Activity questions (for practice)

1. What is the goal of every organization?

Ans. The goal of every organization is to make money – both now and in future. This definition
is found in Goldratt.

2. Give some examples of customer expectations?

Ans. The customer expects products to be available, affordable, have good quality, and have
variety. Customer also wants to buy frequently. These make the manufacturing organizations
produce high quality, low price, high volume and high variety goods.

3. Give some examples of challenges that manufacturing systems face today?

Ans. Manufacturing faces several challenges today. These are:  Changing market conditions.
Faster rate of change of the conditions, Global competition, Need to be proactive and Increased
Customer focus. The customers expect products and services which are available, priced well
and have good flawless quality. They also require new products with more variety. 

4. What are the requirements of manufacturing?

Ans. The requirements of manufacturing as defined by Skinner are: “Make an increasing variety
of products, on shorter lead times with smaller runs and flawless quality. Improve ROI by
automating and introducing new technology in process and materials so that price can be
reduced to meet local and foreign competition. Mechanize – but keep schedules flexible,
inventories low, capital costs minimal and work force contented” 

5. How do you classify manufacturing systems based on volume and variety?

Ans. Manufacturing systems are classified as low volume high variety manufacturing and high
volume low variety manufacturing. The first type uses process type layout while the second
uses product type layout or line layout.

6. Define quality?
Ans. Quality has several definitions. Early definitions were “fitness for purpose” and
“conformance to specifications”. Quality is also defined as the totality of characteristics of an
entity that bears on its ability to meet the stated and implied needs of the customer” (ISO
9000).
7. What is total quality management?
Ans. Total Quality Management (TQM) is a Management Approach of an Organization centered
on Quality based on participation of all its members and aiming at long term success through
customer satisfaction, and benefits to all members of the organization and to society. TQM is
based on continuous improvement and involves a cultural change in the organization.

8. What for is an ISO 9000 certification given?

Ans. ISO 9000 is given to an organization for developing and implementing a Quality
Management System

9. Give some disadvantages of functional layout?

Ans. Functional layout concentrates on pooling of resources and has higher machine utilization.
The main disadvantage is lack of ownership for the product. Changeover times can be high and
requires more inspection.

10. What is Cellular Manufacturing?

Ans. It is a type of manufacturing system where machines are grouped into cells and parts
(components) into families such that all parts within a family can be processed entirely within a
cell. The idea is to have a “factory within a factory” so that similar things are grouped together
saving in time and effort.

11. What is the biggest intangible advantage in Cellular Manufacturing?

Ans. The biggest advantage is “ownership and responsibility” to the products and components
made in the cell.

12. What is JIT?

Ans. Just-in-time (JIT) manufacturing is a systematic way to eliminate waste in manufacturing.

13. What is waste according to JIT?

Ans. Waste is anything other than the minimum amount of resource required to make a
product. Any activity that does not add value to the product can be treated as waste.
14. Into how many types are waste classified?
Ans. Wastes are classified into seven types (also called seven muda). These are waste from over
production, Waste of waiting time, Transportation waste, Inventory waste, Processing waste,
Waste of motion and waste from product defects.

15. What is flexible manufacturing?

Ans. Flexible Manufacturing Systems (FMS) is a manufacturing philosophy based on the concept
of effectively controlling material flow through a network of versatile production stations using
an efficient and versatile material handling and storage systems. Each work station in an FMS is
capable of processing a variety of part types with relatively small change over times. It can
handle large aggregate volumes and increased variety.

16. Give examples of delays in raw materials?

Ans. Delays happen in raw material availability due to many reasons. Some of these are:
Time delay in knowing that ROL has been reached, Delays in placing orders, Lead time between
placing the order and receiving the item, Transportation from the vendor and internal
transportation, Inspection and delay in stock taking and issue of items.

17. Give examples of delays in WIP?

Ans. Delays happen in the work in progress due to many reasons. Some of these are: Machine is
busy, Machine break down due to which it is not available, Set up times to get the machine
ready to process, Processing time, Time spent in Inspection and Quality, Time spent on rework
of rejected items, Transportation from one machine to another and waiting for assembly
because assembly is busy.

18. Give examples of methodologies from overall business perspective?

Ans. Some examples of methodologies from overall business perspective are: Business Process
Reengineering, Constraint Management and Agility. This list is not exhaustive.

19. What is business process reengineering?

Ans. Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign
of business processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service, and speed. It is more than automation and involves
automation and computerization.
20. Mention some principles in agility?
Ans. Agility is an organization's capacity to respond rapidly and effectively to unanticipated
opportunities and to proactively develop solutions for potential needs. It is the result of an
organization and the people who comprise it working together in ways which benefit the
individual, the organization, and their customers. Some of the principles are: Enriching the
customer, Leveraging human resources, Cooperate to compete and create virtual
organizations. 

21. What is forecasting?

Ans. Forecasting is defined as estimating the future value that a parameter will take. Most
scientific forecasting methods forecast the future value using past data. In Operations
Management forecasting is used extensively to estimate future demand of product(s)

22. What is time series forecasting?

Ans. Time series forecasting uses past data to estimate the future values. Here the performance
with respect to time is considered. Time is the independent variable.

23. Mention some simple forecasting models for time series data?
Ans. Some simple forecasting models using time series data are simple average, moving
average and simple exponential smoothing.

24. What is moving average?

Ans. Moving average is a simple time series forecasting model based on averages of a chosen
number of periods. It is used to forecast a constant model or level data.

25. Write the basic equation for simple exponential smoothing?

Ans. F_(t+1)=αD_t+(1-α) F_t. This equation can be used when simple exponential smoothing is
used as a forecasting model. Here Ft represents the forecast for period t, Dt is the known
demand for period t and α is the smoothing constant. The basic equation for simple exponential
smoothing is Y ̂_t=αY_t+(1-α) Y _̂ (t-1). Here Y ̂_t is the smoothed value of the data including Yt
the most recent data.
.
26. Is exponential smoothing a form of weighted average? How?
Ans. Simple exponential smoothing can be seen as a form of weighted moving average.
Expanding the general equation , we get  
As t is large and tends to infinity, the term (1- α)t tends to zero. The rest of the terms are all
terms involving Dj. It can be seen that the Ft+1 value is a weighted average of the terms Dt to
D1 with weights  . If  0 ≤ α ≤ 1, each weight is smaller than 1 and is decreasing. The highest
weight is given to the most recent point and the weights progressively decrease by a factor (1 –
α) as the data gets older. As t tends to infinity, the weights are  This is an infinite geometric
series whose first term is α and the common term is (1 – α). The sum of all the terms of the
progression is 1 .

27. What are the implications of using small α?

Ans. A small value of α implies that initial weight given to the recent data is small and the
subsequent weights are smaller. This means that more terms contribute to the forecast. This
also means that more weight is given to the forecast than to the demand.

28. In the equation Y = a + bt + ε, what does ε represent? What can you say about the
mean and variance of ε?
Ans. The symbol ε represents the error term. It is assumed to be normally distributed with
mean = 0 and with small variance. This means that the errors are expected to cancel out each
other. The error term is also expected to be small.

29. What do a and b represent in the equation Y = a + bt + ε?

Ans. In the linear equation Y = a + bt + ε, b is the slope and a is the y intercept – the point in
which the line touches the y axis.

30. Write the equations for Holt’s model?

Ans. The basic equation for Holt’s model is Ft+1 = at + bt. Here at is called the level which
represents the smoothed value up to and including the last data. The slope of the line is given
by bt and therefore the forecast for the next period Ft+1 = at + bt. The values of at and bt are
updated using at = α Dt + (1 – α)(at-1 + bt-1) and bt = β (at – at-1) + (1 – β)bt-1.
31. How is the Holt’s model different from the linear regression model?
Ans. Holt’s model is different from linear regression because it computes different values of the
slope and intercept at different points using simple exponential smoothing.

32. Write the equations for the Winter’s model?

Ans. Ft+1 = (at + bt)Ct+1 where at and bt are the level and trend as described in the Holt’s
model. Ct+1 is the seasonality index for the period that we are forecasting. The equations are
at+1 = alpha (Dt+1/Ct+1) + (1-alpha)(at + bt)
bt+1 = beta (at+1 - at ) +  (1 - beta)bt
Ct+p+1 = gamma(Dt+1/at+1) + (1 - gamma)Ct+1

33. What is seasonality index and how is it calculated?

Ans. Seasonality index captures the effect of the season on the data. It can be defined as Si =
Di/Average. For example, if there are 4 seasons, we can compute the average of the demands
of four seasons. The demand in a period divided by the average gives the seasonality index for
the period. It is important to know the number of periods that constitute a season.

34. Mention some measures of goodness of forecasts?

Ans. Some measures of goodness of forecasts include, mean squared deviation, mean absolute
deviation, mean percentage deviation etc.

35. What is a causal model?

Ans. In a causal model, there is an independent variable or a causal variable that impacts the
dependent variable (demand).

36. Write equations for causal model?

Ans. The equation for a causal model is Y = a + bX where X is the independent (causal) variable
and Y is the dependent variable. This is a linear model. Other models exist.

37. Derive the expression for a and b in the equation Y = a + bt?

Ans. We wish to find a and b such that residue is minimized. Partially differentiating the residue
with respect to a and b and setting the first derivative to zero, we get 2 equations. Here a and b
are unknowns and the other terms can be computed. Solving these equations we get the values
of a and b.