakdown on one machine in a product line may cause stoppages
of machines inthe downstreamof the line.
(ii) A change in product design may require major alterations in the
layout.
(iii)Comparatively highinvestment inequipments is required.
(3) A group layout is a combination of the product layout
and process layout. It combines the advantages of both layout systems.
The basic aim of a group technology layout is to identify families of
components that require similar processing on a set of machines. In
turn, these machines are grouped into cells. Each cell is capable of
satisfying all the requirements of the component family assigned to it. In
a group technology layout, the objective is to minimize the sumof the cost
of transportation and the cost of equipments. So, this is called as multi-
objective layout.
(4) A fourth type of layout is the static product
layout or layout by fixed positions, in which the physical characteristics
Limitations of Process Layout :
Product Layout :
Advantages of Product layout :
Limitations of Product Layout :
Group Layout :
Fixed Position layout :
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of the product dictate as to which type of machines and men are to be
brought to the product. The ship building industry commonly employs a
static product layout. Since, the static product layout is not justified
except inunusual situations, it has limited scope.
Ans. In addition to designing of the layout for a
factory system, the development of materials handling system to move
materials from one stage of production to another is very important. Materials
handling includes moving, packaging and storing all the materials used by a
firm. The materials handling system is judged by how well it serves the
productionprocess and howeconomical it is.
With the development of technology, a variety of materials handling
equipments has been developed to economize costs, lessen the monotony and
effort of the workers, improve the safety for men and materials and improve the
overall productivity. Such equipments range from hand trolleys to automatic
devices for handling a variety of products and materials.
The materials are shipped froma given source to a given
destination in vetches consisting of certain number of pieces or certain
quantity in each trip. Again, for the purpose of handling within a given work
area, loading to a material handling equipment and unloading from a material
handling equipment, there must be a limit on the number of pieces in the case
of discrete items or a limit on the quantity of materials in the case of continuous
materials to be picked and placed simultaneously while loading and unloading
the materials. In this process, the batch of materials which are placed at
particular destination should retain its original shape and size before picking.
The optimal shape and size of the bulk of material which will retain its original
shape and size evenafter unloading is called as unit load.
Some of the important principles of
materials handling are listed below:
1. All materials to be handled mechanically from the inbound raw
materials stage to the outgoing finished goods stage.
2. Heavy loads must be handled mechanically
3. Avoid mixing materials whichrequire future sorting.
4. Transfer of materials from one container to another should be done
mechanically.
5. Hot and hazardous materials must be handled mechanically.
6. Unit load concept must be followed. The larger the size of the unit load,
the greater the economy.
7. Use of overhead space for conveyers and for stocking materials to be
stored must be encouraged.
8. Materials are to be moved in a straight line to the extent possible.
Q. Explain Materials Handling Systems. Also explain its principles.
:
:
:
Material Handling System
Unit Load Concept
Materials Handling Principles
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Minimum number of changes in the direction while moving materials
is preferable.
9. Avoiding floor contact of materials is preferable. Pallets can be used for
this purpose.
10.Pick and place of materials within operations and in transit should be
infrequent.
The materials handling
equipments canbe classified into the following categories:
(A) Fixed PathEquipments
(B) Variable PathEquipments
(C) Auxiliary Equipments
(A) The fixed path equipments are as listed
below:
(i) Belt Conveyer
(ii) Roller Conveyer
(iii)ScrewConveyer
(iv) Bucket Conveyer
(v) Pneumatic Conveyer
(vi) Gravity Conveyer
(i) Overhead traveling Crane
(ii) Gantry Crane
(iii)Jib Crane
(iv) Hoist
(v) Stacker Crane
(vi) Monorail
(B) The equipment that can be included in
this category are listed below:
(1) Lift Truck
(2) PlatformTruck
(3) Hand Stacks
(4) Tractors
(5) Hand Trolleys
(C) These can be classified into the following
categories:
(1) Pallets, skids
(2) Containers
(3) Lift Truck attachments
Classification of Materials Handling Equipments
Fixed Path Equipments
Varied Path Equipments
Auxiliary Equipments
:
:
(1) Conveyers :
(2) Cranes and Hoists :
:
:
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(4) Loaders and unloaders
(5) Ramps
Ans. Many differences exist in the management of production
activities in make-to-order and make-to-stock firms. In make-to-order
situations, due dates are important, and hence the sequencing of customer
orders at various machine centres is an essential function. This involves both
planning and control of activities. Make-to-stock products are generally high-
volume consumer goods, such as telephones, automobiles, wrist watches, etc.
The manufacture of standardized, high-volume items, which involves flow
shops requires control for effective production.
A flow shop consists of a set of facilities through which work flows in a
serial fashion. The same operations are performed repeatedly in every work
station, thus requiring lower-level skilled workers. The flow shop generally
represents a mass production situation and hence the operations are carried
out very efficiently e.g. when an operator has to install a gear box on an
automotive assembly or assembling cooling systemona washing machine.
In flow shops, items enter the finished goods inventory one after another,
Often in the same order of the inputs for these goods, leaving very low in-
process inventories. Since the items are mostly make-to-stock, forecasting is a
difficult job, and hence the finished goods levels in terms of anticipation
inventories are very high. For the same reason, raw materials are carried at
higher inventory levels. Machines in flow shop tend to have a special-purpose
design, and hence the initial investment level is generally high for heavy
automated plants.
The production control system of continuous production is called flow
control. Specialization, high volume, division of labour and efficiency are built
into the designof assembly lines.
The main objective of flow control in flow shop is to balance the assembly
line. The assembly line is represented in the form of a precedence diagram. A
sample diagramis showninthe following figure:
Q. Write a short note on Line Balancing.
:
A Sample precedence diagram (timings are in minutes)
Introduction
2 5
4 7
3 6
1
10 5
7 6
4 8
5
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A precedence diagram specifies the order or sequence in which the
activities must be performed. Each circle is a node and the number inside each
circle identifies particular operation. The number outside the circle represents
the duration of the operation. Arrowindicates the direction of flowof operation.
For example, activity 2 and activity 3 must be completed before taking up the
activity 4.
Cycle time (CT) is directly related to the production rate of the
assembly line.
Productive Time
CT =
Demand per period
For example, if 24 assemblies are required per day, the cycle time
based onaneight-hour day, would be :
8 X60
CT = = 20 Minutes
24
We used line balancing technique to achieve:
1. The minimizationof the number of workstations;
2. The minimizationof cycle time;
3. The maximizationof workload smoothness;
4. The maximizationof work relatedness.
An assembly line is a manufacturing process in which interchangeable
parts are added to a product in a sequential manner to create a finished
product. The assembly line was first used by Henry Ford and his engineers.
Ford was also the very first to build factories around that concept.
The objective of line balancing is to subdivide
the network into several sub networks (Stations) without violating the
precedence relationships and allocating operations to each station without
exceeding the cycle time, i.e., the sum of the times of operations allocated to
eachstationshould not exceed the cycle time.
While allocating operations to each station, the precedence relationships
must be maintained. If these are followed, thenwe canensure productionof the
specified volume of products or items using the assembly line.
Cycle Time
Need of Line Balancing
Objectives of Line Balancing
:
Example :
:
:
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Q. Explain Product planning and selectionindetail.
:
:
Planning Phase:
Planning phase has two categories of planning namely :
Prior Planning :
Product Development and Design :
Ans. The planning process within an organization is dynamic and
continuous. It is nothing but deciding future courses of action of the
organization well in advance so that executives at different level will play their
role as per these guidelines.
The planning is considered to be an
essential step in any business mainly because the end results depend on the
input and the approach followed at this stage. So, the productivity of an
organization can be improved by better planning efforts. Production planning
and selectionhas two phases:
(1) Planning Phase
(1) SelectionPhase.
(1) Production planning is an exercise of intelligent
anticipation in order to establish how an objective can be achieved or a
need fulfilled in circumstances which are invariably restrictive. The
outcome of planning is either dropping the whole idea or the formulation
of a new plan in-line with the objective. Production planning determines
the following:
(i) Optimal Schedule and sequence of operations
(ii) Economic batchquantity
(iii)Machine assignment and dispatching priorities for sequencing.
(i) Prior planning means pre-production planning. This
includes all the planning efforts which are taking place prior to the
active planning.
Modules of Prior Planning : The modules of prior planning are:
a) Product development and
design is the process of developing a new product with all the
features which are essential for effective use in the field and
designing it accordingly. At the design stage, one has to take several
aspects of design like, design for selling, design for manufacturing
and design for usage. Product design is the collection of information
regarding specification, bill of materials, drawing etc.
Meaning
Production Planning and Selection
UNIT II
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b) Forecasting is an estimate of demand which will
happen in future. Since it is only an estimate based on the past
demand, proper care must be takenwhile estimating it.
c) Given the sales forecast, the factory
capacity, the aggregate inventory levels and size of work force, the
manager must decide at what rate of production to operate the
plant over an intermediate planning horizon. This exercise is called
aggregate planning. It is a macro level exercise designed to plan by
converting resource requirements of several products into common
units.
d) Master scheduling is the next level exercise
following the aggregate planning which aims to find out a product-
wise planning over the intermediate planning horizon.
e) Order writing is nothing but giving authority to
one or more persons to undertake a particular job.
f) Material requirements
planning is a technique for determining the quantity and timing for
the acquisition of dependent items (if exist) needed to satisfy the
master productionschedule.
(ii) Active planning means the actual production
planning which includes various activities directly related to the
production at micro level immediately following the prior planning.
The modules of active planning are:
a) Process planning and routing is a
complete determination of the specific technological process steps
and their sequence to produce products at the desired quality,
quantity and cost. It determines the method of manufacturing a
product, selects the tools and equipments, analyzes how the
manufacturing of the product will fit into facilities. Routing in
particular prescribes the flowof work in the plant and it is related to
the considerations of layout, temporary locations for raw materials
and components and material handling systems.
b) Materials planning is a process which
determines the requirements of various raw materials or
subassemblies by considering the trade-off between various cost
components like, carrying cost, ordering cost, shortage cost, and so
forth.
c) Tools planning determines the requirement of
various tools by taking process specifications, material
specifications and equipment specifications.
d) Loading is the process of assigning jobs to several
machines suchthat there is a load balance among the machines.
e) Scheduling is the time phase of loading and
determines whenand inwhat sequence the work will be carried out.
This fixes the starting as well as the finishing time for eachjob.
Forecasting :
Aggregate Planning :
Master Scheduling :
Order Writing :
Material Requirements Planning :
Active Planning :
Process Planning and routing :
Material Planning :
Tools Planning :
Loading :
Scheduling :
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(2) Product Selection phase consists of the following
steps:
Inany organization,
the following types of decisions are taken:
(1) Strategic decisions are taken at top level
management. Some example of strategic decisions are:
(i) Warehouse Location.
(ii) Distributionsystems
(iii)Building a newplant
(iv) Mergers and Acquisitions
(v) NewProduct Planning.
(vi) Compensationplanning
(vii) Quality assurance planning
(viii) R&Dplanning
(ix) Forming newtechnology department
(x) Dropping a product fromthe existing product mix.
(xi) Social Responsibility planning, etc.
The type of decisiontakenat this level is oftenhighly unstructured innature.
(2) Tactical decisions are taken at middle level
management. Some examples of tactical decisions are:
(i) Pricing a product
(ii) Product improvement throughvalue analysis.
(iii)Preventive maintenance policy
(iv) Budget analysis
(v) Short termforecasting
(vi) Make or buy Analysis
(vii) Credit evaluation
(viii) Plant layout
Selection Phase :
:
Strategic Decisions :
Tactical Decisions :
Types of decisions in Product Planning and Selection
Create Concept Alternative
Develop Concept
Evalution
Select Concept
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(ix) Project scheduling
(x) Reward systemdesign.
(xi) Buying equipments etc.
The type of decisiontakenat this level is mostly semi-structured innature.
(3) Operational decisions are taken at bottomlevel
management. Some examples of operational level decisions are:
(i) Designing sampling plan to inspect the raw materials at stores while
receiving materials fromvendors
(ii) Deciding price discount at salesmanlevel inthe field
(iii)Scheduling of maintenance manpower.
(iv) Machine loading
(v) Daily operator scheduling
(vi) Order Entry
(vii) Productionscheduling
(viii) Inventory Control
(ix) Buying software
(x) Approving loans etc.
The type of decisiontakenat this level is mostly structured innature.
Ans. Process selection decisions determine the type of productive
process to be used and the appropriate span of that process. For example- the
managers of a fast food restaurant may be required to decide whether to
produce food strictly to customer order or to inventory. The managers must
also decide whether to organize the process flow as a high volume line flow or a
low volume batch production process. Further more, they must decide
whether to integrate forward towards the market and backward toward their
suppliers. All these decisions help in defining the type of process which will be
used to make the product.
Production selection is sometimes viewed as a layout problem or as a
series of relatively lowlevel decisions. But, on the contrary, process selection is
strategic in nature and is of utmost importance. Process selection or decisions
affects costs, quality, delivery and flexibility of operations.
(i) Quality of work to be done along withproduct specifications.
(ii) Quality of work to be completed
(iii)Availability of equipments, tools and personnel.
(iv) Sequence inwhichoperationwill be performed onrawmaterial
(v) Names of equipments onwhichthe operations will be performed.
(vi) Standard time for eachoperation
(vii) Whenthe operationwill be performed.
Operational Decisions :
Q. Explain process planning and Selection indetail.
:
:
Meaning
Information required to do process planning
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Process Planning Procedure
Meaning
:
Selection of Process :
Current Production Commitments :
Delivery Date :
Quantity to be produced :
Quality Standard :
Selection of Material :
Selection of Jigs, fixtures and other special attachments :
Selection of cutting tools and inspection Gauges :
Q. Explain inbrief about Capacity Planning.
:
The different steps involved are:
(1) A process is necessary in order to shape, form,
condition and join materials and components with the help of machines
and labour in order to convert raw materials into a finished product. One
should select the must economical process and sequence that satisfies the
product specifications. The selectionprocess depends upon:
(a) If enough work has already
been allocated to more efficient equipments, the current work may also
have to be passed on to less efficient machines to complete the same in
time.
(b) Anearly delivery date may:
(i) Force the use of less efficient machines
(ii) Rule out the use of special tools and jigs as they will take time for
designand fabrication.
(c) Small quantity will not probably justify
the high cost of preparation and efficient set-ups. Thus, quite possible
they may have to be made onless efficient machines and vice-versa.
(d) Quality standards may limit the choice of making
the product ona particular machine etc.
(2)
(a) Material should be right quality and chemical composition as per the
product specifications.
(b) Shape and size of materials should restrict scrap.
(3) These
supporting devices are necessary:
(a) To give higher productionrate.
(b) To reduce cost of productionper piece.
(4) They respectively
are necessary to:
(a) Reduce productiontime.
(b) Inspect accurately and at a faster rate.
Ans. Production system design is the first level planning for the
inputs, conversion activities and outputs of a production operation. Design
decisions are very important because they are often associated with significant
investment of funds. The initial outlay and operating expenses are established
based on design decisions, and these in turn affect productivity of the concern
infuture. So they affect fixed cost and variable cost.
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Capacity is a measure of the ability to produce goods or services or, it may
be called as the ratio of output.
Capacity planning is the task of determining the long and short term
capacity needs of anorganizationand thendetermining howthese needs will be
satisfied.
Different types of organizations use different
measures of capacity e.g. steel plant uses tone of steel produced and auto
plants uses number of autos produced etc.
There are various types of capacity:
(1) The design capacity of a systemis the rate of output
of goods or services under full scale operating conditions. In other words,
designed capacity is the theoretical maximum capacity that a producing
unit can produce under ideal conditions. For example, a cement factory
may be designed to produce 200 tons per day. The projected demand for a
period anywhere from5 to 10 years is taken as the estimate for the design
capacity.
(2) In practice, it may not be possible to achieve
production to the extent of design capacity mainly because of mismatch
betweenrequired resources and available resources.
The maximumoutput of a specific product or product mix that the system
of workers and equipments is capable of producing as an integrated whole
is called system capacity. This may be less than that of the design
capacity.
The actual output may be even less than the systemcapacity since it is affected
by short-range factors such as actual demand, equipment breakdowns and
personal absenteeismor productivity.
There are two types of capacity planning
strategies:
(1) Top management may have the
following strategies to cope up with major changes in products and
services that it can provide to customers in the long run which will have
significant impact on the capacity. The major changes will altogether
revise the demand and resources requirements. These are:
(i) Develop newproducts lines
(ii) Expand existing facilities
(iii)Construct or phase out productionplants
Measures of Capacity
Types of Capacity
Capacity Planning Strategies
:
:
Designed Capacity :
System Capacity :
Actual Output
SystemEfficiency =
SystemCapacity
:
Long-term Capacity Strategies :
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Technological obsolescence may force some industries to use phase-in-
strategy for introducing the next model of the same product or service to retain
and/or improve its market segment. The phase-in-strategy is nothing but the
planning for the next model evenwhenthe present model is moving well.
(2) In short-term planning horizon,
capacity decisions are taken by considering the fluctuations in demand
caused by seasonal and economic factors. The purpose of short-term
capacity planning is to respond to variations in demand during the short-
term planning horizon. The following strategies can be used to cope up
withthe fluctuations indemand:
(i) Overtime
(ii) Subcontracting
(iii)Hiring
(iv) Firing etc.
Ans. Demand forecast can be classified into long range,
mediumrange and short range forecasts. Long range forecast acts as the basis
for capacity planning. A company may be manufacturing several products
using a set of facilities. The association between the facilities and the products
is generally, many to many, i.e. a given facility is used to manufacture more
than on product. Similarly, a product may need more than one facility to
manufacture it. This type of association introduces complexities in scheduling.
Aggregate planning is a process that follows capacity planning, and it uses
medium range forecast. The plans do not necessarily have to be so detailed as
to provide specific instructions for daily or weekly operations such as loading,
sequencing, expediting and dispatching.
The different capacities which are
generally used to manufacture products are as listed below:
(1) Regular time productioncapacity
(2) Subcontracting capacity
(3) Overtime capacity
(4) Hiring and firing capacity.
One can use any one or a combination of the
strategies for smoothing fluctuations in demand. Generally, a mixture of
strategies is preferred. There are two types of strategies:
(A) If a single strategy is used to meet the demand, then it
is called as a pure strategy. The pure strategies are:
1.
The company can use constant work force during the planning
Short-term Capacity Strategies :
Q. What do you mean by aggregate planning? List and explain various
pure strategies and mixed strategies.
:
:
:
:
Building and utilizing inventory through constant work force :
Aggregate Planning
Nature of Aggregate Planning Decisions
Aggregate Planning Strategies
Pure Strategies
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horizon, which will result into a constant output during each period in
the planning horizon. Since, the demand is not a constant quantity,
there may be mismatch between the production quantity and the
demand of each period. The excess production in a period can be
carried as inventory for use in future periods. But, this will result in
inventory cost. If this pure strategy is used, the objective is to identify a
desirable constant work force which leads to the minimum total
inventory cost. This pure strategy helps in having stability in the work
force. This, in turn, helps in producing better quality products because
of the experience gained by the work force and various other related
benefits.
2. The company can employ
varying work force such that the output matches with the demand in
each period of the planning horizon. This pure strategy can be
implemented through hiring and firing of employees. During periods of
increased demand, the company can hire employees and during
periods of decreased demands, the company can fire employees such
that there is an exact match between the production quantity and the
demand of each period in the planning horizon. Hiring and firing will
result in some penalty to the company in terms of training cost and
firing cost, respectively. But, in this strategy, the cost of inventory is
zero.
3. This strategy can be considered as an alternative to
meet the demands of products. In this strategy, orders can be placed
with a subcontractor or a set of subcontractors depending on the
demands of various products. This is generally used during the peak
demand periods to increase the capacity. But the usage of this strategy
may grow the level of competition if the subcontractors become as
competitors infuture.
4. To even out the fluctuations in
demand of products, the company can offer some discount scheme
during off-seasons or during periods with less load on some service
systems. This is nothing but influencing demand pattern to match
withthe capacity.
The telephone companies level their loads by offering evening rates.
Giving off-season discounts during winter for refrigerators, air
cooler, etc.
(B) If a combination of the above pure strategies is used
to meet the demand, then it is called as a mixed strategy. Several mixed
strategies can be generated by taking two at a time, three at a time or four
Varying the size of the work force :
Subcontracting :
Making changes in demand pattern :
Examples :
:
Mixed Strategies
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at a time or four at a time of the above pure strategies. But all these mixed
strategies may not be meaningful and practicable to implement. Only a
limited combinations of these strategies are used inpractice.
Ans. A master production schedule is a
product-wise plan for manufacturing products. When a firm uses an MRP
(Material Requirement Planning) system, the MPS provides the top-level input
requirements. This gives the volume of production during various periods in
the planning horizon.
Aggregate planning aims at an overall plan without distinguishing
products. But, master production schedule aims to prepare a product-wise
schedule which is consistent with the aggregate planning. This process of
generating a feasible master production schedule is known as disaggregation
planning. The relationship of the MPS to other manufacturing and control
activities is showninthe following figure:
The aggregate planning problem provides a basis for decision making
regarding specific productiondates, available capacity, total demand, lead time
or inventory constraints. These informations may not be sufficient for the
smooth functioning of a firm. SO, we need a plan stated in terms of specific
products that are to be produced in certain quantities by certain dates which is
knownas master productionschedule/disaggregationschedule.
(1) The sizing and timing of productionorders for specific items,
(2) The sequencing of individual jobs
(3) The short term allocation of resources to individual activities and
operation
The relationship of the MPS to other manufacturing and control
activities is showninthe following figure:
Q. Explain indetail Master Production Scheduling (MPS)?
Master Production Scheduling :
:
:
It specifies
Relationship of MPS to other Manufacturing Planning and Control
Activities
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Relationship of MPS to other Manufacturing Planning and Control
Activities
Meaning
Basic Inputs for MRP
:
Q. Explain indetail Material Requirement Planning (MRP)?
:
:
Ans. MRP is a technique for determining the quantity and timing for
the acquisition of dependent items needed to satisfy master schedule
requirements.
The basic inputs for MRP are as listed below:
(1) Product structure or Bill of materials (BOM).
(2) Master ProductionSchedule for the final assembly.
(3) Economic Order Quantity.
Demand
management
Production
Planning
Resource
Planning
What-if
analysis
Final Assembly
Scheduling
(FAS)
Master
Production
Scheduling
(MPS)
Rough-cut
capacity
planning
Material
Requirements
Planning
(MRP)
Capacity
Requirements
Planning
(CRP)
Vendor
follow-up
systems
Production
activity
control
Operations
sequencing
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(4) Beginning Inventory.
: In manufacturing a product, the firm has to plan materials so
that the right quantity of material is available at the right time for each
component of the product by taking the master production schedule data and
other details into account. This will enable the firmto smooth out the process of
manufacturing the final product. The terminologies which are involved in doing
the MRP calculationare as follows:
(1) Projected Requirements
(2) Planned order release
(3) Economic Order Quantity
(4) Scheduled receipts
(5) Stock onhand.
The master production schedule gives particulars about demands of the
final assembly for the periods in the planning horizon. These are known as
projected requirements of the final assembly. The projected requirements of
the subassemblies which are in the next immediate level just below the final
product can be calculated only after completing the MRP calculations for the
final product. Similarly, the projected requirements of the subassemblies
which are in the second level can be calculated only after completing the MRP
calculations for the respective assemblies in the first level. Like this, the
projected requirements for all the subassemblies canbe calculated.
:
(1) Step 1 : The MRP process is initiated once the customer orders for the
finished goods from the supplier. Then the forecasting is done for the
finished goods.
(2) Step 2 : A master plan is prepared for the production process. This
master plan contains all the constituents of the production process that
would finally lead to the resultant products.
(3) Step 3 : The master plan for production initiates the process of materials
requirements planning.
(4) Step 4 : For MRP two other inputs are inventory which is already in hand
and product designdevelopment.
(5) Step 5 : Then we have to see whether the capacity is adequate for the
production of requisite number of finished goods demanded by the
customer.
(6) Step 6 : If the answer is negative, then again we have to reschedule our
production plan. But if the answer is affirmative i.e., there is adequate
capacity then we can go for the final master plan that would ultimately
lead us to the Master Requirement Planning.
MRP Concept
Material Requirement Planning Process
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The MRP can be understood withthe help of following diagram:
Reschedule
Production
Planning
Is the
Capacity
Adequate?
Product
Design and
Structure
Inventory in
Hand
Forecast for
the finished
goods
Customer
orders for
finished goods
Master
Requirement
Plan (M.R.P.)
Lead Time for
Manufacturing
and
Procurement
Master
Production
Schedule
Final Master
Production and
Schedule
Materials
Requirement
Plan.
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Q. Explain the planning and control inmass production.
Meaning of Mass Production :
Features of Mass Production :
Advantages of Mass Production :
Ans. Mass production (also called flow
production, repetitive flow production, series production, or serial production)
is the production of large amounts of standardized products, including and
especially on assembly lines. The concepts of mass production are applied to
various kinds of products, from fluids and particulates handled in bulk (such
as food, fuel, chemicals, and mined minerals) to discrete solid parts (such as
fasteners) to assemblies of such parts (such as household appliances and
automobiles).
Mass production of assemblies typically uses electric-motor-powered
moving tracks or conveyor belts to move partially complete products to
workers, who perform simple repetitive tasks. It improves on earlier high-
throughput, continuous-flow mass production made possible by the steam
engine.
(1) Mass productionis capital intensive and energy intensive.
(2) It uses a high proportion of machinery and energy in relation to
workers. It is also usually automated to the highest extent possible.
(3) With fewer labour costs and a faster rate of production, capital and
energy are increased while total expenditure per unit of product is
decreased.
(4) However, the machinery that is needed to set up a mass production
line (such as robots and machine presses) is so expensive that there
must be some assurance that the product is to be successful to attain
profits.
(1) The economies of mass production come from several sources. The
primary cause is a reductionof non-productive effort of all types.
(2) In mass production, each worker repeats one or a few related tasks
that use the same tool to performidentical or near-identical operations
on a stream of products. The exact tool and parts are always at hand,
having been moved down the assembly line consecutively. The worker
spends little or no time retrieving and/or preparing materials and
tools, and so the time taken to manufacture a product using mass
productionis shorter thanwhenusing traditional methods.
UNIT III
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(3) The probability of human error and variation is also reduced, as tasks
are predominantly carried out by machinery.
(4) A reduction in labour costs, as well as an increased rate of production,
enables a company to produce a larger quantity of one product at a
lower cost thanusing traditional, non-linear methods.
(1) Mass production is inflexible because it is difficult to alter a design or
productionprocess after a productionline is implemented.
(2) All products produced on one production line will be identical or very
similar, and introducing variety to satisfy individual tastes is not easy.
However, some variety can be achieved by applying different finishes
and decorations at the end of the productionline if necessary.
The planning process within an organization is dynamic and
continuous. It is nothing but deciding future courses of action of the
organization well in advance so that executives at different level will play their
role as per these guidelines.
The planning is considered to be
anessential step inany business mainly because the end results depend onthe
input and the approach followed at this stage. So, the productivity of an
organizationcanbe improved by better planning efforts.
Similarly, control process within an organization plays a major role in
organizational productivity improvement. In reality, most of the decisions may
not be implemented as per the plans. This is because of uncertainty which is
involved in many of the business processes. The raw material quality may not
be as per the assessed level. The machine breakdown rate may be higher than
the predicted rate of breakdown. The operator efficiency may not be matching
with the time standards. All these deviations would introduce some difficulty in
producing products and services as per the plan. So, a careful control system
with a proper feedback mechanism is a must to correct the whole business
process at appropriate time to manufacture and deliver the goods as per the
plan.
(1) Planning Phase
(2) ActionPhase
(3) Control Phase
(1) Production planning is an exercise of intelligent
anticipation in order to establish how an objective can be achieved or a
need fulfilled in circumstances which are invariably restrictive. The
outcome of planning is either dropping the whole idea or the formulation
of a new plan in-line with the objective. Production planning determines
the following:
Disadvantages of Mass Production :
Meaning :
Planning and Control in Mass Production :
Production planning and Control inMass Production has three phases.
Planning Phase :
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Optimal Schedule and sequence of operations
Economic batchquantity
Machine assignment and dispatching priorities for sequencing.
(i) Prior planning means pre-production planning. This
includes all the planning efforts which are taking place prior to the
active planning.
The modules of prior planning are:
a) Product development and
design is the process of developing a new product with all the
features which are essential for effective use in the field and
designing it accordingly. At the design stage, one has to take several
aspects of design like, design for selling, design for manufacturing
and design for usage. Product design is the collection of information
regarding specification, bill of materials, drawing etc.
b) Forecasting is an estimate of demand which will
happen in future. Since it is only an estimate based on the past
demand, proper care must be takenwhile estimating it.
c) Given the sales forecast, the factory
capacity, the aggregate inventory levels and size of work force, the
manager must decide at what rate of production to operate the
plant over an intermediate planning horizon. This exercise is called
aggregate planning. It is a macro level exercise designed to plan by
converting resource requirements of several products into common
units.
d) Master scheduling is the next level exercise
following the aggregate planning which aims to find out a product-
wise planning over the intermediate planning horizon.
e) Order writing is nothing but giving authority to
one or more persons to undertake a particular job.
f) Material requirements
planning is a technique for determining the quantity and timing for
the acquisition of dependent items (if exist) needed to satisfy the
master productionschedule.
(ii) Active planning means the actual production
planning which includes various activities directly related to the
production at micro level immediately following the prior planning.
The modules of active planning are:
g) Process planning and routing is a
complete determination of the specific technological process steps
and their sequence to produce products at the desired quality,
Planning phase has two categories of planning namely :

Prior Planning :
Modules of Prior Planning :
Product Development and Design :
Forecasting :
Aggregate Planning :
Master Scheduling :
Order Writing :
Material Requirements Planning :
Active Planning :
Process Planning and routing :
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quantity and cost. It determines the method of manufacturing a
product, selects the tools and equipments, analyzes how the
manufacturing of the product will fit into facilities. Routing in
particular prescribes the flowof work in the plant and it is related to
the considerations of layout, temporary locations for raw materials
and components and material handling systems.
h) Materials planning is a process which
determines the requirements of various raw materials or
subassemblies by considering the trade-off between various cost
components like, carrying cost, ordering cost, shortage cost, and so
forth.
i) Tools planning determines the requirement of
various tools by taking process specifications, material
specifications and equipment specifications.
j) Loading is the process of assigning jobs to several
machines suchthat there is a load balance among the machines.
k) Scheduling is the time phase of loading and
determines whenand inwhat sequence the work will be carried out.
This fixes the starting as well as the finishing time for eachjob.
(2) Action phase has the major step of dispatching.
Dispatching is the transition fromplanning phase to action phase. In this
phase, the worker is ordered to start manufacturing the product.
The tasks whichare included indispatching are:
(i) The job order number is the key item which is to be
mentioned inall other reports/orders.
(ii) Store issue order gives instruction to stores to
issue materials for manufacturing the product as per product
specifications.
(iii) As per tooling requirements for manufacturing the
product, the tool order instruct the tool roomto issue necessary tools.
(iv) Time ticket is nothing but a card which is designed to
note down the actual time taken at various processes. This information
is used for deciding the costs for future jobs of similar nature and also
for performing variance analysis whichhelps to exercise control.
(v) Generally, the process sequence will contain
some testing and inspection. So, these are to be instructed to
inspection wing in the form of inspection order for timely testing and
inspectionso that the amount of rework is minimized.
(vi) The manufacture of product involves moving raw
materials/subassemblies to the main line. This is done by a well
Material Planning :
Tools Planning :
Loading :
Scheduling :
Action Phase :
Job Order :
Store Issue Order :
Tool Order :
Time Ticket :
Inspection Order :
Move Order :
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designed materials handling system. So, proper instruction is given to
the materials handling facilities for major movements of
materials/subassemblies in the form of a move order. Movements
which involve less distance and less load are managed at the shop floor
level based onrequests fromoperators.
(3) The control phase has the following two major modules:
(i) In progress reporting, the data regarding what
is happening with the job is collected. Also, it helps to make
comparison with the present level of performance. The various data to
materials rejection, process variations, equipment failures, operator
efficiency, operator absenteeism, tool life, etc., are collected and
analyzed for the purpose of progress reporting. These data are used for
performing variance analysis which would help us to identify critical
areas that deserve immediate attentionfor corrective action.
(ii) The tasks under corrective actionprimarily make
provisions for an unexpected event. Some examples of corrective
actions are:
Creating scheduling flexibility
Schedule modifications
Capacity modifications
Make or buy decision
Expediting the work
Pre-planning and so on.
Ans. As businesses grow and production
volumes increase, the production process is often changed to a batch
method. Batch methods require that a group of items move through the
productionprocess together, a stage at a time.
Business Definitionfor: BatchProduction
A production system in which a process is broken down into distinct
operations that are completed on a batch or group of products before moving to
the next production stage. As batch sizes can vary fromvery small to extremely
large quantities, batch production offers greater flexibility than other
production.
For example when a bakery bakes loaves of wholemeal bread, a large ball
of wholemeal dough will be split into several loaves which will be spread out
Control Phase :
Progress Reporting :
Corrective Action :
Q. Explain indetail Batch Production.
Meaning of Batch Production :
Example :
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together on a large baking tray. The loaves on the tray will then together be
cooked, wrapped and dispatched to shelves, before the bakery starts on a
separate batch of, for example, crusty white bread. Note that each loaf is
identical withina batchbut that loaves canvary frombatchto batch.
Batch production is a very common method of organising manufacture. Good
examples include:
Productionof electronic instruments
Fishand chip shops
Paint and wallpaper manufacturers
Cereal farming
1. Aproductionline is set up.
2. Each worker completes one task and passing down the production line
to the next worker.
3. The workers are semi skilled or unskilled.
4. The workers must be able to switch fromone part of the production line
to another. They are called a flexible workforce
5. The production line can be changed quickly, so that different products
canbe made.
6. Often individual parts of the product are bought fromother companies
and assembled onthe productionline.
7. The production lines runs for a certain amount of time and then the
product is changed.
The batch method can be an advantage for businesses that produce a
range of products. It is cheaper to produce a number of each item in one go
because machines can be used more effectively, the materials can be bought in
bulk and the workers can specialize in that task. There are two particular
advantages of workers being able to concentrate their skills.
(1) They should become more expert at their tasks, which will in turn
increase productivity (output per worker). This will lower costs, as
fewer workers are needed to produce a set amount.
(2) Better quality products should be produced as workers are more
familiar withthe task and so canfind ways of improving it.
(3) It can reduce initial capital outlay because a single production line can
be used to produce several products
(4) Batchproductioncanbe useful for small businesses who cannot afford
to run continuous production lines. Also, companies can use batch
production as a trial run. If a retailer buys a batch of a product that
does not sell then the producer can cease production without having to
sustainhuge losses
Characteristics of Batch Production :

Advantages :
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Disadvantages :
Q. Briefly explain the purpose and concept of Line of Balance. Also
explain its procedure.
Line of Balance (LOB) :
Application Areas of LOB:
Input To LOB:
(1) Batch production requires very careful planning to decide what batch
will be produced when.
(2) Once a batch is in production it is difficult to change, as switching to
another batchtakes time and will meana loss of output.
(3) Batch methods can also result in the build up of significant work in
progress or stocks (i.e. completed batches waiting for their turn to be
worked on in the next operation). This increases costs as it takes up
space and raises the chance of damage to stock.
Ans. Line of balance is a technique which is used to
find out the state of completion of various process stages of a product which
has limited production volume at a given time. Generally, MRP system is
applied when a product has too many process stages, long lead time and large
production volume. But, in many situations the products will have limited
production volume and small lead time. Under such situations, usage of MRP
system will be uneconomical. Hence, LOB is considered to be a suitable
technique for finding out the status of completion of different process stages
whichare involved inmanufacturing a product.
Here, the actual level of completion of each process stage is compared with
its expected level of completion at a given time. This would help us in finding
out the backlog at each process stage of the product, and take appropriate
action to expedite the activities of that process stage to cope up with the
targeted level of production. This kind of status review of the product may be
done at each process stage of the product. Based on the feedback, on can
initiate corrective action to expedite things, if necessary, at each process stage.
Therefore, Line of Balance is the scale against which the progress is measured
at a giventime. The actual progress is represented by a LOBchart.
Some application areas where LOBcan be applied
are listed below:
(1) Productionof aircrafts
(2) Productionof missiles
(3) Productionof heavy machineries/equipments
(4) Productionof special equipments/machineries.
(5) Application software development projects which are having more or
less similar modules.
The list of inputs to LOBis givenbelow:
(1) Product Structure
(2) Monthly productionvolume of the product.
(3) Time of review
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(4) Cumulative units of productionat eachprocess stage.
(1) The
caused elements for these are of the order of 5 to 10 centimeters. Against
each of these elements are the time required to do job is entered. The
elements needed inbalancing are transferable work components.
(2) This can be computed
knowing the number of units needed per hour and the elemental times
required per unit.
(3) As in the above
case, if we have 60 workstations for units, each station will pass per
minute and for each station we will need two men, if the work is perfectly
balanced. But actually we may need 67 to 70 workstations. At some
stations we may have 3 menfor lesser workstation.
(4) Once missing words can decide the line speed and the space requirement
along the time.
(5) In balancing the work the cement precedence has also to be determined
for transferable work. A man getting dressed up has to put on shirts before
putting one the tie, but he can comb his hair before or after. Sometimes,
the elements sequence is absolutely necessary and sometimes it can be
changed.
(6) We have to consider
how elements will combine into job packages per man. The non-
productive activities such as picking tools or moving from one side to
another should be produced minimum. One man need not work on two or
more sides if in the time movement product and adjustment is more. If a
man has to work on a moving product for a considerable time, he will have
to walk back for starting next cycle.
Ans. Work is the basic source of our livelihood. It also
nourishes the human personality. We regard work differently at different
points of time. Our attitude towards work changes from time to time, and is
different fromculture to culture.
Work study deals with the techniques of method
study and work measurement, which are employed to ensure the best possible
use of human, machine and material in carrying out a specified activity. Work
study is concerned withfinding better ways of doing work and avoiding waste in
all its forms.
The objective of work study is to assist
management to obtain the optimumuse of the human, machine and materials
resources available to the organization for the accomplishment of the work
uponwhichit is engaged. The objective has three aspects:
Procedure of LOB:
First making a list of every minor job required for assembly :
Next is to determine the workload of time :
Then to decide the number of workstations required :
Other Considerations in Planning and Balancing :
Q. Explain Work Study and its objectives.
Introduction :
Meaning of Work Study :
Objectives of Work Study :
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(1) The most effective use of planand equipment
(2) The most effective use of humaneffort.
(3) The evaluationof humanwork.
(4) Increased Productionand Productivity
(5) Reduced Cost- Labour, material ,overheads
(6) Improved Quality
(7) Better Control of Cost
Work study has two broad areas:
(1) Method study is concerned withfinding the facts about a
situation and after a critical examination of these facts, developing a new
and better method of doing that work. It is defined as the existing and
proposed ways of doing work and the development and application of
easier and more productive methods.
The steps inmethod study are explained below:
(i) Select the work to be studied.
(ii) Record all the relevant facts of the present (or
proposed) method by direct observations.
(iii) Examine the facts critically in
sequence, using special critical examinationsheet.
(iv) Develop the best method i.e. the most
practical, economic and effective method, under prevailing
circumstances.
(v) Install that method as standard practice.
(vi) Maintaining the Method : Maintain that standard practice by regular
routine check.
(2) Time study is concerned with the establishment of time
standards for a qualified worker to performa specified job at a defined level
of performance.
The following steps are necessary for carrying out a
time study for measurement of work:
(i) To collect and complete all available information about the job, which
should also include surroundings conditions and so also the attribute
of the operations whichare likely to affect the work.
(ii) To record the details of the method and also to break down different
operations into elements.
(iii)To record time takenby the operators performthe operationmeasuring
preferably witha timing device like stopwatch.
(iv) To asses the working speed of the operators comparing the same with a
pre-determined normal speed
(v) To convert the observed time to normal time.
Areas of Work Study :
Method Study :
Steps inMethod Study :
Selection of the Job :
Record the Facts :
Critically Examine the facts :
Develop the New Method :
Install the NewMethod :
Time Study :
Steps in Time Study :
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(vi) To decide the rate of allowances which may be given over and above the
normal time of operation.
(vii) To determine the allowed time of operations.
Ans. Method study is concerned with finding the
facts about a situation and after a critical examination of these facts,
developing a new and better method of doing that work. It is defined as the
existing and proposed ways of doing work and the development and application
of easier and more productive methods. Method study is a productivity
improvement step which helps to produce same output less resources or
enable to produce more with a appropriately or proportionately less increase in
inputs. Method study ensures creativity, innovativeness, optimal decision
making power, good organization practices and better communication. It is
essential to keep following inmind:
(i) Economic Considerations
(ii) Technical Considerations
(iii)HumanFactor
Method study is the systematic
recording, analysis and critical examination of existing and proposed ways of
doing work and the development and application of easier and new production
methods. It can be applied to any field of work, but the most important areas
where it plays a major role inimproving productivity are as follows:
(1) Improved layout of office, working areas of factories
(2) Improved designof plant and equipment
(3) Improved use of materials, plant , equipment and manpower
(4) Most effective handling of materials
(5) Improved flowof work.
(6) Standardizationof methods and procedures
(7) Improved safety standards
(8) Better working conditions
The
steps inthe process of method study are:
(1) Once the method study idea is conceived, the first
step is orientation and determination of objectives. The problem must be
defined. The method study investigator face the following types of
problems and normally required to solve:
(i) Bottlenecks, whichdisrupt smoothflowof materials of processes
(ii) Products which may be required to produce economically by
applicationof lost reducing techniques.
(iii)Economic utilizationof space including land &building
(iv) Economic utilizationof labour, material and plant
Q. Explain Method Study and its Procedure.
Meaning of Method Study :
Areas of Application of Method Study :
Basic, Procedure, Steps, Process or Mechanism of Method Study :
Selection of the Job :
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(v) Elimination of idle item or non-value adding time caused due to
problems of flow, queues and congestion.
(2) In order to carry out any investigation, data or
relevant facts pertaining to the existing method must be collected and
recorded. There are a number of recording techniques developed to
simplify and standardize the work.
The recording may trace the movements of men, materials or details of
various processes. The principle is to use the simplest technique which will
containall relevant informationneeded for investigation.
The different recording techniques are:
(i) Charts (ii) Diagrams
(iii)Models (iv) Photographic aids
(3) This is the most important step in
method study. This step aims to:
(i) To eliminate the activity altogether if it is unnecessary.
(ii) To combine it withother activities.
(iii)To change the sequence of activities so that work delay is reduced
(iv) To simplify the activity to reduce the work content or time
consumption.
In this step, we will have to ask a series of questions. The questions may be
classified primary questions and secondary questions.
Purpose What is the purpose of the event? Why is it necessary?
Place Where does the event take place? Why there?
Sequence Whendoes it occur? Why then?
Person Who carries out the work? Why that person?
Means Howis the purpose achieved? Whay that particular way?
Purpose What else could be done?
Place Where else could be it done?
Sequence Whenelse could it be done?
Person Who else could do it?
Means Howelse could it be done?
When each of the above questions is applied to any
event, number of alternatives would emerge. When these have been
established, ask the following questions.
Purpose What should be done?
Place Where should it be done?
Sequence Whenshould it be done?
Record the Facts :
Critically Examine the Facts :
(i) Primary Questions :
(ii) Secondary Questions :
(iii) Alternatives :
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Person Who should do it?
Means Howshould it be done?
(4) Alternatives selected are used to reshape and
develop the newmethod, layout procedure. These may require test runs to
determine their feasibility. Tests of these natures may be preferably
carried out a place, away from the work site, if possible. To ease the
problems of acceptance for the newmethod in the department, it is good to
involve the departmental officers. The end result must be an improved
method and must be acceptable to the departmental staff and workers.
(5) To install the method, decision must be taken
on phasing in changes in production process, deciding the extent of
redeployment, training, introducing new documentation procedures,
setting new quality standards and test procedures. It is good to have a
detailed time table for effecting such changes. The end product of the
installation stage is that the new method is in operation at the work site,
the line management complete control.
(6) When a method has been installed, it tends to change slowly
for small alteration made by the operators or supervisors. A reference
standard is needed against which the job can be compared to detect any
alterations. Similarly, a corresponding document for an incentive scheme
which also contains details of the standard time for each job called a job
specification is prepared. If changes are considered to be useful, the
instructions sheet can be amended to incorporate them. If they are
unconsiderable they canbe removed throughline management.
Ans. Work Measurement is a termwhich covers several
different ways of finding out how long a job or part of a job should take to
complete. It can be defined as the systematic determination, through the use of
various techniques, of the amount of effective physical and mental work in
terms of work units in a specified task. The work units usually are given in
standard minutes or standard hours.
Work measurement involves the estimation of the amount of human effort
needed for producing a unit of specified output froman operation. The amount
of time that is usually taken by a well trained worker, operating under normal
working conditions, to produce one unit of output is referred to as work
standard.
Operations managers use work standards when assigning work to
employees, scheduling work in departments, and evaluating employee
performance. Managers use several different techniques to set work standards
Why should we need to know how long a job
should take? The answer to this question lies in the importance of time in our
everyday life.
Develop the NewMethod :

Install the New Method :
Maintain :
Q. Write a short note on Work Measurement.
Work Measurement :
Need of Work Measurement :
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Inthe business world these standard times are needed for:
(1) Planning the work of a workforce,
(2) Manning jobs, to decide how many workers it would need to complete
certain jobs,
(3) Scheduling the tasks allocated to people
(4) Costing the work for estimating contract prices and costing the labour
content ingeneral
(5) Calculating the efficiency or productivity of workers - and fromthis:
(6) Providing fair returns onpossible incentive bonus payment schemes.
The method chosen for each individual situation to be measured depends on
several factors whichinclude:
(1) The lengthonthe job to be measured intime units
(2) The precision which is appropriate for the type of work in terms of time
units (i.e. should it be in minutes, hundredths or thousandths of a
minute)
(3) The general cycle-time of the work, i.e. does it take seconds, minutes or
days to complete
Work Measurement Techniques are:
(1) Time Study (2) Predetermined Time systems
(3) Standard Data (4) Operator Reporting
(5) Work Sampling
(1) A technique for determining the amount of time required
for a qualified, well trained person, working at a normal pace to perform a
specific operation is known as Time Study. The person conducting the
study is a Time Study Analyst . But one thing needs to be remembered,
and that is that inany situationthat requires one personto determine how
much work is fair to expect fromanother person, hard feelings may result.
Hence a Time Study Analyst has a task of great responsibility.
The following steps are necessary for carrying out
a time study for measurement of work:
(i) To collect and complete all available information about the job,
which should also include surroundings conditions and so also the
attribute of the operations whichare likely to affect the work.
(ii) To record the details of the method and also to break down different
operations into elements.
(iii) To record time taken by the operators perform the operations
measuring preferably witha timing device like stopwatch.
(iv) To asses the working speeds of the operators comparing the same
witha pre-determined normal speed.
Selecting the most appropriate methods of work measurement
Techniques Of Work Measurement :
Time Study :
Steps in Time Study :
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(v) To convert the observed time to normal time.
(vi) To decide the rate of allowances which may be given over and above
the normal time of operation.
(vii) To determine the allowed time of operations.
(2) Production Standards
are established for new styles before the style goes into production. The
basis is historical data for hundreds of replications of basic motions and
elemental times that have been averaged and converted to standard times
for a specific motion. The rates are based on the time taken to execute a
method. The method of motion sequence is established first, and the time
value or rate is identified for the motion specified. Operation specifications
identify the specific method that anoperator is expected to follow.
(3) Firms may also collect their own data for repetitive
operations with similar characteristics and develop their own standard
data sets for specific operations used in the same way as predetermined
motion-time data except that the data sets are specific to the firms quality
standards, equipments and procedures.
Standard data may be developed for:
Operations,
Components,
Styles, and
Used for preliminary costing and design decisions as well as cost
estimating.
(4) This technique relates to the volume completed
during the time spent. There are no specified methods or output expectation.
The amount of work completed ina specific time frame is ofteninconsistent and
may be unreliable. This type of work measurement provides very little
informationand little incentive for increasing work efficiency.
(5) It is a work measurement method that is not concerned
with howfast a unit is completed but rather which machines are used and
activities pursued the job over an established period of time. When
production standards are needed for operations that are not highly
repetitive, work sampling is a good choice.
Determines the activities involved
Amount of time spent onthe various activities
Equipments used.
Thus the managers can estimate the production of time a worker is engaged in
work activity. The proportioncanthenbe used as a performance standard.
Pre-determined Motion Time Systems (PMTS) :
Standard Data :
Operator Reporting :
Work Sampling :
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Q. What is material management? What are its importance and
functions?
Meaning of Material Management :
Functions of Material Management :
Material Planning :
Procurement or purchasing of materials :
Receiving and warehousing
Storage and Store-administration :
Ans. Materials management may be
thought of as an integrated functioning of the different sections of a company
dealing with the supply of materials and other related activities so as to obtain
maximumcoordinationand optimumminimumexpenditure onmaterials.
The different functions of materials
management are:
(1) Sales forecasting and aggregate planning are the
basic inputs for materials planning. The different tasks under planning
are listed below:
(I) Estimating the individual requirements of parts
(ii) Preparing materials budget
(iii)Forecasting the levels of inventories
(iv) Scheduling the orders.
(v) Monitoring the performance inrelationto productionand sales.
(2) The tasks under purchasing
are listed below:
(I) evaluating and rating suppliers
(ii) Selectionof suppliers
(iii)Finalizationof terms of purchase.
(iv) Placement of purchase orders
(v) Follow-up
(vi) Approval of payments to supplier.
(3)
(4) The different tasks under stores
are listed below:
(I) Physical control of materials
(ii) Preservationof stores
(iii)Minimizationof obsolescence and damage throughhandling
(iv) Disposal and efficient handling
(v) Maintenance of stores records
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(vi) Proper locationand stocking of materials
(vii) Reconciling the materials withbook figures.
(5) This includes the following:
(I) ABCAnalysis
(ii) economical order quantity
(iii)Re-order Point
(6) Standardization, simplificationand value analysis
(7) External Transportationand material handling
(8) Disposal of scrap, surplus and obsolete materials
If these systems are designed to function independently, there wont be
close coordination among them. But we need complete integration of these
functions for better operationof the system.
(1) To minimize material cost
(2) To procure and provide materials of desired quality when required, at the
lowest possible overall of the concern.
(3) To reduce investment tied in inventories for use in other productive
purposes and to develop highinventory turnover ratios.
(4) To purchase, receive, transport and store materials efficiently and to
reduce the related costs.
(5) To take new sources of supply and to develop cordial relations with them
inorder to ensure continuous material supply at reasonable rates.
(6) To cut down cost through simplifications, standardization, value analysis,
import substitutionetc.
(7) To report changes in the market conditions and other factors affecting the
concern, to the concern.
(8) To modify paper work procedure in order to minimize delays in procuring
materials.
(9) To conduct studies in areas such as quality, consumption and cost of
materials to minimize cost of production.
Ans. The purchasing department occupies a vital
and a unique position in the organization of an industrial concern because
purchasing is one of the main functions in the success of a modern
manufacturing concern. The purchasing function is a liaison agency when
operates between the factory organization and the outside vendors on all
matters of procurement.
(1) Purchasing department is a staff function in the overall company
structure.
Inventory Control :
Importance of Materials Management :
Q. Define Purchasing Management. Also explain purchase organization
and purchase system.
Purchase Management :
Purchasing Organisation:
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(2) The internal organization of the purchasing department is on a line basis,
with purchasing agent, director of purchases or purchasing manager
being the incharge of purchase department. He is responsible for the
overall efficient operationof the department.
(3) The purchasing manager is however, assisted in purchasing by a number
of assistants and a fewclerical staff.
(4) The purchasing manager has the powers to execute purchasing contracts
for the concern. He divides the duties among the assistants according to
the nature of purchases to be made. For example- one assistant may
purchase only electrical goods another raw material, third plant
equipment and so on.
The above figure shows an organization of a typical purchasing
department. There are three main sections namely purchasing, purchase
services &records.
(i) Purchasing sectionplaces orders withvendors
(ii) Purchase service stationfollows the progress of orders at vendors.
(iii)Records section maintains all records of quotations, costs, purchases
etc.
The objective of the purchasing
function is to ensure continuity of supply of raw materials, sub-contracted
items and spare parts and at the same time reduce the ultimate cost of the
finished goods. The different parameters of purchasing are as listed below:
(1) Purchasing items withright price
(2) Purchasing items withright quality
(3) Purchasing items at right time so that the items are available when
needed.
(4) Purchasing items from right source. Here, the dependability of the
vendors are estimated using vendor rating. The location of vendors,
Objectives of Purchasing Management :
Purchasing Manager
Assistant
Purchasing
Purchase Service
Assistant
Records and
Correspondence
Assistant
Buyer
Electrical
Goods
Buyer
raw
materials
Buyer
Plant
equipments
Order
Clerk
Record
Clerk
File
Clerk
Clerk
Electrical
Goods
Clerk
raw
materials
Clerk
Plant
equipments
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nature of items, mode of transportation, vendors commitment to due
dates, etc. should be takeninto account.
(5) Purchasing items of right quantity. Generally, there is a trade-off
between cost of ordering and cost of carrying inventory. Hence, orders
should b placed withoptimal quantity.
The purchase system may be classified into PRE-
PURCHASESYSTEM, Ordering Systemand Post-Purchase system.
(1) This includes:
(i) Making requisitions
(ii) Requirement programmes
(iii)Selectionof suppliers
(iv) ObtainQuotations and evaluating them.
(2) Once the decision on supplier and the rates are
finalized, the order is placed with the selected supplier. The next task is to
place order. The details of order formare listed as:
(i) Purchase order Reference number
(ii) Descriptionof the materials and detailed specifications.
(iii)Quantity required and delivery schedule.
(iv) Price and discounts
(v) Shipping instructions
(vi) Locationwhere the materials are to be shipped
(vii) Signature of the materials manager
(viii) Detailed termof conditions.
(3) The activities which are included under this
systemare follow-up procedure, receipt and checking invoices. Whenever
anorder is placed, it should be continuously monitored.
The following are some special purchase systems:
(i) In forward buying, the purchasing decision for a
period (say 1year) will be taken in advance and the organization will
commit accordingly in terms of order quantity, rate and delivery schedule,
by taking into consideration the availability of funds and the
requirements.
(ii) Intender buying the steps are:
Preparing bidders list
Advertising tenders
Receiving bids
Evaluating bids
Placing order withthe bidder withthe lowest cost.
(iii) Inblanket order system, the organizationwill enter into
Purchase System :
Pre-Purchase System:
Ordering System :
Post-Purchase system :
Special Purchase System:
Forward Buying :
Tender Buying :
Blanket Orders :
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an agreement with its supplies to receive items for a required quantity at a
particular rate over a period of time.
(iv) Zero stock purchase system is in-line with using just-in-
time manufacturing system. The main idea of this systemis to operate the
plant withnear zero inventories.
Ans. The different aspects of purchasing
management are as follows:
(1) Price Forecasting
(2) Purchasing of capital equipments
(3) International purchasing
(4) Public Buying.
(1) Forecasting is nothing but prediction of a future
event. In materials management predicting the prices of materials is of
utmost importance. The precise prediction of prices would help us in
buying the materials inright time and of right quantity.
(i) Charting Method
(ii) Moving Average Method
(iii)RegressionMethod
(iv) Exponential Smoothing Method.
(2) All machineries and equipments
which are used in value addition process are termed as capital
equipments. The frequency of purchase of these equipment is very less,
may be once in five years or ten years. But, these equipments involve huge
capital outlay which is treated under fixed overhead. Hence, a careful
analysis should be done before buying these items.
While comparing different alternatives, one can use any one of the following
approaches to select the best alternative:
(i) Payback Period Method
(ii) Rate of ReturnMethod
(iii)Present WorthMethod
(iv) Annual Equivalent Method
(v) Future WorthMethod
The various options to satisfy the demand for capital equipment are listed
below:
a) For the purchase of new equipments,
any one of the methods which are mentioned above may be used to
judge eachalternative. Thenthe best alternative is to be selected.
Zero Stock :
Q. Explain the Aspects of Purchase Management.
Aspects of purchase management :
Price Forecasting :
Methods of Price Forecasting :
Purchasing of Capital Equipments :
Purchase of new equipment :
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b) If we purchase used equipment, the
market value of the used equipment should be treated as the price of
the equipment while comparing alternatives.
c) But the organization may have limitation on fund or it may
have very short lead tome to procure the equipment or it may want the
equipment for a short duration or such equipment will be available
only on lease. Under such cases, one has to lease the required capital
equipment.
(3) In viewof the growing global economy, many
countries are importing major raw materials, sub assemblies which are
available elsewhere at a cheaper rate at the same time the cost of
procurement i s cheaper when compared to i ndi genous
production/supply of the same. But in some cases, the raw material
should be imported just to have a minimumspecified quality standard, or
, if the raw materials are produced using hi-tech process which is not
available withinthe country.
(4) Many organizations are duplicating the same task of
purchasing even though the specifications of the materials are the same.
Whenever, an order is to be placed, there is a minimumlead time involved
to get the items in addition to the minimum time required to source a
supplier. These will certainly introduce delay in the purchase of materials
and also adds a significant cost to the total cost of purchasing.
Ans. The purchased materials are to be
stored/warehouses and issued for production as and when they are required.
As already stated, stores contains inventory mainly to provide uninterrupted
supply of materials to the productiondivisions.
The functions of stores management are:
1) To receive material goods and equipments, and to check them for
identification.
2) To receive parts and components whichhave beenprocessed infactory
3) To record the receipt of goods.
4) To correct positioning of all materials and supplies inthe stores.
5) To issue items to the users only on the receipt of authorized store
requisitions.
6) To record and update receipts and issues of materials.
7) To make sure that stores are kept cleanand ingoof order.
8) To prevent unauthorized persons fromentering the stores.
9) To make sure that materials are issued promptly to the users.
10) To ensure that the required materials are located easily
Purchase of used equipment :
Leasing :
International Purchasing :
Public Buying :
Q. What is stores management? What are the functions of stores
management?
Stores Management :
Functions of stores management :
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11) To initiate purchasing cycle at the appropriate time so that the materials
required are never out of stock.
(i) Location of the stores should be carefully decided and planned so as to
ensure maximumefficiency.
(ii) The best location of stores is one that minimizes total handling costs and
other costs related to stores operation and at the same time provides the
needed protectionfor stored items and materials.
(iii) Stores location depends upon the nature and value of the items to be
stored and the frequency withwhichthe items are received and issued.
(iv) In general, stores are located close to the points of use raw materials are
stored near the first operation, in-process materials close to the next
operation, finished goods near the shipping area and tools and supplies in
a locationcentral to the personnel and equipment served.
(v) All departments should have easy access to the stores and especially those
which required heavy and bulky materials should have stores located
easily.
(i) A good stores layout practice is one which usually brings the points or
origin, store-room and point of use in adjacent and proper sequence for
best lawof materials.
(ii) Stores layout should be planned withflowing objectives:
To achieve minimumwastage of space.
To achieve maximumease of operating.
The different systems instores are as listed below:
(1) The receipt systemmaintains proper document about
items which are received at the stores. The details on pending orders must
be arranged in chronological order of dates which should help in
scheduling labour force for unloading the items when they are received at
the stores.
(2) At the time of receiving the items at the stores,
necessary arrangement should be made to check the quality, quantity and
weight of the items before they are accepted for stocking inthe stores.
(3) There should be a proper system for maintaining
accounts of issues made to internal divisions or external division. This
should help timely to replenish stock. When items are issued to external
divisions, controls should be formal and adequate enough to take care of
payments and claims. The methods of issuing materials are:
Location and Layout of Stores :
Location :
Layout :
Stores System:
Receipt System:
Stocking System :
Issue System :
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(i) First inFirst out Method
(ii) Last inFirst out Method.
(iii)Average Price Method
(iv) Standard Price Method
(v) Market Price Method
(vi) Highest inFirst out Method.
Ans. Every enterprise needs inventory for smooth running of its
activities. The terminventory refers to stock of goods kept for sale by the firm.
(A) InTrading Concern. (B) InManufacturing Concern.
(A) In case of trading concerns, it includes only
finished goods.
(B) In case of manufacturing concern, inventory
may include:-
(i) Raw Material form a major input into the
organisation. The inventory of rawmaterials contains the items which are
to be converted into finished goods through the manufacturing process.
The quantity of raw materials required will be determined by the rate of
consumption. The factors like the availability of raw materials and
government regulations, etc. too affect the stock of rawmaterials.
(ii) The work-in-progress is that stage of
stocks which are in between raw materials and finished goods. The raw
materials enter the process of manufacture but they are yet to attain a
final shape of finished goods.
(iii) These are the materials which are needed to smoothen
the process of productione.g. fuel oil, coal.
(iv) These are the goods which are ready for
the consumers. In other words, inventory of finished goods represents
completed items whichare available for sale.
(v) Spares also forma part of inventory. Spares include those items
which are not converted into finished goods but are needed to run the
manufacturing process smoothly. The costly spare parts like engines,
maintenance spares etc. are not discarded after use, rather they are kept
inready positionfor further use.
Effective inventory
management requires an effective control system for inventories. A proper
inventory control not only helps in solving the problems of liquidity but also
Q. What is Inventory. What are the various tools or techniques of
inventory management?
Inventory :
Kinds of Inventories :
In Trading Concern :
Manufacturing Concern :
Inventory of Raw Materials :
Inventory of Work-in-progress :
Consumables :
Inventory of Finished Goods :
Spares :
Tools and Techniques of Inventory Management :
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increases profits and causes substantial reduction in the working capital of the
concern. The following the important tools and techniques of inventory
management and control:
1. Re-order point.
2. Economic Order Quantity (EOQ)
3. ABCAnalysis.
4. Inventory Turnover Ratios.
5. Aging Schedule of Inventories.
1. The re-order point is that inventory level at which an
order should be placed. Both the excessive and inadequate level of
inventory are not favourable for business. Therefore, re-order level should
not be set up very high or very low. Re-order point is calculated by the
following formula:
Re-order Level/Point = Lead Time X Average Usage
Lead time is the time period between the date of placing order and
the date of receiving delivery. Lead time may also be called procurement of
inventory.
Average usage means the quantity of inventory consumed
daily. Therefore, re-order point can be identified as the inventory level which
should be maintained for consumptionduring the lead time.
Lead time in a business is 15 days and average daily usage of
inventory is 2,000 units. Re-order point of the business will be:
Re-Order Point = 15 days X 2000 units = 30000 units.
in determining re-order point, we have assumed that lead time
and average usage rate have been correctly estimated. But in actual practice,
both of these factors are difficult to predict accurately. Receipt of rawmaterials
may be delayed beyond the estimated lead time due to strike, floods, transport
problems etc. Insuchsituation, the re-order point will be:
Re-order Point = Lead Time XAverage Usage + Safety Stock.
2. Economic order quantity is that
quantity of material for which each order should be placed. Purchasing
large quantities at one time and keeping the same as stock, increases
carrying cost of inventories but reducing ordering cost of inventories. On
the other hand, small orders reduce the average inventory level thereby
reducing the carrying cost of inventories but increasing the ordering costs
because of increased number of purchase orders. Therefore,
determination of economic order quantity is a trade-off between two types
of inventory costs:
(i) Ordering costs includes costs of placing orders and cost
of receiving delivery of goods such as clerical expenses in preparing a
Re-order point :
Lead Time :
Average Usage :
For Example :
Safety Stock :
Economic Order Quantity (EOQ) :
Ordering costs :
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purchase order, transportation expenses, receiving expenses, inspection
expenses and recording expenses of goods received.
(ii) Carrying cost include costs of maintaining or carrying
inventory, such as godown rent, insurance expenses etc. These costs vary
withinventory size.
The sum of ordering costs and carrying costs represents the total costs of
inventory. Economic order quantity is that order quantity at which the
total of ordering and carrying cost is minimum. Economic order quantity
canbe explained withthe help of following diagram:
2 x Rx O
EOQ =
C
EOQ = Economic Order Quantity
R = Annual purchase Requirements inunits
O = Ordering cost per order
C = Carrying cot per unit.
Compute the Economic Order Quantity fromthe following details:
Annual Inventory Requirements = 4,00,000 units
Cost of placing eachorder = Rs. 20
Carrying cost for one year = Rs. 4 per unit.
Carrying Cost :
:
For Example :
EOQCanbe determined by the following formula
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2 x Rx O
EOQ =
C
2 x 4, 00,000 x 20
EOQ =
4
= 2,000 units
3. ABC Analysis is a technique of controlling different items
of inventory. Usually a firm has to maintain several different items as
inventory. All these items are not equally important. Therefore, it is not
desirable to keep same degree of control on all these items. The firmshould give
more attentionto those items whose value is higher incomparisonto others.
Under this analysis all the items of inventory are classified into three
categories:-
Incategory A those items are included whichare small innumber, say, 15
percent of the total items but they are quite valuable, the value being 70
per cent of the total value of the inventory.
Category B stands midway and consists of items which are 30 percent in
number and 20 percent of the total value.
In category C those items are included which are quite large in number,
say, 55 percent of the total items but carrying little value, say, 10 percent
of the total value of inventory.
Thereby, all the items canbe classified as follows:
Class Number of Items Inventory Value
(In terms of their % of (In terms of their % of
total items) total items)
A 15 70
B 30 20
C 55 10
TOTAL 100 100
ABC Analysis can also be presented in the form of a diagram as follows:
ABC Analysis :
(i)
(ii)
(iii)
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4. Certain items of inventory are slow moving.
It means that their consumption is quite slow and capital remains locked
up in such items for along period. As a result, carrying costs continue to
incur on such items. Slow moving items can be identified with the help of
inventory turnover ratios.
Value of RawMaterials Consumed
(i) Raw Material Turnover (in times)=
Average stock of RawMaterials
Cost of Goods Sold
(ii) Finished Goods Turnover ( intimes) =
Average Stock of Finished Goods
5. Another technique of inventory
management is aging schedule. Under this technique, all the items of
inventory are classified into several age groups as on a particular date on
the basis of dates of their purchase or manufacture. A specimen of aging
schedule of inventory is as under:-
Age Date of Purchase Amount Percentage
Classification /Manufacturer of Total
0-15 March 20 1000 5
16-30 March 7 2000 10
31-45 Feb 25 3000 15
46-60 Feb 20 4000 20
61 and above Jan 13 10000 50
Total 20000 100
It is clear fromthe above that 50%of total inventory is in stock for more than 60
years.
Ans: Generally, it can be said that a product is of
satisfactory quality, if it satisfies the customer. The customer will buy a
product or service, only if it meets his or her minimum needs. He or she may
pay more for higher quality to that extent to which its increased utility exceeds
the increased cost. Quality is a measure of how closely a good or service
conforms to specified standard. Quality standards may be any one or a
combinationof attributes/variables of the product being manufactured.
The attributes will include:
(i) Performance
(ii) Reliability
Inventory Turnover Ratio :
Aging Schedule of Inventory :
Q. Explain Quality Assurance and Quality Systemindetail.
Quality Assurance :
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(iii)Appearance
(iv) Commitment to delivery time etc.
The Variables may be some measurement variables like:
(i) Length
(ii) Width
(iii)Height
(iv) Diameter etc.
in the absence of quality, the following will
result:
(i) No yardstick for comparing the quality of goods/services.
(ii) Difficulty inmaintaining consistency inquality
(iii)Dissatisfied customers due to increased maintenance and operating
costs of products/services.
(iv) Increased rework cost while manufacturing products/providing
services.
(v) Reduced life time of the products/services.
(vi) Reduced flexibility withrespect to usage of standard spare parts.
Hence, controlling quality is anessential activity.
(i) Careful considerationof product designspecifications
(ii) Adequate inspection procedure for manufactured or assembled
products.
(iii)Acceptance procedure for purchased raw materials and parts, and
control practices to maintainquality levels inin-process stage.
(iv) Commitment from top management, lower levels of management and
supervisors towards quality
(v) Formulation for quality assurance procedures which are necessary to
integrate and coordinate all these functions.
There is no simple way to define a quality system. Ingeneral,
a quality systemis a part of overhead. The systemdoes not add any value to the
products. It only ensures that the product works and meets customer
expectations. A quality system is a process that combines with manufacturing
process to ensure that a manufacturing process produces quality-perfect
product. The scope of a quality systemis more thana manufacturing process.
(i) Supplier Quality
(ii) Incoming rawmaterials quality
(iii)Process quality
(iv) Final Inspection
(v) Customer quality
Need for Controlling Quality :
Components of Product Quality :
Quality System:
Strategic Areas of quality control program in manufacturing are as
follows :
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Graphic Presentation of Strategic Areas of Quality Control Programme :
Strategic Areas of Quality Control Programme.
Manufacturing
Process
Master Scheduling
Material planning
Purchasing
Receiving, store keeping
Process
Final assembly test
Shipping
Product to the Customer
Supplier
Incoming
material
Process
control
Final
Inspection
Customer
quality
Quality
Process
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Q. Explain the Statistical Quality Control Techniques indetail.
Statistical Quality Control Techniques :
Control Charts :
Generalized Representation of Control Chart :
Ans. The quality control
techniques canbe classified as shownbelow:
(A) Control charts showthe performance of a process from
two points of view.
(i) First, they show a snap shot of the process at the moment the data are
collected.
(ii) Second, they show the process trend as time progresses. Process trends
are important because they help in identifying the out of control status if it
actually exists. Also, they help to detect variations outside the normal
operational limits, and to identify the causes of variations.
Statistical Quality Control Techniques
Control Charts
Acceptance Sampling
For Variables For Attributes For Variables For Attributes
`X Chart
R Chart
P Chart
C Chart
Plan with
Plan with
and
a
a b
Single Sampling Plan
Double Sampling plan
Multiple Sampling plan
Y
Upper Control Limit
Central Line
V
a
r
i
a
b
l
e
Lower Control Limit
(Time/Sample Number)
0
X
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In this figure, the x-axis shows observation number in sequence. The y-
axis shows the sample value of the observations. There are three namely, upper
control limit, lower control limit and central line. The central line is withrespect
to the average of the observations.
The Upper control limit and lower control limit jointly specify the range
over which each sample observation can lie. After plotting all the sample
observations on the chart, we should look for the pattern of those plots. If any
sample observation is outside of these two limits, then we conclude that the
process is out of control, and definitely requires corrective action.
Control chart may be classified as follows:
(1) Control Charts for Variables
(2) Control Charts for Attributes
(1) As the name indicates, these charts will
use variable data of a process. Control charts for variables are further classified
into two categories:
(i) This chart gives an idea of the central tendency of the
observations. These charts will reveal the variations between sample
observations.
The formulas used to establish various
control limits are as follows:
Upper Control Limit, UCL = + 3
Lower Control Limit, LCL ? = X - 3
X = Meanof a sample
X = Meanof the Sample means
= Sample Standard Error
(ii) Rchart gives an idea about the spread of the observations. This
chart shows the variations withinthe samples.
Control Limits for R Chart: The formula used to establish various control
limits are as follows:
Upper Control Limit, UCL = R+ 3
Lower Control Limit, LCL = R - 3
Where R = Range of a sample observations
= Standard deviationof R
Classificationof Control Charts :
Control Charts for Variable :
X Chart :
Control Limits for XChart :
RChart :
`
`
=
s
=
`
=
`
`
X
x
R R
R
s
s
s
s
s
R
R
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Procedure to construct Xchart and Rchart :
Control Charts for Attributes :
P-Chart :
Purpose of P-Chart :
(i) Identify the process to be controlled.
(ii) Select the variable of interest.
(iii) Decide a suitable sample size and number of samples to be
collected.
(iv) Collect the specified number of samples over a giventime interval.
(v) Find the measurement of interest for eachpiece withinthe sample.
(vi) Obtain mean ( X) of each sample. And also obtain the range of each
sample.
(vii) EstablishControl limits for Xand Rcharts
(viii) Incorporate the control limits on Xand RCharts
(ix) Plot Xand Rvalues in Xand Rcharts, respectively.
(x) Hunt for assignable causes when the process is out of control. We
cansay that a process is out of control if
Some points are outside the extreme control limits.
When X Chart is used along with R chart, it tells when to leave the process
alone and whento chase and hunt for the cause whichleads to variation.
(2) In many situations quality
measurements are expressed as attributes (good or bad etc.). In such
situations, the percent defective chart (P-chart) or the number of defective
per sample area (C-chart) are considered to be more suitable control
charts to control the quality.
(i) The other name for P-chart is percent defective chart. P-
chart is based ona normal distribution.
The purposes of this chart are summarized below:
(a) To discover the average proportion of non conforming articles or parts
submitted for inspectionover a period of time.
(b) To bring to the management attention, if there is any change in average
quality level.
Control Limits for P-Chart: The formulas for control limits are as follows:
Upper Control Limit, UCL = P + 3
Lower Control Limit, LCL = P - 3
P = Process percent defective of a sample = (Number of defective items
ina sample)/n
P = Process meanpercent defective
`
`
`
`
` `
`
s
s
P
P
P
P
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N = Sample Size
= Standard deviationof percent defectives
(ii) This chart is based on the Poisson distribution. Some
applications of C-chart are listed below:
To control the number of nonconforming rivets inanaircraft wing.
To control the number of defects in final assemblies ( like, TV, radio,
Computer, etc.)
Upper Control Limit, UCL = c +3 c
Upper Control Limit, UCL = c - 3 c
Where c is the mean number of nonconformities. Also, this is the central line in
the control chart.
(B) The objective of acceptance sampling is to take
decision whether to accept or reject a lot based on samples
characteristics. The lot may be incoming materials or finished parts.
An accurate method to check the quality of lots is to do 100% inspection. But,
100%inspectionwill have the following limitations:
(i) The cost of inspectionis high.
(ii) Destructive methods of testing will result in100%spoilage of the parts.
(iii)Time takenfor inspectionwill be too long.
(iv) When the population is large or infinite, it would be impossible or
impracticable to inspect eachunit.
There are two types of acceptance sampling:
(1) Here decision regarding acceptance
or rejection is based on number of defectives found in a sample. A sample
is taken froma lot and good items and defective items are separated. Then
the number of defective items is compared with the allowable limit stated
in sampling also. If the number of defective items is less than the allowable
limit, the lot is accepted, otherwise rejected. This type of sampling is used
widely because of its simplicity.
(i) In such type of plan decision to accept or
reject a lot is taken on the basis of the results of the first sample. The
design of single sampling plan with a specified producers risk and
consumers risk is demonstrated in this section. The required data for
designing suchplanare as follows:
(a) Producers risk
(b) Consumers risk
sP
C-Chart :
Control Limits for C-chart :
Acceptance Sampling :
Types of Acceptance Sampling :
Attribute Acceptance Sampling :
Single Sampling Plan :
c
c
` `
` `
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(c) Acceptable Quality Level
(d) Lot Tolerance Percent Defectives
(ii) In the single sampling plan, based on the
outcome of the sample, we either accept or reject the lot. But in double
sampling plan, at the maximum, two samples will be drawn before
accepting/rejecting a lot. If the outcome of the first sample is not to
accept the lot, then one more sample is drawn. Based on the combined
quality level of the sample, final decision will be made. The plan is
explained withthe following input:
n = size of the first sample
n = size of the second sample
A= Acceptance number for sample 1.
A= Acceptance number for sample 2
R= Rejectionnumber for sample 1
R = Rejectionnumber for sample 2.
The procedure for double sampling
planis summarized below:
Input sample sizes, n1 and n2. Acceptance numbers, A1 and A2.
Rejectionnumbers, R1 and R2.
Take and inspect a sample of size n1.
If the number of defective pieces X1 inthe first sample is
a) Less thanor equal to A1 , thenaccept the lot and stop.
b) Greater thanor equal to R1, thenreject the lot and stop.
c) InbetweenA1 and R1 but excluding A1 and R1, thengo to step 3.
Take and inspect a second sample of size n2. Let the number of
defective pieces inthe second sample to X2.
If the number of defectives founds in both the sample (X1 +X2) is
less than or equal to A2, then accept the lot and stop, otherwise reject the
lot and stop.
(iii) Under this plan, several samples are taken
until a decision to accept or reject a lot is reached. It known as sequential
sampling planalso.
(2) In practice, acceptance sampling
by variables is most widely used. This is mainly because, most of the
attributes are either reject/accept type. Also, the cost of data collection for
such measure is less. But, acceptance sampling by variable may yield the
desired result with less number of samples. This plan also uses producers
risk () and consumers risk ().
Double Sampling Plan :
Procedure for Double Sampling Plan :
Step 0 :
Step 1 :
Step 2 :
Step 3 :
Step 4 :
Multiple Sampling Plan :
Acceptance Sampling by Variables :
1
2
1
2
1
2
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Q. Explain Maintenance Management indetail.
Maintenance Management :
Objectives of Maintenance Management :
Types of Maintenance System:
Repair Maintenance :
Preventive Maintenance :
Ans. The efficiency of the production function
solely depends onthe functional reliability of the productionfacilities whichare
nothing but a package of land and building, plant and equipment and tools and
plant services such as material handling, power plant, gas and steamlines,
water supply etc. All these facilities are subjected to wear and tear either simply
by elapse of time or by the frequency of their use. For the maintenance of the
functional reliability of all these facilities, plant maintenance is considered as
an important service function of modern production management. The basic
objective of plant maintenance is to keep all the production facilities in a
constant and smooth servicing condition. It is a service function and thus
involves indirect costs of productionactivity.
(1) One of the most important objectives of maintenance management is to
improve functional reliability of the production facilities. The functional
reliability of the production facilities can be maintained or improved as
under:
(i) To employ sufficient maintenance staff and to provide adequate repair
and maintenance facilities.
(ii) To provide for reasonable slacks in the production system so that the
parallel paths canbe developed inancritical situation.
(iii)To provide for the stand by equipment for key operations.
(iv) To adopt the preventive maintenance system so that the critical parts
canbe replaced before they fail.
(2) Maintenance extends the useful life of assets by reducing wear and tear.
In developing countries replacement of assets is not always economical
and hence the importance of maintenance.
(3) Maintenance keeps up operational rediness of all equipments required for
emergencies.
(4) Maintenance contributes a great deal to safety of man power using the
facilities.
(5) It prevents wastage of spares, tools and materials.
It is of two types:
1. When any sudden break-down occurs in any
machine or plant service, the repair maintenance staff endeavours to
locate any mechanical, electrical or some such fault and to correct it
immediately. The repair maintenance functionmay be of a major nature or
it may be minor one.
2. Repair maintenance attempts to repair the
break-down, while preventive maintenance attempts to prevent any
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probable break downresulting inproductionstoppages. It follows a slogan
that prevention is better than cure. Preventive maintenance ensures
smooth and continuous production flow. It eliminates any chances of
breakdown and industrial accidents. It controls vibration and noise
transmission and thus prevents any adverse effects on the morale of
workers. Preventive maintenance is carried as under:
(i) Eliminating of overloading onequipments or plant services.
(ii) Regular cleaning, greasing and oiling of moving parts.
(iii)Replacement of wornout parts before they fail to operate.
(iv) Parts of equipments which are liable to sudden failure should be
installed induplicate e.g. pumps, motors etc.
(i) Production
directly contributing to the productionoperations and so the maintenance
instrategic innature.
It is a time scheduled inspection of all
production departments conducted with a view to detect any wear and
tear of the equipment or any plant. A predetermined schedule is
prepared for the inspection of each part of the machines and
equipment.
The routine maintenance of the production
department involves the cleaning of work bench, cleaning, greasing
and oiling of machines, tightening the bolts, recharging of batteries etc.
It is of a repetitive nature and is done more frequently than
anticipationary inspection.
(ii) It is equally important for
the various types of plant services. Though they do not directly contribute
to the production like other production departments, they play a key role
in the production operations. The important plant services requiring
preventive maintenance are ground and flouring, building , power plants,
material handling equipment, water supply, waste disposal systems,
store-room, tool room, fire fighting facilities etc.
Some ratios which could be used for
measuring the effectiveness of maintenance functionare:
Waste Quantity (WQ)
Waste Index = -
Output Quantity (OQ)
Classificationof Preventive Maintenance Function :
Preventive Maintenance of Production Departments :
Anticipationary Inspection :
Routine Maintenance :
Preventive Maintenance of Plant Services :
Maintenance Performance Ratios :
(i) Waste Index :
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Output (Product)
Productivity =
Maintenance Cost
Maintenance Cost
Maintenance Cost Index = X100
Capital Cost
BreakdownHours
BreakdownMaintenance Index =
Manhours available
Downtime Hours
Downtime Index = X100
Productionhours
(ii) Productivity of Maintenance :
(iii) Maintenance Cost Index :
(iv) Breakdown Maintenance Index :
(v) Downtime Index :
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JULY 2009
JULY 2008
UNITI
UNITII
UNITIII
UNITIV
UNITI
UNITII
1. What are the basic criteria for determining the nature of production?
Contrast continuous and intermittent production.
2. How do product and process layout differ from each other? explain the
conditions under whicheachof the two types is appropriate and why?
3. Identify the basic issues of capacity management and describe how these are
treated indetailed capacity planning?
4. Discuss the steps involved in aggregate planning process. Outline the
advantages and disadvantages of the strategies of aggregate planning.
5. What do you mean by batch production? Explain its merits and demerits.
Under what circumstances you will recommend one organization to go for
batchproduction.
6. Why work study is conducted? Discuss the pre-requisites and procedure of
conducting a work study.
7. Define the termsafety stock and E.O.Qwiththe help of ideal inventory model.
8. What do you mean by statistical quality control? Explain the importance of
control charts for variables and attributes.
1. What do you mean by production management? Discuss the major decision
areas of productionmanagement?
2. Discuss the significance of material handling equipment. What factors must
be taken into consideration while selecting the material handling
equipments?
3. Explain the meaning and significance of capacity planning. Discuss the basic
techniques of capacityplanning.
4. Outline the basic purpose of material requirement planning (MRP) and
explainhowanMRP systemcanachieve these purposes.
Past Year Question Papers
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UNITIII
UNITIV
UNITI
UNITII
UNITIII
UNITIV
UNITI
UNITII
UNITIII
5. What is Batch production? Discuss it detail how planning and controlling is
done inbatchproduction?
6. Define work measurement. Explainthe techniques of work measurement.
7. What do you mean by materials management? Explain its scope and
importance.
8. Define acceptance sampling. Discuss the significance and procedure of
implementing acceptance sampling.
1. Define production and production management. Discuss the scope and
functions of productionmanagement.
2. Examine the importance of location decisions. Which are the factors that
influence these decisions?
3. What is capacity? How is it measured? Discuss the process of capacity
planning.
4. What are the features of aggregate planning? How are aggregate plans
prepared? Explainand illustrate.
5. Describe the merits and demerits of batch production. How is the batch size
determined init?
6. Write a detailed note onthe charts used inmethod study.
7. a) Purchasing Management
b) Maintenance Management
8. i) Acceptance sampling
ii) Functions of Purchasing Department
1. Briefly describe various decisionareas of productionmanagement.
2. Discuss the various factors considered during facility locationdecision.
3. Discuss the process of product selection.
4. Write a note onmaterials requirement planning.
5. What is Batch procution? Discuss in detail how planning and controlling is
done inbatchproductionproduction?
6. Explain the challenges faced by the public sector banks in India. Also specify
the steps takenby theminthis connection.
JAN 2008
JULY 2007
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UNITIV
UNITI
UNITII
UNITIII
UNITIV
UNITI
UNITII
UNITIII
7. i) PURCHASINGMANAGEMENT
i) MAINTENANCEMANAGEMENT
8. i) STORESMANAGEMENT
ii) ACCEPTANCESAMPLING
1. What id production management? Discuss the major short-term decisions of
productionmanagement.
2. Why are layout decisions called strategic decisions? Discuss the relative
merits and demerits of line and functional layout.
3. Explain the steps involved in capacity planning. How is capacity changed in
long run?
4. Explain the concepts of aggregate planning and master production
scheduling. What are the steps inpreparing aggregate plans?
5. What are the features of batch production? Taking a hypothetical example,
howis the economic batchsize determined?
6. Describe the procedure of work measurement. Explain the work sampling
technique of work measurement.
7. Discuss the objectives of purchasing management and its role in materials
management. Howdoes it help inreducing the inventory costs?
8. Write short notes on:
a) Economic order quantity
b) Maintenance management
1. Explain the meaning of production management. Discuss the major decision
areas of productionmanagement.
2. Define Facilities layout. What are the modes of facilities layout? Discuss with
examples.
3. What do you mean by Capacity Planning? Explain the methods of planning
the capacity.
4. What is the significance of material requirement planning? How is it
performed?
5. Under what circumstances you suggest a firm to go mass production?
Discuss the benefits and limitations of mass productionsystem.
JAN 2007
JAN 2006
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6. Define the term work measurement. Explain the procedure and instruments
used inwork measurement.
7. Explain the meaning and types of inventory. Discuss the two most common
methods of inventory management in a large scale manufacturing
organisation.
8. What do you mean by Acceptance Sampling? How does the acceptance
sampling help inquality assurance?
1. What is a production system? Discuss the relative merits and demerits of
production-to-order and production-to-stock systems.
2. Why are locationdecisions called strategic decisions? Discuss the factors that
influence the selectionof a location.
3. Explain the steps involved in product development. When should the existing
product be phased out?
4. What are the basic inputs for MRP? What are the steps in preparing material
requirement plans?
5. What are the features of mass production? Taking a hypothetical exmple
explainthe process of line balancing inmass production.
6. Distinguish between method study and work measurement. Explain the
charts used inmethod study.
7. Discuss the meaning and objectives of materials management. How does it
help inreducing the cost of producion?
8. Describe the procedure for construction of mean and range charts. With the
help of anexample, showhoware UCL and LCL determined for these charts.
1. Define production management. What are the major decision areas of
productionmanagement?
2. What is the role of infrastructure in determining the location of facilities?
Explainthe social dimension inthe locationdecisions.
3. What is process selection? Discuss the various factors influencing process
design.
4. a) Write brief notes onPull systemand Push system
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b) Discuss the relevance of material requirement planning in the indian
context.
5. Define Production planning and control. What is its purpose? What
techniques are employed to achieve this purpose?
6. Distinguishbetweenthe following
i) Shop-floor productionand batchproduction
ii) Method study and work measurement
7. a) Describe the purchase cycle indetail.
b) Outline the organisationstructure for purchasing.
8. Define quality assurance. Discuss its advantages. Elaborate the various
factors affecting quality assurance.
1. What is a production system? Discuss the relative merits and demerits of
production-to-order and production-to-stock systems.
2. What are location decisions called strategic decisions? Discuss the factors
that influence the selectionof a location.
3. Explain the steps involved in product development. When should the existing
product be phased out?
4. What are the basic inputs for MRP? What are the steps in preparing material
requirement plans?
5. What are the features of mass production? Taking a hypothetical example
explainthe process of line balancing inmass production.
6. Distinguish between method study and work measurement. Explain the
charts used inmethod study.
7. Discuss the meaning and objectives of materials management. How does it
help inreducing the cost of production?
8. Describe the procedure for construction of mean and range charts. With the
help of anexample, showhoware UCL and LCL determined for these charts.
1. Explain the meaning of production management. Discuss the major decision
areas of productionmanagement.
2. Define Facilities layout. What are the modes of facilities layout? Discuss with
examples.
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3. What do you mean by capacity planning? Explain the methods of planning
the capacity.
4. What is the significance of material requirement planning? How is it
performed?
5. Under what cirumstances you suggest a firmto go mass production? Discuss
the benefits and limitations of mass productionsystem.
6. Define the termwork measurement. Explain thje procedure and instruments
used inwork measurement.
7. Explain the meaning and types of inventory. Discuss the two most common
methods of inventory management in a large scale manufacturing
organisation.
8. What do you mean by Acceptance Sampling? How does the acceptance
sampling help inquality assurance?
1. Define production management. What are the major decision areas of
productionmanagement?
2. What is the role of infrastructure in determining the location of facilities?
Explainthe social dimension inthe locationdecisions.
3. What is process selection? Discuss the various factors influencing process
design.
4. a) Write brief notes onPull systemand Push system.
b) Discuss the relevance of material requirement planning in the Indian
context.
5. Define production Planning and Control. What is its purpose? What
techniques are employed to achieve this purpose?
6. Distinguishbetweenthe following:
i) Shop-floor productionand batchproduction
ii) Method study and work measurement.
7. a) Describe the purchase cycle indetail.
b) Outline the organisationstructure for purchasing.
8. Define quality assurance. Discuss its advantages. Elaborate the various
factors affecting quality assurance.
JULY 2004
244
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Meaning of Production Management

Planning phase has two categories of planning namely :

Characteristics of Batch Production :

Develop the NewMethod :

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