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Operations Management 1/Operations Management 2 Stage 3

June 2014 Timezone 1

Section A

Question A1

There are five key operations management performance objectives that apply to all types of
organisations. Explain each of these performance objectives, giving specific examples where it is

(Total 100 Marks)

Answer A1

The five operations management performance objectives are: quality (it reduces costs and
increases dependability); speed (it reduces inventories and risks), dependability (it saves time
and money and gives stability); flexibility (different products/services, mix or range of
products/services, volume of products/services and different delivery times) and Cost- cost
advantage to customers.

In addition flexibility speeds up response, saves time and maintains dependability and finally
cost. The average candidate is expected to provide a brief explanation of each objective and give
specific examples of each which could be from the text or the case studies or from wider reading.
The better candidates should be able to provide more detailed explanations and examples. The
best candidates should be capable of enhancing the above and may well place their discussion
within the wider context of the role of the operations function specifically in relation to
operations strategy. Good students would compare the performance objectives for two
operations by using polar diagram. Credit is given for attempting more examples.

Question A2

The different process types suggest differences in the set of tasks performed by the process and
the way materials or information or customers flow through the process. Describe the main
process types to be found in manufacturing AND service organisations. Give brief examples of
each process type.

(Total Marks 100)

Answer A2

The five generic process types in manufacturing are project, jobbing, batch, mass (line) and
continuous. A summary of the characteristics of each type should be given along with specific
examples. Similarly, the characteristics of the four process types found in service organisations
should be described i.e. professional services, mass, services and service shops.

The average candidate is likely to provide an overview of process types in both manufacturing
and services with limited examples. The better candidates could extend their discussion to

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include how service providers can be differentiated according to labour intensity and
customisation. They could also discuss how process types vary with respect to repeatability and
standardisation, flexibility and planning/control complexity, lead time and inventory, technology
and capital investment. The better candidates are likely to include a wider and more detailed
array of examples. The best candidates in addition to the aforementioned may extend their
discussion to comment on the differences and anomalies between manufacturing & service

Question A3

Performance improvement is an ongoing effort in an organization to find new and better ways of
doing things. Explain the step-by-step process followed for performance improvement. Provide
an appropriate diagram to support your answer.
(Total Marks 100)

Answer A3

Performance improvement is a collaborative team process for achieving desired organizational

and individual results. The performance improvement process has following steps involved in it.

1. Obtain and maintain stakeholder agreement: Purpose is to get everyone working towards
same goal.
2. Consider institutional context: strategies and relationships between the firms.
3. Define desired performance and key performance indicators: Identifying critical success
factors and prioritising them.
4. Measure and analyse performance: Performance analysis to identify gaps as well as
Each stage needs to be clearly explained with appropriate diagram to support the explanation.
Good students will discuss some of the common causes of poor performance along with the
discussion on stages. The best student in addition to above will explain the whole process by
considering an example.

Section B

Question B1

Inventory overcomes the imbalance between demand and supply. Discuss different types of
inventory with examples.

(Total Marks 100)

Answer B1
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Inventory can be classified in several types. Some students many classify it as raw-material, WIP
and finished goods inventory. Good students will explain the difference between these three
along with discussion on other types of inventory such as:

Buffer inventory: To compensate for unexpected demand

Cycle inventory: To cope with operational inability to produce simultaneously
Decoupling inventory: To allow different stages to operate at different speeds and different
Anticipation inventory: To cope with planned fluctuations in supply and demand
Pipeline inventory: To cope with transportation delays in supply network

Good students are expected to discuss most of the types of Inventory with suitable examples to
support their answer. The best candidates may well use diagrams to explain particular points and
briefly discuss cost aspects of inventory and inventory control systems as well as providing a
wider range of examples.

Question B2

What are different types of waste identified through Lean Philosophy? Explain different
approaches to eliminate waste.
(Total marks 100)

Answer B2

The average candidate should be able to briefly identify different types of wastes such as: Over-
production, waiting time, transport, process, Inventory, Motion and Defective. Good
candidates would explain each of these wastes and relate them with elimination approaches.

Different approaches to eliminate waste are: Through streamlined flow, through matching
supply and demand, through flexible processes and through minimizing variability. The
better candidates explain each of this approach with appropriate techniques or tools used to
eliminate waste. The best candidate would select a waste and suggest the application of one
approach to eliminate it.

Question B3

Total quality control is a process of involving everyone in an organisation in continuously

improving products and services to achieve quality that satisfies customers needs. Discuss
different improvement techniques used in total quality control.

(Total Marks 100)

Answer B3

Total quality control process examines the process and prevents them from failing or recurring.
Different approaches are available for total quality control. Some of the improvement techniques
are discussed below:
Business process reengineering (BPR) a radical approach to improvement that attempts to
redesign operations along customer-focused processes rather than on the traditional functional
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Total quality management (TQM) puts quality and improvement at the heart of everything
that is done by an operation.
Lean and JIT an approach that emphasizes the smooth flow of items synchronized to demand
so as to identify waste.
Six Sigma a disciplined methodology of improving every product, process, and transaction.
Students will also discuss other approaches such as Continuous Improvement, Robust design
and manufacturing as improvement techniques. Good students are expected to discuss each
technique in detail providing appropriate example where necessary. All these improvement
approaches share overlapping sets of elements. Good student will discuss all the improvement
techniques in detail. The best answer will discuss different operational examples, where one of
these improvement techniques is used.

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