SET II

1. Describe indirect inventories with. Give suitable example.

Indirect inventories are those materials which help the raw materials to
get converted into the finished products, but do not become an integral
part of finished products. Indirect inventories are further classified as:
Tools
Various tools used for processing are
Standard tools Lathe tools, milling cutters, drill
etc
Hand tools Hand saws, chisels, drill gums,
hammers, mallets, pliers, spanners, wrenches,
punches etc.
Supplies
2. Describe the time series model for forecasting.
3. Draw the organization chart of PPC department.

The PPC department must be carefully organized to carry out the

activities and procedures established in the planning system.

4. Describe briefly VED analysis.

VED analysis specially pertains to the classification of maintenance
spare parts. The spares are split into three categories of importance from
the view point of functional utility.
V Vital Items, without which production would come to halt.
Those items would render the equipment or whole line operation in the
process totally and immediately inoperative, unsafe. If these items go out
of stock or are not readily available there will be loss of production.
 E Essential items, without which the performance or efficiency of
the equipment will be reduced. Non-availability of these items may result
in temporary loss of productivity.
D Desirable Items. The remaining items which do not cause any
immediate loss in production fall under this category.
5. Name the types of forecasting and their uses.

There are two types of forecasting:

Short term forecasting

Long term forecasting
6. With the help of neat diagram explain
(i) Order quantity
(ii) Lead time
(iii) Safety stock

Order quantity:

If the inventory is plotted against time, the result looks like a saw
tooth pattern. Starting from the instant when inventory is in stores, it
consumes gradually in as quantity form at uniform rate and again the
inventory raises to the original level when a fresh stock (order) is arrived.

Lead time:

There is always some interval between the time the need for the
material is determined and the time the material is actually received. This
period is known as lead time.

Safety stock:

If the use rate and lead time could be predicted correctly, it would be
possible to limit maximum inventory of items to the order quantity. In
this case the maximum inventory would be equal to the order quantity.

7. State the advantages of PPC.

1. Avoidance of Rush Orders
Production is well planned and its time aspects are well controlled.
Therefore, production control reduces the number of risk-orders and
overtime works on plant.
2. Avoidance of Bottlenecks
The incomplete work does not get accumulated because production
control maintains an even flow of work.
3. Cost Reduction
Production control programmes minimizes the idleness of men and
machines, keeps in process inventories at a satisfactory level, leads to a
better control of raw materials inventory, reduces costs of storage and
materials handling, helps in maintaining quality and containing rejection
and thus reduces unit cost of production.
4. Effective Utilization of Resources
It reduces the loss of time by the workers waiting for materials and
makes most effective use of equipments.
5. Co-Ordination
It serves to co-ordinate the activities of plant and results in a concerted
effort by workmen.
6. Benefits to Workers
Adequate wages, stable employment, job Security, improved working
conditions, increased personal satisfaction, high morale.
7. Efficient Service to Customers
It ensures better service to the customers by enabling production to be
conducted in accordance with the time schedules and therefore deliveries
are made on promised dates.