1. Mention the current trends in Operations management.

Ans 1: In the manufacturing industry, operations management is the key

component in achieving the highest level of optimized production, and with
that, a hand-in-glove means of profit control. This goal is attained by
transforming adequate labour and ample materials into a finished product
without producing needless waste. Efficiency translates into profit;
operations management controls the components whose sum of parts
equates to efficiency (again, profit). Along with various other departments,
the role of operations management is constantly evolving and broadening -
which means that keeping up with the current production trends is vital.
Whether it is competitiveness, cost reduction, waste management, or
various other components of production, dialing-in on where operations
management is heading in the future can put you ahead of the pack. So,
without further adieu, here are three trends in operations management
that can aid your production facility.

Mobile Accessibility
Utilizing mobile accessibility within your manufacturing operation has
become an essential aspect of operations management. Without mobile
accessibility, the operation misses out on core information from consumers
such as potential leads or a target market plan for development. Along with
the consumer aspect, employees also miss out on important production
attributes such as mobile collaboration, utilization of third party apps, data
sharing, monitoring and a growing list of coming functionality.
Collaboration
Along with mobile accessibility, employee interaction is another key aspect
in improving the overall work climate. Collaboration improves employee
output more times than not - two heads are better than one kind of thing.
Working together as a unit can increase morale and promote productivity
by developing one-to-one relationships with various other project
members.
Automation
Automation has allowed production facility to be able to effectively increase
efficiency within operations management. Within the various disciplines
contained within operations management, automation allows operations
managers to be able to focus their undistracted efforts on other tasking,
allowing employees to focus on other areas in flow such as customer
service, quality assurance and product improvement/development.
Automation can have positive and negative sides to it. With increased
automation, obtaining more revenue through enhanced production
efficiency is an upside, of course, but also, reducing the number of manual
labour employees, should the automation go offline, then there is often not
enough human labour to fill an order on time - and this can cost you a
customer. Regardless of the upsides and downsides, automation has
adequately increased the bottom line and systemic integrity for
manufacturing and production operations around the globe.

2. Explain the technologies used in product/service design

Ans 2: Product-Service Systems (PSS) are an approach for companies to
cope with several challenges such as raising customer expectations
regarding cost and quality. This is enabled by integrating service and
product components in one market offer.
There are three different types of PSS
1) Product-oriented PSS embrace product related services as well as advice
and consultancy. 2) Use-oriented PSS incorporate product renting, leasing
or pooling. 3) Result oriented PSS incorporate activity management, pay
per service unit and functional result.
Of particular interest for the development and innovation of PSS is the key
resource “technology”. “Technology” is defined as knowledge for solving
technical problems. Following the service-dominant logic of marketing, “the
application of specialized skill(s) and knowledge is the fundamental unit of
exchange”, the importance of technology becomes apparent. The scope of
the term “technology” is widened from a purely product- towards a holistic
PSS-perspective. Furthermore findings from innovation and technology
management as the “technology-push” and “market-pull concept” are
applied to PSS. On a methodical and practical level, the system description
serves as an analysis and communication basis for PSS as well as to
identify/define innovation potentials for PSS.

New and more sustainable technologies are an important factor for PSS.
Technical inventions allow for performance improvement and
 differentiation from the competition. But only by embedding technologies
in a competitive PSS concept, benefits and potentials of a technology can be
exhausted and maxed out. A decisive role plays bottleneck technologies, or
respectively technologies which limit the performance of a PSS-function.
These technologies may be product- or service-related, as well as
infrastructure related. They are characterized by technological limits or
competition-critical properties. Only by embedding technologies in a PSS,
limiting factors may be cleared (cp. [24]): “The history of innovation is
littered with companies that had a disruptive technology within their grasp
but failed to commercialize it successfully because they did not couple it
with a disruptive business model“. PSS may both enhance or enable a
technology.

4. Suppose that a firm is in the process of installing a computer system for providing information
services, like preparation of pay-rolls, balance sheet etc., to the firms in an industrial area.
The firm has to take a decision as to what size of computer system should be purchased. The
three alternatives open to the firm are: large-sized, medium-sized and small-sized computer
systems. The management of the firm feels that the overall level of acceptance of its services
would be either high or low. The pay-offs expected under various event-action combinations
to9gether with the estimated probabilities of the likely demand are

Act A
Event Prob.
A1:Large-sized System A2:Medium-sized System A3:Small-sized System
High Acceptance 0.2 500000 250000 120000
Low Acceptance 0.8 -60000 50000 100000

With this information, there are two strategies before the management of the firm: First, to
decide on the size of the computer system on the basis of the prior information only. second,
to conduct a market research and take a decision about the size of the system on the basis of
both: the prior information and on the information obtained from the research .Help it.
The conditional probabilities based on the past records of marketing research agency are
given below.
Marketing Research report
Event
Favourable (I1) Unfavourable (I2)
E1:Highacceptance 0.90 0.10
E2: Low acceptance 0.15 0.85
With this information, there are two strategies before the management of the firm: First, to decide
on the size of the computer system on the basis of the prior information only. Second, to conduct a
market research and take a decision about the size of the system on the basis of both: the prior
information and on the information obtained from the research. Help it. The management has to
decide on its strategy—by considering relative merits of the two strategies in terms of expected
pay-offs associated with them. The evaluation of the former is the same as the analysis that we
have considered so far. It is called prior analysis because it uses only prior probabilities. On the
other hand, the latter involves incorporating the information obtained through the marketing
research into the analysis and take the decision thereafter. This is termed as the posterior analysis.
We consider them in turn now.
Prior analysis The pay-off table for the problem, is reproduced in Table 13.8 and the expected
values for various acts are shown calculated.

Since the expected pay-off for the strategy A, is the maximum, the choice would be for the
small-sized computer system. With optimal policy of A3, EP=Rs 104000.

In the event of high acceptance of the services, the optimal strategy is large-sized system with
a pay-off of Rs 500000, while in case of the event of low acceptance; the small-sized system
represents the optimal decision, yielding a pay-off of Rs 1.000. Using these values, we can
determine the expected pay-off of perfect information, EPPI, for this decision problem as:

Event Probability Payoff Payoff X probability

E1:High acceptance 0.2 500000 100000
E2: Low acceptance 0.8 100000 80000
EPPI = 180000

Thus order conditions of completed and certain information, the expected profit would be
Rs.180000/- .From this the expected value of perfect information, EVPI, can be obtained as
follows

EVPI= EPPI –EP3 =180000-104000= Rs.76000/-

Posterior Analysis
Now we shall consider how the information to be obtained through the marketing research
shall be included to take a decision. It may be mentioned at the outset that the new
information obtained through marketing research and so on is usually called indicator or,
more generally, the sample information. Suppose that management of the firm in question
hires a marketing research agency to conduct a survey for it. Suppose also that the outcomes
of the marketing research study may be indicated by I1 and I2 as:
I1: A favourable report, indicating a satisfactorily high acceptance of the potential customers
of the firm's services, and
I2 : An unfavourable report, suggesting an unsatisfactory, low response rate.

Given these indicators, our objective is to provide the revised and improved estimates of the
events, the states of nature, on the basis of which the decision based on prior probabilities
may be revised or confirmed.

In all likelihood, the information provided by the marketing research agency would not
always be cent per cent correct. Thus, to make effective use of this information, we should
know about the probability relationships between the indicators (I1 and 12), and the states of
nature (E1, and E2). Suppose the past record of the marketing research agency on similar
studies has led to the following estimates of the relevant probabilities:

Marketing Research report

Event
Favourable (I1) Unfavourable (I2)
E1:Highacceptance 0.90 0.10
E2: Low acceptance 0.15 0.85
 Here the given probabilities represent the conditional probabilities. For example, 0.90 is the
answer to the following question: given that the state of nature ultimately turns out to be a
high customer acceptance, what is the probability that the marketing research study shall give
a favourable report? This is, in other words, the conditional probability P(I1/E1). Similarly,
P(I1/E2) = 0.15, P(I2/E1) = 0.10 and P(I2/E2) = 0.85. Obviously, on the basis of these
probability estimates, we can place a high degree of confidence on the market research report.
This is because when the true state of nature is high acceptance for the computer services, E1
the report shall be favourable 90 per cent of the time and unfavourable the 10 per cent.
Similarly, when the true state is E2, them is an 85 per cent likelihood of the re, being
unfavourable one, giving correct information.

Using the prior and conditional probabilities, we determine the total probability that the
report given by the research shall be favourable, and the total probability that the research
report shall be unfavourable. Since both, the favourable and unfavourable report may be
associated with the events of high and low customer acceptance; we can determine these
probabilities as follows:

P(I1) = P (I1ᴖ E1) + P(I1ᴖ E2)

= P(E1) X P(I1/E1) + P(E2) x P(I1/E2)

Substituting all value we get

P(I1)= 0.30

Similarly P(I2) = 0.70

Now we shall calculate the posterior probabilities for the events E1 and E2 under the
conditions (a) that a Now we shall calc 2 favourable report given, and (b) that an
unfavourable report is given by agency. These probabilities would be used to determine the
two situations represented by I1 and I2.

A) When Favourable Report is given (Indicator I1)

The posterior probabilities tor the events El and E2 when favourable report is given by the
agency, are shown calculated in Table

Event Ei Prior Prob P(Ei) Conditional Prob P(Ii/Ei) Joint Prob P(Ii ᴖEi) Posterior Prob P(Ei/Ii)
E1 0.2 0.90 0.18 0.6
E2 0.8 0.15 0.12 0.4
Total 0.30
The posterior probabilities, calculated by using Bayes' theorem, suggest that if the marketing
research report was in fact a favourable one, then the probability of the event E1, would be
0.6 and that of the event E2 would be 0.4. We shall use these probabilities instead of 0.2 and
0.8 respectively to determine the optimal course of action. The posterior probabilities of the
events, the pay-off matrix and the expected values using these probabilities are contained in
Table below.

Act A
Event Prob.
A1:Large-sized System A2:Medium-sized System A3:Small-sized System
High Acceptance 0.6 500000 250000 120000
Low Acceptance 0.4 -60000 50000 100000
Expected Pay off 276000 170000 112000

Since the expected pay-off for the act A, is the highest of all, we conclude that given that a
favourable research re, is obtained, the best course of action would be A I—the installation of
large-sized computer. This has expected pay-off of Rs 2, 76.000.

(b) When unfavourable report is given (indicator I2)

Posterior probabilities in the event of indicator I2—unfavourable research report—are

calculated and shown in Table Below.

Event Ei Prior Prob P(Ei) Conditional Prob P(I2/E1) Joint Prob P(I2 ᴖEi) Posterior Prob P(Ei/I2)
E1 0.2 0.10 0.02 0.0286
E2 0.8 0.85 0.68 0.9714
Total 0.70

From this, it is clear that if an unfavourable research report is obtained, then the probabilities
of high and low acceptance of the firm's services would be 0.0286 and 0.9714. respectively.
Using these probabilities we can calculate the expected pay-offs of various strategies and
choose the appropriate one.