PRODUCTION AND OPERATIONS MANAGEMENT

MBA (201)
ASSIGNMENT
WINTER 2018-2019

NAGESHWAR SINGH
1802000398

Q1. Explain factors affecting Strategic decision-making.

Ans:

 Environmental scanning – It refers to the scanning of the different environment that

effects the working of the organization. Environmental scanning helps to find out the
strengths and the weakness of the organization. Environmental scanning helps the
managers to take decisions according to the problems they are facing in the organization.
The business environment of any organization includes the industry, marketplace,
governmental agencies, society, ecology, technology, and others. Organizations should be
aware of the business environment in which the firm exists, and have to compete
continually by exhibiting potential for opportunities and threats. Being aware of those,
and their impact on the firm by a process of analysis, is called environmental scanning.
Typically it used to be SWOT analysis. Now there is also PESTLE analysis which stands
for analysis of Political, Environmental, Social, Technological, Legal and Economic
environments. These analyses help in shaping the operations strategies.
 Core competencies – It refers to the strengths of the organization by which they can
achieve their goals on time with optimum utilization of resources. These strengths are
analyzed by the managers after scanning the environment of the organization. Each
organization is started by an entrepreneur or a small group of entrepreneurs. The
objective is to use their unique strengths to create and develop an organization. These
 unique strengths are the core-competencies of the organization. For example, IKEA, the
Swedish furniture maker has the core competency in design. IBM’s core competency lies
in research. Apple is known for innovation. Reliance group’s core competency is
handling mega projects. However, many-a-time, it becomes necessary to augment the
existing business with some additional strengths or competencies. Such developments
and improvements in core competencies provide an edge over the competitors who would
have to grapple with these competencies. These build ups are usually through
collaborations and acquisitions or joint ventures. Core processes of an organization are
determined by the core competencies.
 Customer relationship
 New product/service development
 Supplier relationship
 Order fulfillment

The emphasis on these processes depends on:

 The type of industry

 The length of its existence
 The consequent strengths built up in certain areas
 The way earlier successes have been achieved
 The reinforcement they have given to the organization

Q2. List Quantitative and Qualitative Methods of Forecasting .

Ans: Several Qualitative methods of forecasting:

 Market surveys: It refers to the surveys conducted by the organization for different
purposes. Conducting surveys among the prospective buyers or users is a very old
method of forecasting. Here, a questionnaire is prepared and circulated among the people
and their responses are obtained The responses are collated and analysed to reveal
possible clues towards acceptance or otherwise about a new product or service. Based on
 the overall decision, the forecasting is done. This method is typically done for new
products or at new places where a product is to be launched.
 Nominal group testing: In this method trial use is given and then the results are
analysed. In the nominal group testing method, the product or service may be given a
trial use to a specified group like students, employees, neighbours, etc. and their
responses are collected and analysed.
 Historical analysis: It includes making predictions for future on analysing the past
actions. The historical analysis method is based on the fact that the past is an indicator of
the future. People try to associate the events that happened earlier with the events that are
likely to happen in the future.
 Jury of executive opinion: This method is concerned with opinions. In the jury of
executive opinion method, the opinion of a group of experts is collected and used as an
estimate to obtain the forecast.
 Life cycle analysis: In the life cycle analysis method, an assessment of the life cycle
stage in which the product lies is made first and an opinion is formed.
 Delphi method: In the Delphi method, the experts give their opinions which are
collected by the coordinator and several rounds of discussion may be held before a
consensus is reached. This forms the basis for forecasting.

Various Quantitative Methods are:

1) Time series analysis: A time series is defined as a set of values pertaining to a variable
collected at regular intervals (weekly, quarterly, or yearly). For example, the temperature
recorded every one hour is time series. Similarly, the annual rainfall or agricultural output
forms a time series.

 Moving average method: A moving average is obtained by summing and averaging

the values of a time series over a given number of periods repetitively, each time
deleting the oldest value and adding a new value. Usually, the number of time periods
chosen will be an odd number like 3 or 5 or 7.
 Weighted moving average: In the simple moving average, all the past periods in the
averaging period are weighted equally and hence, the forecast is sometimes influenced
 by bigger values. Secondly, older values are not relevant, particularly in the changing
environments. Hence, to reflect those changes, the simple moving average method is
modified by using different weights to different time periods. A weighted average
generally gives more weight to recent observations than older ones. This has an
advantage over simple moving averages that, older values are given less importance
than more recent values of a series and that the number of values included in the
average can be large while still achieving responsiveness to changes through judicious
selection of weights.
 Exponential smoothing method: It insists on the principle of modification of the
time series method. This method is a modified weighted moving average method using
weights in an exponentially increasing way. The name exponential smoothing is
derived from the way the weights are assigned to historical data: The most recent
values receive most of the weight and weights decrease exponentially as we go back in
the periods.
 Naive method: It refers to the set of observations. In the naive method, a set of
observations pertaining to a certain variable like sales, production, or consumption is
observed and the forecast is taken as the same value as that of the most recent period.

2) Casual Methods

 Regression Analysis
 Input-Output Model
 Leading Indicators
 Simulations Models
 Economic Models

Q3) Describe manufacturing facility layouts .

Ans :

1) Process layout: The first type of layout is process layout. In this process the machines
are grouped together according to their working and processing. This type of layout is
 concerned with the grouping of machines, process, or services according to their
function. This grouping of machines by function is characteristic of job shops and batch
type production facilities. Hence this type of layout is also called as functional layout.
Process layout typically uses general purpose machines that can be changed over rapidly
to new operations for different product designs.
2) Product layout: The second type of manufacturing layout is the product layout. These
machines are used to perform a specific function for a specific time .Product layout is
also known as 'line layout', it focuses on the sequence of production or assembly
operations enquired for manufacturing or assembling a part or a product. These are used
in mass or continuous production. Examples are automobile assembly, cement
manufacturing, oil refining. In contrast to process layouts, they are not flexible as they
are specifically designed for making or assembling one product.
3) Fixed position layout: The third type of manufacturing layout is the fixed position
layout. This layout is concerned with the physical location. Work is done o the basis of
the physical location. In this type of layout, the product is located in a fixed position and
all the resources like workers, materials, machines and equipment's are transported to that
location. Missile assembly, large aircraft assembly, ship construction and bridge
construction are examples of fixed-position layouts. These layouts are used when a
product is bulky, large, heavy or fragile. These minimise the amount of product
movement required.
4) Group technology layout: The last manufacturing layout is group technology layout. It
includes grouping of machines into a single unit for performing the task given to the
employees and the managers of the organization. In group technology, machines are
grouped into a cell. The cell acts like a product layout which is land within a larger
process layout environment. It requires that each cell process is a family of parts that
have many common characteristics, such as machining operations, similar machine set -
ups and common raw materials. Due to these common characteristics, the parts can be
produced in a different path through a cell much like a product layout.
 SET -2

Q1 Explain Business Process Modeling

Ans: Business Process Modeling

Business process modeling consists of two parts –

1) Logical processing modeling:

The first business processing modeling is logical process modeling. It represents all the activities
together. Logical process modeling is the representation of putting together all the activities of
business process in detail and making a representation of them. The initial data collected has to
be arranged in a logical manner so that, links are made between nodes for making the workflow
smooth.

Logical process model consists of only the business activities and shows the connectivity among
them. The process model is a representation of the business activities and is different from the
technology dependent ones. Thus, we have a model that is singularly structured only for business
activities. Computer programs are also present in the total system. This allows the business
oriented executives to be in control of the inputs, processes and outputs. The logical process
model improves control on the access to data. It also identifies, who is in possession of data at
different nodes in the dataflow network that has been structured.

2) Physical process modeling:

The second type of business process model is physical process modeling. It is concerned with the
actual design of the organization. Physical process modeling is concerned with the actual design
of database meeting the requirements of the business. Physical modeling deals with the
conversion of the logical model into a relational model. Objects get defined at the schema level.
The objects here are tables created on the basis of entities and attributes. A database is defined
for the business. All the information is put together to make the database software specific. This
means that the objects during physical modeling vary on the database software being used. The
outcomes are server model diagrams showing tables and relationships with a database.
Q2) Explain project management life cycle and its phases.

Ans: Project management life cycle

Project management life cycle consists of the following activities:

 Understanding the scope of the project

 Establishing objectives of the project
 Formulating and planning various activities
 Executing the project
 Monitoring and controlling the project resources
 Closing and post completion analysis

Phases of project management cycle

1) Analysis and evaluation phase:

It deals with the strategic planning of the problem and submission of report to the top level
management. Analysis and evaluation phase is the initial phase of any project. In this phase,
information is collected from the customer pertaining to the project. From the collected
information, the requirements of the project are analyzed. According to the customer
requirement, the entire project is planned in a strategic manner..

2) Marketing phase

A project proposal is prepared by a group of people including the project manager. This proposal
has to contain the strategies adopted to market the product to the customers.

3) Design phase

Design phase involves the study of inputs and outputs of the various project stages. These stages
are Input and Output stages.

•Inputs received consist of: project feasibility study, preliminary project evaluation details,
project proposal, and customer interviews.
Outputs produced consist of: system design specifications, functional specifications of the
project, design specifications of the project, and project plan.

Execution phase

In execution phase, the project manager and the team members work on the project objectives as
per the plan. At every stage during the execution, reports are prepared.

Control – inspecting, testing and delivery phase

During this phase, the project team works under the guidance of the project manager. The project
manager has to ensure that the team is implementing the project designs accurately. The project
has to be tracked or monitored through its cost, manpower, and schedule. The project manager
has to ensure ways of managing the customer and marketing the future work, as well as ways to
perform quality control work.

Closure and post completion analysis phase

Upon satisfactory completion and delivery of the intended product or service, the staff
performance has to be evaluated. The project manager has to document the lessons from the
project. Reports on project feedback get prepared and analyzed. A project execution report is
prepared.

Q3) Describe major decision areas in supply chain management

Ans) 1.Location decision: The geographic placement of production facilities, stocking points,
and sourcing points is the natural first step in creating a supply chain. The location of facilities
involves a commitment of resources to a long term plan. Once the size, number, and location of
the production are determined, the possible paths of product supply to the final customer can be
determined. These decisions are of great significance to a firm since they represent the basic
strategy for accessing customer markets. They will have a considerable impact on revenue, cost,
and level of service. These decisions should be determined by an optimization routine that
considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution
costs, and production limitations.
2. Production decision: It is concerned with the production process of the organization. The
strategic decisions include what products to produce and which plants to produce, in allocation
of suppliers to plants, plants to distribution control system (DCS), and then DCS to customer
markets. As mentioned earlier, these decisions have a big impact on the revenues, costs, and
customer service levels of the firm. These decisions assume the existence of the facilities, but
determine the exact path through which a product flows to and from these facilities. Another
critical issue is the capacity of the manufacturing facilities – and this largely depends on the
degree of vertical integration within the firm. Operational decisions focus on detailed production
scheduling. These decisions include the construction of the master production schedules,
scheduling production on machines, and equipment maintenance..

3. Inventory decisions: It refers to decisions that are taken to manage the inventory in a
particular organization. Inventory decisions refer to means by which inventories are managed.
Inventories exist at every stage of the supply chain as either raw material, semi-finished or
finished goods. They can also be in process between locations. Their primary purpose is to buffer
against any uncertainty that might exist in the supply chain. Since holding of inventories can cost
anywhere between 20 to 40 percent of their value, their efficient management is critical in supply
chain operations. It is strategic in the sense that top management sets goals. However, most
researchers have approached the management of inventory from an operational perspective.
These include deployment strategies control policies – the determination of the optimal levels of
order quantities and reorder points, and setting safety stock levels, at each stocking location.

4. Transportation decisions: These decisions deals with the transportation related issues faced
by the organization. Transportation decisions are closely linked to the inventory decisions, since
the best choice of the mode is often found by trading-off the cost of using the particular mode of
transport with the indirect cost of inventory associated with that mode. While air shipments may
be fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile, shipping by sea
or rail may be much cheaper, but they necessitate holding relatively large amounts of inventory
to buffer against the inherent uncertainty associated with them. Therefore, customer service
levels and geographic location play vital roles in such decisions. Since transportation is more
than 30 percent of the logistics costs, operating efficiently makes good economic sense.
Shipment sizes, routing and scheduling of goods are the keys in effective management of the
firm’s transport strategy.