Answers of Production and Operational Management (MGT713) Paper-[1] Q-1: Forecasting is the prediction of future demands and it is accompanied with the related planning in order to meet the forecasted demand. The forecasting is believed by some people as related to production department only which is not true. How will you advocate the above stance stating the importance of forecasting for marketing, finance and management departments? Capacity decisions are important to all departments of the organization; an accountant would be interested in collecting cost accounting information in order to ensure that correct capacity expansion decision is reached. Similarly a financial manager would be interested in performing the financial analysis of whether the investment decision is justified for a plant or capacity increase. An Information Technology Manager would end up preparing data bases that would aid the organization again to decide about the capacity and last but not the least an operations manager would select strategies that would help the organization achieve the optimum capacity levels to meet the capacity demand. Ans. Q-2: Independent demand is the demand for finished products whereas dependent demand is the demand for component parts related to that product. State you opinion that forecasting for which type of demand is difficult to be made. Also describe how firms can manage independent demand in an efficient way? Q-3: Mr. Ali is a operation manager of a crew that installs carpeting, has recorded the crew’s output over the past several weeks, his obtained results are depicted in table below: Week Crew size Yard installed 1 6 646 2 4 620 3 3 588 4 2 570 Compute labor productivity for each week and draw a general conclusion about crew size and productivity. Q-4: Despite of the fact that process layout has ability to handle a variety of process requirements, some critiques still don’t support the idea of process layout. Being an analyst of production/operation management how will you support their view of NOT using process layout. Ans.Process layout should not be used as it has the following drawbacks. 1. In-process inventory costs can be high. 2. Challenging routing and scheduling. 3. Equipment utilization rates are low. 4. Material handling slow and inefficient. 5. Complexities often reduce span of supervision. Paper-[2] Q-1: Difference between Operational and Organizational Strategy, 5 marks Ans. •Organizational strategy is o Over all big picture for the whole organization. o Longer in time horizon o Less detailed and broader in scope. •Operational Strategy is • Narrower in scope and in more detail • Prepared by middle management. • Should be in line with the Organization strategy •Operational Strategy if • Designed and implemented successfully can make an organization more successful. • Operational strategies mostly function on two dimensions of quality management and •s ervice/manufacturing strategy. Q-2: Forecasting techniques k bary main ak paragraph dia hoa tha btana tha k yahan operational manager kon si technique use kery ga. Ans.For this as we are not given the scenario so that we may accurately apply the technique lets have a look at all techniques . Fundamental Types of Forecasts •Qualitative Techniques which use subjective inputs and no numerical data. It relies solely on soft information like human factors, personal opinion, hunches. Thus Qualitative Forecasts are often biased and tilted towards what the management wants to predict. © Copyright Virtual University of Pakistan 34 Production and Operations Management –MGT713 VU •Quantitative Forecast involves the extension of the historical data. It sometimes makes use of forecasting technique that uses explanatory variables to predict future demands. Quantitative techniques are favored where quality attributes cant be quantified. •In reality both need to be used together to develop a judicious and realistic forecast. Finer Classification of Forecasts •Judgmental - uses subjective inputs meaning that a judgmental forecast rely on analysis of subjective inputs obtained from various sources, such as consumer surveys, the sales staff, managers and executives, and panels of experts. These insights are not available publicly. •Time series - uses historical data assuming the future will be like the past and depend on developing relationships between variables that can be expressed to predict future values. Some time series forecast try to smoothen out random variations in historical data. There are some time series forecast which identify specific patterns and then may even extrapolate those patterns into the future. • Associative models - uses explanatory variables to predict the future for example demand for a small car may be dependant upon increase in price of petrol or CNG. The analysis in this case would employ a mathematical model that would relate the predicted variable with the predictor variable or variables. Judgmental Forecasts Characteristics •Judgmental Forecasts rely solely on judgment and opinion to make forecasts. •In the absence of enough time, it is easy to use qualitative type of forecast. •In case of changing external environment economic and political conditions, organizations may use judgmental forecasts. •When introducing new products, services, new features, new packaging, judgmental forecasts are used in preference over quantitative techniques. Judgmental Forecasts •Executive opinions normally consist of a group of senior level managers from different interfaces, used for long range planning and new product development. Advantage being the collective pool of information from all divisions and departments, disadvantage being that one person will dominate other interfaces, which can lead to erroneous forecasts. •Sales force opinions have the advantage of being in direct contact with customers. The sales force can detect the customers’ change of plan, However it suffers from the fact that it can not differentiate between what the customer can do and will do. Current data of sales can often lead to over pessimistic and overly optimistic forecasts, which then results in incorrect sales projections. •Consumer surveys are based on sample taken from potential customers. These type of surveys require skill to develop, administer and interpret the results. Often fall victim of the consumers irrational behavior of buying. •Outside opinion which is a mix of consumer and potential customers. This kind of opinion is now a days readily available through internet, telephonic surveys and newspapers. Its biggest limitation is a fixed format which often fails to quantify the exact demand forecast. •Delphi method: Managers and staff complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast. Commonly used for Technological forecasting, when to introduce a new technology. It’s a long term one time activity and has the same issues like expert opinion type of judgmental forecast. Time Series Analysis •Time series forecasting models try to predict the future based on past data •We as Managers can pick models based on: 1. Time horizon to forecast 2. Data availability 3. Accuracy required 4. Size of forecasting budget 5. Availability of qualified personnel Maximin or Laplace find out kerna tha kuch alternatives dye hoe thy Paper-[3] Q-1: Operation manager want to forecast the impact of technical changes to the employees. a) Which method of forecasting he has to use and Why? b) how to implement that method you suggested? Ans. •Delphi method: Managers and staff complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast. Commonly used for Technological forecasting, when to introduce a new technology. It’s a long term one time activity and has the same issues like expert opinion type of judgmental forecast. Q-2: The operations manager of a garments manufacturing Company has the following data of the possible forecasted demands against the different alternatives which are small facility, medium facility and the large facility. Calculate Laplace and Minimax regret Alternatives Possible - future - demand Low (Rs.) - Moderate (Rs.) - High Small: 5,000 7,000 14,000 Medium: 14,000 16,000 27,000 Large: 11,000 16,000 19,000 Ans. Laplace: Small 5000+7000+14000/3 = 26000/3 = 866.66 Medium 14000+16000+27000/3 = 57000/3 = 19000 Large 11000+16000+19000/3 = 46000/3 = 15333 So the answer is the medium facility since it has the highest value Rs. 19000 Minimax: 14000-5000=9000 16000-7000=9000 27000-14000= 13000 14000-14000=0 16000-16000=0 27000-27000=0 14000-11000=3000 16000-16000=0 27000-19000=8000 Selecting the maximum regret value of each row :13000 0 8000 So the minimum of the maximum is 0. Q-3: Difference between Organizational strategies from operational strategies. and what will its impact on business if these are aligned in an organization? Q-4: Standardization is important but some are its critics. a) What if the standardization is not implementing? Ans. Brief answer. We live in a world where for the sake of convenience, reliability and safety, majority of the products and services have been standardized. If for a moment any process whether it relates to manufacturing or services is made standard less, the vital concept of compatibility would be lost. Think for a moment if there is a fire at a Montessori school or at a crowded stadium, if there is no standardization of fire hose attached to the fire truck and fire hydrant present at the site, no effort would succeed in putting out the fire and saving the lives of the people. Elaborated answer Advantages of Standardization All the sections of company will be benefited from standardization as mentioned below. Benefits to Design Department 1. Fewer specifications, drawings and part list have to prepared and issued. 2. More time is available to develop new design or to improve established design. 3. Better resource allocation. 4. Less qualified personnel can handle routine design work. Benefits to Manufacturing Department 1. Lower unit cost. 2. Better quality products. 3. Better methods and tooling. 4. Increased interchangeability of parts. 5. Better utilization of manpower and equipment. 6. Accurate delivery dates. 7. Better services of production control, stock control, purchasing, etc. 8. More effective training. Benefits to Marketing Department 1. Better quality products of proven design at reasonable cost leads to greater sales volume. 2. Increased margin of profit. 3. Better product delivery. 4. Easy availability of sales part. 5. Less sales pressure of after-sales services. Benefits to Production Planning Department 1. Scope for improved methods, processes and layouts. 2. Opportunities for more efficient tool design. 3. Better resource allocation. 4. Reduction in pre-production activities. Benefits to Production Control Department 1. Well proven design and methods improve planning and control. 2. Accurate delivery promises. 3. Fewer delays arise from waiting for materials, tools, etc. 4. Follow-up of small batches consumes less time. Benefits to Purchase and Stock Control Department 1. Holding of stock of standard items leads to less paper work and fewer requisitions and orders. b) Do you agree with standardization or not? Yes ,from both manufacturerservice provider and customers’ point of view it is useful;is a source of convenience , safety and reliability which is the need of the time ,so I agree. Paper-[4] Q-1: Does improvement in the quality of a product can differentiate your product from that of your competitors? Explain in detail with logical reasons. Ans. Yes, definitely .The basic implication of differentiation is providing those features or quality or services etc that fulfil the changing demands of consumers in a better way,efficiently and effectively so that the consumer starts looking at the product/service as more useful and starts buying that instead of others.So very clearly quality improvement DOES differentiate products. Further, quality improvement can be accomplished in countless ways e.g by improving the inputs’ standard so that the end product becomes more: durable/long lasting gives better results than before makes it easier to use, safer to use efficient etc etc In short ,every way of quality improvement is differentiating your product and making the older versions obsolete. Q-2: It is a concept that forecasting is done by production department and it helps only to this department. Do you agree with this? Explain the importance of forecasting in the marketing, Finance and Management department? Q-3: Numerical question from Lesson no.6. Calculate Minimax Regret and Laplace of the given data. (I have not done this question) Q-4: yad nhn but it was from forecasting also. Paper-[5] Q1. Define Opration and organizational strategy. Y op strategy need to align with organizational strategy.? Relationship between Operations and Organizational Strategy •Organizational strategy is o Over all big picture for the whole organization. o Longer in time horizon o Less detailed and broader in scope. •Operational Strategy is • Narrower in scope and in more detail • Prepared by middle management. • Should be in line with the Organization strategy •Operational Strategy if • Designed and implemented successfully can make an organization more successful. • Organizations started focusing on operational strategies in early 1990s before that organizations focused on financial and marketing strategies. • Operational strategies mostly function on two dimensions of quality management and • service/manufacturing strategy. Q2. Question about cpfr. Ans.Web-Based Forecasting: Steps in CPFR 1. Creation of a front-end partnership agreement 2. Joint business planning 3. Development of demand forecasts 4. Sharing forecasts 5. Inventory replenishment •Assumes causal system( That same system that existed in the past will exist in future, where as in reality unplanned events happen like tax rate increase, introduction of a competitors product or service or natural disasters) •Forecasts rarely perfect because of RANDOMNESS (having no specific pattern). Allowances should be made for inaccuracies. •Forecasts more accurate for groups vs. individuals naturally because forecasting errors in a group tend to cancel out forecasting errors for individuals. •Forecast accuracy decreases as time horizon increases indicating it is safe to make short range forecasts instead of long term forecasts. If you can recall we had talked about Flexible and Agile Corporations in the past. Ans. Q3. Data was given and need to find laplace and minimax regression. Q4. Disadvantages of process layout Disadvantages of Process Layouts 1. In-process inventory costs can be high. 2. Challenging routing and scheduling. 3. Equipment utilization rates are low. 4. Material handling slow and inefficient. 5. Complexities often reduce span of supervision.
Posted on: Sat, 17 Jan 2015 10:30:47 +0000
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