FACULTY OF MANAGEMENT & COMMERCE POSTGRADUATE UNIT First Examination in Master of Business Ad ministration (MBA)/ Postgraduate in Diploma in Management (PGDM)- 2012 2013 ‘Semester - I - November / December, 2012 MBAS105 — Operations Management ‘Answer all questions Time : Two (02) Hours Use of Calculators is allowed 01. (i) “The operations management provides a systematic way of looking at organizational processes”. Briefly explain the basic goals of operations management. (05 Marks) (ii) “Operations management should have the close relationship with marketing function in an organization”. Why? Explain. (08 Marks) i) What are the competitive challenges that face operations management today? Briefly explain. (06 marks) (iv) Identify and briefly explain the current issues in Operations Management. (06 Marks) (Total 25 Marks) 02. (i) Why capacity planning is important in a manufacturing firm. (03 Marks) Gi) Monthly demand and their respective probabilities for a manufacturing company is expected to be as follows: Units demanded | Probability | Contribution per unit (Rs) 8000 — 05 105 “| 10000 os 120 12000 02 110 : Revenues are Rs.200 per unit. The annual fixed operating cost for the existing ‘manufacturing facility is Rs 400,000. An expanded facility under consideration Page 1 of §would require Rs 100,000 fixed operating cost additionally per year. Contribution would average Rs 130 at the 10000 unit level; Rs 140 at the 12000 unit level; and Rs 125 at the 8000 unit level; To maximize net earnings, which capacity should be selected? (08 Marks) Assume that your stock of sales merchandise is maintained based on the forecast demand. The following table contains the demand from the last five months: Month Demand in units July 810 August 754 September 790 October 816 November 840 a. Using the four month moving average, what is the forecast for December? (02 Marks) b. Using a weighted moving average, what is the forecast for December with weights of 0.5, 0.3, 0.2, 0.1 for November, October, September, August, respectively. (02 Marks) c. Using single exponential smoothing and assuming that the forecast for July had been 850 units, forecast sales for December with a smoothing constant alpha of 0.2. (06 Marks) 4. Calculate the Mean Absolute Deviations (MAD) for the forecast made by single exponential smoothing technique in period July to November. (04 Marks) (Total 25 Marks) 03. (i) “Costs incurred in planning, implementing and maintaining a quality management system that is intended to ensure conformance to quality requirement”. Briefly explain cost of quality. (06 Marks) (ii) Identify and briefly describe the quality gaps. (04 Marks) Page 2 0f 5(iii) Given the data below, shows the sales for soap for the last five weeks. What is the simple linear regression model that can be used to predict sales in future weeks? ‘What will be the demand for the sixth week? Month Sales in w 1 2 3 165 4 5 182 (07 Marks) (iv) Determine the optimal order quantity for a purchased part having the following characteristics, Estimated usage, constant rate 12000 units, Cost of processing each purchase order Rs 400 and Holding cost rate of 5 % of the inventory cost of the item. Unit price schedule are as follows; For an order of 1-999 units Rs, 360 For an order of 1000-1999 units Rs, 355 For an order of 2000-2999 units Rs. 350 For an order of 3000 or more Rs. 345 (08 Marks) (Total 25 Marks) 04. (i) Briefly explain the characteristics of a good Layout by taking a manufacturing firm. (04 Marks) (ii) An assembly line is to be designed to operate seven hours per day and supply @ steady demand of 105 units per week which has 5 working days. The work elements, work contents, and preceding work elements are given below. Work elements Work contents (Minutes) Preceding work elements 08 - B 04 A c 10 : D 07 A E 10 BC Page 3 of S|F 04 G G 10 DE H 08 F I 03 GH K 06 H J 10 1 L 04 J M 08 KJ N 08 LM Pp 05 N Other information; Because of the technological constraints work element E and H must carry out at the same work station. (a) Draw the Precedence Diagram (03 marks) (6) What is the cycle time and theoretical minimum number of work station? (02 marks) (©) Using the longest operation time rule assign work element to work station and calculate the balance delay at each work station. (06 marks) (@) Whats the efficiency of the line? (02 marks) (©) _Isthere any alternative layout for this assembly line? Give reason. (02 marks) (Suppose demand per week decreased to 115 units, Can you improve the efficiency of the line? Justify (06 marks) (Total 25 Marks) Page 4 ofSFormulae 13. Au tAu tAps tt Ane z n xo B= WA tW2Ays + Wey tnt Won Fy= Fur ta (Aci Fea) MAD = D Q TC =DC+ —S+—H Q 2 2DS Q om Ht Available time p= DMI) X xP atx)? Page 5 of 5