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Assignment A Q.1: Discuss the changing philosophy of operations management. What are the new trends in operations management?

Answer: Changing philosophy of operations management Operations management has two important components. 1. Operations systems and procedures. 2. Philosophy The performance of the organi ation is greatly influenced !y the philosophy or mental framewor" of the people in#ol#ed. $anagement philosophy influences the decision ma"ing and thought process in the organi ation. %t pro#ides a wor"ing en#ironment and wor" culture& which ma"es all the difference to the organi ation. Operations management is concerned with all these aspects rather than 'ust producing goods and ser#ices. %n today(s operations management& the focus has shifted from the earlier concept of large scale production and cost reduction to new methodologies& new approaches& new tools& system(s simplification& continuous impro#ements& total )uality management and 'ust*in*time manufacturing. The operations management are not limiting their options to the new technologies de#elopment& automation and computeri ation& !ut are loo"ing !eyond with new approaches and perspecti#es. The following are factors affecting Operations Management: +eality of glo!al competition Quality& customer ser#ice and cost challenges +apid e,pansion of ad#anced technologies -ontinued growth of the ser#ice sector .carcity of operations resources .ocial responsi!ility issues

Operations management has undergone lots of changes in its concept& structure and implementation. The three terminologies are interrelated. 1. $anufacturing management&

2. Production management and /. $odern operations management( The concept of manufacturing management is more than a century old. .u!di#ision of wor" and speciali ation of wor"force was the focus of manufacturing management. Production management !ecame popular in 10/1s. 2 scientific approach& techni)ues of doing wor" or use of techni)ues in decision ma"ing !ecame the focus of production management. %ndustrial engineering applications& wor" measurement& method study& incenti#e schemes were used to impro#e efficiency in operations. %n modern operations management& the focus is on product )uality& customer satisfaction& technological inno#ation& collecti#e performance of management and use of models in !etter decision ma"ing. New trends in the operations management can !e summari ed as under: 3lo!al $ar"et Place: 3lo!ali ation of !usiness has compelled many manufacturing firms to ha#e operations in many countries where they ha#e certain economic ad#antages. This has resulted in a step increase in the le#el of competition among manufacturing firms throughout the world. Production4Operations .trategy: $ore and more firms are recogni ing the importance of production4operations strategy for the o#erall success of their !usiness and the necessity for relating it to their o#erall !usiness strategy. Total Quality $anagement 5TQ$6: TQ$ approach has !een adopted !y many firms to achie#e customer satisfaction !y a ne#er ending )uest for impro#ing the )uality of goods and ser#ices. Flexibility: the a!ility to adapt )uic"ly to changes in #olume of demand& in the product mi, demanded& and in product design or in deli#ery schedules& has !ecome a ma'or competiti#e strategy and a competiti#e ad#antage to the firms. This is sometimes called as agile manufacturing. Cycle time reduction: +eduction of manufacturing cycle time and speed to mar"et for a new product pro#ides competiti#e edge to a firm o#er other firms. When companies can pro#ide products at the same price and )uality& )uic"er deli#ery 5short lead times6 pro#ide one firm competiti#e edge o#er the other.

Technology: 2d#ances in technology ha#e led to a #ast array of new products& new processes and new materials and components. 2utomation& computeri ation& information and communication technologies ha#e re#olutioni ed the way companies operate.

Wor" in#ol#ement 5Wor"ers are not costs& they are assets6: The recent trend is to assign responsi!ility for decision ma"ing and pro!lem sol#ing to the lower le#els in the organi ation. This is "nown as employees( in#ol#ement and empowerment. 7,amples of wor"er in#ol#ement are )uality circles and use of wor" teams or )uality impro#ement teams.

8usiness

process

+e*engineering:

This

in#ol#es

drastic

measures

or

!rea"through impro#ements to impro#e the performance of a firm. %t in#ol#es the concept of clean slate approach or starting from scratch in redesigning the !usiness processes. 7n#ironmental issues: Today(s production managers are concerned more and more with pollution control and waste disposal which are "ey issues in protection os en#ironment and social responsi!ility. -orporate Downsi ing 5Or right .i ing6 Downsi ing or right si ing has !een forced on firms to shed their o!esity. This has !ecome necessary due to competition& lowering producti#ity& need for impro#ed profit and for higher di#idend payments to shareholders. .upply -hain $anagement: $anagement of supply chain from suppliers to final customers reduces the cost of transportation& warehousing and distri!ution throughout the supply chain. 9ean production: Production systems ha#e !ecome lean production systems which use minimal amounts of resources to produce a high #olume of high )uality goods with some #ariety. These systems use fle,i!le manufacturing systems and multi s"illed wor"force to ha#e ad#antages of !oth mass production and 'o! production. Q.2: What is the difference in strategy in de#eloping an initial layout for a new facility as compared to the strategy in impro#ing the layout of an e,isting facility?

Answer: 2 layout is the physical configuration of departments& wor"stations& and e)uipments in the con#ersion process. %t is arrangement of physical resources used to create the product. .uccess of operations depends on the physical layouts of the facilities. :low of raw material. Producti#ity and human relationship are all affected !y the arrangements of the con#ersion facilities. 2ccording to $oore ; Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipment and all other supporting services along with the design of best structure to contain all these facilities. Plant layout in#ol#es: Planning and arranging facilities in new plant %mpro#ements in e,isting layout to introduce new methods. Planning and arranging facilities in new plant 9ayout decisions ha#e long term conse)uences on cost and companies a!ility to ser#e the customers. %ts optimal goal is to ma,imi e the profit !y arrangement of all the plant facilities to the !est ad#antage of total manufacturing of the product. The following are the ma'or o!'ecti#es of layout: Pro#iding enough production capacity +educing material handling costs 7asy super#isions %mpro#ement in producti#ity 7fficient utili ation la!or %ncrease in morale of the employees +educing accidents and ha ards to personnel +educing congestion <tili ing the space efficiently and effecti#ely. :acilitate the organi ational structure Improvements in existing layout to introduce new methods The impro#ements of layout in e,isting facility has the important role in the sense that 2 good plant layout in#ol#es not only the designing and installing of the layout for the first time !ut also re#ision of e,isting layout& in addition The !est layout !ecomes o!solete o#er a period of time. The following reasons can push plant managers underta"ing new strategies for facility layout re#isions: 7,pansion Technological ad#ancements %mpro#ement in the layout Expansion %t is a natural feature of any industrial esta!lishment. 2 plant may e,pand in: %ncrease in the output of the e,isting layout

%ntroduction of a new product Di#ersification of the lines of acti#ity Technological development +eplacement of la!our !y machines De#elopments in fuel and energy De#elopments in process De#elopments in materials %mpro#ements in product design and 2d#ancements in information technology. Improvement in the layout 9ayout needs to !e re#iewed and re#ised to correct any deficiencies. The limitations in a layout go unchec"ed for two reasons: The e#ils of a poor layout are a hidden cost not re#ealed e#en !y !est accounting method 7#en if the limitations are re#ealed the management may !e unwilling to initiate remedial steps The ta!le !elow summari es this difference: New facility e!ised or existing facility collect all the data of the e,ternal Ta"e into account all the e,isting constraints in terms of: en#ironment to the facility physical structure and !uilding study the physical flows in and out to health and safety issues to !e the facility respected analy e the ma, capacity of the redesign the material flow production process& and a#oid streamlining it with a lean approach !ottlenec"s test a pilot ma"e it simple and efficient& with an implement totally appropriate layout !etween production area& warehouse and =indirect people office= supporting the production : this people needs to !e located closed to the production area to support it )uic"ly simulate and model the possi!le solutions with a computer !ased program !efore implementing

Q.3: Discuss the #arious factors to !e considered to decide the location of a cement plant? >ow do the factors differ in case of a nuclear plant? Answer: The first step in cement plant location would !e to decide whether the facility should !e located domestically or internationally. This is necessary !ecause& countries across

the world are #ying with each other to attract foreign in#estments. The choice of a particular country depends on such factors as political sta!ility& e,port ? import )uotas& currency ? e,change rates& cultural ? economic conditions. The second step would !e the selection of a particular region out of the many natural regions of a country. The following factors would influence such selection: 2#aila!ility of raw materials @earness to the mar"et 2#aila!ility of power Transport facilities .uita!ility of climate 3o#ernment Policy -ompetition !etween states The third step would !e selecting a particular locality or community in a region where!y the selection of a locality in a particular region is influenced !y the following factors: 2#aila!ility of la!our -i#ic amenities for wor"ers 7,istence of complementary ? competing industries :inance ? research facilities 2#aila!ility of water ? fire fighting facilities 9ocal ta,es ? restriction $omentum of an early start Personal factors .election of the site will !e !ased on the following elements: Technical 7conomical -ommercial .ocial Political

3o#ernment policies Technical factors Technical considerations relating to the location of a cement plant may include the following: Ai!rations -limate :loods .oil condition :actors that affect the installation cost and operating cost of the plant are to !e e,amined carefully. -ost of land is normally #ery high in an industrial area. 8ut if a plant is located in remote area& distance from the plant from the source of raw materials or from the mar"et for the finished products !ecomes #ery long. 9ot of money has to !e spent for mo#ement of raw materials to the plant or for mo#ing the products to the mar"et. 2part from this& lot of time and effort are spent in transportation of the materials. 7conomic factors that need to !e considered are: 2#aila!ility of power and water Quic" access to raw material source Quic" access to the mar"et $anpower Total cost 9ocation of a plant is generally influenced !y many commercial factors such as: 9ocation of other industrial units installed in the region 2#aila!ility of ser#ices from e,pert contractors 2#aila!ility of competent repairs facilities in the #icinity of the plant %t is a great ad#antage if the main machinery manufacturer has his office near!y. 8an"ing facilities& airport and seaport should !e closer to the plant. 9ots of materials are re)uired at #ery short notice for urgent repairs and maintenance of the plant and machinery. Too long a distance !etween the plant and the airport4 seaport is not desira!le. %ris ad#antageous to ha#e the

Commercial Factors

location of the plant in or near a commercially de#eloped area well connected !y road& sea and air. "ocial Factors 2#aila!ility of good housing comple,es& recreation facilities& school and medical facilities facilitate the li#ing of the people. %t is essential to fulfill the !asic re)uirements of the people. 3ood )uality of people could !e attracted if their !asic needs are fulfilled. 2 plant producing high le#el of air and noise pollution distur! the near!y en#ironment and people li#ing in ad'oining areas. 2t the same time& a plant which does not create such pro!lems to the society& if located near!y creates more 'o! opportunities to the local population. Political Factors 8esides economic& technical and social factors& political factors will !e e)ually important for deciding the location of a cement plant. Aarious parts of the world are facing militancy in one form or the other& ad#ersely affecting peace in the region and influencing e#ery wal" of life. 7#en !usiness is not left untouched !y militancy. Political insta!ility or distur!ances in a country can ruin the smooth operation of a plant and hamper its future growth. Political insta!ility or distur!ances in a country can ruin the smooth operation of a cement plant ? hamper its future growth. #o!ernment Policies :or de#elopment of a !ac"ward area& #arious go#ernments offer many attracti#e concessions and !enefits to industrial entrepreneurs to set up their plants. These !enefits or concessions are so attracti#e that they influence the decision a!out the location of a cement plant. :or e,ample& the go#ernment can gi#e land at a #ery low price& assure an uninterrupted and ade)uate power supply and water supply& construct a #ery good road networ" and gi#e ta, re!ates for a period of fi#e or ten years. %n #iew of such !enefits& #arious in#estors are attracted to in#est in the area !y setting up the plants as the returns on the in#estments are #ery high.

2part from the !asic amenities the following points should !e "ept in #iew while selecting the site for a nuclear power station $i%A!ailabilty of &ater 2s sufficient of water is re)uired for the cooling purposes& therefore the plant site should !e located where ample )uantity of water is a#aila!le. $ii% 'isposal of &aste The waste produced !y fission in nuclear power station is generally radio acti#e which must !e disposed off properly to a#oid health ha ards. The waste should either !e !uried in a deep trunch or disposed off in a sea )uite away from the sea shore. Therefore the site selected for such a plant should ha#e ade)uate arrangement for the disposal of radio acti#e waste. $iii%'istance from populated areas The site selected for a nuclear power station should !e )uite away from the populated areas as there is a danger of presence of radio acti#ity in the atmosphere near the plant. >owe#er& as a precautionary measure& a dome is used in the plant which does not allow the radioacti#ity to spread !y wind or underground waterways. $i!%Transportation Facilities The site selected for a nuclear power station should ha#e ade)uate facilities in order to transport the hea#y e)uipments during erection and to facilitate the mo#ement of wor"ers in the plant. :rom the a!o#e mentioned factors it !ecome apparent that ideal choice for a nuclear power station would !e near sea or ri#er and away from thic"ly populated areas. B. Write short notes on: Answer: a% Capacity e(uirements Planning& also "nown as -+P& in $anufacturing +esource Planning 5$+P6 parlance& is the techni)ue that allows !usiness to plan ahead to determine how large their future in#entory capacity needs to !e in order to meet demand. -+P also helps companies determine how much space they will need to hold these materials. %t #erifies that you ha#e the sufficient capacity a#aila!le to meet the capacity re)uirement for the $+P plans. %t thus helps the planners to ma"e the right decisions on scheduling !efore the pro!lem de#elops. The "ey elements of the -apacity +e)uirements Planning process are of esta!lishing& measuring& and ad'usting the limits or le#els of the production

capacity !ased on the process of determining the amount of la!or and machine resources re)uired to accomplish the tas"s of production. %nputs of the -+P process are the Order 7ntry modules in a $+P system which facilitates translating the orders into hours of wor" !y the wor" center !y time period #ia the use of parts routings and time standards. 2ccording to !usiness definition& capacity re)uirements planning is a computeri ed trac"ing process that translates production re)uirements into practical implications for manufacturing resources. -apacity re)uirements planning is part of manufacturing resource planning and is carried out after a manufacturing resource planning program has !een run. This produces an infinite capacity plan& as it does not ta"e account of the capacity constraints of each wor"station. Where the process is e,tended to co#er capacity re)uirements& a finite capacity plan is produced. This ena!les loading at each wor"station to !e smoothed and determines the need for additional resources. :orecast for demand of the product is the !ase for estimating the short term wor"load on the facility. -ompanies ma"e plans for a period of a!out one year and wor"out the e,pected output of different products or ser#ices !ased on the forecast. The plans thus generated are compared with the e,isting capacity. %t is o!ser#ed that one of the products ha#e high demand in one season and low demand in another. For example: Woolen clothes would ha#e high demand in winter season whereas in summer it could ha#e low or no demand. 2nother product could ha#e a uniform demand throughout the year. :or e,ample& mil" and some of the food items ha#e uniform demand throughout the year. -apacity +e)uirement plans 5-+P6 loo"s into the indi#idual operations !y using the routine information. 7ach operation is #alued in standard hours& which results in total hours re)uired per wor" center per time period. :inal ad'ustments are then made to the manufacturing plan at the operation le#el to o!tain a !alanced wor"load for each wor" center.

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ough cut capacity plans $ CCP% ser#es the $aster Production .chedule 5$P.6 for one or two years. +--P is used to chec" the !alance of scheduled items& normally finished goods& and time period. +--P loo"s at the wor"load for each critical area !y time period. %f this e,ercise is not carried out& it would result in an out of !alance $P.& which would cause o#erloads and waiting time in manufacturing. +e!alancing the wor"load at the last minute to get the material supply in line with the $P. would !e a #ery difficult 'o!. ough Cut Capacity Planning is a term used in relationship with production planning and controlling an en#ironment. 5+--P6 is also an important part of the manufacturing process within a company( s .upply -hain !y e#aluating capacity with a#aila!ility within a companies manufacturing en#ironment.

c%

esource

e(uirement Planning 5++P6 ser#es the production plan and

co#ers a num!er of years. 9onger term capacity re)uirements are difficult to determine due to the uncertainties in the future mar"et demand and technologies. ++P is interacti#e. -apacity re)uirements are dependant on the mar"eting plans and forecasts. Q.C. 2ctual demand differs from forecasted demand. >ow to ad'ust the aggregate plan to meet this situation? 2.C 2ctual demand is the demand e#idenced !y customers Dorders and4or allocation of in#entory. Demand forecasting is the acti#ity of estimating the )uantity of a product or ser#ice that consumers will purchase. Demand forecasting in#ol#es techni)ues including !oth informal methods& such as educated guesses& and )uantitati#e methods& such as the use of historical sales data or current data from test mar"ets. Demand forecasting may !e used in ma"ing pricing decisions& in assessing future capacity re)uirements& or in ma"ing decisions on whether to enter a new mar"et. :orecasts are essential for the smooth operations of the !usiness organi ations. They pro#ide information that can assist managers in guiding future acti#ities toward organi ational goal. :orecasts are estimates of the occurrence& timing& or magnitude of uncertain future e#ents. Operations managers are primarily concerned with concerned with forecasts of demand& which are often made !y mar"eting. >owe#er& managers also use forecasts to estimate raw material prices& plan for appropriate le#els of personnel& help decide how much in#entory to carry& and a host of other acti#ities. This results in !etter use of capacity& more responsi#e ser#ice to customers& and impro#ed profita!ility. 2s for the determination of the production re)uirements the forecasted demand places on the facility& it may happen that there is a difference !etween forecasted demands and

actual. There are three strategies to cope with this situation that are e,plained in the following lines: .trategy 1.Aary the num!er of Producti#e employees in +esponse to Aarying output +e)uirements 5also "nown as -hase 1 plan6. >ere& first the a#erage producti#ity per employee is first calculated which determines the num!er of employees needed to meet the monthly re)uired output demand. The employees are laid off when the output demand falls. 2s a result there is always >iring and laying of employees. This strategy has the following disad#antages: The hiring and layoff costs are going to !e high& indirect costs of training new employees are going to !e there& employee morale low& re)uired wor" s"ills may not !e readily a#aila!le when they are needed& lead times necessary to hire and train the new employees must !e accounted for in the planning process& society reaction negati#e. :inally this strategy is not feasi!le for the companies constrained !y guaranteed wage and also hiring and layoff agreements. "trategy ): Maintain a Constant &or* Force "i+e but ,ary the -tili+ation of the &or* Force $also *nown as .e!el / 0 6 for e,ample& the strategy of employing E1 wor"ers per month throughout the year is chosen. On an a#erage& this wor" force would !e capa!le of producing E11 wagons each day. During the lean months 5Fanuary& :e!ruary& $arch& Fuly& Octo!er& @o#em!er& Decem!er6& the wor" force would !e scheduled to produce only the amount forecasted& resulting in some idle wor"ing hours. During high*demand months 52pril& $ay& Fune& 2ugust& .eptem!er6& o#ertime operations would !e needed to meet demand. The wor" force would therefore !e intensely utili ed during some months and underutili ed in other months. 2 !ig ad#antage of this strategy is that it a#oids the hiring and layoff costs associated with strategy 1. 8ut other costs are incurred instead. O#ertime& for e,ample& can !e #ery e,pensi#e& commonly at least C1 percent higher than regular*time wages. :urthermore& there are !oth legal and !eha#ioral limits on o#ertime. When employees wor" a lot of o#ertime& they tend to !ecome inefficient& and 'o!*related accidents happen more often.

%dle time also has some su!tle draw!ac"s. During slac" periods& employee morale can diminish& especially if the idle time is percei#ed to !e a precursor of layoffs. Opportunity costs also result from idle time. When employees are forced to !e idle& the company foregoes the opportunity of additional output. While wages are still paid& some potential output has !een lost fore#er. "trategy /: ,ary the "i+e of 1n!entory in *nown as Chase /) plan% :inished goods in#entories in ma"e*to*stoc" companies can !e used as a cushion against fluctuating demand. 2 fi,ed num!er of employees& selected so that little or no o#ertime or idle time is incurred& can !e maintained throughout the planning hori on. Producing at a constant rate& output will e,ceed demand during slac" demand periods& and finished goods in#entories will accumulate. During pea" periods& when demand is greater than capacity& the demand can !e supplied from in#entory. This planning strategy results in fluctuating in#entory le#els throughout the planning hori on. The comparative advantages of this strategy are obvious : sta!le employment& no idle time& and no o#ertime. What a!out disad#antages? :irst& in#entories of finished goods 5and other supporting in#entories6 are not cost*free. %n#entories tie up wor"ing capital that could otherwise !e earning a return on in#estment. $aterials handling costs& storage space re)uirements& ris" of damage and o!solescence& clerical efforts& and ta,es all increase with larger in#entories. 8ac"orders can also !e costly. -ustomers may not !e willing to tolerate !ac"ordering& particularly if alternati#e sources of supply are a#aila!leG sales may !e lost& and lingering customer will may decrease future sales as well. %n short& there are costs for carrying too much or too little in#entory 2ssignment 8 Q1.6 Why is materials planning needed? Discuss the #arious aspects of materials planning. Which other departments contri!ute to materials planning and in what way? 2.1 Material re(uirements planning $M P% is a production planning and in#entory control system used to manage manufacturing processes. $ost $+P systems are software*!ased& while it is possi!le to conduct $+P !y hand as well. esponse to ,arying 'emand $also

2n $+P system is intended to simultaneously meet three o!'ecti#es: 7nsure materials are a#aila!le for production and products are a#aila!le for deli#ery to customers. $aintain the lowest possi!le le#el of in#entory. Plan manufacturing acti#ities& deli#ery schedules and purchasing acti#ities.

The o!'ecti#e of materials management is to ha#e the right material re)uired for manufacturing& or production& in the right amount& at the right place& and at the right time& and& as we ha#e already noted& this implies that the what& how much& and when of material re)uirements must !e determined first. This is the !asic o!'ecti#e of the materials planning and !udgeting function. The )uestions that must !e answered are the following: 16 Which material inputs must we get? @ote: The inputs re)uired are dependent on the outputs4end products planned to !e manufactured. 26 >ow much of each of these inputs do we need& and !ased on how much is a#aila!le in stores and4or has already !een ordered 5in#entory on hand and or order6& how much of each of these should !e ordered? The gross re)uirements of each of the re)uired material inputs is calculated first and the net re)uirements are deri#ed !y su!tracting from it the on hand and on order in#entory. /6 When should the orders for each of these materials !e placed? This decision is dependent on 5i6 where in the manufacturing process for the end product is the particular material re)uired& namely& the cran"shaft forging for the machining of the cran"shaft prior to its assem!ly with the piston& cylinder etc. for the engine su!assem!ly of the automo!ile& and 5ii6 the lead times for procurement and manufacturing& namely procurement lead times for raw materials 5including forgings and castings6 and purchased& or !ought*out& components and su!assem!lies& and manufacturing lead times for the in*house manufactured components and assem!ly operations& !oth su!assem!lies and final assem!ly. $aterials re)uirement planning 5$+P6 is a computational techni)ue that con#erts the master schedule for the end products 5$P.6 into a detailed schedule for the raw materials and components used in the end products. The detailed schedule identifies each raw material and component item re)uired for a particular end product. %t also determines when each of these items must !e ordered !y the factory and deli#ered !y the #endor4supplier to the factory so as to meet the planned completion date for the end product as per the $P.. <nder this& the function of materials management is considered su!ordinate to the production. The materials manager acts as a su!ordinate to the wor"s manager. $aterials management is considered as a ser#ice function to operations and is

regulated with the other operations under the control and superintendence of the wor"s manager. The splitting of the materials management department will largely depend on the )uantum of the wor" of each section and the need of the organi ation. Whether the materials management is treated as a prime function or an operating function& the nature of splitting of the acti#ities will !e more or less the same. The usual splitting of the materials under the prime consideration is gi#en as under: 1. Production department: +egarding the flow of materials& selection of the supplier etc. 2. $ar"eting department: :or con#erting the sales forecast into production schedule and gi#ing deli#ery dates to customers etc. /. :inance department: :or maintaining the le#el of the stoc"& loc"ing up of funds into in#entory& tapping cash discount and )uantity discounting& pledging or hypothecating the materials for wor"ing capital needs etc. B. 7ngineering department: :or the specification of materials& )uality re)uirements& product research etc. C. Personnel department: :or manning the materialHs management department& #endor relationships& ad#ertising& pu!lic relations etc. I. Top management: 2s an important profit center& top management has a great concern for materials management. Production and materials ha#e #ery close interaction which is treated separately. Fust as production depends upon the other departments in the organi ation& these other departments also deri#e useful information from the production department. $ar"eting and sales come to reali e the producti#e capacity of the firm to ma"e their plans. >uman +elations need the data a!out the changes in production capacity to do the manpower planning. Q26 What do you understand !y the term correcti#e maintenance? %n what way is correcti#e maintenance different from pre#enti#e maintenance and predicti#e maintenance? .upport your answer with e,amples. 2&2 Maintenance Management 2ll of us are #ery familiar with repair and maintenance wor"s. %f water tap lea"s in our house& we replace the washer and repair the tap. %n case& heating element of the coo"ing range in our "itchen is not heating up& we try to find out& if the heating element is ma"ing proper electrical contact. These small pro!lems in our daily life and the action ta"en in repairs& has a direct relation to the maintenance of our facilities. $aintenance department is one department which is constantly under pressure from the users as well as from the management. <ser departments want their machinery to !e in operation all the time. On the other hand& the management stresses on cost reduction& less usage of manpower& less o#ertime& control on purchases of in#entory items and reduction in tools and tac"les. <nder the unfriendly en#ironment&

maintenance department is una!le to achie#e e,cellence. <nscheduled !rea"down and long repair times are some of the symptoms of ineffecti#e maintenence. Correcti!e Maintenance During pre#enti#e chec"s& certain pro!lems are noticed a!out the condition of the machine. The machine might !e operating in a condition that could cause damage to the machine if continued to operate. Therefore& the machine is to !e stopped without delay to correct the situation. :or e,ample& if an a!normal sound is coming from a water pump& it is necessary to identify the part of the pump from which the a!normal sound is coming. %t is o!ser#ed on detailed inspection os the pump that its !earing is damaged or the !earing of the pump is running dry or the shaft of the pump is !ent. %f it is esta!lished that the !earing is star#ed of the lu!ricant or running dry& the pro!lem of a!normal sound is sol#ed !y lu!rication of the !earing. The steps for correcting the situation are termed a correcti#e maintenance. -orrecti#e maintenance is a form of system maintenance which is performed after a fault or pro!lem emerges in a system& with the goal of restoring opera!ility to the system. %n some cases& it can !e impossi!le to predict or pre#ent a failure& ma"ing correcti#e maintenance the only option. %n other instances& a poorly maintained system can re)uire repairs as a result of insufficient pre#enti#e maintenance& and in some situations people may opt to focus on correcti#e& rather than pre#enti#e& repairs as part of a maintenance strategy. The process of correcti#e maintenance !egins with the failure and a diagnosis of the failure to determine why the failure appeared. The diagnostic process can include a physical inspection of a system& the use of a diagnostic computer to e#aluate the system& inter#iews with system users& and a num!er of other steps. %t is important to determine what caused the pro!lem in order to ta"e appropriate action& and to !e aware that multiple failures of components or software may ha#e occurred simultaneously. The ne,t step is replacement of damaged components. %n some cases& the damage may !e repaira!le& either in situ or !y remo#ing the item in )uestion and doing repairs off site. %n other instances& full replacement with a new item may !e re)uired to restore the systemJs functionality. :or e,ample& if an optical dri#e in a computer fails& a

technician may determine that replacing part of the dri#e or repairing part of it may !e sufficient& or may find that the entire dri#e needs to !e scrapped so that a new one can !e inserted. 2fter the correcti#e maintenance is performed& a technician #erifies that the fi, has wor"ed !y testing the system. This may !e done in se#eral stages to confirm that the system is operational slowly !efore o#erloading it with tas"s. Aerification is especially important on systems sent in to a facility for repair& as the technicians want to !e sure that when they are sent !ac" out& the users will !e happy with the standard of the wor" performed. :or some older systems& it may ma"e more sense to rely on correcti#e maintenance. Pre#enti#e maintenance can !e e,pensi#e& and with these systems& it may not ma"e senseG it may !e more cost effecti#e to simply repair system components as they go wrong. 8y contrast& with a newer system& pre#enti#e maintenance can sa#e money in the long term and e,tend the life of the system !y pre#enting system failures as much as possi!le !efore they happen. Pre!entati!e 2 Correcti!e Maintenance Pre#entati#e maintenance is maintenance which is carried out to pre#ent an item failing or wearing out !y pro#iding systematic inspection& detection and pre#ention of incipient failure. :or instance +esol#e :$(s pre#entati#e maintenance program will !e used to manage scheduled maintenance performed at specific inter#als. +esol#e :$ uses pre#entati#e maintenance tas"s to sustain the functional and operational capa!ilities of e)uipment or systems. The pre#entati#e maintenance efforts are aimed at preser#ing the useful life of e)uipment and a#oiding premature e)uipment failures& minimising any impact on operational re)uirements. %n addition to the routine aspects of cleaning& ad'usting& lu!ricating and testing& +esol#e :$ performs inspections to identify impending pro!lems and schedule repairs prior to e)uipment failure and4or further degradation. Pre#entati#e maintenance is carried out only on those items where a failure would ha#e e,pensi#e or unaccepta!le conse)uences e.g. lift& fire alarms& electricity supply and gas supply. $any of these items are also su!'ect to a statutory re)uirement for inspection and pre#enti#e maintenance.

Periodic pre#enti#e maintenance is defined as actions ta"en on a fi,ed time inter#al. 7,amples of periodic maintenance include: daily filter changes& wee"ly lu!rications& or monthly cali!rations. Predicti#e maintenance results from trending and monitoring e)uipment performance parameters 5i.e.& #i!ration& oil& and infrared analysis on operating e)uipment6 and initiating specific planned maintenance prior to e)uipment failure. 2n e,ample of predicti#e maintenance would !e a pump !earing replacement& after wear*out was indicated as a result of an oil analysis. Correcti!e maintenance can !e defined as the maintenance which is re)uired when an item has failed or worn out& to !ring it !ac" to wor"ing order. -orrecti#e maintenance is carried out on all items where the conse)uences of failure or wearing out are not significant and the cost of this maintenance is not greater than pre#entati#e maintenance. -orrecti#e $aintenance acti#ity may consist of repair& restoration or replacement of e)uipment. This acti#ity will !e the result of a regular inspection& which identifies the failure in time for correcti#e maintenance to !e planned and scheduled& then performed during a routine maintenance shutdown. The repair or restoration of e)uipment that has a failure or is malfunctioning and not performing its intended function. -orrecti#e maintenance should normally !e performed only on e)uipment pre#iously selected to run until failure. 2s a result of an effecti#e maintenance program& only a small fraction of correcti#e maintenance should !e needed on e)uipment that is important to safe and relia!le system operations. .ome e,amples of correcti#e maintenance include: replacement of a failed electrical !rea"er weld repair of a crac"ed process line& and repair of a failed instrument transmitter

Q/6 What do you understand !y DTotal )uality $anagement(? Discuss the o!'ecti#es of total )uality management. %n what way the approach to Total Quality $anagement has changed o#er the last ten years? 2./ The definition of )uality depends on the role of the people defining it. $ost consumers ha#e a difficult time defining )uality& !ut they "now it when they see it. :or e,ample& although you pro!a!ly ha#e an opinion as to which manufacturer of athletic shoes pro#ides the highest )uality& it would pro!a!ly !e difficult for you to define your )uality standard in precise terms. 2lso& your friends may ha#e different opinions regarding which athletic shoes are of highest )uality. The difficulty in defining )uality e,ists regardless of product& and this is true for !oth manufacturing and ser#ice organi ations. Thin" a!out how difficult it may !e to define )uality for products such as airline ser#ices& child day*care facilities& college classes& or e#en O$ te,t!oo"s. :urther complicating the issue is that the meaning of )uality has changed o#er time. Today& there is no single uni#ersal definition of )uality. .ome people #iew )uality as performance to standards. Others #iew it as meeting the customerDs needs or satisfying the customer. 9etDs loo" at some of the more common definitions of )uality. Conformance to specifications measures how well the product or ser#ice meets the targets and tolerances determined !y its designers. :or e,ample& the dimensions of a machine part may !e specified !y its design engineers as / K.1C inches. This would mean that the target dimension is / inches !ut the dimensions can #ary !etween 2.0C and /.1C inches. .imilarly& the wait for hotel room ser#ice may !e specified as 21 minutes& !ut there may !e an accepta!le delay of an additional 11 minutes. 2lso& consider the amount of light deli#ered !y a I1 watt light !ul!. %f the !ul! deli#ers C1 watts it does not conform to specifications. 2s these e,amples illustrate& conformance to specification is directly measura!le& though it may not !e directly related to the consumerDs idea of )uality. Fitness for use focuses on how well the product performs its intended function or use. :or e,ample& a $ercedes 8en and a Feep -hero"ee !oth meet a fitness for use definition if one considers transportation as the intended function. >owe#er& if the definition !ecomes more specific and assumes that the intended use is for transportation on mountain roads and carrying fishing gear& the Feep -hero"ee has a

greater fitness for use. Lou can also see that fitness for use is a user*!ased definition in that it is intended to meet the needs of a specific user group. ,alue for price paid is a definition of )uality that consumers often use for product or ser#ice usefulness. This is the only definition that com!ines economics with consumer criteriaG it assumes that the definition of )uality is price sensiti#e. :or e,ample& suppose that you wish to sign up for a personal finance seminar and disco#er that the same class is !eing taught at two different colleges at significantly different tuition rates. %f you ta"e the less e,pensi#e seminar& you will feel that you ha#e recei#ed greater #alue for the price. "upport ser!ices pro#ided are often how the )uality of a product or ser#ice is 'udged. Quality does not apply only to the product or ser#ice itselfG it also applies to the people& processes& and organi ational en#ironment associated with it. :or e,ample& the )uality of a uni#ersity is 'udged not only !y the )uality of staff and course offerings& !ut also !y the efficiency and accuracy of processing paperwor". Psychological criteria is a su!'ecti#e definition that focuses on the 'udgmental e#aluation of what constitutes product or ser#ice )uality. Different factors contri!ute to the e#aluation& such as the atmosphere of the en#ironment or the percei#ed prestige of the product. :or e,ample& a hospital patient may recei#e a#erage health care& !ut a #ery friendly staff may lea#e the impression of high )uality. .imilarly& we commonly associate certain products with e,cellence !ecause of their reputationG +ole, watches and $ercedes*8en automo!iles are e,amples. Cost of (uality The reason )uality has gained such prominence is that organi ations ha#e gained an understanding of the high cost of poor )uality. Quality affects all aspects of the organi ation and has dramatic cost implications. The most o!#ious conse)uence occurs when poor )uality creates dissatisfied customers and e#entually leads to loss of !usiness. >owe#er& )uality has many other costs& which can !e di#ided into two categories. The first category consists of costs necessary for achie#ing high )uality& which are called

quality control costs. These are of two types: prevention costs and appraisal costs. The second category consists of the cost conse)uences of poor )uality& which are called quality failure costs. These include external failure costs and internal failure costs. Pre!ention costs are all costs incurred in the process of pre#enting poor )uality from occurring. They include )uality planning costs& such as the costs of de#eloping and implementing a )uality plan. 2lso included are the costs of product and process design& from collecting customer information to designing processes that achie#e conformance to specifications. 7mployee training in )uality measurement is included as part of this cost& as well as the costs of maintaining records of information and data related to )uality. Appraisal costs are incurred in the process of unco#ering defects. They include the cost of )uality inspections& product testing& and performing audits to ma"e sure that )uality standards are !eing met. 2lso included in this category are the costs of wor"er time spent measuring )uality and the cost of e)uipment used for )uality appraisal. 1nternal failure costs are associated with disco#ering poor product )uality !efore the product reaches the customer site. One type of internal failure cost is rework& which is the cost of correcting the defecti#e item. .ometimes the item is so defecti#e that it cannot !e corrected and must !e thrown away. This is called scrap, and its costs include all the material& la!or& and machine cost spent in producing the defecti#e product. Other types of internal failure costs include the cost of machine downtime due to failures in the process and the costs of discounting defecti#e items for sal#age #alue. 3xternal failure costs are associated with )uality pro!lems that occur at the customer site. These costs can !e particularly damaging !ecause customer faith and loyalty can !e difficult to regain. They include e#erything from customer complaints& product returns& and repairs& to warranty claims& recalls& and e#en litigation costs resulting from product lia!ility issues. 2 final component of this cost is lost sales and lost customers. :or e,ample& manufacturers of lunch meats and hot dogs whose products

ha#e !een recalled due to !acterial contamination ha#e had to struggle to regain consumer confidence. Other e,amples include auto manufacturers whose products ha#e !een recalled due to ma'or malfunctions such as pro!lematic !ra"ing systems and airlines that ha#e e,perienced a crash with many fatalities. 7,ternal failure can sometimes put a company out of !usiness almost o#ernight. -ompanies that consider )uality important in#est hea#ily in pre#ention and appraisal costs in order to pre#ent internal and e,ternal failure costs. The earlier defects are found& the less costly they are to correct. :or e,ample& detecting and correcting defects during product design and product production is considera!ly less e,pensi#e than when the defects are found at the customer site. 7,ternal failure costs tend to !e particularly high for ser#ice organi ations. The reason is that with a ser#ice the customer spends much time in the ser#ice deli#ery system& and there are fewer opportunities to correct defects than there are in manufacturing. 7,amples of e,ternal failure in ser#ices include an airline that has o#er!oo"ed flights& long delays in airline ser#ice& and lost luggage. To summari e all the a!o#e costs Pre!ention costs are those -osts incurred while preparing and implementing a )uality plan. Appraisal costs are those incurred -osts for testing& e#aluating& and inspecting )uality. 1nternal failure costs are -osts of scrap& rewor"& and material losses. 3xternal failure costs are -osts of failure at customer site& including returns& repairs& and recalls. The following are the basic ob4ecti!es of Total 5uality Management: -ustomer satisfaction Performance superiority .peed -ost Quality Dependa!ility :le,i!ility .ome other o!'ecti#es of Total Quality $anagement include:

$a"ing the organi ation mar"et and customer focused 3uiding the organi ation !y its #alues& #ision& mission& and goals set through Dstrategic planning processes. -hanging the organi ation from function focused to customer focused& where customer priorities come first in all acti#ities. $a"ing the organi ation fle,i!le and learning oriented to cope with change $a"ing the organi ation !elie#e in and see" continuous impro#ement as a new way of life. -reating an organi ation where people are at the core of e#ery acti#ity& and are encouraged and empowered to wor" in teams. Promoting a transparent leadership process to lead the organi ation to e,cellence in its chosen field of !usiness esult achie!ed by setting appropriate ob4ecti!e should lead to: -ontinuous impro#ement of the organi ational processes and outputs& which must !e e)ual or superior to the competitionG -ontinual and relentless cost reduction& and #alue addition to products and ser#icesG -ontinual and relentless thrust for impro#ement of manufacturing processes& products and ser#icesG -reation of an organi ational wor" culture where!y e#eryone is in#ol#ed in the process of customer satisfaction and #alue creation for its customers. The e!olution of total (uality management $T5M% The concept of )uality has e,isted for many years& though its meaning has changed and e#ol#ed o#er time. %n the early twentieth century& )uality management meant inspecting products to ensure that they met specifications. 8ac" to 2111& %.O re#ised %.O 0111 to focus more on !usiness planning& )uality management and continuous impro#ement. Other certification standards were created including 2.0111 for aerospace& T.1I0B0 for automoti#e& %.O 1B111 for en#ironmental& T90111 for electronics& and %.O 1E12C for la!oratories. These standards all include the %.O 0111 elements.

6ey Concepts of Total 5uality Management include structured system for e,ceeding customer e,pectations system that empowers employees dri#es higher profits dri#es lower costs continuous impro#ement. management centered approach on impro#ing )uality. 7enefits of T5M include

%mpro#es competiti#e position increase adapta!ility to glo!al mar"ets ele#ated producti#ity superior glo!al image eliminates defects .ignificantly reduces waste. reduces )uality costs %mpro#es management communication raises profits dri#es customer focus customer loyalty reduces design time.

Case study Paradise .and Management Company Paradise 9and $anagement owns and operates hotels and apartment comple,es near a ma'or metropolitan area. They want to e,pand operations in the near future& the goal !eing to increase net earnings !efore ta,es. Two alternati#e e,pansion opportunities are under considerations: the Densmore comple, and the >ighgate pro'ect. 8oth pro'ects in#ol#e the purchase of land on which apartment !uilding would !e constructed and operated. The site for the Densmore comple, is situated in a respecta!le& )uite& sparsely populated residential neigh!orhood. 9and for the E1*unit comple, can !e purchased for MI1&111. 8uilding costs are estimated at M1&IN1&111. 2nuual maintenance costs would amount to M/1&111. 2partment units would rent for MB11 per month. Paradise is also conidering constructing a recreation facility near!y. %t would cost M111&111 and would ser#ice !oth Densmore residents and the residents of the company owned Paradise west& the only e,isting apartment comple, in the neigh!orhood. Paradise west& with 121 units renting for M201 per month& has had an a#erage occupancy rate of NBO for the past three years. The addition of Densmore and the recreation facility are e,pected to increase Paradise West(s occupancy rate to 01O 5pro!a!ility 1.I6 or 0CO 5pro!a!ility 1.B6. Densmore(s occupancy rate is e,pected to !e 01O 5pro!a!ility 1.C6& NCO 5pro!a!ility 1./6& or N1O 5pro!a!ility 1.26. The highgate pro'ect calls for B11 units to !e constructed on land costing M221&111 in a high density population neigh!orhood with many competing apartments. 8uilding costs would !e MB&211&111. +ental re#enue per unit would !e M2B1 per monthG anuual operating costs would !e M1C1&111. >ighgate(s occupancy rate is e,pected to !e 01O 5pro!a!ility 1.26& N1O 5pro!a!ility 1.C6& or E1O 5pro!a!ility 1./6. 5% What factors should !e analy ed in ma"ing this capacity decision? 2ns Capacity planning is the process of determining the production capacity needed !y an organi ation to meet changing demands for its products.H1P %n the conte,t of capacity planning& =capacity= is the ma,imum amount of wor" that an organi ation is capa!le of completing in a gi#en period of time. The phrase is also used in !usiness computing as a synonym for -apacity $anagement

2 discrepancy !etween the capacity of an organi ation and the demands of its customers results in inefficiency& either in under*utili ed resources or unfulfilled customers. The goal of capacity planning is to minimi e this discrepancy. Demand for an organi ationJs capacity #aries !ased on changes in production output& such as increasing or decreasing the production )uantity of an e,isting product& or producing new products. 8etter utili ation of e,isting capacity can !e accomplished through impro#ements in o#erall e)uipment effecti#eness 5O776. -apacity can !e increased through introducing new techni)ues& e)uipment and materials& increasing the num!er of wor"ers or machines& increasing the num!er of shifts& or ac)uiring additional production facilities. -apacity is calculated: 5num!er of machines or wor"ers6 Q 5num!er of shifts6 Q 5utili ation6 Q 5efficiency6. The !road classes of capacity planning are lead strategy& lag strategy& and match strategy. .ead strategy is adding capacity in anticipation of an increase in demand. 9ead strategy is an aggressi#e strategy with the goal of luring customers away from the companyJs competitors. The possi!le disad#antage to this strategy is that it often results in e,cess in#entory& which is costly and often wasteful. .ag strategy refers to adding capacity only after the organi ation is running at full capacity or !eyond due to increase in demand 5@orth -arolina .tate <ni#ersity& 211I6. This is a more conser#ati#e strategy. %t decreases the ris" of waste& !ut it may result in the loss of possi!le customers. Match strategy is adding capacity in small amounts in response to changing demand in the mar"et. This is a more moderate strategy. %n the conte,t of systems engineering& capacity planningH2P is used during system design and system performance monitoring. -apacity planning is long*term decision that esta!lishes a firmsJ o#erall le#el of resources. %t e,tends o#er time hori on long enough to o!tain resources. -apacity decisions affect the production lead time& customer responsi#eness& operating cost and company a!ility to compete. %nade)uate capacity planning can lead to the loss of the customer and !usiness. 7,cess capacity can drain the companyJs resources and

pre#ent in#estments into more lucrati#e #entures. The )uestion of when capacity should !e increased and !y how much are the critical decisions. Capacity 8 A!ailable or e(uired9

:rom a scheduling perspecti#e it is #ery easy to determine how much capacity 5or time6 will !e re)uired to manufacture a )uantity of parts. .imply multiply the .tandard -ycle Time !y the @um!er of Parts and di#ide !y the part or process O77 O. %f production is scheduled to produce C11 pieces of product 2 on a machine ha#ing a cycle time of /1 seconds and the O77 for the process is NCO& then the time to produce the parts would !e calculated as follows: 5C11 Parts R /1 .econds6 4 NCO S 1EIBE.1 seconds The O77 inde, ma"es it easy to determine whether we ha#e ample capacity to run the re)uired production. %n this e,ample B.2 hours at standard #ersus B.0 hours !ased on the O77 inde,. +epeating this process for all the parts that run through a gi#en machine& it is possi!le to determine the total capacity re)uired to run production. Capacity A!ailable %f you are considering new wor" for a piece of e)uipment or machinery& "nowing how much capacity is a#aila!le to run the wor" will e#entually !ecome part of the o#erall process. Typically& an annual forecast is used to determine how many hours per year are re)uired. %t is also possi!le that seasonal influences e,ist within your machine re)uirements& so perhaps a )uarterly or e#en monthly capacity report is re)uired. To calculate the total capacity a#aila!le& we can use the formula from our earlier e,ample and simply ad'ust or change the #olume accordingly !ased on the period !eing considered. The a#aila!le capacity is difference !etween the re)uired capacity and planned operating capacity.

Assignment C 1. Which of the following methods !est considers intangi!le costs related to a location decision? a6 Weighted method !6 9ocation !rea"*e#en analysis c6 Transportation method d6 2ssignment method e6 @one of the a!o#e 2. What is the ma'or difference in focus !etween location decisions in the ser#ice sector and in the manufacturing sector? a6 There is no difference in focus !6 The focus in manufacturing is re#enue ma,imi ation& while the focus in ser#ice is cost minimi ation c6 The focus in ser#ice is re#enue ma,imi ation& while the focus in manufacturing is cost minimi ation d6 The focus in manufacturing is on raw materials& while the focus in ser#ice is on la!our /. .er#ice 4 retail 4 professional location analysis typically has a: a6 -ost focus !6 +e#enue focus c6 9a!or focus d6 7n#ironmental focus B. 7fficiency is calculated as: a6 7fficiencyS .tandard time T 2ctual time !6 7fficiencyS .tandard time4 2ctual time c6 7fficiencyS 2ctual time4 standard time d6 @one of the a!o#e C. The factors in#ol#ed in location decisions include a6 :oreign e,change !6 2ttitudes c6 9a!or producti#ity

d6 2ll of the a!o#e e6 @one of the a!o#e I. %ndustrial location analysis typically has a a6 -ost focus !6 +e#enue focus c6 9a!or focus d6 7n#ironmental focus E. >otel chain find regression analysis useful in site location a6True !6:alse

N. The telemar"eting industry see"s locations that ha#e a6 3ood electronic mo#ement of data !6 9ow cost la!our c6 2de)uate a#aila!ility of la!our d6 2ll of the a!o#e 0. :actors affecting location decisions include a6 Pro,imity to mar"ets& pro,imity to suppliers& pro,imity to athletic facilities !6 .ite costs& transportation a#aila!ility& la!our a#aila!ility c6 2#erage age of la!our force& la!our costs& and num!er of females in college d6 <tility costs& oning& altitude of city e6 2ll of the a!o#e 11. 2n aggregate plan for a manufacturing firm includes consideration of: a6 Production rates !6 wor"*force le#els c6 %n#entory holdings d6 2ll of the a!o#e 11. 2 ser#ice firmJs aggregate plan lin"s the firmJs strategic goals and o!'ecti#es with detailed operational plans called: a6 Production plan !6 .taffing plan c6 Wor"*force schedule d6 @one of the a!o#e 12. <tili ation is calculated as: a6 <tili ation S 2ctual hoursT.cheduled a#aila!le hours !6 <tili ation S 2ctual hours4 .cheduled a#aila!le hours c6 <tili ation S 2ctual hoursU.cheduled a#aila!le hours d6 @one of the a!o#e 1/. Which of the following statements does @OT apply to a production plan? a6 Plans are consistent with companyJs strategic goals and o!'ecti#es !6 7na!les the assessment of financial and physical resource needs without e,cessi#e detail c6 .er#es as a !ridge !etween the strategic and operational plans d6 Pro#ides a #iew of detailed wor"*force schedules 1B. The time hori on for an aggregate plan is typically: a6 1 * / months !6 / * 1N months c6 2B * I1 months d6 @one of the a!o#e

1C. 2 for*profit ser#ice may e,pect to encounter which of the following se)uence of plans? a6 8usiness planG staffing planG wor"*force schedule !6 8usiness planG production planG wor"*force schedule c6 :inancial planG staffing planG master production schedule d6 2nnual planG production planG master production schedule 1I. The operations area input to the aggregate plan includes: a6 Demand forecasts !6 -ost data c6 wor"*force capacities d6 Product design changes 1E. 2ggressi#e alternati#es for coping with demand re)uirements include: a6 2nticipation in#entory !6 -reati#e pricing c6 7mployee hiring and layoffs d6 <se of su!contractors 1N. 2 reacti#e strategy that is sometimes called the capacity strategy may !e characteri ed as: a6-hase V1: #ary wor"*force le#el to match demand !6 -hase V2: #ary output rate to match demand c6 9e#el V1: constant wor"*force le#el d69e#el V2: constant output rate 10. Planned capacity is: a6 Planned capacity S Demonstrated capacity T 7fficiency T <tili ation factor !6 Planned capacity S Designed capacity T 7fficiency 4 <tili ation factor c6 Planned capacity S Designed capacity T 7fficiency T <tili ation factor d6 @one of the a!o#e 21. The aggregate planning strategy that is most li"ely to impact the producti#ity of manufacturing wor"ers& ad#ersely& is: a6 >iring of temporary wor"ers !6 <se of o#ertime c6 9ayoff of wor"ers d6 8uilding anticipation in#entory 21. 2 linear programming model -2@@OT !e used when which of the following are true? a6 2n optimal production plan is desired !6 The #alues of decision #aria!les are fractional c6 2 set of linear constraints may !e defined d6 -ross product relationships e,ist !etween two or more decision #aria!les

22. 8asic element of operations $anagement is: a6 -ustomer demand !6 Operating system4Process c6 Process capacity d6 2ll of the a!o#e 2/. The transportation method may !e used to determine the costs of alternati#e strategies for anticipation in#entory when which of the following data are a#aila!le? a6 wor"*force capacity per planning period !6 2ggregate demand per planning period c6 8eginning in#entory d6 2ll of the a!o#e 2B. Which of the following statements are true a!out anticipation in#entory? a6 %n#entory increases during periods of light demand !6 <se of anticipation in#entory is a reacti#e alternati#e to arri#e at an accepta!le aggregate plan c6 %ncrease in anticipation in#entory leads to increases in pipeline in#entory d6 8oth a and ! 2C. When following a utili ation strategy& which alternati#e relies on e,ternal sources of production? a6 O#ertime4under time !6 .u!contracting c6 8ac" orders d6 .toc" outs 2I.2 ma'or department store initiates a !usiness plan that gets translated into an operational plan called a KKKKKKKKKKKKKKK. a6 Production plan !6 .taffing plan c6 $aster production schedule d6 Wor"*force schedule 2E.2n appliance manufacturer initiates a !usiness plan that gets translated into an operational plan called a KKKKKKKKKKKKKKK. a6 Production plan !6 .taffing plan c6 $aster production schedule d6 Wor"*force schedule 2N. Which one is not a factor for ma"e or !uy decisions: a6 -ost !6 Quality c6 9a!or d6 Plant location

20. Which one is correct? a6 Designed capacity W Planned capacity W Demonstrated capacity !6 Designed capacity W Demonstrated capacity W Planned capacity c6 Designed capacity S Demonstrated capacity W Planned capacity d6 2ll of the a!o#e /1. Plant Producti#ity is: a6 Producti#ity S %nputs4Outputs !6 Producti#ity S %nputsTOutputs c6 Producti#ity S Outputs44%nputs d6 @one of the a!o#e /12 ser#ice encounter includes a6 :ace*to*face interaction !6 -ustomers and a !uilding c6 -ustomers and ad#ertising d6 2ll of the a!o#e /2. Which function typically employs more people than any other functional area? a6 %nformation .ystems !6 :inance c6 Operations d6 $ar"eting //. The inputs to a transformation process include all of the following e,cept a6 $aterials !6 People c6 2ssem!ly d6 %nformation /B. 2n assem!ly line is an e,ample of a6 2 product layout !6 2 process layout c6 2 fi,ed position layout d6 2n intermittent organi ation /C. Which of the following characteristics is most typical of a continuous manufacturing organi ation? a6 The firm manufactures customi ed product. !6 The firm has a low #olume of production c6 The firm has a relati#ely low unit cost of production d6 The firm creates many different products with many different characteristics /I. Which type of processing system tends to produce the most product #ariety? a6 2ssem!ly

!6 Fo! shop c6 8atch d6 -ontinuous /E. 8uying on the !asis of price alone ris"s pro!lems in each of the following categories e,cept a6 -apacity !6 Quality c6 Quantity d6 .upplier /NWhich one is not a factor for ma"e or !uys decisions: a6 -ost !6 Quality c6 9a!or d6 Plant location /0 F%T is a a6 Push system !6 Pull system c6 8oth d6 @one of these B1. The word management in )uality assurance descri!es many different functions& encompassing a policy management a6 >+$& .afety control !6 -omponent control ? management of other resources c6 @one of the a!o#e