PRODUCTION MANAGEMENT

1) Acceptance sampling: Acceptance sampling is a major component of

quality control and is useful when the cost of testing is high compared to the
cost of passing a defective item or when testing is destructive. It is a
compromise between doing 100% inspection and no inspection at all.
Acceptance sampling can be done on attributes or measurements of the
product. Acceptance sampling is "the middle of the road" approach between
no inspection and 100% inspection. There are two major classifications of
acceptance plans: by attributes ("go, no-go") and by variables. The attribute
case is the most common for acceptance sampling, and will be assumed for
the rest of this section. A company cannot test every one of its products due
to either ruining the products, or the volume of products being too large.
Acceptance sampling solves this by testing a sample of product for defects.
The process involves batch size, sample size and the number of defects
acceptable in the batch. This process allows a company to measure the
quality of a batch with a specified degree of statistical certainty without
having to test every unit of product. The statistical reliability of a sample is
generally measured by a t-statistic.
2) Work sampling: Work Sampling (also sometimes called ratio delay study) is
a technique of getting facts about utilization of machines or human beings
through a large number of instantaneous observations taken at random time
intervals. The ratio of observations of a given activity to the total
observations approximates the percentage of time that the process is in that
state of activity. In a work sampling study, a large number of observations are
made of the workers over an extended period of time. For statistical
accuracy, the observations must be taken at random times during the period
of study, and the period must be representative of the types of activities
performed by the subjects.
3) Objectives of method study: (1) The improvement of processes and
procedures. (2) Factory and work place layout improvement. (3) Improvement
in the design of plant and equipment. (4) Reduction in unnecessary fatigue
and movements. (5) Use of improved materials, machines and manpower. (6)
Better Working conditions.
4) Steps in Method study: (1) Selecting the work to be studied. (2) Obtaining
all the relevant informations or facts regarding the exiting method by direct
observation. (3) Examining these facts critically but impartially. (4)
Developing the most effective and practical method. (5) Defining the new
method so as to create its identity. (6) Installing the new method. (7)
Maintaining this method by regular routine checks.

5) Cost of Quality types:

Prevention Costs
 Prevention costs are investments made ahead of time in an effort to ensure
conformance to requirements. Examples include activities such as
orientation of team members, training, and the development of project
standards and procedures.

Appraisal Costs

Appraisal costs are costs incurred to identify defects after the fact. Examples
include activities such as walk-throughs and testing.

Internal Error Costs

Internal error costs are the costs of rework and repair before delivery to a
customer. An example is fixing faults detected during internal testing.

External Error Costs

External error costs are the costs of rework and repair after delivery to a
customer. One example would be rework and repair resulting from
acceptance testing. Another example would be the actual costs incurred
during warranty support.

MATERIAL MANAGEMENT
Perpetual inventory system: A perpetual inventory system, or continuous
inventory system, is an inventory control system that allows businesses to keep a
real-time account of inventory on hand. Perpetual inventory is a method of
accounting for inventory that records the sale or purchase of inventory immediately
through the use of computerized point-of-sale systems and enterprise asset
management software. Perpetual inventory provides a highly detailed view of
changes in inventory with immediate reporting of the amount of inventory in stock,
and accurately reflects the level of goods on hand. The widespread use of
computers after the 1970s increased this systems popularity because businesses
were able to more easily keep track of inventory as it sold. Barcodes,
radiofrequency identification scanners (known as RFID), and point of sale systems
(also known as POS) provided support for this system by quickly inputting inventory
information as customers purchase items.

Perpetual inventory systems are common in many modern businesses. They are
most often found in large businesses, businesses with multiple locations, or
businesses that carry expensive products, such as a jeweler or electronics store.
While errors in inventory occur due to loss, breakage, theft, improper inventory
tracking, or scanning errors, there are many advantages to using a perpetual
inventory system:
Prevents stock outs; a stock out means that a product is out of stock
Gives business owners a more accurate understanding of customer
preferences
Allows business owners to centralize the inventory management system for
multiple locations
Provides greater accuracy due to each inventory item being recorded on a
separate ledger
Gives valuable information to business owners, such as discounts, purchases,
and returns
Reduces physical inventory counts

HRM-I
The Hot Stove Rule
The "Hot-Stove Rule" of Douglas McGregor gives a good illustration of how to
impose disciplinary action without generating resentment. This rule draws an
analogy between touching a hot stove, and undergoing discipline. When you touch a
hot stove, your discipline is immediate, with warning, consistent, and impersonal.

These four characteristics, according to McGregor, as applied to discipline are as

follows:

1.When you touch the hot stove, you burn your hand. The burn was immediate. Will
you blame the hot stove for burning your hand? Immediately, you understand the
cause and effect of the offense. The discipline was directed against the act not
against anybody else. You get angry with yourself, but you know it was your fault.
You get angry with the hot stove too, but not for long as you know it was not its
fault. You learn your lesson quickly.

2.You had warning as you knew the stove was red hot and you knew what would
happen to you if you touched it. You knew the rules and regulations previously
issued to you by the company prescribing the penalty for violation of any particular
rule so you cannot claim you were not given a previous warning.

3.The discipline was consistent. Every time you touch the hot stove you get burned.
Consistency in the administration of disciplinary action is essential. Excessive
leniency as well as too much harshness creates not only dissatisfaction but also
resentment.

4.The discipline was impersonal. Whoever touches the hot stove gets burned, no
matter who he is. Furthermore, he gets burned not because of who he is, but
because he touched the hot stove. The discipline is directed against the act, not
against the person. After disciplinary action has been applied, the supervisor should
take the normal attitude toward the employee.

In applying this Hot Stove rule in disciplinary action, there must be organizational
policies, rules and regulations regarding certain behavior and conduct which were
issued and clearly explained to employees and accepted by them for compliance.
Disciplinary action must be directed against the act, not against the person. It must
be used by supervisors as a tool to develop the employee and the group. The steps
that should be followed are:

Immediate investigation of the offense must be done to determine the facts.

Promptness is necessary in order that the employee will associate the investigation
with the offense rather than with his person.

Previous warning. It is important that the organizations policies, rules and

regulations are issued to and explained to all employees upon induction as part of
the orientation program. This should be done by the supervisor with the help of
Human Resources. In addition, whenever new policies, rules and regulations are
developed, the employee must be made aware of them.

Consistency in the administration of disciplinary action is highly essential so that

employees will know what to expect as a consequence of an infraction or violation
of the rule or regulation.

Disciplinary action must be impersonal. It should be directed against the act, not
the person. It should be institutional, that is, for the protection and interest of the
entire organization and for all employees, and not done to satisfy the personal whim
of the supervisor.