LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT, DELHI

PGDM - (General/R&BA/Finance Term-III)

End-term Exam, April 2021

Course: Operations Management Course Code: OPM 103

Time: 2 hrs Max. Marks: 40

Instructions:
1. Do not mix the answers to questions from different parts. Complete your answers to the part
that you choose first and then move to other part(s) of the question paper. Answer length
should not exceed unnecessarily
2. Attempt any four questions out of five. Each question is of 10 marks.
3. Answers should be attempted in pen and paper mode on sheets. It should be scanned and
uploaded on moodle.

Q.1 (i) Chetan runs a small shop to cook chapatis. People can place their order over the phone and come
and collect it. Orders are taken for a standard pack of five chapatis. The entire process is done in batches
of five chapatis only. Chapati making and delivery has five steps. Preparing the dough (3 minutes), rolling
(5 minutes), heating (4 minutes), packing (2 minutes), billing and cash (1 minute). Given this process,
answer the following:
a) Prepare a process flowchart. What type of process is Chetan following?
b) Identify the bottleneck time. Can the bottleneck be changed to other step? How?
c) Identify the throughput time and cycle time.
d) What is the production capacity if Chetan opens the shop for 4 hours?
(1.5+1.5+1+1=5 marks)
(ii) The back room operations of a fast food restaurant have these tasks. The time to perform each task
and the tasks that must immediately precede are shown below:
Task Tasks that immediately precede Time to perform tasks (in
minutes)
A - 0.25
B A 0.08
C B 0.12
D B 0.17
E C,D 0.06
 F E 0.05
G E 0.09
H E 0.11
I F,G,H 0.16
J I 0.08

If 150 pizzas are needed per hour and 50 minutes per hour are productive,
a) Draw a precedence diagram
b) Compute the cycle time per unit in minutes and minimum no. of workstations require.
c) Use the longest task time heuristic to balance the line. Evaluate your solution.
(1+1+3 = 5 marks)

Q.2
(i) A firm having a departmental store is considering expanding its capacity to meet a growing demand
for its products. The alternatives are to build a new store at a site nearby, expand and refurbish the old
store, or do nothing. Economists have projected the regional economic outlook: a 50 percent probability
that the economy will remain unchanged, a 20 percent probability of an economic upturn, and a 30
percent probability of an economic downturn. The following estimates of annual returns have been
prepared (in million dollars):
Market downturn Stable Market Market upturn
Build new store 0.8 0.5 2.1
Expand old store 0.4 0.8 1.4
Do nothing 0.1 0.2 0.5

Use a decision tree to analyze these decision alternatives. What decision must the company take based
on your analysis? What returns will they accrue by taking this decision?

(ii) ABC company is dealing in laptops and mobiles. They are a leading brand selling across the global
markets. They want to open a factory in India. What major factors should be considered in choosing
location of the new factory for the manufacturing purpose? How would you weight the factors
according to the importance? Discuss and defend your answer.

(iii) An educational firm wants to achieve six sigma in its processes. What techniques should they use?

(iv) ”Operations strategy can be leveraged as tool for competitiveness’. Explain the statement with the
help of at least two real life examples.
(4+2+2+2=10 marks)
Q.3 (i) Technology has changed the shape and face of supply chain. Explain the quote in context of
pandemic Covid-19 ?
(ii) Although lean methods are most appropriate to reduce the overall cost of operations but in context of
global pandemic COVID-19 they cannot be implemented by the operations managers for vaccine kind of
products. Give your views in support or opposition of statement.
(iii)‘Organisations may greatly benefit from creating sustainable operations.’ Do you agree with
statement? Substantiate your answer giving a suitable example.
(iv) ‘Reuse through recycling’. Explain a generic reverse supply chain framework with the help of a
diagram. (2.5*4=10
marks)

Q.4 (i) Kaparo Manufacturing located near Bilaspur Border HARYANA supplies metal part to Maruti
Suzuki Manesar plant. Kaparo is trying to decide between two options of production plans, namely level
capacity with overtime and level capacity with sub-contracting. Either overtime or subcontracting will
satisfy all the demand above what its current 183 employees can produce by working for 8hr/day, 62 days
/quarter. The primary metal costs Kaparo 6.85 Rs. per gauge. Each product requires an average 2.4
labour-hours per unit. The demand for the upcoming four quarters is 47,500; 39,600; 36,400; and 42,100
units, respectively. A subcontractor can supply any quantity of the product at Rs. 24 per unit (raw
materials would be provided by Kaparo). The standard labour cost of Kaparo is 21 Rs. Per hour and the
overtime cost is 150 percent of standard one.
a. Calculate the cost of each option which KAPARO can follow.
b. Suggest which one should Kaparo follow and why? Is any of the data given in the question is
irrelevant?
(ii) For production of a computer seven jobs are waiting to be processed at a workstation. Their job code
numbers, estimated production time, and promised delivery times are as mentioned.
Determine the sequence of producing the jobs using critical ratio and SPT? Compare the performance of
these two methods using relevant criterias.

Job code number Production time (Hour) Promised delivery time (Hour)
241 2.4 31.0
242 3.7 12.0
243 5.2 19.0
244 3.3 14.0
245 5.6 10.0
246 6.1 27.0
247 4.0 24.0

(5+5=10 marks)
Q5. (i) Suppose you are the Manager of Pizza Hut in your area. Draw a transformation diagram.
Explain product service continuum.
(ii) Assuming you are to launch a new model of a high-end automobile. Using a schematic
diagram, explain how you would use Kano’s model and achieve customer’s delight and give your
recommendations.
(iii) A management analyst is using exponential smoothing to predict merchandise returns at an
upscale branch of a department store chain. Given an actual number of returns of 154 items in the
most recent period completed, a forecast of 172 items for that period, and a smoothing constant of
0.3, what is the forecast for the next period? How would the forecast be changed if the smoothing
constant were 0.6? Explain the difference in terms of alpha and responsiveness.
(iv) A time study of a restaurant activity yielded a cycle time of 2.00 minutes, and the waitress
was rated at PR = 96 percent. The restaurant chain has a 20 percent allowance factor, Find the
standard time.
(2.5+2.5+3+2=10 marks)