Industrial Management Section -I

Q1(a). “Management is an art” Do you agree? Ans. Every human being has several needs & desires but no individuals can satisfy all his wants alone. Therefore, people work together to meet their mutual needs. They can achieve their goals effectively, only when their efforts are properly planned, organized, co-ordinate and controlled. So the task of getting results through others by coordinating & motivating their efforts is known as ‘Management’. Management is an art and it can be proved through following :1.

Art requires skill - Management also requires skill. A person cannot become a successful manager simply by reading theory & getting a degree or diploma in management He must also learn to apply his knowledge in solving managerial problems practical life, which requires conceptual, technical, interpersonal & decision-making skills. Art requires knowledge - Management also requires acquiring & updating knowledge. For e.g.-A manager of a firm must know, what are the latest marketing strategies, what are sources of finance & production possibilities.

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3. Art is creative - An artist always aims at producing something new. Similarly, management needs creativity in facing challenges of competition. For e.g.:- Whenever a new product is launched, new & unique ideas are used for advertisement purpose. 4. Art is personalized - Every artist has his own style & approach to his job. Similarly, every manager has its individual approach & style of solving managerial problems. The success of a manger depends upon his personality in addition to his technical knowledge.
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Art is performance - Similarly, management is what management does. It is a resultoriented task, which is understood by performance. For e.g. :- Profit, growth & development of a company is the performance indicators of its management.

Thus, from the above, it can be concluded that ‘Management is an Art’. Q1(b). Discuss briefly the process of management. What are the fundamental functions of management? Ans. Management is the art of getting work done through others and the methodology to be followed for the purpose requires a series of actions or operations to be performed in a specific sequence. The fundamental functions to be performed by the executive concerned & the sequence in which they need to be performed is designated as ‘Management Process’

Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management

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Process of Management involves following steps :
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Planning - One of the most important functions of management at all levels is to plan. It is concerned with determining the future course of action in advance to achieve the desired goals. Planning is deciding in advance-what to do, how to do it, where is to be done & who will do it. It determines company’s future needs so that the enterprise will be able to achieve its production targets. Planning helps in efficient utilization of resources, avoids duplication of work, improves quality & compels managers to visualize the whole picture of business. It specifies starting & finishing time of each activity. Organizing - Next important step of the management process is organizing. Planning establishes objectives & draws a plan of activities and organizing puts that plan into action. Organizing involves activities like- Identification of various activities necessary for achievement of goals, formation of department, allocation of resources, delegation of authority etc. Organizing results in great coordination among subordinates, smooth functioning & effective communication among organizations. Directing - Directing means giving instructions to the subordinates regarding what & when is to be done, by what method, properly guiding & helping them in performing that particular work, supervising them to ensure that the job is carried out as per the establish plan and also motivating the subordinates for their better performance. Thus, directing is the process by which actual performance of the subordinates is guided towards attainment of goals of the organization. Directing involves functions like - Leadership, Communication, Motivation & Supervision. Controlling - Controlling is the process of measuring current performance and taking corrective actions if required to ensure that pre-determined goals are accomplished. Controlling involves functions like- Setting of performance standards, measuring of actual performance, comparing actual performance against pre-set standards, identifying gaps in performances and taking corrective & preventive actions. Thus, controlling is a continuous process, which monitors progress of activities on continuous basis and initiates corrective actions when performance is not as per the pre-established goals & standards.

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The fundamental functions of Management are as follows :
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Forecasting - Forecasting is a prerequisite to planning. It is required to estimate the future requirements of business regarding production, sales, manpower, machinery etc. Forecasting is of two types- Long term forecasting & Short term forecasting. Planning - Planning is determining & listing future course of activities in order to achieve desired goals. Planning therefore is looking forward & deciding in advance so that we don’t forget anything and run at the last minute. Planning affects future. Organizing - Organizing is the next step to planning. Planning establish objectives & draws a plan of action and organizing puts that plan into action. Thus, organizing is basically implementation of plans.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Directing - Directing is the process by which actual performance of the subordinates is guided towards attainment of the goals of the organization through leadership, communication, motivation and supervision. Staffing - Staffing is the process of selecting, training, developing & placing of qualified people in the various jobs, according to the requirement of the organization. Coordination - Coordination is integrating the work performed by various individuals for the accomplishment of organizational goals. Coordination improves communication between different departments & increases productivity. Controlling - Controlling is the process of measuring current performance & taking corrective actions if performance is not as per the standards to ensure that predetermined goals are accomplished.

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8. Decision making - Decision-making is selecting the best course of action among the available alternatives. Decision-making is required at every step of management & involves activities like- identifying the problem, finding out different possible solutions, selecting the best course of action & implementing them. These functions have been explained in the form of a diagram as shown below :-

Functions Of Management Thus, all the activities mentioned above are the key functions of management without which management cannot exist.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Q2(a). What is a Joint Stock Company? Explain its merits and demerits. Ans. A Joint Stock Company is a voluntary organization of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and who share the profit or loss arising therefrom. The common stock so contribute is denoted in money and is the capital of the company. The persons who contribute it or to whom it belongs are members of the company. The proportion of capital to which each member is entitled is his share. The shares are of fixed value and the whole capital of the company is divided into an equal number of shares. The shares are generally transferable although under certain circumstances the right to transfer may be restricted. Merits of a Joint stock Company are as follows : 1. Large capital - A joint stock company can raise huge amount of capital from number of small investors. Large capital collected can be used to set up medium and large industrial & commercial firms.
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Increased borrowing capacity - A joint stock company enjoys increased borrowing capacity because of its broad capital base. Economy of large scale operations - Since the company can raise large unlimited finance, it can enjoy the economies of large-scale operations ( i.e. large scale buying, selling and production.). Availability of expert services - Due to its huge nature, business of a joint stock company requires appointment of qualified and experienced personnel. In addition, experts can be invited as directors of company without any financial commitment on their part. Limited liability - Directors and shareholders are not held personally liable in case of losses in business except when such losses have resulted form negligence or fraud committed by any of them. Easy transferability of shares - Due to high degree of liquidity, the shares are freely transferable and can be disposed off any time. Diffused risk - Due to large number of members of the company, the risk of loss is reduced and its effect is lessened. Democratic management - However, managerial powers are given to the directors of the company but they are responsible and accountable to the shareholders. The shareholders can also remove inefficient & corrupt directors. Lower tax liability - Tax rates of the companies are lower than the rates for individuals. Moreover many tax incentives are given to corporate enterprises.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Positive effect of statutory regulations - Statutory obligations in respect of maintenance and recording of the major decisions (minutes) under the provisions of the companies act help building discipline in the organization.

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Expansion and growth - Since the company can secure large amount of capital, ii can also expand the business according to the opportunities. Benefits to society - A joint stock company creates large opportunities for employment, produces cheaper & quality products, and as a separate legal entity adds to the revenue of the government.

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Demerits of the Joint Stock Company are as follows :
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Elaborate & complicated formation - The formation of a company is expensive and time consuming as it requires the services of experts such as promoters, share brokers, bankers etc. Moreover, many legal formalities are required to be completed before starting the company. Lack of initiative involvement - Salaried officers to whom company’s management is entrusted can not be expected to take as much interest as the proprietors would take. Lack of secrecy - There is lack of secrecy in the business matters of the company, as it is required to file several returns & statements with the registrar of the companies, has to circulate final accounts among its shareholders and inform them before taking any major decision, etc. Concentration of power & control in few hands - Though company is said to have a democratic management yet in practice management is concentrated in a small group of shareholders and many shareholders are not interested in anything except dividend. Thus, the indifference of shareholders result in concentration of power & control in few hands. Reckless speculation on stock exchange - Since shares of the company are easily transferable, the director and senior executives for the purpose of speculation and personal gains sometimes misuse them. Reckless speculation may result in sudden fluctuations in the market value of shares & create chronic conditions in stock market. Red-tapism and bureaucracy - Decision making in this form of organization is rather slow, firstly because it involves elaborate procedures to be followed causing red tapism & bureaucracy and secondly because salaried executives try to shirk responsibility. Lack of personal interest - Due to large number of owners & limited liability the share holders of such type of organization shows lack of interest in the company and company matters.

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8. Difficult to reconcile conflicting interests - It is really difficult to reconcile the diverse conflicting interests in these types of organizations.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Q2(b). How does a Joint Stock firm differ from partnership firm ? Ans. Partnership and joint stock firm differ from each other in following ways :1.

Formation procedure - Procedure of forming a partnership firm is simple as compared to Joint Stock Company. For the formation of a partnership firm, only an agreement between the partners is required whereas, a Joint Stock Company requires an elaborate procedure to be followed under the Company Act, 1956 to register the company. It comes into existence only on the issue of Certificate of In Corporation by the Registrar of Companies. Concerned Legislation or law - The concerned legislation or law for a partnership firm is, The Indian partnership act, 1932 whereas for a joint stock company, it is- The Companies act, 1956. Status - Owners of a partnership firm has no separate life, firms and partners are not separable because firm’s existence is based upon partners. Whereas, a joint stock company’s owner is an artificial legal person with perpetual and independent life. Membership - For the membership of a partnership firm, minimum 2 persons are required and maximum it can be 10 for banking & 20 for trading. Whereas in the case of Joint Sock Company, minimum membership is 2 for private companies & 7 for public companies, maximum it can be 50 for private companies & there is no limit for public companies. Management & control - Under a partnership firm, management is a joint task and control is in the hands of all partners. Whereas under a joint stock company, mgmt. is the responsibility of Board of Directors collectively who need not be owners of the company. Liability - Under a partnership firm, liability is unlimited. All the partners are jointly & severally liable for business debts. Whereas in a joint stock company, shareholder or member’s liability is limited to the extent of shares subscribes by them. Transfer of shares - Under a partnership firm, transfer of shares or sale of business is done only with the mutual consent of partners. Whereas in joint stock companies, shares are freely transferable subject to restrictions of Articles of Association. Constitution - A partnership firm enjoys flexible constitution. Their agreement can be changed at will of the partners. Whereas, joint stock company’s constitution is not flexible. Important changes in the constitution of a company require the consent of government. Business secrecy - Secrecy is limited with partners and no audit or reports are compulsory, while in joint stock company , the secrets are shared with the partners of private companies and with the public. Apart from this, audit & reports are compulsory here.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Government control & regulation - In case of partnership firm, optional registrations are held with the limited government control. On the other hand joint stock companies give emphasis on registration & consider Govt. control & regulations. Continuity of life - In partnership, there is no stability in continuity of life. While there is a perfect stability in joint stock company. It is not affected by change of membership or after death of shareholders & directors.

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Winding up - In partnership firm, winding up depends upon the will of director or shareholders. On the other hand, in joint stock Company, the winding up of companies are in accordance with the company’s act of 1956.

Section –II
Q4(a). Enlist different manufacturing systems. State the distinguishing features of any one of them. Ans. Manufacturing systems can be classified into five groups : 1. Project production - Project production is characterized by complex set of activities that must be performed in a particular order within the given period & within the estimated expenditure. Operations of such products are carried out in fixed position assembly type of layout.
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2. Jobbing production - It is characterized by the manufacture of one or few numbers of a 3 single product designed and manufactured strictly to customer’s specifications within the given period and within the price fixed prior to the contract.
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Batch production - It is a production system where limited quantity of each type of product is authorized for manufacture at a time. Mass & flow production - It is characterized by the manufacture of several numbers of a standard product, produced & stocked in the warehouses as finished goods awaiting sales. The goods under mass production are manufactured either at a single operation or at a series of operations on one machine. Process production - It is characterized by the manufacture of a single product produced and stocked in the warehouses awaiting sales. The flexibility of such plants is almost zero as only one type of product can be produced. Batch Production

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Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management

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Batch production is characterized by the manufacture of a limited number of a products produced at periodic intervals & stocked in warehouses as finished goods awaiting sales. Distinguishing features of Batch production are :1.

Short run - Batch production is also characterized by short production runs and frequents changes of set up. The production is generally made to stock.

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Skilled labour in specific trades - The labour force is expected to possess skills in one specific manufacturing process.

3. Supervisor to possess knowledge of a specific process - The supervisor has considerable knowledge of a specific process.
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Limited span of control - The ratio of direct workers to supervisors is more or less a function of batch size. The smaller the batches, the lower are the ratio of direct workers to supervisors and vice-versa. Manual material handling - Material handling in Batch production is smaller as compared to others. Flexibility of production schedules - Disruption due to machine breakdowns and absenteeism do not seriously affect production as another machines can be used.

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Q4(b). Why are plant location decisions important? Briefly, describe the factors, which need to be considered to arrive at an ideal location of plant? Ans. The selection of location is an important phenomenon for the success of an enterprise and requires thorough analysis. The selection of location is important both for new and already established enterprises because poor location can be constant source of higher cost, difficult marketing and transportation, dissatisfaction among the employees and customer, frequent disturbances in production, substandard quality, competitive disadvantage etc. and once plant is setup at a particular location, it is comparatively immobile and can be shifted late only at a considerable cost and interruption of production. Moreover the investment in land and building is quite large in case of bigger firms and economics of once location against another needs to be evaluated carefully to ensure fair return on such investment. Following are the factors that need to be considered to arrive at an ideal location of a plant:1.

Proximity to market - Every company is in business to market and it can survive only if their product reaches the consumers on time and at competitive price. The ratio of selling cost to sales generally increases with distances. Therefore, in the choice of location of plant, this factor is given the highest priority. Moreover, if the plant is located near the
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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market then the management can keep close touch with the changes in the market environment & formulate its production policies accordingly.
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Proximity to sources of raw material - An ideal location is one where the main raw material at reasonable price required to manufacture the product is adequately available. This will ensure regular supply of the material & will also reduce the transportation cost. The technical & delivery problems associated with raw material can be reviewed and discussed from time to time. Infrastructural facilities - Infrastructural facilities consider availability’s of utilities like power, water, disposal of water etc. These form the life-blood of many types of industries without which their activities may come to a halt. Under estimating, the need of anyone of the utilities can be extremely costly and inconvenient.

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A Transport facility - Transportation cost to value added is a key determinant of the plant location. The need for transport arises because raw materials and fuels are to be moved to factory site and finished goods are to be transported from factory to markets. Other things being equal since transport cost has a major effect on product cost, the regions well served by transport facilities are most suitable for industrial locations. Labour and wages - Plant location should be such that required labour is easily available in the neighborhood. Importing labour from outside is usually costly and it causes a lot of administrative problems. Moreover, other related problems also arise like their accommodation etc. But local labour near the plant will be available at cheaper rate & some inhabitants of certain areas are more productive than others. Legislation & taxes - The policies of state government & local bodies related to issue of licenses, building codes, labour laws, etc are the factors in selecting or rejecting a particular location. Taxes & duties applied by the government substantially influences product cost. Climatic conditions - Subsoil of the location should be able to support the load likely to be placed on it. Similarly. The climatic condition like humidity, temperature and other atmospheric conditions should be favorable for the plant.

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8. Other conditions - Other factors like community attitude towards supporting hostile 4 trade unions, community facilities of education, accommodation, transport & communication facilities, safety requirements, special grants, political situations etc are also has to be considered while selecting an ideal plant location. Q5(a). How does a product layout differ from process layout? Under what condition is each type of layout suitable? Ans. Product layout differs from process layout in following ways: Product Layout - Product layout is also called ‘layout by sequence’.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Here the position of a particular machine/equipment is determined at some definite stage on place where the machine is required to perform some operation from a sequence of operations designed to manufacture the product. It is assumed that materials are transformed into products through a series of integrated operations arranged in a ordered sequence. Process layout - Process layout is also called ‘layout by function’. All operations of similar nature are grouped together in the same department on part of the factory. Here machines performing same type of operations are installed at one place i.e. plant is grouped according to functions.
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Manufacturing time - Under process layout, it takes comparatively more time in manufacturing goods. Whereas manufacturing cycle time under product layout is smaller. Material handling - Process type of layout results in more handling than the product layout Flexibility - Process layout offers a very high flexibility as alterations in operation sequence can be made when they are required as compared to product layout where flexibility does not exist. Immobilization due to breakdowns - In product layout break down of any component or unit immobilizes the whole system but break down of any machine does not immobilize the whole system in process layout.

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Conditions under which Product layout is suitable :a) b) c) d) e) f) When the products are standard & require being prepared in large quantities. When the products have reasonably stable demand. When the processing times of individual operations is more or less equal. When huge investment is available. When less floor space is available. When uninterrupted supply of materials can be maintained.

Conditions under which Process layout is suitable :a) b) c) d) e) f) When investment available is less. When products are non-standard. When there are wide variations in the processing times of individual operations. When there is required, higher utilization of available equipments. When more floor space is available. When there are less specialized control & inspection efforts are available.

Q5(b). What are the symptoms of poor material handling? Explain briefly key principles of a good material handling system?
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Ans.
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Symptoms of poor material handling are as follows :-

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Production losses due to delays in trucking, handling and supplying materials to the point of use. Congestion queues of vehicles at supply and dispatch points. Congestion at receipt areas, production areas, preparation areas and dispatch areas. Lack of activity in the operating areas due to congestion. Frequent cases of material damages in handling. Badly damaged floors and narrow passages. Frequent cases of material mix up and assembly being supplied wrong items. Difficulties in locating things when required. Key principles of material handling are :a)

Planning principles - Material handling should be planned and well integrated with production activity to obtain maximum overall operating efficiency. This requires a systematic approach and it should include the following : 1. Plant layout principle - Only good layout can ensure minimum material handling 2. Delegation of responsibility principle - Efficiency in material handling results when it is recognized as an important function is given weight age. 3. Minimization of Re-handling principle - Re-handling adds to cost, increases spoilage & leads to wasted movements. 4. Space saving principle - Storage space is not best measured in terms of cubic contents.

b) Operating Principles - These principles includes the following : Unit load handling principle - Unit load implies packing of several pieces on a pallet as platform for movement as a single unit. 2. Gravity principle - Gravity is the most economical motive force. 5 3. Flow of material principle Material handling efficiency is greatest when it approaches 6 a steady flow of material, over as straight path as possible with minimum of interruptions.
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Section —III
Q10(a). Enlist different methods of buying. Briefly discuss any two such methods. Ans. The buying department of the company is responsible to provide goods & services required by the company at the least cost to the company. There can be wide variations in the practices to be followed for the purchase of different types of items & therefore the need to select an appropriate buying method. Below mentioned are the different methods of buying : 1. Speculative Buying
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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2. Group Purchasing 3. Hand To Mouth Buying 4. Scheduled Buying 5. Market Purchasing 6. Contract Buying 7. Blanket Orders 8. Tender Buying 9. Seasonal Buying 10. Sub-Contracting 11. Central Purchase Organization 12. Directorate General Of Suppliers & Disposal ( Dgs & D )

1. Speculative Buying : Speculative buying refers to ‘the buying large requirements of an item when its price is low with the intention to sell bulk of it at a higher price for speculative profits’.
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a) Purchases are no way related to the company’s production program. An item, which is not required for production, may be purchased.
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Speculative buying does not base decisions on quantity. Its single aim is to make speculative profits. The quantity purchased is thus generally high and is as much as the company finance can permit to be.

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The only advantage of the speculative buying is earning of speculative profits. But its disadvantages are numerous such as tying up to large amount of capital, storage problem, risk of obsolescence and ruination of the company if predictions go wrong.
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Speculative buying is not really a function of the buying department. It should ordinarily be discouraged. 2. Group Purchasing: Group purchasing refer to ‘ buying of items of trivial value in a single purchase order.’
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a) Items required in small quantities are classified into few basic groups, basic group being dependent on the source of purchase. For example, drills and taps are placed in one group, plug gauges in other group, hardware in other groups etc.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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b) Inventory levels (i.e. minimum level , re-order level , re-order quantity etc. ) are fixed for each item within each classified group. c) One purchase order – one for each group – covering a number of valued items within its group is placed on the supplier. d) Stocks-on-hand are reviewed periodically, say once a month or once in 2 months. e) Replenishment action is taken ( i.e. pre-fixed quantity of the item is communicated to the supplier for supply ) of all such items whose stocks has fallen to ot approached the re-order level.

Benefits of group purchasing :-

Group purchasing results in significant saving in clerical and delivery costs since one order is placed for a number of varied small items of an individual order for each item. Q1O(b).Describe the procedure to be followed for the purchase of an item until payment of the bill to the supplier? Ans. The procedure to be followed for the purchase of an item until payment of the bill to the supplier is followed: 1. Indenting purchase requirements: Procurement activity begins with the receipt of a purchase indent, which is an authority for the purchase department to initiate purchase action. 2. Scrutinizing purchase indents: Every indent is then scrutinized to see whether it is signed by authorized signatory , it is routed through stores dept. ,the description is correct & clear etc and then security is logged into purchase indent register and given it to the concerned supplier 3. Market study and selection of sources of supply: This stage involves segregating of items into items groups , review of available information and selecting potential suppliers who can supply goods of the right quality and quantity it right prices and can make reliable promises 4. Other preparations: The next step is to authorize the selected supplier to supply material, which is done through placing a purchase order. 5. Follow up with supplier:
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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Purchase follow up is the function of seeing that suppliers affect deliveries on time. it is required at two stages pre-delivery follow up and shortage chasing. 6. Receiving material: When goods are in warded at the receiving stores, uncrated/unpacked from the packet/parcel and contents are physically verified against the details provided in the purchase order. 7. Inspection of goods: All supplies are subjected to tested and inspected. Inspection results are entered by quality control on the goods receipt report 8. Storage and record keeping: The accepted goods are forwarded to the main stores. the quantity is physically verified and entered after which the issue is allowed

9. Invoicing and payment: Normally when the supplier supplies goods ,he immediately prepares but sometime, both buyer and supplier have discussions and buyer agrees to raise invoice after receipt of the goods receipt report and after the payment is made. Q11(a).What precautions can be taken to Prevent outbreak of fire in store? Pilferage of items from store? Ans. To Prevent outbreak of fire in store :The following prevention can be taken to prevent outbreak of fire in store: 1. Doors and staircase should be made of fire resistant materials. 2. Smoking should be prohibited in & around the storehouses. 3. Adequate earthling should be provided to the external and internal wiring of store buildings. 4. Material should be properly stored. Leakage of inflammable oils, greases and fluids should be prevented. 5. Combustible materials should be stored in covered metal bins and if they are in large quantities, they should be stored in small lots at more than one location with enough gaps to limit spread of fire. 6. Defective wiring should be immediately replaced to eliminate possibility of the fire due to short circuit. 7. Since inflammable materials can undergo spontaneous ignition, they should be stored appropriately. 8. Those parts of building where inflammable materials are kept should be well insulated to reduce risk of fire spread. 9. Exits should be provided with panic bolts an d should open outwards.
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Telephone should be provided at strategic location with ready access to telephone numbers of fire brigade. 11. Materials inside the stores should be stocked keeping fire hazards in mind. 12. Appropriate fire fighting equipment and fire alarms should be provided at strategic places.
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To Prevent Pilferage of items from store :The following steps should be taken to check Pilferage of items from store: 1. Only authorized personnel should be allowed to enter the store 2. No personal property should be allowed to be kept inside the store. 7 3. Items liable for pilferage should be monogrammed with company’s name or marked for 8 some identification details before taking them into stocks. 4. Fresh materials may be issued against return of old ones. 5. Surprise checks of a section of store items should be done now and then. 6. Immediate inquiries should be conducted as soon as any case of malpractice is brought to 9 light.. 7. Store staff should be searched before they are allowed to leave the main gate after days 10 11 12 work.. 8. Prompt disciplinary action should be taken against defaulter and punishment for 13 pilferage should be given adequate publicity. Q11(b).Describe briefly the procedure of issue of materials from store. Ans. The following are the steps that occur in the procedure of issue of materials from store :(a) Need Identification: The user has to decide the item that he needs, the specification of the item, quantity an time when required. (b) Preparation of Materials issue Note/Material Requisition: The requisitioned next needs to prepare a Material Requisition giving complete details the goods required.The requisitioned next must locate a designated official or member of staff to authorize issue of stock & request him for his approval and signature. (c) Authorization: The requisitioned next must locate a designated official or member of staff to authorize issue of stock and request him for his approval and signature. (d) Verification by authorized person:

Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management

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The official/person designated to authorize issue must study the requirement carefully and convince him that the demand is real and correct. (e) Presentation of MR to store: Once the material requisition or issue note has been authorized it needs to be presented to the store for delivery. Store staff is obliged to check all details concerning the item requisitioned such as description, code number, quantity etc and verify the reliability of authorization. (f) Identification of required items: Store then identifies the items required, using code numbers/description contained in the issue note/MR and codification system held in the store vocabulary. (g) Issue of required items: Storekeeper should check up the availability of indented material in full or part. (h) Collection/Delivery:

Material should be collected by the requisitioned from the issue counter after signing the issue voucher however where the material are bulky/heavy, they may be delivered by the store on door-delivery basis. (i) Cost allocation: To enable costing department to determine true cost of the job, the issue note must be priced. Entering the value of each issue on the issue note before forwarding it to costing does this.
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Updating of stock records and stock control:

Once materials have been issues, both stock records and stock control are updated for the issued quantity. Q11(c).What is the meaning of physical stock taking? Why it is done? What are principal methods of stock taking? Ans. Stock taking is the process of ascertaining y counting weighing or measuring whether the physical stock of materials tallies with balances shown in the stock records. Stock taking is required: 1. To correct discrepancies between physical stocks and book balance and thereby ensure better material control. 2. Is the premier requirement for certification of the financial statements.
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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3. Helps early detection of obsolete and dormant stocks. 4. Provides a moral deterrent on store personnel against fraud, malpractice and pilferage. 5. Lends an opportunity to audit store procedures. Principal methods of stock taking: 1.

Annual Stock taking - It is the process of making a complete count once a year of all materials, finished parts, work in progress, finished goods and supplies. Continuous stock taking - It is the process of taking physical counts of few items daily and thus covering each item in store room at least once a year.

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3. Reorder point stocktaking - It is the process of taking physical count of an item when it’s stock falls below the reorder level.

Section —IV
Q13(a).What is manpower planning and what are the steps involved in Manpower planning?

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Manpower planning is the process by which management determines how an organization should move from its current manpower position to its desired manpower position. Through it Management strives to have the right number & the right kind of people at the right place at the right time. Doing things, which results in both the organization & the individual receiving more long-term benefits. Steps involved in the manpower planning are :
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Analyzing organizational plans - First of all the objectives & strategies plans of the company are analyzed. Plans concerning technology, production, management, finance, expansion and diversification give an idea about the volume of future work activity. It is also necessary to divide the time horizon for which the plans are to be prepared. Organization’s structure & job design should be made clear and the changes in the organizational structure should be examined so as to anticipate its manpower requirements

2. Forecasting demand for HR - The number of people and the skill levels needed in future depends on the production & sales budgets in a manufacturing enterprise. It is necessary to make projections for new positions to be created & its vacancies arising in current manpower. Job analysis and forecasting of future activity levels help in HR forecasting but many factors influence the demand for the HR. Major factors responsible for it are :a.

External challenges - External factors influence the demand for human resources in the working of organization such as economic environment, inflation,
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unemployment etc are social political legal changes like changes in retiring age of personal or changes in layoff rules etc and Technical factors such as invention of new technology. Though such factors are uncontrollable but provisions can be made to check the extension.
b.

Organizational decisions - Major organizational decisions that affect the demand for HR can be in organization’s strategic plans, new ventures as expansions and growth of business by introduction of additional machines or personnel and merger and acquisition and revision in HR demands thereof. Work force factors - It includes employees actions such as retirement, resignation, terminations, deaths etc which are some time sudden and unexpected. So such factors should also be taken care off.

c.

3. Forecasting supply of HR - Every organization has two services of supply of HRInternal and External. Internally HR can be obtained through promotions, demotions, transfers etc for certain posts. In order to judge the inside supply of HR in future, HR inventory and HR audit is necessary. Manpower inventory helps in determining and evaluating the quantity and quality of the internal HR. some organizations use manpower table to see job wise list of employees. Other uses manpower replacement charts, which shows the present performance of each employee. After estimating the future external demand, the external sources of supply are analyzed.
4.

Estimating manpower gaps - Net HR requirement as comparing demand can identify manpower gaps forecast and supply forecast. Such comparisons will reveal other deficit and surplus of HR in future. Deficits suggest the number of persons to be recruited from the outside whereas surplus implies redundant to be redeployed or terminated.

5. Action planning - Once the manpower gaps are identified, plans are prepared to bridge these gaps. People may be persuaded to quit voluntarily through golden handshake. Deficit can be met through recruitment, selection, transfer, and promotion & training plans. Realistic plans for procurement and development of manpower should be made after considering the macro and microenvironment, which affect the manpower objectives of the organization.
6.

Monitoring & control - Once the action plans are implemented, the HR structure and systems need to be reviewed and regulated. Monitoring and control phase involves allocation and utilization of HR overtime. Review of manpower & programs help to review deficiencies. Corrective actions should be taken at right time to renew deficiencies. Manpower planning should be updated periodically and necessary modifications in manpower should be done in the light of changing environment and needs of the organization and appraised of all policies should also be done.

Q13(b).What are the steps involved in recruitment & selection of employees and what are the steps in recruitment? Ans. The steps involved in recruitment & selection of employees are :Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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1. Defining the job to be done - Recruitment process generally begins when personnel department receives requisition for recruitment from any department of the company. Next, requirements of the job should be obtained for which the most useful of information is job analysis. Job analysis contain details about the position to be filled, number of persons to be recruited, the duties to be performed, qualifications required from the candidate, terms and conditions of employment and also the time by which the persons should be available for appointment etc.
2.

Defining the ideal candidate - Once the job description has been prepared it is necessary to draft characteristic of the candidate to match requirements of the job. This aspect is commonly known as Job Specification. The plans covers physical make up that includes age, sex, health, appearance etc and attainments that includes education, experience, special skills etc and personality traits such as decision making integrity, self motivation etc and also requires that compels late night emergency calls or occasional night shifts etc. Attracting candidates - The last but not the least rather most important step is to attract the competent and appropriate suitable candidate to come forward to work with the company It includes locating & developing the sources of required number & type of employees and encouraging them to apply. This can be done through various internal & external sources of recruitment with company. Features, which are important for the employees attraction, should be included like salary, designation, promotion prospects, job security and conditions of job etc.

3.

Selection Procedure: Steps in the selection process are as follows: 1. Preliminary interview or screening - Initial interview is meant to weed out totally undesirable candidates so that time, money and energy is not wasted in interviewing unsuitable candidates. Preliminary interview is basically a sorting process under which if the candidate is found suitable, he is selected for the further action otherwise he is eliminated at the preliminary stage and thereby saving time and efforts of both the company and the candidates. 2. Application bank - An application bank or application is traditionally and widely 14 accepted device for collecting information from a prospective candidate. These kinds of application forms require the candidate to provide necessary information like- personal details, physical characteristics, educational background, work experience etc. 3. Selection tests - Selection tests are a kind of psychological tests that are used for selection of employees. These types of tests provide a systematic basis for measuring individual’s attitudes, behavior and performances. Some important selection tests are -Intelligence test, aptitude test and personality test.
4.

Selection interview - Interview is a face to face conversation between the employer and
Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management
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the prospective employee for determining whether the candidate is suitable for the employment or not. Through this, the employer interact with the applicant both verbally and non-verbally (i.e. gestures, postures and expressions) It provides an opportunity to confirm and cross check the personal data provided by the candidate in his application bank.
5.

Physical & Medical examination – After clearing the selection interview, applicants have to undergo physical & medical examination either by company’s physician or by a medical officer approved by the company. This examination is administered to ascertain physical capabilities of the candidate. Reference checking - Applications are asked to mention the names and addresses of two to three people in his application who aren’t his relative but know him very well. The personal department then approaches these people to get their honest feedback about the candidate. Final approach (or letter of offer) - The short listed candidate are ranked according to preference by the company and this list is got approved by the executive of the concerned department/units. The offer letter is then issued to the successful candidate depending upon the number of vacancies to be filled. The letter of offer mentions clearly the post, the rank, the salary grade and the data by which the acceptance of offer shall be communicated. Induction - Induction is orienting a new employee to the organization to his fellow employees and supervisors. The newly selected employee, during his induction training is briefed about this history and operations of the enterprise, its position and image in the market, its products & process, extent of competition, manufacturing organization etc.

6.

7.

8.

Q14(a).How do you identify Training needs ? What are the principal methods of – 1. On-the-job training 2. Off-the-job training Ans: Establishing the need for training is the first essential step in the training sequence. Three Types of analysis are required to identify trouble spots :1) Organizational analysis. 2) Operations analysis. 3) Man analysis.
1.

On-the-Job-Training :- These methods are employed by all firms for training employees at various levels in the organization.

2. Off-the-job-Training :- Trainees under these methods leave their work place and devote their entire time to undergo training.

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TRAINING METHOD

On-the-job training Job Instruction Training (JIT) Vestibule Training Training by experienced workmen Training by supervision Coaching Mentoring Job rotation “Assistant to” position Temporary promotion Simulation Apprenticeship

Off-the-job training Classroom training Conferences. Case studies Business games Role playing Programmed instructions In basket exercise In basket exercise Sensitivity training

Types of Training Methods Q14(b).What is performance appraised? What are its objectives? Enlist traditional and modern methods of performance appraisal, Discuss one method of performance appraisal from each category. Ans: Performance appraisal may be defined as “a process and a system for knowing as to how efficiently and effectively the assigned work is carried out by employees & identifying suitability of employers for other jobs, particularly on higher responsibility in an organization.” Objectives of Performance Appraisals :Performance appraisals can be used for wide variety of purposes: 1) Performance improvements 2) Increments & promotions 3) Training & development needs 4) Deficiencies of recruitment and selection process 5) Confirmation of employees 6) Errors in job description
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7) Employees’ performance outside the work 8) Survivor’s knowledge of employees 9) Counseling of employees 10) Equal opportunities for al employees 11) Demonstration of management’s interest in employees 12) Reliable records on employees performance 13) Effective of HRD function Performance appraisal methods :Methods of performance appraisal Traditional methods
Comparative evaluation methods Non comparative evaluation methods

Modern Methods a. Human Resource Accounting Method b. Assessment center method c. Management by objectives (MBO) d. Behaviorally anchored rating scales (BARS) e. 360 degree appraisal method

a. Straight ranking method b. Point allocation method c. Paired comparison method d. Forced distribution method

a. Rating scales b. checklists c. Forced choice method d. Free essay method e. Critical incidents method f. Field review method

2. Modern Methods of Performance Appraisal :a. Human Resource Accounting : Human resource is the most valuable asset of an organization and like other assets it can be valued in terms of money. The effectiveness (or performance) of the human resource can be judged from the relationship between costs and contribution of the employees. The costs of human resource include expenses incurred in planning, acquiring, training, developing, retaining, (i.e. making payments) evaluating & rewarding people. The contribution of human resource represents the value added by human resources. And the difference between cost and contribution reflects the performance of the employee.

Section - V.
Q18(a).What is working Capital ? Why is it required ? What factors influence working capital needs of an industrial organization ? Ans: Working capital represents the funds invested in working (or current) assets such as stock of
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raw materials, work in progress, or finished goods, investments in stock of other companies, per paid expenses, advances to employees/supplier, bills receivables etc., since these assets vary from time to time and get converted into cash during operating cycle of business, the working capital is also called “circulating capital”. Working capital is required for day to day running of the organization. The funds are required for different purposes mentioned above. Factors affecting working capital requirements :Various factors that affect working capital needs of an organization are as follows :
1.

Size and volume of business - Bigger units need more working capital compared to smaller units, working capital needs of the enterprise usually increase in proportionate to increase in volume of its activity. Nature of business - Some business require lesser working capital as no funds are blocked in inventories or receivable on the other hand, traders require large working capital. Length of production Cycle - The longer the production cycle, the larger would be the working capital needs and vice-versa. Terms of purchase & sales - Greater the sales on cash terms, lesser the operating working capital & vice-versa. Turnover of Inventories - If the inventories are small and their turnover is large, smaller working capital would be required. Labour incentive verses capital intensive - For the same level of activity, firms in the labour intensive industries would need higher working capital than those in the capital intensive industries. Availability of banking facilities - Availability of good and dependable banking facilities reduces working capital requirements. Operating efficiency of the firm - Efficient handling of documents, correctness of paper work, proper routing of documents to customers, timely collection of bills etc. reduce working capital cycle and working capital needs.

2.

3.

4.

5.

6.

7.

8.

Q18(b).What do you understand by Break even point ? How do you calculate it ? Ans: The volume or level of activity at which total costs curve intersects revenue curve is called break-even-point. Break-even point is that level of sales at which income equals expenditure or it is the lowest point at which fixed costs are fully absorbed. Break-even point, therefore, is the stage of no profits no loss.
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Break-even-sales formula :Since at break even level, profit is zero (i.e. p=0), we can derive equation for break even quantity and break even sales as under : i) From equation q = F + P , if P = 0 ; P–V F P-V ………… (1)

Break even quantity (qo) = ii) From equation Q =

F+P (1-v/p) = ,

, if P = 0 ; F V/P if P = 0 ; …………… (3) , if P = 0 ; …………….(4) …………… (2)

Break even Sales ( Qo)
iii)

From equation Q = F + P (1-v/s) Break even sales (Qo) =

F__ 1- V/S

iv)

From equation Q =

F+P p/v ratio F+P_ P/v ratio =

Break even sales (Qo) =

Therefore , Break even sales i.e. Qo

F + P_ P/V ratio

Q18(c). Universal Industries Manufactures lubricating oil pumps. Each pump is priced at Rs.2, 500. The variable cost of production of each pump is Rs.2000 while fixed cost is Rs.2, 00,000. Calculate break even sales. Ans: Given : Sales Price (S.P.) Variable cost (V.C) Fixed cost (F.C) (i) P/V ratio = = P–V P 2,500 – 2,000 2,500
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= = =

Rs.2,500/Rs.2,000/Rs.2,00,000/-

=

0.20

(ii)

Break even sales

= = =

FC__ P/V ratio Rs.2,00,000 0.20 Rs.10,000/-

Q19(a).Define marketing? What are the key functions of marketing? How does marketing differ from selling? Ans: American Marketing Association defines marketing as follows: “Marketing is the performance of business activities that direct the flow of goods or services from producer to consumer.” Key functions of Marketing :Marketing functions can be classified into three main sub-groups: 1. Functions of Exchange (i.e. functions involving transfer of title) (a) Buying (b) Selling.

2. Functions of physical supply (i.e. functions involving physical distribution)

(a)

Transportation

(b)

Storage

3. Facilitating functions (i.e. functions enabling performance of foresaid functions). (a) (c) Financing Market information (b) (d) Risk taking standardization & grading.

Differences in Selling & Marketing: Selling 1. It revolves around the needs & interests of the sellers. 2. It concerns existing products & it undertakes Marketing 1. It revolves around the needs & interests. 2. It concerns customers & it undertakes the task
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Name - Neha Duggal , Enrollment No - 200325260 , Subject – Industrial Management

the task of pushing the sale of existing products

of identifying market needs & converting customers needs into products. 3. It seeks profit by pushing the existing 3. It seeks profit by making the org. to select products on the customers. product, prices & method of distribution & promotion is as to satisfy customers needs. 4. In selling, the firms makes the products first x 4. In marketing, the firm identifies needs of the then decides how to sell it x make profit. customers, x then manufactures the products which customers buy to serve their own interest. 5. Selling emphasizes on staying with existing 5. Marketing emphasizes on adopting the most technology x reducing cost of production. innovative technology to improve quality, cost & delivery x there by providing better value to the customer. 6. In selling, costs determine price. 6. In marketing, price determines costs. 7. Selling looks upon the customer as the last 7. Marketing looks upon the customer as the very link in the business. purpose of business & customer consciousness permeates every department & every employee in the organization. 8. Transportation, storage & warehousing are 8. Transportation, storage & warehousing & treated as mere extension of production treated as essential services. Keeping customers in function. focus. Q19(b).What is the meaning of market segmentation? What criteria can be used for segmenting industrial market? Ans: Market segmentation can be defined as “the process of dividing the customers of product into several homogeneous groups having common characteristics such as age, sex, income etc, thereby permitting. Selection of the right marketing strategy.” Definition of Market Strategy :R.S. Davar defines market strategy as “Grouping of buyers or segmenting the market is described as market segmentation.” Rajan Saxena defines market strategy as “Market segmentation is the process of dividing a heterogeneous market into homogeneous sub-units.” Criteria for segmenting the market :There can be several bases for market segmentation. Bases for segmentation of consumer products have to be different from those to be used for segmentation of industrial products. The consumer product market may be segmented on the basis of demographic, geographical, phychographic or behavioral factors. The industrial product market may be sub-divided on the basis of factors such as buying procedure, geographical location, of users size of industrial purchases etc. Criteria for Segmenting Market

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Consumer products (1) (2) Geographical location Demographic characteristics. • Age • Sex • Income • Occupation • Education • Material status • Family size (3) Psychographic (or personality factors) (4) Behavioral factors • Quantity consumption • Brand loyalty • Buyer’s motives. (1) (2) (3) (4)

Industrial products Nature of business Purchasing procedure Geographical location of cust. Size of the industrial purchase.

Criteria for Segmenting Market

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