WINTER DRIVE 2015

EXAM

APRIL/MAY 2016

MASTERS OF BUSINESS ADMINISTRATION

SEMESTER II
SUBJECT CODE - MB0044
PRODUCTION AND OPERATIONS MNGT.

Q. No.1 What is value engineering? List the main benefits of value

engineering?
Ans.1
Value engineering\ value analysis
Value engineering (VE) or value analysis is a methodology by which we try to
minimize the cost and improve the revenue of a product or an operation.
Let us consider a component which needs a round brass rod as raw material of
diameter 21.5mm. the component has to perform seven operations: cutting,
drilling, chamfering, boring, milling, plating, and polishing.
Value analysis considers all aspects of each of these and investigates whether any
of them can be substituted by another material, a different size, a different tool for
an operation, a different chemical, a different concentration, a different voltage,
shorter time or processing.
Modern manufacturing can be seen from two important perspectives. One is the
management approach which consists of adopting techniques like TQM, JIT,
Kanban, cincurrent engineering, lean manufacturing, TPM, group technology,
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cellular manufacturing, and others. These have basic philosophies based on which
techniques, tools, and methodologies are developed, to aid the process, we have
computers and software written to collect data, process them, distribute them, and
analysa them. We have management information systems which help in decision
making, and this can be stated as the second important perspective.
With globalization, procurement and distribution are being conducted over great
distances. The main thrust is on quality and timely delivery at the least price.
These are the values that we put in the product.

Benefits:
The main benefits of the application of VE are:
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cost reduction

overall cost consciousness

a culture of effecting savings across organization

streamlining of administration and creation of transparency in all dealings

evens with outsiders

development of reliable suppliers

Q. No.2 Case study: SABMiller revamps supply chain management

SABMiller, the $24bn global brewing giant,is revamping its supply chain
management system to reduce stock-outs caused by an increasingly
complex and hard to predict market.
The firm is developing and testing the new system in South Africa with an
eye on rolling it out to group companies worldwide. Says SABMiller
programme manager Rudi van Schoor.
The trigger for the revamp came when the companys customers ran out
of stocks of popular SABMiller brands during peak periods in two
consecutive years, 2007 and 2008. The shortfall on some brands was as
high as 22%. That had a direct on the bottom line, Van Schoor says.
Given SABMillers ambition to be the worlds most efficient producer,
such a gap was never going to be tolerated. Bout instead of addressing
the symptom, it called in management consultancy
McKinsey to look at the entire supply chain system to see where it could
be improved and future stock-outs avoided.
The study revealed a complex situation, one that wasnt susceptible to a
quick fix, Van Schoor says..
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Why did SABMIller revamp its supply chain? Describe the domain
application used for SCM integration?

Ans.2
Solution:
See Answer of This Case Study in Paid Assignment..
Q. No: 3 Write short notes on:

Ingredients of a business process

Acceptance sampling

Work Breakdown Structure

Productivity

Ans.3 (a)
The ingredients of business process:The ingredients that might be used in a business process can be briefly outlined as
follows:

the data which accomplishes the desired business objective

acquisition, storage, distribution, and control of data which undrtakes the

process across tasks

persons, teams, and organizational

units which helps to perform and

achieve the take

decisions which enhance the value of data during the process

We also have some behavioral aspects of the business process, mainly the decision
making process where humans are involved. Decision failures are common and
research has shown that, the failure of decisions due to:
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bases in perception and fallacies in reasoning

tendency to bring out of memory the facts that reinforce easily for
verification and\ or confirmation

tendency of bring out of memory the facts that reinforce our assumption and
based evaluation

tendency to accept evidence or facts as absolute which support our

hypothesis

These listed factors result in faulty decision making. Being aware and avoideing
them consciously improves the processes of the business.

Ans.3 (b)
Acceptance sampling:
Acceptance sampling is also known as end of line inspection and categorizing the
products based on sample based inspection. In acceptance sampling method of
quality control, the supplier and customer agree upon accepting a lot, by
inspecting a small number taken randomly from the bulk supply. Out of the sample,
if a small number as agreed upon by the parties or as validated by a sampling
scheme, is determined as defective, the lot is accepted. If the number of
defectives is more than the agreed size, the entire lot is rejected; obviously, risks
for the producer and buyer exist. As the sample size increases and the number of
acceptable defectives decreases, the risk for the buyer decreases. And the
converse is true. That is the reason these numbers cannot be foxed as they
depend on the customers requirements.
Ans.3(c)
Work breakdown structure (WBS):
The entire process of a project may be considered to be made up on number of sub
process placed in different stage called the work breakdown structure (WBS).
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WBS is the technique the content of work and cost by breaking it down into its
component parts. Project key stages form the highest level of the WBS, which id
then used to show the details at the lower levels of the project. Each key stage
comprises many tasks identified at the start of planning and later this list will have
to be validated.

Ans.3 (d)
Productivity
Productivity is generally expressed as the ratio of outputs to inputs.

While

the above ratio may imply efficiency is the value

added for every unit of investment. Thus, it is value added upon cost.
Enhancement of productivity is achieved by either reducing the inputs for the
same output or increasing the output by using the same input.
Productivity can be calculated for:

A single operation

A functional unit

A department or division

A plant

Productivity is a measure of the efficiency of the system and looks at the

economies achieved during the processes. Every process will have a number of
contributions which help in achieving the maximum productivity. The processes are
people, machines, facilitating goods, ancillary equipments, and technology. Each of
these elements attempts to enhance the contribution of other elements.
Q. No. 4 Collaborative Forecasting Running Smoothly at Brooks Sports.

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Brooks Sports designs and develops high-performance running footwear,

apparel and accessories which are sold in 80 countries worldwide. In
2001, when the company shifted from a broad product line to focus on
high-performance products targeted at serious runners, it was clear that
the forecasting process needed to change to support the strategic
direction of the company. The existing forecasting process, based
entirely on the judgment of the sales team, was limiting the companys
ability to grow.
What is the main issue of the case study? Analyze the forecasting
solution.
Q.No.5 Explain the risk management and its various components.
Q. No. 6 Why redesign of layouts may be necessary? List the differences
between product and process layout.
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