Operation Management Free Essays

agement AEREN FOUNDATION’S Maharashtra Govt. Reg. No. We will write a custom essay sample on Operation Management or any similar topic only for you Order Now : F-11724 [pic] SUBJECT : OPERATIONS MANAGEMENT Total Marks : 80 CASE-1 (16 Marks) Bloomsday Outfitters produces T-shirts for road races. They need to acquire some new stamping machines to produce 30,000 good T-shirts per month. Their plant operates 200 hours per month, but the new machines will be used for T-shirts only 60 percent of the time and the output usually includes 5 percent that are â€Å"seconds† and unusable. The stamping operation takes 1 minute per T-shirt, and the stamping machines are expected to have 90 percent efficiency considering adjustments, changeover of patterns, and unavoidable downtime. How many stamping machines are required? CASE-2 (16 Marks) In the table given below the Distribution Manager is expected to service these DCs as per the demands placed. If the actual sales after completing week one is as follows, what would be the quantities that would need amendment as far as Distribution Manager is concerned to service for week two and onwards? After week one the actual sales to Forecasted sales for week one ratio is as under: Mumbai did 80 % of forecast , Lucknow did 75 % of forecast Kolkata did 60 % of week one forecast Chennai did 125 % of forecast and Delhi did 150 % of week one forecast [pic] Note : Kolkata will receive transit stocks in week 2 . CASE-3 (16 Marks) After working for 30 years, Ramjee Somjee Dutt opted for VRS and started a courier company and did very well in the first four years. He was now looking for expansion of his business and decided to venture into Road transportation business between Chennai and Mumbai and Mumbai and Delhi as he felt that he could do well on this line. However before taking a final decision he hires your Management Consultant firm formed by yourself. He has requested you to work out the Price to quote his clients for these two routes considering the costs involved. He expects to earn a minimum profit of Rs 1000 per day per truck after meeting all expenses. Your analysis of market conditions tell you the following: Vehicle cost Rs 7 lacs Depreciation 15 % Maintenance costs per day Rs 150 Drivers monthly Salary Rs 5000 : Attendants monthly salary Rs 3000 . Misc expenses Rs 200 per day. Driver allowance is Rs 125 per day and attendant gets Rs 75. Diesel cost per liter is Rs 25 and the vehicle gives an average mileage of 4 km to a liter. The Financial institutions offer loans at 10 % interest pa, which Ramjee has been negotiating. It has been observed that on an average the vehicle covers 400 km per day. The distance between Mumbai to Delhi is 1500 km and Mumbai to Chennai is 1350 km. The driver gets rest day in Mumbai only for one day after they return from any trip. CASE-4 (16 Marks) A company is operating in two unrelated businesses. The first one is making common salt, which is sold in one-kilogram consumer packs. The second business is making readymade garments. The owner of the businesses has decided to implement Materials Requirement Planning (MRP) in one of the two businesses, which is likely to give him greater benefit. Assuming that the current turnover and profits of both the units are comparable, compare the relative benefits and limitations of Materials Requirement Planning (MRP) for these two businesses. CASE-5 (16 Marks) A Manufacturer of motorcycles buys spark plugs at Rs. 15 each. Now he wishes to manufacture the plugs in his own factory. The estimated cost for the manufacture of spark plugs is around Rs. 50,000=00 and the variable cost comes to Rs. 5 per spark plug. The Production Manager advises the Manufacturer that the factory should go for manufacturing instead of procuring them from the open market. List out reasons for the decision of the Production Manager backed up by the necessary data. ———————– AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL How to cite Operation Management, Papers Operation Management Free Essays It is usually stated that ‘the structural decisions items of an operations strategy reflect the hardware of the firm, while the infrastructure decision areas represent the firm’s software’. Comparing structural decisions with the hardware of the firm and the infrastructure decisions as its software, it shows that the structural decisions are very important and the firm cannot exists without them because without a hardware computer would not exist and the software would have nothing to run on. Structural decisions involves a big investment decisions and it is very difficult to change these decisions without the significant financial losses, that is why structural decisions require detailed considerations about the operations across different countries. We will write a custom essay sample on Operation Management or any similar topic only for you Order Now Generally, structural decisions areas include: facilities decisions, capacity management, process technology and the supply network. On the other hand, infrastructural decisions are concerned with the management of the systems and procedures through which the physical assets operated. Also infrastructural decisions can be changed easier than structural decisions, but it still involves complex considerations. However, the infrastructural decisions deal with the most important part of the operation management: Planning and control. It is concerned with matching supply from the organization’s operations with demand from its customers. Also infrastructural decisions include Quality, Work Organization, Human Resources, New Product Development and Performance Measurement. Nevertheless, in the statement it seems that structural decisions are more important than the infrastructural decisions, because hardware seems to be more important than software. However, the computer cannot operate without both, so both of them are very important parts of the firm. How to cite Operation Management, Essay examples Operation Management Free Essays string(182) " following is an aid used to monitor jobs in process\? A\) A Gantt load chart B\) The assignment method C\) A Gantt schedule chart D\) Johnson’s rule E\) None of the above 20\." Which of the following best describes the strategic importance of short-term scheduling? A) Effective scheduling, through lower costs, faster delivery, and more dependable schedules, can provide a competitive advantage. B) Effective scheduling is a tactical tool for increasing demand to meet production. C) Forward scheduling looks to future demand levels in order to increase customer satisfaction. We will write a custom essay sample on Operation Management or any similar topic only for you Order Now D) Aggregate planning is a tactical action, but short-term scheduling is strategic because of its immense impact on costs.E) Short-term scheduling matches capacity to demand during the short term, three to eighteen months into the future. 2. The three components that can lead to competitive advantage through effective scheduling are: A) aggregate planning, intermediate scheduling, and medium-term planning. B) forward scheduling, real-time scheduling, and backward scheduling. C) the item master file, the routing file, and the work-center master file. D) lower costs, faster delivery, and more dependable schedules. E) Gantt charts, Johnson’s rule and the Pareto principle. 3.A firm uses graphical techniques in its aggregate planning efforts. Over the next twelve months (its intermediate period) it estimates the sum of demands to be 105,000 units. The firm has 250 production days per year. In January, which has 22 production days, demand is estimated to be 11,000 units. A graph of demand versus level production will show that: A) the January requirement is below level production of 420 units. B) level production is approximately 1000 units per day. C) level production of 420 units per day is below the January requirement.D) level production is approximately 420 units per month. E) the firm must hire workers between December and January. 4. Which of the following statements regarding finite capacity scheduling (FCS) is false? A) Finite capacity scheduling allows delivery needs to be balanced against efficiency. B) Finite capacity scheduling overcomes the disadvantages of systems based exclusively on rules. C) Finite capacity scheduling allows virtually instantaneous change by operators. D) Finite capacity scheduling software formalizes the same data needed in any manual system. E) None; all of the above are true. . The number of kanbans is: A) one. B) the ratio of the reorder point to container size. C) the same as EOQ. D) one full day’s production. E) none of the above. 6. Which of the following techniques is not a technique for dealing with a bottleneck? A) Schedule throughput to match capacity of the bottleneck. B) Increase capacity of the constraint. C) Have cross-trained employees available to keep the constraint at full operation. D) Develop alternate routings. E) All are tools for dealing with bottlenecks. 7. A master production schedule (MPS) calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are: A) 150. B) 170. C) 300. D) 320. E) 440. 8. Dependence on an external source of supply is found in which of the following aggregate planning strategies? A) Varying production rates through overtime or idle time B) Subcontracting C) Using part-time workers D) Back ordering during high demand periods E) Hiring and laying off 9. Five jobs are waiting to be processed. Their processing times and due dates are given below.Using the shortest processing time dispatching rule, in which order should the jobs be processed? |Job |Processing Time (days) |Job due date (days) | |A |4 |7 | |B |7 |4 | |C |8 |11 | |D |3 |5 | |E |5 |8 |A) A, B, C, D, E B) C, E, A, D, B C) B, D, A, E, C D) D, A, E, B, C E) C, E, A, D, B 10. Enterprise resource planning (ERP): A) seldom requires software upgrade or enhancement. B) does not integrate well with functional areas other than operations. C) is inexpensive to implement. D) automates and integrates the majority of business processes. E) all of the above. 11. Which of the following aggregate planning strategies is a â€Å"capacity option†? A) Influencing demand by changing price B) Counterseasonal product mixing C) Influencing demand by extending lead timesD) Changing inventory levels E) Influencing demand by back ordering 12. The probability that a product will function properly for a specified time under stated conditions is: A) functionality. B) maintenance. C) durability. D) reliability. E) fitness for use. 13. What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A) Lot-for-lot. B) EOQ. C) Part-period balancing. D) The Wagner-Whitin algorithm. E) All of the above are appropriate for the situation. 14. MRP II is accurately described as: A) MRP software designed for services.B) MRP with a new set of computer programs that execute on microcomputers. C) MRP augmented by other resource variables. D) an enhancement of MRP that plans for all levels of the supply chain. E) a new generation of MRP software that extends MRP to planning and scheduling functions. 15. Ten high-technology batteries are tested for 200 hours each. One failed at 20 hours; all others completed the test. FR(%) is ________ and MTBF is ________. A) 10%; 1/1820 B) 90%; 1/1820 C) 10%; 1820 hours D) 10%; 1980 hours E) Cannot calculate from information provided 16. The typical time horizon for aggregate planning is:A) less than a month. B) up to 3 months. C) 3 to 18 months. D) over one year. E) over 5 years. 17. Which of the following aggregate planning strategies might direct your client to a competitor? A) Using part-time workers B) Subcontracting C) Changing inventory level D) Varying production rates through overtime or idle time E) Varying work force size by hiring or layoffs 18. Which of the following statements regarding MRP in services is true? A) MRP is for manufacturing only, and is not applicable to services. B) MRP can be used in services, but only those that offer very limited customization.C) MRP does not work in services because there is no dependent demand. D) Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. E) None of the above is true. 19. Which of the following is an aid used to monitor jobs in process? A) A Gantt load chart B) The assignment method C) A Gantt schedule chart D) Johnson’s rule E) None of the above 20. You read "Operation Management" in category "Papers" Which of the following is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices?A) Just-in-time (JIT) B) Toyota Production System (TPS) C) Lean operations D) Material requirements planning (MRP) E) Kanban 21. Which of the following costs tend to be ignored in determining the optimal maintenance policy? A) Expected breakdown costs B) Preventive maintenance costs C) The costs associated with various levels of commitment to maintenance D) Cost of low morale E) all of the above 22. Which of these aggregate planning strategies adjusts capacity to match demand? A) Back ordering. B) Using part-time workers. C) Counterseasonal product mixing. D) Changing price.E) None of the above is a capacity option. 23. Which of these is among the demand options of aggregate planning? A) Subcontracting. B) Back-ordering during high-demand periods. C) Changing inventory levels. D) Varying workforce size. E) All of the above are demand options. 24. Which of these is not a characteristic that makes yield management attractive? A) Demand can be segmented B) Service can be sold in advance of consumption C) Capacity is easily changed D) Variable costs are low and fixed costs are high E) Demand fluctuates 25. Which one of the following statements about maintenance is true?A) The optimal degree of preventive maintenance is associated with zero breakdowns. B) Breakdown maintenance is proactive. C) Preventive maintenance is reactive. D) Preventive maintenance is limited to keeping machinery and equipment running. E) Human resources are a major component of effective maintenance management. Question 1 throughput time a) cost/price, quality, delivery speed, delivery reliability, and flexibility b) because the customer is involved c) rate at which flow units are output from the process d) time it takes a flow unit to get through the process nswer : d Question 2 essential functions of operations management: marketing, finance/accounting, operations a) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience b) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc. c) as batch size becomes â€Å"larger† throughput time d) marketing: generates (detects) demand answer : d Question 3 observations about moving average ) over the long run, the average throughput rate of a process is always strictly less than its capacity this implies that utilization can never be 100% in the long run b) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience c) as batch size becomes â€Å"larger† throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size d) responsiveness/stability of MA depends on n, the number of periods in the average MA lags data with significant trendsMA often effective for short term forecasting answer : d Question 4 measuring regression fit a) variance; is a measure of how values are spread about the mean, often we talk about standard deviatio n, which is the square root of the varience b) High R^2 value: R^2 the percentage of variability in Y that is explained by X R^2 is a unitless measure the closer that R^2 Low Syx value: Syx measures the c) responsiveness/stability of MA depends on n, the number of periods in the average MA lags data with significant trendsMA often effective for short term forecasting d) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% answer : b Question 5 quantitative forecasting a) number of flow units contained within the process measured in physical units or in dollars b) fraction of time that an activity is busy (not idle)= flow rate into activity/capactiy of activity c) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression ) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : c Question 6 measuring variability a) 1. define the process boundaries 2. list the steps 3. sequence the steps 4. complete the map using appropriate symbols to describe the actions, flows, and waiting b) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience c) Forecast error=Ai-Fi=Acutal-Forecast Mean absolute deviation (MAD)Graphically plot errors over time to detect bias or patterns d) measure of process improvement, represents output relative to input, total factor productivity $value of output/ cost of all inputs answer : b Question 7 queueing theory a) cost/price, quality, delivery speed, delivery reliability, and flexibility b) processing rate; throughput rate of an activity under ideal conditions (no detractors c) the science of waiting lines explains the effect of variability on a process d) increasing variability always degrades the performance of a system answer : cQuestion 8 variability propagation a) as batch size becomes â€Å"larger† throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size b) forecasts are almost always wrong, the longer the forecast horizon, the less accurate the forecast will be, a good forecast is more than a single number forecasts should incorporate qualitative info aggregate forecasts are more accurate orecasts become worse the further up the supply chain c) variability early in a process routing increases flow time mroe than equivalent variability later in a process routing how variability is propagated depends on the relative utlizations of the different stages in the process d) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc. answer : c Question 9 work-in-process inventory a) cost/price, quality, delivery speed, delivery reliability, and flexibi lity b) number of flow units contained within the process easured in physical units or in dollars c) 3 months to 2 years; sales and production planning, budgeting and cost projections, capacity planning d) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : b Question 10 medium range forecast a) correlation coefficient denoted R values range from -1 to 1 measures degree of association when x gets larger y does also b) 3 months to 2 years; sales and production planning, budgeting and cost projections, capacity planning c) model that characterizes the relationship between a dependent variable and variables. ) executive judgment, grass roots, market research, panel consensus, Delphi method historical analogy answer : b Question 11 qualitiative methods a) companies are constantly looking for people that know how to increase work place productivity b) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy c) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge d) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity answer : b Question 12 naive forecast a) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy b) processing rate; throughput rate of an activity under ideal conditions (no detractors c) companies are constantly looking for people that know how to increase work place productivity d) purely naive forecast for the next period is equal to observation from current period answer : D Question 13 productivity a) variability induced by process design etup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing b) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% c) measure of process improvement, represents output relative to input, total factor productivity $value of output/ cost of all inputs d) model that characterizes the relationship between a dependent variable and multiple independent variables answer : CQuestion 14 utilization a) the science of waiting lines explains the effect of variability on a process b) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression c) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity model that characterizes the relationship between a dependent variable and multiple independent variables answer : C Question 15 actual capacity ) increasing variability always degrades the performance of a system b) processing rate; throughput rate of an activity under ideal conditions (nodetractors c) =design capacity-detractors max avg throughput rate of a process d) time it takes a flow unit to get through the process answer : C Question 16 Why is service productivity lower? A) because the customer is involved B) averaging over the long-run: WIP=throughput rate*throughput time (I=R*T) C) ;gt;2 years; new product planning, facility location D) 2. 5% answer : A Question 17 productivity variablesA) processing rate; throughput rate of an activity under ideal conditions (no detractors B) the science of waiting lines explains the effect of variability on a process C) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression D) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : D Question 18 detractors A) events that slow down the output of an activity (by reducing the available time it can execute) equipment breakdowns, setups, worker unavailabitlity etc.B) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing C) average throughput time increases with increases in utilization (barring other changes and does so sharply as utilization approaches 100% D) linear regression: facilitates alternative forecasting using explanatory factors deve lop linear trend projections can incorporate seasonality answer : AQuestion 19 Why do we need to know OM? A) purely naive forecast for the next period is equal to observation from current period B) model that characterizes the relationship between a dependent variable and multiple independent variables C) companies are constantly looking for people that know how to increase work place productivity D) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy answer : B Question 20 process mappingA) ES is a form of weighted moving average, weights decline exponentially with most recent data weighted most responsivness/stability of ES depends on alpha ES lags data with significant trends ES often is very effective for short term forecasting B) a process map clearly describes â€Å"how the process actually exists† by diagramming the flow of materials and or information ultimate goal: undesrtand and improve the process so that it generate s the most possible value C) marketing: generates (detects) demand finance/accounting: tracks how well the organization is doing, pays bills, collects the money operations: creates the product and/or delivers the service D) as batch size becomes â€Å"larger† throughput time increases, the firm is less responsive, to increase process capacity, better to focus on reducing set-up time rather than increase batch size answer : B Question 21 causual forecasting modelA) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience B) linear regression: facilitates alternative forecasting using explanatory factors develop linear trend projections can incorporate seasonality C) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing D) measure of process improvement, represents output relative to inpu t, total factor productivity $value of output/ cost of all inputs answer : B Question 22 queueing theory A) the science of waiting lines explains the effect of variability on a process B) purely naive forecast for the next period is equal to observation from current period C) activity that constrains the capacity of the entire process D) labor: edu. ,diet, and sanitation capital: equipment, building management: tech, knowledge answer : A Question 23 qualitiative methodsA) the science of waiting lines explains the effect of variability on a process B) executive judgment, grass roots, market research, panel consensus, delphi method, historical analogy C) time series models;gt; moving average, exponential smoothing, trend projections casual models;gt;linear regression D) companies are constantly looking for people that know how to increase work place productivity answer : B Question 24 moving average method A) used if data exhibits little or no trend B) rate at which flow units are out put from the process C) time it takes a flow unit to get through the process D) because the customer is involved answer : A Question 25 batching A) variability induced by process design setup times incurred between switching product or customer types the activity desgin facilitates simultaneous processing B) High R^2 value:R^2 the percentage of variability in Y that is explained by X R^2 is a unitless measure the closer that R^2 Low Syx value:Syx measures the C) Forecast error=Ai-Fi=Acutal-Forecast Mean absolute deviation (MAD) Graphically plot errors over time to detect bias or patterns D) variance; is a measure of how values are spread about the mean, often we talk about standard deviation, which is the square root of the varience answer : A Question 26 throughput rate A) underlying basis of virtually all business decisions B) time it takes a flow unit to get through the process C) used if data exhibits little or no trend D) rate at which flow units are output from the process ans wer : D Question 27 bottleneckA) cost/price, quality, delivery speed, delivery reliability, and flexibility B) activity that constrains the capacity of the entire process C) averaging over the long-run: WIP=throughput rate*throughput time (I=R*T) D) rate at which flow units are output from the process answer : B Question 28 multiple linear regression A) processing rate; throughput rate of an activity under ideal conditions (no detractors B) number of flow units contained within the process measured in physical units or in dollars C) model that characterizes the relationship between a dependent variable and multiple independent variables D) fraction of time that an activity is busy (not idle) = flow rate into activity/capactiy of activity answer : C How to cite Operation Management, Papers Operation Management Free Essays The Operation management is the activity of managing the resources which produce and deliver products and services. It is one of the core functions of any business. Operations function is the part of the organisation that is responsible for this activity. We will write a custom essay sample on Operation Management or any similar topic only for you Order Now Every organisation produces some type of product or services so it has an operations function. However not all organisations call the operations function by its name. The people who have the responsibility of managing the resources which compose the operations function are known as the operations manager. Each organisation may call their operations manager by different names. For e. g. in a hospital they are known as ‘administrative mangers’ and in supermarkets they are known as ‘store managers’. Operations function is important to any organisation as it produces the goods and services- the reason why an organisation exists for. It is one of three core functions but there are also support functions that enable the core functions to work effectively, these are: Operations function which is responsible for fulfilling customer requests for service through the production and delivery of products and services Product/service development function which is responsible for creating new and modified products and services in order to generate future customer requests for service Marketing function which is responsible for communicating the organisation’s products and services to its markets in order to generate customer requests for service Human resources function which recruits and develops the organisation’s staff as well as looking after their welfare Accounting and finance function which provides the information to help economic decision-making and manages the financial resources of the organisation As different organisations call their functions by different names so they will have different supporting functions. But an organisation must have three core functions as the organisation needs to sell their product and services, satisfy their customer and create the means to satisfy their customers in the future. Sometimes there is not a clear division between the core functions and supporting functions. All operations produce products and services by transferring the inputs into outputs using an ‘input-transformation-output’ process. Operations are processes that take in a set of input resources to transform them into outputs of products and services. All processes can be applied to this model but they differ in the nature of their specific inputs and outputs. The other set of inputs to any operations process are known as transforming resources. These resources act upon the transformed resources. There are two types which form the ‘building blocks’ of all operations: Facilities- the buildings, equipment, plant and process technology of the operation Staff – the people who operate, maintain, plan and manage the operation The nature of both facilities and staff will differ between operations. Services may have a shorter stored life whereas products can be stored at least once. Products are tangible whereas services are not. Mostly, operations produce either just products or services but most produce a mixture of both. All operations are service providers which may produce products as part of serving their customers. It is not just the operations function that manage processes; all functions manage processes. For e. g. the marketing function will have processes that produce demand forecasts, processes that produce advertising campaigns and processes that produce marketing plans. These processes in the other functions also need managing using similar principles to those within the operations function. Operations management is relevant for all functions and so all managers should have something to learn from the concepts, principles, approaches and techniques of operations managements. There are two meanings of operations: Operation as an activity meaning the management of the processes within any of the organisations functions Operation as a function meaning the part of the organisation which produces the products and services for the organisations external customers Businesses always attempt to satisfy their customer’s needs by using many processes, in both its operations and other functions. Each of these processes will contribute some part in fulfilling the customer needs. Customer needs for each product are entirely fulfilled from within an ‘end-to-end’ business process. How to cite Operation Management, Essays