1. WINTER DRIVE 2015 EXAM APRIL/MAY 2016
MASTERS OF BUSINESS ADMINISTRATION
SEMESTER II
SUBJECT CODE - MB0044
PRODUCTION AND OPERATIONS MNGT.
Q. No.1 What is value engineering? List the main benefits of value engineering?
Ans.1
Value engineering value analysis
Value engineering (VE) or value analysis is a methodology by which we try to minimize the cost and
improve the revenue of a product or an operation.
Let us consider a component which needs a round brass rod as raw material of diameter 21.5mm. the
component has to perform seven operations: cutting, drilling, chamfering, boring, milling, plating, and
polishing.
Value analysis considers all aspects of each of these and investigates whether any of them can be
substituted by another material, a different size, a different tool for an operation, a different chemical,
a different concentration, a different voltage, shorter time or processing.
Modern manufacturing can be seen from two important perspectives. One is the management
approach which consists of adopting techniques like TQM, JIT, Kanban, cincurrent engineering, lean
manufacturing, TPM, group technology, cellular manufacturing, and others. These have basic
philosophies based on which techniques, tools, and methodologies are developed, to aid the process,
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2. we have computers and software written to collect data, process them, distribute them, and analysa
them. We have management information systems which help in decision making, and this can be
stated as the second important perspective.
With globalization, procurement and distribution are being conducted over great distances. The main
thrust is on quality and timely delivery at the least price. These are the values that we put in the
product.
Benefits:
The main benefits of the application of VE are:
• cost reduction
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3. • overall cost consciousness
• a culture of effecting savings across organization
• streamlining of administration and creation of transparency in all dealings evens with outsiders
• development of reliable suppliers
Q. No.2 Case study: SABMiller revamps supply chain management
SABMiller, the $24bn global brewing giant,is revamping its supply chain management system to
reduce stock-outs caused by an increasingly complex and hard to predict market.
The firm is developing and testing the new system in South Africa with an eye on rolling it out to
group companies worldwide. Says SABMiller programme manager Rudi van Schoor.
The trigger for the revamp came when the company’s customers ran out of stocks of popular
SABMiller brands during peak periods in two consecutive years, 2007 and 2008. The shortfall on
some brands was as high as 22%. “That had a direct on the bottom line,” Van Schoor says.
Given SABMiller’s ambition to be the world’s most efficient producer, such a gap was never going to
be tolerated. Bout instead of addressing the symptom, it called in management consultancy
McKinsey to look at the entire supply chain system to see where it could be improved and future
stock-outs avoided.
The study revealed a complex situation, one that wasn’t susceptible to a “quick fix”, Van Schoor
says…………………………………………..
Why did SABMIller revamp its supply chain? Describe the domain application used for SCM
integration?
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4. Ans.2
Solution:
See Answer of This Case Study in Paid Assignment……..
Q. No: 3 Write short notes on:
• Ingredients of a business process
• Acceptance sampling
• Work Breakdown Structure
• Productivity
Ans.3 (a)
The ingredients of business process:-
The ingredients that might be used in a business process can be briefly outlined as follows:
• the data which accomplishes the desired business objective
• acquisition, storage, distribution, and control of data which undrtakes the process across tasks
• persons, teams, and organizational units which helps to perform and achieve the take
• decisions which enhance the value of data during the process
We also have some behavioral aspects of the business process, mainly the decision making process
where humans are involved. Decision failures are common and research has shown that, the failure of
decisions due to:
• bases in perception and fallacies in reasoning
• tendency to bring out of memory the facts that reinforce easily for verification and or
confirmation
• tendency of bring out of memory the facts that reinforce our assumption and based evaluation
• tendency to accept evidence or facts as absolute which support our hypothesis
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5. These listed factors result in faulty decision making. Being aware and avoideing them consciously
improves the processes of the business.
Ans.3 (b)
Acceptance sampling:
Acceptance sampling is also known as end of line inspection and categorizing the products based on
sample based inspection. In acceptance sampling method of quality control, the supplier and
customer agree upon accepting a lot, by inspecting a small number taken randomly from the bulk
supply. Out of the sample, if a small number as agreed upon by the parties or as validated by a
sampling scheme, is determined as defective, the lot is accepted. If the number of defectives is more
than the agreed size, the entire lot is rejected; obviously, risks for the producer and buyer exist. As the
sample size increases and the number of acceptable defectives decreases, the risk for the buyer
decreases. And the converse is true. That is the reason these numbers cannot be foxed as they depend
on the customer’s requirements.
Ans.3(c)
Work breakdown structure (WBS):
The entire process of a project may be considered to be made up on number of sub process placed in
different stage called the work breakdown structure (WBS).
WBS is the technique the content of work and cost by breaking it down into its component parts.
Project key stages form the highest level of the WBS, which id then used to show the details at the
lower levels of the project. Each key stage comprises many tasks identified at the start of planning and
later this list will have to be validated.
Ans.3 (d)
Productivity
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6. Productivity is generally expressed as the ratio of outputs to inputs.
While the above ratio may imply efficiency is the value added for
every unit of investment. Thus, it is value added upon cost.
Enhancement of productivity is achieved by either reducing the inputs for the same output or
increasing the output by using the same input.
Productivity can be calculated for:
• A single operation
• A functional unit
• A department or division
• A plant
Productivity is a measure of the efficiency of the system and looks at the economies achieved during
the processes. Every process will have a number of contributions which help in achieving the
maximum productivity. The processes are people, machines, facilitating goods, ancillary equipments,
and technology. Each of these elements attempts to enhance the contribution of other elements.
Q. No. 4 Collaborative Forecasting Running Smoothly at Brooks Sports.
Brooks Sports designs and develops high-performance running footwear, apparel and accessories
which are sold in 80 countries worldwide. In 2001, when the company shifted from a broad product
line to focus on high-performance products targeted at serious runners, it was clear that the
forecasting process needed to change to support the strategic direction of the company. The
existing forecasting process, based entirely on the judgment of the sales team, was limiting the
company’s ability to grow………………………………………………………….
What is the main issue of the case study? Analyze the forecasting solution.
Q.No.5 Explain the risk management and its various components.
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7. Q. No. 6 Why redesign of layouts may be necessary? List the differences between product and
process layout.
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