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Operations Management 1
Operations Management 1
Operations Management 1
Part A
Discuss the changing philosophy of operations management. What are
the new trends in operations management
ANSWER.
(1) Operations management has two important components namely:
A . Operations systems and procedures
B . Philosophy.
The performance of the organization is greatly influenced by the
philosophy or mental framework of the people involved. management
philosophy influences the decision making and thought process in the
organization. It provides a working environment and work culture & which
makes all the difference to the organization. Operations management is
concerned with all these aspects rather than must producing goods and
services.
In todays operations management & the focus has shifted from the earlier
concept of large scale production and cost reduction to new methodologies&
new approaches& new tools& system(s simplification& continuous
improvements & total quality management and just in time manufacturing.
The operations management are not limiting their options to the new
technologies development & automation and computerization & but are
looking beyond with new approaches and perspectives.
The following are factors affecting Operations Management:
1. Reality of global competition
2. Quality& customer service and cost challenges
3. Rapid expansion of advanced technologies
4.Continued growth of the service sector
5. Scarcity of operations resources
ANSWER
Plant location refers to the choice of region and the selection of a particular site
for setting up a business or factory. But the choice is made only after
considering cost and benefits of different alternative sites. It is a strategic
decision that cannot be changed once taken. If at all changed only at
considerable loss, the location should be selected as per its own requirements
and circumstances. Each individual plant is a case on its itself.
Businessman should try to make an attempt for optimum or ideal location.
Examples of plant location in the case of India include, most textile mills are
found in or near Mumbai and Ahmedabad because of the humidity conditions
that prevail there. Another is sites for nuclear power plants to be located in
different parts of the country largely depend upon environmental, safety, socioeconomic and also the engineering factors affecting the construction and
operation of such plants. Lastly, steel plants are generally located near the
Jharkhand, Bengal, Chhattisgarh and Orissa regions. This choice of site is
mainly because of more economical transport of the finished goods as
compared to basic raw materials.
Part B
1A .Why is materials planning needed?
Material planning is needed because it forces the planner to determine the
total material required during the year, to examine its required specifications
and fixing of acceptable limits of the materials i.e at what limit a material is to be
rejected and at what stage a material can be accepted
(iv)
Engineering department: for the specification of materials,
quality requirements, product research
(v) Personnel department: for planning the materials, management
department, vendor relationships, advertising, public relations etc.
(vi)
Top management: as an important profit center, top
management has a great concern for materials management
2. Culture
An important component of quality management systems is influencing the
culture of the organization. A quality-oriented company culture values the
characteristics of quality that the system measures and strives for continuous
improvement. Such a culture orients itself toward the customers and fulfilling
their needs. When there are problems with quality, employees are ready to take
responsibility for possible mistakes and focus on avoiding them in the future.
This orientation is a key factor in improving the test results that measure quality.
3. Training
Quality management systems detail the skills, training and qualifications that
are prerequisites for carrying out specific tasks. When problems arise despite
the skill of employees, additional training may be required. When employees
don't achieve the quality goals the company sets for them, the test results often
indicate the sources of problems and the kind of training that will improve
performance. If a company can measure the quality of its products and cultivate
a quality-centered culture, employees are motivated to take the appropriate
training so they can achieve the company's quality goals
Finally, the main objective of TQM may put the customer at the center of every
activity and consider the process as customer driven, but all other factors which
do not involve the customers have to be taken into consideration for the
successful implementation of TQM.
(C).In what way the approach to Total Quality Management has changed
over the last ten years?
essential that programs are structured to meet the needs and situations of
individual companies. Whilst some may benefit from a fully integrated program,
others have realized that there are significant payoffs to be gained from a more
modest or tailored approach designed to solve specific problems or achieve
defined, targeted improvements. The scope and scale are up to the client
company to choose.
Case study
Paradise Land Management Company
Paradise Land Management owns and operates hotels and apartment
complexes near a major metropolitan area. They want to expand operations in
the near future, the goal being to increase net earnings before taxes. Two
alternative expansion opportunities are under considerations: the Densmore
complex and the Highgate project. Both projects involve the purchase of land
on which apartment building would be constructed and operated.
The site for the Densmore complex is situated in a respectable, quite,
sparsely populated residential neighborhood. Land for the 70-unit complex
can be purchased for $60,000. Building costs are estimated at $1,680,000.
Annual maintenance costs would amount to $30,000. Apartment units would
rent for $410 per month. Paradise is also conidering constructing a recreation
facility nearby. It would cost $100,000 and would service both Densmore
residents and the residents of the company owned Paradise west, the only
existing apartment complex in the neighborhood. Paradise west, with 120
units renting for $290 per month, has had an average occupancy rate of 84%
for the past three years. The addition of Densmore and the recreation facility
are expected to increase Paradise Wests occupancy rate to 90% (probability
0.6) or 95% (probability 0.4). Densmores occupancy rate is expected to be
90% (probability 0.5), 85% (probability 0.3), or 80% (probability 0.2).
The highgate project calls for 400 units to be constructed on land costing
$220,000 in a high density population neighborhood with many competing
apartments. Building costs would be $4,200,000. Rental revenue per unit
would be $240 per month; anuual operating costs would be $150,000.
Highgates occupancy rate is expected to be 90% (probability 0.2), 80%
(probability 0.5), or 70% (probability 0.3).
2.
Quantity
Here, one need to ask how much of the products will be needed? Well, in
choosing their construction site, Paradise Land Management needs to
consider providing enough products for its targeted customers. The quantity of
products should match with their projected number of customers
3.
Time
It is important to know when the product will be needed by your customers.
Therefore the timing for Paradise Land Management Company should be with
respect to peoples needs at the time of supply so as to avoid providing
products/services that are not demanded by their customers which might lead
to losses.
4.
Place
Where the hotel and apartment for paradise land Management Company will
be situated is very crucial because that will determine the choices that
customers will have in making their decision. It doesnt matter if the building
costs for the project at Dens more will be high, so long as the project will yield
high returns after its finished, then this place would be the best place to build
in.
Part C
ASSIGNMENT 3: SOLUTIONS
1E
6A
11C
16III
21A
26D
2C
7A
12D
17B
22D
27C
3B
8D
13D
18A
23D
28D
4IV
9E
14B
19D
24D
29D
5D
10B
15A
20C
25B
30D