PRODUCTION AND OPERATION RESEARCH

1. PRODUCTION AND OPERATION
RESEARCH
MODULE 1

2. Definition, meaning, functions, objectives
and benefits of production and materials
management.
Production systems, types, advantages,
limitations and examples.

3. Meaning of Production Management
Production Management refers to the application
of management principles to the production
function in a factory.
In other words, production management involves
application of planning, organizing, directing and
controlling the production process.

4. Definition of Production Management
•“Production management deals with
decision-making related to production
processes so that the resulting goods or
service is produced according to
specification, in the amount and by the
schedule demanded and at minimum cost.”

5. Functions of Production Management
• Design and development of production process.
• Production planning and control.
• Implementation of the plan and related activities to
produce the desired output.
• Administration and co-ordination of the activities of
various components and departments responsible for
producing the necessary goods and services.

6. Objectives of Production Management
• Right quality: The term right quality refers to a suitability of an item for the
purpose it is required. For producing the goods of best quality, the best grade of
raw material may be the right quality whereas for producing items of
medium quality, the average lowest grade may be the right quality.
• Right quantity: The right quantity is the quantity that may be purchased at a
time with the minimum total cost and which obviates shortage of materials.
Ensuring and maintaining a regular flow of materials for carrying the production
activity is the vital aim of any purchase organisation.
• 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.
• Right / Minimum cost:

7. Definitions of Materials Management
 ‘Materials Management’ is a term used to “controlling the kind,
amount, location, movement and timing of various commodities used in
production by industrial enterprises”.
 Materials Management is the planning, directing, controlling and
coordinating those activities which are concerned with materials and
inventory requirements, from the point of their inception to their
introduction into the manufacturing process.
 Materials Management is a basic function of the business that adds
value directly to the product.

8. Functions of Materials Management
• Planning and programming for materials purchase.
• Stores and Stock control.
• Receiving and issue of the material.
• Transportation and material handling of the material.
• Value engineering and value analysis: Value engineering is a
systematic, organized approach to providing necessary functions in a
project at the lowest cost. Value engineering promotes the
substitution of materials and methods with less expensive
alternatives, without sacrificing functionality. ... Value engineering is
also called value analysis.
• Disposal of scrap and surplus materials.

9. Disposal of scrap and surplus materials.
1. Feedback
2. Return to the Supplier:
3. Direct Sale to Another Company:
4. Sale to Dealer or Broker:
5. Sale to Employees:
6. Donation to Educational/Research Institutions:

10. Objectives of Materials Management
• Material Selection: right quality, quantity, time & cost
• Low operating costs: Operating costs include all expenses
associated with the day-to-day maintenance
and administration of a business.
• Receiving and controlling material safely and in good
condition.
• Issue material upon receipt of appropriate authority.
• Identification of surplus stocks and taking appropriate
measures to produce it.

11. Benefits of Material Management
• Regular uninterrupted supply of raw-materials to
ensure continuity of production.
• By providing economy in purchasing and minimizing
waste it leads to higher productivity.
• To minimize storage and stock control costs.
• By minimizing cost of production to increase profits.
• To purchase items of best quality at the most
competitive price.

12. Production System
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.

13. Types of Production systems

14. Intermittent Production System
Intermittent means something that starts (initiates) and stops (halts)
at irregular (unfixed) intervals (time gaps).
 In the intermittent production system, goods are produced based on
customer's orders. These goods are produced on a small scale.
The flow of production is not continuous. In this system, large
varieties of products are produced.
These products are of different sizes. (Customized)
The design of these products goes on changing according to the
design and size of the product. Therefore, this system is very flexible.

15. Examples
• The work of a goldsmith is purely based on the frequency of his
customer's orders.
• The goldsmith makes goods (ornaments) on a small-scale basis as per
his customer's requirements.
• Here, ornaments are not done on a continuous basis.
• The work of a tailor is also based on the number of orders he gets
from his customers.
• The clothes are stitched for every customer independently by the
tailor as per one's measurement and size.

18. Project Production flows
•Project production flows, company accepts
a single, complex order or contract. The
order must be completed within a given
period of time and at an estimated cost.
•Examples of project production flows mainly
include, construction of airports, dams,
roads, buildings, shipbuilding, etc.

19. Jobbing Production flows
• Jobbing production flows, company accepts a contract to
produce either one or few units of a product strictly as per
specifications given by the customer.
• The product is produced within a given period and at a
fixed cost.
• This cost is fixed at the time of signing the contract.
• Examples of such jobbing production flows include, services
given by repair shops, tailoring shops, manufacturer of
special machine tools, etc.

20. • The production of items takes place in small lots. Sometimes
only one product is produced at one time.
• The items are manufactured strictly as per customer's
specifications.
• Highly skilled labour is required to perform specialized jobs.
• There is disproportionate manufacturing cycle time.
• For e.g. the time needed to design the product may be more
than the manufacturing time.
Characteristics

21. Job production has the following limitations
1. The economies of large scale production may not be
attained because production is done in short-runs.
2. The demand is irregular for some products.
3. The use of labour and equipment may be an
inefficient.
4. The scientific assessment of cost in difficult.

22. 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 characterized by the manufacture of limited
number of products produced at regular intervals and
stocked awaiting sales.

23. Characteristics
One operation is carried out on whole batch and
then is passed on to the next operation and so
on.
Same type of machines is arranged at one place.

24. Examples of Batch Production
• Baked goods
• Clothing
• Computer chips
• Computer software
• Electrical goods
• Newspapers/magazines
• Medicines
• Books

25. •Advantages
Better utilization of plant and machinery.
• Promotes functional specialization.
• Lower investment in plant and machinery.
•Limitations
• Production planning and control is complex.
• Higher set up costs due to frequent changes in set up.

26. 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.

27. Characteristics
• Standard products are manufactured, which have large demand
throughout the year.
• Standardized inputs and standardized sequence of operations,
machine tools and equipment are used.
• Division of labour is made more efficient.
• Use of productivity techniques is feasible.
• Minimum cost of production per unit is possible.
• More maintenance is required.

28. Types of Continues Production Systems
•Mass Production System
•Process production System
•Assembly production system

29. 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.

31. Characteristics
• Standardization of product and process sequence.
• Dedicated special purpose machines having higher production
capacities and output rates.
• Large volume of products.
• Perfectly balanced production lines.
• Production planning and control is easy.
• Material handling can be completely automatic.

32. •Advantages
• Higher rate of production with reduced cycle time.
• Less skilled operators are required.
• Manufacturing cost per unit is low.
•Limitations
• Breakdown of one machine will stop an entire production line.
• High investment in production facilities.

33. Process Production
•This system is used for the manufacture of those
items whose demand is continuous and high.
•Here, single raw material can be transformed
into different kinds of products at different
stages of the production process.
&

35. Process production is classified into two
• Analytical process of production and
• Synthetic process of production.
• Analytical Process of Production: In analytical process of production,
a raw material is broken into different products. For example, crude
oil is analysed into gas, naphtha, petrol, etc. Similarly, coal is
processed to obtain coke, coal, gas, coal-tar, etc.
• Synthetic process of production: Synthetic process of production, on
the other hand, involves the mixing of two or more materials to
manufacture a product. For instance, lauric acid, myristic acid,
plasmatic acid, stearic acid, linoleic acid, etc., are synthesized to
manufacture soap.

36. Assembly Production
• In assembling process, two or more components are
combined to manufacture a finished product.
• Such process is employed in assembling automobiles,
radio sets, television sets, bicycles, watches, cameras,
etc.

37. Advantages of Continuous Production System
1. Reduced Labour cost
2. High accuracy
3. Reduced material handling,
4. Minimum wastage
5. Better materials /inventory control
6. Higher return on investments.

38. Limitations of Continuous Production System
1. Heavy loss during slack demand period
2. Customers’ tastes cannot be met as only one standard product is
manufactured.
3. Special purpose machine tools are required.