Paper 13

Operations and Project Management & Control

June 2003
I—13(OPM)
Revised Syllabus
Time Allowed : 3 Hours Full Marks : 100

Answer Question No. 1 which is compulsory and any two

from Section I & any two questions from Section II
SECTION I
Marks
1. (a) What do the following abbreviations stand for? 1x5
(i) CIM; (ii) MTBF; (iii) SWOT (iv) PLC; (v) TOT.
(b) Match the words (a) to (j) under Column A with the corresponding words ½x10=5
under Column B's (i) to (x)
Column A Column B
(a) Rotics (i) Maintenance Management
(b) Rolling of Billet into Bar (ii) Flame Cutting
(c) FCFS (iii) Statistical Quality Control
(d) Power Metallurgy (iv) Locational Planning
(e) Chain Pulley Block (v) Labour Cost
(f) Down Time Analysis (vi) Flexible Manufacturing System
(g) Proximity Factor (vii) Transportation of heavy Material
(h) Control Chrart (viii) Prioritisation
(i) Oxy-acctylene Gas Torch (ix) Forming Process
(j) Learning Curve (x) Cemented Carbide
(c) State whether the following statements are True/False. You are not ½x10=5
required to offer any justification/arguments for your answer:
(i) A project is a non-scheduled set of activities aimed towards the
creation of a particular asset as per planned specification.
An entrepreneur desirous of investing on a project has to look for
(ii)
suitable opportunities.
Diversification project represents project to increase the volume of
(iii)
production/service.
(iv) Market appraisal of a project investment relates to find out the
aggregate demand of the proposed product/service in future as well as
the market share of the proposal under consideration.
The secondary data, collected through market survey, is specific for
(v)
the project being appraised.
 The project work-break down structure breaks the project into a
(vi)
logical smaller task.
(vii) Independent Float = Free Float - Head Event Slack.
(viii) LOB is a device for planning and monitoring the progress of an
order project or programme to be completed by a target data.
(ix) Resource levelling is a network technique which is used for
reducing the requirement of a particular resource due to its paucity.
(x) The network based cost control system, known as PERT-COST
system, consists of the planning and control cycle.
(d) Define the following in not more than two sentences: 1x5=5
(i) Bill of Material;
(ii) Pre-investment Phase of Project Development Cycle;
(iii) Limited Tender;
(iv) Standard Time;
(v) Operation Process Chart.
2. (a) List some of the fundamental principles of Material Handling, briefly 10
stating their salient features.
(b) A factory produces three products A, B and C. The SMH/unit of A, B and
C are 2, 3, and 4 respectively.
During a particular year the factory produced the following units of A, B
and C
A — 10,000
B — 20,000
C — 30,000
During the year there were 120 Direct Labours and 300 working days.
The hours worked per day was 8 hours.
Average absenteeism was 10%.
What was the Direct Labour Productivity of the factory during the year?

Please turn over

(2)

F-13(OPM)
Revised syllabus
Marks
3. (a) On scrutinising the overall productivity factors, you have found out a 10
dismal performance in the Material Productivity area. You are to find
methods/techniques for improving Material Productivity. State briefly
your line of action.
(b) M/s. EPC Ltd., has a manufacturing capacity of 1,00,000 units of Product 5+5=10
'A' per month. The selling price varies with volume as given below:
 Volume in units per mopnth Selling price per unit (Rs.)
(i) Up to 50,000 1.80
(ii) 50,001 to 80,000 1.70
(iii) 80,001 to 90,000 1.60
(iv) Above 90,000 1.50
Fixed costs work out to Rs. 80,000 per month. But, for achieving a
production beyond 60,000 units per month, three additional workers and
beyond 80,000 units per month, five additional workers would be
required.
Variable cost is Re. 0.30 per unit.
Average salary of a worker is Rs. 2,000 per month.
Find out the production volume at which profit will be the highest. Also
calculate the maximum profit.
4. Write short notes on any four of the following:- 5x4=20
(i) Methods used in Job Evaluation;
(ii) Retraining;
(iii) Line of Balance;
(iv) Plant Layout;
(v) Performance appraisal.
Role of Cost and Management Accountant in Operations Management
(vi)
and Control.
SECTION II
5. Competent Automobile is an authorised service centre of Maruti Cars. A new 5+3+2
manager employed wants to analyse the efficiency of work and service
personnel. To facilitate his analysis, he has classified the service procedure
into the following seven activities:
Activity Duration (Hrs.) Precedence Activity
A 8 —
B 4 —
C 6 A
D 9 B
E 11 A
F 3 C
G 1 D,E,F.
Help him by—
(a) Drawing the network diagram 6
(b) Finding the critical path. 4
(c) Calculating the expected time for service of a car. 3
(d) Amount of slack time for the technician in each activity. 3
(e) Computing the Earliest Starting and Finishing Time. 1+1=2
(f) Computing the Latest Finishing and Starting Time. 1+1=2
6. (a) Briefly bring out the basic differences between commercial calculation 8
and social cost benefit computation in Project Analysis. The answer may
be put up in a tabular format only.
 (b) A Project requires an initial cash outlay of Rs. 50,000 and offers an annual 12
expected cash inflow of Rs. 40,000 for three years and has no salvage
value. The risk coefficients for three years are estimated to be 0.80, 0.70,
and 0.65 respectively. The risk free rate of interest is estimated to be 15%.

Given the PV factor @ 15% as 0.870 for 1st year, 0.756 for 2nd year,
0.658 for 3rd year.
Calculate the NPV of the Project.
7. (a) The following data pertains to a project— 10
Activity Normal time (days) Crash time (days) Cost slope (Rs.)
1-2 3 2 700
1-3 7 4 200
2-3 5 3 100
2-4 8 6 200
3-4 4 2 400
It is desired to compress the project to the least possible duration day by
day.
You are required to compress the project day by day and estimate the total
extra cost at each stage of the crashing.
(b) An investor is willing to start a project in India. As a Cost Accountant, you 10
are required to guide him for selection of projects.
8. Write short notes on any four of the following: 5x4=20
(i) Consortium Lending;
(ii) Resource Leveling;
(iii) Capital Rationing;
(iv) Role of Communication in Project Management;
(v) Important appraisal parameters in financial appraisal;
(vi) Detailed Project Report.

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