Operations Management

AMACE/MBA/I/II

ARULMIGU MEENAKSHI AMMAN COLLEGE OF ENGINEERING

Department of Management Studies
Two Marks
Subject Name /Code.
Class/Year/Sem.

Operations Management /BA 9221/BA 7201

MBA/I Year/II

Unit I
1. Define Production Management
It is the process by which raw material and other inputs are converted into
finished goods.
2. What are the needs or Objectives of Production Management.
To manufacture the products as per the specification
To effectively manage the available resources and facilities
To produce products as per the market requirement .
3. What are the Functional subsystems of the any organization?
Production Management
Marketing Management
Personnel Management
Finance Management
4. What are the major managerial decisions to be taken while managing the
functional subsystems?
Strategic decision
Tactical decision
Operational decision
5. What are the strategic decisions need to be taken in Production Management?
Alternative manufacturing approaches and alternative approaches to automation
6. Define Product Planning.
Product planning is process of searching ideas for new products, screening them
systematically, converting them into tangible products and introducing the new
products into markets.
7. Define Operations Management
This is concerned with the management of the resources and processes required by an
organization to produce goods or services for customers.
8. Name the different types of inventories.
Raw materials
Bought out components or sub assemblies
Goods of work in progress.
Consumables
Finished goods.
9. Explain the term strategy and tactics
Strategies are plans to achieve organizational goals.
Tactics are methods and actions o accomplish strategies.

Page 1 of 10

Operations Management

AMACE/MBA/I/II

10. List the strategies for improving the productivity of an organization.

Increased output for the same input.
Decreased input for the same output.
Proportionate increase in the output is more than the proportionate increase in
the input.
Proportionate decrease in the input more than the proportionate decrease in the
output.
Simultaneous increase in the output with decrease in the input.
11. Define the term contribution.
Contribution is the difference between sales and marginal cost of sales.
12. What is PDCA cycle?
PDCA cycle can be called as Deming wheel or Deming cycle.
P- Plan the improvement.
D- Do implement the plan
C- Check how closely result meets goals.
A- Act on the improved process as standard practice.
Unit-II
13. Define Forecasting
Estimating the future demand for product, services and resources necessary to
produce these outputs.
14. What are the types of Forecasting
Technological
Economic
Demand
15. What do you mean by Quantitative and Qualitative methods?
Quantitative method involves projection of historical data or development of
associative model.
Qualitative it consist mainly of subjective inputs.
16. What is tracking signal in forecasting?
Tracking signal is a measurement of how well the forecast is predicting actual values.
Positive tracking signals indicate that demand is greater than forecast. Negative
tracking signals means that demand is less than forecast.
17. When are the time series methods best for demand forecasting?
Simple moving average
Single exponential smoothing
Double moving average
Simple regression
18. What do you mean by Delphi method in forecasting?
In Delphi method several knowledgeable persons are asked to provide subjective
estimates of demands of forecasts of possible advances of technology. The experts may
provide several opinion
19. Define Capacity Planning.
A long term strategic decision that establishes a firms overall level resources

Page 2 of 10

Operations Management

AMACE/MBA/I/II

20. What are the types of Capacity Planning

Production capacity
Design capacity
Effective capacity
Maximum capacity
21. What are the various steps involved in process planning?
Process planning is to plan the process steps needed to convert the raw materials into
the finished product.
22. Define CRP.
CRP- Capacity Requirement Planning, facility planning includes determination of how
much long range production capacity is needed, where production should be located
and layout and characteristics of the facilities
23. What tools can help in long term capacity planning?
Long term capacity planning is done to include major changes that affect the overall
level of output in the long run. The major change could be decisions to develop new
product lines, expanding existing facilities and construct new or phase out existing
production plants.
24. What is aggregate planning?
Aggregate planning is a medium range forecast that is carried out just after the capacity
planning to have a plan of workforce size; Production rate levels at different time
periods.
25. Define MRP .
Material Requirements Planning (MRP) is a software based production planning and
inventory control system used to manage manufacturing processes. Although it is not
common nowadays, it is possible to conduct MRP by hand as well.
26. Define MRP- II
Manufacturing Resource Planning (MRP II) is defined by (APICS American
Production and Inventory Control Society) as a method for the effective planning of
all resources of a manufacturing company. Ideally, it addresses operational planning in
units, financial planning in dollars, and has a simulation capability to answer "what-if"
questions and extension of closed-loop MRP.
27. What is ERP ?
ERP is Enterprise Resource Planning a software package developed for optimum use of
resources of an enterprise in a planned manner. ERP integrates the entire enterprise
starting from the supplier to the customer, covering logistics, financial and human
resources. This will enable the enterprise to increase productivity by reducing costs.
ERP is a package for cost saving.
Unit III
28. What is Product Design?
Concern with form and function of a product it refers to the arrangement of elements or
parts that collectively form a product.
29. What are the factors to be considered while designing a product?

Page 3 of 10

Operations Management

AMACE/MBA/I/II

Product design is concerned with the form and function of a product. Form or Shape
design is to determine the product appearance. Functional design is to determine the
functional features of the product in terms of performance.
30. What is job design and what approach is taken to design of jobs?
Job design is nothing but specifying the skills, qualifications, and training required for
the job to be performed. This is done based on the job content what is listed out based
on the tasks, duties and responsibilities of the job to be performed.
Work simplification, Job rotation, Job enlargement, Autonomous work team are some
of the approaches to design the jobs.
31. Define plant layout.
Plant layout means the arrangement and location different departments and of the
machinery and equipment within a department in such a manner that overall operating
costs are minimized.
32. Explain Group technology.
The objective of the Group technology is to minimize the sum of the cost of
transportation and the cost of the equipment. This is a multi objective layout.
33. Explain the term AQL.
Any lot having not more than 1% defective level is called Acceptable quality Level.
AQL.
34. What is break-even analysis?
It is financial analysis tool to study the cost, volume, and profit analysis of the product.
At the break-even point, the income is equal to the expenditure.
35. Explain type 1 and type2 error.
Type I Error . This is an error in sampling inspection. A sample from the output of a
process may lead to the conclusion that the process is out of control when the quality is
good.
Type II Error. A sample from the output gives the conclusion that the process is good
when the quality is out of control.
36. What is TQM?
A philosophy that involves everyone in an organization in a continual effort to improve
quality to achieve customer satisfaction is called TQM.
37. What do you mean by Business Process Re-Engineering?
Re-engineering is about achieving a significant improvement in process so that
contemporary customer requirements of quality, speed, innovations, customization and
service are met.
38. Comment on the fundamental factors affecting quality.
Management who set the quality policy
Suppliers who supply the raw material.
Design engineers who set the specifications.
Manufacturing personnel who make the product.
39. Define Work Study
Is body of knowledge concern with analysis of work methods and standard of proposed
work methods.
40. Define Motion Study

Page 4 of 10

Operations Management

AMACE/MBA/I/II

Is a science of eliminating wastefulness resulting from using and necessary ill directed
and inefficient motion.
41. Define Work Measurement.
Is defined as the application of techniques designed to establish the work content of a
specified task by determining the time require for carrying out the task
42. Define Method Study
Method study may be understood as the systematic recording and critical examination
of existing and proposed ways of doing work
43. Define Scheduling
Is the allocation of start and finish time to each particular order.
44. Define Cyclical Scheduling
Cyclical or rotating a schedule rotate employees through a series of work days or
working hours.
Unit-IV
45. Define materials management.
Materials management is the planning, directing, controlling, and coordinating of all
those activities concerned with materials and inventory management.
46. Distinguish materials management and materials requirements planning.
Material management deals with planning, executing and controlling the flow of
materials in relation to changes in variables like demand , prices, availability, delivery
schedule etc.
Materials requirement planning performs three important functions,
Order planning and control
Priority planning and control
Capacity planning.
47. Define Purchasing
Is the act of buying an item at price.
48. Define Vendor Rating
It is process of rating a supplier based on some rating technique
49. Define Value analysis
It is also known as value engineering, it is an important activity that typically occurs
jointly between purchasing and metal engineering.
50. What is the reorder point system of controlling inventories?
It is about how much quantity to be ordered (Economic Order Quantity) and when the
order should be placed (Re-order level), it is based on the lead time for order delivery.
51. State the types of layout. Brief the salient features of any one.
Process Layout
Product layout
Group layout.
Fixed position layout.
52. Distinguish between mode, median, and arithmetic mean as measures of central
tendency.
Arithmetic mean refers to the average of the given data.
Median. refers to the individual data at the center position in a data distribution.
Mode. is defined as the individual data which has more number of frequency in a given
data distribution.
Page 5 of 10

Operations Management

AMACE/MBA/I/II

53. What are the important drivers of supply chain management?

A supply chain refers to process flow starting from raw material sourcing to finished
products delivered to the ultimate customer.
54. What do you mean by Parteo Diagram?
It is the fundamental for the ABC analysis. The vital few and trivial many.. 20% of
the items lead to 80% of the cost. 80% of the items lead to only20%of the cost.
55. Define mean square error.
Mean square error is the mean of the squares of deviations of forecast demand from the
actual demand values.
56. Define Mean forecast error
Mean forecast error is the mean of the deviation s of the forecast demand from the
actual demand.
57. What are the key elements Process re-engineering?
Re-engineering is about achieving a significant improvement in process. The key
elements are quality, speed, innovations, customization and service of the product.
58. Define Inventories
Inventory management is primarily about specifying the shape and percentage of
stocked goods. It is required at different locations within a facility or within many
locations of a supply network to proceed the regular and planned course of production
and stock of materials.
59. Define quality circles.
Quality circle is the fundamental step for TQM. A quality circle is group of employees
whose assignment is to identify the problems, formulate solutions, and present their
results to management with suggestions for implementation.
60. What are the steps involved in developing an acceptable aggregate plan?
a. Feasible. The plans should provide for the portion of demand that the firm intends
to meet and should be within the capacity of the firm.
b. Optimal. The firm should aim for plans which will ensure that resources are used as
wisely as possible and costs kept as low as possible.
To increase the range of alternatives of capacity use that is decided by the
management of the firm.
61. How JIT can facilitate the continuous improvement of operations?
The objective the JIT concept is to totally eliminate the inventory, to keep minimal
inventory of work in progress and these would be monitored by constant reduction in
working capital.
Unit V
62. Define Project Management
Project management is the discipline of planning, organizing, securing, and managing
resources to achieve specific goals. A project is a temporary endeavor with a defined
beginning and end, undertaken to meet unique goals and objectives, typically to bring
about beneficial change or added value.
63. What are the difference between PERT and CPM methods of Project
management?
In CPM time estimate of the activities are deterministic.

Page 6 of 10

Operations Management

AMACE/MBA/I/II

In PERT time estimate of the activities are probabilistic.

64. Explain what is value analysis.
It refers to an examination of the function of the purchased parts and materials in an
effort to reduce the cost and improve the performance of those items.
65. What do you mean by cellular manufacturing?
In cellular manufacturing, machines are grouped into cells and the cells function
somewhat like a product layout within a larger shop or process lay out. Advantage of
cellular lay outs are lower work in progress inventories, reduced material handling
cost, shorter flow times in production, simplifies production planning, increased
operator responsibilities, improved visual control and fewer tooling changes therefore
facilitating quicker setups.
66. Define Process control charts.
These are statistical control charts, which are required for monitoring the
manufacturing process to check whether it is still in control or it needs any corrective
action.
67. What is mass Production system?
It is nothing but large scale standardized production is done on demand basis through
standardized process layout. This involves both planning and controls activities.
Make to stock products are generally high volume consumer goods, such as
telephones, automobiles, wristwatches etc.
68. What is crash analysis?
Crashing analysis is a cost time, trade off analysis in a project. In this analysis
overheads or indirect costs are reduced. The crashing of a network increases the
direct cost because of expedition of activities. But it results in decreased project
completion time. This in turn reduces indirect costs like cost of supervision, security
personnels salaries etc. Hence there is a trade-off between the direct cost and indirect
cost when a project is crashed. The objective is to crash the project until it becomes
economical.
69. What is route chart?
Route chart shows the path on which manufacturing operations will travel from raw
material into finished products. It is done in routing phase of PPC.
70. Define OC curve.
It is nothing but operating characteristics curve. This curve will provide a basis for
selecting alternate sample plans. In the OC curve percent defective is on X-axis. The
probability of accepting the lot for, given % defective is shown in the Y axis. The
value for percent defective indicates the quality level of the lot inspected.
71. List out the assumptions in EOQ?
The monthly demand for the item is known, deterministic and constant.
The lead time is known and constant.
The receipt of the order occurs in a single instant and immediately after
ordering it
Quantity discounts are not calculated as part of the model .
The setup cost is constant.
72. What is warehouse management system?

Page 7 of 10

Operations Management

AMACE/MBA/I/II

Warehouse Management Systems (WMS) are a key part of the supply chain and
provide directed stock rotation, intelligent picking directives, automatic consolidation
and cross-docking to maximize the use of valuable warehouse space. The systems
also direct and optimizes stock put-away based on real-time information about the
status of bin utilization.Having a WMS in place means you don't depend any more on
people's experience, the system has the intelligence.
73. Write the formula of EOQ and give an explanation?

K = the incremental cost of placing an order

kc = the annual cost of carrying one unit of inventory
D = annual demand in units
Q = optimal order size in units
TC = total cost over the year
which is known as the Economic Order Quantity or EOQ formula.
74. What is Kanban system?
Kanban is a signaling system. As its name suggests, Kanban uses cards to signal the
need for an item. Other devices such as plastic markers (Kanban squares) or balls
(often golf balls) can also be used to trigger the movement, production, or supply of a
unit in a factory.
For example, in the production of a widget, the operator has two shelves, one on
either side of the workplace. The raw materials arrive on one shelf and the finished
article on the other. These shelves act as kanbans. The outgoing kanban signals the
customer's need so that when it is empty, the operator must produce one more widget.
75. What is ASRS Automated Storage and Retrieval System?
Automated Storage and Retrieval Systems (often referred to as ASRS or AS/RS)
refers to a variety of computer-controlled methods for automatically depositing and
retrieving loads from defined storage locations. Systems of this nature have been used
for years in manufacturing and warehouse facilities.
ASRS technology is just beginning to be used in large libraries, particularly at
universities. It is used mostly to retrieve seldom-used books and periodicals that are
kept in storage vaults. It works via a robotic "arm" that quite literally fetches
materials from archival locations.
76. What are the components in supply chain management?
Customer Service Management
Product Development and Commercialization
Physical Distribution, Manufacturing support and Procurement
Performance Measurement
77. Explain Supply Chain Management.
Supply chain management (SCM) is the process of planning, implementing, and
controlling the operations of the supply chain with the purpose to satisfy customer
requirements as efficiently as possible. Supply chain management spans all
movement and storage of raw materials, work-in-process inventory, and finished
goods from point-of-origin to point-of-consumption. The term supply chain

Page 8 of 10

Operations Management

AMACE/MBA/I/II

management was coined by consultant Keith Oliver, of strategy consulting firm Booz
Allen Hamilton in 1982.

78. Explain what is CAM.

Computer-aided manufacturing (CAM) is the use of a wide range of Product
Lifecycle Management computer-based software tools that assist engineers, in the
manufacture of product components. 3D models of components generated in CAD
software are used to generate CNC code to drive numerical controled machine tools.
This involves the engineer in selecting what type of tool, machining process and paths
that are to be used.
79. What are the important types of production?
Flow shop
Job shop
Batch manufacturing
The project
80. What is CAD explain in detail.
CAD is used to design, develop and optimize products, which can be goods used by
end consumers or intermediate goods used in other products. CAD is also extensively
used in the design of tools and machinery used in the manufacture of components.
CAD is also used in the drafting and design of all types of buildings, from small
residential types (houses) to the largest commercial and industrial structures
(hospitals and factories).
81. Define Customer Service management
It includes the rimary level component of customer relationship management, and
secondary level components such as benchmarking and order fulfillment.
82. Define product development and commercialization
It includes the primary level component of Product Data Management (PDM), and
secondary level components such as market share, customer satisfaction, profit
margins, and returns to stakeholders.
83. Define Physical Distribution, Manufacturing support and Procurement
It includes the primary level component of Enterprise Resource Planning (ERP), with
secondary level components such as warehouse management, material management,
manufacturing planning, personnel management, and postponement (order
management).
84. Define Performance measurement
This includes the primary level component of logistics performance measurement,
which is correlated with the information flow facility structure within the
organization. Secondary level components may include four types of measurement
such as. variation, direction, decision and policy measurements. More specifically, in
accordance with these secondary level components total cost analysis (TCA),
customer profitability analysis (CPA), and Asset management could be concerned as
well. In general, information flow facility structure is regarded by two important

Page 9 of 10

Operations Management

AMACE/MBA/I/II

requirements, which are a) planning and Coordination flows, and b)operational

requirements).

Page 10 of 10