Name Of Student:- Nayan Sayta

Roll No:- N/A

Reg No:- 17-1070
Specialization:- Marketing
Batch:- 2020-2022
Institute:- B.I.T.M
Semester:- 1st
Subject Name:- Operations Management
Assignment No:- 4
Submission Date:- 02-12-2020
Total no.of pages written:- 6

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 Q1. What is the Cycle Time of this Process which has a sequence of seven steps with
timings of each step given? If there are 480 minutes in one working day, what is the
production capacity of this process? If there is a weekly order of 360 pieces of the
product under consideration, will the company be able to fulfil this order? Assume 6
working days in a week.

Ans – Cycle time is the maximum of time a product spends at a workstation. We cannot go faster
than the cycle time of the process.
As in the question we are given 7 steps of sequence, but the maximum time is taken in sequence 3.
480 min
Since there are 480 working minutes, therefore, the production capacity = =60 products .
8 min
We are given that there is a weekly demand of 360 products and it is working for 6 days.
 60 products/day*6 days a week = 360 products.
Since our weekly order is 360 pieces of product and our production capacity is 360 products a
week,
Hence, the company will be able to fulfil this order.

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Q 2 - The following data have been tabulated for two machines that are used in a company –
Machine A Machine B
Investment 100000 160000
Interest on Capital invested 15% pa 15% pa
Hourly Charges (Wages + Power) 20 16
Pieces produced per hour 10 16
Annual Operating Hours 4000 4000

What are the Annual Costs per unit for both machines? Which machine would be a better
option?
If Machine B had a 10% of rejection recorded, what would be the effect on the decision taken?

Ans –
Machine A Machine B
Interest on investment (1,00,000*15%) 15,000 24,000
(investment*interest) (1,00,000*15%) (1,60,000*15%)

Operating charges 80,000 64,000

(annual operating hours*hourly charges) (4000*20) (4,000*16)
Total annual charges 95,000 88,000
(Annual Operating Charges + Interest on Capital)
Pieces produced for 4000hrs. 40,000 64,000
(Prices per hour × Annual operating hours) (4,000*10) (4,000*16)
Cost per unit 2.375 1.375
Total annual charges 95,000 88,000
= = 40,000 = 64,000
Pieces produced for 4,000 hrs

Annual cost of Machine A is ₹2.375 and that of Machine B is ₹1.375.

Therefore, Machine B is a better option.
If Machine B had a 10% of rejection recorded,
∴ @10% rejection then the total sellable goods are (64,000-10%) = 57,600.
88,000
 cost per unit = =1.527
57,600
We can see that even after 10% rejection, Machine B is a better option.

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Q3) A manager in a garment manufacturing unit was faced with a peculiar problem. He used
to order for yarn that would be used in the manufacture of Baseball Caps. These were
ordered on a 'need' basis in kilograms. The annual consumption pattern is as given below.

Consider the demand as the summation of this consumption.

Suppose the price of this yarn is ₹ 240 per kilogram, the ordering cost is ₹500 per order
regardless of the quantities and the inventory carrying cost is 20% of the price, what
would be an optimum quantity to be ordered and what would be the periodic review time
frame?

Ans –
Price = ₹240/kg.
Co = ₹500.
Cc = 20% of price = 20% of ₹240 = ₹48.
Total quantity (D) = 1010.

EOQ =
√ 2 Co . D
Cc √=
2∗500∗1010
48

 EOQ = 145.057
Optimum quantity to be ordered is 145.057 = 145 kg (Approx)
EOQ
Periodic review time frame = ∗365 days
D
145.057
= ∗365=52.421=52 ( ¿ )
1010
Periodic review time frame = 52days

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Q 4 - Explain the following ways of classifying materials in your own words:
 FSND
 GOLF
Ans – FSND
FSND stands for fast-moving (F), slow-moving (S) and non-moving items (N) and dead stock (D).
F – Fast moving – Items consumed in short span of time. These items are generally paced in
dispatch area.
S – Slow moving – item which are issued/ used less for a certain period. These items are generally
placed far away then dispatch area.
N – Non-moving – items that are not issued/ used for more than a certain duration. These items are
placed in visible area but are placed far away.
D – Dead stock – items which are no longer is used. These items are no longer visible.
FSND analysis can be beneficial for showing which items are active in your inventory.
Fast-moving goods need to be reviewed regularly.
It helps us make smarter buying decisions from suppliers and keep inventory relevant to demand.
This classification comes in very handy when we desire to control obsolescence
Close watch of slow-moving items.
 GOLF
The letter stands for Government (G), Ordinary (O), Local (L) and Foreign (F). These are mainly
imported items which are canalized through the State Trading Corporation (STC) Minerals and
Metals Trading Corporation, etc. Indian Drugs and Pharmaceutical Ltd (IDPL), Mica trading
corporation etc. These are special procedures of inventory control which may not applicable to
ordinary items as they require special procedures.
The GOLF classification of inventory items is done considering the nature of suppliers. As the
source of supply of different items are different, with a view to determining the lead time, order
quantities, safety stock and terms of purchase and payment. The main use of GOLF is procurement
storage and the basis of GOLF is sources of supply. The GOLF classification of inventory items is
done considering the nature of suppliers. As the source of supply of different items are different,
with a view to determining the lead time, order quantities, safety stock and terms of purchase and
payment. Foreign suppliers require lot of administrative or other procedural work such as obtaining
bill of lading licenses from local country, import and export formalities, opening letters of credit
with the banks and shipping, packing and forwarding procedures. All these makes foreign
purchases a completed procedure.

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Q 5 - Explain in sufficient detail the concept of Supply Chain Management (Provider
Network Management) in your own words. Enlist the possible components of a Supply Chain
for a hospital.
Ans – The supply chain generally refers to the resources needed to deliver goods or services to a
consumer. It involves the active streamlining of a business's supply-side activities to maximize
customer value and gain a competitive advantage in the marketplace. SCM represents an effort by
suppliers to develop and implement supply chains that are as efficient and economical as possible.
Supply chains cover everything from production to product development to the information
systems needed to direct these undertakings.
In hospital, managing the supply chain is typically a very complex and fragmented process.
Custom-made provider network management helps in measuring and improving the provider’s
performance and redefining networking procedures to focus the value of their healthcare service.
Hospital supply chain management involves obtaining resources, managing supplies, and
delivering goods and services to providers and patients. To complete the process, physical goods
and information about medical products and services usually go through a number of independent
stakeholders, including manufacturers, insurance companies, hospitals, providers, group purchasing
organizations, and several regulatory agencies. Employees involved in healthcare supply chain
management are responsible for stocking organizations with the products providers need and
managing inventory such as syringes, prescriptions drugs, gloves, pens, papers, and computers.
The hospital supply chain starts at the medical product manufacturer where items are produced and
sent to a distribution centre. Depending on the type of product, hospitals can either purchase
inventory directly through the manufacturer or distributor, or the transaction can be conducted
through a group purchasing organization, which establishes a purchasing contract with the
manufacturer on behalf of the hospital. Some healthcare organizations have found success with
supply chain management through cost transparency. By harnessing price and utilization data,
healthcare organizations can track and manage inventory more efficiently and construct more
informed purchasing contracts with manufacturers.

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