Unit 1: Material Management
Q1. Discuss various areas of material management?
Q2. What are various objectives of material management?
Q3. What is the concept of integrated material management?
Q4. “Integrated material management serves many aims” discuss.
Q5. “Integrated material management is very advantageous to an organization.” Explain.
Q6. Differentiate between conventional and modern approaches of organization structure
of material management.
Q7. What are various problems in material management?
Q8. Discuss very problems related to procurement of materials.
Q9. What are the various activities included in material management?
Q10. Discuss various costs involved in management of materials.
Q11. How departmental relationships affect materials management?
Q12. How integrated material management is different from material management?
Unit 2: Material Handling
Q1. Is material planning a part of production planning?
Q2. Why material planning is needed?
Q3. Discuss various factors that affects material planning.
Q4. Discuss various techniques of material planning.
Q5. What is a material budget?
Q6. Which factors govern the drawing up of material budget?
Q7. How materials are classified?
Q8. How important is the material identification?
Q9. Why codification is necessary?
Q10. Discuss merits and demerits of material codification.
Q11. Discuss various codification systems with examples.
Q12. Discuss various standards.
Q13. What are the aims of standardization?
Q14. What factors must be taken into account while deciding upon a proper stores
layout?
Q15. Write material handling equipment used in :
a) Chemical plant
b) Steel plant
c) Oil exploration unit
d) Cement plant
e) Milk dairy
Q16. What are planning principles of material handling?
Q17. What are operating principles of material handling?
Q18. What are costing principles of material handling?
Q19. On what basis material handling equipment are classified?
Q20. Discuss various principles of material handling?
Q21. Differentiate in ABC and VAD classification of materials.
Unit 3: Inventory Management
Q1. How will you control the inventories of a manufacturing organization? Discuss the
various inventory costs.
Q2. Explain the following terms:
a) carrying cost
b) shortage cost
Q3. Write short note on following:
a) necessity for inventory control
b) function performed by inventory
c) inventory cost and their components
Q4. Most of the businessman view inventory as a necessary evil. Do you agree with this?
Explain.
Q5. A certain item cost Rs,235 per ton. The monthly requirement is 5 tons and each time
the stock is replenished, there is a set up cost of Rs.1000. the cost of carrying of inventory
has been estimated at 10% of value of the stock per year. What is the optimal order
quantity?
Q6. The XYZ manufacturing company has determined, from an analysis of its accounting
and production data for part no. 625, that its cost to purchase is Rs.36 per order and Rs. 2
per part. Its inventory carrying charges are 18% of the average inventory. The demand for
this part is 10000 units per annum. Find
a) EOQ
b) What is the optimal no. of days supply per optimum order?
Q7. consider the inventory system with the following data in usual notations: R=1000
unit/year, I=.30, P= Re.50 per unit, C3 = Rs.10, L= 2 year and C1=IP, determine
a) optimal order quantity
b) reorder point
c) minimum average cost
Q8. A motor co. purchases 9000 motor spare parts for its annual requirement, ordering
one month usage at a time. Each spare parts cost Rs. 20. the ordering cost per order is
rs.15 and carrying charges are 15% of average inventory per year.
You have been asked to suggest more economical purchasing policy for the company.
What advice would you offer and how much would it save the company per year.
Q9. A company uses 1200 unit per month of an electronic component each costing Rs. 2.
Placing each order cost Rs.50 and the carrying cost is 6% per year of average inventory.
a) EOQ
b) If the company gets 5% discount on single order should it accept the discount
offer?
c) Find the discount percentage which matches EOQ ordering for a single order.
Q10. In a warehouse the independent demand for a commonly used bolt is 500 unit per
month. The ordering cost is Rs. 30 per order placed. The carrying cost is 25% per year
and each bolt cost 50 paise.
i)
Calculate the lot size for this product. State assumptions made in using
formula
ii)
How often is this product to be purchased?
iii)
If ordering cost is reduced to Rs.5 per order, how will it change lot size and
frequency of purchasing?
Q11. A company works 50 weeks in a year. For a certain part included in the assembly of
several parts there is an annual demand of 10000 units. This part may be available for
either an outside supplier or a subsidiary company. The following data relating to the
parts are given:
From outside supplier (Rs)
Purchase price per unit
Cost of placing an order
Cost of receiving an order
Storage and all carrying
cost, including capital cost
per unit per year
i)
ii)
12
10
20
2
From subsidiary company
(Rs)
13
10
15
2
What purchase quantity from which source would you recommend?
What would be the minimum total cost?
Q12a. What are the different costs associated with inventory control system? How are
they obtained? Give both the analytical and graphical method of determining EOQ.
b. for one of the bought item, the following are the relevant data?
Ordering cost = Rs.500, holding cost = 40%
Cost per item =Rs.100, annual demand =1000
The purchase manager placed 5 order of equal quantity in one year in order to avail the
discount of 5% on cost of the item. Work out the gains or loss to the organization due to
his ordering policy for this item.
Q13. The inventory company after an analysis of its accounting and production records
has determine that it uses Rs. 36000 per year of a component part purchased at rs.18 per
part. The purchase cost is Rs.40 per order. And its annual inventory carrying charges are
50/3% of the average inventory.
a)
b)
c)
d)
Determine the most EOQ to order at one time
Determine the most EOQ of time to order per year
Determine the average days supply for ordering the most EOQ
Determine the optimum amount of Rs.Worth of unit per order.
Q14. A contractor has to supply 10000 bearing per day to an automobile manufacturer.
He finds that when he starts a production run, he can produce 25000 bearing per day. The
cost of holding a bearing in stock for one year is 2 paise and the set up cost of a
production run is Rs.18. what is the optimum lot size and how frequently should
production run be made?
Q15. A product is produced 50 items per day. The demand occurs at the rate of 30items
per day. Given the set up cost per order = Rs. 100 and holding cost per unit time =
Re.0.05, find the economic lot size and the associated total cost per cycle assuming that
no shortage is allowed.
Q16. A company manufactures refrigeration units in batches. The estimated demand is
10000 units/year. It cost Rs.100 to set up the manufacturing process and the carrying cost
is Re. 0.50 per unit per year. Once the production process has been set up, 80 units can be
manufactured daily. The demand during the production day has been 60 units per day.
How many units should the company produce in each batch? How long will the
production cycle last?
Q17. the manager of the company manufacturing car parts has entered into a contract of
supplying 1000 nos. per day of a particular part to a car manufacturer. He finds that his
plant has a capacity of producing 2000 nos. per day of part. The cost of the part is Rs.50,
cost of holding stock is 12% per annum and setup cost per production run is Rs.100. what
should be the run size for each production run and total optimum cost/month. How
frequently should production runs be made? Shortage is not permissible.
Q18. A contractor undertakes to supply diesel engines to a truck manufacturer @ 25/day.
He finds that cost of holding a completed engine in stock is Rs.16 per month, and there is
a clause in the contract penalizing him Rs.10 per engine per day late for missing the
schedule delivery date. Production of engines is in batches, and each time a new batch is
started there are setup cost of Rs.10000. how frequently should batches be started, and
what should be the initial inventory level at the time batch is completed?
Q19. Describe decision rules for a purchase inventory model with three price breaks.
Q20. A manufacturer of engines is required to purchase 2400 casting per year. This
requirement is assumed to be fixed and known. The manufacturer is given a lower price
for quantity purchased within certain ranges. The problem is to determine the optimal
purchase quantity.
The following data are given:
Time period T = 12 months
Total demand R= 2400 units.
I =2%
Set up cost per procurement, C3 = Rs.350
K11 = Rs.10
0≤q≤500
K12 = Rs. 9.25
q≥500
Q21. the demand for a product is 2400 units over 360 days. The storage cost is 0.06% of
unit cost of the product and ordering cost is Rs. 35000. find the optimal order quantity if
the price breaks are as follows:
Quantity range
purchasing cost(Rs)
0≤q≤1000
1000
1000≤q≤4000
925
4000≤q
850
Q22. A manufacturer’s requirement for an item is 2000 per unit per year. Ordering cost
are Rs.100 per order and inventory cost are 16% per year per unit of average inventory.
calculate the EOQ. If the price quoted is Rs.10 each for quantity below 1000 units.
Rs.9.50 for quantities between 1000 and below 2000 and Rs.9.30 for lot of 2000 or more,
compute total ordering cost when ordering in lot of (i) 500 (ii) 1000 (iii) 2000 units
Q23. Assume that the following quantity discount schedule for a particular bearing is
available to a retail store:
Order size (units)
Discount
0-49
0%
50-99
5%
100-199
10%
200 and above
12%
The cost of single bearing with no discount is Rs. 30. the annual demand is 250 units.
Ordering cost is Rs. 20 per order and annual inventory carrying cost is Rs. 4 per unit.
Determibe the optimal order quantity and associated minimal total cost of inventory and
purchasing cost. If shortage are not allowed.
Q24. A hardware store procures and sells hardware items. Following information is
available:
Expected annual sales
Ordering cost
Holding cost
8000 units
Rs. 180 per order
10% of the average inventory value
The items can be purchased according to the following schedule:
Lot size
1-999
1000-1499
1500-1999
2000 or above
Determine the best order size.
Unit price (rs)
22.00
20.00
19.00
18.50
Q25. A company is requiring 1000 units of raw material per month. The ordering cost is
Rs. 15 per order. The carrying cost in addition to Rs. 2 per unit is estimated to be 15% of
average inventory per unit per year. The purchase price of raw material is Rs.100 per
unit. Find the economic lot size and the total cost. The company gets concession of 5%
on purchase price if it orders 2000 units or more but less than 5000 units. Orders of 5000
units or above get 2% commission in addition to 5%. Which of three ways of order the
company should adopt?
Unit-4: Understanding Operations
Q1. What do you understand by term operation management?
Q2. What are the major operations management issues that manufacturing organizations
face in the country?
Q3. How do you define a service system? Give some examples to support your definition.
Q4. How important is it to apply formal management principles to service operations?
Q5. There is nothing like a service system or a manufacturing system, in reality there is a
continuum between these two extremes. Comment on this statement.
Q6. Services are very different from manufacturing. Therefore it is not appropriate to use
the same sets of principles for managing the operations in manufacturing and service
organizations. Comment on this statement.
Q7. What is the role of the operations in an organization? What are the other functions in
an organization? Are these functions are independent of one another? Give some
examples to support your argument
Q8. Distinguish between the following:
a) service and product attributes
b) manufacturing and service organization
c) design and operational control functions in operation
d) long term and short term function in operation
Q9. What are the various functions of operations and how are they linked to other parts of
the organization?
Q10. How will economic liberalization measures influence operations management
practice?
Q11. manufacturing usually takes place in factories. Does the term operations mgmt also
apply to non manufacturing activities? If so why?
Unit-5: Designing Operations
Q1. What are key determinants of process characteristics in operations? Give specific
examples to show how they influence process characteristics?
Q2. Is there any relationship between volume, variety and flow with respected to process
design?
Q3. How is the continuous flow system different from the intermittent flow system?
What are the key implications for operations managers?
Q4. Give three examples for each of following and identify two important issues of
interest to an operation manager:
a)
b)
c)
d)
e)
f)
g)
mass production system
continuous flow system
flow shop
intermittent flow system
job shop
process industry
batch production system
Q5. As an operation manager, which area would you focus on if you were to manage a
jumbled flow process?
Q6. What are the key aspects of service process design? How is it different from
manufacturing process design?
Q7. Is it important to have a good product development process? What do firm gain from
this?
Q8. Briefly sketch the product development process?.
Q9. Why is a product development process analogously linked to a funnel with stages
and gates?
Q10. What do you mean by quality function deployment? Of what use is it to the product
development process?
Q11. What is the relevance of mass customization principles to the product development
process? What are the alternatives available to a firm to enable itself for mass
customization?
Q12. How important is location decision in operation management? What are the
consequences of a bad location decision?
Q13. Will the choice of the factor for selecting an appropriate location vary with the
geographical spread of potential candidates for location? Why?
Q14. Identify three important factors that a location planner may consider with respect to
each of the following:
a)
b)
c)
d)
e)
a super specialty intensive care unit
a thermal power plant operating with coal as its fuel
a state of the art design centre for automatic manufacturing
a multi cuisine restaurant
an agro based handicraft manufacturing unit
Q15. What are the pros and cons of using the location factor analysis method for location
planning? Do you have any recommendation on how to use this method for location
planning?
Q16. A manager intending to use the location planning model for analysis is not clear as
to which of two models-centre of gravity method and load distance method –should be
used for his analysis. Prepare a one page note that will help him identify an apporiate
model for his consideration.
Q17. A firm is considering three alternative locations. Each of these location provides
some advantages and some limitations. Therefore it is necessary that some method of
assessing the attractiveness of each site be arrived at. Based on the survey of its top
mgmt, the company has identified seven factors that will determine the appropriateness
of site for setting up the new factory. These factors and scores out of 100 for each of
them are tabulated below:
SI. no.
1
2
3
4
5
6
7
Factors for consideration
Nearness to port
Existence for supplier
infrastructure
Availability of skilled
worker
Govt. policies and local
taxes
Projected cost of operations
Quality of road
infrastructure
Availability of educational
infrastructure
Score (out of 100)
80
70
90
50
60
70
40
The company collected some data pertaining to each site that it is considering and based
on some criteria was able to arrive at how each site rates against a score of 100 against
each factor. In some cases actual data was estimated on the basis of some projections.
The table below has details pertaining to these:
SI. no.
1
2
3
4
5
6
7
Factors for
consideration
Nearness to port
Existence for
supplier
infrastructure
Availability of
skilled worker
Govt. policies and
local taxes
Projected cost of
operations
Quality of road
infrastructure
Availability of
educational
infrastructure
Site 1
Site 2
Site3
Basis
70 kms
130 kms
95 kms
60
80
85
Actual
data
Score out
of 100
50
70
85
70
45
60
Rs.200
80
Lacs
Rs.180
90
Lacs
Rs.170
70
60
80
80
Score out
of 100
Score out
of 100
Actual
data
Score out
of 100
Score out
of 100
Identify the most appropriate site for locating the new factory on the basis of the above
information.
Q18. A chain of stores trading in host of retail goods for urban customers is planning to
set up operations in one of the metro cities in the country. The exact location for the new
outlet is to be decided. In order to do that the company conducted a market survey and
found five pockets of consumption in metro. The distance coordinates of these five
pockets from a reference point in grid map pertaining to the city are as follows:
Zone 1 (15,22), zone 2 (10,40), zone 3 (35,15), zone 4 (50,5), zone 5 (40,35). The
annual demand for goods (in tones) in five zones is 200,130, 80,170,120 respectively.
a) What is the centre for gravity for setting up the operation in the city?
b) If the cost of transporting the goods is Rs.300 per tonne, what is the cost
implication of locating the stores in centre of gravity?
Q19. The chain stores officials found that locating the operations in centre of gravity
point, as obtained in above problem, cost them a lot. The operational cost of renting and
maintaining the site will be Rs.25 lacs per annum. In view of this they are now
considering other options. They have identified three other candidate locations whose
cost of operation will be less than the centre of gravity location by 10%,25% and 18%
respectively. The location coordinators for these three are (20,40) (40,25) (35,45)
respectively. What should the chain store do in this case? Does it make sense to set up
operation in any of these to set up operation in any of these three alternative locations?
Q20. How does the choice of the layout affect the operational performance of an
organization?
Q21. What is the relationship between the volume, variety and flow characteristics of an
operating firm and its layout?
Q22. What are the different types of layout? How should an organization decide on
which layout to choose?
Q23. Is group technology layout any different from product layout? Give reasons for your
answers.
Q24. Identify an appropriate layout for each of following situation. Justify your choice.
A)
B)
C)
D)
a manufacturer of garment for Van Heusen
a multi cuisine restaurant in posh residential area in Mumbai
the overhaul of helicopter
an eye hospital
Q25. Suppose you are given three alternative designs for layout of a shop floor in
manufacturing organization, how will you decide which of these three is most
appropriate?
Q26. What do you understand from the phrase “cellular manufacturing system”?
Q27. Is layout design for service organization any different from that of a manufacturing
organization? Explain in detail.
Q28. in what ways can location decision have an impact on the production system?
Q29. in case you want to locate a modern sized hospital cum research and diagnostic
centre, what factor would you consider relevant in taking a location decision?
Q30. Location A would result in annual fixed cost of rs. 300000, variable cost of rs
68/unit. Annual fixed costs at location B are Rs.800000, variable cost are Rs.32/unit and
revenue are Rs.68/unit. Sales volume is estimated to be 25000 units/year. Which location
is most attractive?
Q31. Potential locations in Ahemdabad, Baroda and Chennai have the cost structure
shown in table below for a product expected to sell for Rs.130.
a) find the most economical locations for an expected volume of 6000 units per year.
b) What is the expected profit if the site selected in (a) used?
c) For what output range is each location best?
Potential location
Ahmedabad
Baroda
Chennai
Fixed cost per year
150000
200000
400000
Variable cost per unit
75
50
25
Q32. A firm is considering four alternative locations for a new plant. It has attempted to
study all cost at the various locations and finds that production cost of the following item
vary from one location to another. The firm will finance the new plant from bonds
bearing 10% interest.
Labour/ unit
Plant
construction
cost(million Rs)
Material and
equipment (per
unit)
Electricity (per
year)
Water (per
year)
Transportation
(per unit)
Taxes (per
year)
A
.75
4.60
B
1.10
3.90
C
.80
4.00
D
.90
4.80
.43
.60
.40
.55
30000
26000
30000
28000
7000
6000
7000
7000
0.02
.10
.10
0.05
33000
28000
63000
35000
This cost includes a projected depreciation expenses, but no interest cost.
Determine the most suitable location for output volumes in the range of 50000 to 130000
units per year.
Q33. A sight is sought for a temporary plant to supply cement to 4 existing sites F1, F2,
F3, F4. the location of the existing sites and the loads to be delivered to each are given
below:
Existing facility F1
F1
F2,
F3
F4
Annual loads Li
between Fi and new
plant
1505
1800
900
1000
Total 5205
Cost C1 to more one
load one distance
unit
Rs.1
1
1
1
Coordinate
locations(X i,Yi)
(X i,Yi)
(20,30)
(10,40)
(30,50)
(40,60)
Find the best site of the plant and total cost.
Q34. There are five existing facilities which are to be served by a single new facility. The
details of existing facilities are shown in the following table.
Existing
1
facility (i)
Coordinates 5,10
(ai, bi,)
No. of trips
100
of loads/year
(wi)
2
3
4
5
20,5
15,20
30,25
25,5
300
200
300
100
Find the optimum location of the new facility based on gravity location concept. If the
cost of transporting one load is Rs. 5 per unit distance, compute the total cost of
transportation.
Q35. Bigtown is trying to find the best location for a master solid waste disposal station.
At present, four substations are located at the following coordinates (x,y) locations:
station 1 (40,120), station 2 ( 65,40) , station 3 (110,90), station 4 (10,130). The no. of
loads hauled monthly to master station will be 300 from station 1 and 200 from station 2
and 350 from station 3 and 400 from station 4. use simple median model to find the best
locations.
Q36. Arvind paper products ltd has two plants located in Mumbai and Kolkata. These
plants distribute paper stocks to four major markets viz. Indore, Ahemdabad, Baroda and
Pune. Data on production capacities and wage rate are given in table along with location
coordinates.
Plants
Markets
Locations
Location coordinates
Mumbai
Kolkata
Indore
Ahemdabad
Baroda
Pune
X
58
80
30
90
127
65
Y
96
70
120
110
130
40
Capacity/usage
rates in tones
p.m
400
300
200
100
300
100
Company wishes to find some central location between the plants and customers to locate
the warehouse. Use centre of gravity method to decide.
Q37. srinath department stores has five location throughout the city. Its parent
corporation, consolidated retail, Inc.is investigating centralizing all distribution to these
stores. Their plans call for a central distribution centre to accept all incoming
merchandise. Process the necessary paperwork, and ship the goods to the individual
stores. Since the stores are of different sizes, the volume of merchandise differs. Srinath
owns its own fleet of trunk for distribution. On a grid superimposed over the city, the five
store locations and their monthly volumes are :
Stores
1
2
3
4
5
Coordinates
Y
1
18
9
22
8
X
4
3
9
10
17
Volume (1000 LBS)
30
40
70
30
20
Determine the approximate location for the distribution centre by finding the centre of
gravity.
Q38. A company is planning to set up a new plant. Following is a table showing
alternatives locations and respective costs. (in Rs.)
Cost locations
Transport, Rs. Per
unit of production
Power, Rs. Per
unit of production
Investment in
land *
Building
construction*
Equipment(capital
cost) Rs. Per unit
of production
volume
Location taxes,
etc. 20 lakh
Wages (average)
Rs. Per unit of
production
1
1.00
2
1.50
3
1.35
4
1.65
5
1.70
1.25
.65
1.05
1.20
0.75
50 lakh
35lakh
40 lakh
20 lakh
30 lakh
130lakh
110 lakh
120 lakh
70 lakh
100 lakh
2.50
2.80
2.00
3.00
4.50
10 lakh
8 lakh
12 lakh
9 lakh
1.40
1.40
0.90
0.80
0.90
* To be costed at 15% per annum.
If the volume of production is 500000 units, what is the preferred location? If the volume
is expanded to 700000 units would decision change?
If the locations are rated for some factors as given below, would earlier decision will
change? All factors are equally important.
Locations
1
2
3
4
5
Factor
industrial
relations
Excellent
Good
Ok
Ok
Excellent
Power
availability
Labour
climate
Ok
Good
Excellent
Ok
Good
Good
Ok
Good
Excellent
Excellent
Ok
Ok
Excellent
Excellent
Excellent
How were these factors quantified? Can Brown and Gibson method be used for this
location decision? Explain.
Q38. An industrialist faced with the choice among three possible locations has developed
the subjective factors which are given below:
Factor
City proximity
Industry relations
Environmental
advantage
State govt. support
Site 1
Good
Ok
Good
Site 2
Ok
Excellent
Excellent
Site 3
Ok
Good
Ok
Ok
Good
Excellent
Property comparisons:
Factor
City proximity
Industry relations
Environmental advantage
State govt. support
Relative weightage
1/6
0/6
2/6
3/6
The different costs are given below (in lakh of Rs.)
Transportation cost
Labour cost
Energy cost
Material cost
Site 1
165
354.5
231
495
Site 2
346.5
288.4
182.5
629.6
Site 3
231
255.5
197.1
766.5
The industrialist considers objective factors to be more important than the subjective
factors and allocated a weightage of 70% to the objective factors. Use brown and Gibson
method and suggest suitable sites.
Q39. A factory manager considering an interchange of department 3 and 6 in present
layout. The present layout and the interdepartmental material handling frequencies are
furnished in figure. All the departments are of same size and configuration.
1
2
3
4
5
6
Present layout
Weekly frequency of interdepartmental material handling.
From \to
1
2
3
4
5
6
1
2
0
3
90
70
4
160
0
20
5
50
100
0
180
6
0
130
0
10
40
The per unit length interdepartmental cost of material handling are equal. What is the
effect of the interchange of the departments 3 and 6 in layout?
Q40. given the following nearness diagram expressing the proximity requirements,
arrange the work centres into a suitable 2×3 grid.
A
B
C
D
E
F
B
I
C
U
U
D
A
E
X
E
E
E
I
O
F
X
I
E
U
U
Q41. find an improved layout for initial unit layout in fig. by using craft pairwise
exchange technique. The interdepartmental flows are also furnished alongwith the
interdepartmental cost matrix.
A
B
C
Cost matrix:
From\to
A
B
C
A
1
1
B
1
1
C
1
1
Flow matrix:
From\to
A
B
C
A
B
1
1
3
C
2
3
3
Distance matrix:
From\to
A
B
C
A
B
1
1
2
C
2
1ss
1
Q42. the layout of department A,B,C and D is shown in fig. the load summary or flow
matrix is shown below:
A
A
B
C
D
A
C
2
0
1
B
1
C
1
2
2
0
0
B
D
Use the craft pairwise exchange technique and get the final layout.
D
3
1
2
Unit 6a: Capacity Planning
Q1. How do you define capacity in an operating system? Are input measures of capacity
more appropriate than output measures of capacity?
Q2. Identify an appropriate measure of capacity in each of the following:
A)
B)
C)
D)
E)
a watch manufacturer such as titan
the paint shop at maruti udyog ltd
a healthcare hospital focused on cardiac diseases
Bangalore metropolitan transport corporation
The gear shop at Bharath earthmover’s KFG plant
Q3. What are alternative methods available for building up capacity in a system? Which
method is the most suited for implementation?
Q4. Is capacity management a short term or a long term issue? Explain with examples.
Q5. What are the implications of adding capacity in huge chunks at less frequent
intervals?
Q6. Why is capacity planning important? Outline the steps involved in a capacity
planning exercise.
Q7. What do you mean by waste elimination? Does it have any relevance for capacity
management?
Q8. What are the alternative methods by which capacity could be augmented in an
operating system? Explain with some examples? Are capacity management issues in a
service system different from those in a manufacturing system?
Q9. The manager of an automobile garage in the heart of the city of Delhi has built a
good reputation for himself and more customers throng his garage for getting their car
serviced. The utilization of the facility is now about 88%. He has been getting more and
more request for automobiles servicing. What would you advice the manager. Prepare a
one page report for the manager.
Q10. A manufacture of table fan has a factory that works on a single shift basis. A shift
lasts eight hours. But 30 minutes will be lost in normal breakage and allowances to be
given to the workers. There are 300 hundred working days in a year. There is a
fabrication shop, an assembly shop and a painting shop in factory. Each unit requires two
hour in fabrication shop and 45 minutes each in assembly and paint shops. The workers
are at 80% proficiency. Currently the shop is manufacturing 20000 fans per annum.
Using the above data compute the following:
A) If there are 24 workers in fabrication shop and 12 each in other two shops, what
will the utilization of the worker be at the current level of operation?
B) How many worker are required if the overall utilization of the factory is targeted
at 90%?
C) What is the additional no. of workers are required in each of the shops if the
annual production increases to 25000? (assume a targeted utilization of 80% in all
the shops)
11. An eye hospital conducting surgeries is now operating at a capacity of 20 surgeries a
day. On an average each surgery takes 45 minutes of the surgeon’s time, one hour of the
pre operative staff in hospital. A surgeon works for 4 hrs a day while the staff works for 8
hrs a day. The hospital currently estimates the surgeon works at utilization of 94% and
other staff at 85% utilization. The hospitals are planning to increase its capacity by 20%
and it has all other infrastructure facilities to handle this proposed capacity expansion.
What it needs to plan for its human resource required. During this expansion it also
proposes to bring down the utilization of surgeons to 85% and that of the other staff to
75%. The excess capacity will be used for training and development activities. If the cost
of locating new staff, training and inducting them into the hospital is Rs.20000 per person
and that of surgeon is Rs.80000. what will be the initial cost of expansion plan?
Unit 6b: Resource Planning
Q12. What do you mean by dependent demand and independent demand? Is knowledge
of this useful to an organization? If so, in what way is this information useful?
Q13. What is meant by bill of material (BOM)? Why does organization need BOM?
Q14. Suppose that an organization prepared an MRP on the basis of incorrect data on
lead time of the components. What will the impact of this be on the actual operations?
Q15. Identify the appropriate lot sizing rule for each of the components given below.
Justify your choice of the rule.
a) steel plates for manufacture of automobile doors
b) eye surgeon time (in hour) in an eye hospitals
c) bed linen for a five star hotel
d) packing carton for a manufacturer
e) sliced vegetables for use in 12 vegetarian dishes in a fast food joint
f) aircraft engines for Hindustan aeronautics ltd’s advance light helicopter
Q16. Omega a manufacturer of office aids, produces a desktop calendar unit a simple
process and the following components. The desktop calendar unit is basically assembled
using a base plate, a sliding unit and a calendar assembly. the sliding unit is made up of a
plastic tray and a set 30 cards to store telephone and address information. The sliding unit
is fixed to the base plate using a pair of 3mm screw. The calendar assembly is made up of
two U shaped hooks and a calendar (consisting of about 400 pages containing the daily
calendar details). The calendar assembly is fixed to the base plate by clamping the U
shaped hooks using a pair of 3mm screw each.
Each base plate is made of plastic sheets and require 150 square inches of plastic sheets.
Similarly the sliding unit is also made of the same plastic and requires 30 square inches
of plastic sheets. Each U shaped hooks is made from 7 inches of 4mm steel rod. The
calendar is bought directly from supplier. Finally the product is packed in a specially
made carton box and sealed using 12 inches of tape. There are also four bar coded labels
to stuck to each carton box after it is sealed. This makes it to be a packaged calendar
ready for shipping.
a) develop a product structure for desk calendar unit
b) using the above information prepare a BOM for desktop calendar unit
Q17. A gearbox manufacture has 20 gearbox in stock. Each gearbox has four gears.
There are 200 gears already in stock. The gears are made from gear blank. The stock of
gear blanks in stores is 100. each gear blank requires 30 kg of alloy steel.the stores have
7000kg of alloy steel. Compute the requirement of components for manufacturing 570
gearboxes in the next month.
Q18. Consider the product structure given below pertaining to a product manufactured by
oriental housing and seals. the number in paraentheses in the figure indicate the number
of unit of the item required to assemble one unit of its parent. Use the information
available in product structure to answer the question below:
A
D(3)
B(2)
E(2)
C(2)
C(4)
a) how many units of C are required to manufacture one unit of product A? did you
make any assumption in computing this value?
b) How much inventory of each component is required for satisfying a demand of
100 unit of final product if (i) there is no stock of finished good (ii) there is a
stock of 30 units of final product?
Q19. In the above question, if lead time for manufacturing/assembly of the
components is as follows:
Product A- 2 week
Component B- 1 week
Component C- 2 week
Component D- 2 week
Component E- 1 week
a) how early can oriental deliver an order of 100 units of product to the customer if
(i) there is no stock of item B
(ii) there is stock of 220 unit of B.
b) willl the result change if there is stock of product A?
Q20. Given below is partially completed MRP working for component X. using the
information provided, complete the table.
Component X
BOM qty
0
Gross
requirement
On hand
300
inventory
Net
requirement
Planned
receipt
Planned
order
release
Lot size
Lead time
1
1
200
2
150
3
100
4
200
2 periods
1
5
120
6
200
Q21. Consider component XX, for which the MRP exercise needs to be done. The relvant
information pertaining to the component has been extracted from the company records
and reproduced below. Currently no decision has been made about the lot size rule.
Company estimates suggest that the cost of carrying inventory Rs. 10 per unit period and
the cost of scheduling an order is Rs.500 per order. The EOQ is 150 units.
Component XX
BOM qty
0
Gross
requirement
On hand
600
inventory
Net
requirement
Planned
receipt
Planned
order
release
Lot size
Lead time
1
1
200
2
350
3
400
4
200
???
1
5
450
6
200
Use this information to analyze following 5 lot size rule and suggest an appropriate lot
sizing rule for the component.
a) lot for lot
b) POQ periods
c) POQ based on the EOQ
d) FOQ=500
e) FOQ=500
Q22. consider the following product structure of a manufacturing firm. The company is
interested in performing an MRP exercise for next eight weeks to cover the requirement
indicated in the MPS. The MPS requirement for the next eight weeks is
20,80,100,200,100,0,120 and 150.
A
C(2)
B(2)
D(3)
E(2)
E(2)
F(2)
F(2)
The relevant information on lead time, inventory status and lot sizing are available in the
table below. Develop the MRP schedule for the final product as well as for all the
components and answer the following question:
Item
Lead time (weeks) z Inventory status
Lot sizing rule
A
1
100
Lot for lot
B
2
200
Lot for lot
C
1
400
2 period
D
2
1000
3 period
E
2
2000
2 period
F
2
1200
500
G
1
2000
1000
a) do we need a schedule order release for component B? if so, when and how
much?
b) How long will the on hand inventory of item D satisfy the requirement?
c) How many order need to be placed for component F?
d) If the cost of scheduling an order is Rs.2000. what is the total cost of ordering for
the MRP plan?
Q23. given below is the product structure pertaining to a manufacturing firm. In addition
to the final product A, component B is sold as a spare in the market. The MPS for product
A and component B and other relevant information for the problem are given in table
below:
A
D(4)
B(2)
C(3)
G(2)
E(2)
Period
1
Product A 100
Component 40
B
Item
A
B
C
D
E
F
G
F(2)
D(2)
2
80
30
3
220
70
Lead time (weeks)
2
2
1
2
1
2
1
4
140
Inventory status
200
900
750
2500
300
1000
600
5
70
60
6
160
50
Lot sizing rule
Lot for lot
Lot for lot
Lot for lot
2period
3period
500
1000
Perform an MRP exercise to cover the requirement of MPS and answer the following:
a) What is the gross requirement for Component B during six periods?
b) How many order do we have to place for component C and in what quantities?
c) Suppose the lead time for component G is two weeks instead of one week, what
will its impact on planning process?
d) Suppose the EOQ for component c is 320 units. What will the appropriate POQ
lot size rule be for component C?
Q23. discuss the various approaches to define capacity. How do they differ?
Q24. what is capacity planning? How is capacity measured?
Q25. “establishing the minimum capacity and managing with alternative sources like
overtime additional shift and subcontracting is always a low risk strategy.” Comment.
Q26. what is learning curve? And how it can be used in POM?
Q27. explain various element required for success of a MRP system.
Q28. Outline the purpose of MRP and explain how an MRP system can achieve those
purpose?
Q29. production of a certain type of television series programme follows an 80%
learning curve and requires 100 hours to complete the first unit. Estimate the time
required for fourth unit of the series.
Q30. the operation manager of the business resort international is preparing a budget
for the labour cost required to handle several major conventions of the same type
during the coming year. She estimated that the first one will take 300 labour hours at
$ 25 per hour. Assuming that work follows a 78% learning curve, what is the firm’s
estimated labour cost for the eight conventions?
Q31. reliance appliance co. has a new facility for producing home freezers. The firm
has gone through a preliminary manufacturing period and believes it is experiencing
an 88% learning curve. The 200th unit has required 1.40 labour hours for an assembly
activity. Estimate comparable time for (a) 100th unit (b) the 500th unit and (c) 5000th
unit.
Q32. A firm, does control panel wiring for solid fueled rocket engines. The firm is
currently preparing delivery estimates for govt. contract for 80 panels. The first unit is
expected to take 200 worker-hour and the firm usually experiences an 84% learning
curvefor this type of work.
a) what average time per unit can be expected for the first three units?
b) How many worker-hours should be scheduled for the 40th unit?
Q33. telecom produces a new telephone system with built in TV screens. Its learning rate
is 80%.
a) how long does it take telecom to make the 11th system when the first one took 56
hours?
b) How long will the first eleven systems take in total?
c) As a new purchasing agent, you expect to buy unit 12 through 15 of the new
phone system. What would be your expected cost for the unit if telecom charges
Rs. 30 for each labour hour?
Q34. A manufacture has committed to supply 10 units of a particular product. The first
unit took 100 hours to produce. The manufacturer wants to know.
i)
time to make the 10th unit
ii)
time to make all the 10 units
iii)
total labour cost if the labour rate is Rs.10/hr
iv)
profit earned if total material cost is Rs.4000 and total overhead is Rs.700. the
price per unit is Rs.1500.
use 80% learning curve to answer each of the questions.
Q35. survodaya industries uses MRP for its production material planning. The table
below provides the information about a particular component is somewhat uncertain
and in order to take care of a sudden spurt in the demand a safety stock of 50 item is
recommended.
Order
quantity=250
Lead time =
3 weeks
Gross
requirements
Scheduled
receipt
On hand at
150
the end of
the period
Net
requirement
Planned
order release
Week
1
2
3
4
5
6
7
8
9
40
100
70
150
20
20
50
100
70
250
During which week should the receipt be planned? When should the order be placed?
What is the expected on hand position at the end of week 9?
Q36. complete the material requirement plan for item X shown below. Note that this
item has an independent demand that necessitates that a safety stock of 40 units is
maintained.
Order qty
=70
Lead time
= 4 weeks
Safety
stock =40
Project
requiremnt
Receipts
On hand at 65
end of
period
Planned
order
release
Week
1
2
3
4
5
6
7
8
9
10
11
12
20
20
25
20
20
25
20
20
30
25
25
25
70
Q37. for the product structure tree shown, compute the net requirement of A,B,C,D,E
and F to produce 10 units of end item X. assume stock on hand as NIL.
X
A(1)
B(2)
C(1)
E(4)
D(4)
F(3)
E(2)
C(3)
Q38. the product structure tree for end item ‘A’ below. Lead times for items are one
week for 0 level items; 1 week for I level items; 2 weeks for level II items. There will
be 50 units of ‘B’ on hand and 200 units of ‘C’. lot for lot ordering is used.
A
G(2)
B(3)
C(2)
D(1)
H(4)
I(3)
draw partial assembly charts of items A, B and C. determine material requirement of
ordered part C chat will be needed to complete 150 units of A, by start of week 5.
Unit-7:operation scheduling and production activity control
Q1. what are the key elements of mass manufacture?
Q2. write note on problems and prospects of batch production.
Q3. what is the distinctive feature of the job production as compared to mass and batch
production system?
Q4. the work elements, precedence-requirement and time requirement to assemble a
picture frame are shown below:
Element
A
C
B
D
E
F
G
H
I
a)
b)
c)
d)
e)
Precedence
A,B
C,D
E,F
F,G
D
Time(minutes)
.35
.35
.70
.50
.50
.20
.20
.50
.10
construct a precedence diagram
set up an assembly line capable of producing 1600 frames per 40 hrs. week
calculate efficiency and balance delay of line
calculate maximum no. of frames that can be assembled each week
rebalance the line for maximum production.
Q5. the work element ,precedence requirement and time requirement to assemble an item
as tabulated below:
Element
A
C
B
D
E
F
G
H
I
Precedence
A
B
C
D
E
F,G
H
Time(minutes)
.30
.40
.60
1.20
.20
1.20
.10
.50
.30
MANAGEMENT HAS DESIGNED AN OUTPUT RATE OF 275 UNITS PER DAY.
ASSUME 440 minutes are available per day.
i)
construct a precedence diagram
ii)
iii)
iv)
v)
set up an aseembly line for this output rate.
calculate efficiency and balance delay of line
calculate maximum no. of frames that can be assembled each week
rebalance the line for maximum production.
Q6. the time required to process four jobs received in order(A,B,C,D) are shown in
table below. Determine the processing sequence that would result from using the
priority rules
a) FCFS
b) EDD
c) SPT
d) Critical ratio
Also find
i)
avg completion time
ii)
avg job lateness
iii)
avg no. of jobs at WC for FCFS and CR priority decision rule.
Job
A
B
C
D
Job time (days)
8
11
4
12
Due date(days)
6
18
24
14
Q7. shown below are due dates and process time remaining for 5 jobs that were assigned
a letter as arrived. Sequence of jobs by priority rules.
a) FCFS
b) EDD
c) LS
d) SPT
e) LPT.
Also compare the effectiveness of the FCFS ans SPT rules in terms of
I)
avg completion time
II)
avg job lateness
III)
avg no. of jobs at WC
Job
A
B
C
D
E
Due date(days)
8
3
7
9
6
Process time(days)
7
4
5
2
6
Q8. today is day 22 on production control calendar and four jobs are on order as shown.
Determine the critical ratio for each job, and assign priority ranks.
Job
A
B
C
D
Date due
28
26
24
30
Work days remaining
8
2
2
12
Q9. consider the following scheduling problem.
Job
Processing
time (hrs)
1
15
2
4
3
5
4
14
5
8
Find the optimal sequence which minimize the mean flow time and also obtained the
minimum mean flow time.
Q10. A small work shop undertaking repair of damaged cars has one denter and one
painter. Presently there are six cars needs repair. The following estimates in hours of time
needed for denting and painting on cars are available:
Car
Denting
time (hrs)
Painting
time(hrs)
1
4
2
7
3
3
4
12
5
11
6
9
11
7
10
8
10
13
What is the sequence that completes all the jobs in minimum time? What is the
corresponding schedule of jobs.
Q11. consider the following two machines and six jobs flow shop scheduling problem.
Using Johnson’s algorithm obtain the optimal sequence which will minimize the
makespan.
Job
I
1
2
3
4
5
6
1
5
2
13
10
8
12
Machine no.
2
4
3
14
1
9
11
Q12. a job shop has eight shop orders that must be processed sequentially through three
work centers. Each job must be finished in the same sequence in which it was started.
Times (hours) required at various work centres are as shown in table. Use Johnson’s rule
to develop the job sequence that will minimize the completion time over all shops orders.
Job no
WC#1
time
WC#2
time
WC#3
time
A
4
B
8
C
5
D
9
E
3
F
4
G
9
H
6
6
4
7
1
4
2
5
2
8
7
9
7
9
8
9
7
Q13. Six jobs are to be processed on three machines. Each job requires three operations
on each machine. Find the optimal sequence and the minimum time.
jobs
J1
J2
J3
J4
J5
J6
Operating time (hrs)
MACHINE 1
MACHINE 2
9
8
10
5
13
7
8
8
8
3
12
4
MACHINE 3
20
10
3
9
9
12
Q14. ten students are required to enroll for an MBA programme following an interview
and registration process the time in minutes are given below:
Students
S1
S2
S3
S4
S5
S6
S7
S8
S9
S10
Registration
7
8
10
3
7
4
5
8
5
6
Interview
4
2
6
6
5
7
2
6
7
6
Identify how many optimal sequences can be formed and also compute the total
completion and idle time. (draw Gantt chart for it.)
Q15. A workshop has six machines A,B,C,D,E,F. two jobs have to be processed through
each of these machines. The time spent on each machine and technological sequence if
job is given below:
machines A
B
Time (hr)
C
D
E
F
JOBS
J1
20
30
10
10
25
15
J2
10
15
30
10
20
15
Technological sequence
J1= A-C-D-B-E-F
J2= A-C-B-D-F-E
Determine the minimum time required to process two jobs on the above six machines
assuming that both jobs cant be processed simultaneously on the same machine.
Q16. using graphical method determine the minimum time needed to process the two jobs
on six machines. The information about machine sequence and time required by each job
on each machine is given here:
Job 1
Machine sequence
A
B
C
D
E
F
Time (hrs)
4
5
1
3
6
5
Job 2
Machine sequence
B
A
C
F
D
E
Time (hrs)
6
3
2
4
3
5
Q17. ROBOTIC control corp. uses a robotic controlled flexible production system to
assemble the robots it sells. Five robots are available and must complete the task
specified in table:
Task
A
B
C
D
E
F
G
H
I
J
K
L
Time (sec)
10
24
17
49
12
14
27
9
20
23
36
18
Preceding task
NONE
None
A
A
C
C
B
E
F,G
D,H,I
I
J,K
a) draw precedenc diagram
b) what is the theoretical minimum cycle time if all five robots are fully
utilized in a five station assembly line.
c) Group the task into the most efficient five stations assembly line.
d) What is cycle time?
e) What is balance efficiency?
Q18. shown below are the due dates and process time remaining for five jobs that were
assigned a letter as they arrived. Sequence the jobs by priority rules:
a) FCFS
b) EDD
c) LS
d) SPT
e) LPT
Job
A
B
C
D
E
Due date (days)
8
3
7
9
6
Process time
7
4
5
2
6
Q19. the orders shown in table were received in job shop where scheduling is done by
priority decision rule:
Job no.
Received
870
870
872
873
874
317
319
320
326
333
Shop calendar date
Due
368
374
354
373
346
Production days
required
20
30
10
25
15
In what sequence would the jobs be ranked according to the following decisions rule:
a)
b)
c)
d)
earliest due date
shortest processing time
least slack
FCFS
Q20. Consider the following two machines and six jobs flow shop scheduling problem.
Using Johnson’s algorithm, obtain the optimal sequence which will minimize the
makespan.
Job
I
1
2
3
4
5
6
1
5
2
13
10
8
12
Machine no. (times in minutes)
2
4
3
14
1
9
11
Q21. vidyasagar book binding works has six binding jobs on hand today. Book binding
consist of a two step procedure:
a) cutting
b) binding.
The time estimates for jobs are as follows:
Job
A
B
C
D
E
F
Time estimates (cutting)
40
55
25
70
20
35
Minutes binding
30
65
60
50
30
70
Sequence them so as to complete all jobs in minimum time: compute this minimum
time.
Q22. consider four jobs. A,B,C,D which have to be processed on three machines
M1,M2,M3. the processing time for each job on each of three machines are given in
table.
Jobs
A
B
C
D
M1
12
6
7
8
M2
6
4
5
3
Using Johnson’s rule find the optimal sequence.
M3
10
8
6
7
Unit 8: Scheduling of operations
Q1. How is scheduling linked to other aspects of production planning? Explain with the
help of an example.
Q2. Classify the following as a job shop or as a flow shop for the purpose of scheduling.
Also identify the relevant parameters of the system that have a bearing on the scheduling
complexity.
F)
G)
H)
I)
J)
Executive health check up in a hospital
Tirupati temple queue complex having multiple stages
Breakfast buffet system at taj hotel
Final assembly shop of computer manufacturer
Computerized passenger reservation system of Indian railways
Q3. What is cycle time? What are practical implications of cycle time measure in mass
production scenarios?
Q4. An organization has a certain no. of workstations in its final assembly for a desired
production rate. If the desired production rate has gone up by 10%, how would you
respond to the new requirement? Will this change have an effect on cycle time?
Q5. Consider one machine six job scheduling problem. All the jobs are available for
scheduling at the beginning of planning horizon itself. The processing times and due
dates of the job are given below:
Processing times
(minutes)
Due (minutes
from start of
planning
horizon)
1
12
2
10
3
15
25
45
55
Job number
4
13
30
5
12
6
9
90
70
a) Use LPT, SPT, FCFS, Random, EDD and arrive at a schedule.
b) For each of the schedules given above, compute the following performance
measures
i)
mean flow time
ii)
make span
iii)
mean completion time
iv)
mean lateness
v)
mean tardiness
vi)
no. of tardy jobs
Q6. A service provider has two stages in service delivery. Initially, the customer arrive at
stage 1, get the service and then reach stage 2, where the remaining part of the service is
completed. All arriving customers wait a lounge and are called on some basis into the
system once a batch of eight accumulates. All of them go through these two stages,
although the time they spend in these two stages may vary depending upon their specific
requirement. The time spent by a set of eight customers on these two stages are given
below:
1
11
Stage
1(minutes)
Stage
9
2(minutes)
Arrival
0
time
(minutes
from start
of batch)
2
10
3
9
Customer number
4
5
6
13
12
10
7
9
8
11
14
10
12
14
14
11
10
1
3
4
5
7
8
10
a) use Johnson’s rule to schedule customers in the system
b) develop a Gantt chart for the schedule
c) identify key performance measure for above situation and compute them for
solution obtained using Johnson’s rule
d) if you scheduled the customer using FCFS what is the impact on the performance
criteria?
e) Evaluate and compare the performance of the random rule with the above two
rule.