QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

I. Choose only one right answer

1. Which of the following explain the need for facility location selection?
(a) When the existing business unit has outgrown its original facilities and expansion is
not possible.
(b) When a business is newly started.
(c) When the lease expires and the landlord does not renew the lease.
(d) All of these.
2. Which of the following is the first step in making a correct location choice?
(a) Develop location alternatives
(b) Decide the criteria for evaluating location alternatives
(c) Evaluate the alternatives
(d) Make a decision and select the location
3. Which of the following technique emphasises transportation cost in the determination
of facility location?
(a) Location rating factor technique
(b) Transportation technique
(c) Centre-of-gravity technique
(d) Both (b) and (c)
4. Transportation cost mainly depends on which of the following factors?
(a) Distance
(b) Weight of merchandise
(c) Time required for transportation
(d) All of the above
5. In which of the following site selection techniques, a weightage between ‘0’ to ‘1’ is
provided to factors that influence its location decision?
(a) Location rating factor technique
(b) Transportation technique
Digitally signed by
(c) Centre-of-gravity technique NZAYIRAMBAHO
(d) None of these JEAN MARIE
6. Which of the following does not cause to production delay? VIANNEY
Date: 2024.04.12
(a) Shortage of space 00:21:34 +02'00'
(b) Long distance movement of materials
(c) Spoiled work
(d) Minimum material handling
7. Process layout is also known as ________.
(a) Functional layout
(b) Batch production layout
(c) Straight line layout
(d) Both (a) and (b)
8. Which of the following facility layout is best suited for the intermittent type of
production, which is a method of manufacturing several different products using the
same production line?
(a) Product layout
(b) Process layout
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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

(c) Fixed position layout

(d) Cellular manufacturing layout
9. In which of the following layout type, materials are fed into the first machine and
finished products come out of the last machine?
(a) Product layout
(b) Process layout
(c) Fixed position layout
(d) Cellular manufacturing layout
10. Which of the following is not an advantage of using product layout?
(a) Minimum material handling cost
(b) Minimum inspection requirement
(c) Specialised supervision requirement
(d) None of these
11. Frederick Taylor is known as father of _____________ management. a. operations
a. production
b. scientific
c. resource
12. ___________helps operations managers make decisions when problems are complex. a.
Operations Research
d. Marketing Research
e. Financial Research
f. Production Research
13. __________ Management is the conversion of inputs into outputs.
a. Processing
b. Materials
c. Logistics
d. Operations
14. Production management and Operations management are differentiated on the basis of
tangibility of ________.
a. raw material
b. finished goods
c. processed goods
d. unprocessed (stock)
15. _________involves drastic measures or break-through improvements to improve the
performance of a firm.
a. Downsizing
g. Re-engineering
h. Technology
i. Networking
16. Methodologies, technology, toolings, fixtures for establishing, maintaining and improving
productivity fall under this 'P' of Operations Management.
a. Plant
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j. Processes
k. People
l. Parts
17. Inputs of an operations management include_____________.
a. Machinery
b. Storage service
c. Transpiration services
d. Industrial waste
18. Managing issuance of work order falls under____________.
a. Planning
b. Organising
c. Directing
d. Staffing
19. The ability of an organisation to accept the changes quickly and continue with the new
adaptations with the demands on Productivity, design, lead time, work structure in particular
delivery schedule is known as_________.
a. Total quality management
b. Lean manufacturing
c. Total production management
d. Agile manufacturing.
20. Using minimal amounts of resources to produce a high volume of high quality goods with
workforce to have advantages of both, mass production and job production is known
as__________.
a. Quality improvement
m. Lean manufacturing
n. Total quality management
o. Just-In-Time
21. The ultimate objective of __________is to create goods and services that meets the needs and
wants of the customers.
p. manufacturing
q. production process
r. service operation
s. transformation
22. In manufacturing operations, _____________includes casting, forging, stamping, embossing,
spinning. a. transformation
b. forming
c. deforming
d. machining
23. In manufacturing process, __________ includes metal removal by turning, drilling, milling,
grinding, shaping, boring.

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t. assembling
u. forming
v. machining
w. deforming
24. _______ means division of work or effort and this operates both, at workers and management
level.
a. Specialisation
b. Mechanisation
c. Transformation
d. Operation
25. Mail Service, Library service is considered as ___________ goods/service. a. intangible
b. standard
c. tangible
d. customised
26. The unwanted or random levels of service quality customers receive when they patronise a
service because of the human element involved in providing a service is known
as___________.
a. inseparability
b. variability
c. perishability
d. uniformity
27. Advanced form of mechanisation is known as__________.
x. Auto-mechanisation
y. Advancement
z. Computerisation
aa. Automation
28. Melting, refining, casting are the processes of _______________.
bb. service operation
cc. manufacturing operation
dd. production
ee. processing
29. Which of the following is not the characteristic of Service operation?
ff. Intagibility
gg. Inseperability
hh. Variability
ii. Mechanisation
30. Operations research is an aid in decision making based on________________.
jj. qualitative analysis
kk. quantitative analysis
ll. statistical analysis

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

mm. methodology
31. _________ capacity planning which is usually having a time horizon of more than one or two
years. a. Short range
nn. Intermediate range
oo. Long range
pp. Medium range
32. Intermediate range capacity planning which has a time horizon or duration for________
months.
qq. 0-12
rr. 6-8
ss. 10-20
tt. 6-18
33. ____________ capacity refers to the maximum output that can possibly be attained. It is the
maximum rate of output achieved under ideal conditions.
a. Production
uu. Design
vv. Effective
ww. Efficient
34. The capacity is measured relative to equipment is known as ________.
a. Peak Capacity
b. Relative Capacity
c. Design Capacity
d. Measure of Capacity
35. Effective capacity is usually less than _______capacity because of capacity losses due to
realities such as product mix changes, need for periodic preventive maintenance of equipment,
problems in scheduling and balancing operations, coffee breaks, lunch breaks and so on.
a. peak
b. relative
c. design
d. measure of
36. Following analysis focuses on relationships between cost, revenue and volume of output is
known as_________.
a. financial analysis
b. break-even analysis
c. decision tree analysis
d. waiting line analysis
37. Which of the following analysis helps mangers to take decisions regarding allocation of scarce
funds to alternative investment proposals?
a. Financial analysis
b. Break-even analysis

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c. Decision tree analysis

d. Waiting line analysis
38. The difference between the cash received from sales and cash outflow for labor, materials,
overhead and taxes etc., is known as___________.
a. Present value
b. Cash inflow
c. Cash flow
d. Interest
39. The expected value (EV) gives only relative measures of value and lot absolute measures is
used in________.
a. Waiting line analysis
b. Decision tree analysis
c. Financial analysis
d. Break-even analysis
40. Adequate ______ is essential for the successful working of any organisation, where facilities
for raising capital are available attracts new industries.
a. machinery
b. manpower
c. capital
d. materials
41. The problem of arranging floor space of the building, restrooms for employees; offices for
supervision, design, and production control and space for inventory etc. is known as
_________.
a. Inventory problem
b. Layout conflict
c. Facility layout problem
d. Facility design problem
42. _____ is a format in which similar equipment or functions are grouped together, such as all
lathes in one area and all stamping machines in another.
a. Flow shop layout
b. Job shop layout
c. Fixed position layout
d. Group technology layout
43. _________ type of layout is typical for an assembly line where a single product, or a few very
similar products, passes through the line in a continuous fashion.
a. Job shop layout
b. Fixed position layout
c. Flow shop layout
d. Group technology layout

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44. ________ also refers to the parts classification and coding system used to specify machine
types that go into a cell.
a. Group technology layout
b. Job shop layout
c. Fixed position layout
d. Flow shop layout
45. In _______ layout, a high degree of task ordering is common, and to the extent that this
precedence determines production stages, a fixed-position layout might be developed by
arranging materials according to their technological priority.
a. Job shop
b. Fixed position
c. Flow shop
d. Group technology
46. Which of the following system is a system with automated material handling moving
individual units of product between automated processors?
a. Assembly line system
b. Robotic system
c. Flexible Manufacturing system
d. MRP
47. Good Facility Layout helps to manufacture quality goods in _________.
a. Economical manufacturing cost
b. Less manufacturing cost
c. Average manufacturing cost
d. Controlled manufacturing cost
48. Production scheduling is difficult with which type of arrangement in which the level and type
of work is highly variable?
a. Fixed-position layout
b. Group technology layout
c. Product layout
d. Process layout
49. Which of the following layout is similar to process layout?
a. Fixed-position layout
b. Group technology layout
c. Product layout
d. Process layout
50. Construction sites and movie lots are examples of which of the following format of layout?
a. Product layout
b. Process layout
c. Group technology layout
d. Fixed-position layout

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

51. ______________ are difficult to update when there are many changes.
a. Bar charts
b. Scheduling
c. Controlling
d. Designing
52. ___________________ are/is the allocation of resources to large, long term projects.
a. Working capital
b. Capital expenditures
c. Cash cycle
d. Capital budgeting
53. The _______________ is a statement of the planned capital expenditures.
a. working capital
b. capital expenditure
c. cash cycle
d. capital budget
54. The purpose of _______________ is to provide detailed realistic estimates of time, duration,
resource and cost and planning should be carried out only in sufficient detail to allow this to
be achieved.
a. project plan
b. project schedule
c. project change management
d. project tasks
55. Determination of _____________ is essentially systematic planning and execution of projects.
a. work design
a. project design
b. work structure
c. project controlling
56. What does PID stand for?
a. Project Income Document
b. Project Initiation Document
c. Project Initiation Department
d. Planning Initiation Document
57. Which of the following statements is true?
a. Determining the design of the project helps to clarify objectives and set the boundaries of
the project.
b. Determining the structure of the project helps to clarify objectives and set the boundaries
of the project.
c. Determining the process of the project helps to clarify objectives and set the boundaries of
the project.

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

d. Determining the scope of the project helps to clarify objectives and set the boundaries
of the project.
58. Which is an analysis and evaluation of internal conditions and external factors that affect the
organisation?
a. Force field analysis
d. Critical issues review
e. SWOT
f. Customer/stakeholder/competitor analysis
59. Which of the following statements is true?
a. Bar chart is a pictorial representation showing the various activities involved in a
project.
b. Scheduling is a pictorial representation showing the various activities involved in a project.
c. Controlling is a pictorial representation showing the various activities involved in a project.
d. Designing is a pictorial representation showing the various activities involved in a project.
60. Which of the following statements is true?
a. Scheduling is a tool for organising the present on the basis of the projections of the desired
future.
b. Strategic planning is a tool for organising the present on the basis of the projections
of the desired future.
c. Controlling is a tool for organising the present on the basis of the projections of the desired
future.
d. Planning is a tool for organising the present on the basis of the projections of the desired
future.
61. _____________is a list of goods and materials or those goods and materials s held available
in stock by a business
a. Inventory
b. Supplies
c. Commodities
d. Products
62. Some inventory used to protect against the uncertainties of supply and demand are called
_______________
a. MRO inventory
a. Buffer inventory
b. Anticipation inventory
c. Transit Inventory
63. __________ are items that are used to support and maintain the production process and its
infrastructure
a. Finished Goods
a. Raw Material
b. Maintenance, repair, and operating supplies(MRO goods)

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c. Work in Progress goods

64. _____________ is that inventory valuation assumes that the first goods purchased are the first
to be used or sold regardless of the actual timing of their use or sale
a. Last-in, First-out (LIFO)
a. Average Cost Method
b. Standard Cost Method
c. First-in, First-out (FIFO)
65. __________________of inventory valuation is often used by manufacturing companies to
give all of their departments a uniform value for an item throughout a given year.
a. Standard Cost Method
a. First-in, First-out (FIFO)
b. Last-in, First-out (LIFO)
c. Average Cost Method
66. ______________compares the organisation’s most liquid current assets to its current liabilities
a. Last-in, First-out (LIFO)
a. Average Cost Method
b. Standard Cost Method
c. The Quick ratio test
67. ________________ of inventory valuation identifies the value of inventory and cost of goods
sold by calculating an average unit cost for all goods available for sale during a given period
of time.
a. Average Cost Method
a. Standard Cost Method
b. First-in, First-out (FIFO)
c. Last-in, First-out (LIFO)
68. _____________are the ones that need to transport items or material from one location to
another, and from the fact that there is some transportation time involved in getting from one
location to another.
a. MRO inventory
d. Buffer inventory
e. Anticipation inventory
f. Transit Inventory
69. ______________________measures, on average, how many times inventory is replaced over
a period of time.
a. The inventory turnover ratio
b. The Quick ratio
c. The Current ratio
d. Last-in, First-out (LIFO)
70. _______________assesses the organisation’s overall liquidity and indicates a company’s
ability to meet its short-term obligations

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a. The inventory turnover ratio

b. The Current ratio
c. Last-in, First-out (LIFO)
d. The Quick ratio
71. The category consists of costs necessary for achieving high quality, which are called ________
costs.
a. quality control costs
a. prevention costs
b. appraisal costs
c. quality failure costs
72. ________ includes quality planning costs, such as the costs of developing and implementing
a quality plan.
a. Appraisal costs
a. Internal failure costs
b. Prevention costs
c. External failure costs
73. The ______ is the first step of Shewhart cycle.
a. Plan
b. Do
c. Study
d. Act
74. ___________ is an integrated organisational effort designed to improve quality at every level.
a. TPM
a. TQM
b. Kaizen
c. Kanban
75. In 1977 the International Organisation for Standardisation (ISO) published its first set of
standards for quality management called ___________.
a. ISO
a. ISO 9001
b. ISO 9000
c. ISO 14000
76. In 1996 the International Standards Organisation introduced standards for evaluating a
company’s environmental responsibility called as___________.
a. ISO
a. ISO 9000
b. ISO 14000
c. ISO 9001
77. Which of the following phases explains the data are evaluated to see whether the plan is
achieving the goals established in the plan phase?

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a. Plan
a. Do
b. Study
c. Act
78. ___________ is the sequence of steps involved in an operation or process.
a. Checklist
a. Flowchart
b. Control charts
c. Cause and effect diagrams
79. Technique used to identify quality problems based on their degree of importance is known
as___________.
a. Parreto analysis
a. Statistical process control
b. Histogram
c. Scatter diagrams
80. In which type of diagrams or charts are the upper control limit and the lower control limit
reflected?
a. Scatter charts
a. Histograms
b. Control charts
c. Statistical Process control
81. _______ production is a manufacturing philosophy, which eliminates waste associated with
time, labor, and storage space.
a. Lean manufacturing
b. Just-In-Time
c. Toyota Production System
d. Total Production Management
82. _________ technique was first used by the Ford Motor Company during 1920s, but the
technique was subsequently adopted and publicised by Toyota Motor Corporation of Japan
as part of its Toyota production System (TPS).
a. JIT
a. Lean Manufacturing
b. Total Quality Management
c. Total Production Management
83. In which of the following systems, the concurrent engineering design is applied to process
design? a. Lean flexible system
a. Rigid system
b. Buffered system
c. Traditional System
84. In Just-In-Case system, the system shows low turnover due to _____ inventory.

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a. low level
a. high level
b. complex
c. rigid
85. Integrated single piece continuous workflow is one of the important characteristic of
___________. a. JIT
a. Total quality
b. Lean manufacturing
c. Six sigma
86. Which of the following is defining a shorthand commitment to eliminating waste,
simplifying procedures and speeding up production?
a. JIT
d. Six Sigma
e. Flexible Manufacturing
f. Lean Manufacturing
87. Which of the following systems shows continuous remarkable improvements in Processes,
Products and services, Investor relations, Design methodology, Supplier relationships,
Training and recruitment?
a. Lean Manufacturing
g. JIT
h. Toyota Production
i. Six Sigma
88. At a strategic level, what identifies the real need to deliver the product to the customer as
soon as he needs it?
a. Push strategy
j. Pull strategy
k. Perfection
l. Relational
89. In process of implantation of JIT in manufacturing, the ERP system is established only
after_________. a. understanding the process
m. understanding the new concept
n. understanding the work allocation
o. understanding the wastes
90. In which of the following systems are the small batches are made with reduced setup time?
a. Just-In-Case
p. Just-In-Time
q. Lean Manufacturing
r. Six Sigma
81. Which of the following factors is most likely to influence pricing decisions based on
production relevance?

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a) Marketing expenses
b) Raw material costs
c) Competition's pricing strategy
d) Economic conditions
82. In production-intensive industries, what effect do economies of scale typically have on pricing?
a) They tend to decrease prices due to lower production costs per unit.
b) They have no impact on pricing decisions.
c) They lead to higher prices to cover increased production expenses.
d) They result in unpredictable fluctuations in pricing.

83. How does production efficiency contribute to setting competitive prices?

a) By increasing production costs and allowing for higher prices
b) By reducing production costs and enabling lower prices
c) By having no effect on pricing decisions
d) By making price setting more complex

84. What role does variable costs play in determining prices based on production relevance?
a) Variable costs have no impact on pricing decisions.
b) They are the primary factor in setting prices.
c) They influence pricing decisions alongside fixed costs.
d) Variable costs are only considered in niche markets.

85. How do changes in production volume or capacity affect pricing strategies?

a) They have no effect on pricing decisions.
b) Higher volume leads to lower prices, while lower volume leads to higher prices.
c) Higher volume leads to higher prices, while lower volume leads to lower prices.
d) Pricing is solely determined by demand, regardless of production volume.
86. Which of the following factors is most likely to influence pricing decisions based on production
relevance?
a) Marketing expenses
b) Raw material costs
c) Competition's pricing strategy
d) Economic conditions
87. In production-intensive industries, what effect do economies of scale typically have on pricing?
a) They tend to decrease prices due to lower production costs per unit.
b) They have no impact on pricing decisions.
c) They lead to higher prices to cover increased production expenses.
d) They result in unpredictable fluctuations in pricing.

88. How does production efficiency contribute to setting competitive prices?

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a) By increasing production costs and allowing for higher prices

b) By reducing production costs and enabling lower prices
c) By having no effect on pricing decisions
d) By making price setting more complex

89. What role does variable costs play in determining prices based on production relevance?
a) Variable costs have no impact on pricing decisions.
b) They are the primary factor in setting prices.
c) They influence pricing decisions alongside fixed costs.
d) Variable costs are only considered in niche markets.

90. How do changes in production volume or capacity affect pricing strategies?

a) They have no effect on pricing decisions.
b) Higher volume leads to lower prices, while lower volume leads to higher prices.
c) Higher volume leads to higher prices, while lower volume leads to lower prices.
d) Pricing is solely determined by demand, regardless of production volume.

91. Which pricing strategy is typically employed in response to achieving economies of scale in
production?
a) Penetration pricing
b) Price skimming
c) Cost-plus pricing
d) Value-based pricing

92. How does the level of automation in production impact pricing decisions?
a) Higher automation leads to higher prices.
b) Higher automation leads to lower prices.
c) Automation has no effect on pricing decisions.
d) Automation only impacts pricing in service industries.

93. What effect does a decrease in production costs due to technological advancements have on
pricing?
a) Prices decrease to match the reduction in costs.
b) Prices increase to reflect the improved technology.
c) Prices remain unchanged.
d) Prices become more volatile.

94. What role does production capacity play in determining prices?

a) Higher capacity leads to lower prices.
b) Higher capacity leads to higher prices.

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

c) Production capacity has no impact on prices.

d) Prices are solely determined by market demand.

95. How do production-related factors, such as quality control measures, affect pricing decisions?
a) They have no impact on pricing decisions.
b) Higher quality leads to higher prices.
c) Lower quality leads to higher prices.
d) Quality control measures are reflected in pricing through added costs.
96. How does the level of automation in production impact pricing decisions?
a) Higher automation leads to higher prices.
b) Higher automation leads to lower prices.
c) Automation has no effect on pricing decisions.
d) Automation only impacts pricing in service industries.

97. What effect does a decrease in production costs due to technological advancements have on
pricing?
a) Prices decrease to match the reduction in costs.
b) Prices increase to reflect the improved technology.
c) Prices remain unchanged.
d) Prices become more volatile.

98. What role does production capacity play in determining prices?

a) Higher capacity leads to lower prices.
b) Higher capacity leads to higher prices.
c) Production capacity has no impact on prices.
d) Prices are solely determined by market demand.

99. How do production-related factors, such as quality control measures, affect pricing decisions?
a) They have no impact on pricing decisions.
b) Higher quality leads to higher prices.
c) Lower quality leads to higher prices.
d) Quality control measures are reflected in pricing through added costs.

100. Which pricing strategy focuses on setting prices based on the perceived value to the customer?
a) Penetration pricing
b) Price skimming
c) Cost-plus pricing
d) Value-based pricing

101. How do fluctuations in raw material costs influence pricing decisions?

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a) They have no impact on pricing decisions.

b) Prices increase to cover higher raw material costs.
c) Prices decrease to offset higher raw material costs.
d) Prices remain unchanged regardless of raw material costs.

102. What role do fixed costs play in determining prices based on production relevance?
a) Fixed costs are the primary factor in setting prices.
b) They have no impact on pricing decisions.
c) They influence pricing decisions alongside variable costs.
d) Fixed costs are only considered in niche markets.

103. How does a decrease in production efficiency affect pricing strategies?

a) Prices decrease to compensate for lower efficiency.
b) Prices increase to cover increased production expenses.
c) They have no effect on pricing decisions.
d) Pricing becomes more volatile due to efficiency fluctuations.

104. What effect does high competition in the market typically have on pricing decisions?
a) Prices decrease to gain market share.
b) Prices increase to reflect higher demand.
c) They have no impact on pricing decisions.
d) Pricing becomes more unpredictable.

105. What is the primary goal of setting prices based on production relevance?
a) Maximizing profits
b) Matching competitor's prices
c) Covering production costs
d) Following industry standards
106. What is the primary purpose of payment modality in production and operation management?
a) Maximizing profit margins
b) Ensuring timely payment to suppliers
c) Streamlining financial transactions
d) Minimizing production costs

107. Which payment modality is commonly used for large-scale procurement of raw materials?
a) Cash on delivery (COD)
b) Letter of credit (LC)
c) Electronic funds transfer (EFT)
d) Barter system

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108. In which scenario might milestone payments be utilized in production and operation
management?
a) For one-time purchases of non-perishable goods
b) When payment terms are negotiable with suppliers
c) In long-term projects with defined project phases
d) When customers demand immediate payment upon delivery
109. What payment modality is typically preferred for international transactions to mitigate risks?
a) Wire transfer
b) Cash payment
c) Letter of credit
d) Promissory note
110. Which payment modality offers the greatest flexibility for businesses in managing cash flow?
a) Advance payment
b) Installment payments
c) Cash on delivery (COD)
d) Electronic funds transfer (EFT)

111. How does electronic funds transfer (EFT) contribute to efficiency in payment processing?
a) It requires physical presence for each transaction.
b) It eliminates the need for paper-based transactions.
c) It delays payment processing due to manual verification.
d) It limits transaction security compared to other modalities.

112. In which situation might businesses opt for advance payments in production and operation
management?
a) When cash flow is stable and predictable
b) For high-value purchases with long lead times
c) When suppliers offer discounts for early payments
d) When customers require proof of payment before delivery

113. What payment modality is commonly used for recurring expenses such as utility bills?
a) Cash payment
b) Standing order
c) Wire transfer
d) Promissory note

114. When is the barter system typically utilized in production and operation management?
a) When there is a lack of trust between buyers and sellers
b) For transactions involving highly perishable goods
c) In situations where traditional currency is not readily available

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

d) For long-term contracts with fixed pricing terms

115. How does the choice of payment modality impact supplier relationships in production and
operation management?
a) It has no impact on supplier relationships.
b) It can strengthen relationships through consistent and timely payments.
c) It often leads to conflicts and disputes over payment terms.
d) It only affects supplier relationships in international transactions.
116. What is the primary goal of Total Quality Management (TQM)?
a) Maximizing profits
b) Minimizing employee turnover
c) Achieving customer satisfaction
d) Increasing production speed

117. Which of the following is a key principle of TQM?

a) Centralized decision-making
b) Continuous improvement
c) Blaming individuals for errors
d) Rigid hierarchy

118. How does TQM differ from traditional quality management approaches?
a) TQM focuses solely on product quality
b) TQM involves all employees in the quality improvement process
c) TQM relies on external consultants for quality control
d) TQM disregards customer feedback

119. What role do employees play in TQM implementation?

a) They are not involved in TQM efforts
b) They are responsible for blaming others for quality issues
c) They actively participate in quality improvement initiatives
d) They only follow instructions from management

120. Which of the following tools is commonly used in TQM to analyze processes and identify
areas for improvement?
a) Pareto chart
b) Gantt chart
c) Scatter plot
d) Flowchart

121. How does TQM contribute to cost reduction in organizations?

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a) By increasing waste and rework

b) By implementing costly technologies
c) By minimizing defects and improving efficiency
d) By outsourcing quality control functions

122. What is the significance of customer focus in TQM?

a) Customers are not important in TQM
b) Customer feedback is used to improve products and services
c) Customers have no role in quality improvement initiatives
d) TQM only focuses on internal processes

123. Which of the following statements best describes TQM's approach to quality?
a) Quality is the responsibility of a separate quality control department
b) Quality is achieved through inspection and defect detection
c) Quality is built into the processes and products from the beginning
d) Quality is irrelevant in TQM principles

124. How does TQM promote a culture of continuous improvement?

a) By maintaining the status quo
b) By discouraging employee feedback
c) By implementing rigid processes
d) By encouraging innovation and learning from mistakes

125. What is the ultimate outcome of successful implementation of TQM?

a) Decreased customer satisfaction
b) Increased operational inefficiencies
c) Improved product quality and customer loyalty
d) Higher employee turnover rates

126. What is the primary objective of inventory management in production and operation
management?
a) Maximizing production speed
b) Minimizing customer demand
c) Optimizing inventory levels
d) Increasing manufacturing costs

127. Which of the following inventory management techniques aims to reduce inventory levels by
ordering only when needed?
a) Economic Order Quantity (EOQ)
b) Just-in-Time (JIT)

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c) Material Requirements Planning (MRP)

d) Fixed-Order Quantity (FOQ)

128. What is the purpose of safety stock in inventory management?

a) To ensure adequate inventory levels during peak demand periods
b) To minimize production costs
c) To eliminate stockouts entirely
d) To increase lead times for order fulfillment

129. Which inventory management technique involves categorizing items based on their
importance and allocating resources accordingly?
a) ABC analysis
b) EOQ model
c) Reorder Point (ROP)
d) Stock-keeping unit (SKU)

130. How does Just-in-Time (JIT) inventory management contribute to operational efficiency?
a) By maintaining high inventory levels at all times
b) By reducing lead times and minimizing waste
c) By prioritizing large batch production runs
d) By increasing inventory holding costs

131. What role does forecasting play in inventory management?

a) It eliminates the need for safety stock
b) It helps in determining optimal reorder quantities
c) It increases stockouts and backorders
d) It has no impact on inventory levels

132. What is the purpose of inventory turnover ratio in inventory management?

a) To increase inventory levels
b) To assess the efficiency of inventory management
c) To prolong lead times for order fulfillment
d) To reduce customer demand

133. Which of the following statements is true regarding the Economic Order Quantity (EOQ)
model?
a) It aims to minimize inventory holding costs only
b) It calculates the maximum level of safety stock required
c) It considers ordering and holding costs to determine optimal order quantity
d) It is not applicable to perishable goods

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134. How does the use of technology impact inventory management practices?
a) It increases stockouts and backorders
b) It eliminates the need for inventory control systems
c) It enhances visibility and accuracy of inventory data
d) It reduces the need for forecasting techniques

135. Which inventory management approach focuses on reducing waste and increasing efficiency
by continuously improving processes?
a) Fixed-Order Quantity (FOQ)
b) Reorder Point (ROP)
c) Material Requirements Planning (MRP)
d) Lean inventory management
136. What is the primary goal of Just-in-Time (JIT) manufacturing?
a) Maximizing inventory levels
b) Minimizing production speed
c) Reducing waste and lead times
d) Increasing batch sizes

137. Which of the following best describes the key principle of JIT manufacturing?
a) Producing large batches to meet forecasted demand
b) Maintaining high inventory levels as a buffer against uncertainty
c) Producing only what is needed, when it is needed, and in the quantity needed
d) Implementing complex production scheduling systems

138. How does JIT manufacturing impact inventory levels?

a) Increases inventory levels to avoid stockouts
b) Reduces inventory levels by eliminating excess and obsolete inventory
c) Maintains inventory levels at a constant level regardless of demand fluctuations
d) Has no impact on inventory levels

139. What role does setup time reduction play in JIT manufacturing?
a) It increases lead times for production
b) It allows for larger batch sizes
c) It minimizes downtime and enables smaller, more frequent production runs
d) It has no effect on production efficiency

140. How does JIT manufacturing contribute to improving quality?

a) By increasing inspection efforts
b) By reducing the number of defective products through early detection

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c) By implementing complex quality control measures

d) By prioritizing quantity over quality

141. What is the primary benefit of JIT manufacturing in terms of cost?

a) It increases production costs due to frequent setup changes
b) It reduces costs associated with inventory holding and storage
c) It leads to higher transportation costs for frequent deliveries
d) It has no impact on overall production costs

142. How does JIT manufacturing affect lead times?

a) It increases lead times by relying on large batch production
b) It reduces lead times by streamlining production processes
c) It has no effect on lead times
d) It makes lead times unpredictable

143. What role does employee involvement play in the success of JIT manufacturing?
a) Employees are not involved in JIT manufacturing initiatives
b) Employee involvement is crucial for identifying waste and implementing improvements
c) Employees only follow instructions from management
d) Employee involvement leads to increased setup times

144. What is the primary challenge associated with JIT manufacturing?

a) Excessive inventory levels
b) Inflexible production processes
c) High setup times
d) Dependency on suppliers for just-in-time delivery

145. How does JIT manufacturing impact production flexibility?

a) It increases production flexibility by allowing for larger batch sizes
b) It decreases production flexibility due to rigid production schedules
c) It has no impact on production flexibility
d) It increases production flexibility by enabling quick response to changing demand
146. What is the primary goal of Six Sigma manufacturing?
a) Maximizing production speed
b) Minimizing inventory levels
c) Reducing variation and defects
d) Increasing batch sizes

147. Which of the following best describes the key principle of Six Sigma manufacturing?
a) Producing large batches to meet forecasted demand

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b) Maintaining high inventory levels as a buffer against uncertainty

c) Reducing variation and defects to achieve near-perfect quality
d) Implementing complex production scheduling systems

148. How does Six Sigma manufacturing impact quality?

a) By increasing the number of defects through complex processes
b) By maintaining a moderate level of defects to balance cost-effectiveness
c) By reducing defects and variation to achieve high levels of quality and consistency
d) By prioritizing quantity over quality

149. What role does statistical analysis play in Six Sigma manufacturing?
a) It has no role in Six Sigma manufacturing
b) It is used to increase variation and defects
c) It is utilized to identify root causes of variation and guide process improvements
d) It is only used for academic research purposes

150. How does Six Sigma manufacturing approach problem-solving?

a) By ignoring problems until they become severe
b) By relying solely on intuition and guesswork
c) By using structured methodologies like DMAIC (Define, Measure, Analyze, Improve,
Control) to identify and solve problems systematically
d) By blaming employees for issues without analyzing the root causes

151. What is the primary benefit of Six Sigma manufacturing in terms of cost?
a) It increases costs due to extensive training programs
b) It reduces costs by minimizing defects and variation, thereby improving efficiency
c) It leads to higher costs due to the implementation of complex statistical tools
d) It has no impact on overall production costs

152. How does Six Sigma manufacturing affect customer satisfaction?

a) It has no effect on customer satisfaction
b) It decreases customer satisfaction by slowing down production processes
c) It increases customer satisfaction by delivering high-quality products with minimal
defects
d) It focuses solely on internal processes, ignoring customer needs

153. What role do Black Belts and Green Belts play in Six Sigma manufacturing?
a) They are titles given to the highest-ranking executives in the organization
b) They are ceremonial titles with no practical significance
c) They are individuals trained in Six Sigma methodologies who lead improvement projects

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d) They are unrelated to Six Sigma manufacturing initiatives

154. What is the primary challenge associated with implementing Six Sigma manufacturing?
a) Lack of employee training and involvement
b) Excessive focus on short-term gains over long-term improvements
c) Inability to adapt to changing market conditions
d) Reliance on outdated production techniques

155. How does Six Sigma manufacturing impact process efficiency?

a) It decreases process efficiency by introducing unnecessary complexities
b) It increases process efficiency by reducing variation and defects
c) It has no impact on process efficiency
d) It increases process efficiency by encouraging manual work over automation

156. What is the primary goal of Lean Manufacturing?

a) Maximizing inventory levels
b) Minimizing production speed
c) Reducing waste and increasing efficiency
d) Increasing batch sizes

157. Which of the following best describes the key principle of Lean Manufacturing?
a) Producing large batches to meet forecasted demand
b) Maintaining excess inventory as a safety net
c) Eliminating waste and optimizing processes to create more value with fewer resources
d) Implementing complex production scheduling systems

158. How does Lean Manufacturing impact efficiency?

a) By increasing waste through redundant processes
b) By maintaining inefficient processes to ensure job security
c) By streamlining operations and eliminating non-value-added activities to improve
efficiency
d) By prioritizing speed over quality
159. What role does continuous improvement play in Lean Manufacturing?
a) It is not a part of Lean Manufacturing principles
b) It involves making occasional big changes to processes
c) It emphasizes making small, incremental improvements to processes over time
d) It focuses solely on maintaining the status quo

160. How does Lean Manufacturing approach inventory management?

a) By keeping excess inventory to buffer against fluctuations in demand
b) By minimizing inventory levels to reduce waste and improve cash flow

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c) By outsourcing inventory management to third-party vendors

d) By stockpiling raw materials for future use

161. What is the primary benefit of Lean Manufacturing in terms of lead times?
a) It increases lead times by relying on large batch production
b) It reduces lead times by improving process flow and eliminating bottlenecks
c) It has no impact on lead times
d) It makes lead times unpredictable

162. How does Lean Manufacturing involve employees in the improvement process?
a) Employees are not involved in Lean Manufacturing initiatives
b) Employee involvement is crucial for identifying waste and implementing improvements
c) Employees are only responsible for carrying out instructions from management
d) Employee involvement leads to increased setup times

163. What is the primary challenge associated with implementing Lean Manufacturing?
a) Excessive inventory levels
b) Resistance to change and lack of buy-in from employees
c) Inflexible production processes
d) Dependency on suppliers for timely deliveries
164. How does Lean Manufacturing impact production flexibility?
a) It decreases production flexibility due to rigid production schedules
b) It increases production flexibility by enabling quick response to changing demand
c) It has no impact on production flexibility
d) It increases production flexibility by allowing for larger batch sizes

165. What role does value stream mapping play in Lean Manufacturing?
a) It is not utilized in Lean Manufacturing principles
b) It is used to visualize and analyze the flow of materials and information to identify areas
for improvement
c) It is used primarily for marketing purposes
166. What is the primary purpose of PERT and CPM in project management?
a) Maximizing resource allocation
b) Minimizing project duration
c) Identifying critical activities and managing project schedules
d) Prioritizing stakeholder communication

167. Which of the following best describes PERT?

a) A technique for optimizing project costs
b) A method for identifying the most efficient project sequence

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c) A probabilistic technique for estimating project durations

d) A tool for tracking project progress in real-time

168. What does CPM primarily focus on in project management?

a) Identifying the critical path and shortest project duration
b) Allocating resources to project activities
c) Analyzing project risks and uncertainties
d) Monitoring project expenses and budget deviations
169. How are activities represented in a PERT/CPM network diagram?
a) As rectangles with arrows indicating precedence relationships
b) As circles with arrows indicating precedence relationships
c) As triangles with lines indicating precedence relationships
d) As squares with lines indicating precedence relationships

170. What is the critical path in a PERT/CPM network diagram?

a) The path with the shortest duration
b) The path with the highest resource utilization
c) The longest sequence of dependent activities determining the project's minimum
duration
d) The path with the lowest cost implications

171. What is the significance of the critical path in project management?

a) It indicates activities that can be delayed without affecting the project duration
b) It identifies the activities with the highest resource requirements
c) It determines the minimum time required to complete the project
d) It represents activities that are not critical to project success

172. How are activity durations estimated in PERT analysis?

a) Using a single-point estimate based on historical data
b) Using a pessimistic, optimistic, and most likely estimate to calculate a weighted average
c) Using a deterministic approach based on expert judgment
d) Using a random sampling technique to gather duration data

173. What does slack or float represent in a PERT/CPM network diagram?

a) The delay in project start time due to resource constraints
b) The difference between the earliest and latest start times for an activity without delaying the
project
c) The additional resources needed to expedite critical activities
d) The buffer time added to each activity to account for uncertainties

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174. How do PERT and CPM differ in terms of activity duration estimation?
a) PERT uses a single-point estimate, while CPM uses a weighted average of three estimates.
b) PERT uses a deterministic approach, while CPM uses a probabilistic approach.
c) PERT focuses on minimizing project costs, while CPM focuses on maximizing project
efficiency.
d) PERT incorporates uncertainty by using optimistic, pessimistic, and most likely
estimates, while CPM uses historical data exclusively.

175. What role does the critical path play in project scheduling?
a) It allows project managers to allocate resources more efficiently.
b) It helps identify activities that can be fast-tracked to accelerate project completion.
c) It guides project managers in prioritizing activities to minimize project risk.
d) It provides a roadmap for project managers to monitor and manage project progress
effectively
176. What is the primary purpose of budget forecasting in Production and Operations
Management?
a) Maximizing production speed
b) Minimizing inventory levels
c) Estimating future financial requirements and resource allocation
d) Optimizing equipment maintenance schedules

177. Which of the following best describes budget forecasting?

a) Predicting future sales revenue only
b) Estimating future costs and expenses based on historical data and market trends
c) Setting arbitrary financial targets without considering market conditions
d) Analyzing past production performance without projecting future needs

178. How does budget forecasting assist in production planning?

a) By ensuring unlimited resource availability for production activities
b) By accurately predicting demand and resource requirements for production
c) By relying solely on historical data without considering market fluctuations
d) By minimizing production flexibility to adhere strictly to budget constraints

179. What role does budget forecasting play in inventory management?

a) It encourages excessive inventory levels to avoid stockouts
b) It helps optimize inventory levels by predicting future demand and adjusting
procurement accordingly
c) It disregards inventory management, focusing solely on financial targets
d) It relies on guesswork rather than data analysis to manage inventory levels

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180. How does budget forecasting impact decision-making in operations management?

a) By limiting decision-making to financial considerations only
b) By providing insights into resource availability and constraints for informed decision-
making
c) By disregarding the need for long-term planning and strategic thinking
d) By prioritizing short-term gains over long-term sustainability

181. What challenges may arise when conducting budget forecasting in production and operations?
a) Lack of historical data
b) Over-reliance on past performance without considering market dynamics
c) Inability to adapt to changing customer preferences and technological advancements
d) All of the above

182. How does budget forecasting contribute to cost control in production and operations?
a) By disregarding cost fluctuations and focusing solely on revenue projections
b) By providing a basis for setting cost targets and monitoring expenses against budgeted
amounts
c) By maximizing costs to ensure quality standards are met at all times
d) By minimizing budget allocations for training and development programs

183. What techniques are commonly used for budget forecasting in production and operations
management?
a) SWOT analysis
b) Break-even analysis
c) Time-series analysis and regression modeling
d) Pareto analysis

184. How does accurate budget forecasting contribute to overall business performance?
a) It has no impact on business performance
b) It enables better resource allocation, cost control, and strategic decision-making
c) It increases production speed at the expense of quality
d) It reduces the need for innovation and continuous improvement efforts

185. What is the consequence of inaccurate budget forecasting in production and operations
management?
a) Increased efficiency and productivity
b) Improved customer satisfaction
c) Cost overruns, resource shortages, and production delays
d) Enhanced employee morale and engagement.

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186. Which of the following best describes the aspect of operations management concerned with
designing, developing, and delivering products or services to meet customer needs?
a) Process
b) People
c) Product
d) Performance

187. Which of the following refers to the methods, procedures, and systems used by a company
to transform inputs into outputs in operations management?
a) People
b) Performance
c) Process
d) Place

188. In operations management, which P focuses on the location, distribution channels, and
logistics involved in delivering products or services to customers?
a) People
b) Process
c) Place
d) Performance

189. Which aspect of operations management emphasizes the importance of human resources,
including hiring, training, and managing employees to ensure efficient operations?
a) Process
b) People
c) Product
d) Place

190. Which P of operations management involves measuring and improving the efficiency,
effectiveness, and quality of operations to achieve organizational goals?
a) Product
b) Performance
c) Process
d) Place

191. Match the type of manufacturing productivity with its corresponding description:

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

type of manufacturing description

productivity
1. Labor productivity a) Measures the efficiency of machinery and equipment in
converting inputs into outputs.
2. Machine productivity b) Focuses on the efficiency and effectiveness of labor in
producing goods or services.
3. Capital productivity c) Evaluates the efficiency of capital investment in
generating output.
4. Energy productivity d) Assesses the ratio of output to energy input in the
manufacturing process.
5. Overall equipment e) Provides a comprehensive measure of equipment
effectiveness (OEE) performance, considering availability, performance, and
quality.

192. Match the letters with the correct numbers to complete the matching:

1. Labor productivity – a) Measures the efficiency of machinery and equipment in

converting inputs into outputs.
2. Machine productivity b) Focuses on the efficiency and effectiveness of labor in
– producing goods or services.

3. Capital productivity – c) Evaluates the efficiency of capital investment in

generating output.
4. Energy productivity – d) Assesses the ratio of output to energy input in the
manufacturing process.
5. Overall equipment e) Provides a comprehensive measure of equipment
effectiveness (OEE) – performance, considering availability, performance, and
quality.

Answer:

1. Labor productivity - b) Focuses on the efficiency and effectiveness of labor in producing goods
or services.
2. Machine productivity - a) Measures the efficiency of machinery and equipment in converting
inputs into outputs.
3. Capital productivity - c) Evaluates the efficiency of capital investment in generating output.
4. Energy productivity - d) Assesses the ratio of output to energy input in the manufacturing
process.
5. Overall equipment effectiveness (OEE) - e) Provides a comprehensive measure of equipment
performance, considering availability, performance, and quality.
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193. Match the type of manufacturing productivity with its corresponding description:

type of manufacturing
productivity Description
a) Measures the output generated per unit of
1. Labor productivity labor input.

b) Measures the efficiency of multiple inputs

2. Multifactor productivity (e.g., labor, capital, materials) in generating output.
c) Evaluates the efficiency of capital
3. Capital productivity investment in generating output.
d) Measures the efficiency of all inputs
(including labor, capital, materials, etc.) in generating
4. Total factor productivity output.

type of manufacturing
productivity Description

a) Labor productivity i) Measures the output generated per unit of labor input.

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

ii) Measures the efficiency of multiple inputs

b) Multifactor productivity (e.g., labor, capital, materials) in generating output.
iii) Evaluates the efficiency of capital
c) Capital productivity investment in generating output.

iv) Measures the efficiency of all inputs

d) Total factor productivity (including labor, capital, materials, etc.) in generating output.
194. Match the type of manufacturing productivity with its corresponding description: Choose the
correct answer for the matching option.

A) i - b, ii - d, iii - c, iv - a

B) i - a, ii - b, iii - c, iv - d
C) i - c, ii - b, iii - a, iv - d
D) i - d, ii - b, iii - c, iv - a

195. Identify the type of manufacturing productivity that measures the output generated per unit
of labor input:

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

A) Labor productivity
B) Multifactor productivity
C) Capital productivity
D) Total factor productivity

196. Which type of manufacturing productivity evaluates the efficiency of capital investment in
generating output?

A) Labor productivity
B) Multifactor productivity
C) Capital productivity
D) Total factor productivity

197. Determine the type of manufacturing productivity that measures the efficiency of all inputs
in generating output:

A) Labor productivity
B) Multifactor productivity
C) Capital productivity
D) Total factor productivity

198. Which of the following focuses specifically on the planning, organizing, directing, and
controlling of the production process within a manufacturing environment?
a) Supply Chain Management
b) Operations Management
c) Production Management
d) Inventory Management

199. Which of the following encompasses a broader scope, including not only production
processes but also aspects such as supply chain, quality control, and strategic decision-making?
a) Production Management
b) Inventory Management
c) Operations Management
d) Quality Management

200. Which area primarily deals with optimizing production processes, scheduling production
activities, and ensuring efficient resource utilization within a manufacturing facility?
a) Operations Management
b) Quality Management

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

c) Production Management
d) Inventory Management

201. Which field focuses on managing both the internal and external factors affecting the
production process, including suppliers, distribution channels, and customer satisfaction?
a) Supply Chain Management
b) Production Management
c) Operations Management
d) Quality Management

202. Which discipline primarily concerns itself with the day-to-day operations of the
production floor, ensuring that products are manufactured according to specifications and quality
standards?
a) Quality Management
b) Inventory Management
c) Production Management
d) Operations Management

203. Which of the following key decisions of operation managers primarily involves
determining the features, functions, and specifications of products or services to meet customer
needs?
a) Quality Control
b) Inventory Management
c) Design of Goods and Services
d) Supply Chain Management

204. Which key decision of operation managers focuses on ensuring that products or services
meet or exceed customer expectations and industry standards?
a) Process Improvement
b) Capacity Planning
c) Managing Quality
d) Location Strategy

205. Which decision involves determining how to produce goods or deliver services efficiently,
including selecting the right equipment, technology, and production methods?
a) Process and Capacity Design
b) Managing Quality
c) Location Strategy
d) Supply Chain Management

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

206. Which decision involves selecting the best location for facilities, considering factors such
as proximity to customers, suppliers, labor force, and transportation infrastructure?
a) Quality Control
b) Inventory Management
c) Location Strategy
d) Design of Goods and Services

207. Which decision focuses on managing the flow of goods, services, and information from
suppliers to customers to ensure timely delivery and minimize costs?
a) Capacity Planning
b) Process Improvement
c) Supply Chain Management
d) Managing Quality

208. Which key decision of operations managers involves determining the allocation of tasks
and responsibilities among individuals or teams within the organization?
a) When
b) Where
c) Who
d) What

209. Which decision involves scheduling production activities, including determining the
timing of operations, resource allocation, and delivery timelines?
a) When
b) Where
c) How
d) What
210. Which decision focuses on selecting the location for facilities, warehouses, or distribution
centers to optimize logistics and minimize costs?
a) Who
b) When
c) Where
d) How
211. Which key decision involves determining the methods, processes, and technologies used
to produce goods or deliver services efficiently?
a) When
b) Where
c) How
d) What

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212. Which decision focuses on the selection and design of products or services offered by the
organization, including features, specifications, and customization options?
a) Who
b) When
c) Where
d) What

213. Match the key decision with its corresponding description:

i) Determining the staffing requirements and

a) Who responsibilities for each task.
ii) Establishing the timing and
b) When scheduling of production activities.
iii) Selecting the best location for
c) Where facilities and resources.
iv) Choosing the most efficient methods
d) How and processes for production.
v) Deciding on the products and services
e) What to offer based on market demand.
A) i - d, ii - b, iii - c, iv - e, v - a
B) i - a, ii - b, iii - c, iv - d, v - e
C) i - d, ii - e, iii - c, iv - a, v - b
D) i - e, ii - b, iii - c, iv - d, v - a
214. Identify the decision associated with determining the best location for facilities and
resources:
A) Who
B) When
C) Where
D) How
E) What
215. Which decision involves selecting the most efficient methods and processes for production?
A) Who
B) When
C) Where
D) How
E) What
216. Determine the decision related to establishing the timing and scheduling of production
activities:
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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

A) Who
B) When
C) Where
D) How
E) What

217. Match the decision with its appropriate action:

a) Who i) Hiring and assigning employees to specific tasks.

b) When ii) Setting up production timelines and schedules.
c) Where iii) Evaluating potential locations for facilities.
d) How iv) Implementing efficient manufacturing processes.
e) What v) Deciding on the range of products to offer
A) i - a, ii - b, iii - c, iv - d, v - e
B) i - e, ii - b, iii - c, iv - d, v - a
C) i - a, ii - e, iii - c, iv - d, v - b
D) i - d, ii - b, iii - c, iv - e, v - a
Choose the correct answer for each question.
1. A) i - d, ii - b, iii - c, iv - e, v - a
2. C) Where
3. D) How
4. B) When
5. A) i - a, ii - b, iii - c, iv - d, v - e
218. Match the facility layout type with its description:
A. Process Layout
B. Product Layout
C. Cellular Layout
D. Fixed Position Layout
i. Arranges machinery and equipment according to the sequence of operations required to
produce a specific product.
ii. Groups machines and equipment by their functions or processes they perform.
iii. Organizes workstations in close proximity to each other to facilitate communication and
workflow between workers.
iv. Involves bringing equipment, materials, and workers to a central location for assembly or
production.
A) i-A, ii-B, iii-C, iv-D
B) i-B, ii-A, iii-C, iv-D
C) i-A, ii-B, iii-D, iv-C
D) i-B, ii-A, iii-D, iv-C

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

219. Match the facility layout advantage with the corresponding type:
A. High flexibility and adaptability
B. Efficient use of space
C. Low equipment investment
D. Minimized material handling
i. Product Layout
ii. Cellular Layout
iii. Process Layout
iv. Fixed Position Layout
A) i-A, ii-D, iii-B, iv-C
B) i-B, ii-C, iii-D, iv-A
C) i-C, ii-A, iii-B, iv-D
D) i-D, ii-B, iii-C, iv-A
230. Match the facility layout characteristic with the corresponding type:
A. Grouping similar activities together
B. Flexibility to accommodate changes in product mix
C. High equipment utilization
D. Minimized transportation costs
i. Product Layout
ii. Process Layout
iii. Cellular Layout
iv. Fixed Position Layout
A) i-C, ii-D, iii-A, iv-B
B) i-D, ii-A, iii-C, iv-B
C) i-A, ii-C, iii-D, iv-B
D) i-B, ii-C, iii-A, iv-D

231. Match the facility layout advantage with the corresponding type:
- A. High flexibility and adaptability - ii. Cellular Layout
- B. Efficient use of space - iii. Process Layout
- C. Low equipment investment - iv. Fixed Position Layout
- D. Minimized material handling - i. Product Layout

232. Match the facility layout characteristic with the corresponding type:
- A. Grouping similar activities together - iii. Cellular Layout
- B. Flexibility to accommodate changes in product mix - ii. Process Layout
- C. High equipment utilization - i. Product Layout
- D. Minimized transportation costs - iv. Fixed Position Layout

231. Match the inventory management method with its description:

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

A. Just-in-Time (JIT)
B. Economic Order Quantity (EOQ)
C. ABC Analysis
D. Vendor Managed Inventory (VMI)
i. Focuses on reducing waste by ordering and receiving inventory only when it is needed for
production or sales.
ii. Determines the optimal order quantity that minimizes total inventory costs, including
holding costs and ordering costs.
iii. Classifies inventory items into categories based on their value and importance to prioritize
management efforts.
iv. Involves the supplier managing the inventory levels and restocking process for the
customer.
A) i-A, ii-B, iii-C, iv-D
B) i-C, ii-B, iii-A, iv-D
C) i-A, ii-B, iii-D, iv-C
D) i-D, ii-C, iii-A, iv-B
232. Match the inventory management term with its definition:
A. Safety Stock
B. Lead Time
C. Reorder Point
D. Stockout

i. The level of inventory maintained to mitigate the risk of running out of stock due to
uncertainties in demand or supply.
ii. The time it takes for an order to be delivered after it has been placed.
iii. The inventory level at which a new order should be placed to replenish stock before it runs
out.
iv. The situation where inventory is depleted and no more units are available for sale or
production.
A) i-A, ii-B, iii-C, iv-D
B) i-C, ii-B, iii-A, iv-D
C) i-D, ii-A, iii-B, iv-C
D) i-A, ii-C, iii-B, iv-D
233. Match the inventory management strategy with its objective:
A. Just-in-Time (JIT)
B. Safety Stock
C. Cycle Counting
D. Economic Order Quantity (EOQ)
i. Minimizing the risk of stockouts and ensuring product availability to meet customer demand.

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

ii. Reducing carrying costs and minimizing excess inventory levels.

iii. Achieving accurate inventory records by regularly counting a subset of items in inventory.
iv. Eliminating waste and improving efficiency by synchronizing production with demand.
A) i-A, ii-D, iii-B, iv-C
B) i-D, ii-A, iii-C, iv-B
C) i-B, ii-C, iii-A, iv-D
D) i-C, ii-B, iii-D, iv-A
234. Match the Total Quality Management (TQM) principle with its description:

A. Customer Focus
B. Continuous Improvement
C. Employee Involvement
D. Process Approach
i. Focusing on meeting customer needs and expectations to achieve customer satisfaction.
ii. Striving for ongoing enhancement of products, services, and processes.
iii. Engaging employees at all levels in the organization to contribute their ideas and efforts
towards quality improvement.
iv. Managing activities and resources as interconnected processes to achieve desired
outcomes.
A) i-A, ii-B, iii-C, iv-D
B) i-C, ii-A, iii-D, iv-B
C) i-A, ii-D, iii-C, iv-B
D) i-B, ii-C, iii-D, iv-A
235. Match the Total Quality Management (TQM) tool/technique with its description:
A. Six Sigma
B. Kaizen
C. Pareto Analysis
D. Fishbone Diagram
i. A statistical method focused on reducing defects and improving process quality by
minimizing process variation.
ii. A continuous improvement approach that emphasizes small, incremental changes made by
everyone in the organization.
iii. A technique used to identify and prioritize the most important causes of a problem by
analyzing their frequency or impact.
iv. A visual tool used to identify and explore potential causes of a problem, categorizing them
into major categories.
A) i-A, ii-B, iii-C, iv-D
B) i-C, ii-D, iii-A, iv-B
C) i-A, ii-B, iii-D, iv-C
D) i-D, ii-C, iii-A, iv-B

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236. Match the Total Quality Management (TQM) concept with its definition:
A. Quality Circles
B. Benchmarking
C. Total Employee Involvement (TEI)
D. Continuous Improvement
i. Involving all employees in quality improvement activities and decision-making processes.
ii. A systematic process of comparing an organization's performance against industry leaders
or best practices to identify areas for improvement.
iii. Small groups of employees who voluntarily meet regularly to identify and solve work-
related problems.
iv. A philosophy and management approach focused on incremental and ongoing
improvement of products, services, and processes.
A) i-C, ii-B, iii-A, iv-D
B) i-D, ii-A, iii-C, iv-B
C) i-A, ii-B, iii-C, iv-D
D) i-C, ii-D, iii-A, iv-B

237. Match the quality standard principle with its description:

A. Leadership
B. Customer Focus
C. Involvement of People
D. Process Approach
i. Providing direction and creating an environment where people can contribute to achieving
organizational objectives.
ii. Understanding and meeting customer requirements to enhance customer satisfaction.
iii. Engaging, empowering, and recognizing the contributions of all personnel in achieving
quality objectives.
iv. Managing activities and resources as interconnected processes to achieve desired
outcomes.

A) i-A, ii-B, iii-C, iv-D

B) i-C, ii-B, iii-A, iv-D
C) i-A, ii-D, iii-C, iv-B
D) i-B, ii-C, iii-D, iv-A

238. Match the quality standard principle with its description:

A. Systematic Approach to Management
B. Continual Improvement

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

C. Factual Approach to Decision Making

D. Mutually Beneficial Supplier Relationships
i. Using data and evidence-based methods to make informed decisions that drive organizational
improvement.
ii. Building and maintaining relationships with suppliers based on trust, cooperation, and
mutual benefit.
iii. Implementing and maintaining a systematic approach to achieving organizational goals
and objectives.
iv. Striving for ongoing enhancement of products, services, and processes.
A) i-C, ii-D, iii-A, iv-B
B) i-D, ii-C, iii-A, iv-B
C) i-B, ii-A, iii-C, iv-D
D) i-A, ii-B, iii-D, iv-C
239. Match the quality standard principle with its description:
A. Evidence-based Decision Making
B. Supplier Management
C. Continual Improvement
D. Leadership
i. Providing direction and creating an environment where people can contribute to achieving
organizational objectives.
ii. Using data and evidence-based methods to make informed decisions that drive
organizational improvement.
iii. Building and maintaining relationships with suppliers based on trust, cooperation, and
mutual benefit.
iv. Striving for ongoing enhancement of products, services, and processes.
A) i-D, ii-A, iii-C, iv-B
B) i-C, ii-D, iii-A, iv-B
C) i-B, ii-C, iii-D, iv-A
D) i-A, ii-B, iii-C, iv-D

240. Match the product pricing method with its description:

A. Cost-Plus Pricing
B. Competitive Pricing
C. Value-Based Pricing
D. Penetration Pricing
i. Setting prices based on the costs of producing, distributing, and selling the product, plus a
markup for profit.
ii. Establishing prices based on the prices charged by competitors for similar products or
services.
iii. Determining prices based on the perceived value of the product to the customer and the

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

benefits it provides.
iv. Introducing a new product at a low initial price to capture market share quickly and attract
customers.
A) i-A, ii-B, iii-C, iv-D
B) i-D, ii-A, iii-B, iv-C
C) i-A, ii-C, iii-B, iv-D
D) i-C, ii-B, iii-D, iv-A

241. Match the product pricing method with its description:

A. Skimming Pricing
B. Dynamic Pricing
C. Psychological Pricing
D. Bundle Pricing
i. Offering multiple products or services together as a package at a discounted price.
ii. Adjusting prices in real-time based on factors such as demand, time of day, or customer
demographics.
iii. Setting high initial prices for a new product and gradually lowering them over time.
iv. Pricing products at certain price points, such as $9.99, to create a perception of value or
affordability.
A) i-C, ii-D, iii-A, iv-B
B) i-D, ii-C, iii-A, iv-B
C) i-B, ii-A, iii-C, iv-D
D) i-A, ii-B, iii-D, iv-C

242. Match the product pricing method with its description:

A. Cost-Plus Pricing
B. Freemium Pricing
C. Premium Pricing
D. Contribution Margin Pricing
i. Offering a basic version of a product or service for free, while charging for premium features
or advanced functionality.
ii. Setting prices above the market average to position the product as a high-quality or luxury
option.
iii. Determining prices based on the product's contribution margin, which is the difference
between selling price and variable costs.
iv. Adding a markup to the product's variable costs to cover fixed costs and generate a profit.
A) i-D, ii-A, iii-C, iv-B
B) i-C, ii-D, iii-A, iv-B
C) i-B, ii-C, iii-A, iv-D
D) i-A, ii-B, iii-D, iv-C

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

Here are the answers to the matching questions:

1. Match the product pricing method with its description:

- A. Cost-Plus Pricing - i. Setting prices based on the costs of producing, distributing, and
selling the product, plus a markup for profit.
- B. Competitive Pricing - ii. Establishing prices based on the prices charged by competitors
for similar products or services.
- C. Value-Based Pricing - iii. Determining prices based on the perceived value of the product
to the customer and the benefits it provides.
- D. Penetration Pricing - iv. Introducing a new product at a low initial price to capture market
share quickly and attract customers.

2. Match the product pricing method with its description:

- A. Skimming Pricing - iii. Setting high initial prices for a new product and gradually
lowering them over time.
- B. Dynamic Pricing - ii. Adjusting prices in real-time based on factors such as demand, time
of day, or customer demographics.
- C. Psychological Pricing - iv. Pricing products at certain price points, such as $9.99, to create
a perception of value or affordability.
- D. Bundle Pricing - i. Offering multiple products or services together as a package at a
discounted price.

3. Match the product pricing method with its description:

- A. Cost-Plus Pricing - iv. Adding a markup to the product's variable costs to cover fixed costs
and generate a profit.
- B. Freemium Pricing - i. Offering a basic version of a product or service for free, while
charging for premium features or advanced functionality.
- C. Premium Pricing - ii. Setting prices above the market average to position the product as a
high-quality or luxury option.
- D. Contribution Margin Pricing - iii. Determining prices based on the product's contribution
margin, which is the difference between selling price and variable costs.

224. Match the factor influencing product pricing with its impact:
A. Economic conditions
B. Government regulations
C. Product lifecycle
D. Customer perceptions

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

i. Influences pricing flexibility and affordability based on consumer purchasing power.

ii. May impose price controls or taxes affecting the final price of products.
iii. Determines pricing strategies such as introductory pricing or discounts.
iv. Shapes pricing strategies to reflect value and competitive positioning.
Correct answer:
- A. i
- B. ii
- C. iii
- D. iv
244. Match the factor influencing product pricing with its significance:
A. Product differentiation
B. Distribution channels
C. Seasonality
D. Marketing objectives
i. Influences pricing based on the exclusivity or uniqueness of the product.
ii. Affects pricing strategy based on the costs and efficiencies associated with different
channels.
iii. Impacts pricing adjustments during peak or off-peak periods.
iv. Guides pricing decisions aligned with promotional goals and target market positioning.

245. Match the factor influencing product pricing with its description:
1. Target market
2. Competition
3. Willingness to pay
4. Cost analysis
5. Organizational needs
A. Analyzing the expenses involved in producing, distributing, and selling the product.
B. Assessing the level of desire and affordability of the product among potential customers.
C. Evaluating the prices set by rival companies offering similar products.
D. Considering the specific requirements and objectives of the company.
E. Understanding the segments of customers the product is designed for and their preferences.

246. Match the step of product pricing with its description:

1. Choose a pricing strategy

2. Understand lifetime value (LTV)
3. Choose a pricing model
4. Monitor and adjust the price

A. Determining the overarching approach to pricing, such as cost-based, value-based, or

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

competition-based.
B. Evaluating the long-term profitability of acquiring and retaining customers.
C. Selecting a specific method for setting prices, such as cost-plus, value-based, or dynamic
pricing.
D. Continuously reviewing market conditions, competitor pricing, and customer feedback to
make necessary changes to pricing strategies.

Correct answer:
- A. 1
- B. 2
- C. 3
- D. 4

These questions cover the sequential steps involved in product pricing, including choosing a
pricing strategy, understanding lifetime value, selecting a pricing model, and monitoring and
adjusting the price accordingly.
247. Which step of product pricing involves selecting a pricing strategy?
a) Step 1: Choose a pricing model
b) Step 2: Understand lifetime value (LTV)
c) Step 3: Choose a pricing strategy
d) Step 4: Monitor and adjust the price

248. What is the correct sequence of steps in product pricing?

a) 1-2-3-4
b) 3-1-2-4
c) 2-4-1-3
d) 4-3-2-1

249. Which step of product pricing involves evaluating the potential value a customer will
generate over time?
a) Choose a pricing strategy
b) Understand lifetime value (LTV)
c) Choose a pricing model
d) Monitor and adjust the price

250. When is the pricing strategy typically determined in the product pricing process?
a) At the end
b) Before understanding lifetime value (LTV)
c) After choosing a pricing model
d) Before choosing a pricing model

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

251. In which step of product pricing is the pricing model selected?

a) Step 1: Choose a pricing strategy
b) Step 2: Understand lifetime value (LTV)
c) Step 3: Choose a pricing model
d) Step 4: Monitor and adjust the price

253. Match the type of product pricing method with its description:

1. Cost-oriented pricing method

2. Market-oriented pricing method

A. Setting prices based primarily on internal factors such as production costs.

B. Determining prices based on external market factors such as demand, competition, and
perceived value.
254. Which pricing method involves setting a price based on the perceived value of the product?
a) Cost-plus pricing
b) Value-based pricing
c) Penetration pricing
d) Competitive pricing
255. Which pricing method involves setting a high initial price to maximize profits before
gradually lowering the price?
a) Skimming pricing
b) Value-based pricing
c) Penetration pricing
d) Cost-plus pricing
256. Which pricing method involves setting a price based on the production cost plus a markup?
a) Cost-plus pricing
b) Value-based pricing
c) Penetration pricing
d) Competitive pricing
257. Which stage of the shipping process involves the preparation of goods for transportation?
a) Shipping
b) Receiving
c) Packaging
d) Inventory management

258. Which stage of the shipping process involves the actual movement of goods from the seller
to the buyer?
a) Shipping

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

b) Receiving
c) Packaging
d) Inventory management
259. Which stage of the shipping process involves checking and accepting goods upon arrival?
a) Shipping
b) Receiving
c) Packaging
d) Inventory management
260. Which stage of the shipping process involves tasks such as inventory checks, packaging,
and labeling?
a) Dispatching
b) Packaging
c) Receiving
d) Shipping
261. During which stage of the shipping process are goods physically transported from the
origin to the destination?
a) Dispatching
b) Packaging
c) Receiving
d) Shipping
262. Which stage of the shipping process involves confirming the arrival of goods, inspecting
for damages, and updating inventory records?
a) Dispatching
b) Packaging
c) Receiving
d) Shipping
263. Which delivery method involves sending products directly from the manufacturer or
supplier to the customer without passing through a retailer's inventory?
a) Direct shipping method
b) Warehouse method
c) Cross-docking method
d) Fulfillment method
264. Which delivery method involves storing products in a central location before being
shipped to customers upon receiving orders?
a) Direct shipping method
b) Warehouse method
c) Cross-docking method
d) Fulfillment method
265. Which delivery method involves receiving products at a distribution center and then
immediately transferring them to outbound transportation without the need for storage?

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

a) Direct shipping method

b) Warehouse method
c) Cross-docking method
d) Fulfillment method

266. Which mode of payment involves the physical exchange of currency or coins for goods or
services?
a) Cash payment
b) Cheque payment
c) Digital mode of payment
d) Bank draft payment
267. Which mode of payment involves a written order directing a bank to pay a specific amount
of money from the payer's account to the payee's account?
a) Cash payment
b) Cheque payment
c) Digital mode of payment
d) Bank draft payment
268. Which mode of payment involves electronically transferring funds from one bank account
to another, often used for international transactions?
a) Telegraphic Transfer or Mail Transfer
b) Bill of exchange
c) Promissory note
d) Bank draft payment
269. Which mode of payment involves a written order from one party (the drawer) to another
(the drawee) to pay a specified sum to a third party (the payee) at a predetermined future date?
a) Telegraphic Transfer or Mail Transfer
b) Bill of exchange
c) Promissory note
d) Bank draft payment
270. Which mode of payment is a written promise by one party (the maker) to pay a specific
sum of money to another party (the payee) at a future date?
a) Telegraphic Transfer or Mail Transfer
b) Bill of exchange
c) Promissory note
d) Bank draft payment
271. Which mode of payment involves electronic transactions conducted over the internet or
through mobile devices?
a) Digital mode of payment
b) Cheque payment
c) Cash payment

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

d) Bank draft payment

272. Which mode of payment involves a financial institution guaranteeing payment on behalf
of the payer to the payee, often used for large transactions or international payments?
a) Digital mode of payment
b) Cheque payment
c) Cash payment
d) Bank draft payment
273. Sarah decides to purchase a new laptop from an online electronics store. She has different
modes of payment available. Which payment method would require her to physically exchange
currency or coins for the laptop upon delivery?
274. Emily wants to buy a gift for her friend's birthday from an online store. Which payment
method would allow her to make the purchase instantly through electronic transactions over the
internet or through mobile devices?
a) Cash
b) Cheque
c) Digital mode of payment
d) Promissory note

275. James needs to transfer funds to his business partner in another country. Which payment
method would involve electronically transferring funds from one bank account to another, often
used for international transactions?
a) Cash
b) Telegraphic Transfer or Mail Transfer
c) Bank Draft
d) Bill of exchange

275. Maria is purchasing a car from a dealership. Which payment method would involve writing
a written order from Maria (the drawer) to the dealership (the drawee) to pay a specified sum at a
predetermined future date?
a) Cash
b) Cheque
c) Bank Draft
d) Promissory note

276. John needs to pay his monthly rent to his landlord. Which payment method would involve
a written promise by John (the maker) to pay a specific sum of money to his landlord (the payee)
at a future date?
a) Cash
b) Cheque
c) Promissory note

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

d) Digital mode of payment

277. Sarah's company is importing goods from a supplier overseas. Which payment method
would involve a financial institution guaranteeing payment on behalf of Sarah's company to the
supplier, often used for large transactions or international payments?
a) Telegraphic Transfer or Mail Transfer
b) Bank Draft
c) Bill of exchange
d) Digital mode of payment

278. David, a freelance writer, has completed a project for a client. Which payment method
would involve the client writing a written order directing their bank to pay a specific amount
from their account to David's account?
a) Cash
b) Cheque
c) Digital mode of payment
d) Bank Draft

279. Rachel is purchasing clothes from an online retailer. Which payment method would allow
her to pay for the items upon delivery by physically exchanging currency or coins?
a) Cheque
b) Digital mode of payment
c) Bank Draft
d) Cash
280. Mark's employer deposits his monthly salary directly into his bank account. Which
payment method would involve electronically transferring funds from Mark's employer's account
to Mark's account?
a) Cash
b) Promissory note
c) Digital mode of payment
d) Bank Draft

281. Alex's company is purchasing machinery from a supplier in another country. Which
payment method would involve a written promise by Alex's company to pay the supplier a
specific sum of money at a future date?
a) Telegraphic Transfer or Mail Transfer
b) Bill of exchange
c) Promissory note
d) Digital mode of payment

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

282. Lisa is renting an apartment and prefers to pay her rent electronically every month. Which
payment method would allow her to transfer funds directly from her bank account to her
landlord's account?
a) Cash
b) Cheque
c) Digital mode of payment
d) Bank Draft

283. Match the model of production system with its corresponding description:
a) Job Shop
b) Batch Production
c) Assembly Line
d) Continuous Production
i) Produces small batches of customized products with flexible production processes.

ii) Produces moderate quantities of standardized products in batches.

iii) Produces high volumes of standardized products with a linear production flow.
iv) Produces large volumes of identical products without interruption.
A) i - a, ii - b, iii - c, iv - d
B) i - d, ii - c, iii - b, iv - a
C) i - b, ii - a, iii - d, iv - c
D) i - c, ii - b, iii - a, iv - d
284. Identify the production system model that produces small batches of customized products
with flexible production processes:
A) Job Shop
B) Batch Production
C) Assembly Line
D) Continuous Production
285. Which production system model produces high volumes of standardized products with a
linear production flow?
A) Job Shop
B) Batch Production
C) Assembly Line
D) Continuous Production
286. Determine the production system model that produces large volumes of identical products
without interruption:
A) Job Shop
B) Batch Production
C) Assembly Line

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

D) Continuous Production

287. Match the production system model with its appropriate description:
i) Produces small batches of customized products with flexible production processes.
ii) Produces moderate quantities of standardized products in batches.
iii) Produces high volumes of standardized products with a linear production flow.
iv) Produces large volumes of identical products without interruption.
A) Job Shop - i, Batch Production - ii, Assembly Line - iii, Continuous Production - iv
B) Job Shop - iii, Batch Production - ii, Assembly Line - i, Continuous Production - iv
C) Job Shop - iv, Batch Production - ii, Assembly Line - iii, Continuous Production - i
D) Job Shop - ii, Batch Production - iv, Assembly Line - iii, Continuous Production - i
1. A) i - a, ii - b, iii - c, iv - d
2. A) Job Shop
3. C) Assembly Line
4. D) Continuous Production
5. A) Job Shop - i, Batch Production - ii, Assembly Line - iii, Continuous Production - iv

288. You have been hired as the operations manager for a medium-sized furniture manufacturing
company. In your role, you are tasked with overseeing the manufacturing operations to ensure
they meet the company's objectives. During a recent strategic planning meeting, the executive
team highlighted several key Objectives of Manufacturing Operations Management.
289. List 6 Objectives of Manufacturing Operations Management
289. Give the differences between manufacturing and service operations and propose strategies
to leverage these differences for competitive advantage.

290. Give the key challenges faced by operations managers in the manufacturing industry and
propose strategies to mitigate these challenges effectively.

291. Outline 5 steps you would take to ensure successful decision-making in operations
management.

292. In a factory for casting metal, there are seven shops whose coordinates are summarized in the
table below. The company is interested in locating a new costly molding equipment in the foundry.
As a production supervisor,
(a) determine the minimax location of the new molding shop.
(b) Plot an XY graph to locate a minimax location for that new molding shop.
Table 1. Coordinate of centroid for the existing facilities
S/N Existing facilities Coordinate of geometric center
1 Molding shop 5,10
2 Pattern shop 15,20

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

3 Melting shop 5,60

4 Felting shop 5,30
5 Fabrication shop 15,50
6 Sand plant 15,70
7 Heat treatment shop 20,90
293. Suppose you are an operation manager at CNC manufacturing company and your company
wants to sell manufactured U-bolts. You previously determined that the fixed costs of the
company consist of property taxes, a lease, and executive salaries, which add up to Rwf
1,000,000. The variable cost associated with producing one bolt is Rwf 2,000 per unit. The bolt
is sold at a premium price of Rwf 12,000 per unit. How many quantities of bolts to be sold so
that the company will be in no loss and no profit situation?
294. Y3MT manufacturing company is producing 22,500 forged hammers however the experts
determined that the company can produce 30,000 forged hammers. As a young engineer in
manufacturing technology, who knows that the important measure of company effectiveness is
to calculate the capacity utilization rate which reveals how close the company is to its best design
capacity, calculate the capacity utilization rate of Y3MT manufacturing company.
295. Differ manufacturing productivity from manufacturing efficiency
296. Suppose you are an operations manager of a mobile phone manufacturing company called
“MT ltd”. The company wants to sell a batch of new phones. List 4 responsibilities you need
to fulfill as an operations manager.
Answer:
1. Ensure the products are designed to meet the criteria of customer expectations through
analysis of past data.
2. Predict the future requirements through analysis and ensure that the production amount
meets the demand in the market.
3. Secure the supply chain system. It involves arranging raw materials and delivering the
same, maintaining existing inventory, ensuring a successful smooth production process,
confirming the production numbers, distributing them in the market, and guaranteeing
their sales.
4. Ensuring there is no loss incurred from the organization’s side by evaluating the cost
and best alternatives available. This reduces the overall cost and overhead costs.

297. As a young engineer in manufacturing technology, explain with facts why

(i) Production in the right quantity is important for every organization to ensure profitability
(ii) Cost reduction is the primary focus of every business
Answer
(i) Production in the right quantity is important for every organization to ensure
profitability. Because Excess or shortage in production will have adverse effects. Excess
production of products will lead to blockage of funds in inventory. Whereas the shortage
in production will create a shortage of its products and will not be able to fulfill demand.

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(ii) Cost reduction is the primary focus of every business. Because Production
management aims at minimizing the cost of product activities of the business. It involves
the usage of sound supply chain management in production planning minimizing the
overall production and supply cost. Production management estimates the true cost of a
product before its production and tries to keep its production cost within the parameter of
pre-estimated cost.

298. As an engineer,
(i) Why forecasting is critical for Business
(ii) What are the key financial statements for forecasting.
Answer
i) Forecasting is sometimes an overlooked part of business management that helps us
predict future events and can greatly help leaders make the best possible decisions.
ii) The Key Financial Statements for Forecasting are:
• The income statement,
• balance sheet,
• statement of cash flow
299. With a clear explanation, give any three skills needed to be an effective Production
Supervisor (3marks)
Answer

300. As an engineer, explain (i) How the business forecasting process usually occurs (Forecast
budget sheet preparation steps)
Answer

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301. State the objectives of cost accounting

Cost accounting is also referred to as costing. It is defined as a system which systematically records
all the expenditures to determine the total cost of a product. It is the determination of the actual
cost of a component or product after adding different expenses related to various departments
engaged in the production of the product.
302. Define cost estimation
Cost estimation may be defined as the process of forecasting the expenses that must be incurred to
manufacture a product.

303. Explain different functions of break even chart in decision making

With the help of break even analysis, management of a production firm can take decisions related
to the following
• To calculate the volume needed to obtain the target profit
• To determine at what level the sales price can be reduced in competition
• To find out change in price and its effect
• Whether to expand production capacity or not
• Whether to add a new product or drop production of any product
• Whether to make or buy
• To determine the margin of safety

304. Discuss the various stages in the Life Cycle of a product. (Stevenson)

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305. State the activities involved in life cycle costing of equipment/products/items

What are the life cycles cost associated activities
• Develop an accounting breakdown structure
• Define activities that generate ownership costs of products
• Establish cause-and-effect relationships
• Identify cost drivers
• Determine or define the life cycle of items/products
• Develop cost estimates relationships for every element in in the life cycle cost
breakdown structure
• Conduct sensitivity analysis
• Develop escalated and discounted life cycle costs

306. Describe the steps associated with life cycle costing

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Life cycle costing steps

307. What are the advantages and disadvantages of life cycle costing

What are the reasons and uses of the life cycle costing concept.
What are the inputs required to conduct life cycle costing

Estimate goal
Time schedule
Required data
Involved individuals
Required analysis format
Required analysis detail
Treatment of uncertainties
Ground rules and assumptions
Analysis constraints
Analysis users
Limitations of funds
Required accuracy of the analysis

308. A company using a machine to manufacture a certain Engineering component is

contemplating replacing the machine with a modern one.Three different machines are being
considered for its replacement and their data ia as given in the table.Determine which of the
three machines should be purchased to replace the existing one with respect to their life cycle
costs

Item no. Description Machine A Machine B Machine C

1 Procurement $175,000 $160,000 $190,000
price
2 Expected useful 12 12 12
life in years
3 Annual failure 0.02 0.03 0.01
rate
4 Annual interest 5% 5% 5%
rate
5 Annual operating $5,000 $7,000 $3,000
cost
6 Cost of a failure $4,000 $3,000 $5,000
Data for three machines under consideration
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The expected failure costs of machines A, B, and C, respectively are given by

𝐹𝐶𝐴 = 0.02 × 4,000 = $80
𝐹𝐶𝐵 = 0.03 × 3,000 = $90
𝐹𝐶𝐶 = 0.01 × 5,000 = $50
The present values of machines A failure cost over its useful life is given by :
1 − (1 + 0.05)−12
𝑃𝑉𝐹𝐶𝐴 = 80 ( ) = $709
0.05
𝑃𝑉𝐹𝐶𝐴 𝑖𝑠 𝑡ℎ𝑒 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑚𝑎𝑐ℎ𝑖𝑛𝑒 𝐴 𝑓𝑎𝑖𝑙𝑢𝑟𝑒 𝑐𝑜𝑠𝑡 𝑜𝑣𝑒𝑟 𝑖𝑡𝑠 𝑙𝑖𝑓𝑒 𝑠𝑝𝑎𝑛.The present
values of machines B and c over their useful lives are as follows
1 − (1 + 0.05)−12
𝑃𝑉𝐹𝐶𝐵 = 90 ( ) = $798
0.05
1 − (1 + 0.05)−12
𝑃𝑉𝐹𝐶𝐶 = 50 ( ) = $443
0.05
The present values of machines A, B, and C operating costs over their useful life span are
1 − (1 + 0.05)−12
𝑃𝑉𝑂𝐶𝐴 = 5000 ( ) = $44,316
0.05
1 − (1 + 0.05)−12
𝑃𝑉𝑂𝐶𝐵 = 7000 ( ) = $62,043
0.05
1 − (1 + 0.05)−12
𝑃𝑉𝑂𝐶𝐶 = 3000 ( ) = $26,590
0.05
𝑃𝑉𝑂𝐶𝐴 , 𝑃𝑉𝑂𝐶𝐵 . 𝑃𝑉𝑂𝐶𝐶 𝑎𝑟𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑐𝑜𝑠𝑡𝑠 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑟𝑒𝑠𝑝𝑒𝑐𝑡𝑖𝑣𝑒 𝑚𝑎𝑐ℎ𝑖𝑛𝑒𝑠 𝑜𝑣𝑒𝑟 𝑡ℎ𝑒𝑖𝑟 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒
The life cycle costs of machines A,B,and C are
𝐿𝐶𝐶𝐴 = 175,000 + 709 + 44,316 = $220,025
𝐿𝐶𝐶𝐵 = 160,000 + 798 + 62,043 = $222,841
𝐿𝐶𝐶𝐶 = 190,000 + 443 + 26,590 = $217,033
As the life cycle of machine C is the lowest it should be purchased

309. Imagine you're a newly appointed manager at a manufacturing company tasked with
optimizing the company's processes. During your orientation, your supervisor asks you to
distinguish between production management and operations management. How would you
explain the difference between the two concepts to your supervisor, and why is understanding
this difference crucial for effectively managing the company's resources and processes?
Answer
As a newly appointed manager, I would clarify to my supervisor that production management and
operations management are indeed distinct concepts, primarily differentiated by the tangibility of
the final output.

1. Tangibility of Goods or Services: Production management typically refers to the management

of processes involved in transforming raw materials into tangible goods. This includes activities
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such as manufacturing, assembly, and quality control. On the other hand, operations management
encompasses a broader range of activities, including those related to both tangible goods and
intangible services. Operations management involves managing processes such as supply chain
management, inventory control, and service delivery.

To estimate the budget for Widget Ltd's new production process, we'll consider the following
factors:

1. Forecasting Budget Sheet Preparation: This involves the cost of analyzing market trends,
demand forecasts, and production projections. It might include hiring consultants or using
specialized software.

2. Salaries: Calculate the salaries for all employees involved in the new production process,
including engineers, technicians, operators, and management personnel.

3. Research and Development: Include expenses for R&D activities aimed at improving the
production process, such as prototyping, testing, and equipment upgrades.

4. Travel Costs: Account for travel expenses related to visiting suppliers, attending industry events,
or conducting market research. This may include transportation, accommodation, and per diems.

5. Operation Expenses: This encompasses the day-to-day costs of running the production facility,
including utilities, maintenance, raw materials, and packaging.

6. Profit Margin: Factor in the desired profit margin to ensure the company generates a return on
investment.

310. You are a project manager tasked with overseeing the production activities of a new
manufacturing plant. The plant specializes in producing environmentally friendly packaging
materials. The project has a tight deadline, and you need to ensure that the production activities
are well-planned and executed efficiently to meet the demands of your clients. However, you
encounter several challenges along the way, including resource constraints, unexpected delays
in material procurement, and fluctuations in market demand. How would you develop a
comprehensive plan for production activities to address these challenges and ensure the
successful completion of the project within the specified timeline?

To develop a comprehensive plan for production activities amidst challenges like resource
constraints, delays in material procurement, and market demand fluctuations, I would:

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1. Resource Allocation: Assess available resources and allocate them efficiently based on
production needs. Prioritize resource utilization to optimize productivity while ensuring minimal
waste.

2. Supply Chain Management: Establish robust relationships with suppliers to mitigate delays in
material procurement. Implement backup suppliers or alternative sourcing strategies to counter
unexpected disruptions.

3. Demand Forecasting: Utilize data analytics and market research to forecast demand trends
accurately. Implement flexible production schedules and inventory management systems to
respond promptly to fluctuations in market demand.

4. Risk Management: Identify potential risks and develop contingency plans to address them.
Conduct regular risk assessments and adjust production plans accordingly to minimize the impact
of unforeseen events.

5. Communication and Collaboration: Foster open communication channels among team

members, suppliers, and stakeholders. Collaborate closely with all parties involved to address
challenges collectively and ensure alignment with project goals.

6. Continuous Improvement: Implement a feedback loop mechanism to gather insights from

ongoing production activities. Use this feedback to refine processes, streamline operations, and
enhance overall efficiency.

7. Timeline Monitoring: Monitor production progress closely against the project timeline.
Implement tracking tools and performance metrics to identify bottlenecks early and take corrective
actions to keep the project on schedule.

311. As part of the technical team responsible for production operations and management, how
do you plan to optimize efficiency and minimize downtime in our manufacturing plant?
Consider factors such as workflow optimization, equipment maintenance strategies,
automation implementation, and workforce training programs in your response. Additionally,
how would you ensure that our production processes align with industry best practices and
regulatory standards while maximizing output quality?

312. As a member of the technical team overseeing production operations and management,
how do you propose optimizing efficiency and minimizing downtime within our
manufacturing plant?

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1. Workflow Optimization: How would you analyze our current production processes to identify
inefficiencies and streamline workflow for enhanced productivity?

2. Equipment Maintenance Strategies: What approach would you take to ensure timely
maintenance and upkeep of our machinery to prevent unexpected breakdowns and minimize
downtime?

3. Automation Implementation: In what areas of our production process do you see opportunities
for automation? How would you introduce automation technologies to improve efficiency and
reduce manual labor requirements?

4. Workforce Training Programs: How do you plan to invest in training and development initiatives
for our production staff to enhance their skills, increase job satisfaction, and boost overall
productivity?

Additionally:

5. Industry Best Practices: How would you stay updated on the latest industry best practices and
incorporate them into our production processes to ensure competitiveness and efficiency?

6. Regulatory Compliance: What measures would you implement to ensure that our production
processes adhere to relevant regulatory standards and certifications while maintaining high-quality
output?

7. Output Quality Maximization: How do you propose monitoring and optimizing output quality
to meet or exceed customer expectations while minimizing waste and rework?
Question:

313. Discuss the decision-making process in operation management, highlighting key factors
and considerations that influence strategic choices. Additionally, provide examples of how
different decision-making models, such as quantitative analysis, qualitative assessment, and
intuitive judgment, can be applied in various operational scenarios to optimize outcomes.

314. In operation management, the decision-making process is a crucial aspect that impacts the
overall efficiency and effectiveness of organizational operations. Several key factors and
considerations influence strategic choices in this domain:

315. Explain the difference between manufacturing and production in the context of operations
management. Provide examples to illustrate the distinctions between these two terms,
highlighting how they contribute to the overall process of delivering goods or services to

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customers. Additionally, discuss the implications of understanding these differences for

operational decision-making within a manufacturing or service-oriented organization.

316. As a manager overseeing operations within a manufacturing facility, you are tasked with
ensuring efficient processes and timely delivery of goods to customers. During a recent team
meeting, one of your colleagues asked about the difference between operation management
and production management. Provide by using a tabl, a comprehensive explanation of the
distinctions between these two concepts, using real-world examples from your industry to
illustrate their respective roles and contributions to overall organizational success.
Additionally, discuss how a clear understanding of these differences can inform decision-
making and strategy development within your operational framework.

317. Understanding the distinctions between operation management and production

management informs decision-making and strategy development within the operational
framework by providing clarity on the roles and responsibilities of each aspect. Operation
management guides strategic decisions related to resource allocation, process optimization,
and alignment with organizational goals, while production management guides tactical
decisions within the manufacturing process, such as scheduling, inventory management, and
quality control. By recognizing these differences, managers can effectively allocate resources,
optimize processes, and address operational challenges to ensure efficient processes and timely
delivery of goods to customers, ultimately contributing to overall organizational success.

With the help of a neat flowchart, outline and discuss the key areas of production management
within a manufacturing facility. Identify and explain the critical functions within each area,
highlighting their importance in optimizing production processes and ensuring efficient
operations. Additionally, provide examples of how advancements in technology or industry best
practices have influenced these areas in recent years.

318. Suppose you are the operations manager of a rapidly growing e-commerce company that
specializes in selling consumer electronics. Your company has expanded its product offerings
and customer base significantly over the past year, resulting in increased operational
complexities. During a strategy meeting, one of your colleagues asks about the scope of
operations management within the company. Provide a detailed explanation of the scope of
operations management in the context of your e-commerce business, highlighting the various
areas it encompasses and its significance in ensuring smooth operations and customer
satisfaction. Additionally, discuss how you plan to address the operational challenges and
opportunities presented by the company's growth trajectory.

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319. Imagine you're a newly appointed manager at a manufacturing company tasked with
optimizing the company's processes. During your orientation, your supervisor asks you to
distinguish between production management and operations management. How would you
explain the difference between the two concepts to your supervisor, and why is understanding
this difference crucial for effectively managing the company's resources and processes?

As a newly appointed manager, I would clarify to my supervisor that production management and
operations management are indeed distinct concepts, primarily differentiated by the tangibility of
the final output.

320. As a newly appointed technical team member in a growing manufacturing company, you're
tasked with understanding the vast scope of operations management. Your team leader
emphasizes that operations management extends far beyond the shop floor, starting from the
selection of location for the company's facilities. In light of this, your team is tasked with
evaluating potential locations for a new production facility. How would you approach this task,
considering the comprehensive nature of operations management and its implications for
location selection? Additionally, how do you plan to leverage operations management
principles to ensure the success of the new facility beyond just its physical setup?

321. (a)List the major expenses of cost estimation

The major components of cost estimation include
Cost of design
Cost of manufacturing
Cost of service facilities
Cost of administration
Cost of selling
(b)With a sketch diagram describe the cost elements involved in the determination of the
selling price of a product

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The price paid by the customer of M.R.P (maximum retail price) is known as selling price of the
product. It has the following components.
(i)Prime cost is given by
Prime cost =Direct material +Direct labor + direct expenses (if any)
(ii)Factory cost.
This cost is given as,
Factory cost =prime cost +factory expenses. It is also known as works cost
(iii)Manufacturing cost
It is also referred to as the cost of production. It is given by the expression
Manufacturing cost =factory cost +administrative expenses
(iv)Total cost
It is given by
Total cost =Manufacturing cost +selling and distribution expenses

322.Explain the effect of the following factors on product design

(i)Customer requirements
The product should satisfy customers in terms of its functioning, quality, durability.It should create
a good impression on the customers.
Cost/price ratio
Cost is one of the factors which influence design of a product. In a competitive market, usually the
designer is given a unit cost price for each product within which he must work. The designers have
very little scope for overdesigning.
(iii)Performance factors
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Accuracy, cutting speed and feed of material used as well as the total time for manufacturing,
machinability of material also affect the design of the product.
(iv)Product quality
Product quality mostly depends upon quality of design. The designer must give clear and concise
drawings and realistic tolerances, surface finish, reliability, maintainability and properly specified
visual standards
High quality of design means high and consistent performance over a period of time.
(v)Process capability
Designer must design the product by considering availability of the plant and machinery to meet
specifications, accuracy, quality of machined surface, All these factors determines the process
capability of machine. The process capability of machines should be such that they meet
company’s quality standards. The process capability of machines should be such that they meet
company’s quality standards
(v)Packaging
Designer must give due considerations to good packaging. Packaging is required for
• Protection of the product
• Advertising the product
Consumer products requires attractive packaging while capital goods require heavy and
sturdy packaging

325. (a)Explain the importance of the following requirements in the design of a good product
Function
A good product should function correctly and should satisfy needs of the customer, and while in
use the product design should offer trouble free operation.
Reliability
A product should be defined as reliable when it gives trouble free service over its estimated life. A
product should have required standard of reliability.
Maintenance
A good product should ensure that repairs and replacements are carried out without much trouble.
Customer expectations from a product are that it should give less maintenance over its life. The
cost of maintaining a product after sales is also one of the important design criteria
Production
Easiness in production and reasonable cost of production are two important aspects of product
design. To achieve these aspects, the product must be made by using the least number of
operations. By reducing work content productivity can be improved
Quality
When a customer feel or realize that a product is suitable or fit for its purpose or use we say that
the product is a quality product. Quality cannot be inspected directly; it is built into the product. A
product should possess desired degree of quality.
Use of standard parts

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The parts used in the design of a product should be of minimum variety and should either be easily
available in the market or can be manufactured easily with the available machines. The product
should have as many standard parts as possible
Simplification
Simplification reduces the range of products, their types, size and also reduces their complexity of
manufacturing procedure. This is helpful in eliminating wastage by avoiding unnecessary variety
and complication in design and manufacturing.
Economy
It is easy to minimize the cost of a product at design stage than later on when the product is actually
being manufactured. A good product design always offer reasonable price to compete with other
products in the consumer market. All possible ways to reduce the cost should be considered at the
design stage.
322. Define product development
Generation of new goods to fill the new demands of the market, improvements in the old products
to suit the changes in consumer demand is grouped as product development. Product development
aims to supply the goods demanded by the market at the time and in quantities desired by it and at
the prices which gives net profit to the company. Product development falls into two categories
• Introduction of new products
• Improvement of existing product
• Product design involves the development of specification of the product while product
development involves the improvement of an existing product
(b)Describe the importance of the following parameters in product development
(i)Market aspect
It is important to know the market potential of the product. If there is no potential market then
there is no point to design and manufacture the product. It is easy to estimate the demand for the
existing product, but if the product is entirely new, a detailed market survey is to be carried out to
estimate demand for the product
(ii)Functional aspect
Once the market potential of the product is defined and identified, the functional scope of the
product is to be carefully analyzed and the functions are to be defined properly. These are
• The functions the product is expected to perform
• Single function or multiple functions
• Cost considerations due to multiple functions
(iii)Operational aspect
Once the functions expected to be service by the product are established, then operational aspects
of the products are determined. The product should
• Function properly
• Must be easy to handle
• Must be simple to operate
(iv)Durability and dependability
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Durability is the span of active life of the product under given working conditions. For example
durability of a two wheeler four stroke engine is given in years under standard working conditions
like road, mileage load etc
(v)Aesthetic aspect
Aesthetic aspect refers to external look of the product. It creates the first impression about the
product. Designers use a variety of methods to build aesthetic characteristics.
• Use of special materials
• Use of color
• Texture as a supplement to color
• Good packaging
(vi)Economic aspects
Economic analysis is important management decision in product development. It involves
• Total capital for manufacturing new product
• Total production cost per unit
• Reasonable margin of profit
• Price competitiveness in the market
• Expected sales volume
323. Describe the following tools of product development
Interchangeability
The concept of simplification, standardization and specialization are closely related with each
other and leads to interchangeability. With all modern technology developments, still it is not
possible to achieve dimensional perfection. Change in temperature, tool wear, vibrations of the
machines, human errors etc are the responsible factors for this. Even if the required dimensional
accuracy is achieved, a lot of time will be consumed which increases the cost of manufacturing.
The term interchangeability implies that the parts which fit perfectly into assembly may be selected
at random from large number of parts. These parts which have been produced with all their
dimensions within their specified limits, need not be made in the same shop or even the same
company
Specialization
It is a process where particular firms concentrate on the manufacture of the limited number of
product types. When standardization and simplification are applied to some specific product, it
results into specialization. Specialization means expertise in some particular area or field,
Examples are gears, belts, pulleys, bulbs, nuts,bolts etc.All these are specialized items. Mastering
the particular area for manufacturing a product which later is termed as specialized product
Standardization
Standardization is a tool for variety reduction. It is the process of setting standards for quantity,
quality, raw materials, sizes, performance. For example when someone buys batteries for torch, he
knows that it will fit into the torch. Why, because size of batteries is standardized. Automobile
tires, bulbs, spark plugs are examples of standardized items.
Simplification
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Work simplification means making improvements in methods. Job simplification refers to

reducing the variety of products manufactured. Simplification can be done at the enlisted two
stages above..Simplification reduces the range of products, their types ,sizes and their complexity
of manufacturing procedures. This thus eliminates wastage. The main purpose of simplification is
to improve quality and reduce unit cost and price leading to higher sales. Simplification is
advantageous to both producer and consumer.
Example of simplification, washing machine capacity is simplified as 5kg, 5.5kg, 6kg, 7kg etc

324. Describe the following types of plant layout

Product layout

Process layout

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325. List the areas of applications of network techniques. /5marks

326. A small project is composed of the following activities whose time estimates are given:
(Estimated activity duration in weeks)
Activity Optimistic Most likely Pessimistic
1–2 1 1 7
1–3 1 4 7
1–4 2 2 8
2–5 1 1 1
3–5 2 5 14
4–6 2 5 8
5–6 3 6 15

(1) Find the expected duration and variance for each activity
(2) Draw the network and find the critical path
(3) Calculate the standard deviation of project length as well as Expected time of the project. (
round-up for decimals, e.g. σ = 1.2 weeks = 2 weeks)
(4) What is the probability that the project will be completed
(i) At least 4 weeks earlier than expected time?
(ii) No more than 4 weeks later than 4 weeks?
(iii) If the project due date is 19 weeks what is the probability of not meeting the due date?
(iv) Find the project duration at 95 per cent probability? /15marks
D − Te Where Te is the total project duration
Given, Z =
St St is the standard deviation
D is the due or scheduled time
The corresponding value of probability can be read from table 1 in appendix.
a) Discuss the various stages in the Life Cycle of a product. /7marks

b) List the advantages and disadvantages of urban locations. /7marks

c) A company manufactures three products P, Q, and R using the same manufacturing facilities
arranged in six departments A, B, C, D, E, and F. The material handling is done by a forklift.
The containers can carry 300, 400, and 600 pieces of the products P, Q, and R respectively.
The annual demand for each product is 12000 units. Sequence of operations of product
movement is given below.

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Product Movement
P A E B D C F

Q A B C D E F

R C B A E D F

Construct the travel chart. /6marks

Appendix
Table 1. Standard Normal Distribution
Z Probability of meeting due or Z Probability of meeting due or
scheduled date scheduled date
2.8 0.997 - 0.2 0.421
2.6 0.995 - 0.4 0.345
2.4 0.992 - 0.6 0.274
2.2 0.986 - 0.8 0.212
2.0 0.977 - 1.0 0.159
1.8 0.964 - 1.2 0.115
1.6 0.945 - 1.4 0.081
1.4 0.919 - 1.6 0.055
1.2 0.885 - 1.8 0.036
1.0 0.841 - 2.0 0.023
0.8 0.788 - 2.2 0.014
0.6 0.726 - 2.4 0.008
0.4 0.655 - 2.6 0.005
0.2 0.579 - 2.8 0.003
0.0 0.500

(a) Applications of Network Analysis (PERT AND CPM)

(1) Research and development projects
(2) Equipment maintenance and overhauling
(3) Construction projects (building, bridges, dams)
(4) Setting up new industries
(5) Planning and launching of new products
(6) Design of plants, machines and systems
(7) Shifting the manufacturing location from one location to another
(8) Control of production in large job shops

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(9) Market penetration programs

(10) Organization of big programs, conferences, etc. /0.5marks each (5marks total)

(b) (1) Expected times and variance of each activity is shown in Table 1
Table 1: Expected time and variance of each activity
Activity Expected Time (Te) Variance
𝑡𝑜 + 4𝑡𝑚 + 𝑡𝑝 𝑡𝑝 − 𝑡𝑜
6 6
1–2 2 1
1–3 4 1
1–4 3 1
2–5 1 0
3–5 6 2
4–6 5 1
5–6 6 2

(2) The network diagram is shown in figure below

2 1

5
2 7
6
4
1 3 6

3 5

Critical path is: 1 – 3 – 5 – 6

(3) Standard deviation = √Variance = √5 weeks = 2.2 weeks ≈ 3
Expected time of the project = 4 + 6 + 7 = 17 weeks /

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Annual demand for parts Ordering cost (Co) Cost per unit (Cp) Inventory carrying
(D) = 10,000 nits/annum = $36/order = $2/unit cost (I) = 0.09
2𝐷𝐶𝑜
(𝑖)𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑜𝑟𝑑𝑒𝑟 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦 , 𝑄 ∗ = √
𝐶𝑝 𝐼

2×10,000×36
=√ = 2000 𝑢𝑛𝑖𝑡𝑠
2×0.09

𝐷
(𝑖𝑖) 𝑂𝑝𝑡𝑖𝑚𝑢𝑚 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠 = /
𝑄∗
10,000
= =5
2000

(1) Project passes through several distinct activities which constitute a project life cycle.
(2) Project is one time activity which will never be repeated exactly the same manner.
(3) A project has a definite start and finish, i.e., a project is executed in a definite time bound
schedule.
(4) A project uses a cross-functional relationship because it needs diversified skills and talents
from different professions.
(5) A project has definable goals or end results that can be defined in terms of cost, schedule
and performance requirements.
(6) Project demands the investment (current outlay) and the benefits are spread for number of
future periods.
(7) Once the project goals are achieved, the project team will be either disbanded or
reconstituted for another new project.

327. Compare production planning and production control.

Comparison between production planning and production control

Production Planning Production Control
1. Production Planning is a pre-production Production Control will be in action when
activity. production activity begins.

Control is concerned with communication

of their information and producing reports

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2. Planning involves the collection, like output reports, productivity, rejection

maintenance and analysis of data with rate, etc.
respect to time standards, materials and
their specification, machines and their
process capabilities.
Control involves in taking corrective steps
3. Planning is useful to anticipate the in case of error to match actual
problems and devising remedial measure performance against the planned
in case the problem arises. performance.

4. Planning is a centralized activity and Control is a widespread activity. Includes

includes functions like materials control, functions such as dispatching
tool control, process planning and programming and inspection, etc.
control.

5. Planning sees that all the necessary Control keeps track of the activities and
resources are available to make the sees whether everything is going as per
production at right quality and time. schedule or not.

(a) What are the considerations in selection of an equipment or process?

1 Economic considerations: Due analysis should be made with respect to the initial cost,
maintenance and running cost. An alternative which results in lower total cost should be
selected.
2 Production rate and unit cost of production.
3 Durability and dependability, i.e., quality and reliability aspects.
4 Lower process rejection
5 Minimum set-up and put away times.
6 Longer Productive life of machines or equipment.
7 Functional versatility- Should be able to perform more than one function.

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B) Four items A, B, C and D are to be processed successively in batches on the same facility. The
demand, consumption rates and production rates, set-up costs and holding costs for each product
are given below:
Item Demand Consumption Production Holding Set-up
per year rate (per day) rate (per cost/unit cost per
day) batch
A 10,000 40 250 12.5 100
B 5,000 50 100 12.5 50
C 8,000 40 200 25 80
D 12,000 40 300 12.5 60

Determine the number of complete processing cycles and the quantity in batches and the
production times for each item in a cycle.

Hint: Qi = consumption or demand/ N

(b) Explain MRP logic?

MRP processing logic accepts the master schedule and determines the components
schedules successfully for low-level items of the product structures. It calculates for each
item in each product structure and each time period (typically one week) in the planning
horizon how many of that items are required (Gross requirements) how many units from
inventory are already available, the net quantity that must be planned (planned order
receipts) and when ordered for new shipments must be planned (planned order releases)
so that all materials arrive when needed.

a) Bar codes, radio frequency data transmission, magnetic stripes, and voice recognition are types
of
a. Optical character recognition systems
b. Automatic identification technology
c. Image interpretation systems
d. Product analysis methodology
(a) The answer is b. Automatic identification technology /5marks
b) The demand for an item is uniform at the rate of 25 units/month. Ordering cost is $30 and cost
per unit is $2/unit. Inventory carrying cost is $0.5/unit/month and if shortage cost is $0.3/unit/
month. Determine Economic order quantity, and optimal scheduling time between two
consecutive orders.
(i) The economic order quantity

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2𝐷𝐶𝑜 (𝐶𝑆 +𝐶ℎ )

𝑄∗ = √ 𝐶ℎ 𝐶𝑠

Ch= $0.5/unit/month
Cs= $0.3/ unit/month
2×25×30 (0.5+0.3)
𝑄∗ = √ 0.5 0.3

(ii) Optimal scheduling time between two consecutive orders

𝑄∗ 90
= = 25 = 3.6 months
𝐷

328. From where you get information regarding project ideas?

The various sources of project ideas are:
(1) Thorough analysis of performance of existing industries
(2) Examination of inputs and outputs
(3) Examination of imports and exports
(4) Have a knowledge of guidelines and government development plan outlays
(5) Guidelines and suggestions given by the financial institutions and other promotional
agencies.
(6) Investigate local materials and resources.
(7) Analyzed economic and social trends.
(8) Exploring the possibilities and reviving sick units.
(9) Study of changes in technology and keeping pace with technological developments.
(10) Trends analysis and study of consumption pattern of foreign markets.
(11) Identification of unfulfilled psychological needs.
(12) Analysis of demand-supply gap.
(13) Participate in seminars/conferences and attend trade fairs, industrial exhibitions to provide
an access for new products and new technology.
(14) Stimulate creativity for generating new product ideas.

329.List the advantages and disadvantages of rural locations

Advantages Disadvantages

1. Cheaper and ample availability of 1. Poor transportation network

site. 2. No good communication facilities.
2. Cheaper labour rates 3. Sourcing of components and
3. Fewer turnovers of labours because materials should be from outside.
of limited mobility. 4. Far away from market.
4. No municipal restrictions. 5. High absenteeism during harvest
5. Good industrial relations. season.
6. Scope for expansion and 6. No educational, medical and
diversification. recreational facilities.
7. No slums and environmental
pollution.
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330.Give reasons why the analysis of the plant layout problem is done.
The need for the plant layout change arises because of the following reasons:
1. Changes in the product design or introduction of the new product.
2. Changes in the volume of demand for the company’s product.
3. Increasing frequency of accidents because of existing layout.
4. Plant and machinery becomes outdated and is to be replaced by new one.
5. Poor working environment affecting worker efficiency and productivity
6. Change in the location or markets
7. Minimizing the cost through effective facilities location.
331. Define the following terms commonly used in Project Scheduling with CPM and PERT
(i) Network: It is a graphical representation of the project and it consists of series of activities
arranged in a logical sequence and show the interrelationship between the activities.
(ii) Activities: An activity is a physically identifiable part of the project, which consumes time
and resources. Each activity has a definite start and end. Activity is represented by an arrow
( )
(iii) Event: An event represents the start or the completion of an activity. The beginning and end
points of an activity are events

332. The activities involved in a small project are given below along with relevant information.
Construct the network and find the critical path as well as Project duration. Find the floats for
each activity.
(Time: days)
Activity 1–2 2–3 2–4 3–5 4 –5 5–6
Duration 4 6 4 5 3 3

Ans:
6 3 5

4 3
1 2 5 6

4 3
4
/1.5marks

Critical path 1 – 2 – 3 – 5 – 6 /1marks

Project duration 18 days /1marks

Activity Duration Earliest Latest Float

Start Finish Start Finish Total Free Independent
1–2 4 0 0 4 4 0 0 0
2–3 6 4 4 10 10 0 0 0
3–5 5 10 10 15 15 0 0 0
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2–4 4 4 8 8 12 4 0 0
4 –5 3 8 12 11 15 4 4 0
5–6 3 15 15 18 18 0 0 0

333. Describe the term line balancing in production process planning?

Assembly line balancing is associated with a product layout in which products are processed as
they pass through a line of work centers. An assembly line can be considered as a “Production
Sequence” where parts are assembled together to form an end product. The operations are carried
out at different workstations situated along the line.

a)Exponential smoothing method requires only the current demand and the forecasted demand for
the current month.
Lead time is a factor in scheduling in as much as the MRP system issues purchase orders and
production orders because both manufacturing and ordering lead time are important issues.
• Manufacturing lead time : Lead time is a factor in scheduling (production queue) and in
manufacturing (setup, operation, and non operation time)

334. Give two reasons with details why lead time is a factor in scheduling in as much as the MRP
system issues purchase orders and production orders.
Ordering lead time: Lead time is a factor in ordering (parts and materials). Because sometimes
suppliers do not send or supply materials on the scheduled time.

c) What is the role of digital sensors and analog sensors in automatic identification for material
handling?
Digital sensors, such as encoders, provide positioning data with incremental or absolute
positioning on the rotary or linear encoder. Two-phase output from quadrature encoders can
indicate direction of rotation or movement.
d)
335. In the above problem, if the company decides to manufacture the above item with equipment
which produce 100 units per day, how your answer is changed in the second case. The cost per
unit produced is $3.5/unit and the setup cost (Co) is $150/order. Consider the demand rate as
30 units per day.
2𝐷𝐶𝑜 2×10,000×100
𝐸𝑂𝑄 = √ =√ = 1265𝑢𝑛𝑖𝑡𝑠
𝐶𝑝 𝐼 0.25×5

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2𝐷𝐶 2×10,000×150
𝐸𝑂𝑄 = √ 𝑑 𝑜 = √ 30 = 2214𝑢𝑛𝑖𝑡𝑠
(1− )𝐶𝑝 𝐼 (1− )×3.5×0.25
𝑝 100

336. List out the monitoring areas of projects.

The monitoring areas are as follows:
(i) Monitoring of time
(ii) Monitoring of manpower
(iii) Monitoring of material resources
(iv) Monitoring of costs in relation to work done
V) Monitoring of funds

337.List the advantages and disadvantages of Suburban locations

Advantages Disadvantages

1. Land available at cheaper rate 1. Due to concentration the suburban

compared to urban location. area will become crowdy and will
2. Infrastructure facilities are become urban in turn within short
developed by promotional agencies. period.
3. Because of nearness to city 2. High mobility of workers and hence
availability of skilled manpower. higher labour turnover.
4. Educational, medical facilities are 3. Government incentive and subsides
available because of nearness to city. to promote industries.
338.List out the advantages of travel charts?
(1). It is a useful tool for movement analysis.
(2). It is helpful to locate the activities and backtracking.
(3). Useful for comparing alternative flows.
(4). Can be easily computerized as quantitative data is involved.

Introduction to CPM / PERT Techniques

CPM/PERT or Network Analysis as the technique is sometimes called, developed along two
parallel streams, one industrial and the other military.
CPM (Critical Path Method) was the discovery of M.R.Walker of E.I.Du Pont de Nemours &
Co. and J.E.Kelly of Remington Rand, circa 1957. The computation was designed for the
UNIVAC-I computer. The first test was made in 1958, when CPM was applied to the construction
of a new chemical plant. In March 1959, the method was applied to maintenance shut-down at the
Du Pont works in Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.

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PERT (Project Evaluation and Review Technique) was devised in 1958 for the POLARIS
missile program by the Program Evaluation Branch of the Special Projects office of the U.S.Navy,
helped by the Lockheed Missile Systems division and the Consultant firm of Booz-Allen &
Hamilton. The calculations were so arranged so that they could be carried out on the IBM Naval
Ordinance Research Computer (NORC) at Dahlgren, Virginia.
The methods are essentially network-oriented techniques using the same principle. PERT and
CPM are basically time-oriented methods in the sense that they both lead to determination of a
time schedule for the project. The significant difference between two approaches is that the time
estimates for the different activities in CPM were assumed to be deterministic while in PERT
these are described probabilistically. These techniques are referred as project scheduling
techniques.

In CPM activities are shown as a network of precedence relationships using activity-onnode

network construction
– Single estimate of activity time
– Deterministic activity times
USED IN: Production management - for the jobs of repetitive in nature where the activity time
estimates can be predicted with considerable certainty due to the existence of past experience.
In PERT activities are shown as a network of precedence relationships using activity-onarrow
network construction
– Multiple time estimates
– Probabilistic activity times
USED IN: Project management - for non-repetitive jobs (research and development work),
where the time and cost estimates tend to be quite uncertain. This technique uses probabilistic time
estimates.
Benefits of PERT/CPM
⚫ Useful at many stages of project management
⚫ Mathematically simple
⚫ Give critical path and slack time
⚫ Provide project documentation
⚫ Useful in monitoring costs
Limitations of PERT/CPM
⚫ Clearly defined, independent and stable activities
⚫ Specified precedence relationships
⚫ Over emphasis on critical paths
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2.2 Applications of CPM / PERT

These methods have been applied to a wide variety of problems in industries and have found
acceptance even in government organizations. These include
• Construction of a dam or a canal system in a region
• Construction of a building or highway
• Maintenance or overhaul of airplanes or oil refinery
• Space flight
• Cost control of a project using PERT / COST
• Designing a prototype of a machine
• Development of supersonic planes

2.3 Basic Steps in PERT / CPM

Project scheduling by PERT / CPM consists of four main steps

1. Planning
• The planning phase is started by splitting the total project in to small projects. These
smaller projects in turn are divided into activities and are analyzed by the department or
section.
• The relationship of each activity with respect to other activities are defined and established
and the corresponding responsibilities and the authority are also stated.
• Thus the possibility of overlooking any task necessary for the completion of the project is
reduced substantially.

2. Scheduling
• The ultimate objective of the scheduling phase is to prepare a time chart showing the start
and finish times for each activity as well as its relationship to other activities of the project.
• Moreover the schedule must pinpoint the critical path activities which require special
attention if the project is to be completed in time.
• For non-critical activities, the schedule must show the amount of slack or float times which
can be used advantageously when such activities are delayed or when limited resources are
to be utilized effectively.

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3. Allocation of resources
• Allocation of resources is performed to achieve the desired objective. A resource is a
physical variable such as labour, finance, equipment and space which will impose a
limitation on time for the project.
• When resources are limited and conflicting, demands are made for the same type of
resources a systematic method for allocation of resources become essential.
• Resource allocation usually incurs a compromise and the choice of this compromise
depends on the judgment of managers.

4. Controlling
• The final phase in project management is controlling. Critical path methods facilitate the
application of the principle of management by expectation to identify areas that are critical
to the completion of the project.
• By having progress reports from time to time and updating the network continuously, a
better financial as well as technical control over the project is exercised.
• Arrow diagrams and time charts are used for making periodic progress reports. If required,
a new course of action is determined for the remaining portion of the project.

2.4 The Framework for PERT and CPM

Essentially, there are six steps which are common to both the techniques. The procedure is listed
below:
I. Define the Project and all of its significant activities or tasks. The Project (made up of
several tasks) should have only a single start activity and a single finish activity.
II. Develop the relationships among the activities. Decide which activities must precede and
which must follow others.
III. Draw the "Network" connecting all the activities. Each Activity should have unique event
numbers. Dummy arrows are used where required to avoid giving the same numbering to
two activities.
IV. Assign time and/or cost estimates to each activity
V. Compute the longest time path through the network. This is called the critical path.
VI. Use the Network to help plan, schedule, and monitor and control the project.

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The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest
path through the activity network control the entire project. If these "critical" activities could be
identified and assigned to responsible persons, management resources could be optimally used by
concentrating on the few activities which determine the fate of the entire project.
Non-critical activities can be replanned, rescheduled and resources for them can be reallocated
flexibly, without affecting the whole project.
Five useful questions to ask when preparing an activity network are:
▪ Is this a Start Activity?
▪ Is this a Finish Activity?
▪ What Activity Precedes this?
▪ What Activity Follows this?
▪ What Activity is Concurrent with this?
2.5 Network Diagram Representation

In a network representation of a project certain definitions are used

1. Activity
Any individual operation which utilizes resources and has an end and a beginning is called activity.
An arrow is commonly used to represent an activity with its head indicating the direction of
progress in the project. These are classified into four categories
1. Predecessor activity – Activities that must be completed immediately prior to the start of
another activity are called predecessor activities.
2. Successor activity – Activities that cannot be started until one or more of other activities
are completed but immediately succeed them are called successor activities.
3. Concurrent activity – Activities which can be accomplished concurrently are known as
concurrent activities. It may be noted that an activity can be a predecessor or a successor
to an event or it may be concurrent with one or more of other activities.
4. Dummy activity – An activity which does not consume any kind of resource but merely
depicts the technological dependence is called a dummy activity.

The dummy activity is inserted in the network to clarify the activity pattern in the following two
situations
• To make activities with common starting and finishing points distinguishable

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• To identify and maintain the proper precedence relationship between activities that is not
connected by events.
For example, consider a situation where A and B are concurrent activities. C is dependent on A
and D is dependent on A and B both. Such a situation can be handled by using a dummy activity
as shown in the figure.

2. Event
An event represents a point in time signifying the completion of some activities and the beginning
of new ones. This is usually represented by a circle in a network which is also called a node or
connector.
The events are classified in to three categories
1. Merge event – When more than one activity comes and joins an event such an event is
known as merge event.
2. Burst event – When more than one activity leaves an event such an event is known as
burst event.
3. Merge and Burst event – An activity may be merge and burst event at the same time as
with respect to some activities it can be a merge event and with respect to some other
activities it may be a burst event.

3. Sequencing
The first prerequisite in the development of network is to maintain the precedence relationships.
In order to make a network, the following points should be taken into considerations
• What job or jobs precede it?
• What job or jobs could run concurrently?

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• What job or jobs follow it?

• What controls the start and finish of a job?
Since all further calculations are based on the network, it is necessary that a network be drawn
with full care.
2.6 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

Rule 3
In order to ensure the correct precedence relationship in the arrow diagram, following questions
must be checked whenever any activity is added to the network What activity must be completed
immediately before this activity can start?
• What activities must follow this activity?
• What activities must occur simultaneously with this activity?

In case of large network, it is essential that certain good habits be practiced to draw an easy to
follow network
• Try to avoid arrows which cross each other
• Use straight arrows
• Do not attempt to represent duration of activity by its arrow length
• Use arrows from left to right. Avoid mixing two directions, vertical and standing arrows
may be used if necessary.

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• Use dummies freely in rough draft but final network should not have any redundant
dummies.
• The network has only one entry point called start event and one point of emergence called
the end event.

2.7 Common Errors in Drawing Networks

The three types of errors are most commonly observed in drawing network diagrams

1. Dangling
To disconnect an activity before the completion of all activities in a network diagram is
known as dangling. As shown in the figure activities (5 – 10) and (6 – 7) are not the last
activities in the network. So the diagram is wrong and indicates the error of dangling

2. Looping or Cycling
Looping error is also known as cycling error in a network diagram. Drawing an endless loop
in a network is known as error of looping as shown in the following figure.

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3. Redundancy
Unnecessarily inserting the dummy activity in network logic is known as the error of redundancy
as shown in the following diagram

2.8 Advantages and Disadvantages

PERT/CPM has the following advantages

• A PERT/CPM chart explicitly defines and makes visible dependencies (precedence

relationships) between the elements,

• PERT/CPM facilitates identification of the critical path and makes this visible,

• PERT/CPM facilitates identification of early start, late start, and slack for each activity,

• PERT/CPM provides for potentially reduced project duration due to better understanding
of dependencies leading to improved overlapping of activities and tasks where feasible.

PERT/CPM has the following disadvantages:

• There can be potentially hundreds or thousands of activities and individual dependency

relationships,

• The network charts tend to be large and unwieldy requiring several pages to print and
requiring special size paper,

• The lack of a timeframe on most PERT/CPM charts makes it harder to show status although
colours can help (e.g., specific colour for completed nodes),

• When the PERT/CPM charts become unwieldy, they are no longer used to manage the
project.

2.9 Critical Path in Network Analysis

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Basic Scheduling Computations

The notations used are

(i, j) = Activity with tail event i and head event j
Ei = Earliest occurrence time of event i
Lj = Latest allowable occurrence time of event j
Dij = Estimated completion time of activity (i, j)
(Es)ij = Earliest starting time of activity (i, j)
(Ef)ij = Earliest finishing time of activity (i, j)
(Ls)ij = Latest starting time of activity (i, j)
(Lf)ij = Latest finishing time of activity (i, j)

The procedure is as follows

1. Determination of Earliest time (Ej): Forward Pass computation

Step 1
The computation begins from the start node and move towards the end node. For
easiness, the forward pass computation starts by assuming the earliest occurrence
time of zero for the initial project event.

Step 2
i. Earliest starting time of activity (i, j) is the earliest event time of the tail end
event i.e. (Es)ij = Ei
ii. Earliest finish time of activity (i, j) is the earliest starting time + the activity
time i.e. (Ef)ij = (Es)ij + Dij or (Ef)ij = Ei + Dij
iii. Earliest event time for event j is the maximum of the earliest finish times of
all activities ending in to that event i.e. Ej = max [(Ef)ij for all immediate
predecessor of (i, j)] or Ej =max [Ei + Dij]

2. Backward Pass computation (for latest allowable time)

Step 1
For ending event assume E = L. Remember that all E’s have been computed by forward
pass computations.

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Step 2
Latest finish time for activity (i, j) is equal to the latest event time of event j i.e.
(Lf)ij = Lj

Step 3
Latest starting time of activity (i, j) = the latest completion time of (i, j) – the activity time
or (Ls)ij =(Lf)ij - Dij or (Ls)ij = Lj - Dij

Step 4
Latest event time for event ‘i’ is the minimum of the latest start time of all activities
originating from that event i.e. Li = min [(Ls)ij for all immediate successor of (i,
j)] = min [(Lf)ij - Dij] = min [Lj - Dij]

3. Determination of floats and slack times

There are three kinds of floats

• Total float – The amount of time by which the completion of an activity could be
delayed beyond the earliest expected completion time without affecting the overall
project duration time. Mathematically
(Tf)ij = (Latest start – Earliest start) for activity ( i – j)
(Tf)ij = (Ls)ij - (Es)ij or (Tf)ij = (Lj - Dij) - Ei

• Free float – The time by which the completion of an activity can be delayed
beyond the earliest finish time without affecting the earliest start of a subsequent
activity.
Mathematically
(Ff)ij = (Earliest time for event j – Earliest time for event i) – Activity time for ( i, j)
(Ff)ij = (Ej - Ei) - Dij

• Independent float – The amount of time by which the start of an activity can be
delayed without effecting the earliest start time of any immediately following
activities, assuming that the preceding activity has finished at its latest finish time.
Mathematically
(If)ij = (Ej - Li) - Dij
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The negative independent float is always taken as zero.

• Event slack - It is defined as the difference between the latest event and earliest
event times. Mathematically
Head event slack = Lj – Ej, Tail event slack = Li - Ei

4. Determination of critical path

• Critical event – The events with zero slack times are called critical events. In
other words the event i is said to be critical if Ei = Li

• Critical activity – The activities with zero total float are known as critical
activities. In other words an activity is said to be critical if a delay in its start will
cause a further delay in the completion date of the entire project.

• Critical path – The sequence of critical activities in a network is called critical

path. The critical path is the longest path in the network from the starting event to
ending event and defines the minimum time required to complete the project.

339. Exercise
1. What is PERT and CPM?
2. What are the advantages of using PERT/CPM?
3. Mention the applications of PERT/CPM
4. Explain the following terms
a. Earliest time
b. Latest time
c. Total activity slack
d. Event slack
e. Critical path
5. Explain the CPM in network analysis.
6. What are the rules for drawing network diagram? Also mention the common errors that
occur in drawing networks.
7. What is the difference between PERT and CPM/
8. What are the uses of PERT and CPM?
9. Explain the basic steps in PERT/CPM techniques.
10. Write the framework of PERT/CPM.

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340. Determine the early start and late start in respect of all node points and identify critical
path for the following network.

Solution
Calculation of E and L for each node is shown in the network

Activity(i, Normal Earliest Time Latest Time Float Time

j) Time (Li - Dij ) - Ei
Start Finish (Ei Start (Li Finish
(Dij)
(Ei) + Dij ) - Dij ) (Li)

(1, 2) 10 0 10 0 10 0
(1, 3) 8 0 8 1 9 1
(1, 4) 9 0 9 1 10 1
(2, 5) 8 10 18 10 18 0
(4, 6) 7 9 16 10 17 1

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(3, 7) 16 8 24 9 25 1
(5, 7) 7 18 25 18 25 0
(6, 7) 7 16 23 18 25 2
(5, 8) 6 18 24 18 24 0
(6, 9) 5 16 21 17 22 1
(7, 10) 12 25 37 25 37 0
(8, 10) 13 24 37 24 37 0
(9, 10) 15 21 36 22 37 1

Network Analysis Table

From the table, the critical nodes are (1, 2), (2, 5), (5, 7), (5, 8), (7, 10) and (8, 10)

From the table, there are two possible critical paths

i. 1 → 2 → 5 → 8 → 10 ii.
1 → 2 → 5 → 7 → 10

341. Find the critical path and calculate the slack time for the following network

Solution

The earliest time and the latest time are obtained below

Activity(i, j) Normal Earliest Time Latest Time Float Time

Time (Li - Dij ) - Ei
Start Finish (Ei Start (Li Finish
(Dij)
(Ei) + Dij ) - Dij ) (Li)

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(1, 2) 2 0 2 5 7 5
(1, 3) 2 0 2 0 2 0
(1, 4) 1 0 1 6 7 6
(2, 6) 4 2 6 7 11 5
(3, 7) 5 2 7 3 8 1
(3, 5) 8 2 10 2 10 0
(4, 5) 3 1 4 7 10 6
(5, 9) 5 10 15 10 15 0
(6, 8) 1 6 7 11 12 5
(7, 8) 4 7 11 8 12 1
(8, 9) 3 11 14 12 15 1

From the above table, the critical nodes are the activities (1, 3), (3, 5) and (5, 9)

The critical path is 1 → 3 → 5 → 9

342. A project has the following times schedule

Activity Times in weeks Activity Times in weeks

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(1 – 2) 4 (5 – 7) 8
(1 – 3) 1 (6 – 8) 1
(2 – 4) 1 (7 – 8) 2
(3 – 4) 1 (8 – 9) 1
(3 – 5) 6 (8 – 10) 8
(4 – 9) 5 (9 – 10) 7
(5 – 6) 4

Construct the network and compute

1. TE and TL for each event
2. Float for each activity
3. Critical path and its duration

Solution

The network is

Event No.: 1 2 3 4 5 6 7 8 9 10
TE: 0 4 1 5 7 11 15 17 18 25
TL: 0 12 1 13 7 16 15 17 18 25

Float = TL (Head event) – TE (Tail event) – Duration

Activity Duration TE (Tail event) TL (Head event) Float

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(1 – 2) 4 0 12 8
(1 – 3) 1 0 1 0
(2 – 4) 1 4 13 8
(3 – 4) 1 1 13 11
(3 – 5) 6 1 7 0
(4 – 9) 5 5 18 8
(5 – 6) 4 7 16 5
(5 – 7) 8 7 15 0
(6 – 8) 1 11 17 5
(7 – 8) 2 15 17 0
(8 – 9) 1 17 18 0
(8 – 10) 8 17 25 0
(9 – 10) 7 18 25 0

The resultant network shows the critical path

The two critical paths are

i. 1 → 3 → 5 →7 → 8 → 9 →10
ii. 1 → 3 → 5 → 7 → 8 →10

3.2 Project Evaluation and Review Technique (PERT)

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The main objective in the analysis through PERT is to find out the completion for a
particular event within specified date. The PERT approach takes into account the
uncertainties. The three time values are associated with each activity

1. Optimistic time – It is the shortest possible time in which the activity can be finished. It
assumes that every thing goes very well. This is denoted by t0.
2. Most likely time – It is the estimate of the normal time the activity would take. This
assumes normal delays. If a graph is plotted in the time of completion and the frequency
of completion in that time period, then most likely time will represent the highest frequency
of occurrence. This is denoted by tm.
3. Pessimistic time – It represents the longest time the activity could take if everything goes
wrong. As in optimistic estimate, this value may be such that only one in hundred or one
in twenty will take time longer than this value. This is denoted by tp.

In PERT calculation, all values are used to obtain the percent expected value.

1. Expected time – It is the average time an activity will take if it were to be repeated on
large number of times and is based on the assumption that the activity time follows
Beta distribution, this is given by
te = ( t0 + 4 tm + tp ) / 6

2. The variance for the activity is given by

σ2 = [(tp – to) / 6] 2

343. For the project

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Task: A B C D E F G H I J K
Least time: 4 5 8 2 4 6 8 5 3 5 6
Greatest time: 8 10 12 7 10 15 16 9 7 11 13
Most likely time: 5 7 11 3 7 9 12 6 5 8 9

Find the earliest and latest expected time to each event and also critical path in the network.
Solution
Task Least time(t0) Greatest time Most likely Expected time
(tp) time (tm) (to + tp + 4tm)/6

A 4 8 5 5.33
B 5 10 7 7.17
C 8 12 11 10.67
D 2 7 3 3.5
E 4 10 7 7
F 6 15 9 9.5
G 8 16 12 12
H 5 9 6 6.33
I 3 7 5 5
J 5 11 8 8
K 6 13 9 9.17

Task Expected Start Finish Total float

time (te)
Earliest Latest Earliest Latest
A 5.33 0 0 5.33 5.33 0
B 7.17 0 8.83 7.17 16 8.83
C 10.67 5.33 5.33 16 16 0
D 3.5 0 10 3.5 13.5 10
E 7 16 16 23 23 0

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F 9.5 3.5 13.5 13 23 10

G 12 3.5 18.5 15.5 30.5 15
H 6.33 23 23 29.33 29.33 0
I 5 23 25.5 28 30.5 2.5
J 8 28 30.5 36 38.5 2.5
K 9.17 29.33 29.33 31.5 38.5 0

The network is

The critical path is A →C →E → H → K

344. A project has the following characteristics
Activity Most optimistic time Most pessimistic time Most likely time
(a) (b) (m)

(1 – 2) 1 5 1.5
(2 – 3) 1 3 2
(2 – 4) 1 5 3

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(3 – 5) 3 5 4
(4 – 5) 2 4 3
(4 – 6) 3 7 5
(5 – 7) 4 6 5
(6 – 7) 6 8 7
(7 – 8) 2 6 4
(7 – 9) 5 8 6
(8 – 10) 1 3 2
(9 – 10) 3 7 5

Construct a PERT network. Find the critical path and variance for each event.
Solution
Activity (a) (b) (m) (4m) te v
(a + b + 4m)/6 [(b – a) / 6]2

(1 – 2) 1 5 1.5 6 2 4/9
(2 – 3) 1 3 2 8 2 1/9
(2 – 4) 1 5 3 12 3 4/9
(3 – 5) 3 5 4 16 4 1/9
(4 – 5) 2 4 3 12 3 1/9
(4 – 6) 3 7 5 20 5 4/9
(5 – 7) 4 6 5 20 5 1/9
(6 – 7) 6 8 7 28 7 1/9
(7 – 8) 2 6 4 16 4 4/9
(7 – 9) 5 8 6 24 6.17 1/4
(8 – 10) 1 3 2 8 2 1/9
(9 – 10) 3 7 5 20 5 4/9

The network is constructed as shown below

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The critical path = 1 → 2 → 4 → 6 → 7 →9 →10

345. Calculate the variance and the expected time for each activity

Solution
Activity (to) (tm) (tp) te v
(to + tp + 4tm)/6 [(tp – to) / 6]2

(1 – 2) 3 6 10 6.2 1.36
(1 – 3) 6 7 12 7.7 1.00
(1 – 4) 7 9 12 9.2 0.69

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(2 – 3) 0 0 0 0.0 0.00
(2 – 5) 8 12 17 12.2 2.25
(3 – 6) 10 12 15 12.2 0.69
(4 – 7) 8 13 19 13.2 3.36
(5 – 8) 12 14 15 13.9 0.25
(6 – 7) 8 9 10 9.0 0.11
(6 – 9) 13 16 19 16.0 1.00
(8 – 9) 4 7 10 7.0 1.00
(7 – 10) 10 13 17 13.2 1.36
(9 – 11) 6 8 12 8.4 1.00
(10 – 11) 10 12 14 12.0 0.66

346. A project is represented by the network as shown below and has the following data

Task: A B C D E F G H I
Least time: 5 18 26 16 15 6 7 7 3
Greatest time: 10 22 40 20 25 12 12 9 5
Most likely time: 15 20 33 18 20 9 10 8 4
Determine the following
1. Expected task time and their variance
2. Earliest and latest time

Solution

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1.
Activity Least time Greatest time Most likely Expected time Variance
(t0) (tp) time (tm) (to + tp + 4tm)/6 (σ2)

(1-2) 5 10 8 7.8 0.69

(1-3) 18 22 20 20.0 0.44
(1-4) 26 40 33 33.0 5.43
(2-5) 16 20 18 18.0 0.44
(2-6) 15 25 20 20.0 2.78
(3-6) 6 12 9 9.0 1.00
(4-7) 7 12 10 9.8 0.69
(5-7) 7 9 8 8.0 0.11
(6-7) 3 5 4 4.0 0.11

2.
Earliest time
E1 = 0
E2 = 0 +7.8 = 7.8
E3 = 0 +20 = 20
E4 = 0 +33 = 33
E5 = 7.8 + 18 = 25.8
E6 = max [7.8 + 20, 20 + 9] = 29
E7 = max [33 + 9.8, 25.8 + 8, 29 + 4] = 42.8
Latest time
L7 = 42.8
L6 = 42.8 – 4 = 38.8
L5 = 42.8 – 8 = 34.3
L4 = 42.8 – 9.8 = 33
L3 = 38.8 – 9 = 29.8
L2 = min [34.8 – 18, 38.8 – 20] = 16.8
L1 = min [16.8 – 7.8, 29.8 – 20, 33 - 33] = 0

347. For the following data, draw network. Find the critical path, slack time after calculating
the earliest expected time and the latest allowable time

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Activity Duration Activity Duration

(1 – 2) 5 (5 – 9) 3
(1 – 3) 8 (6 – 10) 5
(2 – 4) 6 (7 – 10) 4
(2 – 5) 4 (8 – 11) 9
(2 – 6) 4 (9 – 12) 2
(3– 7) 5 (10 – 12) 4
(3 – 8) 3 (11 – 13) 1
(4 – 9) 1 (12 – 13) 7

[Ans. Critical path: 1 → 3 → 7 → 10 → 12 →13]

Question.
Shirley Hopkins is developing a program in leadership training for middle-level managers.
Shirley has listed a number of activities that must be completed before a training program of
this nature can be conducted. The activities, immediate predecessors, and times appear in the
accompanying table.

Activity Immediate Predecessor Time (days)

A – 2
B – 5

Activity Immediate Predecessor Time (days)

C 1
–
D B 10
E A,D 3
F C 6
G E,F 8

Provide the following:

i)Draw an AON diagram for these precedencies.
ii) What is the critical path?
iii) What is the total project completion date?

Answer
i) Draw the activity-on-node (AON) project network
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• Step 1: Obtain the project data. Make a list of all the activities of the project
along with their dependencies and their specific times.
• Step 2: Elaborate the network diagram. We have written a post that explains how
to elaborate the project network diagram step by step.

ii) Determine the critical path

The following table presents the results to determine the critical path:
• Early Start (ES): It is equal to the Early Finish to the activity's precedent. If it
has more than one precedent, the highest value is taken.
• Early Finish (EF): It is equal to the Early Start of the activity plus its duration
(t). EF = ES + t.
• Late Start (LS): It is equal to the Late Finish minus its duration (t). LS = LF –
t.
• Late Finish (LF): It is equal to the late start of the activity that follows. If it has
more than one successor, the lowest value is taken.
• Slack (S): It can be calculated in two ways. S = LS – ES = LF – EF.

This table serves as a guide to build our PERT CPM diagram. It added two dummy
activities to show the start and end. The activities with 0 (zero) slack are the ones that
make up the critical path.

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CPM Network Diagram with Calculations of ES, EF, LS, LF and Float

Activity Time Early Start (ES) Early Finish (EF) Late Start (LS) Late Finish (LF) Slack (S)
A 2 0 2 13 15 13
B 5 0 5 0 5 0
C 1 0 1 11 12 11
D 10 5 15 5 15 0
E 3 15 18 15 18 0
F 6 1 7 12 18 11
G 8 18 26 18 26 0

The critical path is:

B→D→E→G

iii) What is the total project completion date?

The total project time is
26 hours

348. A project schedule has the following characteristics

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Activity Most optimistic time Most likely time Most pessimistic time

(1 – 2) 1 2 3
(2 – 3) 1 2 3
(2 – 4) 1 3 5
(3 – 5) 3 4 5
(4 – 5) 2 5 4
(4 – 6) 3 5 7
(5 – 7) 4 5 6
(6 – 7) 6 7 8
(7 – 8) 2 4 6

(7 – 9) 4 6 8
(8 – 10) 1 2 3
(9 – 10) 3 5 7

Construct a PERT network and find out

e. The earliest possible time
f. Latest allowable time
g. Slack values
h. Critical path
b. Explain the following terms
a. optimistic time
b. Most likely time
c. Pessimistic time
d. Expected time
e. Variance
c. Calculate the variance and the expected time for each activity

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293. A project consists of the following activities and time estimates.

a. Construct the network.
b. Determine the expected task time and the critical path

Answer:

294. Draw the activity-on-node (AON) project network associated with the following activities
for Dave Carhart’s consulting company project.
Activity Immediate Predecessor(s) Time (Days)
A – 3
B A 4
C A 6
D B 6
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E B 4
F C 4
G D 6
H E, F 8
(a) How long should it take Dave and his team to complete this project?
(b) Using a table show the project schedule and slack.
(c) What are the critical path activities?

295. Differ Manufacturing from Production

296. Make a difference between Production and Operations management

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297. List five steps to ensure the successful decision making in operations management

298. What are 4 Objectives of production management?

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299. Define the following terms:

a. Production processes are the methods by which input of resources are turned into products
or services
b. A “Production System” is a system whose function is to transform an input into a desired
output by means of a process (the production process) and of resources. Or Production system
refers to manufacturing subsystem that includes all functions required to design, produce,
distribute and service a manufactured product.
c. A model is a representation of reality that captures the essential features of an
object/system/process.
d. Capacity is known as the amount of output, that a system is capable over a specific period of
time.
e. Capacity Planning is the process of determining the production capacity needed by an
organisation to meet changing demands for its products
f. Long-range capacity planning is a process of forecasting the capacity needs of an
organization over a long period of time.
g. Determinants of effective capacity are the factors that affect the ability of a system to
produce output.
h. A purchase order is a commercial source document that is issued by a business’ purchasing
department when placing an order with its vendors or suppliers.
i. Capital budgeting is a process that businesses use to evaluate potential major projects or
investments.
j. Strategic planning is the art of creating specific business strategies, implementing them, and
evaluating the results of executing the plan, in regard to a company’s overall long-term goals
or desires.
k. Inventory management refers to the process of ordering, storing, using, and selling a
company's inventory
l. Demand Forecasting refers to the process of predicting the future demand for the firm’s
product.
m. First Come, First Served (FCFS) rule: This is a fair approach particularly applicable to
people. In case of inventory management, it is First In First Out (FIFO).
n. The shortest processing time (SPT) rule: SPT rule sequences jobs in increasing order of
their processing times (including set up).
o. The Earliest Due Date (EDD) rule: Sequences jobs in order of their due dates, earliest first.
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p. The critical ratio (CR) rule: Sequences jobs in increasing order of their critical ratio.
q. The Slack Time Remaining (STR) rule: It employs that the next job processed is the one
that has the least amount of slack time. Slack = (Due date – Today’s date) – Remaining
processing time
r. Total quality management (TQM) is the continual process of detecting and reducing or
eliminating errors in manufacturing.
s. Product pricing is the process of setting a selling price for a product or service that considers
all costs associated with producing and selling it, as well as what customers are willing to pay

300. What is the main goal of Capital budgeting?

Answer:
Capital budgeting's main goal is to identify projects that produce cash flows that exceed
the cost of the project for a company
301. List 4 The characteristics of production system
Answer:
❑ The production system has the following characteristics:
1. Production is an organized activity, so every production system has an objective.
2. The system transforms the various inputs (men, material, machines, information,
energy) to useful outputs (goods and/or services).
3. Production system doesn’t oppose in isolation from the other organization system such
as marketing, finance etc.
4. There exists a feedback about the activities which is essential to control and improve
system performance.
302. What are three types of models.
Answer:
✓ Three types of models:
1. Physical model: Replica of a physical object with a change of scale.
a. For big/huge structure of physical object: small scale (Ex. solar system)
b. For microscopic objects: magnified scale(Ex. Atomic model)
2. Schematic model: These are 2-D models which represents
• Price fluctuations with year.
• Symbolic chart of activities in sequence for a job.
• Maps of routings
• Networks of timed events.
✓ The pictorial aspects are useful for good demonstration purposes.
3. Mathematical model:
✓ Formulas and equations have long being the servants of physical sciences.
✓ One can represent the important aspect of a system/problem in mathematical form using
variables, parameters and functions.

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303. List 6 Objectives of Manufacturing Operations Management

Answer:
❑ Here are some of the benefits of doing manufacturing operations management well:
1. Reduced waste: Good manufacturing management helps your company better use raw
materials and thereby ultimately reduce waste.
2. Better product quality: By practicing manufacturing management, a company also
minimizes damage to and waste of raw materials. That means better products. Increased
efficiencies also improve product consistency and overall quality.
3. Increased customer satisfaction: Providing higher-quality products increases customer
satisfaction, which continues to grow as your company improves order taking and
fulfillment accuracy. These steps also lead to ways of working with customers that are
beneficial to both parties.
4. Better use of employees: Manufacturing operations management aims to increase
efficiencies in how your employees perform by encouraging different departments and
teams to work better together.
5. Better compliance with regulations: Effective manufacturing operations management
ensures that your company follows all government regulations and avoids fines and other
penalties.
6. Increased profitability: The goal of manufacturing operations management is to ensure
all of your manufacturing processes run smoothly and efficiently. When performed well
and consistently, MOM helps increase your company's profits.
304. What are 4 Key Characteristics for Manufacturing
Answer:
❑ To manage that risk, manufacturing needs:
1. Productivity: Balancing efficiency with productivity translates to profit. Low
productivity means higher costs, due to wasted manpower and overhead. Understanding
and balancing the ideal ratio between costs of labor, overhead, materials and demand is
critical for any manufacturer.
2. Quality Control: If products are not made with consistent quality, a company may not
survive. Customer experiences must be positive across the all branded products, or the
entire company could suffer. For example, Samsung’s Galaxy Note could have been a
disaster for Samsung when its batteries famously caught fire, causing airlines to ban them
from planes.
3. Good Design: Manufacturers must ensure their product is well-designed, so their product
can beat out competitors. When designed with quality and innovation, a product stands out
from the crowd. It is industry-changing, high-quality design and innovation that have made
Apple into a global electronics powerhouse.
4. Cost Effectiveness: From labor allocation to robotic support through to material quality
and price per unit, there is much that affects the cost effectiveness in manufacturing.

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Without being cost effective, a product will fail and jeopardize the entire company's bottom
line.
305. List four common types of budgets.
Answer:
a. incremental,
b. activity-based,
c. value proposition, and
d. zero-based.

306. What are Challenges faced by Operations Managers

Answer:
1. Managing multiple customers
✓ Many service organisations often serve heterogeneous group of customers, in different
ways and different types of customers.
✓ Understanding who the curious customers are, understanding their needs and expectations,
developing relationships with them and managing the various customers are key tasks for
service operations managers.
2. Understanding the service concepts
✓ There may be differing views about what service an organisation is selling and/or the
customer is buying.
✓ Pronouncing and communicating the service concept is critical for classifying the
organisation service product to all its customers and for ensuring that it can be delivered
to customer specification.
3. Managing the outcome and experience
✓ For many services, there is no clear boundary between experience and the outcome.
o E.g. customers in a restaurant are buying both the meal and the way they are served.
✓ The intangible nature of the experience provides particular problems for both specification
and control.
4. Managing the real time
5. Knowing, implementing and influencing strategy
✓ Operations which are the doing part of the business are also responsible for implementing
strategy of the service organisation.
✓ Service operations managers must understand their role, not only in implementing strategy
but also in contributing to it or influencing the strategy.
✓ Service operations managers need to provide platform for their organisations for
competitive advantage through competence in service operations.
6. Continually improving operations
✓ Service operations managers are faced with a challenge of how continually to improve and
develop their real improvements. They should manage the increased complexity resulting
from change and also improve efficiency as well as quality of service operations.

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7. Encouraging innovations
✓ Innovation looks for what is new rather than improving the existing service operations
usually require elements of financial risk because innovations require time and money and
personal risk for service managers champion change putting their reputation on the line.
8. Managing short term and long term issues simultaneously

307. Actual production last week = 25,000 units, Effective capacity = 28,000 units, Design
capacity = 230 units per hour and Factory operates 7 days / week, three 8-hour shifts (a) What
is the design capacity for one week? (c ) Calculate the efficiency and utilization rates.
Answer:
1. Design capacity = (7 x 3 x 8) x (230) = 38,640 units per week
2. Utilization = 25,000 / 38,640 = 64.7%
3. Efficiency = 25,000 / 28,000 = 89.3%
308. What are the determinants of effective capacity?
1. Facilities: The size, design, and provision for expansion of the physical space and
equipment.
2. Product and Service Factors: The uniformity, standardization, and complexity of the
output.
3. Process Factors: The quantity and quality capability of the production methods and
materials.
4. Human Factors: The skills, experience, training, and motivation of the workers.
Operational Factors: The scheduling, inventory, quality control, and maintenance of the
system.
5. Supply Chain Factors: Questions include: What impact will the changes have on
suppliers, warehousing, transportation, and distributors? If capacity will be increased, will
these elements of the supply chain be able to handle the increase? If capacity is to be
decreased, what impact will the loss of business have on these elements of the supply
chain?
6. External Factors: Minimum quality and performance standards can restrict
management’s options for increasing and using capacity.
7. Policy Factors: Management policy can affect capacity by allowing or disallowing
capacity options such as overtime or second or third shifts
309. What are 8 Steps in the Capacity Planning Process.
Answer:
1. Estimate future capacity requirements
2. Evaluate existing capacity and facilities and identify gaps
3. Identify alternatives for meeting requirements
4. Conduct financial analyses of each alternative
5. Assess key qualitative issues for each alternative
6. Select the alternative to pursue that will be best in the long term

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7. Implement the selected alternative

8. Monitor results
310. The management of a mild windows would like to add a new line of aluminum windows,
which will require leasing a new equipment for a monthly payment of $4,000. Variable costs
would be $4 per window, and windows would retail for $9 each.
a. How many windows must be sold per month in order to break even?
b. What would the profit (loss) be if 1200 windows are made and sold in a month?
c. How many windows must be sold to realize a profit of $10,000 per month?
d. If demand is expected to be 700 windows per month, will this be a profitable investment?
Solution
QBEP = FC / (r – v) = 4000 / (9 – 4) = 800 windows per month
P=Total revenue – total cost = 1200 x 9 – 1200 x 4 = $6000 (i.e. a profit)
P= $10000 = Q(r – v) – FC;
Solving for Q will give us: Q = (10000 + 4000) / (9 – 4) = 2800 windows
Producing less than 800 (i.e. QBEP) windows will bring in a loss.
Since 700 < 800 (QBEP), it is not a profitable investment.
311. Micah wants to open up a new store that sells gadgets but to know how many gadgets he
has to sell to break even he can perform a break-even analysis. Micah has calculated that his
fixed costs for the year amount to £10,000 with variable costs of £0.50 per unit. Using these
figures, Micah's break-even point looks like this: 10,000 / (6 - 0.5) = 1,819 So, Micah now
knows that he needs to sell at least 1,819 gadgets before his business breaks even. This can be
helpful for him to determine how his business is going to operate and can help guide other
business decisions moving forward.

312. The ABX Company has developed a new product and is going to make this product in-
house. To be able to do this, they need to get a new equipment to be able to do the special type
of processing required by the new product design. They have found two suppliers that sell
such equipment. They are wondering which supplier they go ahead with. The costs associated
with each option are provide in the following table:
a. What is the break-even quantity at which the company will be indifferent between the two
options?
b. If the annual demand for the new product is estimated at 1000 units, which supplier should
the company use?
c. For what range of demand volume each supplier will be better?
Answer:

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1. QBEP = (FCB – FCA) / (vA – vB) = (200,000 – 160,000) / (150 – 100) = 40,000/50 = 800
2. Total cost of Supplier A = 1000 x 150 + 160,000 = $310,000; Total cost of Supplier B =
1000 x 100 + 200,000 = $300,000
Thus, it will be better to go with Supplier B, since it will be less costly in total.
3. It will always be better to use the option with the lower variable cost for quantities greater
than the break-even quantity.
This can also be proven as follows:
Let’s see for what quantities Supplier B will be better than Supplier A. In that case, for the
quantity Q, we need to have:
Total cost of Supplier B < Total cost of Supplier A
= 200,000 + 100Q < 160,000 + 150Q
= 40,000 < 50Q= 800 < Q
This means that for quantities above 800 units, Supplier B will be cheaper in total. Thus, for
quantities less than 800, Supplier A will be cheaper in total.

313. 1. A furniture manufacturer sells tables for Rwf 300,000 each. The variable cost per table
is Rwf 120,000. The monthly fixed costs are Rwf 5,000,000.
a. What is the net income if 30 tables are produced next month?
b. How many tables must be produced and sold to incur a loss of Rwf 3,200,000 next month?
Answer:
a) Net income for 30 tables.
NI=300,000×30−(5,000,000+120,000×30)
=9,000,000−150,000,000−3,600,000=Rwf400,000
b) Units for loss of Rwf 300,000.
NI=300,000x−(5,000,000+120,000x)−3,200,000=300,000x−5,000,000−120,000x1,800,000=18
0,000x10=x
Thus 10 tables must be produced

314. What are 4 Purchasing Process/ Steps in Ordering

Answer:
1. Buyer creates a purchase requisition
✓ Before sending out the purchase order to the supplier, the first step is to create a purchase
requisition. This is a document issued within the company to the purchasing department
to keep track of the goods ordered.
2. Buyer creates a purchase order
✓ When the goods that need to be purchased are agreed upon, the purchase order is created.
The PO lists the date of the order, FOB shipping information, discount terms, names of the
buyer and seller, description of the goods being purchased, item number, price, quantity,
and the PO number.
3. Seller accepts (or rejects) purchase order

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✓ At the bottom of the purchase order is a dotted line for the authorized manager of the seller
to sign off on the order.
4. Buyer records purchase order

311. what are Types of Purchasing Orders

Answer:
• Standard Purchase Orders
A standard purchase order is the most common type of PO. They’re used for one-off
purchases. If you’re ordering 500 pens from a vendor in preparation for a pop-up shop, for
example, you’d use a single-use purchase order.
• Contract Purchase Orders
A contract purchase order isn’t necessarily an official PO; it doesn’t contain any specific
information relating to products being purchased. It’s more a blanket agreement between a
buyer and vendor that clarifies delivery, tax, and payment terms for any future orders.
Another type of PO—be that a planned, single-use, or blanket PO—will follow.
• Blanket Purchase Orders
A blanket purchase order is the most vague type. It’s an agreement between a buyer and
vendor to exchange goods in return for payment, but the specifics are to be confirmed. You
might use a blanket PO with a trusted manufacturer.
• Planned Purchase Orders

315. What are 7 factors influence Facility Location selection within the region?
1. Availability of raw materials
➢ As the manufacturing plant is engaged in the conversion of raw material into final product,
it is essential that it should be located in a place where the supply of raw material with
minimum transport cost.
➢ Nearness to raw materials offers such advantages as:
• Reduced cost of transportation
• Regular and proper supply of materials uninterrupted by transportation breakdowns and
• Savings in the cost of storage of materials.
2. Nearness to the market
• Since the goods are produced for sale, it is very essential that the factory should be located
near their market.
• A reduction in the cost of transporting finished goods to the market.
3. Availability of power
4. Transport Facilities
• While going with the process of selection of location an entrepreneur considers the question
of the availability of transport facilities.
• Transport facilities are essential for bringing raw materials and men to the factory and for
carrying the finished products from the factory to the market.
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5. Suitability of climate
• The climate has its own importance in the location of a plant because of two reasons.
• First there are certain industries which, because of the nature of their production, require
particular climatic conditions.
o For example, humid climate for cotton textiles and jute.
• Secondly, climate affects labour efficiency.
6. Government policy
▪ The influence of government policies and programs on plant location is apparent in every
country, particularly in planned economies like ours.
▪ Since 2000s, collected domestic taxes increased 20 times while the national budget
increased 14 times.
▪ Rwanda is the 2nd best place to do business in Africa thanks to extensive 10-year doing
business reforms.
8. Competition between States

316. Explain the difference between manufacturing and production in the context of
operations management. Provide examples to illustrate the distinctions between these two
terms, highlighting how they contribute to the overall process of delivering goods or services
to customers. Additionally, discuss the implications of understanding these differences for
operational decision-making within a manufacturing or service-oriented organization.

317. Suppose you are a manager overseeing operations within a manufacturing facility. You are
tasked with ensuring efficient processes and timely delivery of goods to customers. During a
recent team meeting, one of your colleagues asked about the difference between operation
management and production management. Provide by using a table, a comprehensive
explanation of the distinctions between these two concepts, using real-world examples from
your industry to illustrate their respective roles and contributions to overall organizational
success. Additionally, discuss how a clear understanding of these differences can inform
decision-making and strategy development within your operational framework.
318. Y3MT manufacturing company is producing 22,500 forged hammers however the experts
determined that the company can produce 30,000 forged hammers. As a young engineer in
manufacturing technology, who knows that the important measure of company effectiveness
is to calculate the capacity utilization rate which reveals how close the company is to its best
design capacity, calculate the capacity utilization rate of Y3MT manufacturing company.

319. What are 4 main types of layouts that are widely in usage by industries?
✓ They are:
1. process layout or line layout
2. product layout or functional layout

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3. Group layout or cellurar (combination layout)

4. Fixed position layout

320. With the help of a neat table, differ PERT from CPM, state at least 5 differences
Answer:

321. By using a table provide the difference between Resource Leveling and Resource
Smoothing
Answer:

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322. An enterprise plans to invest $100,000 to enhance its manufacturing process. It has two
mutually independent options in front: Product A and Product B. Product A exhibits a
contribution of $25 and Product B of $15. The expansion plan is projected to increase the
output by 500 units for Product A and 1,000 units for Product B.
Answer:
Here, the incremental cash flow will be calculated as:
(25*500) = 12,500 for Product A
(15*1000) = 15,000 for Product B
Product A = 100,000 / 12,500 = 8 years

The Payback Period for Product A is calculated as:

This brings the enterprise to conclude that Product B has a shorter payback period and
therefore, it will invest in Product B
323. What are 4 Benefits of Inventory Management?
Answer:

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1. Saves Money:
Understanding stock trends means you see how much of and where you have something
in stock so you’re better able to use the stock you have.
2. Improves Cash Flow:
With proper inventory management, you spend money on inventory that sells, so cash is
always moving through the business.
Satisfies Customers:

324. What are 4 Nature of inventory goods?

Answer:

325. What are 5 Types of Inventory?

Answer:

326. MT ltd company sells hexagon nuts. The annual demand for M12 nuts is 1000 units, with
a fixed cost per order being set as Rwf 2000. The unit cost is Rwf 500 and the storage per unit
is Rwf 50. Calculate the cycle inventory of MT ltd company.
Answer:
D = 1000 units S = $200 C = $50 I = $5
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√[(2 x 1000 x $200) / ($50 x $5)] = 40 units (approximately)

Cycle Inventory: The Definitive Guide | Intuendi
That would mean the EOQ is the square root of 2(3000 x 100)/10, which equals 245. The
ideal number for the company to order each time would be 245 units, meaning they would
need to place a new order every 30 days or so in order to maintain their 3,000 units sold for
the year.

327. List Five Principles of Inventory Management

Answer:

328. List 5 steps in demand forecasting

Answer:

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329. Y3 MT ltd produces power screws to sell to wholesalers.

One of the raw materials it buys is round bar which is purchased at the rate of Rwf 2250 per ton.
Y3 MT ltd ’s forecasts show a estimated requirement of 5, 75,000 tons of round bar for the coming
year.
The annual total carrying cost for this material is 40% of acquisition cost and the ordering cost is
Rwf 5950.
What is the Most Economical Order Quantity?
What are 4 assumptions to be taken?
Answer:

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A business owner may choose any of the transport methods to deliver his product depending on
various factors. Give any two factors
As an engineer in manufacturing technology, give any two objectives of production
management, and explain why each one is so essential to better meet the needs of the customer.
Answer
The objectives of Production Management are as follows:

• Production in the Right Quantity: Production management formulates and

implements various production strategies to ensure production in the right quantity.
Production in the right quantity is important for every organization to ensure
profitability. Excess or shortage in production will have adverse effects. Excess
production of products will lead to blockage of funds in inventory. Whereas the
shortage in production will create a shortage of its products and will not be able to
fulfill demand.

• Minimization of Production Time: Completion of production activities timely is

essential for the achievement of the goal. Production management designs schedules
for various production activities of a business. It monitors all production activities and
ensures that all operations are going as per planned schedules. In case of any deviation

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in production activities, the production manager takes all necessary corrective

measures to remove these deviations. It helps in minimizing the overall time involved
in production activities.

• Production of the Right Quality: Production management ensures that quality

products are manufactured by the organization. It aims that customers’ expectations
are fulfilled by the product. Attempts are made to convert the needs of customers into
production specifications while designing a product. Certain standards are set through
the production management process and attempts are made to fulfill these standards.
It is determined by the cost of the product and the technical characteristics as suited
to the specific requirements.

• Minimization of Cost: Cost reduction is the primary focus of every business.

Production management aims at minimizing the cost of product activities of the
business. It involves the usage of sound supply chain management in production
planning minimizing the overall production and supply cost. Production management
estimates the true cost of a product before its production and tries to keep its
production cost within the parameter of pre-estimated cost.

• Planning And Control Of Materials: Production management helps in maintaining

the optimum stock of inventory within the organization. It keeps a complete record of
all materials required for various production activities. By maintaining records, a
shortage of any raw materials can be easily detected. It helps in ensuring that all raw
materials are always available in the right quantity so that production activities are not
affected.

• Analyse The Market: Production management completely analyses market situations

before framing production strategies. It recognizes and takes into account various
technological and innovation changes at early as possible. All these changes are
implemented in the production activities of the organization to face market
competition. Production activities go in line with market demand.

• Optimum Utilisation Of Resources: Proper utilization of all resources is a must to

earn the desired profit and achieve desired goals. Production management issues rules
and guidelines for all persons associated with production operations. It monitors their
activities and helps them in improving their efficiency. Production managers check
the overall activities and productivity of all departments of organizations. It is ensured
that there is no wastage of resources and that all resources are efficiently utilized.

b) As an engineer, explain
(i) Why forecasting is critical for Business
(ii) How the business forecasting process usually occurs (Forecast budget sheet
preparation steps
Answer
i) Forecasting is sometimes an overlooked part of business management that helps us
predict future events and can greatly help leaders make the best possible decisions.

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ii) The business forecasting process usually occurs in the following steps:
1. Identify the Problem
2. Collect Information
3. Perform a Preliminary Analysis
4. Choose the Forecasting Model / Select Methods
5. Data analysis / Implement Methods.
6. Verify Model Performance.

c) With a clear explanation, give any two skills needed to be an effective Production
Supervisor
Answer
The skills needed to be an effective Production Supervisor include:
• Organizational Skills – for tasks such as planning the production schedule
and making sure all necessary materials and equipment are available to the
production team when needed
• Problem-Solving Abilities – needs to be able to quickly assess production
issues and establish the best course of action
• Analytical Skills – must be able to spot problems within the manufacturing
process quickly and take appropriate action to rectify them. Also responsible
for ensuring that the production team has access to all the necessary skills and
equipment at the appropriate times
• Time Management – has to ensure that their production team is working in
the most time-efficient way and with the least downtime possible, to maintain
production output while still maintaining staff safety and product quality
• Decision-Making Abilities – must be able to make decisions quickly, under
pressure, after careful assessment of all available information
• Communication Skills – has to be able to clearly and concisely deliver
instructions to the production team. Must also be able to deal with team-
management issues quickly and effectively
d) Based on how the purchasing process is issued by a business’ purchasing department:
i) Give all required steps needed in Purchasing order Process (Steps in Ordering)

ii) Explain why the purchase order can remain “open.” for a long time

Answer
i) The purchasing process usually occurs in the following steps:
1. Buyer creates a purchase requisition
2. Buyer creates a purchase order
3. Seller accepts (or rejects) purchase order
4. Buyer records purchase order

ii) Once the order has been placed, the purchase order remains “open.” An open
purchase order is a PO where the order is placed but the goods have not yet been
received, or it can mean that only part of the order has been received. Either way, it
signifies that the delivery of the goods is not complete.

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a) As an engineer in manufacturing technology who may get a job in the production control
department,
(i) give any four factors that affect the production system (4Marks)
(ii) give the reason why the production control function may come into action in
production operation and management.
Answer
i) There may be innumerable factors that affect the production system and
because of this, there is a deviation from the actual plan.
Some of the factors that affect are:
1. Non-availability of materials (due to shortage, etc.);
2. Plant, equipment and machine breakdown;
3. Changes in demand and rush orders;
4. Absenteeism of workers; and
5. Lack of coordination and communication between various functional areas
of business.

ii) The control function comes into action if there is a deviation between actual
production and planned production. Production control through control mechanism
tries to take corrective action to match the planned and actual production. Thus,
production control reviews the progress of the work, and takes corrective steps in
order to ensure that programmed production takes place.
b) What are the main types of performance assessment used in business?
Answer
Now, check out what types of performance evaluation you can use in your business:
• Self-assessment
• Team assessment
• Skill Evaluation
• Leader Assessment

c) Give three straightforward steps to calculating a sustainable price for your product
Answer
There are three straightforward steps to calculating a sustainable price for your product.
1. Add up your variable costs (per product) 2. Consider your profit margin 3. Don’t forget about
fixed costs

d) A business owner may choose any of the transport methods to deliver his product depending
on various factors. Give any two factors
Answer
A business owner may choose any of the transport methods to deliver his product
depending on various factors,such as :
• Time consumed,
• types of goods to be shipped, budget, etc.

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330. What are five common inventory valuation methods?

Answer:

1. First-in, First-out (FIFO) inventory valuation assumes that the first goods purchased are
the first to be used or sold regardless of the actual timing of their use or sale
2. Last-in, First-out (LIFO) inventory valuation assumes that the most recently
purchased/acquired goods are the first to be used or sold regardless of the actual timing of
their use or sale.
3. Average Cost Method of inventory valuation identifies the value of inventory and cost
of goods sold by calculating an average unit cost for all goods available for sale during a
given period of time.
Average Cost = Total Cost of Goods ÷ Total Quantity of Goods Available for Sale
4. Available for Sale Specific Cost Method (also Actual Cost Method) of inventory
valuation assumes that the organisation can track the actual cost of an item into, through, and
out of the facility.
5. Standard Cost Method of inventory valuation

331. What are 4 benefits of Just-in-Time Manufacturing?

332. List 5 Steps of Six Sigma

Answer:
❑ Define
➢ A team of people, led by a Six Sigma expert, chooses a process to focus on and defines the
problem it wishes to solve.
❑ Measure
❑ The team measures the initial performance of the process, creating a benchmark, and
pinpoints a list of inputs that may be hindering performance.

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❑ Analyze
➢ Next the team analyzes the process by isolating each input, or potential reason for any
failures, and testing it as the possible root of the problem.
❑ Improve
➢ The team works from there to implement changes that will improve system performance.
❑ Control
➢ The group adds controls to the process to ensure it does not regress and become ineffective
once again.
333. List 5 objectives of Six Sigma
Answer:

334. What are 7 core principles of Total Quality Management

Answer:

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335. What 12 Key benefits of Total Quality Management

Answer:
1. A stronger competitive position: TQM differentiates organizations by delivering superior
products and services, giving them a competitive edge in the market.
2. Adaptability to changing market conditions and regulations: TQM fosters a culture of
continuous improvement, making organizations agile and responsive to market shifts and
regulatory changes.
3. Higher productivity: TQM optimizes processes and reduces waste, increasing
productivity and efficiency.
4. An enhanced market image: Organizations implementing TQM gain a positive
reputation, building trust and confidence in the market.
5. The elimination of defects and waste: TQM emphasizes defect prevention and waste
reduction, ensuring higher-quality outputs and cost savings. Reduced costs and better
cost management: TQM’s focus on efficiency leads to cost savings and improved
resource management.
6. Higher profitability: TQM’s impact on productivity, cost reduction, and customer
satisfaction contributes to increased profitability.
7. Improved focus on customer satisfaction: TQM prioritizes customer needs, resulting in
products and services that better meet customer expectations.
8. Increased customer loyalty and retention: Satisfied customers are more likely to remain
loyal, leading to long-term customer relationships.
9. Increased job security
10. Improved employee morale
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11. Enhanced shareholder and stakeholder value:

12. Improved and innovative processes
336. What seven original Quality Control tools ?
(a) Histograms
(b) Cause-and-effect diagrams
(c) Check sheets
(d) Pareto diagrams
(e) Graphs
(f) Control charts
(g) Scatter diagrams
337. List 6 factors work together when setting a price for a product or service
Answer:
1. Overhead Costs: This includes all the expenses related to producing a product or providing a
service, such as labor costs, marketing/advertising costs, and shipping costs.
2. Competition: What are other businesses charging for similar products or services in the same
market? Companies should consider their competitors’ pricing structures when setting prices
for their own products and services.
3. Price Sensitivity (Demand Elasticity): How sensitive are customers to changes in prices? If
demand for a product or service decreases too much with an increase in price, it may not be
profitable to charge more.
4. Value Proposition: The value of a product or service should reflect its price.
5. Pricing Strategy: Loss leaders, price skimming, penetration pricing, premium pricing. There
are many different strategies to consider when setting prices for products and services.
6. Product Complexity: Businesses with complex products (e.g., software with multiple
features) may need to consider different pricing models depending on the complexity of their
products. For example, subscription-based pricing or pay-as-you-go plans may be suitable for
software products.

338. Suppose you are a technician at a manufacturing company that produces engine
components for various vehicles. Your company has recently decided to implement Total
Quality Management (TQM) principles to improve product quality and overall efficiency. As
a technician, you play a crucial role in ensuring that TQM practices are effectively integrated
into the manufacturing processes. Your task is to explain to your colleagues how TQM works
and its impact on the company's operations. (a) Explain 7 fundamental principles of TQM.
(b) Provide specific examples from your own work experience to illustrate how TQM
principles can be applied to identify and address quality issues, reduce defects, and enhance
overall performance. (c) Discuss the importance of data-driven decision-making and how
TQM fosters a culture of accountability and teamwork. (d) How can you encourage your
colleagues to actively participate in the TQM implementation process and share their insights
on how to further improve quality and efficiency within the company?

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339. List Four steps to determine the right price for the product.

Answer:

a. Choose a pricing strategy

b. Understand lifetime value (LTV)
c. Choose a pricing model
d. Monitor and adjust the price
340. What are 4 departments that are responsible for product pricing?
Answer:

341. What are 2 types of pricing methods?

342. Assume that the cost of production of product A is Rwf 1,000 with a markup of 50% on
the total cost, determine the selling price of product A.
Answer:
Markup Price = Unit cost x Markup Percentage = 1,000 x 50% = Rwf 500
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Selling Price = Unit cost + Markup Price = 1,000 + 500

Selling Price = Rwf 1,500
343. Assume that the cost of production of product A is Rwf 1,000 and the seller wants to earn
a profit of 20% on sales, Calculate the marked up price?
Answer:

Marked-up Price = Rwf 1,250

344. Assume that the manufacturer has invested Rwf 10,000 in business and is expecting an
ROI of 20% i.e., Rwf 2,000, given that the unit price is Rwf 50 and the target sales is 100
units, determine the target return price.
Answer:
Target Return Price == 50+\frac{0.20\times{10,000}}{100}
=Rwf 70
345. What are 3 stages of the shipping process?
Answer:
❑ Stage 1: Receiving the order
✓ Once you receive an order, you will need to make sure you have enough inventory in stock
to the process the order.
✓ This begins by working closely with your manufacturer or supplier to purchase and receive
inventory at a warehouse or sending inventory to a fulfillment center if you partner with a
third-party logistics (3PL) company.
❑ Stage 2: Processing the order
✓ Processing a customer order refers to the process of verifying order data and making sure
it’s accurate (e.g., verifying the shipping address) and that the items ordered are in stock.
✓ Much of this process is often done using automation and technology, which can help to
speed up the order processing stage.
✓ From there, the order status is updated in real-time and customers can be notified that the
order is being processed.
❑ Stage 3: Fulfilling the order

346. List 7 different Modes of Payments

Answer:
1. Payment using Cash
2. Cheque
3. Telegraphic Transfer or Mail Transfer

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4. Bill of exchange
5. Promissory Note
6. Digital mode of payment
7. Bank Draft as a Modes Of Payment
347. Suppose you are a newly hired product manager at a manufacturing startup company
tasked with pricing a new bearing product targeted at small machinery. The product is a
comprehensive project management tool with features for task assignment, time tracking, and
budget monitoring. Your task is to outline four steps to determine right price of that bearing
as a product produced by the company. Explicate these four steps.
348. You are the production manager at NZJ Ltd, a manufacturing company specializing in the
production of industrial machinery components. The company is considering two different
pricing methods for its products: cost-oriented pricing and market-oriented pricing. As the
production manager, you are tasked with understanding the differences between these two
pricing methods and recommending the most suitable approach for the company's products.
Describe with a help of a neat table the differences between cost-oriented pricing and market-
oriented pricing methods, and explain how each method could impact NZJ Ltd's pricing
strategy and overall business performance. Additionally, outline the potential challenges and
benefits associated with implementing each pricing method in the manufacturing industry,
considering factors such as production costs, market demand, and competitive dynamics.
349. Suppose you are a manager overseeing product pricing strategies, you encounter a scenario
where the cost of production for stepped shaft is Rwf 10,000. The seller aims to achieve a
profit margin of 20% on sales. Your task is to calculate the markup price required to achieve
this profit margin. Calculate the markup price needed to achieve a 20% profit margin on sales
for manufactured stepped shaft, considering the production cost of Rwf 10,000.
350. Widget Ltd is a manufacturing company based in Rwanda that majors in manufacturing
and supplying its products to consumers. Despite the quality of widget product, there is an
issue of satistfying a big number of consumers. The latter is rately increasing. To solve this
issue, the company is considering to rectify the production process. However, to design a new
production process requires to estimate the required budget. As Mechanical Engineering
Technician, you are required to estimate the budget by considering:
✓ Forecasting budget sheet preparation
✓ Salaries
✓ Research and development
✓ Travel costs
✓ Operation expenses
✓ Profit margin
✓ Note: This task is required to be finished within 3 hours, in order to reduce the supplying
cost.
Make a table showing budget
Note: This task is required to be finished within 3 hours, in order to reduce the supplying cost

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Here's a table outlining the estimated budget for Widget Ltd's new production process:

| Item | Estimated Cost (in Rwandan Francs) |

|-----------------------------|-------------------------------------|
| Forecasting Budget Sheet Preparation | 500,000 |
| Salaries | 2,000,000 |
| Research and Development | 1,200,000 |
| Travel Costs | 800,000 |
| Operation Expenses | 3,500,000 |
| Profit Margin (10%) | 2,000,000 |
| *Total Budget* | *10,000,000* |

Please note that the figures provided are estimations and may vary based on specific factors such
as market conditions, technology requirements, and operational efficiency. Additionally, the profit
margin percentage can be adjusted based on the company's financial goals and industry standards.

351. Consider the following problem of project scheduling.

Obtain a schedule which will minimize the peak manpower requirement and smooth out period to
period variation of manpower requirement.

Answer:

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

Shirley Hopkins is developing a program in leadership training for middle-level managers. Shirley
has listed a number of activities that must be completed before a training program of this nature
can be conducted. The activities, immediate predecessors, and times appear in the accompanying

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QUESTIONS RELATED TO PRODUCTION AND OPERATIONS MANAGEMENT

table.

End
May Jah bless you all!!!!!!!!!!!!

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