Operations Management Key Unit I 1. Define Productions system.

. Explain how the concept of production system helps in understanding of production and operations management. - JUNE 2010 Or Explain the system concept of production - JUNE 2011 Or Discuss the design issues under which the operations system function. NOVEMBER/DECEMBER 2010 Production System Conversion System Control Sub-system

2. Discuss the organization of production function. - JUNE 2011 Or What are the various functions of operations? How are they linked to other parts of an organization? NOVEMBER/DECEMBER 2010 It defines the relationship between various positions, departments and persons. Position of Various Production Related Functions 1. Product Engineering

2. Production Engineering 3. Plant Maintenance 4. Production planning and control 5. Purchasing 6. Research and Development 7. Marketing Division 8. Finance and Accounting 9. Information Systems 10. Personnel and Industrial Administration

3. Explain the recent trends in production and operations management. - JUNE 2011 Or With illustrations from Indian and International context enumerate the recent trends in production and operations management. May/June 2012 a. Global Market Place: b. Production/Operations Strategy: c. Total Quality Management: d. Flexibility e. Time Reduction f. Technology g. Worker Involvement h. Re-engineering i. Environmental Issues j. Corporate Downsizing (Right Sizing) k. Supply Chain Management l. Lean Production 4. Discuss the need and scope of strategic operations management. (8) - JUNE 2011 Need of Strategic Operations Management Strategic Direction is futuristic Strategies have multifunctional and Multi-business effects Allocation of Resources and improve co-ordination Framework for operational planning Clarity in direction of activities Scope of Strategic Operations Management Product Portfolio

Process Design Capacity and Facilities Supply Chain Technology Quality Sourcing

5. In todays global environmental scenario the nature of operations management in any country is similar to International Operations Management Comment. Take a stand and substantiate your views. May/June 2012 1. Sourcing and vertical Integration Arguments to Make and to Buy (Outsourcing) 2. Facility Location 3. Standardization of Production Functions 4. Contract Manufacturing 5. Supply Chain Management 6. Managing Service Operations 7. International Quality Standards 8. Internationalization of R & D 9. Managing technology transfers

Facilities Location

Country Factor Resources Availability , Infrastructure, Comm unity , Culture

Product Factors Value to weight ratio, Suitability to universal needs

Org anization Issues Business strategy , Org anization Structure, Inventory manag ement

T echnological Factors Feasibility Setup cost

Govt. PoliciesIncentives and S ubsidiaries, Import restrictions, Environment regulations, Labour legislations, Political risk

S upplier S upplier S upplier S torag e

Manufacturing

S torag e

D istribution

R etailer

C ustom er

S upplier S torag e S upplier S ervice C ustom er

6. What are the steps involved in strategic-formulation process? How does the manufacturing technology provide unique advantages to organization in providing products and services to customers? (10) NOVEMBER/DECEMBER 2010 Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps. Though these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order. Setting Organizations objectives Evaluating the Organizational Setting Quantitative Aiming in context with the divisional plans Performance Analysis Choice of Strategy

7. Describe the elements of operation strategy. 1. Positioning the production system Product Focused Process Focused 2. Product/Service design and development. 3. Technology selection and process development 4. Allocation of resources to strategic alternatives 5. Facility planning. 8. Enumerate the Competitive Priorities in operations strategy

1. 2. 3. 4. 5. 6. 7. 8. 9.

Product and service design Cost Location Quality Quick response Flexibility Inventory management Supply chain management Service

Unit II 1. Explain the activities involved in long range capacity planning decision. (8) - JUNE 2010 Assessing existing capacity Forecasting future capacity needs Identifying alternative ways to modify capacity Evaluating financial, economical and technological capacity alternatives Selecting a capacity alternative most suited to achieve the strategic mission of the firm 2. Discuss the information flow for planning and control with MRP. (8) - JUNE 2010
Information flow of planning and controlling with MRP
Business Plan
Forecast Current conditions

Production Plan Tentative MPS Master Schedule

Rough cut Capacity check

Inventory status file

MRP Program
Make items

Product Structure file

Buy items

CRP Purchase Order Detailed Production Plans

Vendor feed-back

Production Activity Control

3. Write about the aggregate planning methods, advantages and their limitation.(8) NOVEMBER/DECEMBER 2010 Varying workforce size by hiring and lay off Varying production rate by use of overtime or idle time Level production and use of inventory built up, in periods of high demand Subcontracting to meet the excess demand which is more that the normal capacity available in-house Capacity utilization, according to the demand to be met Chase approach capacities (workforce levels, production schedules, output rates, etc.) are adjusted to match demand requirements over the planning horizon. Advantages: anticipation inventory is not required, and investment in inventory is low labour utilization is kept high Disadvantages: expense of adjusting output rates and/or workforce levels alienation of workforce Level Approach Capacities (workforce levels, production schedules, output rates, etc.) are kept constant over the planning horizon. Advantages: stable output rates and workforce levels Disadvantages: greater inventory investment is required increased overtime and idle time resource utilizations vary over time Aggregate Planning Methods: Intuitive Methods Intuitive methods use management intuition, experience, and rules-of-thumb, frequently accompanied by graphical and/or spreadsheet analysis. Advantage: easy to use and explain Disadvantage: many solutions are possible, most of which are not optimal 4. What are the factors influencing effective capacity and what are all the factors favoring overcapacity and under capacity? Discuss. (8) - NOVEMBER/DECEMBER 2010 Facilities factor Product/service factor Process factors Human resource factor Operational factor External factor 5. Describe the importance and functions of capacity requirement planning for a manufacturing operation. (8) - JUNE 2011

Importance: To estimate the demand Helps organization to identify and plan to meet customer demand Helps to find optimal capacity Helps initial investment low If helps to satisfy the future demand Functions Enable the firm to flow smoothly without either backlog of orders or a build-up of stock To stock prior to the demand Safeguards against low supplies Use to determine in detail labour, material and machine resource required Considering the lead time

6. Discuss how aggregate production planning is related to master production schedule. (8) JUNE 2011
Demand Management Aggregate Planning What IfAnalysis Final Assembly Schedule MPS Rough-cut Capacity Planning CRP Resource Planning

MRP

Vendor Followup S ystem

Production Activity Control

Operations Sequencing

7. With a detailed sketch explain the evolution of ERP from MRP. - May/June 2012 Timeline 1960 1970 1980 1990 2000 System Inventory Management and Control Material Requirement Planning ( MRP) Material Resource Planning(MRP II) Enterprise Resource Planning(ERP) Web Enabled ERP

8. List the various types of demand forecasting and explain in detail any two qualitative and quantitative methods of demand forecasting. - May/June 2012 Technological forecasts Economic forecasts Demand forecasts 1. Qualitative methods consist mainly of subjective inputs, often of non-numerical description. Jury of executive opinion method involves taking opinion of a small group of high-level managers and results in a group estimate of demand. Salesforce composite method is based on estimate of expected sales by sales persons. Market research method or consumer survey method determines consumer interest in a product or service by means of a consumer survey. Delphi method is a judgemental method which uses a group process that allows experts to make forecasts. 2. Quantitative methods involve either projection of historical data or the development of association models which attempt to use causal variables to arrive at the forecasts Time series models Moving Average Simple moving average, weighted moving average, exponential smoothening Regression and Correlation Methods

9. Developing capacity alternatives: Design flexibility into systems Differentiate between new and mature products or services Take a big picture approach to capacity changes. Prepare to deal with capacity chunks Attempt to smooth out capacity requirements. Identify the optimal operating level.

10. List the various types of demand forecasting and explain in detail any two qualitative and quantitative methods of demand forecasting. - May/June 2012 Technological forecasts Economic forecasts Demand forecasts Qualitative methods Jury of executive opinion Salesforce composite method Market research method or consumer survey method Delphi method Quantitative methods Time series models

 Moving Average Simple moving average, weighted moving average, exponential smoothening Regression and Correlation Methods 11. Over view of MRP (or) Information Flow in Planning and controlling with MRP. MRP - It is a technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy MPS

Information flow of planning and controlling with MRP

Business Plan
Forecast Current conditions

Production Plan Tentative MPS Master Schedule

Rough cut Capacity check

Inventory status file

MRP Program
Make items

Product Structure file

Buy items

CRP Purchase Order Detailed Production Plans

Vendor feed-back

Production Activity Control

12. Operation of MRP System

Operation of MRP System

Input
Inventory status file MPS File MRP Systems

Processing

Output
Inventory Transaction data Planned order schedule Exception reports

BOM File

13. Computational procedure of MRP

The MRP Computational Procedure

MPS File

Inventory Status File

MRP Processing Logic

BOM File

Order release requirements ( orders to be released now)

Order rescheduling ( expedite, deexpedite or cancel open order)

Planned order (future)

(a) BOM - A listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product (b) Inventory status file It contains important information such as what items should be ordered and when orders should be released (c) Gross Requirements Project the use of the items (d) Schedule receipts indicates when the previously released orders if any are scheduled to be received and available for use (e) On hand inventory It indicate the number of units projected to be available at the end of each time period. (f) Net requirement Calculated by subtracting from the gross requirements for that period. (g) Planned order release- It indicate when orders should be placed ot meet the requirements for the item. 14. Issues in MRP a. Lot Sizing b. Safety Stock c. Scrap allowance d. Pegging e. Cycle counting f. Updating g. Time fence

15. Lot- Sizing Rules 1. Fixed Order Quantity (FOQ) A rule that maintain the same order quantity each time an order is issued Formula: (Projected On-hand inventory balance at end of week t) = (Inventory on hand at end of week t-1) + (Scheduled (or) planned receipts in week t) Gross requirement in week t)

2. Periodic Order Quantity (POQ)A rule that allows a different order quantity for each order issued but tends to issue the order at predetermined time intervals. Formula: (POQ lot size to arrive in week t) = (Total gross requirements for P weeks, including week t ) (Projected on-hand inventory balance at end of week t-1) 3. Lot for lot (L4L) A rule under which the lot size ordered covers the gross requirement of a single week. Formula: (L4L lot size) = (Gross requirement in week t) (Projected on-hand inventory balance at the end of week t-1)