MBA SEMESTER 2 MB0044 Production and Operation Management

Q1. State the important considerations for locating an automobile plant. Answer: Factors influencing an automobile plant 1) General factors Availability of land Availability of land plays an important role in determining the plant location. On several occasions, our plans, calculations and forecasts suggest a particular area as the best to start an organization. Availability of inputs While choosing a plant location, it is very important for the organization to get the labor at the right time and good quality raw materials. The plant should be located: Near to the raw material source At the market place Close to the market when universally available,

Closeness to market places Organizations can choose to locate the plant near to the customers market or far from them, depending upon the product they produce. The advantages of locating the plant near to the market place are: Consistent supply of goods to the customers Reduction of the cost of transportation

Communication facilities Communication facility is also an important factor which influences the location of a plant. Regions with good communication facilities namely postal and telecommunication links should be given priority for the selection of sites. Infrastructure Infrastructure plays a prominent role in deciding the location. The basic infrastructures needed in any organization are: Power For example, industries which run day and night require continuous power supply. Water For example, process industries such as, paper, chemical, and cement, require continuous water supply in large amount. Waste disposal For example, for process industries such as, paper and sugarcane industries, facility for disposal of waste is the key factor. Transport Transport facility is a must for facility location and layout of location of the plant. The basic modes of transportation are by air, road, rail, water, and pipeline. Government support The factors that demand additional attention for plant location are the policies of the state governments and local bodies concerning labor laws, building codes, and safety Housing and recreation Locating a plant with or near to the facilities of good schools, housing and recreation for employees will have a greater impact on the organization. These factors seem to be unimportant, but there is a difference as they motivate the employees and hence the location decisions.

2) Special factors The special factors that influence the plant location are: Economic stability outside investments Cultural factors Wages Joint ventures support of big time players

Q2. Explain essentials of Project Management Philosophy. Answer: Essentials of Project Management Philosophy 1. Characteristics of project mindset a) Time: It is an important parameter in framing the right mindset. It is possible to improve the pace of the project by reducing the time frame of the process. b) Responsiveness: Responsiveness refers to quickness of response of an individual. c) Information sharing: Information is power. Information is the master key to todays business. d) Processes: Project mindset lays emphasis on flexible processes. e) Structured planning: Structured planning based on project management life cycle enables one to easily and conveniently work according to the plan. 2. Project evaluation and selection criteria a) Relevance: Is the project relevant to the defined scope in terms of the deliverable product and service? b) State-of-the-art technical methodologies: Check if the state-of-the-art methodologies are adequately described? c) Relevance to market: Has any market analysis been done? Is there any documentation of the various market opportunities? d) Creativity: Creativity is required to understand and develop a project as innovatively as possible and should be well described in its documents. e) Potential: Is there an adequate description of the project methodologies and its Dissemination which would be used in future? f) Project management and work plan: Is there a project management and work plan? 3. Typical characteristics of a project A project is: A program of non-routine work bringing about a beneficial change. Guided by at least one well-engaged sponsor who has both adequate authorities and resources to charter the project effort. A multi-disciplinary team brought together for the project. Scope of work that is well defined. Constrained by cost, time, and quality.

Project parameters for negotiation During the course of a project, a team negotiates for one or more of the following constraints: Scope, cost and schedule objectives Changes to scope, cost or schedules Contract terms and conditions Resources

5. Value addition of project management Projects may be completed with one or more of the following undesirable outcomes: Stretched deadlines Over stressed team Wasted resources Unmet customer functional requirements Overshot budget

6. Project management players, their roles and responsibilities Project management players are individuals and organizations who are involved in the project. The players of the project management are: Project manager Customer Performing organization Sponsor

Q3. Several different strategies have been employed to assist in aggregate planning. Explain these in brief. Answer Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the overall operations of an organization. The aggregate plan generally contains targeted sales forecasts, production levels, inventory levels, and customer backlogs. This schedule is intended to satisfy the demand forecast at a minimum cost. Properly done, aggregate planning should minimize the effects of shortsighted, day-to-day scheduling, in which small amounts of material may be ordered one week, with an accompanying layoff of workers, followed by ordering larger amounts and rehiring workers the next week. This longer-term perspective on resource use can help minimize short-term requirements changes with a resulting cost savings. Types of Pure Strategies:There are three focused or pure strategies these are Vary production to match demand by changes in employment. Produce at a constant rate and use inventories. Produce with stable workforce but vary the utilization rate.

1. Chase demand Strategy In this strategy the production output is increased or decreased according the demand. This is possible if workers are added or removed to vary the input capacity. It also means that if the system is dominantly automated then it will be either under or over-utilized as the as the situation demands. 2. Level production Strategy In this case, the production output is held constant irrespective of the changes in demand from period to period. Usually, the average demand is taken as the constant output. When the demand exceeds the average output, in some months there is shortage and when the output is above the average there is surplus and build-up of inventory. However, wherever possible excess output can be used to accumulate inventory and that inventory is maintained. 3. Stable work-force Strategy In this strategy the work force is maintained at the same level on regular time. Production output is varied either by overtime or by building up inventory. However, if the demand falls then the production output is decreased and some workers may become idle. Mixed Strategies In mixed strategies, the aggregate planner has a wide variety of choices by mixing to or more strategy. The number of mixed strategies in alternative production plans is almost limitless. However, based on the realities of the situations, the number of practical solutions is limited.

Q4. Illustrate the different methods by which quality is sought to be achieved using various tools and techniques Quality at the source Quality control tools Acceptance sampling

Answer:Quality control techniques are specific and procedures adopted using data, foe determining a particular aspect of quality to arrive at decisions which are conclusive. Each technique developed and tested by senior personnel or consultants will be simple enough to be understood, implemented and interpreted by the personnel for their immediate use. Some of the quality control techniques are: Quality at the source The concept of quality makes the production worker responsible for inspecting his /her own work and for taking corrective actions. Since inspection is done immediately after a job is done, finding the cause of the error with clarity aids in faster rectification. Quality control tools The most popular and widely used tools are called as 7 QC tools. These includes the following Flow chart Check sheet Histogram Pareto analysis Scatter diagram Control chart Cause and effect diagram 1. Flow Chart; - flow chart is a visual representation of a process showing the various steps. It helps in locating the points at which a problem exists or an improvement is possible. Detailed data can be collected, analyzed, and methods for correction can be developed using flow charts. The various steps includes Listing out the various steps or activities in particular job. Classifying them as a procedure or a decision. 2. Check sheet: - are used to record the number defects, types of defects, locations at which they are occurring, times at which they are occurring, and workmen by whom they are occurring. The sheet keeps a record of the frequencies of occurrence with reference to possible defect causing parameters. It helps to implement a corrective procedure at the point where the frequencies are more. 3. Histogram: - are graphically representations of distribution of data. They are generally used to record huge volumes of data about a process. They reveal whether the pattern of distribution has single peak, or many peaks and also the extent of variation around the peak value. This helps in identifying whether the problem is serious. The various types of visual patterns have been established along with relevant interpretations which help us to identify the problem. 4. Pareto Analysis: - is a tool for classifying problem areas according to the degree of importance and attending to the most importance and attending to the most important ones. Pareto principles verbally stated as vital few; trivial many is also called 80-20 rule because is to observe that 80% of the problem that we encounter arise out of 20% of items.

5. Scatter diagram: - Scatter diagram is used when we have two variable and want to know the degree of relationship between them .We can determine if there is a relationship between the variable and also the degree of extend over a range of value of the variable. 6. Control chart: - control chart are used to verify whether a process is under statistical control. This means the process is subject to variation duo to assignable causes. Variable when they remain within a range will render the desired quality in the product and maintained the specification. This called the quality of conformance. Acceptance sampling Accepting sampling is also known as end if line inspections and categorizing the products based on sample based inspection. In accepting sampling method of quality control , the supplier and customer agree upon accepting a lot by inspecting a small number as agreed upon by the parties or as validated by sampling scheme , is determined as defective, the lot is accepted. If the number of defectives is more than the agreed size, the entire lot is rejected. Obviously, risks for the producer and buyer exit. As sample size increase and the number of acceptable defectives decreases, the risk for the buyer decreases. And converse is true. That is the reason these number cannot be fixed as they depend on the customers requirements. Q5. Explain the basic competitive priorities considered while formulating operations strategy by a firm? Cost Quality Time Flexibility Answer:Operation strategy reflects the long-term goal of an organization in its corporate strategy. To achieve good result a clear understanding of the operating advantage and a good cross functional area of marketing, production, finance and human resources department are required. Operations strategy advantages depends on its processes and competitive priorities considered while establishing the capabilities. The basic competitive priorities are: 1. Cost: Cost is one of the primary considerations while marketing a product or a service. Being a low cost producer, accepted by the customer offers sustainability and can outperform competitors. Lower prices and better quality of a product will ensure higher demand and higher profitability. 2. Quality: Quality is defined by the customer. The operation manager looks into two important aspects namely high performance design and consistent quality. High performance design includes superior features, greater durability, conveniences to services etc. 3. Time: Faster delivery time, on time delivery, and speedy development cycle are the time factors that Operations strategy looks into. Faster delivery time is the time elapsed between the customer order and delivery. On time delivery is the frequency with which the product is delivered on time. 4. Flexibility: Flexibility is the ability to provide a wide variety of products, and it measures how fast the manufacturers can its process line used for one product to produce another product after making the required changes. The two types of flexibility are Customizations. Volume flexibility.

Q6. Explain briefly the four classification of scheduling strategies Detailed scheduling Cumulative scheduling Cumulative-detailed scheduling Priority decision rules

Answer:Scheduling strategies differs from organization to organizing as it depends on the quantum of production, size and type of production, companys policy, priorities, etc. most of these strategy are concerned with the job shop production since the problem encounter is more than one produced in the same plant. Following are the classifications 1. Detailed Scheduling All job orders from customer are scheduled to the last details this may not be practical in case disruptions are there in production line machine breakdown, absenteeism, etc. 2. Cumulative scheduling The customer order are pooled to from a cumulative work load and then matched with the capacity. The work load is then allocated in such a way that immediate periods get allocated to maximum capacity. 3. Cumulative-detailed combination This combines both the earlier strategies of firm and flexible nature of work load. Cumulative work load projection can be used to plan for capacity as needed. As changes happen during the week, the materials and capacity requirements are updated. The actual time allocated to the specified at the each work center is as per the standard hours needed. This is turned further with the requirement of the master schedule. 4. Priority decision rules When a set of order are to be executed, the question of prioritizing arises. These priority decision rules are scheduling guidelines used independently or in conjunction with any one of the above three strategic.