[5K Mondal’s Industrial Engineering [contents Chapter 1: Forecasting Chapter 2: Routing, Scheduling, etc. Chapter 3: Line Balancing Chapter 4: Break Even Analysis PERT and CPM Chapter Chapter 6: Inventory Control ABC Analysis E0Q Model Chapter 7: Materials Requirement Planning Job design Job Standards Chapter 8: Work Study Motion Study and Motion Economy Work Measurement (Time Study) Predetermined Motion Time System Chapter 9: Plant Layout Type of Plant Layout Product Layout Functional Layout Er. S K Mondal IES Officer (Railway), GATE topper, NTPC ET-2003 batch, 12 years teaching experienced, Author of Hydro Power Familiarization (NTPC Ltd) Page 1 of 318Process Layout Fixed Position Layout Work Flow Diagram Flow Process Chart Computerized Techniques for Plant Layout CORELAP, CRAFT, ALDEP, PLANET, COFAD, CAN-Q Chapter 10: Quality Analysis and Control Statistical Quality Control Control Chart Control Chart for Variables X- Chat and R - Chart Control Chart for Variables C - Chart and P - Chart Chapter 11: Process Capability Operation Characteristic Curve (OC Curve) Sampling Plan (Single, Double, Sequential Sampling Plan) Work Sampling Total Quality Management (TQM) Iso Just in Time (JIT) Operations Research Chapter 12: Graphical Method Chapter 13: Simplex Method Chapter 14: Transportation Model Chapter 15: Assignment Model Chapter 16: Queuing Model Chapter 17: Value Analysis for Cost/Value Chapter 18: Miscellaneous Wages Plan, Depreciation Load Chart, Mass Production Gantt Chart Others Page 2 of 318(Note “Asked Objective Questions” is the total collection of questions from:- |20 yrs IES (2010-1992) [Engineering Service Examination] |21 yrs. GATE (2011-1992) land 14 yrs. IAS (Prelim.) [Civil Service Preliminary] Copyright © 2007 S K Mondal Every effort has been made to see that there are no errors (typographical or otherwise) in the material presented. However, it is still possible that there are a few errors (serious or otherwise). I would be thankful to the readers if they are brought to my attention at the following e-mail address: swapan_mondal_01@yahoo.co.in SK Mondal Page 3 of 318Forecasting S K Mondal Chapter 1 Forecasting Theory at a Glance (For IES, GATE, PSU) Forecasting means estimation of type, quantity and quality of future works e.g. sales ete. It is a caleulated economic analysis. 1. Basic elements of forecasting: 1. Trends 2. Cycles 3, Seasonal Variations 4, Irregular Variations 2. Sales forecasting techniques: a. Historie estimation b. Sales force estimation ¢, ‘Trend line (or Time-series analysis) technique d. Market survey e. Delphi Method f Judge mental techniques g. Prior knowledge b Forecasting by past average i, Forecasting from last period's sales j. Forecasting by Moving average k. Forecasting by weighted moving average 1. Forecasting by Exponential smoothing m. Correlation Analysis n. Linear Regression Analys Average method: Forecast sales for next period = Average sales for previous period Example: Period No Sales 1 7 2 5 3 8 4 8 5 5 6 8 Forecast sales for Period No 7 Il. Forecast by Moving Average: Page 4 of 318Forecasting S K Mondal Chapter 1 Tn this method the forecast is neither influenced by very old data nor does it solely reflect the figures of the previous period Example: Year Period Sales Four-period average forecasting 19871 30 2 60 3 30 4 40 19881 50 2 55 Forecast for 1988 period 122760 50 Forecast for 1988 period 2 = Sone 450 =50 III. Weighted Moving Average: A weighted moving Average allows any weights to be placed on each element, providing of course, that the sum of all weights equals one, Example: Period Sales Month-1 100 Month-2 90 Month-3 105 Month-4 95 Month-5 110 Forecast (weights 40%, 30%, 20%, 10% of most recent month) Forecast for month-5 would bi F,=0.4x95 40.3% 105 +-0,2x90 +0.1x100=97.5 Forecast for month-6 would be: F, =0.4x110+0.8%95 + 0.2105 +0.1x90= 102.5, IV. Exponential Smoothing: New forecast = @ (latest sales figure) + (1-a) (old forecast) [VIMP] Where: a is known as the smoothing constant. ‘The size of @ should be chosen in the light of the stability or variability of actual sales, and is normally from 0.1 to 0.3. ‘The smoothing constant, a, that gives the equivalent of an N-period moving average can be calculated as follows, a = Nei For e.g. if we wish to adopt an exponential smoothing technique equivalent to a nine- 2 jeriod moving average then, a = —>— Pp if average ba 0.2 Page § of 318‘Forecasting S K Mondal Chapter 1 Basically, exponential smoothing is an average method and is useful for forecasting one period ahead. In this approach, the most recent past period demand is weighted most heavily. In a continuing manner the weights assigned to successively past period demands decrease according to exponential law. Generalized equation: Fxa(1-a)'d,,+a(1—a) d,+$a.(1— a)! dy tenet a (Ia) d,, +(1-a)* Fy [Where & is the number of past periods] Tt can be seen from above equation that the weights associated with each demand of equation are not equal but rather the successively older demand weights decrease by factor (1-a). In other words, the successive terms o(1-a)',a(1-a)',a(1-a)',a(1-a)" decreases exponentially. ‘This means that the more recent demands are more heavily weighted than the remote demands, Exponential smoothing method of Demand Forecasting: (ESE-06) (Demand for the most recent data is given more weightage. Gi) This method requires only the current demand and forecast demand. ii) This method assigns weight to all the previous data, V. Regression Analysis: Regression analysis is also known as method of curve fitting. On this method the data on the past sales is plotted against time, and the best curve called the “Trend line’ or “Regression line’ or ‘Trend curve’, The forecast is obtained by extrapolating this trend line orcurve For linear regression yeatbe By bea Past data nay -(2x)(2y) Sales o | pore nx — (Ex) t ee cast Standard error = Page 6 of 318