1. The rate of demand
2. The lead time
3. Stock out risk (safety stock)
4. Demand and/or lead time variability
Why the waiting lines are formed? What are its effects on services
operations? Give an example? (5 marks)
Waiting Lines
4. Waiting lines are non-value added occurrences
5. Are formed at airports, cricket stadiums, post offices.
6. Formed due to non scheduled random arrivals
7. Often regarded as poor service quality
Waiting Line Examples
1. Orders waiting to be filled
2. Trucks waiting to be loaded or unloaded
3. Job waiting to be processed
4. Equipment waiting to be loaded
5. Machines waiting to be repaired.
Service Station as a Waiting Line Example
Service station is usually designed to provide service on average
service time. At macro level system is unloaded at micro level the
system is overloaded a Paradox
Customers arrive at random rate
Service requirements vary only oil change or even tuning or
maintenance activity in order to change oil.
2. What is critical ratio? How to compute it? (3 marks)
CR - critical ratio: Jobs are processed according to smallest ratio of
time remaining until due date to processing time remaining.
Factors to be consider for using the sampling plan (5 marks)
Sampling plans are the plans that specify lot size, sample size,
number of samples, and acceptance/rejection criteria
Factors to be considered for using sampling plan
Single-sampling
Double-sampling
Multiple-sampling
Single Sampling Characteristics
One random is drawn from each lot.
Every item in the sample is examined
Each item after examination is classified good or defective.
If the sample contains more than a specified number of defectives
say c, then that lot is rejected.
Double Sampling Plan Characteristics
Takes care of limitation of Single Sampling Plan by taking another
sample if results of the initial sample are inconclusive.
A double sampling plan specifies the lot size, the size of the initial sample,
If defects are greater than c2, than lot is rejected.
Multiple Sampling Plans
Similar to double sampling plan but allows more than two samples.
A sampling plan will specify each sample size and two limits for each sample.
The values increase with number of samples.
If the cumulative number of defects (in current and previous
samples) exceed the upper limit, then sampling is terminated and the
lot is rejected.
4. Advantages and disadvantages of concurrent engineering (5 marks)
Concurrent Engineering
Concurrent engineering is the bringing together of engineering design
and manufacturing personnel early in the design phase.
Concurrent Engineering Advantages
Manufacturing Personnel are able to identify production capabilities
and capacities .They have thus the opportunity to inform the design
group about the suitability of certain materials on the flipsides the
designer would know the suitability of certain designs in aiding in
cost reduction and quality improvement in production/assembly process.
Early opportunities for design or procurement of critical tooling,
some of which might have long lead times.
early consideration of the Technical Feasibility of a particular
design or a portion of a design. Again this can avoid serious problems
during production.
Concurrent Engineering Disadvantages
long standing existing boundaries between design and manufacturing
can be difficult to overcome. Simply bringing a group of people
together and thinking that they will be able to work together
effectively is probably naive.
There must be extra communication and flexibility if the process is
to work, and these can be difficult to achieve.
Computer-Aided Design
Computer-Aided Design (CAD) is product design using computer graphics.
increases productivity of designers, 3 to 10 times
creates a database for manufacturing information on product specifications
provides possibility of engineering and cost analysis on proposed designs
Numerical question of annual carrying cost
Learn from the example 2 page no 146 of handouts
Philosophy of JIT system? (Marks 3)
Just In Time Production or Lean Production systems focus on the
efficient delivery of products or services. Some of the distinguishing
elements of the JIT systems are a pull method to manage material flow,
consistently high quantity, small lot sizes, uniform work station
loads. The JIT systems provide an organizational structure for
improved supplier coordination by integrating the logistics,
production and purchasing processes. When Operations Manager focuses
on their organization's competitive advantage they aim for low cost of
production, consistent quality with reductions in inventory, space
requirements, paperwork and increases in productivity, employee
participation and effectiveness.'
EDI rewards? (5 marks)
Electronic data interchange (EDI) is the structured transmission of
data between organizations by electronic means. It is used to transfer
electronic documents or business data from one computer system to
another computer system, i.e. from one trading partner to another
trading partner without human intervention.
Electronic Data Interchange gives an organization the following
benefits and advantages.
1. Increased productivity
2. Reduction of paperwork
3. Lead time and inventory reduction
4. Facilitation of just-in-time systems
5. Electronic transfer of funds
6. Improved control of operations
7. Reduction in clerical labor
8. Increased accuracy
1:- Elements of Queuing System (3 marks)
Elements of Queuing System
Population Source, Arrivals, Waiting Lines, Processing Order, Service,
System and Exit are the common identifiable elements of a Queuing
System.
4:- Prior knowledge of job flow times is essential to effective
planning, control and management of customer relationships. Explain
job flow time and identify various components of job flow time. (1+4
marks)
Job Flow Time: The length of time a job is in the shop at a particular
workstation or work center.
Job Lateness: This is the length of time the job completion date is
expected to exceed the date the job was due or promised to a customer.
Make span: This is the total time needed to complete a group of jobs.
It is the length of time between the start of the first job in the
group and the completion of the last job in the group.
Average Number of Jobs: Jobs that are considered in a shop are
considered to be work in process inventory. Mathematically
Average Number of Jobs= Total Flow Time / Make span.
5:- What are the various assumptions that you would consider while
carrying out aggregate planning?
Aggregate planning is an operational activity that does an aggregate
plan for the production process, in advance of 2 to 18 months, to give
an idea to management as to what quantity of materials and other
resources are to be procured and when, so that the total cost of
operations of the organization is kept to the minimum over that
period.
Assumptions for Aggregate Planning
1. The regular output capacity is the same for all periods.
2. Cost (Back Order, Inventory, Subcontracting etc) is a linear
function composed of unit cost and number of units. (In reality cost
is more of a step function)
3. Plans are feasible (There is sufficient inventory exists to
accommodate a plan, subcontractors would provide quality products and
outsourcers would be secure)
4. All costs associated with a decision option can be represented by a
lump sum or by unit costs that are independent of the quantity
involved.
5. Cost figures can be reasonably estimated and are constant over the
planning horizon.
6. Inventories are built up and draw down at a uniform rate and output
occurs at a uniform rate throughout each period. Backlogs are treated
as if they exist for the entire period, even though in reality they
tend to build up towards the end of the period
What is the role of ABC Classification system in inventory management?
ABC Classification System
An important aspect of Inventory Management is that items held in
inventory are not of equal importance in terms of rupees invested,
profit potential, sales or usage volume.
ABC Classification System controls inventories by dividing items into
3 groups A, B and C respectively.
1. Group A consists of High Rupee (Monetary) Value, which account for
a small portion about 10% of the total inventory usage.
2. Group B consists of Medium Rupee (Monetary) Value, which account
for about 20% of the total inventory usage.
3. Group C consists of Low Rupee (Monetary) Value, which account for a
large portion about 70% of the total inventory usage.
4. The level of control reflects cost benefit concerns.
5. Group A items are reviewed on a regular basis.
6. Group B items are reviewed at a less frequency than Group A items
but more than Group C items.
7. Group C items are not reviewed and order is placed directly.
Demand for service is usually difficult to predict'
Comment on this statement in the light of aggregate planning (3 marks)
Senior management of a service firm has initiated a short term project
of building a new facility of a designated area. What will be the
responsibilities and qualification of a project manager regarding this
project (5 marks?)
There is a great deal involved in managing a house-building project,
including major renovation projects. Whether you are managing the
project yourself, or leaving it all to someone else, the main tasks
include:
1. Preliminaries:
Arranging finance.
Organizing the design.
2. Organizing the builder and sometimes the subcontractors:
Asking selected builders and/or subcontractors for prices or tenders
to do the work.
Selecting the form of contract that best suits your needs.
3. Consents:
Getting building consents (and resource consents if necessary).
4. Managing construction:
Arranging for subcontractors to be available when needed
Dealing with suppliers and making sure materials are ordered and
delivered on time.
Monitoring progress once work starts to make sure everything complies
with the contract
Answering questions that arise during building, and clarifying anything
Knowing when progress payments are due and checking claims for payment
Processing variations and anything else that crops up along the way.
Arranging amendments to the building consent where necessary.
Arranging the final inspection for the code compliance certificate.
Qualification of Project Manager
PMP certification
Problems in service schedule (marks 3)?
Service Operation Problems
1. Cannot store or inventory services
2. Customer service requests are random
3. Scheduling service involves
a. Customers
b. Workforce
c. Equipment
6: labor flexibility helpful in services or not?
Labor Flexibility can be advantage in Services Labor often comprises a
significant portion of service compared to manufacturing. That coupled
with the fact that service providers are often able to handle a fairly
wide variety of service requirements means that to some extent,
planning is easier than manufacturing.
Define Lean manufacturing?
Lean Manufacturing: is a management philosophy focusing on reduction
of the seven wastes.
1. Over-production (Capacity exceeding demand)
2. Waiting time
3. Transportation
4. Processing
5. Costs
6. Inventory
7. Motion (Lack of coordination of body movements)
Q: what is product structure tree and briefly describe its significance in MRP?
Product structure tree: Visual depiction of the requirements in a bill
of materials, where all components are listed by levels.
Inventory Records
One of the three primary inputs in MRP
Includes information on the status of each item by time period
Gross requirements
Scheduled receipts
Amount on hand
Lead times
Lot sizes
And more …
Assembly Time Chart
Cumulative lead time: the sum of the lead times that sequential
phases of a process require, from ordering of parts or raw materials
to completion of final assembly.
Q: as operations manager of a manufacturing concern, you are required
to carry out aggregate planning. What would be the various outputs of
aggregate planning?
Aggregate Planning Outputs
1. Total cost of a plan
2. Projected levels of inventory
3. Inventory
4. Output
5. Employment
6. Subcontracting
7. Backordering
Q: what is Kanban and explain the process of kanban system? Support
your answer by giving an example.
Kanban also spelled kamban and literally meaning "signboard" or
"billboard", is a concept related to lean and just-in-time (JIT)
production. According to Taiichi Ohno, the man credited with
developing Just-in-time, kanban is one means through which JIT is
achieved.
Q: the project life cycle refers to a logical sequence of activities
to accomplish the project's goals or objectives. Identify the various
stages of project life cycle and the activities carried out at each
stage.
Project Life Cycle
The Project Life Cycle comprises of a new concept idea for a unique
activity which is then evaluated through feasibility reports, planned
with certain sequence of activities, execution of activities and
terminated after the project has been completed or shelved due to
certain unavoidable.
Diverse project management tools and methodologies prevail in the
different project cycle phases. Let's take a closer look at what's
important in each one of these stages.
1) Initiation
In this first stage, the scope of the project is defined along with
the approach to be taken to deliver the desired outputs. The project
manager is appointed and in turn, he selects the team members based on
their skills and experience.
2) Planning
The second phase should include a detailed identification and
assignment of each task until the end of the project. It should also
include a risk analysis and a definition of criteria for the
successful completion of each deliverable.
3) Execution and controlling
The most important issue in this phase is to ensure project activities
are properly executed and controlled. During the execution phase, the
planned solution is implemented to solve the problem specified in the
project's requirements. In product and system development, a design
resulting in a specific set of product requirements is created.
4) Closure
In this last stage, the project manager must ensure that the project
is brought to its proper completion. The closure phase is
characterized by a written formal project review report containing the
following components: a formal acceptance of the final product by the
client, Weighted Critical Measurements , rewarding the team, a list of
lessons learned, releasing project resources, and a formal project
closure notification to higher management.
3- Benefits of PERT Analysis
Advantages of PERT
1. Forces managers to organize
2. Provides graphic display of activities
3. Identifies
4. Critical activities
5. Slack activities
4- MRP Processing Components
MRP Processing
1. Gross requirements
2. Schedule receipts
3. Projected on hand
4. Net requirements
5. Planned-order receipts
6- High-Volume Success Factors lesson no 41
Process and product design
Preventive maintenance
Rapid repair when breakdown occurs
Optimal product mixes
Minimization of quality problems
Reliability and timing of supplies
Intermediate-Volume Systems
Outputs are between standardized high-volume systems and made-to-order job shops
Run size, timing, and sequence of jobs
Economic run size.
Gantt charts are of various types. Give a brief description about al
least two types of Gantt charts
A Gantt chart is a type of bar chart that illustrates a project
schedule. Gantt charts illustrate the start and finish dates of the
terminal elements and summary elements of a project. Terminal elements
and summary elements comprise the work breakdown structure of the
project.
There are several types of Gantt Charts. The most commonly
used types are as follows:
Load chart – A type of Gantt chart that shows the loading and idle
times for a group of machines or list of departments
Schedule chart – A type of Gantt chart that shows the orders or jobs
in progress and whether they are on schedule or not.
"Six sigma is related to quality improvement" Elaborate this statement.
Six Sigma Programs are always directed towards quality improvement,
cost cutting and time saving.
Six Sigma — 6σ, Six Sigma combines established methods such as
statistical process control, design of experiments and failure mode
and effects analysis (FMEA) in an overall framework.
Six Sigma seeks to improve the quality of process outputs by
identifying and removing the causes of defects (errors) and minimizing
variability in manufacturing and business processes.[3] It uses a set
of quality management methods, including statistical methods, and
creates a special infrastructure of people within the organization
("Black Belts", "Green Belts", etc.)
Implementation of six sigma aims at reducing defects. What could be
the various obstacles in implementing Six Sigma?
Obstacles to Implementing Six Sigma ( TQM) includes the lack of:
1. Company-wide definition of quality.
2. Strategic plan for change.
3. Customer focus.
4. Real employee empowerment.
5. Strong motivation.
6. Time to devote to quality initiatives.
7. Leadership.
8. Poor inter-organizational communication.
9. View of quality as a "quick fix".
10. Emphasis on short-term financial results.
11. Internal political and "turf" wars.
What are the salient features of six sigma quality management?
ANS: following are the 4 salient features of sigma quality management
1. Selecting and training appropriate people.
2. Providing strong leadership.
3. Selecting projects likely to succeed.
4. Defining performance merits.
How would you illustrate the problems that you may encounter in
scheduling the service operations?
ANS:
Cannot store or inventory services
2. Customer service requests are random
3. Scheduling service involves
a. Customers
b. Workforce
c. Equipment
What would happen if customer's expected quality and perceived quality
do not match? Explain by giving an example.
Customers expect certain things from certain companies When someone
goes into a McDonalds to order their favorite meal – a Big Mac, they
are expecting exactly what they are accustomed to getting (a quick, no
hassle, tasty big burger with all the works). If it takes 15 minutes
to get a Big Mac that doesn't even have the famous special sauce on it
the customer's perceived service of McDonalds is going to plummet.
Differentiate Big vs Little Just-In-Time System. Which one of the both
answers the most pressing questions that an organization faces? 4+1
1. Big JIT: it has broad focus in, vendor relations, materials and
inventory management, technology management, human relation
2. Little JIT: it has narrow focus Internal to organization,
Scheduling materials, and Scheduling services of production.
By JIT systems organization can achieve a balanced smooth flow of
production, it will flexible their system with reduction in wastes and
lead time.
Reorder point determinants (3 marks)
Reorder point: When the quantity on hand of an item drops to this
amount, the item is reordered.
Following are the determinant of the Reorder point.
1. The rate of demand
2. The lead time
3. Stock out risk (safety stock)
4. Demand and/or lead time variability
Example :
An apartment complex in Quetta requires water for its home use.
Usage= 2 barrels a day
Lead time= 5 days
ROP= Usage X Lead Time
= 2 barrels a day X 7 = 14 barrels
It means when ever our stock fall to 14 barrels we have to place the
new order for water.
What are the primary reasons for holding inventory?
1) To maintain independence of operations
2) To meet variation in product demand
3) To allow flexibility in production scheduling
4) To provide a safeguard for variation in raw material deliver
time
5) To take advantage of economic purchase order size
Explain the importance of employee empowerment in TQM.
Employee empowerment is a new way of managing organizations towards a
more complex and competitive future. A TQM strategy is deemed to fail
if empowerment of employees is absent. Quality starts with engaging
the people responsible for processes- the people who know the
processes the best. Total Quality management has proven very
successful in fostering responsibility, motivation and belongingness
in organizations with high autonomy and flexibility that how important
the empowerment of the employees.
Why do older machines generally exhibit a higher degree of natural
variability than do the newer machines?
The extent of natural variability inherit in a process differs from
process to process, and changes over time.
As the older machines will generally exhibit a higher degree of
natural variability than the newer machines, partly because of worn
parts and partly because of newer machines may incorporate designs
improvements that reduce the variability of their output.
Mr. Ali is appointed as a quality inspector at ABC Company. He is
responsible for quality assurance that requires acceptance sampling.
What are the various factors that he would consider for deciding which
sampling plan to use?
Choosing a Plan
Cost and time are prime determinants of choosing a plan.
Primary considerations are number of samples needed and total number
of observations required.
Single sample has only one sample but large sample size.
Where the cost to obtain a sample is high than cost of analyzing the
sample, single sample plan is followed.
Where inspection costs are higher than costs of obtaining the
sample, multiple samples are carried to ensure that a good or bad
result can help terminate the sample testing thus ensuring savings in
inspection cost.
Ali takes vitamin tablets at a rate of 2 per day, which are delivered
to his home 4
days after an order is placed. At what point should Ali reorder?
Note: Provide answer with complete working. Failure to show working
will result in deduction of marks.
Usage = 2 vitamins a day
Lead time = 7 days
ROP = Usage × Lead time
= 2 vitamins per day × 7 days = 14 vitamins
Thus, Ali should reorder when 14 vitamin tablets are left.
Prior knowledge of job flow times is essential to effective planning,
control and management of customer relationships. Explain job flow
time and identify various components of job flow time. (1+4 marks)
Job Flow Time: The length of time a job is in the shop at a particular
workstation or work center.
Job Lateness: This is the length of time the job completion date is
expected to exceed the date the job was due or promised to a customer.
Make span: This is the total time needed to complete a group of jobs.
It is the length of time between the start of the first job in the
group and the completion of the last job in the group.
Average Number of Jobs: Jobs that are considered in a shop are
considered to be work in process inventory. Mathematically
Average Number of Jobs= Total Flow Time / Make span.
What wou`ld be the annual ordering cost, if annual demand is 300 units
where the order size is 250 units and ordering cost is Rs. 10 per
order?
Note: Provide answer with complete working. Failure to show working
will result deduction of marks.
Annual ordering cost = no. of orders placed in a year x cost per order
= annual demand/order quantity x cost per order
annual demand= 300
order quantity=250
cost per order= 10
=300/250x10
= 12
Annual ordering cost is 12
Illustrate the role of inventory as a capacity changing option in
aggregate planning.
Capacity Option in changing Inventory levels:
• Increase inventory in low demand periods to meet the high demand in the future
• Increase costs associated with storage, insurance, handling
obsolescence and capital investments
• Shortages can mean lost sales due to long lead times and poor customer service
Being the head of a quality control team of ABC company, what
considerations would you take into account for using control charts?
At what point in the process to use control charts
What size samples to take?
What type of control chart to use?
1. Variables
2. Attributes
Comment on the statement "Labor flexibility can be an advantage in services."
Labor Flexibility can be advantage in Services Labor often comprises
a significant portion of service compared to manufacturing. That
coupled with the fact that service providers are often able to handle
a fairly wide variety of service requirements means that to some
extent, planning is easier than manufacturing
What are the various causes of disruptions and why is it important to
eliminate disruptions in a JIT system?
causes of disruptions:
• Disruptions are caused by variety of causes:
• poor quality
• equipment breakdowns
• changes to the schedule
• late deliveries
• Installation of new equipment
Elimination of disruptions:
• To Make system flexible
• To Eliminate wastes
• To maintain excess inventory
• To maximize the productivity
• To reduce uncertainty of the system
•
What is service level? Generally speaking, how is service level
related to the amount of safety stock held?
Service Levels refer to the important elements of the service to be
provided, usually stated in terms of results produced for customers.
Both are directly proportional. The lower the service level, the
lower the requirement for safety stock.
What is bullwhip effect? What are its consequences?
Bullwhip effect represents the real life time situation that
Inventories are progressively larger moving backward through the
supply chain.
What would happen if customer's expected quality and perceived quality
do not match? Explain by giving an example.
This gap is directly related to everyone's perception of service quality
Customers expect certain things from certain companies
When someone goes into a McDonalds to order their favorite meal – a
Big Mac, they are expecting exactly what they are accustomed to
getting (a quick, no hassle, tasty big burger with all the works). If
it takes 15 minutes to get a Big Mac that doesn't even have the famous
special sauce on it the customer's perceived service of McDonalds is
going to plummet.
Define aggregate planning. Discuss its role in FMCG department of a
departmental store./
Aggregate planning is the process of developing, analyzing, and
maintaining a preliminary, approximate schedule of the overall
operations of an organization. The aggregate plan generally contains
targeted sales forecasts, production levels, inventory levels, and
customer backlogs..
--
*
MUHAMMAD IMRAN
MBA complete
MARKETING
03366466701
LICCS LAYYAH*
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