Name : …………………………………………….

………………
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Roll No. : …………………………………………...……………..
Invigilator’s Signature : ………………………………………..

CS/MBA/SEM-2(FT)/MB-204/2013
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2013
PRODUCTION & OPERATION MANAGEMENT
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Time Allotted : 3 Hours Full Marks : 70

The figures in the margin indicate full marks.

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Candidates are required to give their answers in their own words

as far as practicable.

GROUP – A
( Multiple Choice Type Questions )
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1. Choose the correct alternatives for any ten of the following :

10 × 1 = 10
i) Procurement cost ................... with the increase in
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inventory level.
a) decreases
b) increases
c) does not change
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d) may increase or decrease.

ii) The economic order quantity for an item has been found
out to be 300. If 12000 items are required per annum
a c.

and the ordering cost is Rs. 20 per order, then the

annual procurement cost is
a) Rs. 1,200 b) Rs. 800
c) Rs. 1,800 d) Rs. 20.
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iii) The main objective of assembly line balancing is

a) to reduce the work element time
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b) to combine all the work elements into one work
station
c) to reduce the total number of operations
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d) to reduce the balance delay of the line.
iv) After inspection of 10 carpets, each of length 2 metres,
the following number of defects is found on each
carpet : 35, 32, 42, 56, 41, 26, 40, 33, 51, 39.
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The control chart suitable will be
a) R-chart
b) p-chart
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c) c-chart
d) a combination of R-chart and p-chart.
v) Batch Production is adopted when
a) volume is very large and variety is less
b) volume is small and variety is large
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c) both volume and variety are medium

d) all of these.
vi) Which of the following is not a component of inventory
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carrying cost ?
a) Capital cost b) Insurance cost
c) Obsolescence cost d) Transportation cost.
vii) In a situation of rising prices, the LIFO method of stock
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valuation will have which of the following impacts ?

a) Inflated Profit b) Suppressed Profit
c) Unchanged Profit d) none of these.
a c.

viii) A Six Sigma process ensures not more than ..................

defects per million opportunities.
a) 2700 b) 4·3
c) 3·4 d) 99·73.
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ix) Which one of the following statements best fits with

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'Kaizen' ?

a) Kaizen is a system of production management for

streamlining certain repetitive operations
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b) Kaizen is a system of continuous improvement in
quality, technology, processes, company culture,
productivity, safety and leadership
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c) Kaizen is a tool for work study

d) none of these.
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x) Fishbone diagrams

a) show that the causes of a certain event are charts

which identify potential causes for particular
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quality problems

b) show cause and effect relationship with respect to

manufacturing activities only
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c) show the difference between actual and planned

performance flow chart

d) none of these.
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xi) Examples of variable Control Chart are

a) X-bar, R-Chart & P-Chart

a c.

b) R-Chart, MA-Chart & C-Chart

c) P-Chart, C-Chart & U-Chart

d) X-Bar Chart, R-Chart & MA-Chart.

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xii) A critical path has

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a) zero float
b) longest activity duration
c) both (a) and (b)
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d) none of these.
GROUP – B
( Short Answer Type Questions )
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Answer any three of the following. 3 × 5 = 15
2. What factors need to be considered for the selection of a site
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for a plant ?
3. State the objectives of Work Study.
4. Ten woolen carpets were studied critically for total number of
defects in their texture. The details of the number of defects
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in each carpet are given below :

Carpet
1 2 3 4 5 6 7 8 9 10
No.
No. of
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5 7 3 2 6 4 5 3 2 3
defects
Calculate the following for constructing a control chart for
number of defects :
(a) Central line, (b) Upper Control Limit (UCL), (c) Lower
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Control Limit (LCL).

5. What do you understand by 'Material Requirement
Planning' ? How is it used in planning for materials ?
a c.

6. M/s. Raj Engineering Works, Durgapur has been given a

contract by Indian Railways to make seven components.
Each of these components require processing on two
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machines M 1 and M 2 in the order M 1 , M 2 . The time

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required by each of these jobs for processing on two
machines is given below. Find the optimal sequence for
processing the seven jobs and calculate the waiting time for
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jobs.
Job M1 M2

A 9 2
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B 5 4
C 8 10
D 3 5
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E 4 6
F 1 11
G 7 6
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GROUP – C
( Long Answer Type Questions )
Answer any three of the following. 3 × 15 = 45
7. a) What are the various costs associated with inventory
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management ?
b) Explain why ordering costs decrease with increase in
inventory.
c) A factory uses annually 24,000 units of raw material,
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which cost Rs. 1·25 per unit. Placing each order costs
Rs. 25 and carrying cost is 6% per year of the average
inventory.
a c.

i) Find the economic order quantity and the total

inventory cost including the cost of material and
no. of orders to be placed for the above per year/or
how frequently should the order be placed ?
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ii) The factory works for 320 days a year. If the

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procurement time is 10 days and the safety stock
is 450 units, find the reorder point, the minimum,
maximum and average inventory. 5+4+6
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8. a) What is ERP ? What are the benefits of ERP ?

b) Jobs A through E in the aircraft repair facility must

each pass through the Sheet Metal centre and then
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through Paint centre. The processing time for each job
in each centre is shown below. Find the sequence that
minimizes completion time of the job. Calculate the
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cumulative flow time and idle time.

PROCESSING TIME IN DAYS

Wc-1 Wc-2
Jobs
(Sheet metal centre) (Paint centre)
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A 4 5

B 17 7
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C 14 12

D 9 2
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E 11 6

6+9
9. a) Explain Range Chart and its application in Quality
a c.

Control function.

b) Briefly justify relevance of Economic Order Quantity

(EOQ) in management of inventory.
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c) A spare part "I-10" is produced by a water pump

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manufacturer from a local firm and the average usage
rate in pump manufacturing activity is 500 numbers
per month. Ordering cost of "I-10" is Rs. 36 per order
and the cost of holding this inventory is Rs. 1·20 per
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piece per year.

i) Determine the quantity that should be procured at

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a time to optimize the total cost.

ii) If the usage of I-10 increases to 40 numbers per

day and inventory carrying cost becomes
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Re. 0·02 per unit per day, what will be the revised
EOQ ? (Assume : 300 days in a year.)

iii) From the sum, show that ordering cost is equal to

inventory holding cost in case of EOQ.
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iv) If the company maintains a safety stock of

1000 units, calculate total cost (ordering cost and
inventory carrying cost) with respect to (i) above.
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3+3+(2+3+2+2)

10. a) What do you mean by PERT in Project Analysis ?

b) What are the three time estimates related to PERT ?

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c) Write down the difference between PERT and CPM.

d) A firm is considering the launch of a new product in the

a c.

national market. This project consists of ten major

activities. The firm does not have adequate prior
experience of similar project. The project is riddled with
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interference. The precedence relationship and the three

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possible time estimates of each activity are given in the
table below :

Most
Optimistic Pessimistic
Predecessor Likely
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Activity Duration Duration
Activity Duration
(weeks) (weeks)
(weeks)
A None 2 4 6
B None 2 3 10
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C B 4 7 10
D A 4 5 12
E B 2 7 12
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F C, D 3 4 5
G C, D 6 8 10
H E, F 6 7 14
I G, H 2 3 16
i) Draw the network of the above project.
ii) What is the expected project completion time ?
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iii) Identify the critical activity and critical path.

iv) Determine the float of each activity.
2+1+2+(3+2+1+4)
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11. Write short notes on any three of the following : 3×5

a) PDCA cycle
b) Johnson's Rule
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c) Critical path
d) Vendor Rating
e) Value Analysis.
a c.

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