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Summer 2015 Exam Oct/Nov 2015
Masters of Business Administration
MBA Semester 2
MB0044 –Production & Operations Management
Assignments
Q.1 Explain the elements or components of operations strategy.
Answer:
List the six elements of operations strategy:
The six elements of operations strategy are:
1) Designing of the production system
2) Facilities for production and services
3) Product or service design and development
4) Technology selection, development, and process development
5) Allocation of resources
6) Focus on facilities planning
Describe the six elements of operations strategy:
• Designing of the production system: The designing of the production system involves
the selection of the type of product design, processing system, inventory plan for
finished goods, etc. The product design has two varieties. They are:
 Customized product design
 Standard product design
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• Facilities for production and services: Certain specialization in production allows the
firm to provide the customers with products of lower cost, faster delivery, on-time
delivery, high product quality, and flexibility.
• Product or service design and development: The stages followed in developing a
product are:
 Generating the idea
 Creating the feasibility reports
 Designing the prototype and testing
 Preparing a production model
 Evaluating the economies of scale for production
• Technology selection and process development: A product selected for production will
be analyzed for the process and the applicable technology for optimal production.
• Allocation of resources: The production units face continuous problems of allocating
the scarce resources like capital, machines, equipments, materials, manpower, services,
etc. Allocation at the right time to the right place of production indicates the efficiency
of the production planners.
• Facility, capacity, and layout planning: The location, layout, and facilities creation for
the production are the key decision areas for the operations manager. These are critical
for achieving the competitiveness.
Q.2 Answer the following questions:
a. What is location decision sequence?
b. Which general factors influence the plant location decision?
Answer:
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a. Give the brief explanation of location decision sequence:
Location decisions start from the national level, and move to the site level after moving through
regional level and the community level. This means that, first the country of choice is to be
selected, followed by regional choices and finally community levels have to be selected.
b. List the eight general factors influence the plant location decision:
Briefly explain each factor that influences the plant location decision:
The general factors that influence the plant location are listed as follows:
• Availability of land – Availability of land plays an important role in determining the plant
location. On several occasions, our plans, calculations and forecasts suggest a particular
area as the best to start an organization.
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• Availability of inputs – While choosing a plant location, it is very important for the
organization to get the labor at the right time and good quality raw materials. The plant
should be located:
 Near to the raw material source
 At the market place
 Close to the market when universally available, so as to minimize the transportation
cost
• Closeness to market places – Organizations can choose to locate the plant near to the
customers’ market or far from them, depending upon the product they produce. It is
advisable to locate the plant near to the market place, when:
 The projected life of the product is low
 The transportation cost is high
• Communication facilities – Communication facility is also an important factor which
influences the location of a plant. Regions with good communication facilities namely postal
and telecommunication links should be given priority for the selection of sites.
• Infrastructure – Infrastructure plays a prominent role in deciding the location. The basic
infrastructure needed in any organization are:
 Power – For example, industries which run day and night require continuous power
supply. So, they should be located near the power stations and should ensure
continuous power supply throughout the year.
 Water – For example, process industries such as, paper, chemical, and cement, require
continuous water supply in large amount. So, such process industries need to be located
near the source of water supply.
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• Transport – Transport facility is a must for facility location and layout of location of the
plant. Timely supply of raw materials to the company and supply of finished goods to the
customers is an important factor.
• Government support – The factors that demand additional attention for plant location are
the policies of the state governments and local bodies concerning labor laws, building
codes, and safety.
• Housing and recreation – Housing and recreation factors also influence the plant location.
Locating a plant with or near to the facilities of good schools, housing and recreation for
employees will have a greater impact on the organization.
Q.3 Write short notes on:
• Pareto analysis
• Acceptance sampling
• Juran’s quality trilogy
• Taguchi’s quality loss function
Answer:
 Pareto analysis:
Pareto analysis is a tool for classifying problem areas according to the degree of importance
and attending to the most important ones. Pareto principle, verbally stated as “vital few; trivial
many” is also called as 80-20 rule, because it is observed that 80 percent of the problems that
we encounter arise out of 20 percent of items. For example, if we find that, in a day, we have
184 assemblies having problems and there are 11 possible causes, it is observed that 80
percent of them, that is, 147 of them have been caused by just 2 or 3 of them. It will be easy to
focus on these 2 or 3 and reduce the number of defects to a great extent.
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 Acceptance sampling:
Acceptance sampling is also known as end of line inspection and categorizing the products
based on sample based inspection. In acceptance sampling method of quality control, the
supplier and customer agree upon accepting a lot, by inspecting a small number taken
randomly from the bulk supply. Out of the sample, if a small number as agreed upon by the
parties or as validated by a sampling scheme, is determined as defective, the lot is accepted. If
the number of defectives is more than the agreed size, the entire lot is rejected. Obviously, risks
for the producer and buyer exist. As the sample size increases and the number of acceptable
defectives decreases, the risk for the buyer decreases.
 Juran’s quality trilogy:
Joseph Juran like Edward Deming is considered as a legendary quality guru and is also regarded
as a proponent in spreading total quality management culture. According to Juran, the
definition of quality is “Fitness for use” and is considered as most adequate. Juran uses his
famous universal breakthrough sequence to implement quality programmes. The universal
breakthrough sequences are:
• Proof of need – There should be a compelling need to make changes.
• Project identification – Here what is to be changed is identified. Specific projects with
time frames and the resource allocation are decided.
• Diagnostic journey – Each team will determine whether the problems result from
systemic causes or are random or are deliberately caused. Root causes are ascertained
with utmost certainty.
 Taguchi’s quality loss function:
Genichi Taguchi is a Japanese quality guru and unlike other experts sees quality from a
perspective of loss. Taguchi’s contention is that quality comes from design. He advocated a
wide use of design of experiments for experimentation on variables and obtains specifications
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which will result in high quality of the product. It helps in bringing cost effective improvements
in quality. The loss caused is the square of the deviation multiplied by a cost constant.
Where,
L = Total loss
C= Cost constant
X = Average value of the quality characteristic
T = Target value of the characteristic
Q.4 Answer the following questions:
a. Define project management.
b. What are the major characteristics of a project mindset?
c. What are the advantages of Gantt chart?
Q.5 Answer the following questions:
a. What are the steps involved in developing an aggregate plan?
b. Explain the various types of pure strategies used in aggregate planning.
Q.6 Answer the following questions:
a. Explain the classification of scheduling strategies.
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b. List the distinctive differences between the scheduling followed for manufacturing
and services
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