Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

First Semester 2023-2024

Mid-Semester Test
(EC-2 Regular)

Course No. : MBA ZG526

Course Title : OPERATIONS MANAGEMENT
Nature of Exam : Closed Book
Weightage : 35% No. of Pages =5
Duration : 2 Hours No. of Questions = 6
Date of Exam : 22/09/2023 (FN)
Note:
1. Please follow all the Instructions to Candidates given on the cover page of the answer book.
2. All parts of a question should be answered consecutively. Each answer should start from a fresh page.
3. Assumptions made if any, should be stated clearly at the beginning of your answer.

Q.1Set. (A) (A) What is Differentiation competitive strategy? B) Explain with 5 or more examples
how the operations can contribute to Differentiation competitive strategies of e-
Commence companies like Amazon and Flipkart. [5]

Q.1Set. (B) (A) What is Differentiation competitive strategy? B) Explain with 5 or more
examples how the operations can contribute to Differentiation competitive
strategies of app-based taxi service providers like Uber and Ola. [5]
=====
Q.2Set. (A) (A) Explain the concept of Product Life Cycle. B) Explain how managers can use
the concept of Product Life Cycle to manage the operations of Desktop
computers, Laptop computers, and smartphone manufacturing companies.
[5]

Q.2Set. (B) (A) Explain the concept of Product Life Cycle. B) Explain how managers can use
the concept of Product Life Cycle to manage the operations of Steel, Cement, and
Tyre manufacturing companies. [5]

======
Q.3Set. (A) The demand forecast made by the marketing department of a bottled water
manufacturer (like Bisleri, Kinley, etc.) is shown below. What production
capacity do you suggest- justify your answer. [5]
Q.3Set. (B) The demand forecast made by the marketing department of a milk producer (like
Amul, Heritage, Parag, etc.) is shown below. What production capacity do you
suggest- justify your answer. [5]

======

Q.4Set. (A) The backend office of Bristol General Insurance Co. located in Mumbai processes
insurance claims. The claims process has seven activities- A, B, C, D, E, F, and
G. The activity A is followed by activity B; activity B is followed by a parallel
sub-process comprising of activities C, D, and E and; this sub-process is followed
by another parallel sub-process comprising of activities F and G. [6]

The standard output rates (applications processed per day) of the seven activities
are- 40 for activity A, 30 for activity B, 50 for activity C, 60 for activity D, 20 for
activity E, 10 for activity F, and 70 for activity G.
 (a) What is the output rate of this process? Show all calculations.
(b) Explain in detail how can the principles of bottleneck management be used to
increase the capacity of this process to 60 applications per day.

Q.4Set. (B) The backend office of Bristol General Insurance Co. located in Mumbai processes
insurance claims. The claims process has seven activities- A, B, C, D, E, F, and
G. The activity A is followed by activity B; activity B is followed by a parallel
sub-process comprising of activities C, D, and E and; this sub-process is followed
by another parallel sub-process comprising of activities F and G. [6]

The standard output rates (applications processed per day) of the seven activities
are- 40 for activity A, 30 for activity B, 50 for activity C, 60 for activity D, 20 for
activity E, 80 for activity F, and 70 for activity G.

(a) What is the output rate of this process? Show all calculations.
(b) Explain in detail how can the principles of bottleneck management be used to
increase the capacity of this process to 60 applications per day.

=======
Q.5Set. (A) Naike, a leading garment manufacturer is setting up a new factory to produce a
large variety of garments- school and office uniforms, jerseys for IPL, fashion
garments, Gym wear, Yoga wear, Swimwear, etc.- in small to medium batches
for diverse customers. The major activities involved in the production of
garments are laying, marking, cutting, stitching, checking, finishing, pressing,
and packaging.

(A) What kind of layout would you suggest for the new factory- Justify your
answer. B) How does the layout suggested by you differ from other types of
layouts? C) What are the operational benefits and costs of the layout suggested
by you over other kinds of layouts? [7]

Q.5Set. (B) Naike, a leading garment manufacturer is setting up a new factory to produce a
large variety of garments- school and office uniforms, jerseys for IPL, fashion
garments, Gym wear, Yoga wear, Swimwear, etc.- in small to medium batches
for diverse customers. The major activities involved in the production of
garments are laying, marking, cutting, stitching, checking, finishing, pressing,
and packaging.

Within this factory, a sub-factory will be built to mass produce only office-shirts
for men. A) What kind of layout would you suggest for the sub-factory- Justify
your answer. B) How does the layout suggested by you differ from other types of
layouts? C) What are the operational benefits and costs of the layout suggested
by you over other kinds of layouts? [7]

=======
Q.6Set. (A) The assembly of ceiling fans in a factory involves seven activities- A, B, C, D, E,
and F. The precedence relationship of these activities is given in the diagram, and
the task durations are in the table below. [7]

Task Duration (sec)

A 30
B 20
C 40
D 20
E 40
F 20
G 30
H 40

The production manager has been given a target to produce 500 fans per day (in a 8-hour shift).

a) Suggest an efficient (or near efficient) balanced line. Explain every step and show every
formula and calculation.
b) What is the efficiency of the balanced line suggested by you? Show all calculations.

Q.6Set. (B) The assembly of ceiling fans in a factory involves seven activities- A, B, C, D, E,
and F. The precedence relationship of these activities is given in the diagram, and
the task durations are in the table below. [7]
 Task Duration (sec)
A 30
B 20
C 40
D 20
E 30
F 20
G 40
H 40

The production manager has been given a target to produce 500 fans per day (in a 8-hour shift).

a) Suggest an efficient (or near efficient) balanced line. Explain every step and show every
formula and calculation.
b) What is the efficiency of the balanced line suggested by you? Show all calculations.

********

(A) What is Differentiation competitive strategy? B) Explain with 5 or more examples how the
operations can contribute to Differentiation competitive strategies of e-Commence companies like
Amazon and Flipkart.

Ans : (A) Differentiation Competitive Strategy:

Differentiation is a competitive strategy in which a company seeks to

distinguish its products or services from those of competitors in the eyes of
customers. The goal is to create a unique and desirable offering that
customers perceive as superior, allowing the company to command a
premium price and build customer loyalty. Differentiation can be achieved
through various means, such as product features, quality, customer service,
brand image, innovation, or customization.

(B) Operations Contribution to Differentiation Competitive Strategies

of e-Commerce Companies like Amazon and Flipkart:

1. Product Assortment and Customization:

 • Operations play a crucial role in managing the product
assortment and customization options offered by e-commerce
companies. Amazon and Flipkart leverage sophisticated
inventory management systems and supply chain capabilities
to offer a vast selection of products, including niche items and
personalized recommendations based on customer
preferences.
2. Fulfillment and Delivery Excellence:
• Both Amazon and Flipkart invest heavily in building robust
fulfillment and logistics networks to ensure fast and reliable
delivery of orders. Operations contribute to differentiation by
optimizing warehouse operations, implementing efficient order
picking and packing processes, and partnering with third-party
logistics providers to offer convenient delivery options such as
same-day or next-day delivery.
3. Customer Service and Experience:
• Operations are instrumental in delivering exceptional customer
service and experience, which is a key differentiator for e-
commerce companies. Amazon and Flipkart focus on
streamlining order processing, providing real-time order
tracking, resolving customer inquiries promptly, and offering
hassle-free return and refund policies, all of which contribute to
customer satisfaction and loyalty.
4. Technology and Innovation:
• Operations support technological innovation and continuous
improvement initiatives that enhance the customer experience
and differentiate the e-commerce platforms. Both Amazon and
Flipkart invest in cutting-edge technologies such as artificial
intelligence, machine learning, data analytics, and robotics to
improve website functionality, personalize recommendations,
optimize supply chain operations, and introduce innovative
features like voice-enabled shopping or drone delivery.
5. Quality Control and Assurance:
• Operations ensure the quality control and assurance of
products sold on e-commerce platforms, which is crucial for
maintaining customer trust and loyalty. Amazon and Flipkart
implement rigorous quality control measures, including
product inspections, seller vetting processes, and customer
 reviews and ratings, to ensure that only authentic, high-quality
products are available to customers, thereby differentiating
themselves as trusted and reliable marketplaces.
6. Value-Added Services and Partnerships:
• Operations facilitate the provision of value-added services and
partnerships that enhance the overall offering and differentiate
the e-commerce companies. Amazon and Flipkart partner with
various service providers, such as payment gateways, insurance
companies, and content creators, to offer additional benefits
such as extended warranties, insurance coverage, and exclusive
content, enriching the customer experience and providing
added value to customers.

By focusing on these operational aspects, Amazon and Flipkart differentiate

themselves in the highly competitive e-commerce market, attract and retain
customers, and sustain their competitive advantage over rivals.

Q.1Set. (C) A) What is Differentiation competitive strategy? B) Explain with 5 or more

examples how the operations can contribute to Differentiation competitive
strategies of app-based taxi service providers like Uber and Ola. [5]
Ans Same as above

Q.2Set. (C) (A) Explain the concept of Product Life Cycle. B) Explain how managers can use
the concept of Product Life Cycle to manage the operations of Desktop
computers, Laptop computers, and smartphone manufacturing companies.
[5]
Ans : Concept of Product Life Cycle:

The Product Life Cycle (PLC) is a concept used to describe the stages that a
product goes through from its introduction to the market until its decline
and eventual discontinuation. The PLC is typically divided into four main
stages:

1. Introduction: This stage begins with the launch of a new product

into the market. Sales are initially low as customers become aware of
the product and its features. Companies often incur high costs during
this stage due to heavy marketing and promotion efforts.
 2. Growth: In the growth stage, sales start to increase as consumer
demand rises and the product gains market acceptance. Companies
focus on expanding distribution channels, improving product quality,
and capturing a larger market share. Profits begin to rise during this
stage as economies of scale are achieved.
3. Maturity: The maturity stage is characterized by stable sales and
market saturation. Competition intensifies as multiple competitors
offer similar products, leading to price wars and margin pressures.
Companies may focus on product differentiation, cost reduction, and
market segmentation to maintain market share and profitability.
4. Decline: Eventually, sales decline in the decline stage due to factors
such as changes in consumer preferences, technological
advancements, or the introduction of newer products. Companies
may choose to discontinue the product or explore strategies such as
product diversification or market expansion to extend its life cycle.

B) Managing Operations of Desktop Computers, Laptop Computers,

and Smartphone Manufacturing Companies using Product Life Cycle:

1. Desktop Computers:
• Introduction Stage: Operations managers focus on ramping up
production capacity and ensuring efficient manufacturing
processes to meet initial demand.
• Growth Stage: Operations scale up production to meet
increasing demand while optimizing supply chain and logistics
to reduce lead times and costs.
• Maturity Stage: Operations streamline production processes,
implement cost-saving measures, and explore product
innovation to differentiate from competitors.
• Decline Stage: Operations may rationalize product lines,
optimize inventory management, and explore new markets or
product variants to extend the life cycle.
2. Laptop Computers:
• Introduction Stage: Operations invest in research and
development, prototyping, and testing to bring new laptop
models to market.
 Growth Stage: Operations expand manufacturing capacity,
•
streamline assembly processes, and optimize component
sourcing to meet growing demand.
• Maturity Stage: Operations focus on cost reduction through
economies of scale, supply chain optimization, and product
feature enhancements to maintain market share.
• Decline Stage: Operations may phase out older models, focus
on inventory management, and explore product diversification
or customization to extend profitability.
3. Smartphone Manufacturing Companies:
• Introduction Stage: Operations invest in advanced
manufacturing technologies, supply chain optimization, and
marketing to launch new smartphone models.
• Growth Stage: Operations scale up production, optimize supply
chain logistics, and invest in quality control to meet increasing
demand.
• Maturity Stage: Operations focus on product differentiation
through design innovation, software customization, and after-
sales service to retain customers.
• Decline Stage: Operations may rationalize product portfolios,
explore emerging markets, and invest in research and
development for next-generation products to stay competitive.

By aligning operational strategies with the different stages of the product

life cycle, managers can effectively manage resources, optimize costs, and
maximize profitability throughout the lifecycle of desktop computers,
laptop computers, and smartphones.

Q.2Set. (D) (A) Explain the concept of Product Life Cycle. B) Explain how managers can use
the concept of Product Life Cycle to manage the operations of Steel, Cement, and
Tyre manufacturing companies. [5]

Ans : Same as above

Q.3Set. (C) The demand forecast made by the marketing department of a bottled water
manufacturer (like Bisleri, Kinley, etc.) is shown below. What production
capacity do you suggest- justify your answer. [5]
Ans :

Q.4Set. (C) The backend office of Bristol General Insurance Co. located in Mumbai processes
insurance claims. The claims process has seven activities- A, B, C, D, E, F, and
G. The activity A is followed by activity B; activity B is followed by a parallel
sub-process comprising of activities C, D, and E and; this sub-process is followed
by another parallel sub-process comprising of activities F and G. [6]

The standard output rates (applications processed per day) of the seven activities
are- 40 for activity A, 30 for activity B, 50 for activity C, 60 for activity D, 20 for
activity E, 80 for activity F, and 70 for activity G.

(c) What is the output rate of this process? Show all calculations.
(d) Explain in detail how can the principles of bottleneck management be used to
increase the capacity of this process to 60 applications per day.

Ans : (c) Output Rate of the Process:

To calculate the output rate of the process, we need to consider the flow of
activities and their respective output rates. Since activity A is followed by
activity B, and then by two parallel sub-processes (C, D, E) and (F, G), the
output rate of the entire process is determined by the slowest activity in the
sequence, which is the bottleneck.
Given the output rates:

• Activity A: 40 applications/day
• Activity B: 30 applications/day
• Activities C, D, E (parallel sub-process): 50, 60, 20 applications/day
respectively
• Activities F, G (parallel sub-process): 80, 70 applications/day
respectively

The output rate of the process will be limited by the output rate of the
slowest sub-process, which is (C, D, E) in this case.

Output rate of sub-process (C, D, E) = Minimum of (output rate of C, output

rate of D, output rate of E) = Minimum of (50, 60, 20) applications/day = 20
applications/day

Therefore, the output rate of the entire process is 20 applications/day.

(d) Using Bottleneck Management Principles to Increase Capacity to 60

Applications/Day:

Bottleneck management involves identifying and managing the bottleneck

in a process to improve overall throughput. In this scenario, the bottleneck
is the sub-process (C, D, E) with an output rate of 20 applications/day.
Here's how the principles of bottleneck management can be applied to
increase the capacity of the process to 60 applications/day:

1. Identify the Bottleneck: The first step is to accurately identify the

bottleneck in the process. In this case, it's the sub-process (C, D, E)
where activity E has the lowest output rate of 20 applications/day.
2. Exploit the Bottleneck: Focus on maximizing the utilization and
efficiency of the bottleneck resource (activity E). This may involve
optimizing workflow, allocating additional resources, or
implementing process improvements to ensure that activity E
operates at its maximum capacity of 20 applications/day.
3. Subordinate Other Activities: Ensure that activities preceding the
bottleneck (such as A, B) and following the bottleneck (such as F, G)
are synchronized and paced to match the output rate of the
 bottleneck. This prevents overloading the bottleneck and ensures
smooth flow throughout the process.
4. Elevate the Bottleneck: Implement strategies to increase the
capacity of the bottleneck resource (activity E) to match or exceed the
desired output rate of 60 applications/day. This could involve
investing in additional equipment, technology upgrades, or process
redesign to enhance productivity and throughput.
5. Repeat the Process: Once the bottleneck is addressed and the
capacity increased, reassess the process to identify any new
bottlenecks that may emerge. Continuously monitor and optimize the
process to maintain efficiency and meet changing demand
requirements.

By effectively managing the bottleneck and aligning operations with the

principles of bottleneck management, the capacity of the process can be
increased to meet the desired output rate of 60 applications/day.

Q.5Set. (A) Naike, a leading garment manufacturer is setting up a new factory to produce a
large variety of garments- school and office uniforms, jerseys for IPL, fashion
garments, Gym wear, Yoga wear, Swimwear, etc.- in small to medium batches
for diverse customers. The major activities involved in the production of
garments are laying, marking, cutting, stitching, checking, finishing, pressing,
and packaging.

(A) What kind of layout would you suggest for the new factory- Justify your
answer. B) How does the layout suggested by you differ from other types of
layouts? C) What are the operational benefits and costs of the layout suggested
by you over other kinds of layouts? [7]
Ans:

(A) Layout Recommendation for Naike's New Garment Factory:

For Naike's new garment factory producing a large variety of garments in

small to medium batches for diverse customers, I would suggest
implementing a Cellular Manufacturing Layout. This layout organizes
production into cells or groups of machines and workers dedicated to
producing a specific type or family of garments. Each cell operates
autonomously, handling all tasks required to complete a batch of garments,
from laying and cutting to stitching, checking, finishing, and packaging.
Here's the justification for this recommendation:
 1. Flexibility: A cellular layout offers high flexibility to accommodate
the diverse range of garment types being produced. Each cell can be
configured and equipped with specialized machinery and tools
tailored to the specific requirements of different garment types,
allowing for efficient production of small to medium batches with
minimal changeover time.
2. Reduced Lead Time: By organizing production into self-contained
cells, material flow and processing time are minimized, leading to
reduced lead times. This is critical for meeting the quick turnaround
times required for diverse customer orders, especially in the fashion
industry where trends change rapidly.
3. Improved Quality Control: With dedicated cells focused on specific
garment types, quality control measures can be implemented at each
stage of production, ensuring that defects are detected and rectified
promptly. This contributes to higher overall product quality and
customer satisfaction.
4. Enhanced Worker Productivity: Workers in cellular manufacturing
cells are cross-trained to perform multiple tasks, resulting in greater
versatility and productivity. They become experts in their respective
areas, leading to increased efficiency and throughput.
5. Optimized Space Utilization: Cellular manufacturing allows for
efficient use of factory floor space by organizing machines and
workstations into compact, interconnected cells. This minimizes
material handling distances and reduces wasted space, leading to
higher overall productivity and cost savings.

(B) Differences from Other Layout Types:

Compared to traditional layout types such as process layout or product

layout, a cellular manufacturing layout differs in several key aspects:

1. Flexibility: Cellular manufacturing layouts offer greater flexibility to

accommodate changes in product mix and production volumes
compared to rigid, specialized layouts like product layouts.
2. Batch Production: Cellular manufacturing is well-suited for batch
production of diverse product types, whereas product layouts are
typically optimized for high-volume, repetitive production of a single
product.
 3. Autonomy: In cellular manufacturing, each cell operates
autonomously, whereas in process layouts, activities are arranged
based on functional similarity, and in product layouts, activities are
sequenced based on the production flow of a single product.
4. Quality Control: Cellular manufacturing allows for decentralized
quality control within each cell, whereas centralized quality control is
more common in process and product layouts.

(C) Operational Benefits and Costs:

Operational Benefits:

• Increased Flexibility
• Reduced Lead Time
• Improved Quality Control
• Enhanced Worker Productivity
• Optimized Space Utilization

Operational Costs:

• Initial Setup Costs for Cell Configuration

• Training Costs for Cross-Functional Teams
• Potential Complexity in Material Flow and Coordination
• Maintenance and Management of Multiple Cells

Overall, the operational benefits of a cellular manufacturing layout, such as

increased flexibility, reduced lead time, and improved quality control,
outweigh the associated costs, making it a suitable choice for Naike's new
garment factory producing a wide variety of garments in small to medium
batches.

Q.6Set. (C) The assembly of ceiling fans in a factory involves seven activities- A, B, C, D, E,
and F. The precedence relationship of these activities is given in the diagram, and
the task durations are in the table below. [7]
 Task Duration (sec)
A 30
B 20
C 40
D 20
E 40
F 20
G 30
H 40

The production manager has been given a target to produce 500 fans per day (in a 8-hour shift).

c) Suggest an efficient (or near efficient) balanced line. Explain every step and show every
formula and calculation.
d) What is the efficiency of the balanced line suggested by you? Show all calculations.

Ans : see the rough work