Program: PGDM A&B (Batch 2013 - 15), Second Trimester End Term Exam paper Subject: Operations Mgmt

`K. J. SOMAIYA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

Program: PGDM A/B IInd Trimester (Batch 2013 - 15)

Subject: Operations Management - 1

(End Term Examination)

Maximum Marks: 50 Marks

Each Question carries 10 marks.
Question 1 is compulsory , answer any 4 from Q2 to Q6.
Duration: 180 Minutes (3Hrs)
Date: January, 2014
Notes:
1. Answer questions as per instructions in questions.
2. Make suitable assumptions if required and state them.

QUESTION 1 - Renault – Riding into India (10marks)

Renault , the French Automobile manufacturer and one of the leading brands in Europe turned
to India which is a growing market along with the other BRIC countries for automobiles. Renault
was planning to enter the Indian market in 2011. Earlier it had introduced the Logan model
along with an Indian Company Mahindra and Mahindra which met with limited success but had
increased the visibility of the brand in the market . The introduction of the High end model
Fluence and Koleos after their JV was dissolved did not gather the numbers but helped in
positioning the brand in a premium segment. The strategy now was to get the numbers as well
as the positioning right.
Renault launched the pulse in the beginning of 2012 and it was followed by the much awaited
compact SUV Duster in the middle half of 2012. The car won many awards and was acclaimed
for its classy looks, elegant interiors and competitive pricing.
Since 2010 Renault and Japanese car manufacturer Nissan have been using a concept of badge
engineering and coming out with cars which have minor changes but different badges to save
on cost and reduce time to market. According to Marc Nassif Managing director at Renault the
alliance was used to launch the brand quickly and at less cost and it will not be needed
anymore, but Renault will continue to share common facilities at the Chennai plant with Nissan
to achieve economies of scale.
Renault is fascinated by the Indian market. Carlos Tavares, COO, Renault has shares the view
that automobile manufacturers addressing the entry level are making huge profits . There is
money to be made there but Renault would have to bring out something that appeals to this
mass of customers and that India’s frugal engineering would play a key role in creating such a
product. It would also be a testing ground for such a product which later be introduced in the
rest of the world.
Questions .
1. What is the strategy that Renault is adopting to gain entry into the Indian Market. ?
2. What are operational strategies that would influence the overall corporate strategy?

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Program: PGDM A&B (Batch 2013 - 15), Second Trimester End Term Exam paper Subject: Operations Mgmt

QUESTION 2 – For a special ingredient used in the manufacturing of tyres at Speed Tyres Ltd,
Chennai , The following figures are prevailing.
Yearly demand 3,50,000kg
Production quantity 80,000 kg
Safety stock 30,000 kg
The set-up cost, independent of quantity is Rs 5000 for each production batch .The price of the
ingredient is Rs 200 per kg. Annual holding cost is 15% of the value of the ingredient ( inventory
interest rate 15% )
Calculate the following :
a. Economic order quantity.
b. Reorder point if the lead time is 10 working days.
QUESTION 3 - A manufacturing organization needs to plan the material required for next 6 weeks
to manufacture its end product A. In addition to end product, there is an independent
requirement of component C, as it is sold as spare in market. MPS for both end product and
spare is given in table. Based on the details given in table and charts,

A. Develop MRP for Product A, Product B and Product C

B. Explain the relationship between Strategic planning, aggregate planning and MRP.

Master Production Schedule for next 6 weeks -

1 2 3 4 5 6
Product A 200 300 400 200 0 400
Product C 100 120 140
Product Structure

B C

Inventory Status, Lead Time & Lot Sizing Rule

On Hand
Component Inventory Lead Time ( Week) Lot Size Rule
A 300 1 LFL
B 2000 2 LFL
C 600 1 LFL

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Program: PGDM A&B (Batch 2013 - 15), Second Trimester End Term Exam paper Subject: Operations Mgmt

QUESTION 4 – Answer any two questions. (5*2 = 10 M ARKS)

4.A – Describe the various stages of new product development.

4.B – How does a well managed supply chain add to the bottom-line of companies ?

4.C –Describe in brief the various forecasting methods and their application.

QUESTION 5 – Answer any two questions. (5*2 = 10 M ARKS)

4.A Explain the philosophy involved in JIT systems. What are the major requirements
for the implementation of JIT systems?

4.B – You are required to explore and select a site for a new paper plant. How will you
decide?

4.C -- How is a job shop different from batch production?

QUESTION 6 – Write short notes on (any two). (5*2 = 10 M ARKS)

5A. Value Analysis

5B. Capacity Planning

5C. Total Quality Management

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