10| Noble ‘Study Material Q 4. What do you mean by Batch Production? Ans. Batch Production: t Under this system, the manufacturing is done in Batches or groups or lots either on the basis of customer's order or with a hope of a continuous demand of the product. Under this system, medium scale production is warranted. The best example. of this type of production system is chemical industry where different medicines are produced in batches. Q 5. What do you mean by Mass Production? Ans. Mass Production: This system of production is used by concerns where is carried on continuously in anticipation of demand though demand of the product may not be uniform throughout the year. Standardization is the keynote of mass production. This system may also be called “Flow Production System’. This system is useful on single purpose type of machines and where standardized products are manufactured through standardized plant machineries and processes. Moreover this system requires huge investments in machines are manufacturing equipment Q 6. What do you mean by Continuous Production? Ans. Continuous Production: Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. The items: are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices, ete. Q 7. What do you mean by forecasting? Ans. Forecasting: Forecasting is an estimate of demand which will happen in future. Since it is only an estimate based on the past dem: , care mi i H t be taken while estimating it. ie _ Q8 Discuss Qualitative methods, WO uillkeitive vi edI i types of I (quantitative) models, and are objective ly heavily on mathematical computations, Long Question tion is defined as “the step-by-step conversion of one form 1 into another form through chemical or mechanical Process. : or enhance the utility of the product to the user.” Thus i ion is a value addition process. At each stage of processing, : © will be value addition. , ; Production may be defined as conversion of inputs-men, machine, ials, money, methods and management (6Ms) into output through a isformation process. Output may be goods produced or services x ction Systems: : Production system involves in producing goods with the help of ‘an efficient management, utilizing land, labor, machines, capital and ‘Materials. A production system constitutes an efficient process with an ized procedure for accomplishing the transformation of input its to useful output products. In any production process, there is an organized procedure to duce a unit of output from the several types of inputs as such erials, labor, machines, facilities, energies, information, and ology. * | Continuous Production Mass Productionsystems can be classified as Job Shop. Patch, and Continuous Production systems, 1. Job Shop Production: Job shop production are characterized by manufacturing of «, few quantity of products designed and produced as per the specific .), ‘of customers within prefixed time and cost. The distinguishing festu, of this is low volume and high variety of products. A job shop comprises of general purpose machines arranged int: different departments. Each job demands-unique technologicai requirements, demands processing on machines in a certain sequence Characteristics The Job-shop production system is followed when there is: a) A wide range of general purpose machines like grinder. drill Press, sharpener, etc. are used. b) Whole project is taken as a single operation ¢) The product manufactured is customized, d) Volume of output is generally less. ©) Versatile and skilled labor is needed. f) High capital investment is required. 8) Firms’ can offer the ‘personal touch’ which some customers prefer. h) Quality tends to be very high as workers are skilled and well motivated, i) It is expensive method of production as workforce is skilled. Jj) Awide range of tools, machines and equipment is needed which is expensive. Advantages Following are the advantages of job shop productio: a) Because of general Purpose machinesa aeMaterial ¢) Work in process inventory is higher compared to continuo, d) Higher set up costs due to frequent changes in set up. . Mass Production: _ Manufacture of discrete parts or assemblies using a continuous ‘process are called mass production. This production system is justified by very large volume of production. The machines are arranged in a line or product layout. Product and process standardisation exists and all outputs follow the same path. ‘Characteristics Mass production is used under the following circumstances: a) Standardization of product and process sequence. b) Dedicated special purpose machines having higher production capacities and output rates. c) Large volume of products. d) Shorter cycle time of production. €) Lower in process inventory. f) Perfectly balanced production lines. g) Flow of materials, components and parts is continuous and without any back tracking. h) Production planning and control is easy. i) Material handling can be completely automatic. Advantages Following are the advantages of mass production: ‘ a) Higher rate of production with reduced cycle time, b) Higher capacity utilisation due to line balancing. — c) Less skilled operators are required. ‘it ia7 by ing or production cycle must be . ‘nized and controlling t0 its erie Bae i ‘a department plays a vital role in ne scot je name that it is something -planning, Planning is defined as setting goals. ae 2 “planning and control provides different kinds of information to differen nts. It provides infor to marketing department. Marketing dey according to that information. Similarly, departments and provides relevant information. Objectives of Production Planning and Control: 1. Nature of Inputs: To manufacture a product. different types of inputs are used. The quality of the product depends upon the nature of the inputs are used. Hence the planning is done to determine the nature of various types of inputs which is a complicated process. 2. Quantity of Inputs: To achieve a level of production, determination of quantity of the inputs and their composition is very important. ‘A product can be prepared only when there is an estimate of the required composition of inputs. 3. Proper Coordination: It ensures the proper coordination among the workforce, machines and equipment. This leads to avoidance of wastages and smooth flow of production Better Control: Production planning is the method of control. For "a better control, planning is a precondition. Only then, one can the performance and calculate the deviations which lead mation about available manufacturing resources ¢ partment receives orders it coordinates with other a srely of raw materials and other components of materials and supplies are helpful in theent ces ers her ‘seasons, for instance umbrellas and rai "and outputs. Production planning and control must take such ters: Modem factories are using office automation x ie like PC, punch cards ete. It helps accurate computation “required of men and machine. onal Variations: Demand of certain products is affected by incoats during the monsoons changes into consideration while planning and control activities of inputs and outputs. ‘Test Marketing: In an aggressive are to be test marketed in order to cycle operation, intermittent in natu production. ifter Sales Service: This has become an important parameter for IA) items are returned for repair. success. In after sales services, many These are unscheduled w ork and also overload the production line. Losses due to Unpredictable Factors: Losses occh due to y accidents, fire and theft of production inputs, mainly materials and components. These are unpredictable. Shortage of input due to such factors upset the planned production schedule in time and quantity Losses due to Predictable Factors: There are losses of inputs. due to natural d engineering phenomena like production losses and changes in consumption of materials and occurrence of defectives. Production of Order: Therg are occasions when last minute prioritization of existing orders due to external pressure takes place \ These changes in priority are often decided by sufficiently high level of management. Design Changes: Design changes are issued by R & D and the engineering department. This will necessarily force production planning contro! change the input materials and process: marketing strategy new product 4 know the trends. This is a short- re and often upsets regular RMB OP 03 2)Janning and control. Q3. Explain functions of production PITA ta: ‘Ans. Functions of Production Planning Production Planning Functions:- eee etsy melee meet the planned production targets are the key activities before i sources. 2 Rae ae means, determination of path or route on which manufacturing operations will travel, establishing the sequence of operations to be followed in manufacturing a particular product This route path is determined in advance. Routing information is provided by product or process engineering function and it is useful to prepare machine loading charts and schedules Scheduling: Scheduling involves fixing priorities for each job * and determines the starting time and finishing time for each Operation, the starting dates and finishing dates for each part, sub assembly and final assembly. Scheduling lays down a time table for production, indicating the total time required for the manufacture of a product and also the time required for carrying out the operation for each part on each machine or equipment. Loading: Facility loading means loading of facility or work center and deciding which jobs to be assigned to which work center or machine. Loading is the process of converting operation schedules Fete tcrsc ren Destin pss i and avoids i Production Control Functions:- ee pod 1. Dispatching: The functions above are paper work on} aus started. Dispatching isthe | the paper work into i RMB OP RG) iding the quantity of products of sales forecast o r utilization of ction. of routing and scheduling as discussed ae actual Production has yet been aa Control that translates nM accordance with the details Cone P infor avail: depa in p expe requ Proc in th Q4 Ans cus dec ace timending to bottlenecks or holdups in section ‘same, controlling variations or deviations from ‘ormance levels, following up and monitoring progress coordinating with departments and all stages of production, tool room and maintenance ase, stores, ydifying the production plans and re-plan if necessary. shich Inspection: Inspection is the process of examining an object for ce of identification or checking it for verification of quality and quantity duct. in any of its characteristics. It is an important tool for ascertain on is ~ and controlling the quality of a product. Inspection is an appraisal seful activity that compares goods or services to a standard. Conclusion: - E | job Production planning and control provides different kind of R each information to different departments. It provides information about sub available manufacturing resources to marketing department. Marketing table department receives orders according to that information. Employment r the in production planning and contro! depends upon education and experience. Working in production planning and control is challenging task. It ter requires analytical skills and understanding of manufacturing process. | or _ Production planning and control is an essential part to run any business | les in the market because it can affect the quality of the product. ay Q 4. What do you mean by forecasting? Explain its methods. Ans. Forecasting: Ed Introduction The growing competition, frequent changes in én customer's demand and the trend towards automation demand that Fr decisions in business should not be based purely on guesses rather on Is Acareful analysis of data concerning the future course of events. More time and attention should be given t the future than to the past. andseonditions are made on SYStematic bay. ‘called forecasting and the figure or statement th, eee fined as forecast. na workd where FUtUTE is NOE know virtually every business and economic decision res), forecast ire conditions. alae reducing the area of ‘uncertainty that surrounds fit, sales, ent decision-making with respect to costs, S oe Bice, pricing, capital investment, and so forth. ine ae known with certainty, forecasting would be unnecessary. oe does exist, future outcomes are rarely assured and, therefore, — system of forecasting is necessary. The following are the main of forecasting: Q The creation of plans of action: The general use of forecasting is to be found in monitoring the continuing progress of plans based on forecasts 1 The forecast provides a warning system of the critical factors to be monitored regi rly because they might drastically affect the performance of the plan. It is important to note that the objective of business forecasting is Not to determine a curve or series of figures that will tell exactly what will happen, say, a year in advance, but it is to make analysis based on definite statistical data, which will enable an executive to take advantage of future conditions to a greater extent than he c In forecasting one should note that future precisely and there for in the forecast. Forecasting Fundamentals: Forecast: A Prediction, activity, event, or occurrence, Types of Forecasts F Economic forecasts OD Predict a varies inflation Tales, ‘ould do without them itis impossible to forecast the always must be some range of error allowed Projection, or estimate of some future f en oe €conomic indicators, like m © money supplystrategic category and the tactical require a good estimate of future demand, this is the type of ting that is emphasized in our textbook and in this es of Forecasting Methods: : Qualitative methods: These types of foreca: ‘ing methods are based ~ on judgments, opinions, intuition, emotions, or personal experiences and are subjective in nature, They do not rely on any rigorous mathematical computations in functions 2. Quantitative Methods: These are forecasting techniques that make use of historical quantitative data. It is also called as a statistical method. ae 1. Trend projection Method: Trend projection method is a classical itoring the method of business forecasting. This method is essentially concerned with the study of movement of variable through time. cal factors The use of this method requires a long and reliable time-series ally affect . data. There are two techniques of trend projection based on time- = series data: asting is O Graphical Method: A trend line can be fitted through a series ly what graphically. Old values of sales for different areas are plotted ised on on a graph and a free hand curve is drawn passing through as antage many points as possible. The direction of this free hand curve them shows the trend. - Q Fitting Trend Equation or Least Square Method: The least a squares method is a form of mathematical regression analysis ped that finds the line of best fit for a dataset, providing a visual demonstration of the relationship between the data points. Each point of data is representative of the relationship between a ure known independent variable and an unknown dependent variable, é ‘ 2. Barometric methods of forecasting: The barometric method of forecasting follow the method meteorologists use in ie forecasting. Meteorologists use the barometer to forecast ne f ve : conditions on the basis of movements of mercury in the barom BSmie indicators and to forecast future trends on ; of movements in the index of | economic indicators. The ‘used in this method are classified as: @ Leading Indicators Q Coincidental Indicators Lagging Indicators 3. Econometric methods: The econometric methods combine statistical tools with economic theories to estimate economic variables and to forecast the intended economic variables. The forecasts made through econometric methods are much more reliable than those made through any other method. The econometric methods are therefore most widely used to forecast demand fora product for a group of products and for the economy as a whole. The econometric methods are briefly described under two basic methods: a) Regression analysis: Regression analysis is the most popular method of demand estimation. This method combines economic theory and statistical techniques of estimation in regression technique of demand forecasting, the analysts estimate the demand function for a product. In the demand function, the quantity to be forecast is a dependent variable and the variables that affect or determine the demands are called variables. Q Simple regression technique: In sim, a single independent variable is used value of the dependent variable. O Multi-variate regression: independent ple regression technique to estimate a statistical * M explaining this model, it ae of simultaneous * Regression techniquepourrin pour QAANS poupainl SaA.ang \ Maing —- woresouUNUG pout, $ ~—s Pua aydues ayaydui0D, {es pourri ~ (poe wdPea) ar worujdo y9dXa -sanbyuyay, — sanbyuyal. ‘mayautore gd uonaaforg PUPAL spoyyatni A2A1ns pout " — ae T sanbyuypay, aanenend spoypayA| Suysed210.4Regression equation of Y on X Y = a+bx To find the value of a and b. SY_ 630 ata SXY _ 56_ bo Sy? 28 Hence regression equation comes to Y = 90 + 2X. With the help of this ‘equation we can project the trend values for the next three years. i.e. 2008. 2009 and 2010. Yao = 90+ 2(4)=90+8 =98 (000) units, 90 +2(5)=90+ 19= 100 (600) units, Yoo = 90+2(6)=90+ 12= 102 (000) units the help of following project the trend of sales for the next five | 2007100 ya 110 -330 1s -5 1a +120 +3 135 +405 +5 140 +700 EX=0 zY=720 | 3x?=70 EXY=+280 Regression equation of Y on X = atx To find the values of a and b. SY_ 720 Bae ee ea U os SXY _ 280 _ 4 | 7 ee Sales forecast for the next years, i.e., 2008 to 2012 Yong = 120+4(+7)=120+28= % 148 lakhs, Yocoo = 120+4(+9)=120+36= & 156 lakhs. Yooig = 120-+4(+ 11)=120+44= & 164 lacs. Yoyo, = 120+4(+ 13)=120+52= & 172 lakhs. Yoon = 120+4(+ 15)=120+60= & 148 lakhs. 2012 Illustration 3. An investigation into the demand for colour TV sets in 5 towns has results in the following data : Population of the town (in lakhs) Xe) Soles | f TV sets demanded (in thousands) | Y: | 9_| 13 v1 [15 | 19 Fita linear regression of Y on X and estimate the demand for CTV sets for two towns with a population of 10 alkhs and 20 lakhs.4 Ex=45_ | Regression equation of Y on X Y = a+bX To find the value of a and 6, the following two equations are to be solved BY = —na+ bux A SXY = —alX+ bEX? -- ii) By putting the values we get 61 = Sat+45b - iii) 655 - 45a+ 4556 iv) ‘Multiplying equation (iii) by 9 and putting it as no. (v) we get, 603 = 45a+405b «AV) ‘By deducting equation (v) from equation (Iv); we get $2= 50b 52 pe By putting the value of b in equation (iii), we gete y tan se of aecooters to 5 town has : Population in town : pe a ki : 6 Lex) [4.400 [6.600 5,700 : a linear regression of Y on X and estimate the number of scooters to be found in a town with a population of 16 lakhs. Computation of Trend Values Population | No. of Scooters] Squares of | Product of popu- (in lakhs) demanded population lation and No. of scooters demanded —— 7 x x XY oy) 4, : 4 4400 16 17.600 6 6,600 36 39,600 7 5,700 49 39,900 10 8,000 100 80,000 10,300 a 1,33,900 EY = 35,000 EXY = 3,11,000 Regression equation of Y on X Y = a+bx To find the value of a and 6, we will have to solve the following two equations : ZY = nat bux ll) EXY = alX+ bEX? (ii) By putting the values we get, 35,000 = 5a+40b i 3,11,000 = 40a+ 3706 liv) By multiplying equation no. (iii) by 8 putting as equation (v) we get, 5 2,80,000 = 40a +3206By subtracting equation (v) from equation (iv); we get 31,000 = 50b or, 505 = 31,000 31,000 _ sO By substituting the value of b in equation no. (iii), we get, 35,000 = Sa+40b or, ae or, 35,000 = Sa+40x 620 or, 35,000 = Sa+24,800 or, 10200 = Sa 10,200 or, a 20 Now putting the vlaue of a, b and X (16 lakhs) in regression equation of Y on X, we get E> @tEe or, Y = 2040 + 620 (16) or, Y = 2040 + 9920 or, Y = 11,960 Hence, the expected demand of scooters for a town with a population of 16 lakhs will be 11,960 scooters. QO pr w o