Operations_Management_Assignment_Sep_2022

Q1. What are various decision criteria for deciding a location for a business
setup? Explain these decision criteria with reference to a location decision for
setting up a textile manufacturing plant.

A1.

Location decision: Selecting the location for a business is a vital factor of facility planning
as it affects the cost, achievement, and profitability of a corporation. To select a location
for a manufacturing plant, one need proper vicinity. Consequently, vicinity choice means
finding an excellent region for installing a plant or facility for manufacturing goods or
services. Usually, the region decision includes:

• Decisions regarding setting up a new plant.

• Relocation of a present plant.
• Expansion of the existing plant.

The plant location must be suitable for the accessibility for employees and workers,
material transportation, and many others. This selection depends on factors affecting the
enterprise in the long and brief run. These factors include climate situations, assets, client
proximity, and labor.

Concept and application:

Determining the area for a business is a major part of run operations successfully. An
unsuitable location can affect the business negatively to a first-rate extent. Therefore, a
corporation must observe the proper selection criteria for choosing a business area.

● Availability of Raw Material: One of the important essential criteria for selecting a
location is that it has smooth access to transport raw material. It helps in lowering the
transportation charges and also reduce the work time. Secondly, keeping the fabric
material for a long term in storage changes the color of the material and makes it look like
faded. Also, the changing trend fashion, forces the firm to preserve much less fabric in
inventory so that the organization does not have excess undesirable raw material.

● Proximity to market: Manufacturing of goods and services does no longer serve any
purpose and has no value if it isn't served to customers. Intake rights here a way market
which sells goods to the consumers. Therefore, a plant can't effectively sustain without a
market. For instance, a fabric manufacturing company cannot attain fulfillment without
considering the current phase of the marketing, new areas, ability of growth, and the
 Operations_Management_Assignment_Sep_2022
competitors' area. Further, if the textile production industry is deliberately exporting the
final goods, it has to check for the supply of processing facilities.

● Infrastructural facilities: Each industry relies upon the infrastructural capacity, in

unique approaches, but the availability of best infrastructure decides the performance of
critical area of an enterprise. Many infrastructural facilities encompass transport, water,
banking, communication, power, etc. For example, for a fabric production plant, if there
is less accessibility to energy in a particular place, it is very challenging for the producer
to run-up the machines which costs relatively more money on generators, etc.

● Government coverage: For a balanced improvement, the government gives

extraordinary concessions, tax rebates, incentives, and so on. to set up the manufacturing
plant in backward and less developed regions. The textile production plant can take
advantage of these policies as the production of garb requires hand-made art work and
expertise, which can be seen in folks living in backward areas.

● Availability of Manpower: Another thing affecting the area selection for setting up a
business is the availability of the workforce in that area. An organization has to check
whether the locations in choice have the right, professional, and required workforce
available or not. A company can acquire information concerning this from the industries
already existing in one's regions. Also, a company should observe whether it needs
reasonably-priced exertions or technically superior labor, and so on. For example, for
setting up of a fabric production plant, if the manufacturer wants employees with
embroidering abilities, etc., he can choose for rural regions as the areas can provide the
specified exertions in abundance.

● Opposition: Revenue of firms like retail organizations, rely on the degree of competition
near them. Therefore, the location selection for such sort of organizations relies close to
competitors. Further, for the textile manufacturing industry, the range of competitors near
the plant also plays an important position. The fabric producer will try and look for an area
with no or much fewer competitors due to the fact, fashion industry continues to change,
and there may be tough competition regularly.

Conclusion:

Except for the above-noted standards for the choice of a region for setting up a business,
there are other numerous factors affecting the decision, including climatic situations,
 Operations_Management_Assignment_Sep_2022
political conditions, incentives, subsidies, land prices, etc. An organization must keep each
thing in thought while choosing the region for setting up the business.

Q2. Define and explain the term ‘Operations Management’. Explain the role of
Operations Managers in their interface with other functions in an organization.
Give relevant examples from a Retail Store Operation.

A2.

Operation management: an area through which an employer can oversee, design, and
control the production system and redesign business operations, manufacturing of goods
or offerings is known as operations control/management. In other words, operational
management directs the process of a company that facilitates reworking the firm's inputs
into services and products. As each business employer consists of a system, operations
management is determined in all functional areas. The five operation management
selections for an organization process are strategic choice, fine, operating choices, ability,
format, and area. The two principle standards of operations control that each organization
are:

1. Each part of a company has its particular identification; still, it's far in some way
connected with the operations.

2. Now, not just the operations of an organization. However, each part of the firm
should design and operate in the commercial enterprise tactics and deal with the firm's
technology, quantity, and staffing problems.

Concept and application:

Operational control is a technique of managing the operations and approaches of an

organization. Operations management is a subject of business control that consists of
controlling an employer’s work to ensure the performance and effectiveness inside the
execution of different business projects. The operations supervisor in particular branch has
to carry out specific strategic functions together with product layout, forecasting, supply
chain management, and transport control.

An operations supervisor is an individual that handles the technical operations and makes
the company confident in acting to its high-quality functionality and capacity. The
operations manager is the top-level worker who controls the organization. They must
maintain a report on particular areas and ensure that there may be productivity and
performance within the company despite cost discounts.
 Operations_Management_Assignment_Sep_2022
Position of an operations supervisor in their interface with different capabilities of an
employer concerning a retail shop operation is as follows:

1. Finance: Finance is the must have in every organization; therefore, maintaining

proper economic roadmap can benefit corporation in planning different investment
possibilities, decreasing the price of a product, and selling the products at a decreased
price for the delight of the customers’ needs and price range. The operation’s manager
has to oversee the reports when the budgets are being created and administered inside
the particular areas of the corporation. For example, in a retail shop, the store’s operation
manager will preserve a standard test at the business's expenses and curtail the spending
of every branch so the company can remain on budget. The managers also engage well in
the value-benefit evaluation and should look for acquiring an excellent price for the
specified substances. In addition, they appear over the manufacturing techniques of the
company so that the company’s output is at the high performance stage.

2. Big-picture perspective: As the operation’s manager is the person responsible

for wellbeing of a company and its operations, they must prepare a big-picture perspective.
Another role of an operation manager is to manage people effectively for the correct
functioning of the one-of-a-kind departments. Retail managers can even keep a big-picture
perspective in mind to decide the requirement within the company and to connect with
the organizations to solve any trouble collectively.

3. Supervise deliver chain and inventory: Operations supervisor needs to

supervise the control of supply chain strategies of a corporation and tune its stock. To
achieve this, the operation’s supervisor has to coordinate with the distinctive functions of
the employer. For example, in a retail store, the operations supervisor has to supply the
requirements of the shop, and after they reach the storage facility, they will have to hold
a report of the stock after which oversee. At the same time, the products are dispatched
out on shops for selling them to the clients.

4. Workflow and staffing: The work of operations managers also involve

maintaining the staff and their needs. The operations supervisor has to work with the HRs
to hire and train new employees and handle the disciplinary issues of the organization.
Because the operations managers are aware of the requirements of various departments
of the corporation, so they could quickly alter the company's workflow and reassign extra
duties for the development of efficiency in the operations of the firm.

Conclusion:

With the assistance of the distinctive roles of the operations manager mentioned above,
we can conclude that an operations supervisor collaborates with exclusive functions like
 Operations_Management_Assignment_Sep_2022
planning, organizing, staffing, directing, and controlling an organization. By making plans,
the operations manager enables to maintain the finance of the firm. Through organizing
and directing, the operations supervisor keeps a right waft of work in the enterprise and
oversees one-of-a-kind tasks and business sports of the organization. Through proper
communication with HRs, the managers recruit the employees as per terms of employer.
Ultimately, the operations manager controls the operations and methods of an
organization.

Q3. Many business organizations have operations in which inventory

management is a daily and constant process. Managing a production setup (say
an automobile manufacturing or service shop) is one such business, wherein the
procurement and managing various inventory is a very strategic process. Explain
the following concepts (with atleast one example) in the Operations of the
business, and conclude how relevant is it in the business?

a. Economic Ordered Quantity (EOQ)

A3(a).

Economic order quantity (EOQ): Every organization that purchases and holds stock has
an area for orders in the amount that suits first-rate in line as per the requirements. Having
too massive orders and too much fewer orders for each item isn't good for a business, as
the former results in high storage costs, and the latter does not allow the firm to satisfy a
customer’s desires. Remedy for such issues is monetary reward compensation.

Concept and application:

Economic order quantity is a way of corporation that can calculate the suitable order length
of goods and supply, therefore, it can assume the clients' needs without over or under-
spending on the stock. The inventory managers of a company calculate economic Order
quantity to minimize the preserving prices and immoderate inventory. The formula for
calculating the financial Order amount is

2𝐷𝑆
Economic order quantity = √
H

Right here, D is the annual demand for the products in devices, S is the order cost of the
products, and H is the preserving value of the goods in line with the unit per annum.

Let us recognize the idea of financial Order amount with the help of an instance.
 Operations_Management_Assignment_Sep_2022
ABC Ltd. desires to decide the perfect order quantity of its items through EOQ. The yearly
demand for the goods from the last year changed to 10,000 units. The average order cost
of the products changed to ₹5,000, and the maintaining cost per unit in step with the year
for the goods became ₹3. Calculate the correct order quantity through financial Order
quantity.

2𝑋10,000𝑋5000
𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑜𝑟𝑑𝑒𝑟 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 = √
3

= √33333333.33

= 5774 units.

It means that the ideal order quantity for ABC Ltd. is 5774 devices. Now, the company will
ensure that it has tons of units in its storage at any point in time. If the company has
items much less than the EOQ level, the organization will purchase or produce more
devices, and vice-versa.

Conclusion:

Management of production setups, including car manufacturing businesses or service

shops, requires proper inventory management daily. For those sorts of industries, it's vital
to hold the stock level within the organization. Economic Order amount can help these
companies maintain a proper inventory level. If the company’s current inventory is much
less than the EOQ stage, you will have more inventories. However, if the firm has excellent
inventory than the ideal degree, it will have to forestall procuring more of the stock to
lower charges on storage. Therefore, we will say that EOQ facilitates a company in
maximizing its profits.

b. Define Quality and list and discuss in brief the various dimensions of quality in
operations

A3(b).

Quality: In terms of operations control, the definition of quality is the degree of excellence
or purity of a product or service. Expectations of the customers only fulfilled by a quality
product or service. Each organization, through operations, controls its objective at
maintaining the quality of its goods and services.
 Operations_Management_Assignment_Sep_2022
Concept and application:

There are eight dimensions of satisfaction that plays a crucial role in perceiving the
excellence of an amazing carrier. Those are performance, functions, reliability,
conformance, sturdiness, serviceability, aesthetics, and perceived great. Let us recognize
each of these dimensions in element:

1. Performance: Performance related to the expectancies of a customer with the

functional characteristics of the product or service. The operating traits of a product or
service encompass the measurable factors for performance measurement. Via this
measurement, a corporation answers the question of whether or not or no longer is the
product or service doing what it is supposed to do.

2. Features: The traits that aren't blanketed beneath performance come within the
next dimension, i.e., features. It entails the characteristics that decide the appealing
energy of a product or service. In simple phrases, capabilities are the more excellent
quality of a product or service traits, making them exceptional from other items or
offerings.

3. Reliability: The third measurement of quality focuses on the consistency of a

product or service in phrases of its performance. In different words, it enables the
determination of whether or not the good or service lasts long, as noted in its description.

4. Conformance: Conformance is associated with capabilities and standard

performance. It is answerable to what extent the product or service conforms to its
specifications and whether the product or service has all the features specified by the
company.

5. Durability: As the name suggests, durability tells how long the services or
products will last or perform. Many customers buy items or services, preserving their
durability on preference.

6. Serviceability: It determines whether or not the upkeep and restoration of the

good or carrier are easy. This dimension is vital for the clients who are conscious of the
total possession price of the services or products while buying.

7. Aesthetics: This site is approximately the looks of a product and how it contributes
to the brand and identification of the organization.

8. Perceived Quality: The way a patron perceives the value of a product or service
performs a critical function. A product or service could have high ratings in every one of
the dimensions of high quality however fail in perceived high quality.
 Operations_Management_Assignment_Sep_2022
For the management of production setups like the car production industry, the managers
need to maintain each quality dimension as those dimensions assist an organization in
selling services or products to the clients and constructing its identification and brand.

Conclusion:

The strategic control tool is the best utilized by exclusive businesses as a framework for
evaluation of characteristics of great.