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BA4204 OPERATIONS MANAGEMENT

ALL UNITS TWO MARKS QUESTIONS AND ANSWERS

UNIT 1
1. What is Operation Management?
Operation Management refers to the planning, organizing, and controlling of the processes
that transform inputs (such as raw materials, labor, and capital) into goods and services. It
involves the efficient management of resources to ensure the smooth and effective production
of products or delivery of services.

2. List out Two Milestones in operations management?

Two milestones in operations management are:
a) Scientific Management: Developed by Frederick W. Taylor in the late 19th century, this
approach focused on analyzing and optimizing individual tasks to improve overall efficiency
in manufacturing processes.
b) Total Quality Management (TQM): Popularized in the late 20th century, TQM emphasizes
continuous improvement and involvement of all employees to enhance product quality and
customer satisfaction.

3. Write down the different characteristics of Services.

Characteristics of Services include:
a) Intangibility: Services are intangible and cannot be seen, touched, or felt before they are
consumed.
b) Inseparability: Services are often produced and consumed simultaneously, meaning the
service provider and customer are often present during the service delivery.
 c) Variability: Service quality may vary as it depends on factors like the service provider,
location, and specific circumstances.
d) Perishability: Services cannot be stored, and their availability is limited to the time of
production.

4. Distinguish between goods and services.

Goods:
- Tangible products that can be seen and touched.
- Can be stored as inventory before being sold.
- Production and consumption can be separated.
- Homogeneous (standardized) in nature.

Services:
- Intangible actions or performances.
- Generally produced and consumed simultaneously.
- Cannot be stored as inventory.
- Heterogeneous (vary in quality and delivery).

5. Outline the scope & challenges in production management.

Scope of Production Management:
- Production planning and scheduling.
- Inventory management.
- Quality control and assurance.
- Equipment maintenance and management.
- Process design and improvement.

Challenges in Production Management:

- Balancing demand and production capacity.
- Ensuring product quality and consistency.
- Optimizing resource allocation for cost-effectiveness.
- Incorporating new technologies and automation.
- Managing supply chain complexities.

6. What do you mean by the transformation process?

 The transformation process refers to the series of activities or operations that convert inputs
(such as raw materials, labor, capital, and information) into outputs (goods or services). It
involves the use of resources to add value and create the final product or deliver the desired
service.

7. What is operation strategy?

Operation strategy is the plan and decisions made by a company to effectively and efficiently
utilize its resources to achieve the organization's long-term goals. It involves setting objectives,
designing processes, and making decisions related to production, supply chain, technology,
quality, and other operational aspects to gain a competitive advantage.

8. What is strategic fit?

Strategic fit refers to the alignment between an organization's resources, capabilities, and
competitive advantage with its overall business strategy. It ensures that the operational
activities and capabilities complement the strategic goals, leading to a coherent and consistent
approach in achieving the organization's objectives.

9. What are the scope of operations management?

The scope of operations management includes various areas such as:
- Product and service design
- Capacity planning
- Process selection and improvement
- Quality management
- Supply chain management
- Inventory management
- Scheduling and sequencing
- Equipment maintenance
- Facility location and layout
- Lean management and continuous improvement

10. What is mass customization?

Mass customization is a business strategy that combines the advantages of mass production
(producing large quantities of standardized products) with the benefits of customization
(tailoring products to meet individual customer requirements). It aims to provide customers
with personalized products or services at a relatively affordable cost. Companies achieve mass
customization by using flexible manufacturing processes and advanced technologies to
efficiently produce a wide range of variations based on customers' specific preferences.

UNIT 2
1. What is capacity planning?
Capacity planning refers to the process of determining and assessing the capacity needed by an
organization to meet its production or service requirements. It involves forecasting future
demand, evaluating current capacity, and making decisions to ensure that the organization can
meet customer demands efficiently and cost-effectively.

2. Different between long range capacity planning & short-range capacity planning
The difference between long-range capacity planning and short-range capacity planning:
- Long-range capacity planning: This type of capacity planning is typically conducted for a
period of one year or more. It involves strategic decisions that impact the organization's overall
capacity, such as building new facilities, expanding existing ones, or investing in new
technology. Long-range planning helps the organization prepare for anticipated changes in
demand and future growth.
- Short-range capacity planning: Short-range planning is done for a shorter time frame,
usually a few weeks or months. It involves tactical decisions to manage day-to-day capacity
issues, such as workforce scheduling, inventory management, and adjusting production levels
to match current demand.

3. Write the difference between RCCP & CRP.

The difference between Rough Cut Capacity Planning (RCCP) and Capacity Requirements
Planning (CRP):
- Rough Cut Capacity Planning (RCCP): RCCP is a high-level capacity planning technique
used during the early stages of the production planning process. It involves analyzing the
feasibility of the production plan based on the available capacity and resources without getting
into detailed scheduling. RCCP helps identify potential capacity constraints and the need for
adjustments in the production plan.
- Capacity Requirements Planning (CRP): CRP is a detailed capacity planning technique that
comes after the material requirements planning (MRP) process. CRP considers the specific
routing and scheduling of individual operations to determine the actual capacity requirements
at each work center or machine. It ensures that the production schedule can be met based on
the available capacity and helps in identifying and resolving capacity issues in real-time.

4. What is facility Location?

Facility location refers to the process of selecting a suitable geographic location for an
organization's operations, such as a manufacturing plant, warehouse, retail store, or service
center. The decision regarding facility location is crucial as it can significantly impact the
company's costs, accessibility to markets, and overall operational efficiency.

5. Different between single facility & multi facility location.

The difference between single facility location and multi-facility location:
- Single facility location: In this approach, an organization operates only one main facility to
serve its entire market or customer base. It involves consolidating all operations, production,
and distribution at a single location. This approach can lead to economies of scale and
centralized management but may face challenges in reaching distant customers efficiently.
- Multi-facility location: In this approach, an organization establishes multiple facilities in
different locations to serve various regional or local markets. Each facility may be responsible
for production or service delivery in its specific area, leading to reduced transportation costs,
faster customer service, and better market coverage. However, this approach can increase
administrative complexities and duplicate certain functions across facilities.

6. What do you mean by factor rating system?

The factor rating system is a technique used in facility location analysis to objectively evaluate
and compare different potential locations based on specific factors or criteria. Each factor, such
as labor availability, transportation infrastructure, cost of land, market demand, etc., is assigned
a weight based on its importance. Then, each potential location is scored on these factors, and
the scores are multiplied by their respective weights to calculate a total score for each location.
The location with the highest total score is considered the most favorable choice.

7. What is profit maximization theory of August losch?

The profit maximization theory of August Losch is an economic theory that suggests that firms
or industries tend to locate their facilities in a way that maximizes their profit. According to
Losch, firms choose locations based on the balance between minimizing production costs (e.g.,
labor, transportation, raw materials) and maximizing revenue from the market. The theory
considers factors such as proximity to raw materials, access to labor, transportation costs, and
the size and potential of the local market.

8. What is source & procurement? And strategies of sourcing.

Source and procurement strategies refer to the methods and approaches used by organizations
to obtain the goods and services they need to operate.
- Sourcing: Sourcing involves identifying potential suppliers and negotiating contracts to
acquire the necessary inputs for production or operations. It can be categorized into two main
types: single sourcing (relying on one primary supplier) and multiple sourcing (diversifying
suppliers to reduce risk).
- Procurement strategies: Procurement strategies encompass the overall approach an
organization takes to manage its purchasing activities. This includes decisions related to
inventory management, supplier relationship management, cost management, and technology
adoption to improve the efficiency of the procurement process.

9. Define Make or Buy decision.

Make or Buy decision is a strategic choice that organizations face when deciding whether to
produce a product or service in-house (make) or purchase it from external suppliers (buy). The
decision involves evaluating various factors, such as production capabilities, costs, quality
control, availability of suppliers, technological expertise, and core competencies of the
organization. The goal is to determine the most cost-effective and efficient way to meet the
organization's needs.

10. What is vendor management?

Vendor management refers to the process of effectively overseeing and controlling
relationships with suppliers or vendors. It involves activities such as sourcing suppliers,
negotiating contracts, monitoring vendor performance, ensuring timely deliveries, managing
risks, and building strong partnerships to achieve mutual benefits. Effective vendor
management plays a crucial role in maintaining a smooth supply chain and reducing operational
disruptions.
 UNIT 3
1. What is Product Design & Process Design?
- Product Design: Product design refers to the creation and development of a product's form,
features, and functionality. It involves considering the user's needs, aesthetics, materials, and
manufacturability to create a well-designed product.
- Process Design: Process design involves planning and defining the steps and methods
required to produce a product or deliver a service efficiently. It aims to optimize resource
utilization, minimize costs, and enhance overall productivity.

2. What is Product Development & its Process?

- Product Development: Product development is the process of conceptualizing, designing,
and bringing a new product to the market. It involves various stages, from idea generation to
market launch.
- Product Development Process: The process typically includes idea generation, idea
screening, concept development, product design, prototype creation, market testing,
commercialization, and post-launch evaluation.

3. Distinguish between Standardization and Simplification.

- Standardization: Standardization refers to the process of establishing uniform
specifications, features, or methods for producing goods or providing services. It helps achieve
consistency, interchangeability, and ease of use.
- Simplification: Simplification involves reducing complexity in a product, process, or
system. It aims to streamline operations, eliminate unnecessary steps, and increase efficiency.

4. Define Process Analysis & its Techniques.

- Process Analysis: Process analysis is the examination of a workflow or operation to identify
areas for improvement. It aims to enhance efficiency, reduce bottlenecks, and optimize
resource allocation.
- Techniques: Process analysis can be performed using various techniques, such as
flowcharting, value stream mapping, time-motion studies, statistical process control (SPC), and
root cause analysis.

5. What is Facility Layout and its Types?

- Facility Layout: Facility layout refers to the arrangement of equipment, workstations, and
departments within a physical space to facilitate smooth workflow and material flow.
- Types: There are several types of facility layouts, including process layout (grouping similar
processes together), product layout (arranging resources in a line for assembly), cellular layout
(forming cells for dedicated production), and fixed-position layout (keeping the product in one
place while resources move around it).

6. What do you mean by Cellular Manufacturing?

- Cellular Manufacturing: Cellular manufacturing is a production approach that involves
organizing machines, equipment, and workstations into self-contained cells. Each cell is
responsible for manufacturing a specific set of similar products or components. This approach
promotes efficiency, reduces lead times, and enables flexibility.

7. Give the difference between Product Layout & Process Layout.

- Product Layout: In a product layout, resources and workstations are arranged in a linear or
continuous sequence to produce a single product or a limited range of similar products. It is
suitable for high-volume, standardized production.
- Process Layout: In a process layout, similar processes or machines are grouped together
based on their functions. This layout allows for greater flexibility and is suitable for low-
volume, customized production.

8. What are Planning Tools?

- Planning Tools: Planning tools are techniques or software used to aid in the process of
strategic, tactical, or operational planning. These tools assist in data analysis, forecasting,
resource allocation, and decision-making to achieve organizational objectives effectively.

9. What are Templates in Planning Tools?

- Templates: In planning tools, templates are pre-designed formats or structures that serve as
a starting point for creating plans, reports, or analyses. They provide a standardized layout and
guide users in organizing their data or ideas.
10. What is Product Life Cycle?
- Product Life Cycle: The product life cycle refers to the stages a product goes through from
its introduction to the market until its withdrawal or discontinuation. The typical stages are
introduction, growth, maturity, and decline. Each stage has different implications for
marketing, sales, and profitability.
 UNIT 4
1. What is production planning and control
Production Planning and Control:
Production planning and control (PPC) is the process of efficiently managing and coordinating
the resources, activities, and processes involved in the production of goods or services. It
involves creating a detailed plan to meet the production objectives and ensuring that the actual
production operations align with the planned activities. PPC aims to optimize production,
minimize costs, and meet customer demands while maintaining product quality and efficiency.

2. What are the types of Inventory cost?

Types of Inventory Cost:
a. Holding (Carrying) Costs: These are the costs associated with holding or storing inventory,
such as warehousing expenses, insurance, obsolescence, and capital costs tied up in inventory.
b. Ordering (Setup) Costs: Ordering costs are the expenses incurred when placing orders for
new inventory, including order processing, transportation, and supplier-related expenses.
c. Shortage (Stockout) Costs: Shortage costs arise when there is insufficient inventory to meet
customer demand, leading to lost sales, backorders, or potential damage to the company's
reputation.

3. Define Inventory control & its techniques.

Inventory Control & its Techniques:
Inventory control refers to the management and regulation of the quantity, location, and timing
of raw materials, work-in-progress, and finished goods to ensure efficient production and
distribution.
Some inventory control techniques include:
a. Economic Order Quantity (EOQ): Calculating the optimal order quantity that minimizes total
inventory costs by balancing ordering and holding costs.
b. Just-In-Time (JIT): A system that aims to produce and deliver goods just when they are
needed, reducing the need for extensive inventory storage.
c. ABC Analysis: Classifying inventory items into categories based on their value or
significance to the business, allowing focus on the most critical items.

4. Distinguish between P-system & Q-system.

P-System (Periodic System): In this inventory management system, inventory orders are placed
at fixed time intervals. The order quantity can vary based on demand fluctuations.

Q-System (Fixed-Order Quantity System): In this inventory management system, a fixed

quantity of inventory is ordered whenever the inventory level reaches a specific reorder point.

5. What is EOQ?
EOQ stands for Economic Order Quantity. It is a formula used in inventory management to
calculate the optimal order quantity that minimizes total inventory costs. The EOQ formula
takes into account the trade-off between ordering costs (costs to place orders) and holding costs
(costs to carry and store inventory). The goal of EOQ is to find the order quantity that strikes
a balance between these costs, leading to the most cost-effective inventory management
strategy.

6. What is ABC analysis?

ABC analysis, also known as Pareto analysis, is a technique used in inventory management to
categorize items based on their value and significance to the business. The items are classified
into three categories:

a. A-Items: High-value items that represent a small portion of the total inventory but contribute
to a significant portion of the total value. These items require close monitoring and stringent
control.

b. B-Items: Medium-value items that represent a moderate portion of the total inventory and
value. These items receive intermediate attention compared to A- and C-items.

c. C-Items: Low-value items that constitute a large portion of the total inventory but contribute
to a relatively small portion of the total value. These items are managed with less strict controls.

ABC analysis helps prioritize inventory management efforts, allowing businesses to focus on
the most critical items and optimize inventory control.

7. What do you mean by Demand forecasting & its methods?

Demand forecasting refers to the process of estimating future customer demand for a product
or service. Accurate demand forecasting is crucial for businesses to plan production, inventory
levels, and resources effectively. Some common methods of demand forecasting include:
a. Time Series Analysis: Analyzing historical demand data to identify patterns and trends to
make predictions for the future.
b. Market Research: Collecting data through surveys, interviews, or focus groups to understand
customer preferences and anticipate future demand.
c. Expert Opinion: Seeking opinions and insights from industry experts, sales representatives,
or managers to make informed forecasts.
d. Regression Analysis: Identifying the relationship between demand and other variables (e.g.,
economic indicators, population growth) to predict future demand.
e. Simulation Models: Using computer-based simulations to model different scenarios and
assess their impact on future demand.

8. What is Delphi Technique?

The Delphi Technique is a structured method used to gather and consolidate opinions from a
panel of experts or stakeholders. It is typically used for forecasting, decision-making, or
problem-solving in situations where there is uncertainty or complexity. In the Delphi
Technique, participants remain anonymous, and their identities are not disclosed to the group.
They independently provide their input, which is then collected, summarized, and shared with
the group for further feedback. This iterative process continues until a consensus or
convergence of opinions is reached.

9. What is scheduling & its types?

Scheduling is the process of determining when and in what sequence activities or tasks should
be performed to complete a project or achieve specific goals efficiently.
There are several types of scheduling, including:

a. Project Scheduling: Determining the timeline and order of tasks and activities required to
complete a project.
b. Production Scheduling: Planning the production activities and resources needed to meet
production targets and customer demands.
c. Employee Scheduling: Assigning work shifts and tasks to employees to ensure adequate
coverage and efficient use of human resources.
d. Maintenance Scheduling: Scheduling maintenance tasks and inspections to ensure the proper
functioning of equipment and facilities.
e. Appointment Scheduling: Allocating time slots for appointments or meetings to manage time
effectively.

10. What do you mean by Theory of Constraints?

The Theory of Constraints (TOC) is a management philosophy and methodology introduced
by Eliyahu M. Goldratt. It focuses on identifying and alleviating constraints or bottlenecks that
limit an organization's ability to achieve its goals. According to TOC, a system's performance
is limited by one or a few constraints, and by addressing these constraints, overall system
performance can be significantly improved.

The core principles of the Theory of Constraints include:

- Identifying the constraint(s) in the system.
- Exploiting the constraint(s) to maximize its utilization and efficiency.
- Subordinating all other processes and decisions to the constraint(s).
- Elevating or removing the constraint(s) if possible, to improve the system's capacity.
- Continuously repeating the process to find and address new constraints, as improvement is an
ongoing process.

TOC is often applied in manufacturing, supply chain management, project management, and
various business processes to optimize performance and achieve better results.

UNIT 5
1. Define quality from various perspectives:
- From a customer perspective: Quality is meeting or exceeding customer expectations and
satisfying their needs.
- From a manufacturing perspective: Quality is producing products that conform to
specifications and meet predefined standards.
- From a management perspective: Quality is a strategic approach to ensure that processes,
products, and services consistently meet the desired level of excellence.
- From a financial perspective: Quality is a cost-saving factor, as it reduces rework, warranty
claims, and customer complaints, leading to higher profitability.

2. What do you mean by the cost of quality and its types?

The cost of quality refers to the total cost incurred by an organization to maintain and improve
the quality of its products or services. It includes two main types of costs:
- Cost of Conformance: These are the costs associated with ensuring that products or services
meet quality standards. It includes prevention costs (e.g., training, quality planning) and
appraisal costs (e.g., inspections, testing).
- Cost of Non-Conformance: These are the costs incurred when products or services do not
meet quality standards. It includes internal failure costs (e.g., rework, scrap) and external
failure costs (e.g., warranty claims, customer complaints).

3. What is the PDCA cycle?

The PDCA cycle, also known as the Deming Cycle or Plan-Do-Check-Act cycle, is a four-
step iterative management method used to achieve continuous improvement in processes or
products. The steps are as follows:
- Plan: Identify the problem or opportunity and plan for improvement.
- Do: Implement the plan on a small scale (pilot) to test its effectiveness.
- Check: Evaluate the results of the implementation and compare them against the expected
outcomes.
- Act: If successful, implement the plan on a larger scale; if not, analyze the reasons for failure
and adjust the plan accordingly before trying again. The cycle is repeated to achieve ongoing
improvement.

4. List out the quality Trilogy:

The Quality Trilogy, proposed by Juran, consists of three interrelated processes for managing
quality:
- Quality Planning: Involves defining quality objectives, determining how to achieve them,
and developing the processes required to meet the quality standards.
- Quality Control: Involves measuring performance against quality standards, identifying
variances, and taking corrective actions to maintain or improve quality.
- Quality Improvement: Focuses on achieving breakthrough improvements in products,
processes, and services through continuous improvement efforts and problem-solving
techniques.

5. Define Quality Management & its tools:

Quality management refers to the systematic and strategic approach that an organization
adopts to ensure that its products, processes, and services consistently meet or exceed customer
expectations. It involves various principles, methodologies, and tools to achieve this objective.
Some commonly used quality management tools include:
- Pareto Chart
- Fishbone Diagram (Ishikawa or Cause-and-Effect Diagram)
- Control Charts
- Histograms
- Scatter Diagrams
- 5 Whys
- Six Sigma methodologies
- Total Quality Management (TQM) principles

6. What is the Malcolm Baldrige National Quality Award?

The Malcolm Baldrige National Quality Award is a prestigious award in the United States,
established by the U.S. Congress in 1987. It is named after Malcolm Baldrige, who served as
the U.S. Secretary of Commerce from 1981 until his death in 1987. The award is administered
by the National Institute of Standards and Technology (NIST).

The Baldrige Award recognizes organizations—manufacturing, service, small businesses,

education, healthcare, and non-profit—that demonstrate outstanding performance and
achievement in various quality and performance categories. It aims to promote and recognize
excellence in organizational performance, leadership, and innovation.

7. What is the Golden Peacock Award?

The Golden Peacock Award is an international business award presented annually to
recognize organizations' excellence in various domains. It was established in India in 1991 by
the Institute of Directors (IOD) and has since become one of the most coveted corporate awards
globally.

The Golden Peacock Awards cover several categories, including corporate governance,
sustainability, quality, innovation, environment management, and more. The award aims to
promote best practices in organizations and encourage continuous improvement and
benchmarking against global standards.
8. What is lean management?
Lean management, often referred to as Lean, is a systematic approach to eliminate waste and
improve efficiency in processes. It originated from the Toyota Production System (TPS) and
has been widely adopted in various industries. The main principles of lean management
include:
- Identifying and eliminating waste (Muda) in processes.
- Focusing on adding value from the customer's perspective.
- Continuous improvement through Kaizen (continuous change for the better).
- Respect for people and empowering employees to contribute to process improvement.
- Adopting a pull-based production system where activities are driven by customer demand.

9. Define JIT & its requirements.

JIT stands for Just-In-Time, and it is a production strategy aimed at producing the right
quantity of products or providing services at the precise time they are needed, with minimal
inventory on hand. The main requirements for successful implementation of JIT include:
- Reliable and consistent suppliers who can deliver raw materials and components on time.
- Efficient and flexible production processes that can quickly adapt to changes in demand.
- A strong focus on quality to ensure that defective products do not disrupt the smooth flow
of production.
- Highly synchronized coordination between different departments to avoid bottlenecks and
delays.
- A disciplined approach to scheduling and adherence to production plans.

10. Define Six Sigma & its tools.

Six Sigma is a data-driven methodology used to improve process performance, reduce
defects, and enhance overall quality by identifying and removing the causes of variability and
errors in a process. It aims to achieve near-perfect quality levels by targeting a defect rate of
less than 3.4 defects per million opportunities (DPMO).

Some of the tools commonly used in Six Sigma include:

- DMAIC: A structured problem-solving methodology that stands for Define, Measure,
Analyze, Improve, and Control.
- SIPOC: A high-level process map that stands for Suppliers, Inputs, Process, Outputs, and
Customers.
 - Process Mapping: A graphical representation of the steps and interactions within a process.
- FMEA: Failure Mode and Effects Analysis, used to identify and prioritize potential failures
in a process and their consequences.
- Control Charts: Graphical tools to monitor process stability and identify trends and
variations.
- Root Cause Analysis: Techniques to identify the underlying causes of problems and
defects.