LECTURE NOTES

ON

PRODUCTION PLANNIG AND CONTROL

IV B TECH II SEM

JNTUH - R13

Mrs. G.Karunya,
Assistant Professor

Mr. S.Lokesh
Assistant Professor

MECHANICAL ENGINEERING

INSTITUTE OF AERONAUTICAL ENGINEERING

(Autonomous)
DUNDIGAL, HYDERABAD - 500 043

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 PRODUCTION PLANNING AND CONTROL

UNIT-I

INTRODUCTION : Definition – Objectives of production Planning and Control – Functions of production

planning and control – Elements of production control – Types of production – Organization of production
planning and control department – Internal organization of department – Product design factors – Process
Planning sheet.

UNIT-II
FORECASTING – Importance of forecasting – Types of forecasting, their uses – General principles of
forecasting – Forecasting techniques– qualitative methods and quantitive methods.

UNIT-III
INVENTORY MANAGEMENT: Functions of inventories – relevant inventory costs – ABC analysis –
VED analysis – EOQ model – Inventory control systems – P–Systems and Q-Systems.

Introduction to MRP & ERP, LOB (Line of Balance), JIT inventory, and Japanese concepts,
Introduction to supply chain management.

UNIT-IV

ROUTING: Definition – Routing procedure – Route sheets – Bill of material – Factors affecting routing
procedure. Scheduling – definition –Difference with loading.

SCHEDULING POLICIES: Techniques, Standard scheduling methods.

Line Balancing, Aggregate planning, Chase planning, Expediting, controlling aspects.

UNIT-V

DISPATCHING : Activities of dispatcher – Dispatching procedure –follow up – definition – Reason for

existence of functions – types of follow up, applications of computer in production planning and control.

TEXT BOOKS:

1. Samuel Eilon, “Elements of Production Planning and Control”,

1st Edition, Universal Publishing Corp., 1999.

2. Baffa&RakeshSarin, “Modern Production / Operations Management”, 8th Edition, John Wiley &
Sons, 2002.

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 UNIT-I

INTRODUCTION TO PPC

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 UNIT-1 PPC

Introduction

Production Planning is a managerial function which is mainly concerned with the following
important issues:

1. What production facilities are required?

2. How these production facilities should be laid down in the space available for production?
3. How they should be used to produce the desired products at the desired rate of production?

Production control is a mechanism to monitor the execution of the plans. It has several important
functions:

1) Making sure that production operations are started at planned places and planned times.
2) Observing progress of the operations and recording it properly.
3) Analyzing the recorded data with the plans and measuring the deviations.
4) Taking immediate corrective actions to minimize the negative impact of deviations from the plans.
5) Feeding back the recorded information to the planning section in order to improve future plans.

A block diagram depicting the architecture of a control system is shown in Figure1.

Figure 1: Architecture of Control System

Important functions covered by production planning and control (PPC) function in any
manufacturing system are shown in Table1 along with the issues to be covered.

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 Table 1: Production Planning and control Functions

Functions Issues to be covered

Product Customer needs, market needs, availability of similar product, demand-
Design& Development supply gap, functional aspects, operational aspects, environmental
aspects etc.,
Demand Quantity,
Forecasting Quality,
Demand
pattern.

Capacity No. of machines, No. of tooling, workers, No. of flow lines, Quantity,
Planning Quality and rate of production, demand pattern.

Equipment Selection No. of machines, type of M/c, Quality aspects, Quantity aspects, rate
And Maintenance of production, Cost of equipment, support from the supplier,
maintenance policy, storage of spare parts.

Compatibility between w/c steels, No. of tools, their cost, their material
Tooling Selection etc., storage policy
Path selection for material movement as per the process plan and
Routing loading, minimum material handling and waiting time.
Time based loading, start and finish times, due dates, dispatching rules,
Scheduling re-scheduling.
Expediting Operation Scheduling and order and progress reporting.

Types of Production Systems

A production system can be defined as a transformation system in which a saleable product or service is
created by working upon a set of inputs. Inputs are usually in the form of men, machine, money, materials
etc. Production systems are usually classified on the basis of the following:

1) Type of product,
2) Type of production line,
3) Rate of production,
4) Equipments used etc.

They are broadly classified into three categories:

1. Job shop production

2. Batch production
3. Mass production

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Job Production

In this system products are made to satisfy a specific order. However that order may be produced-
only once or at irregular time intervals as and when new order arrives or at regular time intervals to satisfy a
continuous demand

The following are the important characteristics of job shop type production system:

1) Machines and methods employed should be general purpose as product changes are quite
frequent.
2) Planning and control system should be flexible enough to deal with the frequent changes in
product requirements.
3) Man power should be skilled enough to deal with changing work conditions.
4) Schedules are actually nonexistent in this system as no definite data is available on the product.
5) In process inventory will usually be high as accurate plans and schedules do not exist.
6) Product cost is normally high because of high material and labor costs.
7) Grouping of machines is done on functional basis (i.e. as lathe section, milling section etc.)
8) This system is very flexible as management has to manufacture varying product types.
9) Material handling systems are also flexible to meet changing product requirements.

Batch Production

Batch production is the manufacture of a number of identical articles either to meet a specific order or to
meet a continuous demand. Batch can be manufactured either-only once or repeatedly at irregular time
intervals as and when demand arise or repeatedly at regular time intervals to satisfy a continuous demand.

The following are the important characteristics of batch type production system:
1. As final product is somewhat standard and manufactured in batches, economy of scale can be availed
to some extent.
2. Machines are grouped on functional basis similar to the job shop manufacturing.
3. Semi-automatic, special purpose automatic machines are generally used to take advantage of the
similarity among the products.
4. Labor should be skilled enough to work upon different product batches.
5. In process inventory is usually high owing to the type of layout and material handling policies
adopted.
6. Semi-automatic material handling systems are most appropriate in conjunction with the semi-
automatic machines.
7. Normally production planning and control is difficult due to the odd size and non-repetitive nature of
order.

Mass Production

In mass production, same type of product is manufactured to meet the continuous demand of the product.
Usually demand of the product is very high and market is going to sustain same demand for sufficiently long
time.

The following are the important characteristics of mass production system:

1. As same product is manufactured for sufficiently long time, machines can be laid down in order
of processing sequence. Product type layout is most appropriate for mass production system.
2. Standard methods and machines are used during part manufacture.
3. Most of the equipment are semi-automatic or automatic in nature.

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 4. Material handling is also automatic (such as conveyors).
5. Semi-skilled workers are normally employed as most of the facilities are automatic.
6. As product flows along a pre-defined line, planning and control of the system is much easier.
7. Cost of production is low owing to the high rate of production.

Product Design

Product design is a strategic decision as the image and profit earning capacity of a small firm depends largely
on product design. Once the product to be produced is decided by the entrepreneur the next step is to prepare
its design. Product design consists of form and function.

The form designing includes decisions regarding its shape, size, color and appearance of the product. The
functional design involves the working conditions of the product. Once a product is designed, it prevails for a
long time therefore various factors are to be considered before designing it. These Factors are listed below:

(a) Standardization
(b) Reliability
(c) Maintainability
(d) Servicing
(e) Reproducibility
(f) Sustainability
(g) Product simplification
(h) Quality Commensuration with cost
(i) Product value
(j) Consumer quality
(k) Needs and tastes of consumers.

Types of Production System:

Broadly one can think of three types of production systems which are mentioned
here under: -

(a) Continuous production

(b) Job or unit production
(c) Intermittent production

(a) Continuous production: - It refers to the production of standardized products with a standard set of
process and operation sequence in anticipation of demand. It is also known as mass flow production
or assembly line production this system ensures less work in process inventory and high product
quality but involves large investment in machinery and equipment. The system is suitable in 117
plants involving large volume and small variety of output e.g. oil refineries reform cement
manufacturing etc.

(b) Job or Unit production -. It involves production as per customer's specification each batch or order
consists of a small lot of identical products and is different from other batches. The system requires
comparatively smaller investment in machines and equipment. It is flexible and can be adapted to
changes in product design and order size without much inconvenience. This system is most suitable
where heterogeneous products are produced against specific orders

(c) Intermittent Production -. Under this system the goods are produced partly for inventory and partly
for customer's orders. E.g. components are made for inventory but they are combined differently for
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 different customers. . Automobile plants, printing presses, electrical goods plant are examples of this
type of manufacturing.

PPC functions look after the manufacturing activities. PPC comprise the planning, routing, dispatching in
the manufacturing process so that the movement of material, performance of machines and operation of
labor however are subdivided and are directed and coordinated as to quantity, quality, time and place.
Planning and control are two basic and interrelated managerial functions.

Planning involves setting up to such standard. The controlling is made by comparing the
actual performance with these present standard and deviations are ascertained and analyzed. Production is
an organized activity of converting raw materials into useful products but before starting that work of
actual production, production planning is done in order to anticipated possible difficulties and decide in
advance as to how the production should be carried out in the best and economical way.

PREPLANNING, PLANNING & CONTROL

The activities of preplanning, planning and control may be considered to take place in a time
sequence. The preplanning is completed before production commences. Planning takes place immediately
before production starts and control is exercised during production.

Preplanning:

It is the procedure followed in developing and designing a work or production of developing and
installing a proper layout or tools. It may be involved many functions of the organization and draws
upon forecasting, product design, jigs and tool design, machine selection and estimating to enable
proper design to be made. In short, preplanning decides what shall be made and how it shall be made.
In respective manufacture a large uneconomic output could be produced if preplanning is omitted. It
is also important in one of the operations such as setting up new plants as preplanning can identify
and avoid probable costly errors.

Planning:

This stage decides where and when the product shall be made. It includes the sequencing of
operations viz outing and the time schedule for manufacturing viz scheduling. It also states
procedures for material planning and supplies, machine loading and deliveries. To perform as
functions properly it will need past records of performance and to control statistic which may be
obtained from pre-planning, cost control or progress.

Control:

This refers to the stage of ensuring that the planned action is intact carried out. Control initiate the
plan at the right time using dispatching and there after control makes appropriate adjustments through
progressing to take care of any unforeseen circumstances that might arise. It includes measurement of
actual results, comparison of the same with the planned action and feeding back information the
planning stage to make any adjustments required. The pattern of control is seen in material control,
machine utilization, labor control, cost control and quality control.

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Project Planning or Preplanning:

Before starting every project its planning is done. Planning a project is a very important task and
should be taken up with great care as the efficiency of the whole project largely depends upon its
planning. While planning a project each and every detail should be worked out in anticipation and
should be considered carefully considering all the relevant provisions in advance. Project planning
consists of the following important steps.

1) Market Survey:

Market survey in a broad sense, is a commercial survey for the suitability of business it provides
necessary statistics helpful for forecasting planning project.

2) Project Capacity:

Capacity of the project must be decided considering the amount of money which can be invested for
particular type of product and how the money which can be invested for a particular type of product
and how the money can be arranged. While deciding the capacity of the project, following factors
must be considered.

a) Demand of the product in the market. b) Quantity of power, water, land and raw material available.

c) Nature of product. d) Investment capacity.

3) Selection of Site:

While selecting the site, technical, commercial and financial aspects should thoroughly
be considered. Site should be selected in two states; in first stage general location for factory should
be selected in this location. Important factors to be considered for the selection of site. a) General
location of the factory. b) Selection of exact site.

4) Plant Layout:

One of the most important aspects of production system design is layout of facilities primary object of
these is to optimize the arrangements “4 m’s” and supporting services.

5) Design and Drawing:

After deciding the product its detailed drawing are prepared so that no doubt is left for
future. Detailed specifications for raw materials and finished product should be decided carefully
along with the specification of the machines required for their manufacture.

6) Material Requirement:

The list of materials required for manufacture is prepared from the engineering drawings. This list is
known as “Bill of materials” part list”.

7) Operation Planning:

Work of this is to select the best method of manufacturing, so that the wastage of material, labor,
machine and time can be eliminated, to have more production with less fatigue. This work is done
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 in two phases, namely. Method study is conducted to eliminate the wastage due to ill directed and
inefficient motions. Time study is the exact estimation of time and is very essential for correct
pricing.

8) Machine loading:

Number of machines to be installed in a plant should be decided very carefully while planning, proper
care should be taken to find out the machining time for each operation as correct as possible, so that
arrangement for full utilization of machines can be made and machines loading program is prepared
accordingly.

9) Sub-contract consideration:

With the development of technology and specialization, it is difficult to manufacture all the
components in the same factory, due to fact that specialized machines plants and workers. The
decision about particular item, whether to purchase or to manufacture, is taken by planning
department after making a thorough study of the relative merits and demerits.

10) Equipment Requirement:

After knowing the number of equipment, their accessories and tools required, cost data can be
collected to give and idea of capital requirement.

11) Organizational Layout and staff Requirement:

Layout of organization is decided by considering the nature of work, type of industry size of industry,
etc. and in line of above the stalls is appointed.

12) Material Handling:

The material handling problems must be studied before the erection of the factory building and plant
layout.

13) Budgeting:

Budgeting is forecasting and preplanning for a particular future period using past experience and
market trends.

14) Cost Calculation

Total cost of a product is calculated by adding the expenses incurred during the period on a product.

15) Procurement of Finance:

Generally large industries manage their block capital through partners and shareholders. While the
working capital arranged through ‘shares debentures, loans and banks.
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16) Critical Report on Feasibility:

Generally, rate of return on the invested capital is taken as the criteria for analyzing the feasibility of
the project.

PLANNING

Planning is exercise of intelligent anticipation in order to establish how an objective can be achieved,
or a need fulfilled, in circumstances which are invariable restrictive. Planning provides the supporting
arithmetic for an objective which has already been decided. It does not establish whether the objective
is right or wrong, good or bad, worthwhile or worthless except in terms which have also been decided
beforehand. Consequently, only plan is invariably biased in favor of the chosen objective.

Planning is necessary because resources are limited. Production planning activities originate at the
aggregate level and consider decisions relevant to a specific planning horizon. A planning horizon can
be a period as short as four weeks a month, or a quarter (03weeks) but more commonly refers to
periods of from six months to a year or more.

The aggregate planning problem is to determine the production rate which satisfies the anticipated
output requirements; while minimizing the related costs associated with the fluctuation of work
force, inventories, and other relevant decision variables such as overtime hours subcontracting and
capacity utilization. Production planning translated sales forecast into master production
schedules. There are three distinct types of production planning:

i) Project planning

ii) Lot or batch planning.

iii) Progressive of continuous planning.

THE CONCEPTS OF PRODUCTION PLANNING AND SCHEDULING

The concept of production planning is probably best defined by reversion that to read “The planning
of production”. As used here, it refers to the establishment of policies, procedures, and facilities for
manufacturing operations to produce product required for future. It is ultimately tied to both capacity
planning and product determination in which products will be produced and in what quantities and is
future oriented.

In essence, production planning make sure that everything is available on time to meet the production
target manufacturing system is circumscribed by various limiting factors such market price quality
delivery requirements, funds availability and inherent product restrictions like process time or special
storage requirements.

Planning must take these into account so as to ensure task performance with both limitations
and objectives. Scheduling, on the other hand, is more specific and less oriented to the future
scheduling accepts current conditions like available machinery, manpower and material Eton provides
as detailed pots for utilizing there facilities to achieve immediate product objectives.

A scheduling starts with the desired end results and provides BLUE-PRO for accomplishing the task
on hand. Schedules may be as specific as time and cost per. They may outline general steps needed to
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 complete a task or they may lay down specific operations, starts times completion times etc. Often the
more specific a schedule is the better it can be used as a production control device.

The amount inventory on hand will affect production plans as well as customers delivery and the
form of inventory like raw or finished material, and the good at various stages of processing. It is
readily apparent the need for adequate production planning, especially in situation where long
lead time are required to change production capabilities.

Requirement of rare work force skills of imported equipment or raw materials of expanded plants
of facilities can often severally reduce a companies, abilities to meet changing market condition
considerable advance planning is done, a manufacturing limitation and itself was insufficient
productive capabilities or with an oversupply of absolute limited goods.

PRODUCTION

Implementation is the stage of the project when the theoretical design is turned in to working system.
Implementation phase involves the staff of user departments carrying out specific tasks which require
supervision and control to critical schedules. Production is the process by which goods and services
are created. Production systems combine materials, labors, and capital resources in an organized way
with the objective of producing some goods or service.

Production system may occur in factories, banks, stores, hospitals etc. In all instances, some input to
the system is being processed within the system to produce a goods or services as an output; we are in
fact dealing with the operations phases of any enterprise.

‘Creation’ of goods and services of production, to perform this function, the production system
require inputs from other subsystems of the organization, such as service inputs ( e.g. maintenance,
supervision, plant layout, design etc.) and control inputs (e.g. measurement, data processing,
planning, control, order and sales information processing, forecasting etc.).Three main factors may be
said to determine the place of production planning and control in an organization.

1. The type of production i.e. the quantities of finished products and the regularity of manufacture.

2. Size of the plant.

3. The type of industry i.e. the field of specialization of the plant.

Industries can be classified into types by several methods; by availability of different kinds of labor in
different geographical locations, by the demand for different grades of skills, and by the factors
relating to investment policy.

THE MAIN OBJECTIVES OF PRODUCTION PLANNING

1. To determine capacity of all manufacturing departments and to plan systematically coordinated and
related production activities within the scope of the enterprise to meet sales requirements.

2. To translate orders received from sales department into orders on the works department and to
ensure steady plans of production activities.

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 3. To find ways and means through which product manufacturing requirements such as materials and
their necessary constituents such may be available in right quality and quantity at the right time.

4. To coordinate a number of different department groups so that a fine balance of activities may be
maintained.

5. To promote fuller utilization of plants.

6. To assist labor towards right and greater earnings.

7. To train staff in the effective performance of their duties.

CONTROL

The principles of control are the same for production control, quality control, budgetary control, cost
control and other managerial controls. The basic cycle of events in the control is Action, Feedback,
Evaluation and Adjustment. Since these events aerodynamically in continuous they take the form of a
closed-loop circuit. There are seven essential steps in the establishment and application of operating
controls. These steps will be discussed in their normal sequence and is diagrammatically represented.

(A) Operation:

The first step in the control cycle is operation. In this step, the act of doing something, some faults
will be obvious and, therefore, easily corrected. Other faults will be more deceptively concealed
requiring the steps that follow to reveal them so that they can be dealt with.

(B) Measurement:

The second step is so measure what is being done. In the field of quality control for example,
variations in physical, chemical, electrical, dimensional and other properties are measured. In
production control, all operations are measured to determine the time required for their performance
and the capacities of equipment with which work is done. In automatic electronic and mechanical
operations must be measured accurately in terms of milliseconds before a whole system can
be integrated.

(C) Capability Studies:

Analysis of measurements in step two, aided by many reliable statistical technique gives an accurate
projection of what actually can be done. In production control we need to know quality process
capabilities so that scrap and defer losses can be figured. Studies of process capabilities tell us what
we can do.

(D) Objectives:

After we discover what we can do, we are ready to figure out what we should as this may either be
more or less than our capabilities. This decision then leads to plans for using excess capabilities on
other plans to increase capabilities either for quality or quantity so that the objective can be met.

(E) Evaluations:

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 As the information is fed back from operations, it is compared with plans and objectives other
evaluations are used to adjust budgets and costs.

(F) Adjustment:

The last step in production control is adjustment. Production control adjustments are complicated
because they often require increasing or reducing quantities based upon past operation and sales in
quality control adjustments are made to maintain product quality requirement within limits. The
figure 1.1 illustrates the best cycle in control of production. In it, image two rotating sequence on the
basic elements of action, feedback and evaluation that come log rein compound adjustment. This is
based on the current information.

(G) Feedback & Flexibility:

It we shoot at the target but cannot tell how close to the balls eye or bullet hits out next shot is likely
to be no better than first. But if we do know where the first shot has hit, we can adjust the aim for next
one and thus improve our marksmanship. Information received after the performance of an action in
time to be used as the basis for future, performance is known as feedback, it is the vital control.

The establishment of details, benchmarks during the planned period. Measures of progress, explicit
statements concerning the assumptions made about the operating environment and a formal procedure
for analyzing the process. “Doubling production within two years” is not a plan. It is a goal.

The plan must indicate how this will be done, when the various steps will begin and be completed and
what assumption underlines the plan and goal. As the plan is being implemented, frequent checks are
required to determine whether or not things are proceeding on schedule.

FUNCTIONS OF PPC:

The highest efficiency in production is obtained by manufacturing the required quantity of product of
required quality, at the required time by best and cheapest method. To certain this objective
management employs PPC tool which coordinates all manufacturing activities. The main functions of
PPC are the coordination of all the activities, which exist during production or manufacturing.

(A) Materials:

Raw material, standard finished parts, finished parts of products must be available while starting the
operation within the time.

(B) Methods:

The purpose of this function is to analyze all methods of manufacture and select the best method
according to the given set of circumstances and facilities. It determines the sequence of operations

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 and the division of product into the assemblies and sub-assemblies, modified by the limitation of
existing layout and work flow.

(C) Machines and Equipment:

Methods of manufacturing have to be related to the available production facilities coupled with
a detail study of equipment replacement policy. Maintenance policy, procedure and schedules are also
functions connected with managerial responsibilities for equipment. Design of economy of jigs and
fixtures constitutes some of major duties of PPC.

(D) Routing:

“The specification of the flow of sequence of operation and processes to be followed in producing a
particular manufacturing a lot is routing”. Routing determines that work will be done on the product
of parts as well as where and how it will be done. It estimates the operations, their path, sequence
proper class of machines and personnel required for these operations. Analyses of the article do
determine what to make and what to purchase. Decision as whether to fabricate component or
purchase it from elsewhere. These are based on relative cost, technical consideration purchasing
policies, availability of equipment, personnel, skill. An analysis of article to determine what materials
are needed: - It depends upon the drawing, specifications, standard of quality, identification symbol,
application in product. This depicts the additional material needed Figure 1.2 demonstrate the general
procedure in production routing. A determination of manufacturing operation and the sequence. This
section establishes the operation necessary to manufacture the proper sequence on route sheet and
operation sheet.

Determination of lot sheet

It depends primarily upon the manufacturing involved. If the product is to be manufactured strictly to
a sold order, the customer’s order plus a certain average or allowance of stock, the lot size depends
upon the primary of economic lot quantities etc., the quantity to manufacture so that for which the
sum of the set-up and other preparation cost and the cost of carrying an inventory of the article
manufactured at the minimum.

Determination of scrap factor:

Is the anticipated normal scrap encountered in the course of manufacturing? The difference of amount
of “SHRINKAGE’ depends upon the scrap factor encountered in the process best practice dictates the
establishment of standard scrap factors for use in routing and scheduling.

Analysis of cost article:

It includes cost accounting department for cost estimating of product.

Factors Affecting Routing Procedure:

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 1. Manufacturing type employed.

2. Availability of plant equipment and its component parts.

3. Characteristic of physical plant equipment and its component parts.

4. Human elements.

(E) Estimating:

When production orders and detailed operation sheet available with specification feeds, speed and use
of auxiliary attachments and method, the operation time can be worked out. It may be consequently
results in wide scatter of operation times and unduly large fluctuation and perhaps instabilities in
time schedules.

(F) Loading & Scheduling:

Machines have to be loaded according to their capabilities performance the given and according to
the capacity. Machine loading is carried out in connection with routing to ensure smooth work flow
work estimating, to ensure that the prescribed methods feeds and speed are best utilized. Careful
analysis of process capacities so that flow rates along the various production lines can be suitable
coordinated.

The distinction between planning and scheduling is largely semantically and based upon difference
in detail and time period. The schedule is very detailed plan for an immediate and relatively short
time period. The difference between the plan and the schedule can be illustrated by looking at the
objectives.

Decision Rules:

The scheduling function is such a detailed process that it must usually be delegated to middle or lower
management levels. Consequently, the schedulers, of themselves, are actually not in position to relate
their activities to the overall company goals and objective. Consequently, it is necessary to establish
decision rules which will help tie the two levels of management together.

Decision rules for scheduling should be fairly specific. Not only do they serve the purpose of linking
the scheduling function with the attainment of total organizational goals but they provide consistency
in scheduling practice so that people can be interchanged, so that schedules can be interpreted
uniformly throughout the organization, and so that even one concerned will understand the process.

Decision rules can take many forms. The selection of the particular rules will largely depends upon
the particular circumstance for which they are required. Competitive made of conditions, internal cost
structures, the nature of the product, capacity consideration etc will all have their effect.

Examples of Possible Decision Rules includes the following:

1. Schedule the longest jobs first.

2. Schedule jobs in the order they are received.

3. Schedule the job with the earliest delivery dates first.

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 4. Schedule jobs on a random basis.

5. Schedule first those jobs with the use production facilities for which we have the greatest idle
capacity.

6. Schedule all jobs first which requires operation in department.

7. Schedule customer as order before all others.

Each of these rules (usually in combination with others) provides a means of regarding tasks. There
are an almost unlimited number of possibilities (including the converse of some of the above and
these are provided solely for illustration. It is worth noting that such decision rules are applicable to
all scheduling processes not only these which deal with production operations. Companies often
experiment of determine the specific set of rules which make sense for their particular situations. In
fact, it is possible to use part or projected at orders to simulate operations in the factory and determine
the effect of a given set of decision rules in advance of their actual introduction.

This can be very useful and save considerable relief and confusion as follows the testing of such rules
without the disruption of production. Again, there is a caution involved in the use of decision rules. It
is extremely difficult to design any set of rules which will cover every situation. Consequently,
decision rules must be considered only as guidelines, not absolute, and flexibility must exist to
deviate when necessary.

(G) Dispatching:

It is important mechanism of production control. Meaning of this term is sending to destination or

starting something on way. When applied to production control, it means the assignment of work to
different machines or work places which involve insurance of order and production form in order of
their priority as determined by scheduling. In dispatching translated into reality or physical work
which has been planned scheduling?

Duties of Dispatching:

1. Assignment of work to different machines of work place men.

2. Movement of material from stores to the first process and from process.

3. Issue of tool orders, instructing the tool department to collect and make ready jigs and fixtures, in
advance of time, at which the operation will commence.

4. Issue of time ticket, drawing, instruction cards & other necessary information presented performing
the work.

5. Issue of inspection order after each operation to determine the result in the number of pieces
“good” and the “bad” and cause of spoilage.

6. Issue of more orders and collection of time tickets, drawings, instruction cards for all completed
operations.

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 7. Recording time of beginning and completing jobs hand calculate duration of, forwarding complete
records to production department and time card pay roll department.

8. Recording and reporting idle time of machine and operation.

Dispatching Procedure:

Manner in which schedule or orders are issued depends upon whether the dispatching decentralized or
centralized in the Decentralized: The manufacturing schedules or work orders in blanket fashion to
the foreman or dispatch clerk within department. It is duty of foreman or clerk to dispatch the orders
of material to each machine and operator. In centralized dispatching: This involves the dispatching of
orders from central dispatching division to machine or work station.

Capacity and characteristic of each machine is recorded in central dispatching station. Regardless of
type of dispatching it is customary for department to department themselves informed of the starting
dates, progress of each order by means of wall chart visible index file or one of the several types
of department dispatching boards.

Dispatching Rule:

Simple Rule:

1. Earliest due date: Run the job with the earliest due date, results in good date performance.

2. First come first served: Run the job which arrived in the waiting line first. Result at low variance of
manufacturing cycle time.

3. Shortest processing time: Run the job which has the shortest set up plus machining for the current
work center.

Combination Rule:

1. Minimum stock: Slack equals calendar time remaining minus processing time remaining or slack
equals date minus present time minus set up and machining time all remaining operation.

2. Critical ratio: The critical ratio is made to order work is a slack type rule. Critical equals 0 to due
date minus present time divided by number of days required to complete the job order.

(H) Expediting:

Follow up which regulates the progress of materials and parts through the production process. This
closely inter elated with activities of dispatcher to whom is delegated scheduling responsibility.

Follow up is that novel tool which acts as a regulator of material and components parts when they are
traveling on the path of performance as laid down by sheets and schedule charts. It serves as
a catalytic agent to fuse the various separate an unrelated production activities into the unified whole
that means progress.

18
TYPE:

1. Materials:

To follow up purchased materials is responsibility or purchasing department. This can be

accomplished most simply by filling one copy of requisition in a daily follow up file or in ticket file
according to the date of materials is due to be received.

2. Work in progress:

This follow up the work by checking the process and recording the production accomplished by
production line for comparison purpose with preplanned schedules. It is the duty of follow-up men or
expediters to advise the foreman as to the best sequence in which the orders can be run so as the
required part in which order to be fabricated and brought it together at right time, place for
the completion of finished product.

3. Assembly and Erection:

Responsibility for assembly and erection of products in assembly manufacturing is almost invariably
rested. When all the parts of an available, the follow up man permits assembly of election of products
in start in case of large complicated product this is very necessary.

(I) Inspection:

Another major control is inspection. Its finding land criticism are of the importance both in execution
of current program and both in planning stage of fibre undertaking when the limitations of the
processor, method and manpower are known. These limitations can form a basis for future
investigations in evaluating the showed improving production methods.

(J) Evaluating:

Perhaps the most neglected, but on an essential link between control and forwarding is that of
evaluating. The essential task of dispatching and evaluating are concerned with the immediate issue
of production and with measures that will be as certain fulfillment target. Valuable information is
gathered limited in nature and unless provision is made so that all the accumulated information can
be properly digested and analyzed data may be irretrievable lost. Thus here the evaluating function
comes in to provide a feedback mechanism on the longer term basis so that the past experience can be
evaluated with the view to improving utilization of method and facilities. This is the integral part of
control function.

MATERIAL PLANNING

The importance of material in manufacturing concern needs the explanation because in its absence
production is not possible. Moreover it affects the efficiency of all machines, money & marketing
division of an industry. But there are so many problems awarded with the management of materials,
such as investment in materials idle funds, storage of obsolescence problem, wastage of material in
handling etc. Which require immediate attention of management. So that the most of production may
be reduced to the minimum &the quality of product may be maintained.

19
 As material consume lion’s share of the investment and that too with a possibility of turnover, its
efficient management consumed to the profitability of the organization. Material planning is the
important activity of materials managements. It should also be noticed that inventory ‘Control’ is an
integral part of the materials production material.

Material planning means to develop a purchasing procedure. For procurement of materials, it is

essential to know how much quantity is required. Based on these information the procurement
program is drawn up & financial provision is made materials planning & programming is also
essential to place the orders well in advance (lead time) so that delivery at right time is ensured.

The starting point of the planning of materials procurement is the production schedules & bill of
materials stores & spare parts, planning is done with the help of forecasted demand & the
consumption patterns. Based on the annual forecast, production schedules are made. Working
backwards on the schedules the dates on which the difference materials must be in plant, are
calculated. Appropriate factor of safety should be used in working out latest date of arrival.

The quantities required are also calculated with the help of bill of materials. Materials planning for
project work can be done in the similar way, in such cases use of network techniques can be made to
arrive at later date of materials. In batch manufacturing, where items are assembled in batches, certain
components may be required in large quantities at infrequent intervals i.e. to suit batch assembly
schedule. Thus materials planning activity acts as a effective link between the purchasing
or procurement & the manufacturing function. It require the knowledge of

1. Bill of material quantity, quality & specification of material

2. Production of Assembly schedule.

3. Supply lead times & dependability.

4. Manufacturing capacity.

5. Overall economy.

Material Planning Functions and Objectives

1. Translation ofthe sales projections into long term requirements.

2. On the basis of updated production plan adjusted to the latest sales demand to adjust the materials
accordingly.

3. To project the facilities required for the materials management.

4. Setting up of consumption standards, for working out requirements.

5. To perform value analysis to determine the intrinsic worth of materials.

6. To decide whether to Make or Buy.

7. To highlight exception & priorities.

8. To keep inventories as low as possible.

20
 UNIT-II

FORECASTING

21
 UNIT-II FORE CASTING

Introduction

The growing competition, frequent changes in customer's demand and the trend towards automation
demand that decisions in business should not be based purely on guesses rather on a careful analysis of
data concerning the future course of events. More time and attention should be given to the future than to
the past, and the question 'what is likely to happen?' should take precedence over 'what has happened?'
though no attempt to answer the first can be made without the facts and figures being available to answer
the second. When estimates of future conditions are made on a systematic basis, the process is called
forecasting and the figure or statement thus obtained is defined as forecast.

The following are the main functions of forecasting:

1) The creation of plans of action.

2) The general use of forecasting is to be found in monitoring the continuing progress of plans based on
forecasts.
3) The forecast provides a warning system of the critical factors to be monitored regularly because they
might drastically affect the performance of the plan.

Forecasting Fundamentals

Forecast: A prediction, projection, or estimate of some future activity, event, or occurrence.

Types of Forecasts

- Economic forecasts
Predict a variety of economic indicators, like money supply, inflation rates, interest rates,
etc.
- Technological forecasts
Predict rates of technological progress and innovation.
- Demand forecasts
Predict the future demand for a company’s products or services.

Since virtually all the operations management decisions require as input a good estimate of future
demand, this is the type of forecasting that is emphasized in our textbook and in this course.

Types of Forecasting Methods

Qualitative methods: These types of forecasting methods are based on judgments, opinions, intuition,
emotions, or personal experiences and are subjective in nature. They do not rely on any rigorous
mathematical computations

Quantitative methods: These types of forecasting methods are based on mathematical (quantitative)
models, and are objective in nature. They rely heavily on mathematical computations.

22
 QUALITATIVE FORECASTING METHODS

Qualitative Methods

Executive Market Sales Force Delphi

Composite
Opinion Survey Method

Approach in which
Approach in which Approach that Approach in which
each salesperson
a group of uses interviews consensus
estimates sales in
managers meet and surveys to agreement is
his or her region

23
 QUANTITATIVE FORECASTING METHODS

Quantitative Methods

Time-Series Models Associative Models

Time series models look at past

Associative models (often called
patterns of data and attempt to
causal models) assume that the
predict the future based upon the
variable being forecasted is related to
underlying patterns contained within
other variables in the environment.
those data.
They try to project based upon thos

TIME SERIES MODELS

Model Description

Naïve Uses last period’s actual value as a forecast

Simple Mean (Average) Uses an average of all past data as a forecast

Uses an average of a specified number of the most

Simple Moving Average
recent observations, with each observation receiving the
same emphasis (weight)

Uses an average of a specified number of the most

Weighted Moving Average
recent observations, with each observation receiving a
different emphasis (weight)

A weighted average procedure with weights declining

Exponential Smoothing
exponentially as data become older

24
Patterns that may be present in a time series

Trend: Data exhibit a steady growth or decline over time.

Seasonality: Data exhibit upward and downward swings in a short to intermediate time frame (most notably
during a year).

Cycles: Data exhibit upward and downward swings in over a very long time frame.

Random variations: Erratic and unpredictable variation in the data over time with no discernable pattern.

ILLUSTRATION OF TIME SERIES DECOMPOSITION

Hypothetical Pattern of Historical Demand

Dependent versus Independent Demand

Demand of an item is termed as independent when it remains unaffected by the demand for any other item.
On the other hand, when the demand of one item is linked to the demand for another item, demand is termed
as dependent. It is important to mention that only independent demand needs forecasting. Dependent demand
can be derived from the demand of independent item to which it is linked.

Business Time Series

The first step in making a forecast consists of gathering information from the past. One should collect
statistical data recorded at successive intervals of time. Such. a data is usually referred to as time series.
Analysts plot demand data on a time scale, study the plot and look for consistent shapes and patterns.

A time series of demand may have constant, trend, or seasonal pattern or some combination of these
patterns. The forecaster tries to understand the reasons for such changes, such as,

a) Changes that have occurred as a result of general tendency of the data to increase or
decrease, known as secular movements.
b) Changes that have taken place during a period of 12 months as a result in changes in
climate, weather conditions, festivals etc. are called as seasonal changes.
c) Changes that have taken place as a result of booms and depressions are called as cyclical
variations.
d) Changes that have taken place as a result of such forces that could not be predicted (like
flood, earthquake etc.) are called as irregular or erratic variations.

25
 Figure 1: Business Time Series

Quantitative Approaches of Forecasting

Most of the quantitative techniques calculate demand forecast as an average from the past demand.
The following are the important demand forecasting techniques.

Simple average method: A simple average of demands occurring in all previous time periods is taken as
the demand forecast for the next time period in this method.

Simple Average:
A XYZ television supplier found a demand of 200 sets in July, 225 sets in August & 245 sets in
September. Find the demand forecast for the month of october using simple average method.
The average demand for the month of October is

26
Simple moving average method: In this method, the average of the demands from several of the most
recent periods is taken as the demand forecast for the next time period. The number of past periods to be
used in calculations is selected in the beginning and is kept constant (such as 3-period moving average).

Simple Moving Average:

A XYZ refrigerator supplier has experienced the following demand for refrigerator during past five
months.

Month Demand
February 20
March 30
April 40
May 60
June 45

Find out the demand forecast for the month of July using five-period moving average & three-
period moving average using simple moving average method.

Weighted Moving Average Method:

The manager of a restaurant wants to make decision on inventory and overall cost. He wants to
forecast demand for some of the items based on weighted moving average method. For the past three
months he experienced a demand for pizzas as follows:

Month Demand
October 400
November 480
December 550

27
Find the demand for the month of January by assuming suitable weights to demand data.

Exponential smoothing method: In this method, weights are assigned in exponential order. The
weights decrease exponentially from most recent demand data to older demand data.

Exponential Smoothing:
One of the two wheeler manufacturing company experienced irregular but usually increasing demand
for three products. The demand was found to be 420 bikes for June and 440 bikes for July. They use a
forecasting method which takes average of past year to forecast future demand. Using the simple
average method demand forecast for June is found as 320 bikes (Use a smoothing coefficient 0.7 to
weight the recent demand most heavily) and find the demand forecast for August.

Regression analysis method: In this method, past demand data is used to establish a functional
relationship between two variables. One variable is known or assumed to be known; and used to
forecast the value of other unknown variable (i.e. demand)

28
Regression Analysis:
Farewell Corporation manufactures Integrated Circuit boards (I.C board) for electronics devices. The
planning department knows that the sales of their client goods depends on how much they spend on
advertising, on account of which they receive in advance of expenditure. The planning department wish to
find out the relationship between their clients advertising and sales, so as to find demand for I.C board.

Advertising Sales (Dt)

(Xt)
Period(t) Dt2 Xt2 XtDt
$(1,00,000) $(1,000.000)
1 20 6 36 400 120
2 25 8 64 625 200
3 15 7 49 225 105
4 18 7 49 324 126
5 22 8 64 484 176
6 25 9 81 625 225
7 27 10 100 729 270
8 23 7 49 529 161
9 16 6 36 256 96
10 20 8 64 400 120
211 76 592 4597 1599

Error in Forecasting
Error in forecasting is nothing but the numeric difference in the forecasted demand and actual demand.
MAD (Mean Absolute Deviation) and Bias are two measures that are used to assess the accuracy of the
forecasted demand. It may be noted that MAD expresses the magnitude but not the direction of the error

29
 UNIT-III

INVENTORY

30
 UNIT-III INVENTORY

Introduction

The amount of material, a company has in stock at a specific time is known as inventory or in terms of
money it can be defined as the total capital investment over all the materials stocked in the company at any
specific time. Inventory may be in the form of,

a) raw material inventory

b) in process inventory
c) finished goods inventory
d) spare parts inventory
e) Office stationary etc.

As a lot of money is engaged in the inventories along with their high carrying costs, companies cannot afford
to have any money tied in excess inventories. Any excessive investment in inventories may prove to be a
serious drag on the successful working of an organization. Thus there is a need to manage our inventories
more effectively to free the excessive amount of capital engaged in the materials.

Need of Inventories

Inventories are needed because demand and supply cannot be matched for physical and economic reasons.
There are several other reasons for carrying inventories in any organization.

a) To safe guard against the uncertainties in price fluctuations, supply conditions, demand
conditions, lead times, transport contingencies etc.
b) To reduce machine idle times by providing enough in-process inventories at appropriate
locations.
c) To take advantages of quantity discounts, economy of scale in transportation etc.
d) To decouple operations i.e. to make one operation's supply independent of another's supply.
This helps in minimizing the impact of break downs, shortages etc. on the performance of the
downstream operations. Moreover operations can be scheduled independent of each other if
operations are decoupled.
e) To reduce the material handling cost of semi-finished products by moving them in large
quantities between operations.
f) To reduce clerical cost associated with order preparation, order procurement etc.

Inventory Costs

In order to control inventories appropriately, one has to consider all cost elements that are associated with the
inventories. There are four such cost elements, which do affect cost of inventory.

i) Unit cost: it is usually the purchase price of the item under consideration. If unit cost is related
with the purchase quantity, it is called as discount price.
ii) Procurement costs: This includes the cost of order preparation, tender placement, cost of
postages, telephone costs, receiving costs, set up cost etc.

The amount of material, a company has in stock at a specific time is known as inventory or in terms of
money it can be defined as the total capital investment over all the materials stocked in the company at any
specific time. Inventory may be in the form of,

a) raw material inventory

31
 b) in process inventory
c) finished goods inventory
d) spare parts inventory
e) Office stationary etc.

As a lot of money is engaged in the inventories along with their high carrying costs, companies cannot afford
to have any money tied in excess inventories. Any excessive investment in inventories may prove to be a
serious drag on the successful working of an organization. Thus there is a need to manage our inventories
more effectively to free the excessive amount of capital engaged in the materials.

If one year planning horizon is used, the total annual cost of inventory can be expressed as:

Total annual inventory cost = Cost of items + Annual procurement cost + Annual carrying cost +
Stockout cost

Variables in Inventory Models

D = Total annual demand (in units)

Q = Quantity ordered (in units)

Q* = Optimal order quantity (in units)

R = Reorder point (in units)

R* = Optimal reorder point (in units)

L = Lead time

S = Procurement cost (per order)

C = Cost of the individual item (cost per unit)

I = Carrying cost per unit carried (as a percentage of unit cost C)

K = Stock out cost per unit out of stock

P = Production rate or delivery rate

dl = Demand per unit time during lead time

Dl = Total demand during lead time

TC = Total annual inventory costs

TC* = Minimum total annual inventory costs

Number of orders per year =

32
Cost of items per year = Annual demand * unit cost

= D.C

Total annual inventory cost (TC) =

The objective of inventory management team is to minimize the total annual inventory cost. A simplified
graphical presentation in which cost of items, procurement cost and carrying cost are depicted is shown. It
can be seen that large values of order quantity Q result in large carrying cost. Similarly, when order quantity
Q is large, fewer orders will be placed and procurement cost will decrease accordingly. The total cost curve
indicates that the minimum cost point lies at the intersection of carrying cost and procurement cost curves.

Inventory Related Costs

Inventory Operating Doctrine

When managing inventories, operations manager has to make two important decisions:

a) When to reorder the stock (i.e. time to reorder or reorder point)

b) How much stock to reorder (i.e. order quantity)
Reorder point is usually a predetermined inventory level, which signals the operations manager to start the
procurement process for the next order. Order quantity is the order size.
33
Inventory Modelling
This is a quantitative approach for deriving the minimum cost model for the inventory problem in hand.

Economic Order Quantity (EOQ) Model

This model is applied when objective is to minimize the total annual cost of inventory in the organization.
Economic order quantity is that size of the order which helps in attaining the above set objective. EOQ
model is applicable under the following conditions.

1) Demand per year is deterministic in nature

2) Planning period is one year
3) Lead time is zero or constant and deterministic in nature
4) Replenishment of items is instantaneous
5) Demand/consumption rate is uniform and known in advance
6) No stock out condition exist in the organization

The total annual cost of the inventory (TC) is given by the following equation in EOQ model.

34
A numeric illustration of the EOQ model is

ABC manufacturer’s produces 1, 25,000 oil seals each year to satisfy the requirement of their client. They
order the metal for the bushing in lot of 30,000 units. It cost them $40 to place the order. The unit cost of
bushing is $0.12 and the estimated carrying cost is 25% unit cost. Find out the economic order quantity?
What percentage of increases or decrease in order quantity is required so that the ordered quantity is
Economic order quantity?
Economic Production Quantity (EPQ) Model

In EOQ model supply was instantaneous, which may not be the case in all industrial applications. If supply
of items is gradual to satisfy a continuous demand, then supply line will be depicted by a slanted line

35
In this situation, when the order is placed, the supplier begins producing the units and supplies them
continuously. While new units are added to inventory, other units are being used. Thus, if delivery rate (P) >
demand rate (D), the net result will be a net increase in the inventory level. The slope of replenishment line
will thus be (P-D). Simillarly the slope of demand line will be (-D). The average inventory carried per year
is

A numeric illstration of the EPQ model is given in

The XYZ Company produces wheat flour as one of their product. The wheat flour is produced in the pack
of 1kg. The demand for wheat flour is 40,000 packs/year & the production rate is 50,000 packs/year.
Wheat flour 1kg pack cost $0.50 each to make. The Procurement cost is $5. The carrying cost is high
because the product gets spoiled in few week times span. It is nearly 50 percent of cost of one pack. Find
out the operating doctrine.

36
MATERIAL REQUIREMENT PLANNING

Introduction

It was discussed in demand forecasting that in the dependent demand situation, if the demand for an item is
known, the demand for other related items can be deduced. For example, if the demand of an automobile is
known, the demand of its sub-assemblies and sub components can easily be deduced.
For dependent demand situations, normal reactive inventory control systems (i.e. EOQ etc.) are not suitable
because they result in high inventory costs and unreliable delivery schedules. More recently, managers have
realized that inventory planning systems (such as materials requirements planning) are better suited for
dependent demand items. MRP is a simple system of calculating arithmetically the requirements of the
input materials at different points of time based on actual production plan. MRP can also be defined as a
planning and scheduling system to meet time-phased materials requirements for production operations.
MRP always tries to meet the delivery schedule of end products as specified in the master production
schedule.

MRP Objectives

MRP has several objectives, such as:

1. Reduction in Inventory Cost: By providing the right quantity of material at right time to meet
master production schedule, MRP tries to avoid the cost of excessive inventory.

2. Meeting Delivery Schedule: By minimizing the delays in materials procurement, production

decision making, MRP helps avoid delays in production thereby meeting delivery schedules more
consistently.
3. Improved Performance: By stream lining the production operations and minimizing the
unplanned interruptions, MRP focuses on having all components available at right place in right
quantity at right time.

MRP System

A simple sketch of an MRP system is shown in figure 1. It can be seen from the figure that an
MRPsystem has three major input components:

37
 Figure 1: Material Requirements Planning System Architecture

1. Master Production Schedule (MPS): MPS is designed to meet the market demand (both the firm
orders and forecasted demand) in future in the taken planning horizon. MPS mainly depicts the detailed
delivery schedule of the end products. However, orders for replacement components can also be
included in it to make it more comprehensive.
2. Bill of Materials (BOM) File: BOM represents the product structure. It encompasses information
about all sub components needed, their quantity, and their sequence of buildup in the end product.
Information about the work centers performing buildup operations is also included in it.
3. Inventory Status File: Inventory status file keeps an up-to-date record of each item in the
inventory. Information such as, item identification number, quantity on hand, safety stock level,
quantity already allocated and the procurement lead time of each item is recorded in this file.

After getting input from these sources, MRP logic processes the available information and gives
information about the following:

1. Planned Orders Receipts: This is the order quantity of an item that is planned to be ordered so
that it is received at the beginning of the period under consideration to meet the net requirements of that
period. This order has not yet been placed and will be placed in future.
2. Planned Order Release: This is the order quantity of an item that is planned to be ordered in the
planned time period for this order that will ensure that the item is received when needed. Planned order
release is determined by offsetting the planned order receipt by procurement lead time of that item.
3. Order Rescheduling: This highlight the need of any expediting, de-expediting, and
38
 cancellation of open orders etc. in case of unexpected situations.

CPM

Project Management

A project is a well defined task which has a definable beginning and a definable end and requires one or
more resources for the completion of its constituent activities, which are interrelated and which must be
accomplished to achieve the objectives of the project. Project management is evolved to coordinate and
control all project activities in an efficient and cost effective manner. The salient features of a project are:

1. A project has identifiable beginning and end points.

2. Each project can be broken down into a number of identifiable activities which will consume time
and other resources during their completion.
3. A project is scheduled to be completed by a target date.
4. A project is usually large and complex and has many interrelated activities.
5. The execution of the project activities is always subjected to some uncertainties and risks.

Network Techniques

The network techniques of project management have developed in an evolutionary way in many years. Up
to the end of 18th century, the decision making in general and project management in particular was
intuitive and depended primarily on managerial capabilities, experience, judgment and academic
background of the managers. It was only in the early of 1900's that the pioneers of scientific management,
started developing the scientific management techniques. The forerunner to network techniques, the Gantt
chart was developed, during world war I, by Henry L Gantt, for the purpose of production scheduling. An
example of Gantt chart is shown in Figure 1.

Figure1: Gantt Chart

The Gantt chart was later modified to bar chart ( Figure 2 ), Figure 2: Bar Chart

39
which was used as an important tool in both the project and production scheduling. The bar charts, then
developed into milestone charts ( Figure 3 ), and next into network techniques (such as CPM and PERT).

Figure 3: Mile Stone Chart

40
Network Construction

A network is the graphical representation of the project activities arranged in a logical sequence and depicting
all the interrelationships among them. A network consists of activities and events.

Activity

An activity is a physically identifiable part of a project, which consumes both time and resources. Activity
is represented by an arrow in a network diagram ( Figure 4 ). Figure 4: Activity

The head of an arrow represents the start of activity and the tail of arrow represents its end. Activity
description and its estimated completion time are written along the arrow. An activity in the network can be
represented by a number of ways: (i) by numbers of its head and tail events (i.e. 10-20 etc.), and (ii) by a letter
code (i.e. A, B etc.). All those activities, which must be completed before the start of activity under
consideration, are called its predecessor activities. All those activities, which have
to follow the activity under consideration, are called its successor activities ( Figure 5 ). Figure 5:
Activity Precedence

Activity Immediate Predecessor

A _

B A

C A

D B

E C

Activity Immediate Successor

A B,C

B D

C E

An activity, which is used to maintain the pre-defined precedence relationship only during the construction of
the project network, is called a dummy activity. Dummy activity is represented by a dotted arrow and does
41
not consume any time and resource ( Figure 6 ).

Figure 6: Dummy Activity

An unbroken chain of activities between any two events is called a path.

Event

An event represents the accomplishment of some task. In a network diagram, beginning and ending
of an activity are represented as events. Each event is represented as a node in a network diagram.
An event does not consume any time or resource. Each network diagram starts with an initial event
and ends at a terminal event. Each node is represented by a circle Figure 7 .and numbered by using
the Fulkerson's Rule. Following steps are involved in the numbering of the nodes:

1. The initial event, which has all outgoing arrows and no incoming arrow, is numbered as 1.
2. Delete all the arrows coming out from the node just numbered (i.e. 1). This step will create some
more nodes (at least one) into initial events. Number these events in ascending order (i.e. 2, 3 etc.).
3. Continue the process until the final or terminal node which has all arrows coming in, with no arrow
going out, is numbered.

An illustration of Fulkerson's Rule of numbering the events is shown in Figure 8 .

Figure 8: Fulkerson's Rule

42
As a recommendation it must be noted that most of the projects are liable for modifications, and hence
there should be a scope of adding more events and numbering them without causing any inconsistency in
the network. This is achieved by skipping the numbers (i.e. 10, 20, 30…).

Rules for drawing network diagram

Rule 1: Each activity is represented by one and only one arrow in the network.

Rule 2: No two activities can be identified by the same end events ( Figure 9 ).

Figure 9: Network Preparation

Rule 3: Precedence relationships among all activities must always be maintained.

Rule 4: Dummy activities can be used to maintain precedence relationships only when actually
required. Their use should be minimized in the network diagram ( Figure 10 ).

Figure 10: Use of Dummy Activites

Rule 5: Looping among the activities must be avoided( Figure11 ).

43
 Figure 11: Looping Problem

CPM and PERT

The CPM (critical path method) system of networking is used, when the activity time estimates are
deterministic in nature. For each activity, a single value of time, required for its execution, is estimated. Time
estimates can easily be converted into cost data in this technique. CPM is an activity oriented technique.

The PERT (Project Evaluation and Review Technique) technique is used, when activity time estimates are
stochastic in nature. For each activity, three values of time (optimistic, most likely, pessimistic) are estimated.
Optimistic time (to) estimate is the shortest possible time required for the completion of activity. Most likely
time (tm) estimate is the time required for the completion of activity under normal circumstances. Pessimistic
time (tp) estimate is the longest possible time required for the completion of activity. In PERT β-distribution is
used to represent these three time estimates ( Figure 12).
Figure 12: Time distribution curve

44
As PERT activities are full of uncertainties, times estimates can not easily be converted in to cost data.
PERT is an event oriented technique. In PERT expected time of an activity is determined by using the
below given formula:

The variance of an activity can be calculated as:

Calculation of Time Estimates in CPM

In the project network given in figure below, activities and their durations are specified at the
activities. Find the critical path and the project duration.

Calculations in Network Analysis

The following calculations are required in network analysis in order to prepare a schedule of the project.

a. Total completion time of the project

b. Earliest time when each activity can start (i.e. earlist start time)
c. Earliest time when each activity can finish (i.e. earlist finished time)
d. Latest time when each activity can be started without delaying the project (i.e. latest start time)
e. Latest time when each activity can be finished without delaying the project (i.e. latest finish time)
f. Float on each activity (i.e. time by which the completion of an activity can be delayed without
delaying the project)
g. Critical activity and critical path

The symbols used in the calculations are shown in table below.

Symbol Description

Ei Earliest occurance time of event i

Latest allowable occurance time of event

Lj j

Estimated completion time of activity

tEi-j

(i,j)

45
 (EST)ij Earliest starting time of activity (i,j)

(EFT)ij Earliest finishing time of activity (i,j)

(LST)ij Latest starting time of activity (i,j)

(LFT)ij Latest finishing time of activity (i,j)

The computations are made in following steps.

(a) Forward Pass Computations :

(b) Backward Pass Computations :

(c) Calculation of Slack:

Event slack is defined as the difference between the latest event and earlist event times. Slack

for head event = Lj - Ej

Slack for tail event = Li - Ei

The calculations for the above taken example network are summarised below in the table.

S(i)
Predecessor Successor Event
tEi-j (EST)ij (EFT)ij (LST)ij (LFT)ij
Event i j
Slack

5 10 7 0 7 0 7 0

5 15 12 0 12 7 19 -

5 20 17 0 17 5 22 -
46
10 20 15 7 22 7 22 0

10 25 9 7 16 21 30 -

15 30 11 12 23 19 30 7

20 25 5 22 27 25 30 -

20 30 8 22 30 22 30 0

25 35 10 27 37 30 40 3

25 45 15 27 42 35 50 -

30 35 10 30 40 30 40 0

30 40 8 30 38 35 43 -

35 45 10 40 50 40 50 0

40 45 7 38 45 43 50 5

47
(d) Determination of Critical Path:

The sequance of critical activities in a network is called the critical path. The activities with zero slack of
head event and zero slack for tail event, are called as crititcal activities. In the taken network, the
following activities are critical activities: 5 - 10, 10 - 20, 20 - 30, 30 - 35, 35 - 45. Thus the critical path
is A - E - G - K - M.
Critical path duration is 7 + 15 + 8 + 10 + 10 = 50.

Calculation of Expected Time and Variance of a Path in PERT

The Expected Time of a chain of activities in series, is the sum of their expected times. Similarly the variance
of the path, is the sum of variances of activities on the path. In Figure below, three activities A,B and C are
connected in series, (i.e. form a path). Their time estimates to-tm-tpare given along the activity arrows. The
expected time of the path 1-2-3-4 is calculated as:

As the length of the path ,that is the number of activies connected in series increases,the variance of the path
and hence the uncertainty of meeting the expected time also increases.

48
An Example

In the network of figure below, the PERT time estimates of the activities are written along the activity arrows
in the order to-tm-tp. Compute the expected time and variance for each activity. Also compute the expected
duration and standard deviation for the following paths of the network.

(a) 10-20-50-80-90

(b) 10-30-50-70-90

(c) 10-40-60-80-90

The computation of expected times and variances for different activities are carried in a table given below.

Activity Time Estimates Expected Time Variance

i j to tm tp tE σ2

10 20 6 9 12 9.00 1.00

10 30 3 5 9 5.33 1.00

10 40 10 14 18 14.00 1.78

20 50 7 10 13 10.00 1.00

20 70 3 4 8 4.5 0.69

49
30 50 4 10 12 9.33 1.78

40 50 8 11 14 11.00 1.00

40 60 5 10 15 10.00 2.78

50 70 3 4 5 4.00 0.11

50 80 11 15 17 14.67 1.00

60 80 7 9 12 9.17 0.69

70 90 4 8 10 7.67 1.00

80 90 6 7 9 7.17 0.25

50
TYPES OF INVENTORIES

The term inventory refers to the stock of some kind of physical commodity like raw materials, component
parts, supplies & consumable stores, work-in-progress & finished goods. The analysis of the cost structure of
many of the product reveals that inventories cost range form 40% to 85% of the product cost. Thus
inventories indicate a major of application of financial resources & efficient inventory control can contribute
substantially to the profitability of the business. The type and amount of inventory which an organization
should hold will depend upon several aspects including the product manufactured, or service provided/service
range type of manufacture and span of process. The Principal Types of Inventories Are:
INPUT Production Inventory

PROCESS In-process Inventory

OUTPUT Finished Inventory

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1. Production Inventories :

Items which go into the final products raw materials and bought out components.

2.Maintenance, Repair and Operating Inventories :

Items which do not form a part of final product but are consumed in a prod. Processes, spare parts,
Consumable items etc.

3. In Process Inventories :

Work-in-progress items which are partly manufactured and await the next stage in process.

4.Finished Goods Inventories completed products ready for dispatch.

5. Miscellaneous Inventories :

Which arise out of the above four types of inventory scrap, surplus and obsolete items which are not to be
disposed off. Inventories are also classified as :

1. Transit Inventory/Pipe line inventory :

This inventory results because of the transportation time required. Transit inventory exist between factory &
place of supply or between &factory .e.g . Coal, iron ores etc.

2. Buffer inventory/Safety Stock Inventory/Fluctuation Inventory :

These are the inventories maintained to adjust with variation in demand & supply & to avoid out of stock
condition & back ordering.

3. Anticipation Inventory :

These inventories are maintained to adjust with sudden change in demand ( e.g. seasonal products ). Instead
of producing more in particular season a producing less during rest of the year, inventories can be allowed to
build up before the season. This will avoid idle or shut downs & resource utilization can be increased.

4. Decoupling Inventories:

Same as in process inventories to ensure smooth & uniform work flow.

5. Cycle Inventories/Lot size Inventories:

These are maintained wherever the user makes or purchases material in larger lots than are needed for his
immediate purpose to take the advantages of quantity discounts, to keep shipping cost in balance, & to hold
down clerical costs & handling cost. So these inventories are maintained purely due to the interest
of management.

ABC ANALYSIS OR VALUE DISTRIBUTION

ABC Analysis is the basic method of stock control generally used in a medium sizecompany. Inventory in a
to execute proper control it is necessary to take selective approach& find out the attention required for each
type of item, according to its importance.In relation to the inventory control the curve demonstrates the ‘law’
that a small proportion of the stocked item accounts for a large proportion of inventory cost or value.Their
relationship is often referred to as 80/20 ‘law’ i.e., up to 80% of firm’s total inventorycost or value is
52
accounted by about 20 % types of encourage categories various types of inventory items in to three classes
viz. A, B & C.

Class ‘A’ :

Those relatively few types of items ( upto 20% )Age of total cost ( upto 80% )

Class ‘B’ :

Slightly larger no of types of items ( upto 30% ) which account percentage of total cost ( upto 15% )

Class ‘C’ :

That large no. of types of items which account for a very small (up to 5%) of total cost.In this analysis,
priority is determined by the money value of the importance of theitem. Hence class ‘A’ items need to be
very closely controlled by the management analysiscan be referred as the basic analytical material
management tool.

1.19 EXAMPLE OF A CLOTHING

WHOLE SELLER, FOR ABC ANALYSIS

The table below shows the bought in prices & annual sales of the set of differenttypes of garments which are
held in stock by a whole seller. Construct an ABC chart for these items & suggest which items should be
treated as class A, B, & C

Solution :

Calculation of Annual Value ( Step I )

53
54
UNIT-IV

ROUTING

55
 UNIT-IV- ROUTING

Routing:

Under this, the operations, their path and sequence are established. To perform these operations the
proper class of machines and personnel required are also worked out. The main aim of routing is to determine
the best and cheapest sequence of operations and to ensure that this sequence is strictly followed. In small
enterprises, this job is usually done by entrepreneur himself in a rather adhoc manner. Routing procedure
involves following different activities.

(1)An analysis of the article to determine what to make and what to buy.

(2)To determine the quality and type of material

(3)Determining the manufacturing operations and their sequence.

(4)A determination of lot sizes

(5)Determination of scrap factors

(6)An analysis of cost of the article

(7)Organization of production control forms.

Scheduling:

It means working out of time that should be required to perform each operation and also the time necessary to
perform the entire series as routed, making allowances for all factors concerned. It mainly concerns with time
element and priorities of a job. The pattern of scheduling differs from one job to another which is explained
as below:

Production schedule:

The main aim is to schedule that amount of work which can easily be handled by plant and equipment
without interference. Its not independent decision as it takes into account following factors.

(1) Physical plant facilities of the type required to process the material being scheduled.

(2) Personnel who possess the desired skills and experience to operate theequipment and perform the type of
work involved.

(3) Necessary materials and purchased parts.

Master Schedule:

Scheduling usually starts with preparation of master schedule which is weekly or monthly break-down of the
production requirement for
each product for a definite time period, by having this as a running record of total production requirements th
e entrepreneur is in better position to shift the production from one product to another as per the changed pro
duction requirements. This forms a base for all subsequent scheduling acclivities. A master schedule is

56
followed by operator schedule which fixes total time required to do a piece of work with a given machine or
which shows the time required to do each detailed operation of a given job with a given machine or process.

Manufacturing schedule:

It is prepared on the basis of type of manufacturing process involved. It is very useful where single or few
products are manufactured repeatedly at regular intervals. Thus it would show the required quality of
each product and sequence in which the same to be operated

Scheduling of Job order manufacturing:

Scheduling acquires greater importance in job order manufacturing. This will enable the speedy execution
of job at each center point.

As far as small scale industry is concerned scheduling is of utmost importance as it brings out efficiency in
the operations and s reduces cost price. The small entrepreneur should maintain four types of schedules to
have a close scrutiny of all stages namely an enquiry schedule, a production schedule, a shop schedule and an
arrears schedule out of above four, a shop schedule is the most important most suited to the needs of small
scale industry as it enables a foreman to see at glance.

1. The total load on any section

2. The operational sequence

3.The stage, which any job has reached.

Loading:

The next step is the execution of the schedule plan as per the route chalked out it includes the assignment of
the work to the operators at their machines or work places. So loading determines who will do the work as
routing determines where and scheduling determines when it shall be done. Gantt Charts are most commonly
used in small industries in order to determine the existing load and also to foresee how fast a job can be done.
The usefulness of their technique lies in the fact that they compare what has been done and what ought to
have been done.

Most of a small scale enterprise fail due to non-adherence to delivery schedules therefore they can be
successful if they have ability to meet delivery order in time which no doubt depends upon production of
quality goods in right time. It makes all the more important for entrepreneur to judge ahead of time what
should be done, where and when thus to leave nothing to chance once the work has begun.

Production control:

Production control is the process of planning production in advance of operations, establishing the extract
route of each individual item part or assembly, setting, starting and finishing for each important item,
assembly or the finishing production and releasing the necessary orders as well as initiating the necessary
follow-up to have the smooth function of the enterprise.

The production control is of complicated nature in small industries. The production planning and control
department can function at its best in small scale unit only when the work manager, the purchase manager,
the personnel manager and the financial controller assist in planning production activities.

The production controller directly reports to the works manager but in small scale unit, all the three functions
namely material control, planning and control are often performed by the entrepreneur himself production
control starts with dispatching and ends up with corrective actions.
57
Routing:

“The specification of the flow of sequence of operation and processes to be followed in

producing a particular manufacturing a lot is routing”. Routing determines that work will
be done on the product of parts as well as where and how it will be done. It estimates the
operations, their path, sequence proper class of machines and personnel required for these
operations. Analyses of the article do determine what to make and what to purchase

Determination of lot sheet.

It depends primarily upon the manufacturing involved. If the product is to be manufactured

strictly to a sold order, the customer’s order plus a certain average or allowance of stock,
the lot size depends upon the primary of economic lot quantities etc., the quantity to
manufacture so that for which the sum of the set-up and other preparation cost and the cost
of carrying an inventory of the article manufactured at the minimum.

Determination of scrap factor:

Is the anticipated normal scrap encountered in the course of manufacturing? The difference
of amount of “SHRINKAGE’ depends upon the scrap factor encountered in the process
best practice dictates the establishment of standard scrap factors for use in routing and
scheduling.

Analysis of cost article:

It includes cost accounting department for cost estimating of product.

Factors Affecting Routing Procedure:

1. Manufacturing type employed.

2. Availability of plant equipment and its component parts.

3. Characteristic of physical plant equipment and its component parts.

4. Human elements.

(V) Estimating:

When production orders and detailed operation sheet available with specification feeds,
speed and use of auxiliary attachments and method, the operation time can be worked
out. It may be consequently results in wide scatter of operation times and unduly large
fluctuation and perhaps instabilities in time schedules.

(VI) Loading & Scheduling:

Machines have to be loaded according to their capabilities performance the given and according to
the capacity. Machine loading is carried out in connection with routing to ensure smooth work flow
work estimating, to ensure that the prescribed methods feeds and speed are best utilized. Careful
58
analysis of process capacities so that flow rates along the various production lines can be suitable
coordinated. The distinction between planning and scheduling is largely semantically and based
upon difference in detail and time period.

The schedule is very detailed plan for an immediate and relatively short time period. The difference
between the plan and the schedule can be illustrated by looking at the objectives. The plan may ask
to double production within two years. The schedule will to produce 300 units of articles during
week number 1,200 units during week and so on. Scheduling often refers to the specific
determination of what is going to the production during the next few weeks or months. This
involves determination of the individuals machines that are going to produce the items when they
will be started and completed what quantities ( lot or Batch sizes ) they will be produced and with
what materials.

But many other activities are also scheduled such as maintenance, movement of goods and
materials and oven staff meetings. In essence, a schedule is a detailed statement of how when and
where specific resources are going to the employed to produce specified output or results.

At this level of detail, the schedules is often in separable from the control system e.g. the financial
areas, a budget can be regarded as a schedule of funds usage. On the hand, the budget is also an
integral part of the control system for monitoring expenditure.

The schedule thus provides a short range sequence of activities one for which we must have
sensitive controls and rapid response time. Scheduling can be very simple or very complex. Perhaps
the most simple type schedule can be illustrated by an example drawn from cottage industry.

A worker may be asked to produce as given number of work carvings or square meters of
handloom fabric per week. The control is very simple and consists primarily of a count made each
week, when the goods are lifted by employer.

Decision Rules:

The scheduling function is such a detailed process that it must usually be delegated to middle or
lower management levels. Consequently, the schedulers, of themselves, are actually not in position
to relate their activities to the overall company goals and objective. Yet their function is vital to the
achievement of such ends. Consequently, it is necessary to establish decision rules which will help
tie the two levels of management together.

Decision rules for scheduling should be fairly specific. Not only do they serve the purpose of
linking the scheduling function with the attainment of total organizational goals but they provide
consistency in scheduling practice so that people can be interchanged, so that schedules can be
interpreted uniformly throughout the organization, and so that even one concerned will understand
the process.

They also make it possible to place much of the scheduling detail work on computers. Decision
rules can take many forms. The selection of the particular rules willlargely depends upon the
particular circumstance for which they are required. Competitive made of conditions, internal cost
structures, the nature of the product, capacity consideration etc will all have their effect.

59
EXAMPLES OF POSSIBLE DECISION RULES INCLUDING THE FOLLOWING:

1. Schedule the longest jobs first.

2. Schedule jobs in the order they are received.

3. Schedule the job with the earliest delivery dates first.

4. Schedule jobs on a random basis.

5. Schedule first those jobs with the use production facilities for which we have the greatest
idle capacity.

6. Schedule all jobs first which requires operation in department.

7. Schedule customer As order before all others.

Each of these rules (usually in combination with others) provides a means of regarding tasks. There
are an almost unlimited number of possibilities (including the converse of some of the above and
these are provided solely for illustration. It is worth noting that such decision rules are applicable to
all scheduling processes not only these which deal with production operations. Companies often
experiment of determine the specific set of rules which make sense for their particular situations.

In fact, it is possible to use part or projected at orders to simulate operations in the factory and
determine the effect of a given set of decision rules in advance of their actual introduction. This can
be very useful and save considerable relief and confusion as follows the testing of such rules
without the disruption of production. Again, there is a caution involved in the use of decision rules.

A point often overlooked is that if decision rules for scheduling are not formally and explicitly
established, they usually evolve in through default. Each person involved in the scheduling process
will usually have his own method-perhaps one that makes sense only to him, but still a
method. Sometimes this may be the best the alternative for a firm (e.g. the potential cost saving do
not justify taking the time to establish a formal procedure).However, this should be explicitly
determined. Otherwise, an organization may be looking a major opportunity for improvement and
enhanced efficiency.

60
 UNIT-V

DISPATCHING

61
UNIT-V DISPATCHING

Dispatching:

It is important mechanism of production control. Meaning of this term is sending to

destination or starting something on way. When applied to production control, it means the
assignment of work to different machines or work places which involve insurance of
order and production form in order of their priority as determined by scheduling. In
dispatching translated into reality or physical work which has been planned scheduling?

Duties of Dispatching:

1. Assignment of work to different machines of work place men.

2. Movement of material from stores to the first process and from process.

3. Issue of tool orders, instructing the tool department to collect and make ready jigs and
fixtures, in advance of time, at which the operation will commence.

4. Issue of time ticket, drawing, instruction cards & other necessary information
presented performing the work.

5. Issue of inspection order after each operation to determine the result in the number
of pieces “good” and the “bad” and cause of spoilage.

6. Issue of more orders and collection of time tickets, drawings, instruction cards for all
completed operations.

7. Recording time of beginning and completing jobs hand calculate duration of, forwarding
complete records to production department and time card pay roll department.

8. Recording and reporting idle time of machine and operation.

Dispatching Procedure:

Manner in which schedule or orders are issued depends upon whether the dispatching
decentralized or centralized in the Decentralized: The manufacturing schedules or work
orders in blanket fashion to the foreman or dispatch clerk within department. It is duty
of foreman or clerk to dispatch the orders of material to each machine and operator. In
centralized dispatching: This involves the dispatching of orders from central
dispatching division to machine or work station. Capacity and characteristic of each
machine is recorded in central dispatching station. Regardless of type of dispatching it is
customary for department to department themselves informed of the starting dates, progress
of each order by means of wall chart visible index file or one of the several types
of department dispatching boards.

62
Dispatching Rule:

Simple Rule:

1. Earliest due date: Run the job with the earliest due date, results in good date
performance.

2. First come first served: Run the job which arrived in the waiting line first. Result at low
variance of manufacturing cycle time.

3. Shortest processing time: Run the job which has the shortest set up plus machining for
the current work centre.

Combination Rule:

1. Minimum stock: Slack equals calendar time remaining minus processing time remaining
or slack equals date minus present time minus set up and machining time all remaining
operation.

2. Critical ratio: The critical ratio is made to order work is a slack type rule. Critical equals
0 to due date minus present time divided by number of days required to complete the job
order.

Expediting:

Follow up which regulates the progress of materials and parts through the production process. This
closely inter elated with activities of dispatcher to whom is delegated scheduling responsibility.

Follow up is that novel tool which acts as a regulator of material and components parts when they
are traveling on the path of performance as laid down by sheets and schedule charts. It serves as
a catalytic agent to fuse the various separate an unrelated production activities into the unified
whole that means progress.

TYPE:

1. Materials:

To follow up purchased materials is responsibility or purchasing department. This can be

accomplished most simply by filling one copy of requisition in a daily follow up file or in
ticket file according to the date of materials is due to be received.

2. Work in progress:

This follow up the work by checking the process and recording the production
accomplished by production line for comparison purpose with preplanned schedules. It is
the duty of follow-up men or expediters to advise the foreman as to the best sequence in
which the orders can be run so as the required part in which order to be fabricated and
brought it together at right time, place for the completion of finished product.

3. Assembly and Erection :

63
 Responsibility for assembly and erection of products in assembly manufacturing is almost
invariably rested. When all the parts of an available, the follow up man permits assembly
of election of products in start in case of large complicated product this is very necessary.

Inspection:

Another major control is inspection. Its finding land criticism are of the importance both in
execution of current program and both in planning stage of fibre undertaking when the

limitations of the processor, method and manpower are known. These limitations can form a basis
for future investigations in evaluating the showed improving production methods.

Evaluating:

Perhaps the most neglected, but on an essential link between control and forwarding is that of
evaluating. The essential task of dispatching and evaluating are concerned with the immediate issue
of production and with measures that will be as certain fulfillment target. Valuable information is
gathered limited in nature and unless provision is made so that all the accumulated information can
be properly digested and analyzed data may be irretrievable lost. Thus here the evaluating function
comes in to provide a feedback mechanism on the longer term basis so that the past experience can
be evaluated with the view to improving utilization of method and facilities. This is the integral part
of control function.

Dispatching involves issue of production orders for starting theoperations. Necessary authority and
conformation is given for:

1. Movement of materials to different workstations.

2. Movement of tools and fixtures necessary for each operation.

3. Beginning of work on each operation.

4. Recording of time and cost involved in each operation.

5. Movement of work from one operation to another in accordance with the route sheet.

6. Inspecting or supervision of work Dispatching is an important step as it translates production plans into
production.

Follow up:

Every production programme involves determination of the progress of work, removing bottlenecks in the
flow of work and ensuring that
the productive operations are taking place in accordance with the plans. It spotsdelays or deviations from the
production plans. It helps to reveal detects in routing and scheduling, misunderstanding of orders and
instruction, under loading or overloading of work etc. All problems or deviations are investigated and
remedial measures are undertaken to ensure the completion of work by the planned date.

Inspection:

This is mainly to ensure the quality of goods. It can be required as effective agency of production control.

Corrective measures:
64
Corrective action may involve any of those activities of adjusting the route, rescheduling of work changing
the workloads, repairs and maintenance of machinery or equipment, control over inventories of the cause
of deviation is the poor performance of the employees. Certain personnel decisions like training, transfer,
demotion etc. may have to be taken. Alternate methods may be suggested to handle peak loads.

65