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MB0044 Production and Operations Management - 4 credits
Note: Each Question carries 10 marks. Answer all the questions.
In explaining and operationalizing a set of production models are used. It is commonly employed in economic analysis and in the formulation of production plans and plans for capital expenditures. These definitions are short but too general and insufficient to make the phenomenon productivity understandable.Question 1productivity. workers. Ans1 What is meant by productivity? Write a brief note on capital Productivity is a measure of the efficiency of production. and still remain competitive or even improve its competitiveness in the market place. Capital Productivity Output per unit of value of fixed production assets (fixed capital). To define the way is the object of this article. shareholders. physical units are sometimes used in the calculations. At the national level. using either the average value over the year or the value as of the end of the year. In sectors where the output is homogeneous (petroleum. Furthermore is needed operationalization of the concept productivity that makes it a measureable quantity. A more detailed theory of productivity is needed. It is most advisable to examine any phenomenon whatsoever only after defining the entity the phenomenon under review forms part of. Capital productivity differs from one branch of material production to another. Thus. the national income produced in current prices per ruble of fixed production assets in the USSR in1975 . Such an entity is defined as production process. Capital productivity is calculated on the basis of the balance valuation of the fixed production assets (depreciation costs included). production associations. capital productivity characterizes the efficiency with which fixed capital stock is used. and governments (taxes and regulation). The benefits of high productivity are manifold. A production model is a numerical expression of the production process that is based on production data. It goes without saying that productivity is a critical factor of production process in one way or another. Capital productivity is the reciprocal of the capital-output ratio. improve housing and education and contribute to social and environmental programs. Hence. Productivity growth is important to the firm because it means that the firm can meet its (perhaps growing) obligations to customers. enjoy leisure. productivity cannot be examined as a phenomenon independently but it is necessary to identify the entity it belongs to. data on gross (commodity) or net output are used. both for the national economy as a whole and for individual sectors. which explains the phenomenon productivity and makes it comprehensible. and enterprises. Then it will be possible to analyze the phenomenon as part of such an entity.e. suppliers. measured data in the form of prices and quantities of inputs and outputs. The measure of productivity is defined as a total output per one unit of a total input. coal. i. Data on the gross social product and on national income (from productive activities) are used in calculating capital productivity for the national economy as a whole. In a socialist economy. Productivity is a ratio of production output to what is required to produce it (inputs). cement). for calculating the productivity of individual sectors. productivity growth raises living standards because more real income improves people's ability to purchase goods and services.
The raising of capital productivity leads to increased efficiency of production. lower production costs. if outlays for additional fixed capital stock can be recouped in the period prescribed by norms. by the deterioration of geological and mining conditions in the existing mineral deposits. Many factors act to lower productivity. Thus. During the eighth five-year plan (1966 –70). thereby lowering capital productivity. capital productivity in industry in the USSR rose through the 1950’s and declined between 1961 and 1965. 36kopeks in agriculture. The level of capital productivity and the pattern of changes in productivity depend in large measure on technical and economic indicators describing the utilization of machinery and equipment and especially on increases in the equipment shift index. For example. and 1. Improved use of fixed capital stock is reflected not only in higher capital productivity but also in higher labor productivity. there was a slight decline (by 3 percent). the accelerated development of industrial branches with relatively low capital productivities may lower productivity for industry as a whole. productivity showed no change with regard to gross output but increased with regard to net output. During the ninth five-year plan.18 rubles in construction. and improved product quality. Productivity is influenced by a number of factors. Its growth depends primarily on the level of technology. and by difficulties encountered in supplying light industry and the food processing industry with agricultural raw materials because of extremely adverse weather conditions over a number of years. The working of mineral deposits at greater depths requires additional expenditures in fixed capital. The expansion of production in the country’s eastern and northern regions has t he same effect because the cost of fixed capital stock is between 30 and 50 percent higher there than in the European part of the USSR. 13. again leading to lower productivity. 50 kopeks in industry. Various purification facilities included in industrial projects which do not directly influence the volume of production nevertheless raise the total cost of the fixed capital stock. the organizational and technical measures employed in managing production capacities. Capital productivity has fluctuated over the years because it is simultaneously influenced by a variety of factors. caused primarily by construction programs launched in the country’s eastern and northern regions. the investment is economically warranted even if capital productivity is slightly lowered.amounted to 45 kopeks in the national economy as a whole. Thus.4 kopeks in transport and communications. at enterprises. and in organizations . Five-year plans make provision for better use of fixed capital stock and for the development and implementation of programs to raise capital productivity in various sectors of the national economy. and the proportion of capital investment earmarked for reconstruction and retooling.
There are three kinds of automation: fixed. Fixed: By its very nature. long distance learning technology helps in supplementing class room instruction.Question 2 – (a) What is automation? (b) What are the kinds of automation? Ans 2. The advantage of automation is that it has low variability and will be more consistent on a repetitive basis. For services. Automation is ideal when the service provided or the product manufactured is highly standardized. Automation is the use of scientific and technological principles in the manufacture of machines that take over work normally done by humans. On the shop floor variability causes loss of quality. They are not amenable to change in product or process.The cost per unit determines the extent of automation required. and flexible. Following figure shows a sample automation production process Where is automation used? 1. that is. fixed automation is rigid. a deep analysis of the various factors has to be done. product or services meant to produce or deliver low volumes specific to a requirement. Automation in the banking sector has resulted in ATMs which save a huge amount of bank’s labor and it is found to have given greater customer satisfaction. programmable. Some extent of automation can be designed even with customization. Types of Automation 1. The facilitating goods that are used in this case are e-courses. automation usually means increase in quality and productivity using labor saving devices. They are designed for high volume production and their rigidity ensures less variability. In education. Automation systems cost huge sums of money and therefore. They need minimal human intervention. web sites and videos. . Examples: Oil refineries and chemical processing units. 2.
To make effective use of automated machines. Computers are used for controlling one machine or a number of them and they have programs written into them for operations. receive orders for materials from anywhere in the production area. receive orders for materials from anywhere in the production area. Numerically controlled machines read instructions and convert them to machine. Vision sensors are used for inspection. CNC machines. 3. optical sensing. Programmable: Programming devices enable machines to operate automatically. Automated Guided Vehicle Systems (AGVS) like pallet trucks and unit load carriers follow embedded guide wires or paint strips to reach destinations as programmed. collect materials and deliver materials to the workstations. we need to have the Movement of materials from and to different stations as also stores. Continuous updating gives a clear picture for all concerned to enable them initiate action to keep the throughput smooth. 100% inspection of components can be done which ensures highest quality. automated. To make effective use of automated machines. collect materials and deliver materials to the workstations. With the help of automation. identification and guidance. They are Computer Numerically Controlled or for short.2. They guide. and load sensing mechanisms and activate the controls to remove human intervention. Identification and movement of materials are helped by bar codes which are read and fed into the system for monitoring quantity. . and achieve relative positions by means of cams. automated. They help the automated systems to sort information and provide information for effecting any changes necessary. Computers and information systems are used for placing orders for materials. giving commands and adjusting inventory records which show the location and quantity of materials available/needed. These sensors are sensitive to touch and force to know that the material is to be held with the requisite pressure for the conduct of operations. locate. The machines have sensing and control devices that enable this. The simplest of them called machine attachments replace human effort. location. They use optics based instruments to gather data and feed them to the computers for activating the other parts of the robot. They can grip and hold tools with the help of sensors. Flexible: Robots are higher in the order of automation as they perform a variety of tasks. Automated Storage andRet rieval Systems (ASRS). They simulate human actions. Automated Storage and Retrieval Systems (ASRS). we need to have the movement of materials from and to different stations as also stores. They are designed to move materials by holding them in their arms and making precise movements according to programs written into the computers that reside in them. move. and movement.
Planning the manufacturing facility layout Factors influencing Plant Location can be broadly divided into two types namely: general factors and special factors General factors The general factors that influence the plant location are listed below 1. ii) Reduction of the cost of transportation. ii) At the market place when there is a loss of weight in the material. Closeness to market places: Organizations can choose to locate the plant near to the customers’ market or far from them. Facility Planning Process Planning is the most important function of management. c) The products are delicate and susceptible to spoilage. 3. Lands. it is very important for the organization to get the labor at the right time and raw materials at good qualities. whenwe have to deal with lands. Planning. Availability of land: Availability of land plays an important role in determining the plant location. buildings and machineries are costly and once fixed cannot be moved easily.Question 3 – What are the factors that influence the plant location? Ans 3. The plant should be located: i) Near to the raw material source when there is no loss of weight. and estimates for the future. calculations and forecasts suggest a particular area as the best to start an organization. These considerations are vital for the success of any firm. b) The transportation cost is high. data gathering. requires a lot of thought. 2. availability of land may be in question. Now to deeply understand the importance of planning in operations management. when: a) The projection life of the product is low. It is advisable to locate the plant near to the market place. our plans. . Many-atime. Availability of inputs: While choosing a plant location. iii) Close to the market when universally available. d) After sales services are promptly required very often. It is important especially. so as to minimize the transportation cost. we will have to choose the second best location. 1. Planning the location of the plant 2. therefore. we consider the planning into two parts. In such cases. However. and machineries. buildings. depending upon the product they produce. The advantages of locating the plant near to the market place are: i) Consistent supply of goods to the customers.
and Pipeline. The choice of location should be made depending on these basic modes. Wages 4. 5. Communication facilities: Communication facility is also an important factor which influences the location of a plant. such process industries need to be located near to the water. and safety. Water. Economic stability – outside investments 2. 7. Transport: Transport facility is a must for facility location and layout of location of the plant. paper. Locating a plant with the facilities of good schools. paper and sugarcane industries facility for disposal of waste is the key factor. Joint ventures – support of big time players . building codes. 6. Regions with good communication facilities viz. process industries such as. Cost of transportation is also an important criterion for plant location. c) Waste disposal: For example. So they should be located near to the power stations and should ensure continuous power supply throughout the year.4. requires continuous water supply in large amount. These factor seems to be unimportant. b) Water : For example. Road. Timely supply of raw materials to the company and supply of finished goods to the customers is an important factor. housing and recreation for employees will have a greater impact on the organization. Rail. Cultural factors. chemical. Postal and Tele communication links should be given priority for the selection of sites. Infrastructure: Infrastructure plays a prominent role in deciding the location. So. industries which run day and night require continuous power supply. and cement. Government support: The factors that demand additional attention for plant location are the policies of the state governments and local bodies concerning labor laws. Housing and recreation: Housing and recreation factors also influence the plant location. for process industries such as. The basic modes of transportation are by Air. but have a difference as they motivate the employees and hence the location decisions Special factors The special factors that influence the plant location are: 1. 8. The basic infrastructure needed in any organization are: a) Power: For example. 3.
(See Table for Sample check sheet) No. Scatter Diagram. (See Figure for Sample flow chart) Open Inspect Open Inspect Pack Reject Reject Check Sheet: Check sheets are used to record the number of defects. The sheet keeps a record of the frequencies of occurrence with reference to possible defect causing parameters. Histogram. and methods for correction can be developed using flow charts. and Cause and Effect Diagram are the basic seven control tools considered for achieving quality. Ans 4. It helps in locating the points at which a problem exists or an improvement is possible. It helps to implement a corrective procedure at the point where the frequencies are more. The various steps include: a) Listing out the various steps or activities in a particular job. Check sheet. analyzed.Question 4 . types of defects. b) Classifying them as a procedure or a decision. Criteria and consequences that go with decisions are amenable to evaluation for purposes of assessing quality. Pareto Analysis. OF DEFECT DAYS 1 2 3 4 5 1 III II I II II 2 IIIII IIII IIIIII IIII IIIIIIII 3 III IIII IIIII II IIIII 4 IIII II IIIIII I IIIII 5 II I III II II SAMPLE CHECK SHEET . and workmen by whom they are occurring. The flow chart helps in pinpointing the exact points at which errors have crept in. Flow Chart. Detailed data can be collected. times at which they are occurring. Each decision point generates alternatives.Explain about the seven basic quality control tools. Flow Chart: Flow chart is a visual representation of process showing the various steps. locations at which they are occurring. Control Chart.
If we find that. it is observed that 80 percent of them. 147 of them have been caused by just 2 or3 of them. if need be. we are marching toward zero defects. The column which shows days can be changed to observed by the hour. The values shown are the number of observations made regarding a parameter.The table shows that the number of defects 1 and 5 are not many as compared to defect no 2 which increased over the days and appears to be stabilizing at the higher side and therefore needs to be attended immediately. Pareto principle. the visual patterns help us to identify the problem which should be attended to. . we have 184 assemblies having problems and there are 11 possible causes. When used in conjunction with comparable parameters. They reveal whether the pattern of distribution has a single peak. states that 80 percent of the problems that we encounter arise out of 20 percent of items. also called 80-20 rule. Histogram Histograms are graphical representations of distribution of data (See Figure for Sample histogram chart). or many peaks and also the extent of variation around the peak value. in a day. that is. This helps indentifying whether the problem is serious. They are generally used to record huge volumes of data about a process. When the cause of these defects has been attended. It will be easy to focus on these 2 or 3 and reduce the number of defects to a great extent. we will observe that some other defect becomes predominantly observed and if the process is continued. Sometimes. Variable 2 50 45 40 35 30 25 20 15 10 5 0 12 16 26 38 26 40 Variable 2 Pareto Analysis: Pareto analysis is a tool for classifying problem areas according to the degree of importance and attending to the most important. the percentages are shown to demonstrate the relative contribution of each of the parameters.
will render the product and maintain the specifications. Cause and Effect Diagram: Cause and effect diagram represents all the possible causes which lead to a defect on quality characteristics. we can observe that there is no relationship. Samples are taken and the mean and range of the variable of each sample (subgroup) is recorded. We can determine if there is cause and effect relationship between the variables and the degree of extent over a range of values of the variables. when they remain within a range. This is called the quality of conformance. The other interpretation can be that for a small change in variable 1. We can see that the change in variable 2 does not have much effect on variable 1. These are arranged in such a way that different branches representing causes connect the stem in the direction of the discovery of the problem (See Figure for Sample cause and effect diagram) . we expect 99.The graphical representation of data helps in changing settings to bring back the process closer to the target.97 percent of all values to lie within the Upper Control Limit (UCL) and Lower Control Limit (LCL) –corresponding to + 3. Variables. Sometimes. The mean of the means of the samples gives the control lines. the effect on variable 2 is more 50 45 40 35 variable 1 30 25 20 15 10 5 0 0 5 10 15 20 25 30 35 40 45 Variable 2 Control Charts Control charts are used to verify whether a process is under control. The range of permitted deviations is determined by design parameters.Scatter Diagram: Scatter diagram is used when we have two variables and want to know the degree of relationship between them (See Figure for Sample scatter diagram). in which we can change one parameter being sure that it has no effect on the other parameter. Assuming normal distribution.
When we observe that we have excessive defects from a machine.MAN MACHINE Handling Improper Density variation Hardness variation Crack Setting MATERIAL METHOD When each of them is investigated thoroughly we will be able to pin-point some factors which cause the problem. We will also observe that a few of them can have cumulative effect or even a cascading effect. We make a study of each of them and try to correct it . we try to identify all possible sources of the causes of defects.
quality charts. stage end reports. Team members are identified who will exercise controls at various points of the project. stage end approval reports. project stage schedule. progress controls. The various steps involved in monitoring and controlling a project from start to end are listed below. 2. 1. and execute a project. It is possible to work according to the project plan only by careful monitoring of the project progress. In the PERT method. depends on the inputs to that stage. b) Project progress: The members must keep a track of the project progress and communicate the same to other related members of the project. Project files have to be frequently updated with suitable version control number and revision status should be maintained for each change. through the use of regular check points. one can find out the variance and use the variance to analyze the various probabilistic estimates pertaining to the project. in order to meet the requirements.Define project management. suitable stage version control procedures may be followed.Question 5 . They must understand the stage status reports.The analysis charts can be used to monitor. They must monitor and control project progress. Ans 5. The details are to be documented stage wise. Using the CPM. It is therefore necessary to control all the inputs and the corresponding outputs from a stage. . A project manager may use certain standard tools to keep the project on track. All the members have to understand the tolerances in any change and maintain a change control log. The project manager and the team members should be fully aware of the techniques and methods to rectify the factors influencing delay of the project and its product. PERT (Program Evaluation Review Technique) and CPM (Critical Path Method) may be used. This helps them to plan well in advance for any exigency arising due to deviation from planned schedule. It requires establishing control factors to keep the project on the track of progress. summary of the stage cost and related worksheets. c) Stage control: The project manager must establish a project check point cycle. and statistical tables. The project manager ensures that these changes are made smoothly and organizes review meeting with the project management group. one can estimate the start time and the finish time for every event of the project in its WBS (Work Breakdown Structure). track. Describe the five dimensions of project management. Any project aimed at delivering a product or a service has to go through phases in a planned manner. To analyze the project. control. For this. control the quality factors which are likely to deviate from expected values as any deviation may result in changes to the stage schedule. tracking schedules. They must realize the need and importance of quality for which they have to strictly follow a quality review schedule and frequently discuss the quality agendas. Thus all the members are aware about the progress of the project at all times. methodologies such as. The results of any stage in a project. a) Preliminary work: The team members must understand the project plans.
elapsed time in hours to complete the task. Quality review should focus on product development and its quality factors. These inputs become the base to monitor the performance of the project and its stages. and time frames. and the project controls. There are numerous ways to monitor and measure various project parameters. estimated hours to complete the task. logistics. Analyze the cause of the deviation.d) Resources: The project manager has to plan the resources required for various stages of the project. Actual hours worked per task. any miscellaneous costs incurred during a stage. This increases the visibility into the project performance and hence a quality control can be achieved. actual finish date. Actual start date for tasks started. Quality control is possible if the project members follow the quality charts and norms very strictly. ii. organization metrics. Miscellaneous costs will be automatically updated from the scheduler. This increases the effectiveness of the review and also reduces the time gap. Monitor performance: The first step for any project control mechanism is to monitor the progress. 3. Refer back to the project control factors to iii. 4. Actual finish date for tasks finished. products. He has to brief both the project team and the key resources about the objectives of every stage. responsibilities. actual hours worked per task. This helps the project manager and team members to plan well in advance for any unforeseen deviation. The following lists the possible ways to control quality: 1) Schedule quality review: Project members are recommended to schedule the quality review at the beginning and also the end of every stage. the team members log in details of actual start date. e) Quality control: Quality control is very important in any project. 2) Agenda for quality review: The project manager should create and distribute a quality review agenda specifying the objectives. 3) Conduct quality review: The quality review is to be conducted in a structured and formal manner. planned activities. iv. Latest estimated work in hours to complete the task Update costs: Update the stage cost summary worksheet with actual costs incurred during the period and estimated remaining costs. since they are calculated from actual work. Update schedule: Update the schedule for: 1. Re-plan stage schedule: Review the tracking Gantt and Cost workbook and identify any deviation from the baseline. products. The project members should check whether the review meets the prescribed quality standards. roles. f) Progress control: The progress control of a project can be achieved by considering the following: i. Allocating a right resource at the right place and the right time will significantly enhance the efficiency and effectiveness of the resource. 2. . For example.
Create status report: The status report provides a record of current achievement and immediate expectations of the project. Review any new change requests. the status report provides a record of current achievements and immediate expectations of the project. Approvals: In any project. requirements and phase of the project. vii. This is generated on a regular basis depending upon the type. preparation. Determine if the stage has exceeded the progress. The group review process includes several stages like planning.help determine the appropriate corrective action and adjust the schedule accordingly. vi. Create flash report: Summarize the accomplishments for the month. Review status of open issues and determine any further action required on these issues. Review the status of any outstanding quality reviews. . Conduct team status review: Conduct a status meeting with the project team. The status has to be effectively communicated to all concerned parties.\ v. Project status reports: As discussed earlier. Typically it is generated for a week. schedule status. viii. rework recommendations. upcoming tasks for the month and any major issues. cost and quality tolerance levels agreed with the project management team. Distribute the same to all project team members and stakeholders. ix. This project stage reviews the decisions taken and actions planned and get it approved by the top management. overview of a group review meeting. The goals of such review are to improve quality by finding defects and to improve productivity by finding defects in a cost effective and timely manner. This is important to bring everyone on the same page of the project progress. it is important to have top management or project sponsors into confidence about all the aspects of the project.
JIT helps in this process. and Data processing. for organizations to completely implement JIT manufacturing system. 2. Increase productivity JIT means making what the market demands when it is in need. they need to have a proper commitment along with the following basic facilities . through continuous improvement. JIT has been extended to mean continuous improvement. There are many advantages of JIT: a) Increases the work productivity. and worker’s time. minimize the amount of equipment. It is extended to the shop floor and also the inventory systems of the vendors. Eliminate waste that is. when the customer wants. and people involvement . These principles are being applied to the fields of Engineering. Accounting. equipment. instead. The objective of JIT manufacturing system is to: 1. cost efficiencies have become compulsory. b) Reduces operating costs c) Improves performance and throughput. Purchasing. which adds a great value to the product. materials. parts. However. Lean production supplies customers with exactly what the customer wants. It is the most popular systems that incorporate the generic elements of lean systems. Deploying JIT results in decrease of inventories and increases the overall efficiencies. d) Improves quality. quality. e) Improves deliveries f) Increases flexibility and innovativeness For industrial organizations to remain competitive. they manufacture a product as an order comes in. Decreasing inventory allows reducing wastes which in turn results in saving lots of money.proper material. without waste. Ans 6.Question 6 . space. It is a management philosophy of continuous and forced problem solving. Just-In-Time (JIT) manufacturing is a process by which companies don't keep lots of excess inventory.Write a brief note on Just-In-Time (JIT).
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