Q.1 Explain the elements or components of operations strategy.

Ans. There are 6 elements of operation strategy

1. Designing of production system
2. Facilities for production and services
3. Product or service design
4. Technology selection, development and process development
5. Allocation of resources
6. Focus on facilities planning
1) Designing of production system The designing of production system
involves the selection of type of product design, processing system, inventory
plan for finished goods. Product design has two varieties.
Customised product design: The design is customised when the
volume is low and special features are inbuilt. Examples: Industrial
products like turbines, boilers, air compressors, etc.
Standard product design: The designer adopts a universal design
so that the product will have wide acceptance across the customers. Also
the demand is more and quantity is high. Examples: Air conditioners, TV,
fans, etc.

2) Facilities for production and services:- Certain specialisation in

production allows the firm to provide the customers with products of lower cost,
faster delivery, on-time delivery, high product quality, and flexibility. Here,
overheads will be less and the firm can outperform compared to the competitors.
For example, Nikon Cameras plan and establish special lines for each
model and manufacture huge quantities for the global market. Here, the
economies of scale and the continuous demand matters.

3) Product/service design and development: The following stages are

used in developing a product.

Generating an idea.
Creating feasibility reports.
Designing prototypes and testing.
Preparing a production model.
Evaluating the economies of scale for production.
Testing the product in the market.
Obtaining feedback.
Creating final design and starting the production.

4) Technology selection and process development: - A product

selected for production will be analysed for the process and the applicable
technology for optimal production. There are many challenges faced by the
operations managers in this decision as the alternatives are many. The technoeconomic analysis for each alternative will help to decide the required
technology.

5) Allocation of resources: The production units face continuous problems

of allocating the scarce resources like capital, machines, equipments, materials,
manpower, services, etc. Allocation at the right time to the right place of
production indicates the efficiency of the production planners. Optimal use of
resources will enable economical production. Minimising waste, optimal
utilisation of resources, and the best quality product demand a sound operations
strategy.

6) Facility, capacity and layout planning: The location, layout, and

facilities creation for the production are the key decision areas for the operations
manager. These are critical for achieving the competitiveness. The decision also
influences the future expansion of the plant.

Q.2 Answer the following questions:

a. What is location decision sequence?
b. Which general factors influence the plant location decision?
Ans. A. location decision sequenceLocation decisions start from the national level, and move to the site level after
moving through regional level and the community level. This means that, first
the country of choice is to be selected, followed by regional choices and finally
community levels have to be selected.

B. The general factors that influence the plant location are listed
as follows:
1. Availability of land Availability of land plays an important role in
determining the plant location. On several occasions, our plans, calculations and
forecasts suggest a particular area as the best to start an organisation. However,
availability of land may be in question. In such cases, we will have to choose the
second best location.

2. Availability of inputs While choosing a plant location, it is very

important for the organisation to get the labour at the right time and good
quality raw materials. The plant should be located:
Near to the raw material source
At the market place
Close to the market when universally available, so as to minimise the
transportation cost.

3. Closeness to market places Organisations can choose to locate the

plant near to the customers market or far from them, depending upon the
product they produce. It is advisable to locate the plant near to the market place,
when:

The projected life of the product is low.

The transportation cost is high.

The products are delicate and susceptible to spoilage.

After sales services have to be prompt.

4. Communication facilities Communication facility is also an important

factor which influences the location of a plant. Regions with good communication
facilities namely postal and tele- communication links should be given priority for
the selection of sites.

5. Infrastructure Infrastructure plays a prominent role in deciding the

location. The basic infrastructure needed in any organisation is: Power, Water
and Waste disposal.

6. Transport Transport facility is a must for facility location and layout of

location of the plant. Timely supply of raw materials to the company and supply
of finished goods to the customers is an important factor. The basic modes of
transportation are by air, road, rail, water, and pipeline.

7. Government support The factors that demand additional attention for

plant location are the policies of the state governments and local bodies
concerning labour laws, building codes, and safety.

8. Housing and recreation Housing and recreation factors also influence

the plant location. Locating a plant with or near to the facilities of good schools,
housing and recreation for employees will have a greater impact on the
organisation. These factors seem to be unimportant, but there is a difference as
they motivate the employees and hence the location decisions.

Q.3 Write short notes on:

1. Pareto analysis.
2. Acceptance sampling.
3. Jurans quality trilogy.
4. Taguchis quality loss function.
Ans.

1. Pareto analysis- Pareto analysis is a tool for classifying problem

areas according to the degree of importance and attending to the most

important ones. Pareto principle, verbally stated as vital few; trivial many is
also called as 80- 20 rule, because it is observed that 80 percent of the problems
that we encounter arise out of 20 percent of items. For example, if we find that,
in a day, we have 184 assemblies having problems and there are 11 possible
causes, it is observed that 80 percent of them, that is, 147 of them have been
caused by just 2 or 3 of them. It will be easy to focus on these 2 or 3 and reduce
the number of defects to a great extent. When the causes of these defects have
been attended, we will observe that some other defect becomes predominantly
observed and if the process is continued, we are marching towards zero defects.

2. Acceptance sampling: - Acceptance sampling is also known as end of

line inspection and categorising the products based on sample based inspection.

In acceptance sampling method of quality control, the supplier and customer

agree upon accepting a lot, by inspecting a small number taken randomly from
the bulk supply. Out of the sample, if a small number as agreed upon by the
parties or as validated by a sampling scheme, is determined as defective, the lot
is accepted. If the number of defectives is more than the agreed size, the entire
lot is rejected. Obviously, risks for the producer and buyer exist. As the sample
size increases and the number of acceptable defectives decreases, the risk for
the buyer decreases. And the converse is true. That is the reason these numbers
cannot be fixed as they depend on the customers requirements.

3. Jurans quality trilogy: - Joseph Juran like Edward Deming is considered

as a legendary quality guru and is also regarded as a proponent in spreading
total quality management culture. According to Juran, the definition of quality is
Fitness for use and is considered as most adequate. Juran uses his famous
universal breakthrough sequence to implement quality programmes.
The universal breakthrough sequences are:
Proof of need There should be a compelling need to make changes.
Project identification Here what is to be changed is identified. Specific
projects with time frames and the resource allocation are decided.
Top management commitment Commitment of the top management
is to assign people and fix responsibilities to complete the project.
Diagnostic journey Each team will determine whether the problems
result from systemic causes or are random or are deliberately caused.
Root causes are ascertained with utmost certainty.

4. Taguchis quality loss function: - Genichi Taguchi is a Japanese quality

guru and unlike other experts sees quality from a perspective of loss. He is not in
favour of just meeting the specifications, but contends that the quality
characteristics should always be close to the nominal or target value. Taguchis
contention is that quality comes from design. He advocated a wide use of design
of experiments for experimentation on variables and obtains specifications which
will result in high quality of the product. It helps in bringing cost effective
improvements in quality. He believed that, designers should make robust designs
so that, product can withstand the variability which tends to be persistent and
give quality for longer periods.

Q.4 Answer the following questions:

a. Define project management.
b. What are the major characteristics of a project mindset?
c. What are the advantages of Gantt chart?
Ans. A. Project management
Project management is well recognised as a part of Operation Management
and managing projects is considered as an essential skill required for any
management professional. Project management typically deals with resource

allocation to reach the specified objectives while working within a certain time
frame.

B. Major characteristics of project mindset are:

I) Time: It is an important parameter in framing the right mindset. It is possible
to improve the pace of the project by reducing the time frame of the process.
The mindset is normally to work out a comfort mode by stretching the time
limits.
II) Responsiveness: Responsiveness refers to quickness of response of an
individual. The vibrancy and liveliness of an individual or an organisation are
proportional to its capabilities to respond to evolving processes and structure.
iii) Information sharing: Information is power. Information is the master key to
todays business. Information sharing is an important characteristic of the project
mindset today. A seamless flow of information is the key to build a healthy
mindset among various stakeholders in a project.
iv) Processes: Project mindset lays emphasis on flexible processes. The major
difference in a process and a system is in its capabilities of providing flexibility to
different situational encounters. Flexible processes greater capabilities of
adaptability.
v) Structured planning: Structured planning based on project management life
cycle enables one to easily and conveniently work according to the plan. It also
enables efficient use of project resources and prioritization of the activities based
on resource planning.

C. Advantages of Gantt chart

Total workload shown graphically is simple, clear, and easy to understand.

It indicates the need for more resources or for reassigning or resources
when the load at once work centre becomes too large.
In case some work centres are overloaded, employees from a low-load
work centre may be temporarily shifted to high load centres.

Q.5 Answer the following questions:

a. What are the steps involved in developing an aggregate plan?
b. Explain the various types of pure strategies used in aggregate
planning.
Ans A. The following steps are involved in developing an

aggregate plan:
1. Start with a forecast for each product that indicates the quantity to be
produced during each time period.
2. Combine the individual demands into one single aggregate demand. It is
important to observe that the individual units have to be homogeneous so that
they can be combined.

3. The aggregate demand for each time period is translated into the required
production resources in terms of people, machines, facilities, and materials.
4. The available production capacity is checked against the required or planned
output and a suitable decision is taken with an objective of minimising total cost
or minimising total time or maximising capacity utilisation.

B. Types of pure strategies used in aggregate planning.

Three focused or pure strategies are:
Vary production to match demand by changes in employment
(Chase demand strategy): This strategy permits hiring and layoff of
workers as required. When the output is to be increased more workers are
added and when the output is to be decreased, workers are removed.

Produce at a constant rate and use inventories (Level production

strategy): This strategy retains a stable work force producing at a
constant output rate. Inventory can be accumulated to satisfy peak
demands. Promotional programs may also be used to shift demand.
However, by producing at a constant rate, it is possible that the entire
demand is not met leading to sales loss in some periods while excess
production results in inventory build-up in some cases.

Produce with stable workforce but vary the utilisation rate

(Stable work-force strategy): This strategy retains a stable work force
but permits overtime, part-time, and idle time. Some versions of this
strategy lead to a combination of back orders, subcontracting, and use of
inventories. This strategy avoids the detrimental effects of layoff and
hence is seen as a stable strategy. Typically, information technology
companies follow this strategy.

Q.6 Answer the following questions:

a. Explain the classification of scheduling strategies.
b. List the distinctive differences between the scheduling
followed for manufacturing and services.
Ans A. Following are the classifications:
Detailed scheduling.
Cumulative scheduling.
Cumulative-detailed scheduling.
Priority decision rules.
Let us now discuss these classifications in detail.
Detailed scheduling
All job orders from customers are scheduled to the last details. This may not be
practical in case disruptions are there in production line like machine breakdown,
absenteeism, etc. (Possible in airlines, hotels, etc)
Cumulative scheduling

The customer orders are pooled to form a cumulative work load and then
matched with the capacity. The work load is then allocated in such a way that
immediate periods get allocated to maximum capacity.
Cumulative-detailed combination
This combines both the earlier strategies of firm and flexible nature of work
load. Cumulative work load projections can be used to plan for capacity as
needed. As changes happen during the week, the materials and capacity
requirements are updated. The actual time allocated to the specified job at each
work centre is as per the standard hours needed. This is tuned further with the
requirements of the master schedule.
Priority decision rules
When a set of orders are to be executed, the question of prioritising arises.
These priority decision rules are scheduling guidelines used independently or in
conjunction with any one of the above three strategies.

B. distinctive differences between the scheduling followed for

manufacturing and services.
There are distinctive difference between the scheduling followed for
manufacturing and services. All these differences have a direct impact on
scheduling. These differences are:

Service operations cannot create inventories to provide buffer for demand

uncertainties
Demand in service operations cannot be predicted accurately
Demand for service is initiated mostly as unplanned event and hence,
there may be certain distortions in scheduling.
Providing the required manpower and skills for the sudden demand in
scheduling a service activity is challenging and sometimes becomes
crucial.