1.How do you provide a safeguard for variation in raw material delivery time for inventory?

  Explain with
example. 

Ans:

2. How can an Inventory In-charge take advantage of economic purchase-order size? Explain in brief. 

Ans: An inventory in-charge can take advantage of economic purchase-order size.

Economic Order Quantity (EOQ) may be able to provide insight into your inventory situation and
ultimately locate ways to maximize profits and reduce costs within your organization or
manufacturing operation.

There are a few advantages pertaining to Economic Order Quantity (EOQ) and demonstrate how it can
benefit your business:

 Minimizing Storage Cost – Storing inventory may be extremely expensive for any operation,
especially small businesses. The main advantage pertaining to the EOQ model is the customized
recommendations that are provided regarding the most economical number of units per order.
Locating this number can aid with suggesting larger or smaller quantities per order to take
advantage of potential bulk buying or options. This could easily reduce storage costs as you
develop a thorough understanding of how much inventory is needed. 

 Business Specific – Maintaining sufficient inventory levels to match customer demand is a

balancing act for many small businesses. Another advantage pertaining to the EOQ model is that
it is able to provide specific numbers particular to the business regarding how much inventory
needs to be held, when to re-order it, and how many items are needed to be ordered. This can
smooth out the re-stocking process and ultimately results in enhanced customer service.

3. What do you mean by Training of customer in Delivery stage of a project? Explain briefly.

Ans:

4. “Critical activities determine the project completion time”. Justify the statement.

Ans:
5. Define BOM and Lead time with suitable example. 

 Ans: A bill of materials (BOM) is a centralized source of information containing a list of items
used to manufacture a product and the instructions on how to do so. It shows the
components, and instructions required to construct, manufacture, or repair a product or service.
A bill of materials usually appears in a hierarchical format, with the highest level displaying the
finished product and the bottom level showing individual components and materials. used to
manufacture a product and the instructions on how to do so. Often shown in a hierarchical way,
a bill of materials (BOM) lists the finished product at the top, down to individual components
and materials.

 For example: A bicycle manufacturer that wants to build 1,000 bicycles. A bill of materials for a
bicycle will include all the parts that make up the bicycle such as seats, frames, brakes,
handlebars, wheels, tires, chains, and pedals, including the quantities required of each
component and their cost.

 Lead time measures how long it takes to complete a process from

beginning to end. In manufacturing, lead time often represents the time it
takes to create a product and deliver it to a consumer. For example, the
lead time between the placement of an order and delivery of new cars by a
given manufacturer might be between 2 weeks and 6 months, depending
on various particularities. One business dictionary defines "manufacturing
lead time" as the total time required to manufacture an item, including
order preparation time, queue time, setup time, run time, move time,
inspection time, and put-away time. For make-to-order products, it is the
time between release[vague] of an order and the production and shipment
that fulfill that order. For make-to-stock products, it is the time taken from
the release of an order to production and receipt into finished goods
inventory.



6. Do you think that more profitable should be produced more in order to get maximum profit?  Justify
your answer. 

7. What are the differences between Goods and services? Can a Good be a service? Explain.

8. What is the importance of Forecasting in a factory operation? Explain briefly.

9. Discuss the conditions of n/2 problem with suitable example. Do you think that we can have multiple
solution in case of certain n/2 problem?

Explain such case.

4.To provide a safeguard for variation in raw materials delivery time. When material is ordered from a
vendor, delays can occur for a variety of reasons; normal variation in shipping time, a shortage of
material at the vendor’s plant causing backlogs, an unexpected strike at the vendor’s plant or at one of
the shipping companies, a lost order, or a shipment of incorrect or defective materials.

5.To take advantage of economic purchase order size. There are costs to place an order, labor, phone
calls, typing, postage, and so on. Therefore, the larger each order is, the fewer the orders that needs be
written. Also, shipping costs favor larger orders, the larger the shipment, the lower the per-unit cost.
Functions of Inventories in Manufacturing Process In batch or lot manufacturing, the basic purpose of
inventories is to decouple supply and demand. The purpose of inventories is thus to serve as a buffer:

1. Between customer demands and finished goods

2.Between finished goods, and components availability.

3.Between requirements for an operation and the output from the preceding operation.

4.Between parts and materials to begin production and the supplies of materials. On the basis of the
above, Arnold (1991:144) classified inventories according to functions they perform as follows:
a.Anticipation inventory– These inventories are built up in advance of a peak selling season, a promotion
program, vacation shutdown, or possibly the threat of a strike. They are built up to help level production
and to reduce the cost of changing production rates.

b.Fluctuation Inventory– Inventory is held to cover random unpredictable fluctuations in supply and
demand or lead time. If demand or lead time is greater that forecast, then a stock-out will occur. Safety
stock is carried to protect against the possibility of a stock-out. Its purpose is to prevent disruptions in
manufacturing or deliveries to customers.

c.Lot Size Inventory– Items that are purchased or manufactured in quantities greater than needed
immediately create lot size inventories. Items will be ordered in lots or batches to get quantity discounts
to reduce shipping, clerical, and setup costs and in cases where it is impossible to make or purchase
items at the same rate they will be used or sold.

d.Transportation Inventory –These inventories exist because of the time required to move stock from
one location to another such as from a plant to a distribution centre or a customer. They are sometimes
referred to as pipeline or movement inventories.