Production and Operations Management-1

Assignment – A

1. Discuss the changing philosophy of operations management. What are the new trends in operations management?

2. What is the difference in strategy in developing an initial layout for a new facility as compared to the strategy in improving the layout of an existing facility?

3. Discuss the various factors to be considered to decide the location of a cement plant? How do the factors differ in case of a nuclear plant?

4. Write short notes on:

[a] Capacity requirement plans

[b] Rough cut capacity plans

[c] Resource requirement plans

5. Actual demand differs from forecasted demand. How to adjust the aggregate plan to meet this situation?

Assignment – B

Q1. Why is materials planning needed? Discuss the various aspects of materials planning. Which other departments contribute to materials planning and in what way?

Q2. What do you understand by the term corrective maintenance? In what way is corrective maintenance different from preventive maintenance and predictive maintenance? Support your answer with examples.

Q3. What do you understand by ‘Total quality Management’? Discuss the objectives of total quality management. In what way the approach to Total Quality Management has changed over the last ten years?

Case study

Paradise Land Management Company

Paradise Land Management owns and operates hotels and apartment complexes near a major metropolitan area. They want to expand operations in the near future, the goal being to increase net earnings before taxes. Two alternative expansion opportunities are under considerations: the Densmore complex and the Highgate project. Both projects involve the purchase of land on which apartment building would be constructed and operated.

The site for the Densmore complex is situated in a respectable, quite, sparsely populated residential neighborhood. Land for the 70-unit complex can be purchased for $60,000. Building costs are estimated at $1,680,000. Anuual maintenance costs would amount to $30,000. Apartment units would rent for $410 per month. Paradise is also conidering constructing a recreation facility nearby. It would cost $100,000 and would service both Densmore residents and the residents of the company owned Paradise west, the only existing apartment complex in the neighborhood. Paradise west, with 120 units renting for $290 per month, has had an average occupancy rate of 84% for the past three years. The addition of Densmore and the recreation facility are expected to increase Paradise West’s occupancy rate to 90% (probability 0.6) or 95% (probability 0.4). Densmore’s occupancy rate is expected to be 90% (probability 0.5), 85% (probability 0.3), or 80% (probability 0.2).

The highgate project calls for 400 units to be constructed on land costing $220,000 in a high density population neighborhood with many competing apartments. Building costs would be $4,200,000. Rental revenue per unit would be $240 per month; anuual operating costs would be $150,000. Highgate’s occupancy rate is expected to be 90% (probability 0.2), 80% (probability 0.5), or 70% (probability 0.3).

Q) What factors should be analyzed in making this capacity decision?

Assignment – C

1. Which of the following methods best considers intangible costs related to a location decision?

a) Weighted method

b) Location break-even analysis

c) Transportation method

d) Assignment method

e) None of the above

2. What is the major difference in focus between location decisions in the service sector and in the
manufacturing sector?

a) There is no difference in focus

b) The focus in manufacturing is revenue maximization, while the focus in service is cost minimization

c) The focus in service is revenue maximization, while the focus in manufacturing is cost minimization

d) The focus in manufacturing is on raw materials, while the focus in service is on labour

3. Service / retail / professional location analysis typically has a:

a) Cost focus

b) Revenue focus

c) Labor focus

d) Environmental focus

4. Efficiency is calculated as:

a) Efficiency= Standard time * Actual time

b) Efficiency= Standard time/ Actual time

c) Efficiency= Actual time/ standard time

d) None of the above

5. The factors involved in location decisions include

a) Foreign exchange

b) Attitudes

c) Labor productivity

d) All of the above

e) None of the above

6. Industrial location analysis typically has a

a) Cost focus

b) Revenue focus

c) Labor focus

d) Environmental focus

7. Hotel chain find regression analysis useful in site location
a)True

b)False

8. The telemarketing industry seeks locations that have

a) Good electronic movement of data

b) Low cost labour

c) Adequate availability of labour

d) All of the above

9. Factors affecting location decisions include

a) Proximity to markets, proximity to suppliers, proximity to athletic facilities

b) Site costs, transportation availability, labour availability

c) Average age of labour force, labour costs, and number of females in college

d) Utility costs, zoning, altitude of city

e) All of the above

10. An aggregate plan for a manufacturing firm includes consideration of:

a) Production rates

b) work-force levels

c) Inventory holdings

11. A service firm’s aggregate plan links the firm’s strategic goals and objectives with detailed operational
plans called:

a) Production plan

b) Staffing plan

c) Work-force schedule

d) None of the above

12. Utilization is calculated as:

a) Utilization = Actual hours*Scheduled available hours

b) Utilization = Actual hours/ Scheduled available hours

c) Utilization = Actual hours+Scheduled available hours

d) None of the above

13. Which of the following statements does NOT apply to a production plan?

a) Plans are consistent with company’s strategic goals and objectives

b) Enables the assessment of financial and physical resource needs without excessive detail

c) Serves as a bridge between the strategic and operational plans

d) Provides a view of detailed work-force schedules

14. The time horizon for an aggregate plan is typically:

a) 0 – 3 months

b) 3 -18 months

c) 24 – 60 months

d) None of the above

15. A for-profit service may expect to encounter which of the following sequence of plans?

a) Business plan; staffing plan; work-force schedule

b) Business plan; production plan; work-force schedule

c) Financial plan; staffing plan; master production schedule

d) Annual plan; production plan; master production schedule

16. The operations area input to the aggregate plan includes:

a) Demand forecasts

b) Cost data

c) work-force capacities

d) Product design changes

17. Aggressive alternatives for coping with demand requirements include:

a) Anticipation inventory

b) Creative pricing

c) Employee hiring and layoffs

d) Use of subcontractors

18. A reactive strategy that is sometimes called the capacity strategy may be characterized as:
a)Chase #1: vary work-force level to match demand

b) Chase #2: vary output rate to match demand

c) Level #1: constant work-force level d)Level #2: constant output rate

19. Planned capacity is:

a) Planned capacity = Demonstrated capacity * Efficiency * Utilization factor

b) Planned capacity = Designed capacity * Efficiency / Utilization factor

c) Planned capacity = Designed capacity * Efficiency * Utilization factor

d) None of the above

20. The aggregate planning strategy that is most likely to impact the productivity of manufacturing workers,
adversely, is:

a) Hiring of temporary workers

b) Use of overtime

c) Layoff of workers

d) Building anticipation inventory

21. A linear programming model CANNOT be used when which of the following are true?

a) An optimal production plan is desired

b) The values of decision variables are fractional

c) A set of linear constraints may be defined

d) Cross product relationships exist between two or more decision variables

22. Basic element of operations Management is:

a) Customer demand

b) Operating system/Process

c) Process capacity

d) All of the above

23. The transportation method may be used to determine the costs of alternative strategies for anticipation
inventory when which of the following data are available?

a) work-force capacity per planning period

b) Aggregate demand per planning period

c) Beginning inventory

d) All of the above

24. Which of the following statements are true about anticipation inventory?

a) Inventory increases during periods of light demand

b) Use of anticipation inventory is a reactive alternative to arrive at an acceptable aggregate plan

c) Increase in anticipation inventory leads to increases in pipeline inventory

d) Both a and b

25. When following a utilization strategy, which alternative relies on external sources of production?

a) Overtime/undertime

b) Subcontracting

c) Back orders

d) Stock outs

26.A major department store initiates a business plan that gets translated into an operational plan called a

a) Production plan

b) Staffing plan

c) Master production schedule

d) Work-force schedule

27.An appliance manufacturer initiates a business plan that gets translated into an operational plan called a

a) Production plan

b) Staffing plan

c) Master production schedule

d) Work-force schedule

28. Which one is not a factor for make or buy decisions:

a) Cost

b) Quality

c) Labor

d) Plant location

29. Which one is correct?

a) Designed capacity > Planned capacity > Demonstrated capacity

b) Designed capacity > Demonstrated capacity > Planned capacity

c) Designed capacity = Demonstrated capacity > Planned capacity

d) All of the above

30. Plant Productivity is:

a) Productivity = Inputs/Outputs

b) Productivity = lnputs*Outputs

c) Productivity = Outputs//lnputs

d) None of the above

31.A service encounter includes

a) Face-to-face interaction

b) Customers and a building

c) Customers and advertising

d) All of the above

32. Which function typically employs more people than any other functional area?

a) Information Systems

b) Finance

c) Operations

d) Marketing

33. The inputs to a transformation process include all of the following except

a) Materials

b) People

c) Assembly

d) Information

34. An assembly line is an example of

a) A product layout

b) A process layout

c) A fixed position layout

d) An intermittent organization

35. Which of the following characteristics is most typical of a continuous manufacturing organization?

a) The firm manufactures customized product.

b) The firm has a low volume of production

c) The firm has a relatively low unit cost of production

d) The firm creates many different products with many different characteristics

36. Which type of processing system tends to produce the most product variety?

a) Assembly

b) Job shop

c) Batch

d) Continuous