Tutorial II

Name: Roshan Mahato

Roll No: BME/070/34
22. Explain the following terms with the help of Diagaram

a. Safety Stock: Safety stock is excess inventory that acts as a

buffer between forecasted and actual demand levels. This
inventory is maintained so that a company has sufficient units on
hand to meet unexpected customer and production demand.
The safety stock formula is as follows:
(Maximum daily usage - Average daily usage) x Lead time =
Safety stock

b. Lead Time: Period between placing an order and receiving the

ordered item.
c. Order Quantity: The total number of stock-keeping units (SKUs)
that have been ordered from a supplier. These units are not
counted as part of the quantity on hand until they actually arrive.
However, knowing the quantity on order is important
for avoiding duplicate orders of the same items.
d. Reserve Stock: STOCK RESERVE (SR) or buffer stock is a stock
quantity which is based on the normal average expected
consumption during the lead-time to replenish depleted stock.
e. EOQ: Economic order quantity is that order quantity which will
minimize the total variable cost of managing the inventory.
f. Reorder Point: Inventory level of an item
which signals the need for placement of a replenishment order,
taking into account the consumption of the item during order lead
time and the quantity required for the safety stock.
Also called reorder level, reorder quantity, or replenishment order
quantity.
23. What is inventory management? Explain why company
keep inventories. How do you tackle the problem of
uncertain demand?
Ans: Activities employed in maintaining the optimum number
or amount of each inventory item. The objective of inventory
management is to provide uninterrupted production, sales,
and/or customer-service levels at the minimum cost. Since for
many companies inventory is the largest item in the current
assets category, inventory problems can and do contribute to
losses or even business failures. Also called inventory control.

There are five major reasons for holding inventory:

(1) Pipeline inventory

A pipeline inventory is the minimum inventory an organisation
needs in order to function. E.g. a producer of wine that needs to
age for two years in order to be sold needs a minimum
inventory of wine for two years in order to exist.
(2) Seasonal inventory
A seasonal inventory is helpful, if an organisation wants to
produce at a constant (cost-efficient) capacity, yet the demand
varies with the seasons. E.g. a toy company can cheaply produce
at at steady pace and build up a seasonal inventory for higher
sales during the Christmas holidays.
(3) Cycle inventory
A cycle inventory is helpful if keeping an inventory saves costs
associated with buying supplies on time. A private household will,
for example, keep a box of water bottles in the cellar for practical
reasons instead of satisfying the demand for water at the store
every time it comes up again.
(4) Safety inventory
A safety inventory is a buffer agains high external demand, e.g. a
burger chain keeping an inventory of pre-made burgers so that
customers can be satisfied immediately. Safety inventories are
closely associated with the meme buffer or suffer, meaning
that if a process is not able to buffer for variabilities (such as an
unexpected external demand) it will loose on flow rate.
(5) Decoupling inventory
Whereas the safety inventory can be seen as the buffer against
heightened external demand, the decoupling inventory can be
seen as the buffer against heightened internal demand. Such an
inventory decouples supply from demand and supports a higher
(and steadier) flow rate.

Following are the six strategies points to tackle the

problem of uncertain demand:
1. Use analytic techniques that dont require high accuracy:
Simple statistical models are often more reliable for dealing with
highly complex situations than more detailed models. This is
especially good advice for marketers, who may be used to seeing
awareness and preference data with two or more decimal places.
The problem in dealing with social networks and other complex
systems is that a sophisticated model is more likely to fit past
data well but fail to predict the future, while a more basic model is
less likely to fit past data, but more likely to be able to anticipate
different future scenarios. Multi-variant trade-off analysis may
predict demand for your product quite accurately, but then over
one weekend the mommy bloggers suddenly take offense...
2. Prepare for multiple outcomes:
Rather than trying to make the one right guess as to what will
most likely happen, make multiple guesses. Place many small
bets on a variety of options. This is the way any truly innovative
process works, and innovation is a good analogy for prediction.
Dont bet the farm on the Edsel, in other words, without also
having a Mustang or Thunderbird in your portfolio.
3. Find and rely on the predictable elements of the situation:
You may not be able to predict who the next Adam Fuhrer will be
for any particular social network, but you know there will be a few
participants with extremely high influence, and there will be
cascades of sentiment, sometimes sudden. Just because you
dont know which particular day its going to rain doesnt mean
you should sell the umbrella.
4. Focus your evaluation of initiatives on the inputs, not just the
outputs:

Randomness will confound even the best efforts to produce

results, so when assessing an initiatives success, consider the
quality of the decision to undertake it. Dont rely solely on the
actual outcome of the project (bad or good), but take into account
the quality of the process that went into its planning and
execution. A bad leader can sometimes get elected despite the
evidence, but as long as the election was fair, you shouldnt throw
out the democratic process.
5. Remain agile, and strive to respond quickly:
Theres no substitute for awareness, listening, and detecting
events as soon as they happen. Focus on "sense and respond" as
an organization, and empower your people to act quickly and
decisively. Have a social media policy strong on principle but
general enough to be flexible, remembering that actual results
can vary. And stage a social-media fire drill every so often.
6. Cultivate your reputation for extreme trust:
In the end, you have to prepare for failure, success, and
everything in between. But as long as others find you trustable,
youll never be on your own. Focus ondoing the right thing, and
your customers, employees, and other stakeholders will all have
an interest in seeing your company weather whatever
unpredictable storm might come your way.

24. What is Economic Order Quantity (EOQ)? Derive the

EOQ formula.
Ans: Economic order quantity is that order quantity which will
minimize the total variable cost of managing the inventory.
Assuming that the inventory decrease at a constant rate from the
quantity q to zero and then replenished by another quantity.

Let, S= Annual consumption of the product(units)

C0= Cost of placing an order
Cu= Unit cost of an item (unit price Rs.)
q= Order quantity
i= Interest rate charged per unit per year

Now the total variable cost of managing the inventory per year
= Annual ordering cost + Annual cost of carrying the inventory=
E(Say)
There fore,
E=[ No. of orders per year]

x[ Cost of placing an order]+[Averag inventory]X[Inventory

Carrying cost]
s
q
E= C0 + Cui
q
2
S
q
E=C 0 . + Cu. i.
q
2

Differentiating both sides w.r.t q then we get,

dE
S
1
=C 0 . 2 +C u .i .
dq
2
q

For minimun total cost

C0 .

S
1
=Cu . i.
2
2
q

dE
=0
dq

q 2=2C 0 .

S
Cu . i

Or,

EOQ ( q 0 )=

q=

2 C0 S
C u .i

2[ Annual consumption ( unit ) ][ Cost of placing an order ]

Price per unitInventory carrying cost

25. What is ABC analysis? Explain with neat diagram.

Ans: An analysis of a range of items that have different levels of
significance and should be handled or controlled differently.
The ABC classification process is an analysis of a range of
objects, such as finished products ,items lying in inventory or
customers into three categories. It's a system of categorization,
with similarities to Pareto analysis, and the method usually
categorizes inventory into three classes with each class having a
different management control associated :
A - outstandingly important; B - of average importance; C relatively unimportant as a basis for a control scheme. Each

category can and sometimes should be handled in a different way,

with more attention being devoted to category A, less to B, and still
less to C. Popularly known as the "80/20" rule ABC concept is
applied to inventory management as a rule-of-thumb. ABC
concept is applied to inventory. It says that about 80% of the
Rupee value, consumption wise, of an inventory remains in about
20% of the items.

This rule , in general , applies well and is frequently used by

inventory managers to put their efforts where greatest benefits ,
in terms of cost reduction as well as maintaining a smooth
availability of stock, are attained.
The ABC concept is derived from the Pareto's 80/20 rule curve. It
is also known as the 80-20 concept. Here, Rupee / Dollar value of
each individual inventory item is calculated on annual
consumption basis.

Thus, applied in the context of inventory, it's a determination of

the relative ratios between the number of items and the currency
value of the items purchased / consumed on a repetitive basis :
10-20% of the items ('A' class) account for 70-80% of the
consumption
the next 15-25% ('B' class) account for 10-20% of the
consumption and
the balance 65-75% ('C' class) account for 5-10% of the
consumption
A' class items are closely monitored because of the value
involved (70-80%)
High value (A), Low value (C) , intermediary value (B)

 20% of the items account for 80% of total inventory

consumption value (Qty consumed X unit rate)
Specific items on which efforts can be concentrated
profitably
Provides a sound basis on which to allocate funds and time
A,B & C , all have a purchasing / storage policy - "A", most
critically reviewed , "B" little less while "C" still less with
greater results.
ABC Analysis is the basis for material management processes
and helps define how stock is managed. It can form the basis of
various activity including leading plans on alternative stocking
arrangements (consignment stock), reorder calculations and can
help determine at what intervals inventory checks are carried
out (for example A class items may be required to be checked
more frequently than c class stores.
26. What is forecasting? Why foreasting is necessary in
production function?
Ans: A planning tool that helps management in its attempts to
cope with the uncertainty of the future, relying mainly
on data from the past and present and analysis of trends.
Forecasting plays a pivotal role in the operations of modern
management. It is an important and necessary aid to planning
and planning is the backbone of effective operations. Many
organizations have failed because of lack of forecasting or faulty
forecasting on which the planning was based.
For example, Curtiss-Wright one of the major aeroplane
manufacturers the equal of Douglas and Boeing combined in
1945 decided to put its money into an improved piston engine
instead of jets.

The management of Curtiss-Wright did not accurately forecast

the market for jets and hence failed. The more accurately the
future conditions can be predicted, the better and more sound
are the plans and higher the probability for success of these
plans.

Some of the areas in which accurate forecast about future

events and trends are necessary for organizational success and
growth are:
a) Economic development:
The economic conditions of the country as well as global
economy would have significant effect on the operations of an
organization. The necessary elements of such forecasts include
predictions relating to GNP and GDP, currency strength,
industrial expansion, job market, inflation rate, interests rate,
and balance of payments and so on.
Healthy economic trends assist in the growth of the company. On
the other hand, for example, the economic depression of 19291930 put many companies out of business. The knowledge about
economic trends would assist the management in making plans
for their organization as an effective response to such trends.
b) Technological forecasts:
These forecasts predict the new technological developments
that may change the operations of an organization. For example,

the advent of the transistor put the vacuum tube totally out of
business.
The age of the electronic calculators totally wiped out the
market for slide rules. An aggressive organization keeps up todate with new technological development and readily adopts
new methods to improve performance.
c) Competition forecasts:
It is equally necessary to predict as to what strategies your
competitors would be employing to acquire gains in the market
share, perhaps at the cost of your market share.
The competitor may be planning to employ a different market
strategy for the product or to bring out a substitute for the
product which could be cheaper and easily acceptable by
consumers.
d) Social forecasts:
These forecasts involve predicting changes in the consumer
tastes, demands and attitudes. Consumers have already
established a trend for convenience, comfort and for products
that are easy to use and manage. Matters of taste and
preference may change over a period of time.
For example, in the 1970s, the trend was to buy small economic
cars. In the 1990s, the trend is back to luxury and comfort. While
these trends partly do depend upon the general economic trends
they also depend on the consumer tastes.

For example, trends in womens fashions and clothing change

almost every year. Nehru jacket, highly popular is the 1960s in
unheard of today. Accordingly, in the area of consumer goods,
social trends are important aspects of forecasting.
Forecasting as a strategy is widely used today, and some of
these forecasts, specially the short-term ones are fairly reliable.
Some forecasts, using scientific methods or instrumentations
can be fairly accurately made.

27. Explain the different forecasting techniques?

Ans: Followings are the methods of forecasting:
1. Jury of executive opinion
This method of sales forecasting is the oldest. One, or more of
the executives, who are experienced and have good knowledge
of the market factors make out the expected sales. The
executives are responsible while forecasting sales figures
through estimates and experiences. All the factors-internal and
external are taken into account.
2. Sales force opinion
Under this method, salesmen or intermediaries are required to
make out an estimate sales in their respective territories for a
given period. Salesmen are in close touch with the consumers
and possess good knowledge about the future demand trend.
3. Test marketing result
Under the market test method, products are introduced in a
limited, geographical area and the result is studied. Taking this

result as a base, sales forecast is made. This test is conducted

as a sample or pre-test basis in order to understand the market
response.
4. Consumer's buying plan
Consumers, as a source of information, are approached to know
their likely purchases during the period under a given set of
conditions.This method is suitable when there are few customers
This type of forecasting is generally adopted for industrial goods.
It is suitable for industries, which produce costly goods to a
limited number of buyers - wholesalers, retailers, potential
consumers, etc. .A survey is conducted on face to face basis or
survey method. It is because changes are constant while buyer
behaviour and buying decisions change frequently.
5. Market factor analysis
A company's sales may depend on the behaviour of certain
market factors. The principal factors which affect the sales may
be determined. By studying the behaviours of the factors,
forecasting should be made. Correlation is the statistical analysis
which analyses, the degree of extent to which two variables
fluctuate with reference to each other. The word 'relationship' is
of importance and indicates that there is some connection
between the variable under observation. In the same way,
regression analysis, is a statistical device, which helps us to
estimate or predict the unknown value of one variable from the
unknown values of another variable.
6. Expert opinion
Many types of consultancy agencies have entered into the field
of sales. The consultancy agency has specialised experts in the
respective field. This includes dealers, trade associations, etc.
They may conduct market researches and possess readymade
statistical data. Firms may make use of the opinions of such
experts. These opinions may be carefully analysed by the
company and a sound forecasting is made.

28. What do you mean by forecasting errors? Write the

formula of different forecasting errors?
Ans: In statistics, a forecast error is the difference between the
actual or real and the predicted or forecast value of a time
series or any other phenomenon of interest. Since the forecast
error is derived from the same scale of data, comparisons
between the forecast errors of different series can only be made
when the series are on the same scale.
Followings are the formula for forecasting errors:
1. Mean Absolute Error:
n

|Ai Fi|

MAD= i=0

Where, A= actual demand, F=forcast, n= no. of observations

2. Mean Absolute Percentage Error:
n

100 |A iF i|
i =0

MAPE=

3. Mean Square Error:

n

( A iF i )

MSE= i=0

4. Root Mean Square Error:

RMSE= MSE

29. Justify the following statements:

a) Prevention is better than cure is the underlying principle of

preventive maintenance.
Ans: The general definition of preventative maintenance is as
follows The care and servicing by personnel for the purpose of
maintaining equipment and facilities in satisfactory operating
condition by providing for systematic inspection, detection, and
correction of incipient failures either before they occur or before
they develop into major defects. Put in laymans terms; making
sure machines have the necessary fluids, lubricants, airflow,
protection and are in a fit state to operate before being put to
work much like the person operating them.
Manufacturers are moving towards reduced maintenance
systems and smart technology (such as maintenance free
bearings and engine management systems) that tell us when
servicing is due and protect expensive components by shutting
systems down when there is a problem. But this means that we
seem to have forgotten the basics! Machines still need to be
inspected prior to being put to work, radiators need to be
cleaned, oil levels need to be checked, bearings need to be
greased, air filters need to be blown out, all to avoid catastrophic
and costly mechanical failures.
Machines are not that different to humans when it comes to their
basic needs. All need fuel, fresh air, protection, warming up,
flexibility in joints and muscles so we can remain active. Simple
basic body maintenance if we dont look after ourselves we
become ill. So what makes us think that we can jump on a
machine on a Monday morning, start it up on full throttle, fill it
with diesel and expect it to cut grass for eight hours, five days a
week (with perhaps a 15 minute introduction to a grease gun air
line and if its lucky a pressure washer) and for it not to
complain? We expect these machines to work like this without
breaking down I think not. If we treated our bodies this way
wed all look like Keith Richards (sorry Keith), come to think of it
hes still going strong which somewhat defeats my argument,
but at what cost?
Whilst technology is moving in the right direction by making

things easier and more efficient, there is still a basic need to

look after machinery and to not assume that things will continue
to operate unaided. There is no such thing as a maintenance
free machine; from a trowel to a tractor, everything needs a
certain amount of looking after. The warnings are always there
but are usually noted too late when the damage has been done.
That rumbling bearing, reduction in power, or strange burning
smell can all lead to failures that could be avoided if investigated
early. Spending a bit more time at the start of the day checking
those insignificant leaks can help you to avoid a more
catastrophic failure. The same is true of ourselves, the warnings
are there and normally we tend to act on anything out of the
ordinary. The machine unfortunately needs a bit of help, it only
makes a noise (usually an expensive one) when its too late.

b) Maintenance and plant safety go hand in hand

Ans:W hether you are a facility manager or a maintenance
manager in a factory or industrial setting, safety plays a huge
role in your day-to-day tasks and should be a primary concern
for your department. When we think of safety, however, we tend
to think of it in terms of worker safety or making sure we replace
that stairwells hand railing so no one slips and falls down the
stairs. While that is good and should be a part of your
maintenance plans, consider this: Forming your maintenance
management plan around a safety-centric mindset can actually
help your equipment run more smoothly and keep your PM plan
on track.
Equipment failure not only leads to that which shall not be
mentioned (aka downtime: oh no, I mentioned it!), which
causes a loss of revenue and makes workers stand around
twiddling their thumbs, but it can also be a cause of on-the-job
or on-site injuries as well. One example of this would be a
neglected roof that needs repair. Over time, the roof could leak,

causing a fall and structural damage. By being mindful of these

types of situations and taking a proactive maintenance stance,
you can prevent both equipment and facility damage as well as
personal injuries.
Another great benefit to taking a safety first maintenance
stance is the fact that it will help you stay on top of compliance
and regulatory standards. Chemical spills and burns can arise
from faulty equipment and poor maintenance strategies, so
knowing about these risks and listing them as a primary part of
your maintenance schedule helps you reduce the risk of
regulatory fees and fines as well.
Consider moving facilities, cruise ships, and how poor air quality
or contaminated water would affect the thousands of people on
the boat. This applies to hospitals and schools as well. Of course,
it is an added concern in a building where chemicals are being
handled. While preventing shutdowns and evacuations is very
important, nothing, not even money, should be placed higher on
the list of a maintenance manager than worker and visitor
safety.
c) Down Cost makes the machine maintenance expensive
Ans: The time elapsed from the machine fails to perform its
function to the point it is repaired and bought into operation
condition is called as Down Time or Break down Time. The
down time cost made up of:
i. The loss of production and hence the profit for the period the
machine or equipment remains idle due to breakdown.
ii. Wages paid to the workers while they remain idle.
iii. Depriciation of the machine for the period of idleness.
iv.Reduction in sales caused by the dissatisfaction of the
customers from the delays in deliveries.
v. Loss due to srappin or reworking of the material that may be
spoiled due to machine stoppage.

Hence, If there is no good maintenance of equipment to

minimize breakdown time then the down time cost makes the
machine maintenance expensive.

30. Explain the following terms i) Total productive

maintenance (TPM) ii) Total Planned quality
Maintenance(TPQM)
Ans: i) Total productive maintenance (TPM): TPM concept aims at
Zero Down-time. With today technology, computer control and
considering cost benefits ratios concept of TPM has emerged.
TPM means
o
Total employee involvement,
o
Total equipment effectiveness, and
o
Total maintenance delivery system
TPM combines American practice of Preventive Maintenance
(PM) with Japanese concept of Total Quality Control (TQC) and
Total Employee Involvement (TEI) resulting in innovative system
for equipment maintenance with optimized effectiveness
eliminating breakdowns and promoting autonomous operator
maintenance through day-to-day activities.
Production equipment operators also involves in maintenance
and repair activities and they have constant role with operators.
TPM aims to maximize effectiveness by eliminating waste,
failure of equipment, set up and adjustment, reduced speed,
process defects and reduced yield.
The operators carry out daily maintenance works like clean up,
lubrication, tightening, external inspection and maintenance
personnel carry out periodic inspection and precision diagnosis
and repairs.
The main elements of TPM are:
o
o

To change corporate culture for maximizing effectiveness.

To establish the sound system to prevent losses.

TPM is implemented not only by production related but also

other departments such as product development, sales,
administration etc.
o
It involves every employee from top to bottom level.
o

ii) Total Planned quality Maintenance (TPQM): It is current in

technology program designed to maximize equipment reliability
and plant availability while minimizing maintenance cost and
resources. TPQM is comprehensive program that addresses both
programmatic and technical concerns of maintenance. It
integrates maintenance with quality process (plan, do, check,
adjust).
TPQM considers maintenance as integrated function of
maintenance task, logistic support, configuration management,
technical documentation, personnel, work control, maintenance
management information service, management organization
and administration, measures of effectiveness and maintenance
engineering.
TPQM employs reliability techniques for life cycle maintenance
and logistic for resources required. It permits pre-planning of
over 90% activities and is a living process designed for
continuous improvement.

31. Define the term maintenance. What are the objective

and importance of maintenance? Write the types of
Maintenance.
Ans: Maintenance can be defined as combination of actions such
as replace, repair, service (or modify) the components or some
identifiable grouping of components in a manufacturing plant so
that it will continue to operate at specified availability for a

specified time.
Objective of maintenance:
1.
Minimum breakdown
The time interval between the point where machine fails to
perform to point it is repaired and brought back in operation is
called break time or down time. The down time cost consists
of
Loss of production
Wages paid to idle workers
Depreciation of machine for idle period
Reduction of sales by customer dissatisfaction
Loss due to scrapping or reworking of material due to
machine stoppage.
2. Utilization of optimum capacity
2. To keep life of the equipment
2. To ensure the highest availability
2. To modify the machine tools and other production facilities
2. Economy
2. Improve productivity
2. Ensure safety
3. Importance of maintenanace:
o
o
o
o
o

Maintenance is an important factor in quality assurance, which is

another basis for the successful competitive edge.
Inconsistencies in equipments lead to variability in product
characteristics and result in defective parts that fail to meet the
established specifications. Beyond just preventing break downs,
it is necessary to keep equipments operating within
specifications (i.e. process capability) that will produce high level
of quality.
Good maintenance management is important for the
companys cost control. As companies go in for automation
to become more competitive, they increasingly rely on
equipments to produce a greater percentage of their output. It
becomes more important that, equipments operate reliably

within specifications. The cost of idle time is higher as

equipment becomes more high-tech and expensive e.g. NC/CNC
machines and robots.
Dependability of service is one of the performance measures by
which a company can distinguish itself from others. To establish
a competitive edge and to provide good customer service,
companies must have reliable equipments that will respond to
customer demands when needed. Equipments must be kept in
reliable condition without costly work stoppage and down time
due to repairs, if the company is to remain productive and
competitive.
Many manufacturing organizations, particularly those with JIT
(Just-In-Time) programs are operating with inventories so low
that, they offer no protection in the event of a lengthy
equipment failure. Beyond the cost of idle equipment, idle labor,
and lost ales that can result from a breakdown, there is a danger
of permanently losing market shares to companies that are more
reliable. Maintenance function can help prevent such as
occurrence.
Organizations like airlines and oil refineries have huge
investments in the equipment. Equipment failure will be
disastrous for such companies. They need proper maintenance
to keep the equipment in good condition.
Following are the types of maintenance:
i. Breakdown maintenance
ii. Schedule maintenance
iii. Preventive maintenance
iv. Total productive maintenance(TPM)
v. Total Planned quality Maintenance(TPQM)
32. Define the Preventive maintenance. State the

objectives and advantages of preventive maintenance.

Ans: It consists of routine planned actions to prevent breakdown
and ensure efficiency of the operation. Inspection is carried out
to anticipate breakdown to prevent them from occurring. The
underlying principle is Prevention is better than cure. The data
with frequency with which machines have maintenance free
performance for given operation hours is needed to set
maintenance period for a machine or group of such machines.
Objectives
1.
2.
3.

Minimize unanticipated production interruptions

Make plant equipment and machines always available
Maintain value of machinery, equipment by periodic
inspections and necessary repairs
4.
Ensure safety of employees
5.
Make maintenance job easier
The preventive maintenance includes following activities:
1.
Lubrication
2.
Cleaning
3.
Adjustments
4.
Proper coating
5.
Examination of components state
6.
Analysis of history of machines and its component
7.
Replacement of worn out parts
8.
Repair of cracks and other repairable damages
9.
Modification
10.
Capital replacement
Elements of preventive maintenance
o
Inspection
There are generally signs of wearing long before actual failure.
External inspection can be done for abnormal sound, vibration,
eccentricity, heat smoke etc. internal inspection means
inspection of internal parts like gears, bushes, bearings,
tolerances in parts etc. frequency of inspection should be
carefully decided.

o
Overhauls
It involves stripping of a machine, cleaning it, rectifying its
defects and replacing its worn out parts. Its generally taken
twice or once a year or in more years.
o
Lubrication
It reduces wear and tear of moving parts and cuts down power
consumption. It maintains temperature and protects from rust,
dust and corrosion. So proper lubrication guarantees life of
equipment failure of machine can occur if lubricants are not
applied.
o
Planning and scheduling
Repairs and replacement can be planned a week or a month in
advance, whereas overhauls about 3months ahead. The
components of maintenance, methods and time should be
clearly planned and scheduled.
o
Record and analysis
The records of instruction manuals, drawings, equipment
records, equipment history, inspection registry, log books are
kept. It helps to decide the degree and type of attention that
should be paid to an equipment.
o
Training of maintenance staff
Technicians and supervisors are trained to carry out
maintenance, inspection and repairs in systematic way.
o
Storage of spare parts
Adequate stock of spare parts helps to avoid production loss due
to unavailability of parts. However their cost also plays a role.
The level of spare parts can be determined on basis of past
experience, difficulty of availability, reliability of supplier, cost of
having idle plant, cost of buying versus storing the part.
Advantages of preventive maintenance:
1.
2.
3.
4.
5.

Reduction in breakdown time.

Lesser no. of repairs.
Fewer stand by equipment and spare parts needed.
More employees safety
Increased equipment life

6.
7.

Lower maintenance and repair cost

Maintenance work can be properly planned.
Economic aspects of maintenance:

1.
2.
3.

Down time cost

Cost of spare or other materials for repair
Cost of Maintenance labour and overheads of maintenance
department
4.
Losses due to inefficient operation of machine
5.
Capital expenditure for replacement or machines.
33. Define schedule maintenance and state its benefits.
Ans: This system provides for inspection, overhaul, lubrication
and servicing of certain machines at predetermined dates with
aim to minimize breakdown. Scheduled maintenance utilizes idle
time of equipment without disturbance in production schedule.
However, mere scheduling is not generally sufficient and can
lead to increased down time due to non-availability of requisite
skills and materials.
Advantages
It reduces down time during repairs.
The breakdown is minimized and machines run at higher
efficiency.
Pre-determination of maintenance date enables to plan
work accordingly.
It is done even in those companies where breakdown
maintenance is practiced.
Scheduled maintenance is compromise between
breakdown and preventive maintenance.
34. Describe Breakdown maintenance give its limitation.
Ans: Repairs are made after the equipment fails to perform its
normal function. No much attention is given to a machine or any
other facility until it actually breaks out and fails to perform. Eg.

An electric motor will not start if its belt is broken.

Then, production department requests maintenance department
to rectify the defect. The maintenance department inspect the
equipment, locates the fault and makes necessary repairs.
Causes of equipment breakdown may be as follows:

Failure to replace worn out parts.

Indifference towards minor faults.
Lack of lubrication
External factors Eg. Irregular voltage, wrong fuel etc.
Neglected cooling system
Indifference towards equipment vibrations, unusual sound
produced by rotating parts, heating up etc.
Disadvantages of breakdown maintenance:
Breakdown is random in nature which leads to plant
disruption.
Impossible to plan load and distribution of maintenance
work for balanced attention of all equipment.
Increases overtime practice and down time due to nonavailability of requisite manpower and spares.
Can lead to considerable reduction of output.
Difficult to prevent distortion of quality of products.
Increased chances of accidents and less safety to both
workers and equipment.
Cannot employed to equipment/items like cranes, hoists,
elevators, electrical installations etc.
However, breakdown maintenance involves small
maintenance staff, little administrative work and few
records. It is economic for certain non-critical items whose
repair and down time cost are less this way.
35. Describe the importance of quality for manufacturing
organization. Give four important definitions of quality.

Ans: Quality management is centered around the

management and control of producing fantastic products, and
a business environment that will facilitate their production.
Customer satisfaction is a very important part of quality
control and this is an aspect of business that should definitely
receive due consideration.
Its all about quality management, control, and improvement.
When these three aspects are met, products can be
manufactured with value in mind that will benefit both the
customer and the company in a major way.
Control and improvement can be distinguished from in the
following manner. Quality control is the ongoing effort to
maintain the integrity of a process that will also help in
maintaining the reliability of achieving a certain
outcome. Quality improvement, on the other hand, is the
purposeful change of a process that is designed to improve
the reliability of achieving a specific outcome. Assurance is
another important aspect and can be defined as the planned
or systematic actions that are necessary to provide the
confidence that a product or service will satisfy the given
requirements that have already been set forth.
Quality management is used in all areas of a company from
the products that are manufactured to the customer services
provided by the employees. Team members often work on
projects designed to improve the overall companys value. It
is an ongoing process, and is important to the success of a
company. It can be implemented on several different levels.
Companies must test the quality control of their products to
make sure they are on par with what is expected. Customers
who have purchased products or services from a given
company for a period of time will expect a certain level of
quality. That is why value management is a continual process
that must be adhered to on a regular basis. It has also
become a part of everyday operations for many businesses
and is implemented into their normal agendas. The idea is

that if products or services can continuously be improved

upon, the longer the company who makes those products or
services will remain in business.
Followings are the four important definition of Quality:
1. Fitness for purpose: The component is said to possess good
quality if it works well in the equipment for which meant. Quality
is thus defined as fitness for purpose.
2. Grade: Quality is distinguishing feature or grade of the
product in
appearance,performance,life,reliability,taste,odour,maintainabilit
y etc. This is generally called as quality characteristics.
3. Degree of appearance: Quality is the degree to which a
specified product is preferred over competing products of
equivalent grade, based on comparative test by customers,
normally called as customers preference.
4. Degree of excellence: Quality is measure of degree of general
excellence of the product.
36. Quality is a new competitive weapon. Justify the
statements.
Ans: Organizations are concerned about increasing costs and
always try to find out ways and means of facing this challenge
as it is vital for the long term survival of organizations. However,
many organizations fail to determine the root causes for such
cost increases as most organizations are mainly focused on
visible costs reflected in the accounts.
But if an organisation really assesses the internal activities the
actual picture may be entirely different due to many internal
issues such as waste within the organisation which may be high.
If the organisation has a sound approach to control waste it can
cut down costs and face the challenges of increasing costs to an
extent.
To lead and operate an organisation successfully, it is important

to direct and control activities in a systematic, transparent and

open manner.
Managing an organisation is not an easy task unless and until its
activities are streamlined to avoid unwanted costs. It is
necessary to manage the quality of every process of the
organisation to improve performance of the organisation by
providing quality products or services to customers.
Customers expect the products or services they buy to meet or
exceed certain levels of performance. Conformance to
specifications at all times is, therefore, important to ensure that
the product meets the expected requirements in a consistent
manner.
Managing quality
Despite widespread understanding of the importance of quality,
many organisations still face difficulties integrating quality into
their management efforts.
Due to the lack of proper understanding of the fundamental
principles of quality, many organisations consider setting up a
quality culture within an organisation as the job of the quality
assurance department and others in the organisation do things
in an incorrect manner in their day-to-day functions neglecting
quality principles leading to waste.
Sometimes these lead to a delay in releasing products to the
market, service delays to customers, manufacture of defective
products, re-work or frequent break downs of machines, which
are issues which need to be controlled and managed to minimise
costs. However, top management is not always aware of
structured approaches to problem solving.
They handle many problematic conditions in a superficial
manner. Many problems remain unresolved because of the
inability to understand the primary causes and the inter-action
and effects of uncontrollable sources such as the influence of the
environment on the performance of the organisation.

One way to improve performance is through an acceptable

Quality Management System incorporated with the functions of
the organisation.
Role of quality management models
There is no need to reinvent the wheel to determine a suitable
quality management model to improve performance as a
number of such concepts and models have been introduced to
the world..
Some of those are ISO 9001 Quality Management System, EFQM
Excellence model, Malcolm Baldrige Quality Award, Total Quality
Management System (TQM), Six Sigma, Lean Management
System, Toyota Way, Deming's fourteen points and SLNQA.
These models are popular and are used by many organisations
in the world.
The ISO 9001 Quality Management System is considered as an
internationally accepted Quality Management reference
standard to set up effective Quality Management programs to
focus on preventing defects rather than detection of defects
through inspection.
To reliably improve quality, an organisation should understand
and improve the processes that generate quality. Moreover,
effective quality management requires the support and
commitment of employees at all levels of the organisation to
achieve organisational goals.
Total employee involvement is needed to implement the
practices and tools of the Quality Management System.
The ISO 9001:2008 specifies a need for a Quality Management
System where an organisation needs to consistently provide
products and services that meets statutory and regulatory
requirements to enhance customer satisfaction through the
effective application of the system, including processes for
continual improvement of the system and the assurance of
conformity.

All requirements of ISO 9001:2008 are generic and are

applicable to all organisations, regardless of type, size and
product.
The Malcolm Baldrige National Quality Award was set up by the
US congress in 1987 to promote quality management practices
and improve products of the American industry. The award
'Criteria for Performance Excellence' sets up a framework for
integrating total quality principles and practices in any
organisation.
The award stimulates organisations to attain excellence in
quality and productivity while obtaining a competitive edge
through improved products and services.
The award criteria includes seven requirements.This award
scheme was introduced by the European Community to pass on
the message of the importance of quality to meet the challenges
in the global market and to improve the quality of life of the
people.
The results criteria consists of people satisfaction, customer
satisfaction, impact on society and business results.Excellence
awards are designed to celebrate and recognise organisations
that achieve high levels of performance - not only in what they
achieve, but also in how they achieve it.
Excellence awards use models - frameworks that not only form
the basis of the assessment criteria, but which can also be used
to drive improvements and benchmark performance and be
used to manage specific activities such as procurement.
Total Quality Management is a management approach that
originated in the 1950s. It became popular in the early 1980s.
Total Quality is a description of the people, culture, attitude and
organisation of a company that strives to provide customers with
products and services exceeding customer needs.
This requires quality in all aspects of the company's operations,
with processes being done right the first time with defects and

waste eradicated from operations.

To achieve excellence, organisations must develop a corporate
culture of treating people as their most important asset and
provide a consistent level of high quality products and services
and to achieve this, Total Quality Management (TQM) can be
used as a tool. It is a combination of quality and management
tools to increase business and reduce losses due to wasteful
practices.

37. Quality is defined as the degree of conformance of

all the relevant features and characteristics of the
product to all aspects of a customers need, limited by
the price and delivery he or she will accept. Discuss and
provide suitable examples.
Ans: The word "Quality" represents the properties of
products and/or services that are valued by the
consumer.

Quality is a momentary perception that occurs when

something in our environment interacts with us, in the
pre-intellectual awareness that comes before rational
thought takes over and begins establishing order.
Judgment of the resulting order is then reported as
good or bad quality value.

We at Navy Medicine define quality as: delivering

products and services to our customers which are
faster, better, cheaper and newer.

 There are two definitive types of "quality".

Quality of design
Quality of the process
Whether you are in discrete manufacturing, process
manufacturing or a service related industry you have
design issues of usability, comfort, and tolerance of
durability beyond prescribe use and identity of "status"
of design quality. In this regard, you do not have the
axiom of "variation is inherent..."
The ability to live up to the "quality of design" is
maintained by the "quality of the process"

My definition of Quality is way off from the traditional

concept of Quality. My definition of Quality is:
"Reducing the variation around the target".
That means, it is very basic that process limits are
within the spec limits and process average is very close
to the target. I think " Quality" concept should be
AFTER the above condition. If that's so, strive should be
reduce the variation of the process while maintaining
the process average close to the target.
All your actions aimed at the translation,
transformation and realization of customer
expectations , converting them to requirements, both
qualitatively and quantitatively and measuring your
process performance during and after the realization of
these expectations and requirements .
Quality is doing the right things right and is uniquely
defined by each individual.
A product or process that is Reliable, and that

performs its intended function is said to be a quality

product.
The degree to which something meets or exceeds
the expectations of its consumers.
"Conformance to *Valid* Requirements"
where to be valid, the requirements must be proven (in
advance by management) to:
1) be achievable in operation
2) meet the needs of the intended user
making this a universal, operational and easy-to-use
definition for the quality for all outputs from any work
activity or process.

The definition depends on the purpose and for whom

you are talking:
If you talk for your customers, then it is what ever he
says it is, what he expect from the product or service.
If you talk to your company, to your people, then I
follow the Kano Model. There are three part of Quality:
1. The Basic Q. What absolutely must be. w/o the
customers is dissatisfied.
2. The Customer expected Q. achieve all and the
customer is satisfied. I.e Six Sigma
helps to do
that.
3. The exciting Q. The customer does not know it
exist, is possible.

This becomes tomorrow's expectation.

This is our slogan, and our policy..."Quality" is to
satisfy the ever-changing needs of our customers,
vendors and employees, with value added products and
services emphasizing a continuous commitment to
satisfaction through an ongoing process of education,
communication, evaluation and constant
improvement.
Quality is meeting the customer's needs in a way
that exceeds the customer's expectations.
"Quality is nothing more or less than the perception
the customer has of you, your products, and your
services"!
Definition of Quality: "WOW"
RATIONALE: Suppose you were with your *soul mate*,
*significant other* *spouse* etc. and after a
relationship that person looked longingly into your eyes
and said "That met the requirements!" or "There were
no defects there!" or "That had all the value I wanted!"
or "The degree of excellence was acceptable!. Wouldn't
you rather have that person look into your eyes and
say "WOW!"?
SOURCE: I wish I could remember the specific phrase
from the book/article, but over the years this has been
my approach to the tricky question of how to define
quality.

"Quality is the extent to which products, services,

processes, and relationships are free from defects,
constraints, and items which do not add value for
customers."

My definition of quality is included in our textbook

entitled Strategic Quality Management: A Strategic,
Systems Approach to Continuous Improvement,
published by Dame Publishing Company, a Division of
Southwestern Publishing Company.

Clean, precise and flawless

Quality is a perceived degree of excellence with a

minimum usually set forth by the customer.

Quality-The production of a commodity which

conforms to standards applied to said commodity,be
they mechanical standards, society's standards etc.

When the customer returns and the product doesn't.

When something is what you expect it to be then it is

perceived as quality.
Thus, quality is a fulfillment of expectation.
38. What is total quality management? Write the history
of evolution of quality management. State the guiding
principles of TQM. Describe the various elements of TQM
in brief.
Ans: Total Quality Management (TQM) is the continuous process
of reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the customer

experience, and ensuring that employees are up-to-speed with

their training. Total quality management aims to hold all parties
involved in the production process accountable for the overall
quality of the final product or service.
History of evolution of Quality Management:
The history of total quality management (TQM) began initially as
a term coined by the Naval Air Systems Command to describe its
Japanese-style management approach to quality improvement.
An umbrella methodology for continually improving the quality
of all processes, it draws on a knowledge of the principles and
practices of:

The behavioral sciences

The analysis of quantitative and nonquantitative data
Economics theories
Process analysis

Evolution of Total Quality Management: TQM Timeline & History of TQM

1920
s

Some of the first seeds of quality management

were planted as the principles of scientific
management swept through U.S. industry.
Businesses clearly separated the processes of
planning and carrying out the plan, and union
opposition arose as workers were deprived of a
voice in the conditions and functions of their
work.
The Hawthorne experiments in the late 1920s
showed how worker productivity could be
impacted by participation.

1930
s

Walter Shewhart developed the methods for

statistical analysis and control of quality.

1950

W. Edwards Deming taught methods for

statistical analysis and control of quality to

Japanese engineers and executives. This can be
considered the origin of TQM.
Joseph M. Juran taught the concepts of controlling
quality and managerial breakthrough.
Armand V. Feigenbaums book Total Quality
Control, a forerunner for the present
understanding of TQM, was published.
Philip B. Crosbys promotion of zero defects
paved the way for quality improvement in many
companies.

1968

The Japanese named their approach to total

quality companywide quality control. It is around
this time that the term quality management
systems arises.
Kaoru Ishikawas synthesis of the philosophy
contributed to Japans ascendancy as a quality
leader.

Toda
y

TQM is the name for the philosophy of a broad

and systemic approach to managing
organizational quality.
Quality standards such as the ISO 9000
series and quality award programs such as the
Deming Prize and the Malcolm Baldrige National
Quality Award specify principles and processes
that comprise TQM.

Guiding principles of TQM:

In order to exceed customer expectations, an organization must
embrace five principles:
Produce quality work the first time

 Focus on the customer

Have a strategic approach to improvement
Improve continuously
Encourage mutual respect and teamwork
Producing quality work (the first time) means quality is
built into the processes for producing products or providing
services, and continual improvement measures are taken to
ensure the processes work every time. Employees are
empowered to make decisions to improve a process and are
provided with continual training to develop their skills .
Focusing on the customer involves designing products or
services that meet or exceed the customer's expectations. This
involves the product itself, its functionality, attributes,
convenience and even the means by which the information
about a product is received by a client.
By having a strategic approach to improvement, processes
are developed and tested to ensure the product or service's
quality. This also involves making sure suppliers offer quality
supplies needed to produce products.
Improving continuously means always analyzing the way
work is being performed to determine if more effective or
efficient ways are possible, making improvements and striving
for excellence all the time.
Encouraging mutual respect and teamwork is important
because it fosters a single-organizational culture of excellence
by knowing that every employee from top to bottom of the
hierarchy holds the same core principles at heart.

Elements of TQM:
(i) Managements commitment to quality:
If an organisation is serious about implementing TQM, the lead
has to be taken by the top management with full commitment.
It must initiate quality improvement programmes. The top
management should continue all the efforts and provide the
resources to continue quality improvement programmes. This is
provided by collecting, reporting and use of quality related cost
information.
(ii) Customer satisfaction:
TQM is designed in such a manner so as to meet the
expectations of customers. In the present era, customer is the
king. It must be recognised that customers are the most
important persons for any business. The very existence of an
organisation depends on them. They are the life blood of a
business and deserve the most courteous and affectionate
treatment.
(iii) Preventing rather than detecting defects:
TQM checks the poor quality products or services rather than
simply to detect and sort out defects. Prevention rather than
detection is the main characteristic of TQM. Some of the
important techniques of TQM which aim at the prevention of
defects rather than the detection of the defects are statistical
process control, continuous process improvement and problem
solving and system failure analysis etc.
(iv) Measurement of Quality:

Quality is a measurable entity and we must know what current

quality levels are i.e. Where we are or where we stand in respect
of the quality and what quality levels we are aspiring for or
where we are going
(v) Continuous improvement:
TQM comprises of a continuous process of improvement
covering people, equipment, suppliers, materials and
procedures. It includes every aspect of an operation in an
organisation. In Japan the word Kaizen is used to describe the
continuous process of improvement. In USA, TQM zero defects
and six-sigma are used to describe such efforts.
(vi) Corrective action for root cause:
TQM aims at preventing repetition of problems by identifying the
root causes for their occurrence and developing means and
corrective actions to solve the problems of the root level. Failure
analysis and problem solving skills are very useful techniques in
this regard.
(vii) Training:
Proper training programmes have to be undertaken to train the
employees for the use of TQM concepts and techniques.
Employees have to be provided regular training for continuous
improvement.
(viii) Recognition of high quality:
TQM aims at developing long term relationships with a few high

quality suppliers rather than those suppliers who supply the

inferior goods at the low cost.
(ix) Involvement of Employees:
Involvement of employees means that every employee is
completely involved at every step of production process which
plays an active role in helping the organisation to meet its
targets. Employee involvement and empowerment can be
assured by enlarging the employees job so that responsibility
and authority is moved to the lowest level possible in the
organisation.
(x) Benchmarking:
Benchmarking is a systematic method by which organisations
can measure themselves against the best industry practices.
Benchmarking aims at developing best practices that will lead to
better performance. It helps a company to learn and incorporate
the best practices into its own operations. Benchmarking is a
technique of distinguishing an organizations efforts with the
best performance in the field and also to suggest how the gap
between the two performances can be removed. Thus,
benchmarking is a technique of continuous improvement.