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Production Operations Management - MGT613 2010 Final Term Solved Papers All in One File
Production Operations Management - MGT613 2010 Final Term Solved Papers All in One File
Production Operations Management - MGT613 2010 Final Term Solved Papers All in One File
FINALTERM EXAMINATION
Spring 2010
MGT613- Production / Operations Management
Answer:
Control Charts is a time ordered plot of sample statistics. It is used to distinguish
between random variability and non random variability.
Use of c-Charts:
Use only when the number of occurrences per unit of measure can be
counted; non-occurrences cannot be counted.
Scratches, chips, dents, or errors per item
Cracks or faults per unit of distance
Breaks or Tears per unit of area
Bacteria or pollutants per unit of volume
Calls, complaints, failures per unit of time
FINALTERM EXAMINATION
Spring 2010
MGT613- Production / Operations Management
FINALTERM EXAMINATION
Spring 2010
MGT613- Production / Operations Management
► Rs.350
► Rs.380
► Rs.384
► Rs.375
Calculation: Incremental Holding Cost= H ( d/365)
H=Annual Holding cost for the item.
d = Time savings in days and d/365 is fraction of year saved.
Incremental Holding Cost= 70,000 (2/365)
=383.56 or 384
► Bottleneck operations
► Straight line flow pattern (or adaption)
► Work stations close together
► Open plant floors (high visibility)
► 6.02
► 2.0
► 0.99
► 0.006
Availability = (MTBF)/(MTBF + MTR)
MTBF = Mean time between factor =300
MTR = Mean repair time =2 hours
Availability = (300)/(300+2)=300/302= 0.99
► a, b, d, c, f, e
► a, b, c, d, e, f
► a, b, c, f, e, d
► a, b, d, e, f, c
The Control Process consists of the following important stages.
1. Define
2. Measure
3. Compare
4. Evaluate
5. Correct
6. Monitor results
Which one of the following is the correct payoff under MAXIMIN approach?
► Rs. 8,000
► Rs. 12,000
► Rs. 18,000
► Rs. 20,000
Determine the worst possible payoff for each alternative, and choose the
alternative that has the “best worst.”
Small 10,000
facility
Medium 12,000
facility
Large 18,000
facility
Reduce lead times: Production lead times can be reduced by moving work
stations closer together, applying group technology and cellular manufacturing
concepts, reducing queue length (reducing the number of jobs waiting to be
processed at a given machine), and improving the coordination and cooperation
between successive processes; delivery lead times can be reduced through
close cooperation with suppliers, possibly by inducing suppliers to locate closer
to the factory.
Answer:
Benefits of PERT analysis:
Following are the benefits of PERT analysis:
1.Expected project completion time
2. Probability of completion before a specified date
3. The critical path activities that directly impact the completion time
4.The activities that have slack time and that can lend resources to critical path
activities
5. Activities start and end dates.
6. PERT Charts are able to visually document complex projects.
FINALTERM EXAMINATION
Spring 2010
MGT613- Production / Operations Management
► Multifactor
► Partial
► Single
► Total
► Develop alternatives
► Monitor results
► Consider risk averseness strategies
► Specify criteria for decision
The decision making process involves the following six important steps:
1. Specify Objectives and the Criteria for decision making
2. Develop Alternatives
3. Analyze and compare alternatives.
4. Select the best alternative.
5. Implement the chosen Alternative
6. Monitor the results to ensure the desired results are achieved
► Facilities
► Product mix
► Processes
► Operations
There are 7 determinants of effective capacity
1 Facility.
2 Product and service factors
3 Process factors
4 Human factors
5 Operational
6 Supply chain factors
7External factors.
Question No: 9 ( M a r k s: 1 ) http://vuzs.net
Which one of the following defines the range of the smoothing constant (Alpha)?
► 2 and -2
► 1 and -1
► 0 and -1
► 0 and 1
The smoothing constant must be a value in the range 0.0-1.0.
► Smoothing constant
► Actual forecast
► Forecast error
► Previous forecast
α= Alpha smoothing constant.
► Manufacturability
► Remanufacturing
► Robust design
► Automation
Design for Remanufacturing: Using some of the components of the old products in the
manufacture of new products.
► Edwards Deming
► Joseph Juran
► Kaoru Ishikawa
► Philip Crosby
The PDSA Cycle (Deming Wheel): The concept of the PDCA Cycle was first introduced by Walter
Shewhart, the leading statistician, who also developed statistical process control.
► Reliability
► Conformance
► Serviceability
► Aesthetics
Serviceability refers to services after sale.
► Armand Feigenbaum
► G.S Radford
► W. Shewhart
► David Gravin
Walter Shewhart is also known as “Father of statistical quality control”
► Plan
► Do
► Check/Study stage
► Act
CHECK: Evaluate the data collection during this phase.
► Rs. 995
► Rs. 5000
► Rs. 1050
► Rs. 200
Total cost of inventory = total units × carrying cost per unit = 1000×5=5000
► (Q-2)H
► (Q+2)H
► (Q÷2)H
► (Q×2)/H
Annual carrying cost = average inventory × cost of holding
Average inventory= Q/2
► Master schedule
► Bill of materials file
► Inventory records file
► Rough – cut capacity plan
Inventory Records: Includes information on the status of each item by time period
► Capacity reports
► Operations reports
► Load reports
► Inventory records
Load reports: Department or work center reports that compare known and expected future
capacity requirements with projected capacity availability.
► Small
► Medium
► Large
► Can be small and medium both
JIT systems are a pull method to manage material flow, consistently high quantity, small lot sizes,
uniform work station loads.
A Gantt chart can be used to schedule a periodic or repetitive project, because the sequence of
activities is well understood and past experience has determined how long each activity takes.
► Equal Finish
► Economic Finish
► Early Finish
► Easy Finish
Network activities: EF: early finish
► Population source
► Waiting line
► Order processing
► Logistics
Elements of Queuing System: Population Source, Arrivals, Waiting Lines, Processing Order,
Service, System and Exit are the common identifiable elements of a Queuing System.
► Concurrent design
► Design for manufacture
► Robust design
► Quality function deployment
Quality Function Deployment is the voice of the customer and it should be in the form of a house
of quality.
► Strong motivation
► Quality management practices
► Employee empowerment
► Business performance results
► Heavy manufacturing
► Retail and service
► Warehouse and distribution
► Light industry
Transportation method utilizes linear programming to minimize the cost of shipping
products from two or more plants or sources of supply to two or more warehouses or
destinations.
► First-in-first-out
► Probability model
► Fixed-order quantity
► Periodic review
270
► 6.5 Containers
► 7 Containers
► 6 Containers
► 9 Containers
Calculation: 1500/270 =5.6.
► Tactical goals
► Strategic goals
► Secondary goals
► Primary goals
Secondary Goals
1. Eliminate disruptions
2. Make system flexible
3. Eliminate waste, especially excess inventory
► Logistics
► Technology
► Autonomation
► Just-In-Time System
Important Characteristics of Logistics
1. Movement within the facility
2. Bar coding
3. Incoming and outgoing shipments
4. EDI (Electronic Data Interchange)
► Intermediate-volume-systems
► Low-to-medium volume production (Job shop)
► Medium-to-high volume production (Flow shop)
► Optimal production mixes
► PMP certification
► PMD certification
► FMA certification
► CMP certification
Project Manager is normally considered to have qualification such as
PMP certification, CFM, CFA and CFP certification.
Question No: 49 ( M a r k s: 3 )
As an operations manager of a firm what significant issues you have to consider
while implementing supply chain management?
Answer:
Supply Chain: The sequence of organization’s facilities, functions, and activities
that are involved in producing and delivering a product or service.
Issues in supply chain management implementation:
Logistics: Deciding how to best move and store materials
Location: Determining location of facilities
Suppliers: Monitoring supplier quality, delivery, and relations
Purchasing: Evaluating suppliers and supporting operations
Inventory: Meeting demand while managing inventory costs
Processing: Controlling quality, scheduling work
Design: Incorporating customer wants, mfg., and time
Forecasting: Predicting quantity and timing of demand
Customers: Determining what customers want
Question No: 50 ( M a r k s: 3 )
How would you reveal the importance of maintaining good relationship with
suppliers in a JIT system?
Answer:
Just In Time:
JIT can be defined as an integrated set of activities designed to achieve high-volume
production using minimal inventories (raw materials, work in process, and finished
goods).
Importance of suppliers in JIT system:
Just In Time system provides an organization a robust structure by improving the
relationship between the organization and the supplier by constituting a strategic
alliance network between the organization and the suppliers.
Question No: 51 ( M a r k s: 5 )
As operations manager of a manufacturing firm, how can you judge the
effectiveness of inventory management?
Answer:
Effectiveness of inventory management:
An Inventory Management System would be called Effective if it is able to fulfill the
following requirements:
1. A system to keep track of inventory.
2. A reliable forecast of demand.
3. Knowledge of lead times.
4. Reasonable estimates of:
a. Holding costs
b. Ordering costs
c. Shortage costs
5. A classification system.
Question No: 52 ( M a r k s: 5 )
What is bullwhip effect? What are its consequences?
Answer:
Bullwhip:
An unmanaged supply chain is not inherently stable. Demand variability increases
as one moves up the supply chain away from the retail customer, and small changes
in consumer demand can result in large variations in order placed upstream.
Eventually, the network can oscillate in very large swings as each organization in the
supply chain seeks to solve the problem from its own perspective. This
phenomenon is known as the Bullwhip effect.
Consequences of Bullwhip:
In addition to greater safety stocks, the described effect can lead to either
inefficient production or excessive inventory as the producer needs to fulfill the
demand of its predecessor in the supply chain. This also leads to a low utilization of
the distribution channel. In spite of having safety stocks there is still the hazard of
stock-outs which result in poor customer service. Furthermore, the Bullwhip
effect leads to a row of financial costs. Next to the (financially) hard measurable
consequences of poor customer services and the damage of public image and
loyalty an organization has to cope with the ramifications of failed fulfillment which
can lead to contract penalties. Moreover the hiring and dismissals of employees to
manage the demand variability induce further costs due to training and possible
pay-offs.
Question No: 53 ( M a r k s: 5 )
In the above bill of materials, if existing inventory =0, then how many units of G, E, F,
H and B must be purchased to produce 4 units of A?
solution:
B 2Bs per A = 2
E 2 Es per B ×2 Bs per A = 4
D 2Ds per B ×2Bs per A= 4
H 3Hs per D×2Ds per B ×2Bs per A=12
C 3Cs per A =3
E 1E per C× 3Cs per A=3
F 3F per C× 3Cs per A=9
G 1G per F×3F per C× 3Cs per A=9
B=2
C=3
D=4
E=4+3=7
F=9
G=9
H=12
In order to purchase 4 units of A the quantity of each component must be multiplied
by 4:
B=2× 4=8
C=3×4=12
D=4×4=16
E=4+3=7×4=28
F=9×4=36
G=9×4=36
H=12×4=48
FINALTERM EXAMINATION
Spring 2008
MGT613- Production / Operations Management
Solution is provided by vuZs Solution Team. You are free to distribute and
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Question No: 1 ( M a r k s: 1 ) http://vuzs.net
What would be the productivity if 9 workers installed 650 square yards of
carpeting in 6 hours?
Financial reporting
Inventory management
Scheduling tasks
Supply chain management
67%
20%
100%
150%
Solution: Utilization = Actual output/ Designed capacity
= 40 / 60 ×100 = 67%
Introduction
Growth
Maturity
Decline
In the market maturity phase the size of market starts to become constant with
no considerable growth. Once this phase is reached, organisations tend to have
a stable market share, all things kept constant. At this stage, organisations
increase profitability by reducing costs and utilising available manufacturing
capacity to the maximum.
Social
Political
Economic
Legal
Process selection
Process reengineering
Process redesign
Process design
Process Selection refers to the way an organization chooses to produce its good
or services.
Product
Process
Fixed-position
Storage
In a Process layout, work stations are arranged according to the general function
they perform without regard to any particular product.
Cost curve
Bath tub curve
Fish bone diagram
Reliability curve
The bathtub curve is widely used in reliability engineering. It describes a
particular form of the hazard function which comprises three parts:
The first part is a decreasing failure rate, known as early failures.
The second part is a constant failure rate, known as random failures.
The third part is an increasing failure rate, known as wear-out failures.
Armand Feigenbaum
G.S Radford
W. Shewhart
David Gravin
Mid 1950s, Armand Fiegen Baum proposed total quality control,
Mistake proof
Low quality
Defective
Expensive
Poka-Yoke: Poka Yoke is the Japanese word for mistake proof.
Failure cost
Prevention cost
Appraisal cost
Management cost
It is collecting information, identifying each step and finding inputs and outputs of
process
It is collecting information about cost reduction and improving the defects
It relates to asking questions about process flow and identifying missing
or duplicating activities
It relates with taking a fresh approach to solve an issue on hand
Analyze the process: Ask questions about the process including process flow
being logical, any activities or steps being missing or identification of duplication
activities.
3-7 months
2-10 months
2-12 months
4-8 months
Aggregate planning: Intermediate-range capacity planning, usually covering 2 to
12 months.
a+b-c
a+b+c
a-c+b
a-b+c
Inventory at the end of a ( current) period equals Inventory at the end of the
previous period PLUS Production in the current period – Amount used to satisfy
the demand in the current period.
Ordering cost
Holding cost
Shortage cost
Stock out cost
Ordering costs: Cost of ordering and receiving inventory.
DX (1 T)=N
C
DC(1 X )=N
T
DT(1 +X )=N
C
DT(1 C)=N
X
Kanban Formula, N =DT(1+X)/C
Sequencing
Loading
Scheduling
Budgeting
Loading - assignment of jobs to process centers
Load chart
Schedule chart
Input/output control chart
Sequence chart
Load chart: A type of Gantt Chart that shows the loading and idle times for a
group of machines or list of departments.
Assignment model
Hungarian model
Part per period method
Transportation model
Assignment Model is a type of linear programming model for optimal assignment
of tasks and resources.
Project estimating
Project planning
Project control
Project crashing
Cost reduction
Time delays
Project termination
Inability to meet specifications
Risk: associated to Project management
1. Delays
2. Increased costs
3. Inability to meet specifications
4. Project termination
Queuing theory
Waiting theory
Scheduling theory
Sequencing theory
Goal of queuing analysis is to minimize the sum of two costs Customer waiting
costs and Service capacity costs.
Gantt charts
Load charts
Schedule charts
Input/output charts
Input/output Control Chart : A type of Control Chart that shows management of
work flow and queues at the work centers.
Question No: 43 ( M a r k s: 3 )
Illustrate the role of inventory as a capacity changing option in aggregate
planning.
Answer:
In order to satisfy changes in customer demand, the firm must raise or lower
inventory levels in anticipation of increased or decreased levels of forecast
demand. The firm maintains a level workforce and a steady rate of output when
demand is somewhat low. This allows the firm to establish higher inventory levels
than are currently needed. As demand increases, the firm is able to continue a
steady production rate/steady employment level, while allowing the inventory
surplus to absorb the increased demand.
Question No: 44 ( M a r k s: 3 )
Ali takes vitamin tablets at a rate of 2 per day, which are delivered to his home 4
days after an order is placed. At what point should Ali reorder?
Note: Provide answer with complete working. Failure to show working will result
in deduction of marks.
Answer:
Usage= 2 tablets a day
Lead time= 4 days
ROP= Usage × Lead Time
=2×4=8
Question No: 45 ( M a r k s: 3 )
There are many problems in the supply chain management. Enlist some of them.
Answer:
1. Large inventories
2. Long lead times
3. Large number of parts
4. Cost Quality
5. Variability
6. Long lead times
Question No: 46 ( M a r k s: 5 )
Define aggregate planning. Discuss its role in FMCG department of a
departmental store.
Answer:
Aggregate planning:
Question No: 47 ( M a r k s: 5 )
Project management software is used for scheduling, cost control and budget
management, etc. what can be the other uses of project management software?
Answer:
1. Imposes a methodology
2. Provides logical planning structure
3. Enhances team communication
4. Flag constraint violations
5. Automatic report formats
6. Multiple levels of reports
7. Enables what-if scenarios
8. Generates various chart types
Question No: 48 ( M a r k s: 10 )
Suppose you are the consultant of an ABC company. The CEO of the company is
in favor of implementing total quality management. How would you compare
TQM with traditional management philosophy?
Answer:
Question No: 49 ( M a r k s: 10 )
What is the role of ABC system in inventory management? How would you
differentiate among group a , group B and group C ?
Answer: