Agriculture ,

manufacturing and services are the major economic activities of

any country. Agriculture constitutes the primary sector, while
manufacturing constitutes the secondary sector and service , the
teritiary sector of the economy.
Manufacturing engages in converting inputs into products that are
consumed by individuals or organisations , whereas service
organisations uses a service delivery system to provide the
required services to its customers.
Manufacturers of automobiles , machine tools, TVs , etc. fall in the
manufacturing category , while consultancy firms, legal firms ,
hospitals, banks, etc. figure in the service category.
An operation system is defined as a set of different activities that
are performed to transform a set of inputs into useful outputs.
These inputs can be physical items such as materials and or
information Outputs can be tangible or intangible. Both
manufacturing and service system can be classified as operations
systems.
ANSWER 1. A) PRODUCTION OPERATIONS MANAGEMENT:

Production/operations management is the process, which combines and transforms

various resources used in the production/operations subsystem of the organization
into value added product/services in a controlled manner as per the policies of the
organization. Therefore, it is that part of an organization, which is concerned with
the transformation of a range of inputs into the required (products/services) having
the requisite quality level. The set of interrelated management activities, which are
involved in manufacturing certain products, is called as production management. If
the same concept is extended to services management, then the corresponding set
of management activities is called as operations management.
Production operations management is that function of an
organization that is concerned with the designing , planning and
control of resources for the production of goods and the provision
of services satisfy customer requirements.
I
N

MAN

P
U
T
S

MONEY

ECONOMIC

TRANSFORMATION
ACTIVITIES

T
GOODS &
SERVICES

P
U
T
S

NON- ECONOMIC

MATERIALS

CONTROLS

Transformation activities can be divided into various functions of

operaions management. These functions are :
Product design and development
Process design and analysis
Forecasting
Aggregate planning
Master production scheduling
Materials capacity planning
Production planning and control
Work study
Maintenance
Inventory control
Cost control
Organisations
constantly engage in value creation for their customers. Potential
for profit increases when more and more customer enjoy the
product and services of the organization. The profit potential is
directly related to the competitive advantage of the organization,
compared to its competitors. An important challenge facing an
organisation is to identify ways and means of creating competitive
advantage and sustaining it for a long period. A strategic planning
will help an organization to develop competitive advantage . A
good strategy will help the organisation to generate profit and
increase its market share.
Operations strategy is the process of making appropriate
decisions in the operations functions , in line with the overall
corporate strategy. These decisions include the extent of capacity
ANSWER 1. B) OPERATIONS MANAGEMENT STRATEGIES:

to be built , the type of process and manufacturing technology to

be employed the nature of products to be manufactured and the
type of supply chain to configure. Thus ,strategic planning
exercise enables an organisation to respond to the market needs
in the most effective manner by aligning its resources and various
activities to deliver products and services that are likely to
succeed in the market place.
Objectives of Production Management
The objective of the production management is to produce goods services of right
quality and quantity at the right time and right manufacturing cost.
1. RIGHT QUALITY
The quality of product is established based upon the customers needs. The right
quality is not necessarily best quality. It is determined by the cost of the product
and the technical characteristics as suited to the specific requirements.
2. RIGHT QUANTITY
The manufacturing organization should produce the products in right number. If
they are produced in excess of demand the capital will block up in the form of
inventory and if the quantity is produced in short of demand, leads to shortage of
products.
3. RIGHT TIME
Timeliness of delivery is one of the important parameter to judge the effectiveness
of production department. So, the production department has to make the optimal
utilization of input resources to achieve its objective.
4. RIGHT MANUFACTURING COST
Manufacturing costs are established before the product is actually manufactured.
Hence, all attempts should be made to produce the products at pre-established cost,
so as to reduce the variation between actual and the standard (pre-established) cost.

ANSWER 2. A) Concept of product design : Product design is

the starting point of all operations processes in an organisation.
Design affects the manufacturability , reliability , serviceability
and even logistics of products.

Product design moves through different stages during product

development. The different stages in a product development are :
conceptualisation , design , development and production .
1.Ideally, product development is performed by an interdisciplinary team with
representatives from different segments of an industrial enterprise including
engineering design, materials and manufacturing, finance, legal, sales, and
marketing. This is because in addition to satisfying the technical requirements, a
successful product should also be aesthetically pleasing, safe to use, economically
competitive, and compliant with legal and environmental constraints.
2.The activities involved in product development include: concept development
and feasibility study, system-level design, detail design and selection of materials
and processes, testing and refinement, launching the product, and selling the
product.
3. The selling price of a product is determined by the cost of product engineering
(design, R&D, testing & refinement), manufacturing cost (material and labor
costs), sales expense and administrative cost, income taxes, and net profit.
4. Because materials industry consumes a considerable amount of
energy in making its products, it is no longer acceptable that
engineering materials are used and then discarded in landfills.
Better alternatives include waste reduction and recycling. Efficient
recycling needs an infrastructure for sorting and scrap processing.
5. The life cycle of a product consists of introduction stage,
growth stage, maturity where the production rates and sales
volume reach the design value, decline where sales decrease
leading to the end of the life cycle of the product. Because most
profits are made during the maturity stage, it should be prolonged
by developing new markets and introducing design modifications.
ANSWER 2.B) VARIOUS PRODUCTION SYSTEMS : The
production system of an organization is that part, which produces products of an
organization.
It is that activity whereby resources, flowing within a defined system, are
combined and transformed in a controlled manner to add value in accordance with
the policies communicated by management.
The production system has the following characteristics:
1. Production is an organized activity, so every production system has an objective.
2. The system transforms the various inputs to useful outputs.

3. It does not operate in isolation from the other organization system.

4. There exists a feedback about the activities, which is essential to control and
improve system performance.
Production systems can be classified as Job Shop, Batch, Mass and Continuous
Production Systems

JOB SHOP PRODUCTION

Job shop production are characterised by manufacturing of one or few quantity of
products designed and produced as per the specification of customers within
prefixed time and cost. The distinguishing feature of this is low volume and high
variety of products. A job shop comprises of general purpose machines arranged
into different departments. Each job demands unique technological requirements,
demands processing on machines in a certain sequence.
Characteristics
The Job-shop production system is followed when there is:
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a
challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements
of each product, capacities for each work centre and order
priorities.
Advantages
Following are the advantages of job shop production:
1. Because of general purpose machines and facilities variety of products can be
produced.
2. Operators will become more skilled and competent, as each job gives them
learning opportunities.
3. Full potential of operators can be utilised.
4. Opportunity exists for creative methods and innovative ideas.
Limitations
Following are the limitations of job shop production:
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.

3. Production planning is complicated.

4. Larger space requirements.
BATCH PRODUCTION
Batch production is defined by American Production and Inventory Control
Society (APICS) as a form of manufacturing in which the job passes through the
functional departments in lots or batches and each lot may have a different
routing. It is characterised by the manufacture of limited number of products
produced at regular intervals and stocked awaiting sales.
Characteristics
Batch production system is used under the following circumstances:
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the production of item in a batch
and change of set up is required for processing the next batch.
4. When manufacturing lead time and cost are lower as compared to job order
production.
Advantages
Following are the advantages of batch production:
1. Better utilisation of plant and machinery.
2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of products.
6. Job satisfaction exists for operators.
Limitations
Following are the limitations of batch production:
1. Material handling is complex because of irregular and longer
flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to continuous
production.
4. Higher set up costs due to frequent changes in set up.
MASS PRODUCTION
Manufacture of discrete parts or assemblies using a continuous
process are called mass production. This production system is
justified by very large volume of production. The machines are
arranged in a line or product layout. Product and process
standardisation exists and all outputs follow the same path.

Characteristics
Mass production is used under the following circumstances:
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and
output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back
tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.
Advantages
Following are the advantages of mass production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.
Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.
CONTINUOUS PRODUCTION
Production facilities are arranged as per the sequence of production operations
from the first operations to the finished product. The items are made to flow
through the sequence of operations through material handling devices such as
conveyors, transfer devices, etc.
Characteristics
Continuous production is used under the following circumstances:
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.

5. Planning and scheduling is a routine action.

Advantages
Following are the advantages of continuous production:
1. Standardisation of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilisation due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.
Limitations
Following are the limitations of continuous production:
1. Flexibility to accommodate and process number of products does not exist.
2. Very high investment for setting flow lines.
3. Product differentiation is limited.

ANSWER 5.A) JUST-IN-TIME (JIT) MANUFACTURING

Introduction
Just-In-Time (JIT) Manufacturing is a philosophy rather than a technique. By
eliminating all waste and seeking continuous improvement, it aims at creating
manufacturing system that is response to the market needs.
The phase just in time is used to because this system operates with low WIP
(Work-In-Process) inventory and often with very low finished goods inventory.
Products are assembled just before they are sold, subassemblies are made just
before they are assembled and components are made and fabricated just before
subassemblies are made. This leads to lower WIP and reduced lead times. To
achieve this organizations have to be excellent in other areas e.g. quality.
According to Voss, JIT is viewed as a Production methodology which aims to
improve overall productivity through elimination of waste and which leads to
improved quality.
JIT provides an efficient production in an organization and delivery of only the
necessary parts in the right quantity, at the right time and place while using the
minimum facilities.
Seven Wastes
Shiego Shingo, a Japanese JIT authority and engineer at the Toyota Motor
Company identifies even wastes as being the targets of continuous improvement in
production process. By attending to these wastes, the improvement is achieved.

1. Waste of over production eliminate by reducing set-up times, synchronizing

quantities and timing between processes, layout problems. Make only what is
needed now.
2. Waste of waiting eliminate bottlenecks and balance uneven loads by flexible
work force and equipment.
3. Waste of transportation establish layouts and locations to make handling and
transport.
4. Waste of processing itself question regarding the reasons for existence of the
product and then why each process is necessary.
5. Waste of stocks reducing all other wastes reduces stocks.
6. Waste of motion study for economy and consistency. Economy improves
productivity and consistency improves quality. First improve the motions, then
mechanise or automate otherwise. There is danger of automating the waste.
7. Waste of making defective products develop the production process to prevent
defects from being produced, so as to eliminate inspection. At each process, do not
accept defects and makes no defects. Make the process fail-safe. A quantify
process always yield quality product.
Benefits of JIT
The most significant benefit is to improve the responsiveness of the firm to the
changes in the market place thus providing an advantage in competition. Following
are the benefits of JIT:
1. Product costis greatly reduced due to reduction of manufacturing cycle time,
reduction of waste and inventories and elimination of non-value added operation.
2. Qualityis improved because of continuous quality improvement programmes.
3. DesignDue to fast response to engineering change, alternative designs can be
quickly brought on the shop floor.
4. Productivity improvement.
5. Higher production system flexibility.
6. Administrative and ease and simplicity.

ANSWER 5. B) ACCEPTANCE SAMPLING: The objective of acceptance

sampling is to take decision whether to accept or reject a lot based
on samples characteristics. The lot may be incoming raw materials or finished
parts. An accurate method to check the quality of lots is to do 100% inspection.
But, 100% inspection will have the following limitations:
_ The cost of inspection is high.
_ Destructive methods of testing will result in 100% spoilage of the parts.
_ Time taken for inspection will be too long.

_ When the population is large or infinite, it would be impossible or impracticable

to inspect each unit. Hence, acceptance-sampling procedure has lot of scope in
practical application. Acceptance sampling can be used for attributes as well as
variables. Acceptance sampling deals with accept or reject situation of the
incoming raw materials and finished goods. Let the size of the incoming lot be N
and the size of the sample drawn be n.
The probability of getting a given number of defective goods parts out a sample
consisting of n pieces will follow binomial distribution. If the lot size is infinite or
very large, such that when a sample is drawn from it and not replaced, then the
usage of binomial distribution is justified.
Otherwise, we will have to use hyper-geometric distribution. Specifications of a
single sampling plan will contain a sample size (n) and an acceptance number C.
As an example, if we assume the sample size as 50 and the acceptance number as
3, the interpretation of the plan is explained as follows: Select a sample of size 50
from a lot and obtain the number of defective pieces in the sample. If the number
of defective pieces is less than or equal to 3, then accept the whole lot from which
the sample is drawn. Otherwise, reject the whole lot. This is called single sampling
plan. There are several variations of this plan. In this process, one will commit two
types of errors, viz., type-I error and type-II error. If the lot is really good, but
based on the sample information, it is rejected, then the supplier/ producer will be
penalized. This is called producers risk or type-I error. The notation for this error
is . On the other hand, if the lot is really bad, but it is accepted based on the
sample information, then the customer will be at loss. This is called consumers
risk or type-II error. The notation for this error is . So, both parties should jointly
decide about the levels of producers risk () and consumers risk ( ) based on
mutual agreement.

ANSWER 5. C) MAINTENANCE POLICY: Equipments are an important

resource which is constantly used for adding value to products. So,
it must be kept at the best operating condition. Otherwise, there will be excessive
downtime and also interruption of production if it is used in a mass production line.
Poor working of equipments will lead to quality related problems. Hence, it is an
absolute necessity to maintain the equipments in good operating conditions with
economical cost. Hence, we need an integrated approach to minimize the cost of
maintenance. In certain cases, the equipment will be obsolete over a period

of time. If a firm wants to be in the same business competitively, it has to take

decision on whether to replace the equipment or to retain the old equipment by
taking the cost of maintenance and operation into account.

TYPES OF MAINTENANCE
The design life of most equipment requires periodic maintenance. Belts need
adjustment, alignment needs to be maintained, proper lubrication on rotating
equipment is required, and so on. In some cases, certain components need
replacement, e.g., a wheel bearing on a motor vehicle, to ensure the main piece of
equipment (in this case a car) last for its design life. Different approaches have
been developed to know how maintenance can be performed to ensure equipment
reaches or exceeds its design life. In addition to waiting for a piece of equipment to
fail (reactive maintenance) the other approaches are preventive maintenance,
predictive maintenance, or reliability centered maintenance.
Breakdown (Reactive) Maintenance
Breakdown maintenance is basically the run it till it breaks maintenance mode.
No actions or efforts are taken to maintain the equipment as the designer originally
intended to ensure design life is reached. Studies as recent indicate that, this is still
the predominant mode of maintenance.
Advantages to breakdown maintenance can be viewed as a double-edged sword. If
we are dealing with new equipment, we can expect minimal incidents of failure. If
our maintenance program is purely reactive, we will not expend manpower or incur
capital cost until something breaks. Since we do not see any associated
maintenance cost, we could view this period as saving money. In reality, during the
time we believe we are saving maintenance and capital cost, we are really spending
more money than we would have under a different maintenance approach.
We are spending more money associated with capital cost because, while waiting
for the equipment to break, we are shortening the life of the equipment resulting in
more frequent replacement. We may incur cost upon failure of the primary device
associated with its failure causing the failure of a secondary device. This is an
increased cost we would not have experienced if our maintenanceprogram was

more proactive.Our labour cost associated with repair will probably be higher than
normal because the failure will most likely require more extensive repairs than
would have been required if the piece of equipment had not been run to failure.
Chances are the piece of equipment will fail during off hours or close to the end of
the normal workday. If it is a critical piece of equipment that needs to be back online quickly, we will have to pay maintenance overtime cost. Since we expect to
run equipment to failure, we will require a large material inventory of repair parts.
This is a cost we could minimize under a different maintenance strategy.

Advantages
1. Involves low cost investment for maintenance.
2. Less staff is required.
Disadvantages
1. Increased cost due to unplanned downtime of equipment.
2. Increased labour cost, especially if overtime is needed.
3. Cost involved with repair or replacement of equipment.
4. Possible secondary equipment or process damage from equipment failure.
5. Inefficient use of staff resources.
8.3.2 Preventive Maintenance
Preventive maintenance can be defined as, Actions performed on a time or
machine-run-based schedule that detect, preclude, or mitigate degradation of a
component or system with the aim of sustaining or extending its useful life through
controlling degradation to an acceptable level.
Preventive maintenance is a means to increase the reliability of their equipment.
By simply expending the necessary resources to conduct maintenance activities
intended by the equipment designer, equipment life is extended and its reliability is
increased. In addition to an increase in reliability, lot of amount will be saved over
that of a program just using reactive maintenance.
Studies indicate that this savings can amount to as much as 12% to 18% on the
average.
Advantages
1. Cost effective in many capital intensive processes.
2. Flexibility allows for the adjustment of maintenance periodicity.
3. Increased component life cycle.
4. Energy savings.

5. Reduced equipment or process failure.

6. Estimated 12% to 18% cost savings over reactive maintenance program.
Disadvantages
1. Catastrophic failures still likely to occur.
2. Labour intensive.
3. Includes performance of unneeded maintenance.
4. Potential for incidental damage to components in conducting unneeded
maintenance.
Depending on the facilities current maintenance practices, present equipment
reliability, and facility downtime, there is little doubt that many facilities purely
reliant on reactive maintenance could save much more than 18% by instituting a
proper preventive maintenance program.
While preventive maintenance is not the optimum maintenance program, it does
have several advantages over that of a purely reactive program. By performing the
preventive maintenance.
Predictive Maintenance
Predictive maintenance can be defined as Measurements that detect the onset of a
degradation mechanism, thereby allowing causal stressors to be eliminated or
controlled prior to any significant deterioration in the component physical state.
Results indicate current and future functional capability.
Basically, predictive maintenance differs from preventive maintenance by basing
maintenance need on the actual condition of the machine rather than on some
preset schedule. Preventive maintenance is time-based. Activities such as changing
lubricant are based on time, like calendar time or equipment run time. For
example, most people change the oil in their vehicles every 3,000 to 5,000 miles
travelled. This is effectively basing the oil change needs on equipment run time.
No concern is given to the actual condition and performance capability of the oil. It
is changed because it is time. This methodology would be analogous to a
preventive maintenance task. If, on the other hand, the operator of the car
discounted the vehicle run time and had the oil analyzed at some periodicity to
determine its actual condition and lubrication properties, he may be able
to extend the oil change until the vehicle had travelled 10,000 miles. This is the
fundamental difference between predictive maintenance and preventive
maintenance, whereby predictive maintenance is used to define needed
maintenance task based on quantified material/equipment condition.
There are many advantages of predictive maintenance. A well-orchestrated
predictive maintenance program will eliminate catastrophic equipment failures.
Schedule of maintenance activities can be made to minimize or delete overtime
cost. It is possible to minimize inventory and order parts, as required, well ahead of

time to support the downstream maintenance needs and optimize the operation of
the equipment, saving energy cost and increasing plant reliability.
Past studies have estimated that a properly functioning predictive maintenance
program can provide a savings of 8% to 12% over a program utilizing preventive
maintenance alone. Depending on a facilitys reliance on reactive maintenance and
material condition, it could easily recognize savings opportunities exceeding 30%
to 40%. Independent surveys indicate the following industrial average savings
resultant from initiation of a functional predictive maintenance program:
1. Return on investment10 times
2. Reduction in maintenance costs25% to 30%
3. Elimination of breakdowns70% to 75%
4. Reduction in downtime35% to 45%
5. Increase in production20% to 25%.
Advantages
1. Increased component operational life/availability.
2. Allows for pre-emptive corrective actions.
3. Decrease in equipment or process downtime.
4. Decrease in costs for parts and labour.
5. Better product quality.
6. Improved worker and environmental safety.
7. Improved worker moral.
8. Energy savings.
9. Estimated 8% to 12% cost savings over preventive maintenance program.
Disadvantages
1. Increased investment in diagnostic equipment.
2. Increased investment in staff training.
3. Savings potential not readily seen by management.
MAINTENANCE PLANNING
Planning of maintenance jobs basically deals with answering two questions, what
and Howof the job; what activities are to be done? and how those jobs and
activities are to be done?While answering these two questions, other
supplementary questions are to be answered, e.g., where the jobs is to be done?
and why the job is to be done? etc., but all these will be helping in developing
what and how of the job. It is very essential that engineering knowledge must
be applied extensively to maintenance jobs for development of appropriate job
plans using most suited techniques, tools materials and special facilities etc.
As the job planning forms the basic foundations, over which the efficiency and cost
of actions depends, persons responsible for job planning should have adequate

capabilities, such as, knowledge about jobs and available techniques, facilities and
resources, analytical ability, conceptual logical ability and judgmental courage etc.
Steps of Job Planning
The main steps to be followed for proper job planning are:
1. Knowledge base: It includes knowledge about equipment, job, available
techniques, materials and facilities.
2. Job investigation at site: It gives a clear perception of the total jobs.
3. Identify and document the work: Knowing the earlier two steps and knowing
the needs of preventive, predictive and other maintenance jobs.
4. Development of repair plan: Preparation of step by step procedures which
would accomplish the work with the most economical use of time, manpower and
material.
5. Preparation tools and facilities list indicating the needs of special tools, tackles
and facilities needed.
6. Estimation of time required to do the job with work measurement technique
and critical path analysis.
MAINTENANCE SCHEDULE TECHNIQUES
Different types of schedules are made suiting the respective job plans and different
techniques are used for making and following those schedules. The first step of all
scheduling is to break the job into small measurable elements, called activities and
to arrange them in logical sequences considering the preceding, concurrent and
succeeding activities so that a succeeding activity should follow preceding
activities and concurrent activities can start together. Arranging these activities in
different fashion makes different types of schedules. They are as follows:
1. Weekly general schedule is made to provide weeks worth of work for each
employee in an area.
2. Daily schedule is developed to provide a days work for each maintenance
employee of the area.
3. Gantt charts are used to represent the timings of tasks required to complete a
project.
4. Bar charts used for technical analysis which represents the relative magnitude
of the values.
5. PERT/CPM are used to find the time required for completion of the job and
helps in the allocation of resources.