MBM114 – Production and Operations Management

Practice Problem Set

1. Forecasting

1.1. A manufacturer of LED TVs has the data as given in the Table-1.1 pertaining to the actual
demand for LED TVs (in thousands) during the period of April to September in a year. Use a
three-period moving average method to forecast the demand for October
Month Demand
April 125
May 110
June 95
July 130
Aug 110
Sep 100
Table-1.1: Actual Demand for LED TVs (in thousands) per Month

1.2. The demand for a certain raw material used in the manufacture of a piece of medical equipment
varies from month to month. An organisation engaged in the manufacture of this equipment
wants to place orders with the suppliers for the next month. The inventory records, as given in
Table-1.2, for the component indicate the consumption pattern in the last six months (in metric
tons).
Month Demand
Month-1 15
Month-2 30
Month-3 45
Month-4 25
Month-5 50
Month-6 35
Table-1.2: Consumption Pattern of Raw Materials (in Metric Tons)

1.2.1. Use the method of moving averages and forecast the demand for Month-7 using three-
periods as the model parameter
1.2.2. Suppose the three-periods have the following weights: 0.5 for the immediate past, 0.3 for
two periods before and 0.2 for three periods before. What will the forecast be?
1.2.3. Change the number of periods for moving average to 2, 4, and 5 and obtain the forecast
in each of these three cases.
1.2.4. Compare the results obtained in 1.2.1 to 1.2.3. What do you infer from this exercise?
1.2.5. Compute the forecasts using the method of exponential smoothing when alpha is 0.1, 0.2,
0.4, 0.6, 0.8 and 0.9
1.2.6. Plot the forecasts obtained for various alphas (in 1.2.5). What do you observe?
1.2.7. Compare the forecasts obtained in 1.2.5 with those in 1.2.1, 1.2.2 and 1.2.3. What do you
infer?

1.3. An organisation is using exponential smoothing method for preparing short-term forecasts for
its product with an alpha of 0.2. However, it is not clear if the forecasts obtained from the
system are reliable enough. It is also not clear what the most appropriate measure is for
assessing the forecast accuracy. Perform the following exercise using data in Table-1.3 and
suggest a suitable course of action for the organisation

1.3.1. For the existing forecasting system, compute the MAD and MAPE at the end of
December.
 MBM114 – Production and Operations Management
Practice Problem Set

Month Demand
January 65
February 80
March 90
April 100
May 110
June 80
July 75
August 55
September 50
October 60
November 50
December 45
Table-1.3: Demand Data for Problem-1.3
1.3.2. Suppose you decide to change the value of alpha to 0.5, how will this impact forecasting
accuracy?
1.3.3. On the other hand, if you replace the exponential smoothing model with a3-period moving
average model, will the forecasting accuracy improve?
1.3.4. Assume that a forecasting model with linear trend will suit the system. Is it worthwhile
to shift to this model?
1.3.5. Based on your computations, what will you finally recommend to the organisation?
1.3.6. For the forecasting model that you recommended, compute the tracking signal and plot
the curve. What are your observations based on this plot?

2. Capacity Planning

2.1. An equipment is designed to work for one eight-hour shift a day, five days a week. When
working under ideal conditions, the equipment can process 100 units every hour. However,
10% of the time is needed for set-ups and maintenance. During a particular week, breakdowns,
defective output and other problems led to ab output of 3000 units. What measures can be
found from these figures? {Hint: All measures of capacity and effectiveness can be found}

2.2. Determine the utilization and the efficiency for each of the following situations

2.2.1. A lone processing operation that processes an average of 7 loans per day. The operation
has a design capacity of 10 loans per day and an effective capacity of 8 loans per day.
2.2.2. A furnace repair team that services an average of four furnaces per day, if the design
capacity is 6 furnaces per day and effective capacity is 5 furnaces per day
2.2.3. A machine that has a design capacity of 80 units/hour and effective capacity of 64
units/hour, producing 62 units/hour

2.3. In a job shop, effective capacity is only 50% of design capacity and actual output is 80% of
effective capacity. What design capacity would be needed to achieve an actual output of 8 jobs
per week.

2.4. A manufacturer of medium-voltage circuit breakers is planning for a capacity of 8 cubicles

and 13 circuit breakers per day. A typical year consists of 305 working days. The fabrication
division is responsible for manufacturing metal sheet components that are welded together to
form the cubicle. Some metal sheet components are welded to host the circuit breakers inside
 MBM114 – Production and Operations Management
Practice Problem Set

the cubicle. The components are painted after welding. While the fabrication uses CNC turret
press, painting is a manual job. The standard time required at the CNC turret press for
fabricating a cubicle is 150 minutes and the time for breaker housing is 36 minutes. A cubicle
requires 43m2 of area to be painted and a breaker housing requires 2.6m2 of painting. Standard
time to paint 1m2 of area is 18 minutes. The machine works at 80% efficiency and manual
labour works at 90% efficiency. Using the given information, compute the labour-hour and
machine-hour requirements {Hint: Capacity required (for labour or machine) = Demand*Time per unit /
Efficiency}

2.5. A restaurant works in a busy locality. At the moment they have adequate cooking capacity and
space to seat the customers. They would like to know the adequacy of the service manpower
available with them. The order takers spend on an average 15 minutes per arriving batch of
customer and servers spend 48 minutes.

2.5.1. If there are five order takers and 12 servers, how many batches of customers they can
serve every day?
2.5.2. If a batch of customer arrives on an average every 4 minutes, can they handle the demand
with the existing staff?
2.5.3. The restaurant found that during peak hours a batch of customer arrives every 3 minutes.
Will they be able to handle the demand?
2.5.4. How many order takers and servers should they employ if they want to work with a
utilization of 75% (during non-peak hours)?

3. Facility Location

3.1. A chain of stores trading in a host of retail goods for the urban customers is planning to set-up
operations in one metropolitan city in the country. The exact location for the new outlet is to
be decided. In order to do that, the company has conducted a market survey and found five
pockets of consumption in the city. The distance coordinates of these five pockets from the
reference point in the grid map pertaining to the city are as follows: Zone-1 (1,2), Zone-2
(1.5,4), Zone-3 (1.5,3.5), Zone-4 (5,5) and Zone-5 (3.5,4). The annual demand of goods (in
tonnes) in the five zones are 20, 15, 8, 13 and 12 respectively.
3.1.1. What is the centre of gravity for the setting up the operation in the city?
3.1.2. If the store is located at the centre of gravity, which zone is closest to it?
3.1.3. If the transportation cost is Rs. 12 per tonne per km, what is the cost to transport goods to
each of the Zones from the location of operations?
3.1.4. What would be the best total transportation cost, if the location of operations must be in
one of the Zones and not at the centre of gravity?

3.2. A manufacturer of garments is actively considering five alternative locations for setting up a
factory. The locations vary in terms of their advantages. Hence, the manufacturer requires a
method to identify the appropriate location. Based on a survey of the manufacturer’s senior
executives, six factors have been identified. The rating for each factor on a scale of 1 to 100 is
provided (Table-3.1). Furthermore, based on the detailed analysis of both the qualitative and
quantitative data available for each location, the ratings of the locations against each factor
have also been arrived at on a scale of 0 to 100 and provided in Table-3.2. Given this
information,
3.2.1. What is the relative importance of each factor (as compared to the others)?
3.2.2. What are the scores for the different locations?
3.2.3. Which location will be recommended for setting up the factory, and why?
 MBM114 – Production and Operations Management
Practice Problem Set

Factor Rating
Availability of Infrastructure 90
Size of the market 60
Industry relations climate 50
Tax benefits and concessions 30
Availability of cheap labour 30
Nearness to port 65
Table-3.1: Factor ratings

Factor Location-1 Location-2 Location-3 Location-4 Location-5

Availability of Infrastructure 20 40 60 35 55
Size of the market 30 30 40 60 80
Industry relations climate 80 30 50 60 50
Tax benefits and concessions 80 20 10 20 20
Availability of cheap labour 70 70 45 50 50
Nearness to port 20 40 90 50 60
Table-3.2: Rating for each location against each factor

3.3. A manufacturer of a certain industrial component is interested in locating a new facility in a

target market and would like to know the most appropriate place in the target market to locate
the proposed facility. There are no location constraints in the target market (that is any point
in the target market is good enough). There are four supply points A, B, C and D in the locality
that will provide key inputs to the new facility. The annual supply from these four supply
points to the proposed facility is 200, 450, 175 and 150 respectively. A two-dimensional grid
map of the target market in which the new facility must be located along with the distance
coordinates of the four supply points is provided in Figure-3.1. Identify the most appropriate
point in the grid map to locate the facility.

Figure-3.1: Grid map of the target market

3.4. A firm is considering three alternative locations for set-up of its new facility. Each of these
locations provides some advantages and some limitations. Therefore, it is necessary that some
method of assessing the attractiveness of each site be arrived at. Based on a survey of its top
management, the company has identified seven factors that will determine the appropriateness
of a site for the new facility. These factors and the score out of 100 for each is given in Table-
 MBM114 – Production and Operations Management
Practice Problem Set

3.3. The company collected some data pertaining to each site that it is concerning, and, based
on some criteria, was able to arrive at how each site rates against a score of 100 against each
factor. In some cases, actual data was estimated on the basis of some projections. Table-3.4
has details pertaining to these. Identify the most appropriate site for locating the new factory
on the basis of the provided information.
S. No Factor for consideration Score (out of 100)
1 Nearness to port 80
2 Existence of supplier infrastructure 70
3 Availability of skilled labour 90
4 Government policies and local taxes 50
5 Projected cost of operations (lower the better) 60
6 Quality of road infrastructure 70
7 Availability of education infrastructure 40
Table-3.3: Factor ratings

Factor for consideration Site-1 Site-2 Site-3

Nearness to port 70 km 130 km 95 km
Existence of supplier infrastructure 60 80 85
Availability of skilled labour 50 70 85
Government policies and local taxes 70 45 60
Projected cost of operations (lower the better) Rs. 20 Rs.18 Rs.17
Quality of road infrastructure 80 90 70
Availability of education infrastructure 60 80 80
Table-3.4: Rating of different sites against each factor

3.5. A newly formed firm must decide on a plant location. There are two alternatives under
consideration: location near the major raw materials source or location near the major
customer. Location near the raw materials will result in lower fixed and variable cost than
locating near the market, but the owner believes there would be loss of sales volume because
customers tend to favour local suppliers. Revenue per unit will be Rs. 185 in either case. Using
the information in Table-3.5, determine

3.5.1. Which location would be preferred?

3.5.2. What is the benefit (quantitatively) in choosing the above suggested location {Hint: profit
difference}?

Parameter Location near raw materials Location near customer

Annual fixed cost (Rs. Million) 1.2 1.4
Variable cost (Rs./ unit) 36 47
Expected annual demand (units) 8,000 12,000
Table-3.5: Parameter information for the two location options

3.6. A small producer of cakes products wants to move to a larger building and has identified two
alternatives. Location-A has a fixed cost of Rs. 8,000/month and variable cost of Rs.140/ cake.
Location-B has an annual fixed cost of Rs. 92,000 and variable cost of Rs. 130/cake. If each
cake sells for Rs. 170

3.6.1. At what volume of output would the two locations have the same total cost?
3.6.2. For what range of output would location-A be superior?
3.6.3. For what range of output will location-B be superior?
3.6.4. Given an annual demand of 15000 cakes, which location would be chosen?
 MBM114 – Production and Operations Management
Practice Problem Set

4. Facility Layout

4.1. An assembly line has 17 tasks to be balanced. The longest task is 2.4 minutes and the total
time for the tasks is 18 minutes. The line will operate for 450 minutes per day.

4.1.1. What is the minimum and maximum cycle times?

4.1.2. What range of output is theoretically possible for the line?
4.1.3. What is the minimum number of workstations needed if the maximum output is to be
sought?
4.1.4. What cycle time will provide an output rate of 125 units per day?
4.1.5. What output potential will result if the cycle time is (a) 9 minutes and (b) 15 minutes?

4.2. Using the data in Table-4.1, answer the following

4.2.1. Draw the precedence diagram

4.2.2. Assuming an eight-hour workday, compute the cycle time needed to obtain an output of
400 units per day
4.2.3. Assign tasks to form workstations using this rule: Assign tasks according to greatest
number of following tasks. In case of a tie, use the tie breaker of assigning the task with
the longest processing time first
4.2.4. For the assigned line, compute the performance measures (balance delay and efficiency)
Task Immediate Predecessor Task Time in minutes
A -- 0.2
B A 0.2
C -- 0.8
D C 0.6
E B 0.3
F D, E 1.0
G F 0.4
H G 0.3
Table-4.1: Precedence and time information for activities

4.3. The tasks shown in the precedence diagram (Figure-4.1) are to be assigned to workstations
with the intent of minimizing idle time. Management has desired an output rate of 275 units
per day. Assume 440 minutes are available per day.

4.3.1. Determine the appropriate cycle time

4.3.2. What is the minimum number of stations possible?
4.3.3. Assign tasks using the rule: “Assign tasks with highest following times (including task’s
own time) first. Break ties using greatest number of following tasks.
4.3.4. Compute efficiency for the created assignment

A (0.3 min) C (0.4 min) E (0.2 min) G (0.1 min) H (0.5 min)

B (0.6 min) D (1.2 min) F (0.6 min) I (0.3 min)

Figure-4.1: Precedence diagram for activities to be assigned

 MBM114 – Production and Operations Management
Practice Problem Set

4.4. Given the closeness rating in Table-4.2, assign the departments to a 3X3 grid, such that the
critical departments (with “A” and “E” raring) are assigned first. It is required that Department-
4 must be in the upper right-hand corner of the grid.

Department Closeness Rating for Department vs Department

1 2 3 4 5 6 7 8 9
1
2 O
3 A A
4 E U I
5 A X I U
6 A I A U O
7 A I E U U U
8 I U X X U X I
9 A O I O X I I I
Table-4.2: The closeness ratings for 9-Departments to be Layed Out in a 3X3 Grid

4.5. A computer manufacturer needs to design assembly stations in the factory where the cabinet
housing the hard disk, mother board and other accessories is to be made. The factory currently
works for one shift of 8 hours. The tasks and their durations are given in Table-4.3. Figure4.2
shows the precedence relationship among the tasks.

4.5.1. If the cycle time is 80 seconds, what will be the daily production of cabinets?
4.5.2. If the desired production rate is 320 cabinets per day, what is the maximum possible cycle
time?
4.5.3. What is the maximum and minimum number of workstations required to maintain this
daily rate?
4.5.4. Design an assembly set-up with 5 workstations and 6 workstations. What are the key
inferences of this exercise?
4.5.5. If the assembly station is expected to run at an efficiency of 80%, what are the design and
effective capacities for the above created lines with 5 and 6 workstations?
Task Description Duration (in seconds)
A Assemble and position the base unit 70
B Install hard disk 80
C Install motherboard 40
D Insert ports 20
E Install speakers 40
F Connect relevant modules to mother board 30
G Install controller 50
H Visually inspect and close with a cover plate 50
Table-4.3: Tasks required to make the cabinet housing and the respective times

Figure-4.2: Precedence diagram for activities to assemble the cabinet housing

 MBM114 – Production and Operations Management
Practice Problem Set

4.6. A car manufacturer currently has a daily production rate of 1200 cars. The company works for
16 hours a day. The production process currently employs five stations. There are 12 tasks
involved in the manufacturing process and together they need 120 seconds

4.6.1. What is the actual cycle time for the car?

4.6.2. Compute the average utilization of resources employed to manufacture the car
4.6.3. If the company wants to work with 85% utilization, by how much they should increase
the daily production to achieve this?
Hint-1: Average utilization rate = (total task time)/ (no. of workstations * cycle time)

4.7. Penny is using a few decorative materials purchased from the market and assembling them
into flower badge. She supplies the flower badge to her customers. There is enough demand
for the badge. If she employs Raj, Lenord, Sheldon and Howard for assembly, and they have
an average utilization of 92%. The sum of task times for making a badge is 180 seconds.

4.7.1. What is the cycle time for the process?

4.7.2. What is the daily production rate if they work for an 8-hour shift?
4.7.3. If they add one more person Stuart, in the assembly process, what would be the new cycle
time if the utilization drops to 79%?
4.7.4. By how much can they increase the production on account of the reduced cycle time?

5. Inventory

5.1. Table-5.1 provides the monthly volume and unit costs for a random sample of 16 items from
a list of 2000 inventory items at a health care facility.

5.1.1. Develop a A-B-C classification for these items

5.1.2. After reviewing the classification, suppose the manager decides to place item P05 into A-
category. What are some possible explanations for this decision?

Item Unit Cost Usage Item Unit Cost Usage

(Rs./ unit) (units/ year) (Rs./ unit) (units/ year)
K34 10 200 F99 20 60
K35 25 600 D45 10 550
K36 36 150 D48 12 90
M10 16 25 D52 15 110
M20 20 80 D57 40 120
Z45 80 200 N08 30 40
F14 20 300 P05 16 500
F95 30 800 P09 10 30
Table-5.1: Monthly volume and unit cost information for a random sample of 16 items
5.2. The manager of Reliance Super Store in Kattur, Trichy hopes to achieve a better allocation of
inventory control efforts by adopting an A-B-C approach to inventory control. Given the
monthly usage information in Table-5.2.

5.2.1. Classify the items in A, B, C categories.

5.2.2. Determine the percentage of items in each category and the annual dollar value for each
category
 MBM114 – Production and Operations Management
Practice Problem Set

Item Usage (units/ year) Unit cost (Rs./ unit)

I1 5000 12
I2 400 1400
I3 2000 700
I4 80 1020
I5 10 20
I6 90 10
I7 300 140
I8 30 5
I9 150 20
Table-5.2: Item volume and usage information for Reliance Super Store, Kattur, Trichy
5.3. 2K buys 25 Kg bags of rice. On an average, 2K sells 1,215 bags a year. Preparing an order and
receiving a shipment of rice involves a cost of Rs.10/ order. The annual carrying cost is Rs. 75
per bag.

5.3.1. What is the economic order quantity for 2K in buying Rice?

5.3.2. What is the average number of 25Kg rice bags on hand?
5.3.3. How many orders per year will there be?
5.3.4. What is the total cost of ordering and storing the rice?
5.3.5. If the cost for storing rice increases by Rs.9 per bag per year, how much would it affect
the minimal total annual cost?

5.4. Every month, NITT’s hospital uses 750 syringes. Each syringe is purchased at Rs.2. Annual
carrying cost per syringe is estimated to be 30% of the purchase cost, and ordering cost is
Rs.20 per order. If the medical office has been purchasing 1500 syringes in each order

5.4.1. What is the optimal order quantity?

5.4.2. What is the optimal order frequency?
5.4.3. What additional annual cost is the hospital incurring by staying with this order size of
1500?
5.4.4. Other than cost savings, what benefit would be using the optimal quantity yield?

5.5. A retailer obtains “Ludo” board game from a company in India. The estimated demand for the
next year is 600 units per month. Each Ludo costs Rs. 500 to buy, and additionally each
shipment costs Rs. 5,000. Moreover, 20% of the purchase price is incurred to store the game
in the shelves of the retailer. Therefore, what should be the ordering strategy followed by the
retailer would yield best cost benefits?

5.6. Ford has its engine plant in Sanand, India and its assembly plant Chennai, India. Engines are
transported to the assembly plant in trucks from the engine plant and cost Rs. 1000 each trip.
The assembly plant assembles 300 cars each day. If each engine costs Rs. 500 to make and an
additional 20% of this goes to storing the engine, what should be the shipment that is loaded
into each truck, and what is the associated inventory cost for Ford?

5.7. Prove that the optimal quantity for a marginal unit quantity discount is given by the below
formula
2 ∗ 𝐷 ∗ (𝑆 + 𝑉𝑖 − 𝑞𝑖 ∗ 𝐶𝑖 )
𝑄𝑖 = √
ℎ ∗ 𝐶𝑖
Where, D is demand, S is ordering cost, qi is the breakpoint quantity, Ci is the marginal cost per
unit for that breakpoint, h is the inventory holding cost percentage.
 MBM114 – Production and Operations Management
Practice Problem Set

5.8. A hospital orders bandages from a supplier. The cost of bandages depends on the order size as
given in Table-5.3. The hospital incurs Rs. 5 to process each order and 20% of the per unit
price to store each bandage. Each time an order is placed, how many bandages must be bought
by the hospital if it requires 10,000 a year.

Quantity Cost per unit

Q <200 Rs. 4.40
200<= Q < 400 Rs. 4.20
Q>= 400 Rs. 4.00
Table-5.3: Cost for bandages based on quantity

5.9. If in the previous question, the discount was marginal instead of for all units, then will your
decision change or remain the same?

6. Project Management (Gantt Chart, PERT and CPM)

6.1. A company is moving towards Industry 4.0 implementations for machine maintenance and a
Pilot is planned for this. For this, the company needs to set-up the cloud serves that would
receive data from the machine PLCs. The PLC codes must be rewritten on the machines to
send the data to the servers. The data, once landed in the server, must be accessible to the
analyst. The analyst must then build the models for prescriptive maintenance and deploy them.
The various tasks, their times, responsibilities and the precedence information is provided in
the Table-6.1. Given this, prepare a Gantt Chart to monitor the project progress.
S. Activity/ Task Task Description Duration Responsibility Preceding
No. Task
1 IT Infrastructure The activity involves two tasks (1A and 1B) 3 months IT Team
1A Cloud Server The issue of tenders, issue purchase orders 2 months --
Purchase and receive orders
1B Cloud Server Set- Set-up the server to receive data from the 1 month 1A
up machine PLC
2 PLC Coding The activity of sending data from machines 2 months Plant Team
to servers (2A and 2B)
2A Identify Pilot Identify which machines to use in the pilot 1 month
Machines stage and write the PLC codes to collect
appropriate data
2B Send data to Connect the data to the Cloud Server 1 month Plant & IT 1B
Cloud Teams
3 Analytics Models development and prescriptive 5 months Analytics Team
maintenance
3A Data Access Obtaining the access to the data 1 month Analytics & IT 2B
Teams
3B Model Building Build the models, discuss with business and 3 months Analytics & 3A
and Testing test the outcomes Plant Teams
3C Model Deploy the model and monitor it for 1 month Analytics, Plant 3B
Deployment and consistent performance & IT Teams
Monitoring
Table-6.1: Activities and Tasks Information for Industry 4.0 Pilot Project
 MBM114 – Production and Operations Management
Practice Problem Set

6.2. A programmer is tasked with creating a dashboard that compiles information from multiple
excel sheets in the client server and compiles them into visualization graphs. The various tasks
and related information that are too be performed in the dashboard development project are
presented in Table-6.2. The manager wants him to give a visual representation of his progress
every week through a Gantt chart.
Task Task Duration Preceding
No. (in weeks) Task No.
1 Database access 1
2 Excel read load script 1 1
3 Excel data dictionary preparation 2 1
4 Data extraction script 2 3
5 Data cleansing script 3 4
6 Bar graph script 6 5
7 Column graph script 6 5
8 Bubble graph script 6 5
9 Scatter plot script 6 5
10 Visualization selection script 5 6, 7, 8, 9
11 Dashboard development 2 10
12 Testing 1 11
13 User training & user manual development 2 12
14 Deployment and initial support 3 13
Table-6.2: Activities and Tasks Information for Dashboard Development Project

6.3. With the information in Table-6.2, if the project started on 1st Jan-2021 and the respective
activities were completed on the dates provided in Table-6.3. Then
6.3.1. How will you indicate the actual progress on the previously developed Gantt Chart?
6.3.2. How many activities were delayed?
6.3.3. How many activities were completed ahead of time?
6.3.4. How was the project completed (delayed, on-time or ahead of time)?
Task Task Start Date Completed Date
No.
1 Database access 4th Jan 2021 10th Jan 2021
2 Excel read load script 11th Jan 2021 17th Jan 2021
th
3 Excel data dictionary preparation 18 Jan 2021 3rd Feb 2021
rd
4 Data extraction script 03 Feb 2021 19 Feb 2021
th th
5 Data cleansing script 20 Feb 2021 6 March 2021
6 Bar graph script 8th March 2021 11th April 2021
th
7 Column graph script 8 March 2021 11th April 2021
th
8 Bubble graph script 8 March 2021 4th April 2021
9 Scatter plot script 04th April 2021 11th April 2021
th
10 Visualization selection script 12 April 2021 2nd May 2021
rd
11 Dashboard development 03 May 2021 9th May 2021
12 Testing 10th May 2021 16th May 2021
th
13 User training & user manual 17 May 2021 30th May 2021
Development
14 Deployment and initial support 31st May 2021 20th May 2021
Table-6.3: Actual Dates on Which the Project Activity was performed
 MBM114 – Production and Operations Management
Practice Problem Set

6.4. Table-6.4 provides the list of activities and their durations for the completion of a project.
Given this information,
6.4.1. Draw the AON network diagram
6.4.2. Draw the AOA network diagram
6.4.3. What is the critical path for the project?
6.4.4. What is the earliest start, latest start, earliest finish and latest finish for the activities?
6.4.5. What are the slacks for the various activities?
Activity Activity Time Predecessor
Start 0 --
A 4 Start
B 3 A
C 1 B
D 5 Start
E 4 D
F 6 B, E
G 2 C, F
H 4 D
I 2 H
End 0 G, I
Table-6.4: Activity Information for completion of a project
6.5. In problem number 6.4, for the various activities, the optimistic, pessimistic and most likely
times are estimated and provided in Table-6.5. If these times were estimated with the
assumption that they come from a Beta Distribution, then
6.5.1. What is the new critical path for the project?
6.5.2. What is the earliest start, latest start, earliest finish and latest finish for the activities?
6.5.3. What are the slacks for the various activities?

Activity Optimistic Time Most Likely Time Pessimistic Time

Start 0 0 0
A 2 4 7
B 1 3 9
C 1 1 5
D 2 5 6
E 2 4 8
F 5 6 7
G 2 2 5
H 2 4 9
I 1 2 5
End 0 0 0
Table-6.5: Activity Information for completion of a project
6.6. For a project, the network diagram and the time estimates are provided in Figure-6.1 and Table-
6.6 respectively.
6.6.1. What type of network diagram is this?
6.6.2. What is the new critical path for the project?
6.6.3. What is the earliest start, latest start, earliest finish and latest finish for the activities?
6.6.4. What are the slacks for the various activities?
 MBM114 – Production and Operations Management
Practice Problem Set

Figure-6.1: AOA Network Diagram for the Project

Activity Least Time (min) Greatest Time (min) Most Likely Time (min)
A 4 8 5
B 5 10 7
C 8 12 11
D 2 7 3
E 4 10 7
F 6 15 9
G 8 16 12
H 5 9 6
I 3 7 5
J 5 11 8
K 6 13 9
Table-6.6: Time Estimates for Project Activities

7. Total Quality Management

7.1. The number of FIRs filed by an Indian state for different crimes in the past year is provided in
Table-7.1. For this data, create

7.1.1. A Pareto chart for determining most frequent crimes {Hint: How many times a crime occurs}
7.1.2. A Pareto chart for determining crimes mostly committed {Hint: How many are arrested}
7.1.3. Check sheet to show most number of FIRs and frequency of filing FIRs for each crime
categories

Crime Number Arrested

Public smoking 2
Drunken drive 14
Marital torture 2
Drunken drive 13
Murder 1
Rape 5
Drunken drive 3
Fraud 22
Drunken drive 12
Murder 4
Illegal protesting 25
Terrorist activities 7
Fraud 18
Theft 5
Public smoking 3
Marital torture 4
Murder 3
Terrorist activities 4
Table-7.1: Information on Number of Arrests Made in the Past Year by an Indian State
 MBM114 – Production and Operations Management
Practice Problem Set

7.2. The NITT Estate Maintenance Department has the complains data as presented in Table-7.2
on the primary reason for 33 service calls for the previous month related to institute AC. Using
this data
7.2.1. Make a check sheet for the problem types for each customer type
7.2.2. Construct a Pareto diagram for each type of customer
Job Problem Type/ Job Problem Type/ Job Problem Type/ Key
No. Customer Type No. Customer Type No. Customer Type
301 F/L 312 O/L 323 W/L Problem Type
302 O/L 313 F/A 324 O/D N → Noise
303 N/L 314 W/D 325 O/A F→ Equipment failure
304 N/A 315 W/D 326 O/D W→ Water leak
305 W/A 316 F/D 327 F/A O→ Odour
306 O/D 317 O/D 328 F/L Customer Type
307 N/D 318 F/D 329 W/A L → Lab
308 W/A 319 F/D 330 W/D D→ Department office
309 N/D 320 F/A 331 N/L A→ Admin block
310 N/D 321 F/A 332 N/L
311 W/A 322 N/A 333 W/L
Table-7.2: AC Complaints Received by NITT Estate Maintenance Department
7.3. For the data given in Table-7.3 develop and understand the difference between a Histogram
and Pareto Diagram
Complaint Number of occurrences
Fan not working 250
Tap leaking 240
Tap missing 50
Window broken 50
Tube light broken 260
Loose door hinges 150
Table-7.3: Data on number of civil and electrical complaints in NITT in a month

7.4. Prepare a run diagram for the occurrences of defective computer monitors based on the data
in Table-7.4. Workers are given two 15-minute breaks at 10:15 AM and 3:15 PM. Lunch time
is at noon for 1 hour.

Interval Number of Interval Number of Interval Number of

Start Time Defects Start Time Defects Start Time Defects
08:00 1 11:00 0 03:00 2
08:15 0 11:15 0 03:15 3
08:30 0 11:30 1 03:30 0
08:45 1 11:45 3 03:45 1
09:00 0 01:00 1 04:00 0
09:15 1 01:15 0 04:15 0
09:30 1 01:30 0 04:30 1
09:45 2 01:45 1 04:45 3
10:00 3 02:00 1
10:30 1 02:30 0
10:45 0 02:45 2
Table-7.4: Number of defective computer monitors produced in every 15-minute interval in a plant
 MBM114 – Production and Operations Management
Practice Problem Set

7.5. The various quality cost components for a company are provided in Table-7.5. Then
7.5.1. What is the cost of quality as a percentage of turnover if the total turnover for the three
years were Rs. 200 million, Rs. 240 million and Rs. 300 million during 2018, 2019 and
2020 respectively
7.5.2. Plot the various components of the quality costs. Do you see any rend in the behaviour of
the components of quality cost over time? Justify your observations {Hint: What graph did
you used, why you used it and what is observed?}

Spending in the year (in 1000’s of Rs.)

S. No Quality cost component
2018 2019 2020
1 Warranty 12,532 11,540 12,320
2 Rework 9,348 18,540 17,439
3 Training 234 567 893
4 On-site repair 8,345 7,934 7,839
5 Testing 4,567 5,672 5,789
6 Loss from product returns 4,562 4,234 2,389
7 Inspection 7,812 12,127 17,283
8 Calibration of testing devices 1,678 1,482 2,093
9 Scrap/ wastage 2,568 4,298 6,238
Table-7.5: Quality cost components for a company for three years (in 1000’s of Rs.)
7.6. Prepare a scatter diagram for the data provided in Tables-7.6 and 7.7 and then express in words
the apparent relationship between
7.6.1. Age and Absenteeism rate
7.6.2. Temperature and error rate

Age (in yrs.) 24 30 22 25 33 27 36 58 37 47 54 28 42 55

Absenteeism Rate
6 5 7 6 4 5 4 1 3 2 2 5 3 1
(days/ month)
Table-7.6: Data for Absenteeism rate for people of different ages

Temperature (in oC) 65 63 72 66 82 58 75 86 77 65 79

Error Rate
1 2 0 0 3 3 1 5 2 1 3
(oC/ 100 measurements)
Table-7.7: Error rate for different Temperatures

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