SOLUTION

I Mid-Term Examination - BBA IV Semester

Session 2011-2012 (Even Semester)
Subject: Production & Operations Management (BBA -215)
Time: 90 Mins. M.M.: 20

Notes:
1) Answer all questions from Group A (which is) compulsory, Any Two from group B and
Any Two from Group C.
2) All parts of question (a, b etc.) should be answered at one place.
3) Answer should be brief and to the point and with be supplemented with neat sketches.
4) Any missing and wrong data may be assumed suitably giving proper justification.
5) Figure on the right-hand side margin indicate full marks.


Section - A (0.5 x 16 = 8 Marks)
1. Choose the correct answer:
i. Practices of Production and Operations Management is applicable to ..
(a) Manufacturing (b) Services (c) Both (d) None of these

ii. Which of the following is not a function of Production Department?
(a) Purchasing (b) Selling (c) Maintenance (d) Quality Control

iii. Which of the following is an example of Intermittent Production System?
(a) Furniture (b) Medicine (c) Both (d) None of these

iv. Which of these production systems has features of both continuous as well as
intermittent production system?
(a) Batch (b) Job (c) Assembly Line (d) Project

v. Plant Capacity is decided on the basis of
(a) Current Demand (b) Future Demand (c) Both (d) None of these

vi. Work Your Plan is a term related to Production .
(a) Planning (b) Control (c) Both (d) None of these

vii. Complete automation of Material Handling is possible in. Layout.
(a) Fixed Position (b) Functional (c) Product (d) All of these

viii. Which of the following factors will be the most important factor while selecting location
for a bank?
(a) Nearness to RM (b)NearnesstoMarket(c) Transportation (d) Labour Availability

ix. A plant using bulky material should be located near to ..
(a) Market (b) Transport (c) Raw-Material (d) In Center

x. Assembly Line Balancing is done in . Layout.
(a) Product (b) Line (c) Flow-Shop (d) All of these

Which form of Layout will you choose for these production systems?
xi. Air Craft Manufacturing Fixed Position Layout
xii. College Process/ Job-shop/ Functional Layout/ Fixed Position Layout
xiii. Cement Product/ Flow-shop/ Line Layout
xiv. Bank - Process/ Job-shop/ Functional Layout/ Fixed PositionLayout
xv. Automobile - Product/ Flow-shop/ Line/ Combined/ Grouped Layout
xvi. Flyover Fixed Position Layout




Section - B
Attempt any 2 questions. (2 x 2=4 Marks)

2. What is Production System? What are its elements?

ANSWER:
Production system is the combination of all subsystems or elements, through which inputs are
converted into desired output.
Production System in a Pictorial Form






Elements of Production Process or Production System:
1. Input: Inputs are the physical consumables utilized in production process. They mainly
consist of raw-material, labor, power and other consumable items.
2. Resources: Resources are those assets which help in transforming inputs into outputs. They
mainly consist of Machinery, plant, building, managerial human resource etc.
3. Process: Process refers to a series of operations which are performed on raw-material &
other inputs, to transform them to output.
4. Output: Outputs are the product or services resulting from the conversation process.






















INPUTS PROCESS OUTPUT
RESOURCES


3. Describe the term Production & Operations Management with suitable diagram.

ANSWER:
According to E. S. Buffa, Production Management deals with decision making related to
production process so that the resulting goods or services is produced according to specification
in the amounts and by the schedule demanded and at minimum cost.














4. Write a short-note on Fixed Position Layout.

ANSWER:
Fixed Position Layout:
In this type of layout, the material or major product being produced remains at a fixed
location. Tools, machinery & equipments are moved to that location to perform different
operations. This layout is used when the material being processed are large, very heavy and
difficult to move. For example, Ship building, Railway Coach Manufacturing, Air Craft
Manufacturing etc., as for manufacturing these items moving machine, men & equipments
will be cheaper in comparison to move semi-finished product. We can compare it with
construction of building, we can not move building any where, we have to arrange all factor
of construction like material, machines and labor to the site.





Decision Regarding
INPUTS
Decision Regarding
PROCESS
To have the OUTPUT
Quantity as required
As per Specification
On Scheduled time
At a Minimum Cost
Decision Regarding
RESOURCES
Planning Organizing

Directing Controlling
MANAGEMENT
Use of Management to Production Process
Ship BuildingYard
Work-in-Progress
on Ship
Material
Equipments
Labour etc.
Finished Ship


Section C
Attempt any 2 questions. (4 x 2=8 Marks)

5. Discuss and Differentiate the Product and Process Layouts.

ANSWER:

1. Product Layout or Line Layout:
This type of layout is also called flow shop layout. Under this layout machines and
equipments are arranged in one line according to the sequence of operations, required for
the product. Raw materials are fed into the first machine and finished product comes out of
the last machine. In between, partly finished goods travel automatically, from one machine to
next machine. It is a grouping of machines in one sequence. A product layout may have a
straight line shape, a U shape or a circular shape. Generally, we see this type of layout in
Automobiles Industry, Sugar Industry, and Cement Industry etc.




In above example Product A is produced using Line 1 and there is a separate line for
producing the separate product i.e. product B, even though some of the operations like
Grinder is common for both the products but it has been repeated to avoid conflicts and
delays.

2. Process Layout:
It is also known as Functional Layout or Job-Shop Layout. In this type of layout all machine
performing similar operations are grouped and installed at one place. For example, all
drilling machine in one room i.e. drilling section, all welding machines in another room i.e.
welding section, and all painting in separate room i.e. painting section. Firm may be
producing one or several products, which required some or all of these common operations.
Material moves from one section to other for different required operations.







Lathe
(1)
Drill
(2)
Grinder
(3)
Assembler
(4)
Painting
(5)
Product A
Plainer
(1)
Grinder
(2)
Miller
(3)
Lathe
(4)
Welding
(5)
Product B
(1)
Lathe
(4)
(2)
Driller
(1)

Plainer
(1)
(5)
Painting
(1)
(3)
Grinder
(2)

Miller
(3)
(4)
Assembly

Welding
(5)
Product A
Product B



In above example Product A and Product B both is using the common production
facility like common Lathe and Grinder is used for producing both product A & B.
Raw-material of product A and B is moving to different sections of operations for
getting operated.

POINT PRODUCT LAYOUT PROCESS LAYOUT
Definition Work-centers are arranged in a
fixed sequence.
Work-Centers do not have any
fixed sequence.
Suitability Continuous Production System Intermittent Production System
Automation Full Automation Possible Partial Automation Possible
Initial
Investment
High Low
Cost of
Production
Low High
Flexibility Rigid Highly Flexible
Type of
Machinery
Specific Purpose Machinery
dedicated to one product
General purpose machineries,
commonly used for all products



6. What are the various Primary Factors, based on which Plant Location decision is
taken?

ANSWER:








Primary Factors:
Those factors related to location, which have a direct impact on the cost of production and
distribution are kept under this category:
1. Availability of Raw-Material
The cost of raw-material is an important element of total cost of production. Two things
which should be considered are:
Regular & uninterrupted supply of Raw-Material
At a minimum total cost (i.e. cost of raw-material +Transportation +Storage)
Above two points can be assured by selecting a location near to source of Raw-Material.
But again following principles should be followed:
Factors InfluencingPlant Location
1. Availability of Raw-Material
2. Nearness to Market
3. Availability of Transportation
4. Availability of Labor
5. Availability of Power
6. Special Grants, Regional Taxes &
Import/Export barriers.
7. Industry Concentration
8.
PRIMARY FACTORS
1. Political Factors
2. Legal Factors
3. Natural Factors
4. Religious Factors/Social Factors
SECONDARY FACTORS

When the raw-material is heavier than the finished product in weight (e.g.
sugarcane-sugar) or raw-material is of perishable nature (Milk-Milk Powder), the
factory should located near the raw-material source, as it will reduce the total cost
of Raw-Material.
o Price of the raw-material will be minimum because of competition
o Transportation cost will be minimum because of less distance
o Storage cost will be minimum because of less storage

2. Nearness to Market:
Nearness to market is important from the point of view of control over the market, as it
allow the firm for supplying finished products to customers in a minimum time, adjusting
supply according to change in demand. A firm has to generally locate its plant near to
market in following cases (keeping the basic objective of minimum cost in mind):
If finished product is much heavier than raw-material (Ship Building)
If finished product is perishable (like break, sweets etc.)
Service Industry (like bank, retailers etc.)

3. Availability of Suitable Transportation Facility:
While taking location decision, it should be checked that a suitable and speedy
transportation facility should be available for receiving raw-material and sending
finished goods. There are mainly five basic modes of physical transportation Air, Road,
Rail (train), Water and Pipeline. Suitability of transportation facility depends on the
nature of product. Like a firm producing for export will look for availability of water
transportation.
4. Availability of Labor:
Another factor which should be kept in mind while taking location decision is availability
of required labor. This becomes of prime importance if organization is using labor
intensive technique of production, as labor is generally less mobile in comparison to
other factors. There are two aspects of the factor:
Prevailing wage rate of required type of labor at that location
Productivity of that labor

5. Availability of Power:
In past, when electricity was not enough for production of heavy goods, Coal was
generally used for source of power. Coal is a bulky material, so it takes a higher
transportation cost. Therefore, it plays an important role in deciding location of such
plants near to coal mines, to avoid transportation cost and any interruption in supply. A
steel plant requires 400 tons of coal as source of power and 200 tons of iron ore to
produce 100 tons of steel. Therefore, coal mines played an important role in location
decision of steel plants. Now-a-days, availability of electricity plays important role in
location decision.
6. Special Grants, Regional Taxes & Import/ Export Barriers:
Another important practical consideration while selecting a location for establishing
plant is tax benefit/ exemptions in excise, custom, sales tax etc. Generally, some
governments to attract more capital and industrialization grants certain benefits and tax

holidays, which makes a firm cost efficient and helps in achieving the objective of
minimizing cost (e.g. Uttaranchal, SEZs).
7. Industry Concentration:
Sometimes firms of same type get concentrated in a particular area. So, all the factors of
production providers like labor related to that industry, raw-material provider etc. also
get collected around that area creating economies in operations. It also affects the
location planning decision of the firm as it minimizes the overall cost of the firm.


7. Data related to an assembly line is given below:
Task Time
Cutting 20 Seconds
Lathe 60 Seconds
Drilling 15 Seconds
Grinding 15 Seconds
Assembling 90 Seconds

(a) What is the Cycle Time of current Line?
(b) How many units can be produced in an 8 hours day, with this cycle time?
(c) What is the current efficiency level of this assembly line?
(d) What should be the Cycle Time if we want to produce 960 units in given 8
hours?
(e) How many work stations should be used to optimize this assembly line?
(f) Draw the optimized assembly line for producing 960 units in an 8 hours day.
(g) What is the efficiency level of this optimized assembly line?


ANSWER:
(a) Cycle Time of current Line is 90 Seconds (highest individual time taken by any
workstation).
(b) No. of Units =Available Time / Cycle Time i.e. 8 x 60 x 60 / 90 =320 units
(c) Efficiency Level = Total Work Content / Cycle Time x No. of Work Stations
Therefore it is =200 x 100/ 90 x 5 =44.44%
(d) Cycle Time =Available Time / No. of Units i.e. 8 x 60 x 60 / 960 =30 seconds
(e) No. of Workstations =Total Work Content / Cycle Time i.e. 200/ 30 =6.67 i.e. 7
approx
(f) Optimized (Best Possible) Assembly line is:










(g) Efficiency Level = Total Work Content / Cycle Time x No. of Work Stations
Therefore it is =200 x 100/ 30 x 7 =95.24%

*****
Cutting
Lathe
Lathe
Drilling +
Grinding
Packing
Packing
20
60
30
30
60
Packing
90
90
90
30