SMU BBA4 BB0021 ASSIGNMENT SOLVED

Bachelor of Business Administration-BBA Semester 4

BB0021 –Production and Operations Management - 4 Credits

(Book ID: B0100)

Assignment Set- 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q1. What are types of production? Explain.

A1. Primary Production - This includes all kinds of extractive industries such as agriculture, mining and fishing. The primary sector of the economy is the sector of an economy making direct use of natural resources. This includes agriculture, forestry and fishing, mining, and extraction of oil and gas. This is contrasted with the secondary sector, producing manufactured and other processed goods, and the tertiary sector, producing services. The primary sector is usually most important in less developed countries, and typically less important in industrial countries. The manufacturing industries that aggregate, pack, package, purify or process the raw materials close to the primary producers are normally considered part of this sector, especially if the raw material is unsuitable for sale or difficult to transport long distances. Primary industry is a larger sector in developing countries; for instance, animal husbandry is more common in Africa than in Japan. Mining in 19th century South Wales is a case study of how an economy can come to rely on one form of business. Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada's most important. However, in recent years, the number of terminal exchanges have heavily reduced Canada's primary industry, making them rely more on quaternary industry.

In developed countries primary industry becomes more technologically advanced, for instance the mechanization of farming as opposed to hand picking and planting. In more developed economies additional capital is invested in primary means of production. As an example, in the United States corn belt, combine harvesters pick the corn, and spray systems distribute large amounts of insecticides, herbicides and fungicides, producing a higher yield than is possible using less capital-intensive techniques. These technological advances and investment allow the primary sector to require less workforce and, this way, developed countries tend to have a smaller percentage of their workforce involved in primary activities, instead having a higher percentage involved in the secondary and tertiary sectors.

Developed countries are allowed to maintain and develop their primary industries even further due to the excess wealth. For instance, European Union agricultural subsidies provide buffers for the fluctuating inflation rates and prices of agricultural produce. This allows developed countries to be able to export their agricultural products at extraordinarily low prices. This makes them extremely competitive against those of poor or underdeveloped countries that maintain free market policies and low or non-existent tariffs to counter them. Such differences also come about due to more efficient production in developed economies, given farm machinery, better information available to farmers, and often larger scale.

Secondary Production This includes manufacturing such as assembling, refining and construction (building) industries. Also known as manufacturing industries Secondary production involves transforming raw materials into goods. There are two main kinds of goods:-
Consumer goods – e.g. washing machines, DVD players. As the name implies, these are used by consumers
Industrial / capital goods – e.g. plant and machinery, complex information systems. Industrial and capital goods are used by businesses themselves during the production process. In the secondary production sector, value is “added” to the raw material inputs e.g. foodstuffs are transformed into ready meals for sale in supermarkets; metals, fabrics, and plastics
are transformed into motor vehicles. There are many different industry sectors in secondary
production. For example:
Electronic instruments
House-building
Car building
The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector. Activities associated with the secondary sector include metal working and smelting, automobile production, textile production, chemical and engineering industries, aerospace manufacturing, energy utilities, engineering, breweries and bottlers, construction, and shipbuilding. Secondary production: This can be divided into 2 parts: the manufacturing of goods and the construction of a variety of structures. manufacturing of goods mainly in factories, small plants and in the caribbean, in or near homes.eg .kitchens one might make sweet condiments for export or pepper sauce, candle holders etc.
Tertiary Production This includes all kinds of service industries such as transportation, communication and tourism. The tertiary sector of the economy (also known as the service sector or the service industry) is one of the three economic sectors, the others being the secondary sector (approximately the same as manufacturing) and the primary sector (agriculture, fishing, and extraction such as mining). Service sector The service sector consists of the "soft" parts of the economy, i.e. activities where people offer their knowledge and time to improve productivity, performance, potential, and sustainability. The basic characteristic of this sector is the production of services instead of end products. Services (also known as "intangible goods") include attention, advice, access, experience, and discussion. The production of information is generally also regarded as a service, but some economists now attribute it to a fourth sector, the quaternary sector. The tertiary sector of industry involves the provision of services to other businesses as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to a consumer, as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment. The goods may be transformed in the process of providing the service, as happens in the restaurant industry. However, the focus is on people interacting with people and serving the customer rather than transforming physical goods. For the last 100 years, there has been a substantial shift from the primary and secondary sectors to the tertiary sector in industrialized countries. This shift is called tertiarisation. The tertiary sector is now the largest sector of the economy in the Western world, and is also the fastest-growing sector. In examining the growth of the service sector in the early Nineties, the globalist Kenichi Ohmae noted that: "In the United States 70 percent of the workforce works in the service sector; in Japan, 60 percent, and in Taiwan, 50 percent. These are not necessarily busboys and live-in maids. Many of them are in the professional category. They are earning as much as manufacturing workers, and often more. Examples of tertiary industries may include the following. :

Telecommunication

 Pharmaceuticals

 Hospitality/Tourism

 Mass media

 Healthcare/hospitals

 Public health

 Information technology

 Waste disposal

 Banking

 Insurance

 Financial services

 FMCG

 Legal services

 Construction

 Food processing

 Consulting

 Gambling

 Retail sales

 Franchising

 Real estate

 Education

Q2. What are the sources of ideas in concept generation for a design?

A2. Innovation is the goal in new product development. It's what allows profits to grow, and what keeps the competition a step behind. Product innovation relies upon the creativity of the people responsible for the invention of and delivery into market of the product. The mainstream thought around creativity is that some people have it and others don't. However, there is now strong evidence that creativity actually may be more of a nurtured skill than one given by nature . It can be practiced, and individuals can be trained to think more creatively. But, it's not just the creativity of individuals that is responsible for innovative products, it is also the collective creativity of the organization. The methods discussed are generally methods for creating a population of ideas and concepts. Once a large number of ideas are created, decisions must be made as to which ideas to develop further and to spend time and money on. It probably isn't practical for your organization to develop every idea, and not every idea will even be practical to develop. Evaluation should be performed on the pool of ideas to pick those few or that one that best fits the needs of the user.

The simplest form of concept generation, is brainstorming. Basically, ideas are thrown out as they pop into mind, and are used to spark other ideas. Brainstorming works best when the group is relatively small, approximately 3-6 people. Too few, and not enough diverse and unique ideas are created, too many, and voices get drowned out and productivity slows. The environment should be relaxed, and participants should be encouraged to throw out any idea that comes to mind, even if it does not directly apply. The reasoning is that it may spark other useful ideas from the other participants. Ideas should only be discussed in a positive manner, so as to keep a high rate of creative flow. Negative attitudes will close people down, and shut off the idea faucet. Designate a writer to capture the ideas, and if possible, use somebody who can draw to help others visualize their ideas. Do not evaluate or pick apart ideas until a sufficient number of ideas have been generated. SCAMPER - Substitute, Combine, Adapt, Modify, Put to Other Use, Eliminate, Reverse or Reorder. Substitute - substitute material, parts, assemblies, shapes, and textures Combine - combine parts, elements, features, processes, and methods Adapt - adapt functions and shapes Modify - modify shape, scale, and distort Put to Other Uses - repurpose parts, materials, features, and assemblies Eliminate - eliminate portions of the concept, parts, and features Reverse or Rearrage - flip parts, reverse orders, inside-out, use the negative

The SCAMPER method relies on an initial idea, and then subsequent iterative explorations of change. It is a great method to use when taking on a product improvement project, but is also invaluable for improving the initial concepts in revolutionary product development.

Research of existing designs can be very valuable during the conceptual phases of product development. Research will help to expose flaws and deficiencies in competing designs, help define major challenges and design hurdles, reveal design trends, and bracket the scope of the development effort. Research should not be "me too" development, but instead a learning

acceleration, so that the next technological leap upward can be made from the highest point. Research should not be limited to products in the intended market, but across markets with products that share design elements, materials, and features. The Concept Fan takes ideas and expands them greater in scope, and then reexamines them in further detail. It builds a map or a fan of concepts that reside in the space near the originating concept or idea. One simply builds a hierarchical tree, starting at any point on the tree. Move upward to the next more general concept, then branch back down in parallel and further specificity to other related concepts. Build the tree at random, and as ideas appear interesting and worth expanding the branches, or finding the thicker, more general base branches. Fictional users of the product are imagined, with wants, needs, and desires. Daily interactions are explored, and product features that fill a role are explored. This is very effective when the diverse user base is examined and recreated. It can also be used to create a storyboard of how the product is used, and what it means to the user.

Q3. Discuss the market specific product life cycle

A3.

The Product life cycle explains the product evolution stages during the entire product life cycle. There are generally four product life cycle stages: market introduction market growth market maturity market decline Market Introduction During this stage the product is has been introduced for a first time by using above average advertising and promotional investments by the company to introduce the new product to the target market. The demand for the new product has to be created and target customers are attracted to try the new product. Generally during the market introduction stage the revenues are very low and the investments are very high. Most business do not generate any profits during this stage but use marketing and sales strategies and tactics to successfully position the new product / service in the marketplace and hopefully generate profits in the next product life cycle stages. Market Growth During this stage revenues and profit increase. The target market is already familiar with the product and customers already purchase the product. More competitors try to enter this business as they see the positive market trend development and increased profits generated by the companies. Due to economies of scale the overall cost of doing business is decreasing and the product profitability increases. Market Maturity During this stage market is already saturated with the product and competition is very strong. The growth in revenues starts to decline and profitability decreases as competitors start to compete more on price and less through product differentiation since most of the competitors can offer the same product. At the same time strong competition requires more marketing and sales investments to keep the market share which increases the overall cost of doing business. ; The set of business metrics should be simplified as much as possible. The bottomline is to improve visibility and save time for decision makers who will use the report continuously. Market Decline During this stage both revenues and profits decline. New products are introduced in the marketplace and replace the old products. Many competitors will not be profitable and they will withdraw from the market. Conclusion The product life cycle stages explain the growth and decline of revenues and profits associated with a product or service. Many companies in addition to marketing and sales managers have product managers who are responsible for specific products or services. The company has to develop appropriate strategies and tactics in each of these product life cycle stages in order to improve its market position and profitability which is called product life cycle management. Product life cycle management deals with different challenges at each stage and approaches the market with different strategies and tactics in each of these stages. Products sold, new customers, new products, new revenue, ontime delivery, etc.

Q4. What are the determinates of product mix

A 4 Determinants of the Product Mix  The conditions, which appear to exert a major influence on the product mix decision, are technology, competition, operating capacity, and market factors.

Technology:  The rate of technological change is accelerating, and technical research is unquestionably the most basic force affecting the product mix of the individual company.

Competition: A second important determinant of a firm’s product mix is change in the competitor’s product offerings. Changes in competitive products represent a direct challenge to a company, and if the change is a truly significant improvement, it may prove disastrous unless it can be matched or surpassed within a reasonable length of time. In addition to changes in their product design, competitors may make changes in overall product mix and put a rival at a competitive disadvantage.

Operating capacity: Another important factor influencing a marketer’s product mix is under-utilised capacity. Since production facilities are usually composed of complexes of inter-related machines, changes in production capacity can rarely be made in small increments.

Market factors:  Although declines in demand are disturbing to management and may result in an expansion of the product mix in an effort to replace lost business, upward changes are also significant. These market factors comprise:

• Shifts in customer’s product mix
• Changes in availability or cost
• Changes in manufacturing processes
• Shifts in location of customers
• Changes in levels of business activity
• Government controls

Q5. “The location of plant can be affected by political consideration also”. Explain the factors in the light of this statement.

A5 Political factors become important for selection of location when locations in different countries or major political units such as states within a country are being considered. The biggest reason for this is that the political situation in such locations affect the stability of such places as well as their future development and growth. Setting up a plant is a decision that has long term implications, and therefore decision on plant location must take into consideration the long term impact of political stability and economic development on the plant and the business activities supported by it. In addition to the long term implications the political situation also effects the immediate performance of the plant. One major aspect affecting a plant affected by political factors is the situation relating to labour relations and other employment related issues. The political stance of the government in power has major impact on the discipline among labour force and the relationship between employees and the management. A bad industrial relations situation can lead do frequent strikes, lock outs and other similar problems. Political situation also affect the stance of the government towards large businesses, and foreign companies operating locally. Some countries may prefer doing business with some specific countries and may have negative feeling toward some other countries.

Q6. What principles are to be followed in deciding the plant layout?

A 6 Design of plant layout involves decision of placement of various equipments and facilities in a manufacturing plant. The design attempts to achieve an optimum balance between several objectives which may often be conflicting with each other. The objectives to be optimized in designing a plant lay out include the following.

·         Provide enough space for the various equipments, facilities and activities carried out in the plant. The facilities include the facility for storage and movement of raw material, work in progress and finished goods required or produced in the plant. The activities carried out in the plant include the manufacturing operations as well as maintenance activities.

·         Facilitate smooth movement of material during manufacturing process.

·         Reduce the material handling cost.

·         Provide good and safe working environment for the people working in the plant.

·         Reduce the total space requirement.

·         Reduce the cost of facilities to be constructed or fabricated.

A plant layout is the placing of the right items coupled with the right place and the right method, to permit the flow of production process through the shortest possible distance in the shortest possible time.

The principles of plant layout can be stated as-

1. Integration of all factors - The plant should integrate all the essential resources of men, machines and materials in order to give an optimum level of production.

2. Minimum Movement - The less the movement of men, machines and materials, the less will be the cost of production. Thus, minimum movement of theses resources will provide cost efficiency.

3. Unidirectional flow - All materials should progressively move towards the same direction i.e. towards the stage of completion. Any back-tracking should be avoided here.

4. Efficient space handling - The space used up during the plant work also costs money as more the space required, more will be the floor rent. The materials should be organized in stacks in a proper and recognizable order to maintain space efficiency.

5. Inherent safety - The environment of the plant should be safe for the workers as well as the machines. There should be fire extinguishers and fire exits placed strategically.

There should be minimum contact of the labour to toxic chemicals and environment.

6. Maximum observation capacity - The layout of the plant should such that all of its resources and workforce can be observed and evaluated at all points in time. This helps in better supervision of work and helps in increasing both effectiveness and safety.

7. Maximum accessibility - The layout of the plant should ensure that all essential resources are accessible to the labour and machines without any delay. The aisles should be free from obstacles. The materials should be placed as close,to the machines concerned, as possible.

8. Minimum Handling - The ineffective handling of materials leads to a rise in cost. Materials should be handled in stacks and transferred in one go. Handling of a material twice in the same direction must be avoided.

9. Maximum protection - The layout should ensure the protection of the materials and machines while they are in the working or the storage stage. The security system should be efficient without making too many doors or barriers.

10. Maximum flexibility - The plant layout should not be rigid and permanent. If the need arises, the plant layout should be able to change itself without being expensive

Bachelor of Business Administration-BBA Semester 4

BB0021 –Production and Operations Management - 4 Credits

(Book ID: B0100)

Assignment Set- 2

Q1. Examine the objectives of material handling.

Ans. Objectives of material handling: Material handling relates to the loading, unloading and movement of all types of materials. Today, we have numerous ways by which material handling is done and it is generally classified according to the type of equipment used. Material handling may involve as much as 50% of the total production cost of a business's goods. Hence, the objectives of material handling become crucial to the organization.

Cost Reduction: One of the main objectives of material handling is the reduction of production cost. Material handling can constitute as much as 50% of total product cost and effective handling of materials can help minimize this cost. When handling costs are reduced the overall unit cost is reduced as a direct result. Sophisticated management theories, including just-in-time production and supply chain management are primarily concerned with materials handling.

Increasing Warehouse Capacity: When materials are not stored correctly in a warehouse, much of the facility is being wasted. This wastage adds to the cost of the product. Focusing on efficient storage in terms of cubic as well as floor space becomes important. Minimizing aisle space is also necessary with respect to increasing the amount of storage space. In both cases effective use of material handling will help to reduce warehousing cost of materials.

Improving Layout to Reduce Waste: A complete analysis of the flow of materials between operations, volumes, flow paths and timing is a must for efficient material handling. When space requirements are optimized and travel times reduced through the use of efficient handling systems and equipment, material handling becomes more cost effective. Further, this will lead to enhanced productivity.

Optimal Equipment Utilization: Expensive equipment often fails to operate at full potential simply because the material handling system does not permit it to. For example, the rate at which materials are supplied or removed could cause a drop in equipment performance by simply leaving it standing idle. With a proper material handling system in place or more efficient control of an existing system, equipment utilization can soon be maximized.

Increasing Safety: Safety in any organization is a primary concern and an efficient material handling system can make a direct contribution to the safety of workers, materials and associated equipment. With an efficient system in place, accident costs, lost time and damage to materials, among other things, can be reduced.

Q2. How can a good method of forecasting of demand be ascertained?

Ans. A good method of demand forecasting is easy to use and gives forecasts with low error. We can ascertain the ease of using a given forecasting method by examining the amount of time and efforts that need to be put in for collecting the data to be used for forecasting and for the calculations involved in the forecasting algorithm. Also the skill requirement for using a particular forecasting method is an important determinant of forecasting method.

We can estimate the degree of forecasting error for a given demand forecasting method by using using past demand data to calculated what forecasts of demand the given method would have given for several planning periods in the past, and comparing these calculated forecasts with the actual demands to give forecasting error. The pattern of forecasting errors over several planning period can then be analysed to estimate the the forecasting error likely to result from the given method in future.

Q3. Explain briefly the levels of production planning.

Ans. Production Planning—A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, and so on, as expressed in the overall business plan. The sales and production capabilities are compared, and a business strategy that includes a sales plan, a production plan, budgets, pro forma financial statements, and supporting plans for materials and workforce requirements, and so on, is developed. One of its primary purposes is to establish production rates that will achieve management’s objective of satisfying customer demand by maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable. Because this plan affects many company functions, it is normally prepared with information from marketing and coordinated with the functions of manufacturing, sales, engineering, finance, materials, and so on.

LEVELS OF PRODUCTION, PLANNING & CONTROL: Production planning occurs at several levels in the organization and covers different time horizons.

Strategic planning: Strategic planning is a process of thinking through the organization current mission and environment and then setting forth a guide for future decisions and results.

Strategic plans are usually long range plans done at the top management level. For example, the vice-president-operations, together with the top executives of the firm develop long range capacity and facility plans.

The long range plans focus on product lines, divisions, factories, markets and other business units, span several years and reflect the operations strategy of the business. Long range plans focus on the utilization of production facilities in the long run to achieve business objectives. They involve commitment in terms of capital investment, manufacturing process technology, product life and the like. The factors to be taken into consideration in long range planning are investment capacity of the firm, product life cycle, technology level, market requirement and the like. These plans set in motion activities required to develop facilities and equipment, production processes and major sub-contractors. Long range plans become constraints on how many products can be produced in the intermediate and short range plans.

Tactical Planning: Tactical Planning is done over an intermediate term or medium range time horizon by the middle level management (Operations at departmental level). These plans focus on aggregate products rather than individual specific products. These aggregate plans have a time span of 6 to 18 months. They specify the employment plan; machinery and utility plans, the sub-contractor and materials supply plans and facility modification/ expansion plans.

Operational Planning: Operational planning is done over a short range time span developed by the junior level management. It is concerned with the utilization of existing facilities rather than the creation of new facilities. It involves proper utilization of key resources such as raw materials, machine capacity, energy etc.

Short term planning takes into account, current customer orders, priorities, material availability, absenteeism rate, cash flows, etc., and it is designed to respond quickly to changes in production levels and market conditions.’

Short range planning establishes short range schedules which specify the quantity of specific products to be produced in each week of the planning horizon which varies from a week to a few months.

Example of a short-range plan is master-production schedule, together with materials requirement planning and capacity requirement planning.

Short range production scheduling and shop floor planning involve the day to day issues and decisions related to operations planning.

Q4. Examine the scheduling techniques for job shop

Ans. Scheduling Techniques for Job shop

The type of scheduling technique used in job shop depends on the volume of

orders, the nature of operations and job complexity.

There are two types of scheduling techniques:

1. Forward scheduling and

2. Backward scheduling.

Forward Scheduling: In this approach, each task is scheduled to occur at the earliest time that, the necessary material will be on hand & capacity will be available. It assumes that procurement of material & operations starts as soon as the customers, requirements are known. The customers place their orders on a “needed as-soon-as possible” basis. The earliest completion date, assuming that everything gases as planned could be quoted to the potential customer. Some bulfer time may be added to determine a date that is more likely to be achievable, if it is acceptable to the customer. Forward scheduling is used in many companies such as steel mills and machine tools manufacturers where jobs are manufactured to customer order and delivery is requested on “as early as possible” basis. Forward scheduling is well suited where the supplier is usually not able to meet the schedules. This type of scheduling is simple to use, gets jobs done in shorter lead times but accumulates high work in process inventories. Figure below illustrates forward scheduling.

Backward Scheduling: This scheduling technique is often used in assembly type industries and in job shops that commit in advance to specific delivery dates. After determining the required schedule dates for major sub-assemblies, the schedule uses these require dates for each component and works backward to determine the proper release date for each component manufacturing order. The jobs start date in determined by ‘setting back’ from the

finish date, the processing time for the job. By assigning jobs as late as possible, backward scheduling minimizes inventories, since each job is not completed until it is due, but not earlier. Backward scheduling is also known as reverse scheduling order release date.

Q5. Do you think time motion and work study has relevance on shop floor today? You may discuss this even with small time manufacturers.

Ans. The utility of time and motion study has diminished to some extent with use of highly automated production equipments and processes. As a result of this kind of increasing automation, the principles and methods are used more by the equipment manufacturers for design of the equipments they manufacture rather than the people who use these equipments for for further manufacturing operations. However, no amount of automation completely eliminates some amount of customization of processes used on the shop floor. As a matter of fact a great deal of process design is still carried out for each shop floor independently, and for design of these operational processes as well as for planning and control of such operations, the work study, including time an motion study continues to be as useful as it ever was.

motion and work study is still relevant in modern time,but due to development of new technologies and other methods its use has become limited. for blue collar workers still they use this for planning and controlling processes.

these techniques  improve quality of work and save time. so some managers plan the tactical plans which are short term plans according to these methods.

although the modern machines and equipments have their already set  working and execution time but thing is to function them properly human resource is required. and here the importance of motion and work studies come into existence.

Q6. Why should inventory be controlled? Explain

Ans. Inventory: It is a detailed list of movable goods such as raw materials, materials in process, finished products, general supplies and equipments etc. and give the quantity and value of each item.

Inventory Control: It may be defined as “the systematic location storage and recording of goods in such a way that desired degree service can be made to the operating shops at minimum ultimate cost.’’

Functions of Inventory Control

Following are the most important functions of Inventory Control.

a) To run the stores effectively. This includes layout, storing media (bins, shelves and open space etc.) utilisation of storage space, receiving and issuing procedures etc.

b) To ensure timely availability of material and avoid built up of stock levels.

c) Technical responsibility for the state of materials. This includes methods of storing, maintenance, procedures, studies of deterioration and obsolescence.

d) Stock control system: Physical verification (stock taking) records, ordering policies and procedures for the purchase of goods.

e) Maintenance of specified raw materials; general suppliers, work-in-process and component parts in sufficient quantities to meet the demand of production.

f) Protecting the inventory from losses due to improper handling and storing of goods and unauthorised removal from stores.

g) Pricing all materials supplied to the shops so as to estimate material cost.