Paper Title :- Production and Operation Management JAIPUR NATIONAL UNIVERSITY

1. Internal Assignment No :- 1
Paper Title :- Production and Operation Management
MBA :-- 205
1. I) Define Operation Management?
Operations management refers to the administration of business practices to create the highest level of
efficiency possible within an organization. Operations management is concerned with converting
materials and labor into goods and services as efficiently as possible to maximize the profit of an
organization.
ii) Name any four factors affecting Plant location ?
Some ofthe major factors which affect plant layout are: (1) Policies ofmanagement (2) Plant
location (3) Nature ofthe product (4) Volume ofproduction (5) Availability of floor space (6)
Nature of manufacturing process and (7) Repairs and maintenance ofequipment and machines.
1. Policies ofmanagement:
It is important to keep in mind various managerial policies and plans before deciding plant layout.
Various managerial policies relate to future volume ofproduction and expansion, size ofthe plant,
integration ofproduction processes;facilities to employees, sales and marketing policies and
purchasing policies etc. These policies and plans have positive impact in deciding plant layout.
(2) Plant location:
Location ofa plant greatly influences the layout ofthe plant. Topography, shape, climate
conditions, and size ofthe site selected will influence the general arrangement ofthe layout and the
flow ofwork in and out of the building.
(3) Nature ofthe product:

2. Nature of the commodity or article to be produced greatly affects the type oflayout to be adopted.
In case ofprocess industries, where the production is carried in a sequence,product layout is
suitable. For example, soap manufacturing, sugar producing units and breweries apply product
type oflayout. On the other hand in case ofintermittent or assembly industries, process type of
layout best suited. For example, in case ofindustries manufacturing cycles,typewriters, sewing
machines and refrigerators etc.,processlayout method is best suited.
(4) Volume ofproduction:
Plant layout is generally determined by taking into consideration the quantum of production to be
produced. There are three systems ofproduction viz.,
(5) Availability of floor space:
Availability of floor space can be other decisive factor in adopting a particular mode oflayout. If
there is a scarcity ofspace, product layout may be undertaken. On the other hand more space may
lead to the adoption ofprocess layout.
(6) Nature ofmanufacturing process:
The type ofmanufacturing process undertaken by a business enterprise will greatly affect the type
of layout to be undertaken.
iii) Draw The Input Output process diagram?

3. iv) What are the qualitative factor analysis models?

4. Qualitative analysis is a securities analysis that uses subjective judgment based on unquantifiable
information, such as management expertise, industry cycles, strength of research and development, and
labor relations. Qualitative analysis contrasts with quantitative analysis, which focuses on numbers that
can be found on reports such as balance sheets. The two techniques, however,will often be used together
in order to examine a company's operations and evaluate its potential as an investment opportunity.
v) Write the different types offacility layout?
Keeping in viewthe type ofindustry and volume ofproduction, the type oflayout to be selected is
to be decided from the following:
1. Product or Line Layout
2. Process or Functional Layout.
3. Fixed Position Layout.
4. Combination type of Layout.
Q. 2. Explain the concept ofABC analysis with an example ?
In materials management, the ABC analysis (or Selective Inventory Control) is
an inventory categorization technique. ABC analysis divides an inventory into three categories- "A items"
with very tight control and accurate records,"B items" with less tightly controlled and good records,and
"C items" with the simplest controls possible and minimal records.

5. The ABC analysis provides a mechanism for identifying items that will have a significant impact on
overall inventory cost,[1]
while also providing a mechanism for identifying different categories of stock
that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. [2]
Thus, the
inventory is grouped into three categories (A, B, and C) in order of their estimated importance.
'A' items are very important for an organization. Because of the high value of these 'A' items, frequent
value analysis is required. In addition to that, an organization needs to choose an appropriate order pattern
(e.g. ‘Just- in- time’) to avoid excess capacity. 'B' items are important, but of course less important than
'A' items and more important than 'C' items. Therefore 'B' items are intergroup items. 'C' items are
marginally important.
ABC analysis categories
There are no fixed threshold for each class,different proportion can be applied based on objective and
criteria. ABC Analysis is similar to the Pareto principle in that the 'A' items will typically account for a
large proportion of the overall value but a small percentage of number of items.[3]
Example of ABC class are
 ‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.
 ‘B’ items - 30% of the items accounts for 25% of the annual consumption value of the items.
 ‘C’ items - 50% of the items accounts for 5% of the annual consumption value of the items.
Another recommended breakdown of ABC classes:[4]
1. "A" approximately 10% of items or 66.6% of value
2. "B" approximately 20% of items or 23.3% of value
3. "C" approximately 70% of items or 10.1% of value

6. ts.
Distribution ofABC class
ABC class Number of items Total amount required
A 10％ 70％
B 20％ 20％
C 70％ 10％

7. Total 100％ 100％
Using this distribution of ABC class and change total number of the parts to 14213.
 Uniform Purchase
When you apply equal purchasing policy to all 14213 components, example weekly delivery and re-order
point (safety stock) of 2 week supply assuming that there are no lot size constraints, the factory will have
16000 delivery in 4 weeks and average inventory will be 2.5 week supply.
Application of Weighed Purchasing condition
Uniform condition Weighed condition
Items Conditions Items Conditions
All items
14213
Re-order point=2 week
supply
Delivery frequency=weekly
A-class items
200
Re-order point=1 week supply
Delivery frequency=weekly
B-class items 400
Re-order point=2 week supply
Delivery frequency=bi-weekly
C-class items
3400
Re-order point=3 week supply
Delivery frequency=every 4
weeks
Q. 3. What do you understand by TQM ? Explain the Role of TQM in an organization ?
“Quality management” ensures superior quality products and services.
Quality of a product can be measured in terms of performance, reliability and durability. Quality is a
crucial parameter which differentiates an organization from its competitors. Quality management tools
ensure changes in the systems and processes which eventually result in superior quality products and

8. services. Quality management methods such as Total Quality management or Six Sigma have a common
goal - to deliver a high quality product. Quality management is essential to create superior quality
products which not only meet but also exceed customer satisfaction. Customers need to be satisfied with
your brand. Business marketers are successful only when they emphasize on quality rather than quantity.
Quality products ensure that you survive the cut throat competition with a smile.
Quality management is essential for customer satisfaction which eventually leads to customer
loyalty.
How do you think businesses run? Do businesses thrive only on new customers? It is important for every
business to have some loyal customers. You need to have some customers who would come back to
your organization no matter what.
Would you buy a Nokia mobile again if the previous handset was defective? The answer is NO.
Customers would return to your organization only if they are satisfied with your products and services.
Make sure the end-user is happy with your product. Remember, a customer would be happy and satisfied
only when your product meets his expectations and fulfills his needs. Understand what the customer
expects from you? Find out what actually his need is? Collect relevant data which would give you more
insight into customer’s needs and demands. Customer feedbacks should be collected on a regular basis
and carefully monitored. Quality management ensures high quality products and services by eliminating
defects and incorporating continuous changes and improvements in the system. High quality products in
turn lead to loyal and satisfied customers who bring ten new customers along with them. Do not forget
that you might save some money by ignoring quality management processes but ultimately lose out on
your major customers, thus incurring huge losses. Quality management ensures that you deliver products
as per promises made to the customers through various modes of promotions.
Quality management tools help an organization to design and create a product which the
customer actually wants and desires.
Quality Management ensures increased revenues and higher productivity for the organization.
Remember, if an organization is earning, employees are also earning. Employees are frustrated only
when their salaries or other payments are not released on time. Yes, money is a strong motivating factor.
Would you feel like working if your organization does not give you salary on time? Ask yourself. Salaries
are released on time only when there is free cash flow. Implementing Quality management tools ensure
high customer loyalty, thus better business, increased cash flow, satisfied employees, healthy workplace
and so on. Quality management processes make the organization a better place to work.
Remove unnecessary processes which merely waste employee’s time and do not contribute much to the
organization’s productivity. Quality management enables employees to deliver more work in less time.
Quality management helpsorganizations to reduce waste and inventory.
It enables employees to work closely with suppliers and incorporate “Just in Time” Philosophy.
Quality management ensures close coordination between employees of an organization. It inculcates a
strong feeling of team work in the employees.

9. Internal Assignment No :- 2
Production and Operation Management
MBA :-- 205
1.
i.) What are two major responsibility of Operation Manager?
Ans :- Operations managers are essential to any large business organization. The core responsibilities of
operations managers tend to be similar across many industries.
Policy Formulation
Formulating policy is one of the core duties of an operations manager. Companies must operate and function on a
daily basis within a prescribed set of guidelines.
Planning
The planning of various company operations and activities is anothermajor concern of the operations manager.. The
operations manager also helps plan and coordinate activities between various departments such as determining what
types of sales promotions the company will engage in.
Controlling Resources
Controlling major company resources is yet a third major function of an operations manager. . Operations managers
regularly review financial statements to ensure that the company is operating as efficiently and as profitably as
possible.

10. Communication
A final core responsibility of an operations manager is communicating with other management professionals within
the organization to keep the company running smoothly, and communicating with other companies and
organizations with which the company does business.
ii) what do you understand by CPM?
The critical path method (CPM) is a step-by-step project management technique for process
planning that defines critical and non-critical tasks with the goal of preventing time-frame
problems and process bottlenecks. The CPM is ideally suited to projects consisting of numerous
activities that interact in a complex manner.
In applying the CPM, there are several steps that can be summarized as follows:
 Define the requiredtasksandputthemdownin an ordered(sequenced) list.
 Create a flowchartor otherdiagramshowing eachtaskin relationtothe others.
 Identifythe critical andnon-critical relationships(paths) amongtasks.
 Determine the expectedcompletionorexecutiontimeforeachtask.
 Locate or devise alternatives(backups) forthe mostcritical paths.
iii) What the concept of EOQ ?
Concept And Meaning Of Economic Order Quantity(EOQ)
Economic order quantity is also known as reorder quantity. Economic order quantity (EOQ) is a level
of inventory where the total cost of holding inventory is at minimum. Economic order quantity is the
level of quantity at which the cost of ordering will be equal with the storage cost of materials. In other
words, the quantity of materials which is economical to be ordered at one time is known as economic
order quantity. The total costs of materials consists of the ordering cost and carrying cost. While
determining the economic order quantity, the ordering cost and carrying cost should be considered.
iv) What are the types of Costs to be considered for inventory management?
There are three types of costs that must be considered in setting inventory levels:
1. HoldingCarrying cost:
They are expenses such as storage, handling, insurance, taxes, obsolescence, theft, and

11. interest on funds financing the goods. Holding costs are commonly assessed as a
percentage of unit value, rather than attempting to derive monetary value for each of these
costs individually.
2. Ordering costs:
Ordering costs are those fees associated with placing an order, including expenses related
to personnel in purchasing department, communications, and the handling of related paper
work.
3. Stock-out costs:
They include sales that are lost, both short and long term, when a desired item is not
available; the costs associated with back ordering the missing item; or expenses related to
stopping the production line because a component part has not arrived.
v) What is work study or work measurement ?
Work measurement is the application of techniques designed to establish the time for an
average worker to carry out a specified manufacturing task at a defined level of performance.[1]
It
is concerned with the length of time it takes to complete a work task assigned to a specific job
Work measurement helps to uncover non-standardization that exist in the workplace and non-value
adding activities and waste. A work has to be measured for the following reasons:
1. To discover and eliminate lost or ineffective time.
2. To establish standard times for performance measurement.
3. To measure performance against realistic expectations.
4. To set operating goals and objectives.
3) Explain any 5 difference between PERT and CPM
Project Management and Review Technique (PERT) andCritical Path
Method (CPM) are two popular statistical tool used by the business entities for
the management of the project. These two methods are used in the successful
completion of a project and hence used in conjunction with each other.
Nevertheless, the truth is that CPM is different from PERT in a way that the
former cost based while the latter is time based. In the same manner, there are
many differences between PERT and CPM, which we are going to discuss in this
article.

12. The most important differences between PERT and CPM are provided below:
1. PERT is a project management technique, whereby planning, scheduling,
organizing, coordinating and controlling of uncertain activities is done.
CPM is a statistical technique of project management in which planning,
scheduling, organizing, coordination and control of well defined activities
takes place.
2. PERT is a technique of planning and control of time. Unlike CPM, which is
a method to control costs and time.
3. PERT is set according to events while CPM is aligned towards activities.
4. Deterministic model is used in PERT. Conversely, CPM uses probabilistic
model.
5. There are three times estimates in PERT i.e. optimistic time (to), most
likely time ™, pessimistic time (tp). On the other hand, there is only
one estimate in CPM.
4) What is MRP? Write the objective and advantages of MRP?
Material requirement planning is an information system for production planning based on inventory
management. The basic components of material planning are:
 Material planning provides information that all the required raw material and products are
available for production.
 Material planning ensures that inventory level are maintained at its minimum levels. But also
ensures that material and product are available whenever production is scheduled, therefore,
helping in matching demand and supply.
 Material planning provides information of production planning and scheduling but also provides
information around dispatch and stocking.
Objective of Material Requirement Planning
Material req
uirement planning is processed which production planning and inventory control system, and its three
objectives are as follows:
 Primary objective is to ensure that material and components are available for production, and
final products are ready for dispatch.

13.  Another primary objective is not only to maintain minimum inventory but also ensure right quantity
of material is available at the right time to produce right quantity of final products.
 Another primary objective is to ensure planning of all manufacturing processes, this scheduling of
different job works as to minimize or remove any kind of idle time for machine and workers.
Advantages and Disadvantages of Material Resource Planning
As with every system based process, material resource planning also has its advantages and
disadvantages, and they are as follows:
Advantages of Material Resource Planning
 It helps in maintain minimum inventory levels.
 With minimum inventory levels, material planning also reduces associated costs.
 Material tracking becomes easy and ensures that economic order quantity is achieved for all lot
orders.
 Material planning smoothens capacity utilization and allocates correct time to products as per
demand forecast.