MMS-Sem I Operations Management 60 Marks/3 hrs March 2022

Note: All questions are compulsory.

Q 1. Pl select proper answer & justify.

1 The fourth dimension of Operations Management apart from variety, cost & time is
a. Quality b . capacity c . price d . all of the above

2 From the following statements relating to classical EOQ model, mark the incorrect
one:
a. Total ordering cost = Total holding cost
b. Total relevant cost 2DAh
c. If annual demand doubles with all other parameters remaining constant, the
EOQ is doubled.
d. The lead time is zero.
3 For a 5 % increase in order quantity (under classical EOQ model) the total variable t
cost would
a. Decrease by 2.5%
b. Decrease by 0.25%
c. Increase by 5%
d. Increase by 1.025%

4 Flow rate * Flow time = Inventory is called as

a Law of stocking b Boyle’s law c Newton’s law d Little”s Law

5 There are 3 work stations Q, R & S in an assembly production line with min/unit
as 2,3 & 7. The no. of workers at each work station are 1, 2, 4 resp.
Which work station is bottleneck operation?
a Q b. S c. R d. none of above.
6. The layout strategy that deals with low-volume, high-variety production is
a. fixed-position layout b. process layout c . product layout d . cellular layout

7. A Cellular layout is also known as

a. Group dimensions b. Storage cells C. Group Technology d . all of above.

8. Which of the following is an assumption underlying classical EOQ model?

a. The demand/year is constant and uniform. B . The lead time is zero.
C. Shortages are not permitted at all. D . all of above.

9. For a 69% increase in annual demand EOQ would

e. Increase by 30 % b. Decrease by 6.9 %
c. Decrease by 9.6% d. Increase by 1.69 %
 10. Mark the wrong statement:
A. If demand changes EOQ will change. B. EOQ will have to be changed if
lead time changes. C. EOQ minimizes total variable cost. D . If price
changes EOQ will change.

Q 2 Attempt following.
(a) In a pathological laboratory patients arrive to get tests done. Patients arrive for
checking blood sugar at rate 5/hour, Blood WBC count 2/hour and urine tests 12/hour.
All make payment in stage 1 where there are 2 person taking 5 minutes in all. Blood
tests are carried at stage 2 where there are 4 persons taking 30 minutes. Urine tests are
carried out at stage 3 with 3 persons taking 20 minutes . Reports for all patients can be
collected at stage 4 with 4 persons taking 10 minutes. Analyse the process and find
bottleneck.
(c) There are no of operators as 1 ,2 and 1 in 3 stages in series in an assembly line
production. The time taken is in minutes 10, 15 and 12 respectively. The demand is 6 units
per hour. The direct labour rate is Rs 100 /hour. Find cost of production of 1 unit.
Q 3 Attempt following.
(a) Consider the following data where jobs are processed on M1 first .

Job A B C D E

Time on machine 1 ( M1) 5 6 9 10 12

Time on machine 2 (M2) 4 15 12 7 18

Determine total elapsed time .

(b) Explain factor comparison method of selection of location for production unit.
Q 4. Attempt following.
(a) B1000P company produces bicycles & major parts are 2 wheels ,1 chain, 2
mudguards & 24 spokes per wheel . Annual demand of bicycles is 50 . Assume all
parts are purchased. Spokes are purchased at 3/ unit. Ordering cost is 375 / order.
Inventory carrying cost is 2.5% per month. Calculate EOQ for spokes .
(b) For the data in ( b) above 3 % discount is offered by the supplier if only 1 order is to
be placed in a year. Should discount be accepted? Why ?
(c ) A company manufacturing soaps requires material which is purchased with following
data . Ordering cost 1000/order Inventory carrying cost 1.5 % per month per unit, Purchase
price 50/unit ,Annual demand 18000 units .
Assume demand every month is equal of material purchased. Assume opening stock for
month 1 is 0 and lead time is 0. Prepare MRP for material for first 4 months.