MBA NEP 2ND SEM IMPORTANT QUESTIONS

PRODUCTION OPERATION MANAGEMENT M-24-MBA-206

UNIT-1
Q.1 WHAT DO YOU MEAN BY PRODUCTION & OPERATION MANAGEMENT DISCUSSS ITS
NATURE & SCOPE IN DETAIL.
Q.2 DISCUSS PRODUCTION SYSTEM IN DETAIL.
Q.3 (A) DETAIL NOTE ON FACILITY/PLANT LOCATION.DISCUSS ITS IMPORTANCE & FACTORS.
(B) DETAIL NOTE ON FACILITY LAYOUT & ITS OBJECTIVES, ADVANTAGES & TYPES.

UNIT-2
Q.4 WHAT DO YOU MEAN BY MATERIAL HANDLING.DISCUSS ITS PRINCIPLES & EQUIPMENTS
IN DETAIL.
Q.5 WHAT DO YOU MEAN BY PRODUCTION PLANNING & CONTROL.DISCUSS ITS ONJECTIVES
& FUNCTIONS IN DETAIL.
Q.6 (A) CAPACITY PLANNING
(B) PRODUCTION PLANNING & SELECTION
Q.7 (A)PROCESS PLANNING
(B) AGGREGATE PLANNING
(C ) MASTER PRODUCTION SCHEDULING

UNIT-3
Q.8 DETAIL NOTE ON MAINTENANCE MANAGEMENT.
Q.9 DISCUSSES WORK STUDY, METHODS STUDY & WORK MEASUREMENT.
Q.10 WRITE A DETAIL NOTE ON MATERIAL MANAGEMENT

UNIT-4
Q.11 WHAT DO YOU MEAN BY INVENTORY MANAGEMENT. DISCUSS ITS OBJECTIVES,
FACTORS&PROCESS OR INVENTORY CONTROL TECHNIQUES IN DETAIL.
Q.12 (A) JUST-IN-TIME
(B) TOTAL QUALITY MANAGEMENT
(C ) ISO-9000
(D) STATISTICAL QUALITY CONTROL
Q.13 (A) PURCHASE MANAGEMENT
(B) STORE MANAGEMENT
(C ) ACCEPTANCE SAMPLING
MBA NEP 2ND SEM IMPORTANT QUESTIONS
PRODUCTION OPERATION MANAGEMENT M-24-MBA-206

UNIT-1
Q.1 WHAT DO YOU MEAN BY PRODUCTION & OPERATION MANAGEMENT DISCUSSS ITS
NATURE & SCOPE IN DETAIL.

Production management deals with decision-making related to production

processes so that the resulting goods or services are produced according to
specifications, in the amount and by the schedule demanded and out of
minimum cost.
Objectives of Production/Operations Management:
Some of the important objectives of production/operations management are:
(i) Maximum customer satisfaction through quality, reliability, cost and
delivery time.
(ii) Minimum scrap/rework resulting in better product quality.
(iii) Minimum possible inventory levels (i.e., optimum inventory levels).
(iv) Maximum utilization of all kinds of resources needed.
(v) Minimum cash outflow.
(vi) Maximum employee satisfaction.
(vii) Maximum possible production (i.e., outputs).
(viii) Higher operating efficiency.
(ix) Minimum production cycle time.
(x) Maximum possible profit or return on investment.
(xi) Concern for protection of the environment.
(xii) Maximum possible productivity.
NATURE OF PRODUCTION/OPERATIONS:
The nature of production or operations can be better understood by viewing
the manufacturing function as :
(i) Production/operations as a system,
(ii) Production/operations as an organizational function,
(iii) Production/operations as a conversion or transformation process and
(iv) Production/operations as a means of creating utility.
These four distinct views are discussed in the following section.
Production/Operations as a System
This view is also known as the “systems concept of production”. A system is
defined as the collection of interrelated entities. The systems approach views
any organization or entity as an arrangement of interrelated parts that
interact in ways that can be specified and to some extent predicted.
Production is viewed as a system that converts a set of inputs into a set of
desired outputs. A production system has the following elements or parts :
(i) Inputs,
(ii) Conversion process or transformation process,
(iii) Outputs
(iv) Transportation subsystem,
(v) Communication subsystem and
(vi) Control or decision-making subsystem.
Production/Operations as a Conversion/Transformation Process
The conversion or transformation sub-system is the core of a production
system because it consists of processes or activities wherein workers,
materials, machines, and equipment is used to convert inputs into outputs.
The conversion process may include manufacturing processes such as
cutting, drilling, machining, welding, painting, etc., and other processes such
as packing, selling, etc. Any conversion process consists of several small
activities referred to as “operations” which are some steps in the overall
process of producing a product or service that leads to the final output.
Production/Operations as a Means of Creating Utility:
Production is defined as the process of adding to the value of outputs or the
process of creating utility in outputs. “Utility” is the power of satisfying
human needs. During the process of converting the raw materials into
finished goods, various types of utilities are created while adding value to
the outputs. These
Types of utilities are:
Form utility:
This is created by changing the size, shape, form, weight, color, the smell of
inputs to make the outputs more useful to the customers. For example, iron
ore is changed to steel, wood is changed to furniture, etc.
Place utility:
This is created by changing the places of inputs or transporting the inputs
from the source of their availability to the place of their use to be converted
into outputs. For example, the iron ore and coal are transported from the
mines to the steel plant to be used in the conversion process.
Time utility:
This is created by storage or preservation of raw materials or finished goods
which are in abundance sometimes so that the same can be used at a later
time when they become scarce due to higher demand exceeding the
quantity available.
Possession utility:
This is created by transferring the possession or ownership of an item from
one person to another person. For example, when a firm purchases materials
from a supplier, the possession utility of the materials will increase when
they are delivered to the buying firm.
Service utility:
Which is the utility created by rendering some service to the customer? For
example, a doctor or a lawyer or an engineer creates service utility to a
client/customer by rendering service directly to the client/customer.
Knowledge utility:
This is created by imparting knowledge to a person. For example, a sales
presentation or an advertisement for some product communicates some
information about the product to the customer, thereby imparting
knowledge.
SCOPE OF PRODUCTION AND OPERATION MANAGEMENT
Production and operations management concern with the conversion of
inputs into outputs, using physical resources, to provide the desired utilities
to the customer while meeting the other organizational objectives of
effectiveness, efficiency, and adaptability. It distinguishes itself from other
functions such as personnel, marketing, finance, etc., by its primary concern
for ‘conversion by using physical resources.’ Following are the activities
which are listed under production and operations management functions:
1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management
8. Maintenance management.
The location of facilities for operations is a long-term capacity decision that
involves a long term commitment to the geographically static factors that
affect a business organization. It is an important strategic level decision-
making for an organization. It deals with questions such as ‘where our main
operations should be based?’
Plant layout refers to the physical arrangement of facilities. It is the
configuration of departments, work centers, and equipment in the conversion
process. The overall objective of the plant layout is to design a physical
arrangement that meets the required output quality and quantity most
economically.
According to James Moore, “Plant layout is a plan of an optimum
arrangement of facilities including personnel, operating equipment, storage
space, material handling equipment and all other supporting services along
with the design of the best structure to contain all these facilities”.
‘Material Handling’ refers to the ‘moving of materials from the storeroom to
the machine and from one machine to the next during the process of
manufacture’. It is also defined as the ‘art and science of moving, packing
and storing of products in any form’. It is a specialized activity for a modern
manufacturing concern, with 50 to 75% of the cost of production.
Product design deals with the conversion of ideas into reality. Every business
organization has to design, develop and introduce new products as a survival
and growth strategy. Developing new products and launching them in the
market is the biggest challenge faced by organizations.
Process design is macroscopic decision-making of an overall process route
for converting the raw material into finished goods. These decisions
encompass the selection of a process, choice of technology, process flow
analysis and layout of the facilities.
Production planning and control can be defined as the process of planning
the production, setting the exact route of each item, fixing the starting and
finishing dates for each item, to give production orders to shops and to follow
up the progress of products according to orders. Planning is deciding in
advance what to do, how to do it, when to do it and who is to do it. Planning
bridges the gap from where we are, to where we want to go. Routing may be
defined as the selection of path which each part of the product will follow,
which is transformed from raw material to finished products. Scheduling
determines the programmer for the operations. Scheduling may be defined
as ‘the fixation of time and date for each operation’ as well as determine the
sequence of operations to be followed.
Dispatching is concerned with starting the processes. It gives the necessary
authority to start a particular work, which has already been planned under
‘Routing’ and ‘Scheduling’.
Quality Control (QC) may be defined as ‘a system that is used to maintain a
desired level of quality in a product or service’. It is a systematic control of
various factors that affect the quality of the product. Quality control aims at
the prevention of defects at the source, relies on an effective feedback
system and corrective action procedure. Quality control can also be defined
as ‘that industrial management technique using which product of uniform
acceptable quality is manufactured’. It is the entire collection of activities
that ensures that the operation will produce the optimum quality products at
minimum cost.
The main objectives of quality control are: To improve the companies income
by making the product more acceptable to the customers i.e., by providing
long life, greater usefulness, maintainability, etc. To reduce companies' costs
through the reduction of losses due to defects. To achieve interchangeability
of manufacture in large scale production. To produce optimal quality at a
reduced price. To ensure the satisfaction of customers with productions or
services or high-quality level, to build customer goodwill, confidence, and
reputation of the manufacturer. To make an inspection prompt to ensure
quality control. To check the variation during manufacturing.
Materials management is that aspect of management function which is
primarily concerned with the acquisition, control, and use of materials
needed and flow of goods and services connected with the production
process having some predetermined objectives in view.
The main objectives of materials management are:
· To minimize material cost.
· To purchase, receive, transport and store materials efficiently and to
reduce the related cost.
· To cut down costs through simplification, standardization, value
analysis, import-substitution, etc.
· To trace new sources of supply and to develop cordial relations with
them to ensure continuous supply at reasonable rates.
· To reduce investment tied in the inventories for use in other productive
purposes and to develop high inventory turnover ratios.
THE SCOPE OF OPERATIONS MANAGEMENT
Operations management has been gaining increased recognition in recent
years because of the following reasons:
(i) The application of operations management concepts in service operations.
(ii) The growing importance of quality.
(iii) The introduction of operation management concepts to other areas such
as marketing and human resources and
(iv) The realization that the operations management function can add value
to the end product.

Q.2 DISCUSS PRODUCTION SYSTEM IN DETAIL.

Production System

The production system of an organisation is that part, which produces products of an

organisation. It is that activity whereby resources, flowing within a defined system, are
combined and transformed in a controlled manner to add value in accordance with the
policies communicated by management. A simplified production system is shown in
diagram.

The production system has the following characteristics:

1. Production is an organised activity, so every production system has an objective.
2. The system transforms the various inputs to useful outputs.
3. It does not operate in isolation from the other organisation system.
4. There exists a feedback about the activities, which is essential to control and improve
system performance.

Classification of Production Function

Production systems can be classified as Job Shop, Batch, Mass and Continuous Production
systems.

JOB-SHOP PRODUCTION
Job shop production are characterised by manufacturing of one or few quantity of products
designed and produced as per the specification of customers within prefixed time and cost.
The distinguishing feature of this is low volume and high variety of products.
A job shop comprises of general purpose machines arranged into different departments. Each
job demands unique technological requirements, demands processing on machines in a
certain sequence.

Characteristics
The Job-shop production system is followed when there is:
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each product, capacities
for each work centre and order priorities.

Advantages
Following are the advantages of job shop production:
1. Because of general purpose machines and facilities variety of products can be produced.
2. Operators will become more skilled and competent, as each job gives them learning
opportunities.
3. Full potential of operators can be utilised.
4. Opportunity exists for creative methods and innovative ideas.

Limitations
Following are the limitations of job shop production:
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.

BATCH PRODUCTION
Batch production is defined by American Production and Inventory Control Society
(APICS) “as a form of manufacturing in which the job passes through the functional
departments in lots or batches and each lot may have a different routing.” It is characterised
by the manufacture of limited number of products produced at regular intervals and stocked
awaiting sales.

Characteristics
Batch production system is used under the following circumstances:
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the production of item in a batch and change
of set up is required for processing the next batch.
4. When manufacturing lead time and cost are lower as compared to job order production.

Advantages
Following are the advantages of batch production:
1. Better utilisation of plant and machinery.
2. Promotes functional specialisation.
3. Cost per unit is lower as compared to job order production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of products.
6. Job satisfaction exists for operators.

Limitations
Following are the limitations of batch production:
1. Material handling is complex because of irregular and longer flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to continuous production.
4. Higher set up costs due to frequent changes in set up.

MASS PRODUCTION
Manufacture of discrete parts or assemblies using a continuous process are called mass
production. This production system is justified by very large volume of production. The
machines are arranged in a line or product layout. Product and process standardisation exists
and all outputs follow the same path.

Characteristics
Mass production is used under the following circumstances:\
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

Advantages
Following are the advantages of mass production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.

Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.

CONTINUOUS PRODUCTION
Production facilities are arranged as per the sequence of production operations from the first
operations to the finished product. The items are made to flow through the sequence of
operations through material handling devices such as conveyors, transfer devices, etc.

Characteristics
Continuous production is used under the following circumstances:
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.

Advantages
Following are the advantages of continuous production:
1. Standardisation of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilisation due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.

Limitations
Following are the limitations of continuous production:
1. Flexibility to accommodate and process number of products does not exist.
2. Very high investment for setting flow lines.
3. Product differentiation is limited.

Q.3 (A) DETAIL NOTE ON FACILITY/PLANT LOCATION.DISCUSS ITS IMPORTANCE & FACTORS.

Meaning of Facility Location

Facility or Plant location means determining where the plant should be located for getting
maximum economic benefits and effectiveness. In simple words, the area or location where the
firm set up its plant is called a plant location. It is an important decision in the case of new
entrepreneurs. Economic benefits like cheep & quality raw material, transport availability, near
to market, good man power, etc.
IMPORTANCE OF PLANT LOCATION
1.) Nature and size of business
2.) Production technology and cost structure
3.) Customer Service
4.) Competition
5.) Physical factors

1.) Nature and size of business

Plant location depends on the size or nature of the plant. A small-scale firm normally selects the
location near to the market because if they don't like the location later on then they can relocate.
But for a big company, the amount of investment is large. So, they have to be very careful will
locating the location.

2.) Production technology and cost structure

The location of the plant will decide the type of production technology management adopt and
the structure of cost. For example - If management installs its plant in an underdeveloped
country, they will choose a labor-intensive process to take benefit of the availability of low-cost
labor.

3.) Customer Service

The location of the plant affects the company's ability to serve its customer quickly and speedily.
For example - In case of dairy milk products that are delivered on daily basis to their customers.
In this case, the location of the plant must be near to delivered the milk products on time.

4.) Competition
The importance of plant location decisions also helps the company to take a competitive
advantage. An optimum location that reduces the transportation cost, available to the near
market, having low labor cost, etc. always gives the company an advantage as compared to its
competitor.

5.) Physical factors

One another importance of plant location decisions is that it helps the company to look over the
other aspects also.
For example - heating, ventilation requirements, disposal of company waste properly, etc.

PLANT LOCATION AND FACTORS DETERMINING PLANT LOCATION

Every business is facing the issue of selecting the suitable location for their
factory plant. Units concerning both manufacturing as well as the assembling
of the products are on a very large scale affected by the decisions involving
the location of the plant.

FACTORS AFFECTING PLANT LOCATION

Decisions regarding selecting a location need a balance of several factors.
The factors can influence the business in the long run.
1.NEARNESS TO RAW MATERIEL
Source of raw materials is one of the most important factors influencing the
selection of a plant site. This is particularly true if large volumes of raw
materials are consumed because location near the raw materials source
permits considerable reduction in transportation and storage charges.
Attention should be given to the purchased price of the raw materials,
distance from the source of supply, purity of raw material, availability
storage requirements.
2. NEARNESS TO MARKETS
If the plant is located near to the market, reduces the cost of transportation
as well as the chances of the finished products getting damaged and spoiled
in the way. Moreover a plant being near to the market can a big share of the
market and can render quick service to the customers Industries pong
perishable or fragile commodities are also attracted towards the market
because on savings in time and transportation costs. Industrial units have a
tendency to disperse if market for their products.
3. AVAILABILITY OF WORK FORCE
Service organizations and labour-intensive Industries are extremely sensitive
to the availability, the skill level and the pay rate of the workforce in recent
times low wage rates and non-union deals have caused some manufacturers
to change location Single union deals have also helped to locate facilities
previously they had not existed.
4. AVAILABILITY OF FUEL AND POWER
Because of the wide spread use of electrical power the availability of fuel or
gas has not remained a deciding factor in most of the cases for plant
location. The location of thermal power plants (like Bokhara Thermal Plant)
and steel plants near coal fields are for cutting down cost of the fuel
transportation. The reliability of continuous supply of these facilities is an
important factor.
5. AVAILABILITY OF WATER
Water is another important requirement for industries. Many industries are
established near rivers, canals and lakes, because of this reason. Iron and
steel industry, textile industries and chemical industries require large
quantities of water, for their proper functioning.
Significance of water in industry is evident from Table 27.3. Also it requires
36,400 liters of water to produce one kWh of thermal electricity. Further, it is
worth noting that water used in industries gets polluted and is therefore not
available for any other purpose.
6.TRANSPORTATION FACILITY
Transport facilities, generally, influence the location of industry. The
transportation with its three modes, i.e., water, road, and rail collectively
plays an important role. So the junction points of water-ways, roadways and
railways become humming centres of industrial activity. Accordingly the
plant location is decided Transportation costs depend mainly on the weight
carried and the distance to be covered In some industries.
7. COMMUNICATION FACILITIES
Every business firm requires every type of business information regarding
the position of labor, market, raw materials and finished goods. These
information can be collected and distributed only if there is adequate
communication facilities As communications facilities are not adequately
available in rural areas, industries are very much reluctant to start their
business there.
8. CLIMATIC CONDITIONS
Climate conditions also influence the location decision. Some industries need
special type of climate to run the unit effectively. Scientific development and
new inventions have lowered down the importance of the factor. So due to
the development of artificial humidification, cotton textile industry can now
be started in any region of the county. Climate is more important for
agricultural product like tea, coffee, rubber, cotton etc. even today.
9.GOVERNMENT POLICY
Government plays an important role on the location of industry. In India
Government follows the policy of balanced regional growth of the country.
In order to implement this policy, Government offers several incentives to
entrepreneurs to industrial units in backward regions or no-industry regions.
It offers tax concessions or loan facilities or factory sheds at cheaper
rates. Sometimes Government announces certain disincentives to industries
located at a certain place.
10. CHARACTERISTICS OF THE LAND
Site requirements for industrial development are of considerable
significance. Sites, generally, should be flat and well served by adequate
transport facilities. Large areas are required to build factories. The factors
like shape of the site, cost, drainage the probability of floods and possibility
of earthquakes also influence the selection of plant location. Before selecting
a plant site, the regional history of natural events of this type should be
examined and the consequences of such occurrences considered.
11.WASTE DISPOSAL
In recent years, many legal restrictions have been placed on the methods for
disposing of waste materials from the process industries. The site selected
for a plant should have adequate capacity and facilities for processing waste
disposal. Even though a given area has minimal restrictions on pollution, it
should not be assumed that this condition would continue to exit. In choosing
a plant site, the permissible tolerance levels for various methods of waste
disposal should be considered carefully, and attention should be given to
potential requirements for additional waste treatment facilities.
12.COMMUNITY ATTITUDE
Success of Industry depends very much on the attitude of local people and
whether they want to work or not.
13. SECURITY
Considerations like law and order situation, political stability and safety also
influence the location decision. No entrepreneur will like to start the industry
at a place which is not safe and where there are law and order disturbances
off and on.
14. MOMENTUM OF AN EARLY START
Already established industry in a certain area will produce skilled labor in
that trade. Thus future industries in that area will have no difficulty with
respect to the skilled labor e.g. Ludhiana is famous for cycle industries and
Faridabad for engineering industries.
15. PERSONAL PREFERENCES
Personal preferences and prejudices of an entrepreneur also play an
important role in the choice of location. Economic consideration does not
weight much.
16. CULTURAL FACILITIES
Cultural facilities of the community are important to sound growth.
Churches, libraries, schools, civic theaters, concert associations, and other
similar groups, if active and dynamic, do much to make a community
progressive. The problem of recreation deserves special consideration. The
efficiency, character, and history of both state and local government should
be evaluated.

(B) DETAIL NOTE ON FACILITY LAYOUT & ITS OBJECTIVES, ADVANTAGES & TYPES.

ANS. Introduction
For an organization to have an effective and efficient manufacturing unit, it is important that special
attention is given to facility layout.
Facility layout is an arrangement of different aspects of manufacturing in an appropriate manner
as to achieve desired production results. Facility layout considers available space, final product, safety
of users and facility and convenience of operations.
An effective facility layout ensures that there is a smooth and steady flow of production material,
equipment and manpower at minimum cost. Facility layout looks at physical allocation of space for
economic activity in the plant. Therefore, main objective of the facility layout planning is to design effective
workflow as to make equipment and workers more productive.
Facility Layout Objective
A model facility layout should be able to provide an ideal relationship between raw material, equipment,
manpower and final product at minimal cost under safe and comfortable environment. An efficient and
effective facility layout can cover following objectives:
 To provide optimum space to organize equipment and facilitate movement of goods and to create
safe and comfortable work environment.
 To promote order in production towards a single objective
 To reduce movement of workers, raw material and equipment
 To promote safety of plant as well as its workers
 To facilitate extension or change in the layout to accommodate new product line or technology
upgradation
 To increase production capacity of the organization
An organization can achieve the above-mentioned objective by ensuring the following:
 Better training of the workers and supervisors.
 Creating awareness about of health hazard and safety standards
 Optimum utilization of workforce and equipment
 Encouraging empowerment and reducing administrative and other indirect work

Factors affecting Facility Layout

Facility layout designing and implementation is influenced by various factors. These factors vary from
industry to industry but influence facility layout. These factors are as follows:
  The design of the facility layout should consider overall objectives set by the organization.
 Optimum space needs to be allocated for process and technology.
 A proper safety measure as to avoid mishaps.
 Overall management policies and future direction of the organization

Design of Facility Layout

Principles which drive design of the facility layout need to take into the consideration objective of facility
layout, factors influencing facility layout and constraints of facility layout. These principles are as follows:
 Flexibility: Facility layout should provide flexibility for expansion or modification.
 Space Utilization: Optimum space utilization reduces the time in material and people movement
and promotes safety.
 Capital: Capital investment should be minimal when finalizing different models of facility layout.

Design Layout Techniques

There are three techniques of design layout, and they are as follows:
1. Two or Three Dimensional Templates: This technique utilizes development of a scaled-down
model based on approved drawings.
2. Sequence Analysis: This technique utilizes computer technology in designing the facility layout by
sequencing out all activities and then arranging them in circular or in a straight line.
3. Line Balancing: This kind of technique is used for assembly line.

Types of Facility Layout

There are six types of facility layout, and they are as follows:
 Line Layout
 Functional Layout
 Fixed Position Layout
 Cellular Technology Layout
 Combined Layout, and
 Computerized Relative Allocation of Facility Technique

UNIT-2
Q.4 WHAT DO YOU MEAN BY MATERIAL HANDLING.DISCUSS ITS PRINCIPLES & EQUIPMENTS
IN DETAIL.
Material Handling
Material handling is the movement of materials and goods from one location to another. It
includes protecting, storing, and controlling the materials, from manufacturing to
distribution.
Material handling can be used across industries, but is typically utilized in warehousing,
where goods need to be securely stored, retrieved, and shipped.
Material handling equipment utilizes manual, semi-automated, and automated equipment to
assist the movement and storage of materials within the warehouse.
Types of Material Handling Equipment
Material handling equipment is grouped into four main categories: storage and handling,
bulk material, industrial trucks and engineered systems. Let’s take a look at each
one.
1. Storage and Handling Equipment
Storage and handling equipment secures your goods while they aren’t being used or waiting
for the next stage in the supply chain process.
Storage and handling equipment can keep materials for short or long periods of time,
depending on your warehouse’s needs.
Storage and handling equipment includes:
 Pallet racks: Vertical structures made of steel framing with connectors and beams to store
products
 Shelves, bins and drawers: Shelves, drawers and bins within shelving units store smaller
materials.
 Mezzanines: Wooden, steel or fiberglass raised platforms that create additional storage
 Stacking frames: Equipment that stores and stacks numerous pallets and racks
2. Bulk Handling Material Equipment
Bulk handling material equipment stores, controls and transports loose form materials in
large quantities.
Loose form materials can include liquid, food and minerals, such as stones and rocks, and
metal items, such as bolts and nails.
Bulk handling equipment includes:
 Conveyor belts: Two or more belts and pulleys to transport products from one location to
another
 Stackers: Equipment that loads and unloads heavy materials and places them onto stockpiles
or storage for bulk materials
 Reclaimers: Reclaimers are used to pick out materials from stockpiles
 Bucket elevators: Designed for handling and lifting large amounts of bulk materials through
the system
 Hoppers: Funnel-shaped equipment used to dump or pour loose form materials into
containers
3. Industrial Trucks
Industrial trucks are vehicles that transport goods and materials within your warehouse and
are also utilized to load or unload heavy objects.
There are several different types of industrial trucks. Some have forks or a flat surface to lift
products, while others need additional equipment for lifting. Industrial trucks can range from
small, hand-operated machines to large, drivable equipment.
Industrial trucks include:
 Forklifts: Industrial trucks that raise and lower goods in short distances
 Hand trucks: Also called dollies, industrial trucks are manually pushed by hand and consist of
two wheels and a small ledge to carry goods
 Pallet Trucks: Also known as pallet jacks, pallet trucks are designed to lift and move pallets
 Sideloaders: Industrial trucks that go through narrow aisles, and load and unload goods from
the machine’s sides
 Order pickers: These machines safely lift operators, allowing them to access hard-to-reach
materials on high shelves
4. Engineered Systems
Engineered or automated systems are solutions that incorporate technology supported by
computers and robots to store and transport goods
An automated system is generally made out of several units, controlled by a management
software application.
Engineered systems include:
 Autonomous mobile robots (AMRs): Sophisticated robots that navigate their environment
independently, without the need for human intervention
 Automated storage and retrieval systems (AS/RS): Computer-controlled solutions that
keep and retrieve goods in the warehouse
 Automated guided vehicles (AGVs): Guided robots that require a human operator to
navigate their environment
This is where Modula comes in. At Modula, we provide the most advanced
automated storage and retrieval systems to increase productivity and accuracy
throughout your warehouse.
Our Vertical Lift Modules, Horizontal Carousels and Order Picking Solutions are designed to
optimize space, reduce errors and speed up operations to create a seamless material
handling process, from start to finish — more on this below!
GF MACHINING SOLUTIONS: Vertical Storage Units Fully Integrated with ERP and
Modula WMS.
Benefits of Material Handling
An effective material handling system allows your company to have the necessary stock in
smaller spaces where possible, reduce time spent on internal operations (such us transport
and picking), control inventory in real-time, reduce operational costs and optimize the
overall flow of goods in your facility.
From preventing workplace accidents to saving you money, here are four reasons why
material handling is key to implement in your warehouse.
1. Prevents Workplace Accidents
According to a recent survey, overexertion is the most disabling United States workplace
accident in 2021, with falls and being struck by an object ranking second and third,
respectively.
With materials handling systems and the proper equipment, employees aren’t required to
lift heavy items and reach high storage areas.
2. Improves Employee Satisfaction
Job discomfort causes frustration, low morale and loss of motivation in employees.
By utilizing materials handling systems, employees are released from labor-intensive (for
example, lifting heavy items) and monotonous tasks that will help them reduce stress levels
and achieve overall satisfaction with work.
3. Increases Productivity and Efficiency
Want your employees to focus on more pressing tasks such as quality control assurance?
Material handling equipment can help your employees transport, locate, and pick inventory,
allowing them to be more competent and productive with other tasks.
4. Saves You Money
According to a 2019 report, the worldwide expenditure of warehousing companies is tallied
at a whopping €300 billion each year.
To prevent spending more on equipment damage, invest in quality solutions and educate
your employees on the proper equipment maintenance

The 10 Principles of Material Handling

 Planning Principle
The planning principle states that all material handling operations should be the results of a
deliberate plan. The performance objectives, the need of the operation and the functional
specification should be defined from the very beginning.
 Standardisation Principle
The standardisation principle of material handling believes that all methods, equipment,
controls, and software should be standardised within the limits of achieving the performance
objectives. This should not sacrifice the needed flexibility, modularity or throughput.
 Work Principle
The work principle of material handling believes that material handling work should be
minimised without hindering productivity or the service level requires for the operation.
 Ergonomic Principle
The capability of humans and limitations should be recognised and respected. This should be
considered when designing the material handling tasks and equipment in order to ensure a safe
and effective operation.
 Unit Load Principle
This principle of material handling requires all unit loads to be appropriately sized. They should
also be configured to achieve the material for and the objectives at each stage in the supply
chain.
  Space Utilisation Principle
Space Utilisation requires all available space is used effectively and efficiently.
 System Principle
The system principle states that all material movement and storage activities should be
integrated to form a coordinated operational system. This should include the following things.
 Receiving
 Inspection
 Storage
 Production
 Assembly
 Packaging
 Unitising
 Order Selection
 Shipping
 Transportation
 Handling of returns
 Automation Principle
Wherever possible, all material handling operations should be mechanised or automated. This
improves operational efficiency, increased responsiveness, improved consistency, predictability
and decreases operational costs and/or potentially unsafe manual labor.
 Environmental Principle
The environmental principle of material handling believes that all environmental impact and
energy consumption should be considered when designing or selecting alternative equipment
and material handling systems.
 Life Cycle Cost Principle
Finally, a thorough economic analysis should account for the entire lifecycle of all material
handling equipment and resulting systems.

Q.5 WHAT DO YOU MEAN BY PRODUCTION PLANNING & CONTROL.DISCUSS ITS ONJECTIVES
& FUNCTIONS IN DETAIL.
Production planning and control allows manufacturers to
effectively generate a production plan, execute it, and ultimately take
control of their operations through continuous improvement initiatives.
As these processes are related, production planning and production
control need to be integrated together in order to be executed
effectively. In this blog, we are going to discuss the overall objectives
of production planning and control and why the implementation of an
advanced planning and scheduling (APS) software is essential.

Objectives of Production Planning

and Control
The overall objectives of production planning and control include the
following:
 Continuous Flow of Production
 One of the primary objectives of production planning and control is the continuous flow
of production through the production facility. Continuous flow and process improvement
is one of the integral concepts of lean manufacturing, six sigma, and overall production
enhancement. Production planning and control will attempt to achieve a smooth and
continuous production process by eliminating bottlenecks and waste from your facility,
which allows you to take your production to the next level in terms of productivity.
 Planned Requirements
 The production planning component of production planning and control is essential to
ensure that your production facility has what it needs, in the right amount, at the right
time. Having a production plan ensures that you have enough material, machines, tools,
equipment, and manpower to perform the work.
 Optimal Inventory Levels
 Inventory is often considered to be wasteful within manufacturing operations. This is
because inventory-related costs are some of the largest incurred for many operations.
This is why you should aim to reduce inventory levels as much as you can to adequately
cut costs within your operations. Production planning and control plans and executes
the processes that allows a consistent flow of production to ultimately come closer to JIT
(just-in-time) manufacturing and reducing inventory levels within manufacturing
operations.
 Increased Productivity
 Increased productivity is another substantial objective within production planning and
control. Production planning and control ultimately aims to increase productivity
through efficiency enhancement while also being economical. Increased productivity is
successfully achieved through optimizing the use of existing production resources and
labor resources while eliminating wastage/spoilage of materials.
 Customer Satisfaction
 All companies want to increase customer satisfaction. This is because demand is driven
by customers and happy customers means more business in the future. Having
defective products and having delays in shipment days will only be harmful to the
company. Production planning and control focuses primarily on ensuring that the
manufacturing process successfully completes orders on time and reducing lead times.
This ensures that customer orders are fulfilled on time and within a short time frame
and will improve customer satisfaction with your company.
Functions of Production Planning and Control?
The listed pointers of PPC all contribute towards making a production chain
efficient while keeping the company on a revenue-generating path. These
core functionalities need to work in an optimized manner to ensure that
there are no last-minute errors in the end-to-end process.
1. Material Management One key aspect of PPC is deciding on the quantity of
raw material required in conjunction with the production timeline. Finalizing
the material quota helps a company reduce wastage, minimize inventory
fallacy, and cut down on costs related to resources & workforce involved.
Handling material management directly correlates with enterprises never
running out of stock and subsequently enabling other factions of the supply
chain to work fluently.
2. Equipment :It’s one thing having an infrastructure but another to warrant that
your equipment complies with your daily production scale. This step includes
analyzing equipment downtime issues so that the company prepares itself for
any potential bottlenecks during manufacturing. An enterprise keeping a tab
on regular maintenance of its machines keeps them safeguarded against any
 unwarranted breakdown which might halt the usual workflow of their
operation. The safety & upkeeping of the machinery involved guarantees
rewarding output.
3. Production Method: Citing the resources available to a company, from the
workforce to the economy of its daily proceedings, an organization should
choose the best method suited to its revenue. When finalizing a production
blueprint, management should look for a flexible application that is robust in
the face of varied customer demands and can overcome the constraints
without any effect on the other cyclic tasks. Implementing production
planning and scheduling software can minimize the efforts by enabling
cooperation amongst stakeholders & supply chain processes.
4. Manufacturing Routing: Akin to the production method, manufacturing
routing ensures that the raw material gets shaped into finished goods without
any wastage, improper utilization of resources, or any excessive steps
leading to an elongated timeline. In simplistic definition, routing's essential
goal is finalizing unprocessed material into a final product with negligible to
zero interruptions.
5. Time Estimation :Which process is taking how long forms the crux of the end-
to-end supply chain functioning. While quantifying the efficacy of any
operation involved, management has to look at the duration estimated in
context with the actual timeline utilized to determine the effectiveness of the
manufacturing procedure. A company conducts extensive analysis to
establish key markers to gauge the methods' contribution.
6. Evaluation: The subsequent stage in the functions of production planning and
control is evaluation. This action grades the productivity metric of the
manufacturing function & cites the areas of improvement, if any. Timely
evaluation helps a company establish an efficient framework & be proactive
in its production chain.

Apart from the usual functions of PPC, a few other measures are taken
into account to bookend a comprehensive process. The coined
mechanism is Corrective action, which involves Expediting &
Replanning.
7. Expediting: This step refers to the operational data collection, which is then
compared to the ideated manufacturing plan. If any deviations are recorded,
corrective measures are taken into account to get back to the outline, which
benefits the organization.
8. Replanning :Replanning, in simple layperson's terms, can be defined as a
backup plan for expediting; if in case the plan suggested to correct the
deviation is not practical, then whole replanning is required to avoid all the
critical errors which were found during the application of the primary
planning.

Q.6 (A) CAPACITY PLANNING

Capacity planning is the process of determining the production capacity
needed by an organization to meet changing demands for its products. In
the context of capacity planning, design capacity is the maximum amount
of work that an organization is capable of completing in a given period.

6 Steps in Capacity Planning Process

Effective capacity planning involves the assessment of existing capacity

and the identification of later requirements. It also includes developing
plans to ensure that sufficient resources are available when needed.
The steps involved in capacity planning are:
 Assessing current production capacity
 Determining future requirements
 Planning for anticipated growth
 Meeting current and future demand
 Reviewing and adjusting plans as needed
 Celebrating success!
1. Assessing current capacity
It is the first step in any capacity planning process. Next, you need to
understand what resources you have at your disposal and how they’re
currently used in resource planning. This can include everything from
people and equipment to office space and data storage.
2. Determining later requirement
It may seem daunting, but planning for growth is essential. Whether your
business is expanding or anticipating more traffic on your website, you
need to know what capacity you’ll need down the road.
3. Planning for anticipated growth
It is essential, but it’s also important to be realistic about potential needs.
It’s better to overestimate than underestimate, so don’t be afraid to think
big!
4. Meeting current and future demand.
It is the ultimate goal of capacity planning. Of course, you want to ensure
you have enough resources available at all times, but it’s also important
not to waste money on excess capacity.

5. Reviewing and adjusting plans

Reviewing and adjusting plans as needed will help your business grow
steadily instead of haphazardly. No matter what kind of changes come up
— whether they’re related to growth or anything else — you should
always be willing and able to adapt!
6. Celebrating success
It may seem like an odd part of a process that requires so much focus and
attention, but everyone deserves recognition after doing such hard work.
Whether this means throwing a party for employees, taking time off with
family, or rewarding yourself another way, don’t forget to pause and
appreciate all you’ve accomplished!
Capacity Planning
The production system design planning considers input requirements, conversion process and output.
After considering the forecast and long-term planning organization should undertake capacity planning.
Capacity is defined as the ability to achieve, store or produce. For an organization, capacity would be
the ability of a given system to produce output within the specific time period. In operations,
management capacity is referred as an amount of the input resources available to produce relative output
over period of time.
In general, terms capacity is referred as maximum production capacity, which can be attained within a
normal working schedule.
Capacity planning is essential to be determining optimum utilization of resource and plays an important
role decision-making process, for example, extension of existing operations, modification to product lines,
starting new products, etc.
Strategic Capacity Planning
A technique used to identify and measure overall capacity of production is referred to as strategic
capacity planning. Strategic capacity planning is utilized for capital intensive resource like plant,
machinery, labor, etc.
Strategic capacity planning is essential as it helps the organization in meeting the future requirements of
the organization. Planning ensures that operating cost are maintained at a minimum possible level without
affecting the quality. It ensures the organization remain competitive and can achieve the long-term growth
plan.
Capacity Planning Classification
Capacity planning based on the timeline is classified into three main categories long range, medium
range and short range.
1. Long Term Capacity: Long range capacity of an organization is dependent on various other
capacities like design capacity, production capacity, sustainable capacity and effective capacity.
Design capacity is the maximum output possible as indicated by equipment manufacturer under ideal
working condition.
Production capacity is the maximum output possible from equipment under normal working condition
or day.
Sustainable capacity is the maximum production level achievable in realistic work condition and
considering normal machine breakdown, maintenance, etc.
Effective capacity is the optimum production level under pre-defined job and work-schedules, normal
machine breakdown, maintenance, etc.
2. Medium Term Capacity: The strategic capacity planning undertaken by organization for 2 to 3 years
of a time frame is referred to as medium term capacity planning.
3. Short Term Capacity: The strategic planning undertaken by organization for a daily weekly or
quarterly time frame is referred to as short term capacity planning.

Goal of Capacity Planning

The ultimate goal of capacity planning is to meet the current and future level of the requirement at a
minimal wastage. The three types of capacity planning based on goal are lead capacity planning, lag
strategy planning and match strategy planning.
Factors Affecting Capacity Planning
Effective capacity planning is dependent upon factors like production facility (layout, design, and location),
product line or matrix, production technology, human capital (job design, compensation), operational
structure (scheduling, quality assurance) and external structure ( policy, safety regulations)
Forecasting v/s Capacity Planning
There would be a scenario where capacity planning done on a basis of forecasting may not exactly
match.
 For example, there could be a scenario where demand is more than production capacity; in this
situation, a company needs to fulfill its requirement by buying from outside.
 If demand is equal to production capacity; company is in a position to use its production capacity to
the fullest.
 If the demand is less than the production capacity, company can choose to reduce the production or
share it output with other manufacturers.

(B) PRODUCTION PLANNING & SELECTION

Production planning is the backbone of a smooth manufacturing
process. It’s the roadmap that organizes resources, timelines, and
tasks to keep manufacturing on track and teams in sync. This
coordination helps you meet demand, avoid waste, and keep costs
down.
A strong production plan answers questions like “what,” “when,”
and “how much” to produce. And knowing what you’ll be
manufacturing gives teams the time to ensure that all the right
pieces — from raw materials to machinery or team members — are
in place when needed. With a strong understanding of what your
team needs to accomplish, you can continue to meet customer
demand, even when things don’t go perfectly to plan. You want to
maximize efficiency while leaving room for enough flexibility to
handle surprises, like equipment malfunctions or supplier delays.
The production planning process generally follows five steps:
1. Analyzing demand to know how much to produce.
2. Assessing production capacity to know how much you can
produce.
3. Creating a master production schedule to meet demand.
4. Dividing tasks across teams to keep production moving.
5. Continuously monitoring progress to stay on track.
Benefits of production planning
When you get production planning right, the benefits can be game-
changing. Here are a few ways a solid plan works wonders for your
business.
Boosts efficiency
Think of a production plan as a strategy that helps you stay on top
of everything. By knowing exactly when materials are needed,
workers are scheduled, and machines are available, you eliminate
unnecessary delays. Everything runs smoother, and your team can
focus on what matters most: getting the job done.
Optimizes resource use
No one enjoys feeling like they’re wasting time or materials. With a
clear production planning process, you manage resources more
effectively. That means fewer stockouts, less overordering of raw
materials, and fewer people standing around waiting for something
to do.
Cuts down on waste
We’ve all seen how quickly inventory can pile up, and you know that
excess stock means extra costs. A good production plan
keeps inventory levels in check by ensuring you’re only ordering and
manufacturing what’s necessary. This helps you avoid
overproduction and minimize waste — so you’re saving both money
and space.
Increases flexibility
Even the best-laid plans can have a few hiccups. The beauty of
production planning is that it makes it easier to adjust when things
go wrong. Whether it’s a surprise surge in demand or employees
taking sick days, having a plan means you’re better prepared to
respond quickly without throwing everything off.
Improves customer satisfaction
At the end of the day, your customers want their orders on time,
and a solid production plan helps you deliver. By keeping everything
running smoothly, you avoid late shipments, surprise shortages, and
quality issues — all of which lead to happier customers and more
repeat business.
Types of production planning
Depending on your business needs, your production plan will differ,
but the goal remains the same: smooth operations, minimal delays,
and meeting customer demand. Here’s a look at five key types of
production planning and how they keep things moving.
Batch production planning
If you’re producing items in groups or batches — like seasonal
goods, food products, or anything that needs specific quantities at
once — planning for batch manufacturing is your go-to strategy.
This method involves organizing production in stages, allowing you
to group similar products, and it ensures each batch is timed just
right, maximizing efficiency and reducing waste.
It’s important to forecast demand accurately to stay on track while
avoiding overproduction or stockouts. Leveraging inventory
management software helps you keep a close watch on raw
materials and finished goods, balancing supply with demand.
Flow production planning
Flow production planning is ideal for high-volume, repetitive
production where items move continuously through the assembly
line. The goal is to keep things moving smoothly with minimal
downtime. Think about mass production facilities, like auto
manufacturing, where every step of the process happens in sync.
This type of planning relies on precise supply chain production
planning to keep raw materials available, reducing delays and
ensuring steady output.
Here, optimizing your layout is key to preventing bottlenecks, and
regularly assessing both workforce and equipment efficiency can
maintain a seamless flow. A solid production plan ensures that each
stage flows perfectly from one to the next, steadily pacing
production.
Process manufacturing planning
If your business involves chemical processes, food production, or
pharmaceutical goods, process manufacturing planning is the key to
success. Unlike discrete manufacturing, where parts are assembled
separately, this planning focuses on products that are blended or
transformed during production.
The production planning process here requires a careful balance of
materials and timing to prevent interruptions while meeting strict
quality and safety standards. Accurate forecasting is crucial to
ensure you have the right materials on hand, and automation can
streamline repetitive processes, minimizing human error and
boosting efficiency.
Mass production planning
Mass production planning is all about producing large quantities of
identical items efficiently. Think of assembly lines in factories, where
every product follows the same process to minimize errors and
increase speed. The production plan in this model is tightly
structured, focusing on maintaining constant production cycles and
reducing downtime to meet high demand at low cost.
To keep operations running smoothly, it’s important to implement
lean manufacturing principles, like eliminating waste. Regular
monitoring of machine performance and ensuring a reliable supply
of raw materials will also help minimize unplanned downtime.
Job production planning
When you need to create customized products — like bespoke
furniture, specialty machinery, or one-off projects — job production
planning takes center stage. Here, each product is treated like a
unique job with its own timeline and resource allocation. The
production planning process ensures that you have everything in
place for each job, from materials to manpower.
While this method offers flexibility, it requires a personalized
approach to ensure everything runs smoothly. Regular
communication and careful tracking of timelines are essential to
avoid delays. Using project management tools also helps track
resources, monitor costs, and ensure that each unique job stays on
schedule.
The selection process involves evaluating job candidates’ skills, competencies, and
experience to identify the most qualified individuals for the role and the organization.
The selection starts once a job opening is advertised and candidates flow in. The
process follows a funnel structure, starting with multiple applicants and progressively
narrowing down the candidate pool through interviews and assessments until the best fit
for the role is found.
It typically includes the following seven stages, which we will cover in more detail later:
1. Application
2. Screening & pre-selection
3. Interview
4. Assessment
5. References and background check
6. Decision
7. Job offer & contract

Importance of a strategic selection

process
Organizations usually have some type of hiring procedures in place that they may or
may not consistently follow. However, having a well-thought-out strategy for the process
helps you not just fill each vacancy but also contribute to the lasting success of the
business.
A strategic selection process offers the following advantages:
 Supporting long-term organizational goals: Incorporating strategic objectives into
candidate selection systems puts the focus on finding individuals with the skills,
experience, and mindset to carry out what the organization is aiming for currently and in
the future. For example, a company that is rapidly growing or facing a merger can look
for candidates with attributes such as resilience and adaptability, which indicate the
ability to successfully navigate change and uncertainty.
 Creating a positive candidate experience: A structured, consistent selection process
helps candidates know what to expect. You can inform them of the forthcoming steps, so
they feel in the loop and gauge what’s coming next. Holding candidates’ interest and
providing a positive experience can make all the difference in convincing top talent to
work for you. According to a PwC study, 49% of job seekers in highly competitive fields
claimed to have rejected a job offer due to a bad experience in the hiring process.
 Ensuring job and culture fit: Evaluating candidates on more than just their knowledge
and specialized skills helps identify who will thrive in the position and work environment.
For instance, someone with the ideal technical expertise yet prefers to work alone may
 not do well in an organization that functions in teams with shared tasks and constant
collaboration.

Starbucks provides a clear picture of its culture and values on its career page. This gives
potential employees a better idea of what Starbucks would expect from them and the
type of atmosphere they’d be working in.
 Boosting employee performance and satisfaction and reducing turnover rates:
Effective candidate vetting and selection produces a stronger likelihood that new hires
will be the right fit, perform well, and find contentment in their positions. Not only will they
be productive and contribute to business success, but they are also apt to stay with the
company longer.
 Building a competitive advantage: A thorough and strategic selection process can
support an organization’s competitive advantage by bringing in the most qualified and
productive employees for improved business outcomes. It also creates a better
candidate experience which, in turn, improves your employer brand. This earns you a
wider and higher quality applicant pool for every job opening.

7 selection process steps

Although the specifics differ according to each organization and position, the selection
process happens in a series of steps that candidates move through.
Let’s take a closer look at each step:
1. Application
Once you’ve published a job advert, candidates begin to apply. That’s the first step in
your selection process. However, the number, quality, and diversity of applications will
vary. Here’s what you need to about the different aspects of the application stage:
Application process
The application process itself is crucial. Is it mobile-friendly and quick? Or do you
require candidates to manually fill in all the info from their CVs into your system?
Requiring applicants to create a profile on your career site but failing to optimize the site
for mobile are practical elements of web design can hinder HR’s success in the
candidate selection process.
Test your application process yourself to understand where applicants might struggle.
That way, you can ensure you’re providing a smooth application experience that won’t
turn away potential employees.
Advertising channels and tools
Where you post and promote your job ads matters too. Here are the five most popular
sources for jobseekers:
 Online sites: Job boards, such as Indeed, and postings on social media such as
LinkedIn and Facebook.
 Company websites/career pages: If you work in HR for a large enterprise, such as
Walmart in the U.S. or the NHS in Britain, many people will come directly to your site.
For smaller companies, job seekers may not target your website for job announcements.
However, they may refer to the website once they learn about the opening elsewhere.
 Recruitment agencies and sites: Jobhunters may register with one or several
recruitment agencies or seek out field-specific recruitment sites.
 University and college career departments: Consider holding promotion and
recruitment events at local, national, or international educational institutions. In Britain,
 the Civil Service and armed forces host many events like this, often visiting campuses
with more socially and ethnically diverse populations.
 Word of mouth: Many people will ask their family and friends for advice on where to
apply and for any leads on job openings.
Optimizing job ads
Digital tools can create more efficient job postings that bring in diverse
applicants. Textio uses data and AI machine learning to help companies optimize their
job adverts. The tool makes sure the text reflects not only what your business is looking
for in a candidate, but also what culture and values matter to your company.
According to Michaela Schütt, SVP and Head of Global Talent Acquisition Ecosystem at
Siemens, Textio has had a positive impact on their talent attraction efforts. At an HR
tech event, Schütt mentioned that job ads with high Textio scores, meaning they follow
inclusive language guidelines, brought the company 23% more qualified applicants and
11 days faster hiring times.
Why does inclusivity matter? To increase the diversity of your workforce, you must take
concrete steps to expand inclusivity. Diversity matters not just from an idealist or moral
perspective but also for maximum success and profit. A report published by McKinsey &
Company found that ethnically diverse companies were 39% more likely to outperform
competitors.
Other factors impacting the number and quality of applicants
The size of an application pool is influenced by many factors, including the following:
 External issues: These are the matters taking place outside the organization and
beyond HR’s scope. Namely, the economic climate, unemployment rates, demographic
trends, and social and cultural factors.
 Industry conditions: An organization’s industry also impacts the size of its applicant
pool. For instance, if you’re trying to recruit candidates with specific qualifications like
teachers, law enforcement, or hospital nurses, your recruiting department’s role will be
more challenging than those that hire for less specialized roles.
 Internal factors: The size of an organization and its employer brand will draw in varying
numbers of applicants. Google, for example, receives around 3 million applications a
year. This means that, on average, more than 400 people apply per job opening. What
an organization offers in the form of pay, benefits, and opportunities for progression has
a considerable impact as well.
 Sourcing strategy: The number and quality of applicants also depend on a compelling
job posting and where you publish it. How informative, engaging, and widely appealing it
is directly impacts who you will attract. Job adverts should always use gender-neutral
and inclusive language.
 Your requirements: For example, you can also assess whether higher education is a
necessity for certain positions. If it’s not, you’ll increase the number of available
candidates. The recent SHRM State of the Workplace report found that 28% of HR
departments are relaxing their education/degree requirements. For example, The
Spectator is a widely read British weekly magazine. The publication does not require a
university degree or even a CV for its internships.

2. Screening & pre-selection

The goal of the initial screening phase is to reduce the pool of candidates from a large
number to a manageable group of between 3-10 people who are eligible for an
interview. This can be done in various ways, such as the following:
Resume screening
The most commonly known technique is resume or CV screening. Resume screening
helps to assess if candidates comply with the criteria needed for the job. If you require
5+ years of work experience, a recent college graduate without this experience can be
easily ruled out.
U.S. grocery chain Trader Joe’s looks for applicants who express a certain sentiment.
As one store manager put it, “People who express their love for Trader Joe’s in the
application are the ones that really catch our eye. They put a couple of sentences about
why they wanna work here. They’ve shopped with us for years, or they grew up on
Trader Joe’s. That’s a big one.”
CV reviewing in large companies can be time-consuming for HR. Software is an efficient
and cost-effective way to manage this challenge. Options range from resume screening
tools built into an ATS to resume screeners that use artificial intelligence to predict the
quality of hire.
Be careful not to overuse this kind of technology, though. You need to ensure that it is
regularly reviewed for bias. You can also consider implementing a “blind review” policy
by removing all personal characteristics from resumes, such as name, age, and gender.
This aims to counter implicit bias.
Phone screening/chatbot
After the resume screening, a phone (or video) screening interview is next. This helps
align expectations between the candidate and employer. The recruiter can ask
candidates any questions they have following the screening of resumes. The recruiter
can go through a checklist that may include topics like pay expectations, full-time or
part-time hours, flexible working options, starting date, and other potential deal-
breakers. Since this is a fairly standard procedure, having a chatbot ask these questions
is also an option.

As mentioned above, technology now enables us to do these screenings in an

automated way. Chatbots ask candidates questions and make the interview interactive.
An example is a large engineering company that implemented a chatbot intended to
optimize the recruitment process and keep candidates engaged. The data showed that
after implementing the chatbot, completion rates went up from 74% to 96%.
Pre-selection or pre-employment assessments
Pre-selection is a powerful screening method that helps eliminate potential mismatches.
The SHRM State of the Workplace report (mentioned earlier) showed that 35% of HR
departments rely on pre-employment tests/assessments to identify qualified candidates.
Dedicated pre-selection tools provide assessments that can include cognitive testing, a
job simulation, or other tests that help to predict the quality of the new hire. Sometimes,
resume screening is included in these tools.
A job simulation provides a realistic job preview. This shows both the most enjoyable
and interesting aspects of a role but also the challenging elements, resulting in
authentic insight for the candidate. This helps align expectations between employer and
employee and leads to hires who are a stronger fit. Pre-selection tools are another
aspect of the increasing role of AI technology in the recruitment landscape.
These pre-selection tests are often used for high-volume recruiting (roles with large
numbers of applicants), for example, assessing a customer service rep on their active
listening skills. These screening tools eliminate the obvious misfits so the most suitable
candidates remain.
Be aware that not all pre-selection tools and screenings are fully accurate, so choose
your vendor with care. We’ll cover other types of assessments below in stage 4.
3. Interview
The third step in the candidate selection process funnel is the most visible one, the job
interview. Its purpose is to assess how well-suited candidates are for the role and gain
insight into their verbal fluency and sociability.
A job interview involves the candidate being asked questions by the direct manager or
the recruiter (or both). It provides the structure for posing job-related questions to the
candidate and presents the opportunity to sell the job to them.
Interviews may take place virtually or in person. Many companies conduct a first-stage
interview remotely for more efficient time management. Some of them then choose to
do the final interview on-site to promote a stronger personal connection and allow the
candidate to experience the workplace culture and environment.
Informing candidates upfront about how the interview process works can make it more
productive. American software company Salesforce has an “Understanding the
Interview Process” page on its website that explains who candidates will meet with and
provides resources to help them prepare.
Types of interviews
There are two main types of interviews: structured and unstructured. In a structured
interview, a standardized set of questions is prepared in advance and posed to all
interviewees. This provides the interviewer with a uniform method of recording
information and standardizing the rating of each applicant’s qualifications.
An unstructured interview does not adhere to a pre-determined list of questions. The
questioning works more like a conversation, and the interviewer can improvise
according to what comes up during the discussion.
In academic literature, the structured interview has proven to be almost twice as reliable
as the unstructured interview (Schmidt & Hunter, 1998). The structured interview
enables the interviewer to accurately compare candidates and to make the best
decision based on data.
Other interview types include candidates being interviewed by peers or a panel. These
dialogues aim to gain insights into a candidate’s personality, behavior, and
approachability among team members, or with those they will be supporting in a job.
Evaluating interviews
A common interviewing technique is the STAR method which is a systematic way to
retrieve information from the candidate. STAR is an acronym for:
 Situation: Have the candidate describe a particular situation they were in.
 Task: What goal was the candidate working towards?
 Action: Have the candidate describe in detail which actions they took to make the best
of the situation and complete their task.
  Result: Have the candidate describe the outcome of the action and ask what the
candidate learned.
The STAR method works well to see if the candidate has the key competencies
necessary for the job. If the role calls for dealing with various types of shareholders, an
example question could be: “Describe a situation in which you had to manage multiple
shareholders.”
Using an interview evaluation form makes the evaluation of candidates at this stage of
the selection process more consistent and fair. Also, implementing interview guides will
help the interviewers conduct productive interviews.

4. Assessment
While screening and pre-employment assessments can roughly weed out the least
suitable candidates, a full assessment is usually more accurate.
Commonly used assessments are a General Mental Ability (GMA) test (also known as
an IQ test) and a Five-Factor Model of Personality test. Higher IQ is associated with
faster learning and higher top performance. While these assessments can be a part of
your pre-selection process, many organizations choose to conduct them in later stages
of the hiring process.
Multinational technology corporation IBM has designed “scientifically validated
assessments to be engaging, fair, and relevant to each role.” With these assessments,
IBM recruiters can measure skills and abilities that may not be revealed during
interviews. This provides candidates with the opportunity to showcase all that they have
to offer.
When it comes to conducting personality questionnaires, research shows that
conscientiousness is the strongest noncognitive predictor of job performance. More
conscientious candidates perform better in their jobs. Candidates who score high in
conscientiousness are often described as hard-working, dutiful, achievement-oriented,
and detail-oriented.
Other assessments include work sample tests, integrity tests, and job knowledge
tests. The scientific literature shows that assessments in the form of work sample tests
are among the best predictors of job performance.
It is good practice to have candidates do a case study or solve a real problem during
their interview. This makes it possible to compare the quality of a candidate’s work with
the other applicants, as well as against the expected or ideal performance. What’s
more, a practical assignment also gives applicants an idea of what they’d be doing in
the role.
Work sample tests can bring the most value in roles where practical skills, problem-
solving abilities, and job-specific tasks are critical to performance. For example, you can
give candidates for a software developer role a coding task or ask them to debug a
piece of code to demonstrate their programming and problem-solving skills.
Assessments should be reasonable in scope and accurately reflect the job’s
requirements without imposing undue burden on candidates.
5. References and background check
By this point, you have reduced the long list of applicants down to one to three
candidates. Reference checking is the essential next step in the candidate selection
process.
Ask the candidate to provide references. Reference checks confirm the accuracy of
what a candidate has told you and your impressions of them. If, during the interview,
you have doubts about a certain competency or skill, the reference check is an excellent
way to gather more information from a different perspective.
A background check is commonly used for government departments and other jobs that
involve access to highly confidential information, such as healthcare roles. It can also be
a prerequisite before applying and taking part in the pre-selection.
An example is a confirmation of good conduct or criminal record checks for teaching
positions and other roles that involve a high responsibility for others. These
investigations help eliminate people who may abuse their duty of care over vulnerable
people. However, unless absolutely necessary, you should conduct background checks
later in the selection process.
Requirements and practices for background checks vary by country. In the U.S.,
employers typically use private companies to conduct background checks. Background
checks in hiring are subject to the federal Fair Credit Reporting Act (FCRA) and they
need to fulfill the requirements of the Equal Employment Opportunity Commission
(EEOC). Selecting an FCRA-compliant provider to conduct the background checks on
your behalf ensures it is done correctly and consistently.
6. Decision
The next selection process step is deciding on a candidate with the greatest potential
for the organization. Pre-defined criteria by which every candidate is rated during the
selection process will reveal the best candidate.
Usually, the hiring manager makes the final decision. It may also involve input from
other managers and colleagues. Sometimes, the optimal choice is someone less
qualified at the moment but who is committed to growing and staying with the
organization for a long time.
7. Job offer & contract
Once the decision is made, the selection process has one last phase. The chosen
candidate still needs to accept the offer. At this point, you should have gleaned enough
information from the various screenings and job interviews to have some confidence
that the candidate is likely to accept the job.
The offer is then made to the candidate. You can send an offer letter outlining the main
job details and employment conditions. If they accept the offer, you can proceed to
issue a formal employment contract. Once that is signed by all parties are the selection
process steps complete.

Q.7 (A)PROCESS PLANNING

Planning is the process of setting objectives for a given period and formulating various
courses of action to achieve them and selecting the best possible alternatives from the
various courses of action available there. According to this application, planning is a
choice-making activity because it involves setting up objectives and deciding the
appropriate course of action to achieve the objective. It must be remembered that
plans are always developed for a given period.
Steps in Planning Process
Following are the steps in the planning process:
1. Setting Objectives: The idea behind planning is to achieve desired objectives.
Therefore, the first step is to clearly define and describe the objectives of the
organization. Firstly, the major objectives should be specified, and then they
should be broken down into individual, sectional and departmental objectives.
Objectives serve as guidelines for discussion-making in terms of resource
allocation. Work schedule, nature of actions, etc., are kept in mind while setting
objectives. All efforts must be made to anticipate the problems and relevant
opportunities that are likely to arise in the future. For example, an enterprise ABC
Ltd. is opening their new branch of laptops, firstly they have to specify the
objective, i.e., to sell 3,000 units this year, which is double the previous year’s
sales. For achieving this aim, they have to distribute this objective into various
departments, such as production, marketing, sales, and finance departments. By
distributing the main objective into departmental objectives, the company will face
fewer problems in managing its organization.
2. Developing Planning Premises: The next step in planning is to establish
premises. Planning premises are the anticipated environment in which the plans
are expected to operate. These include assumptions and forecasts in the future
and knowing conditions that will affect the course of the plan. In short, these
provide the environment and the boundaries within which the plans will be
executed. Planning premises may be classified as internal and external premises,
controllable, semi-controllable, and uncontrollable premises, tangible and
intangible premises, and the last foreseeable and unenforceable premises. For
example, ABC Ltd. company has set the objective to sell 3,00,000 units of laptops
this year. For this, they need to gather information by forecasting, as it is an
important technique in developing premises. The enterprise has set this objective
after forecasting the increase in demand for laptops due to work from the home
policy. An accurate forecast is very important for successful plans.
3. Identifying alternative courses of action: After setting the objectives and making
assumptions about the future. The next step is to determine alternative courses of
action through which the organization can achieve its objectives. In order to identify
the various alternative courses of action, it is required to collect all necessary
information from primary and secondary sources. The information collected must
be correct and believable. The only information which is directly and strategically
related to the achievement of the desired objective should be considered. For
every plan, there are several options. All the alternative courses of action should
be identified. For example, ABC Ltd. should have an innovative way that can be
adopted by involving employees and consumers in sharing their own ideas. The
company has many alternatives like decreasing prices, increasing advertisement,
promotion, and after-sale service. In important projects, the enterprise generates
more alternatives through discussion amongst the members of the organization.
4. Evaluating alternative courses: After identifying different alternatives the next
step is to evaluate each alternative. Evaluation means the study of the
 performance of various actions. All the possible alternatives should be evaluated
keeping in mind their expected cost and benefit to the organization. Comparison
among the alternatives should be made in terms of factors, such as the risk
involved, planning premises, goals to be achieved, etc. The positive and negative
points of each alternative must be thoroughly examined, and thereafter planner
should make a choice. For example, ABC Ltd. should evaluate all the possible
alternatives and check their positive and negative points.
5. Selecting an alternative: After evaluating various alternatives, the next step is to
select the most suitable force of action. The basic, detailed, and derivative plans,
such as policies, rules, programs, and budgets should be formulated. This is
because the derivative plans help in the implementation of the basic plans. Most of
the plans may not always be subjected to mathematical analysis. In these cases,
the subject and the management experience, judgment, and at times institute play
an important role in setting the most suitable alternative. Many times combination
of plans is also selected instead of selecting one best course. For example, ABC
Ltd. will start T.V advertisements, online marketing, and direct contact with MNCs
to increase sales, as selecting the most suitable alternative will increase the profit
of the company.
6. Implementing the plan: This step is concerned with transforming the plan into
action. The plan must be communicated to the employees in detail. This, in turn,
will help to secure cooperation from them. Useful suggestions from employees
must be considered, and they should be motivated to execute the plan to the fullest
of their abilities. The plan has to be effectively implemented by the real executor.
This step would also involve organizing labour and purchasing machinery. For
example, ABC Ltd. starts hiring more salesmen in the company to contact and
connect with more MNCs. The company will start creating more interesting
advertisements on the online platform. They will establish more service workshops
in various cities.
7. Follow-up- action: After implementing the plan, the last step is to periodically
review the existing plan to ensure that the plan is effective. The plan must be
consistently monitored, and in case of any deficiency, it should be modified and
adjusted. For example, a proper feedback mechanism was developed by ABC Ltd.
so that they can take all the complaints and reviews from their consumers and
provide a better service experience. Actual customer response, revenue collection,
employee response, etc., are very important for the company.

(B) AGGREGATE PLANNING

ANS Aggregate Production Planning

Aggregate production planning, abbreviated as APP, is useful for operation management. It
is associated with the determination of production, inventory, and personnel levels to fulfill
varying demand over a planning perspective that ranges from a period of six months to one
year. Aggregate production plans are needed to exploit workforce opportunities and
represent a crucial part of operations management. Aggregate production plans facilitate
 the matching of supply and demand while reducing costs. The process of Aggregate
production planning applies the upper-level predictions to lower-level, production-floor
scheduling and is most successful when applied to periods 2 to 18 months in the future.
Plans generally either “chase” demand, adjusting the workforce accordingly, or are “level”
plans, meaning that labor is comparatively constant with fluctuations in demand being met
by inventories and backorders.
The concept of aggregate production planning denotes the process of determining the
overall quantities of products to be manufactured or produced in a plant or other
manufacturing facility during a medium-term planning period such as a month, or a quarter.
The aggregate plan output comprises of the total quantities of each product or a group of
products to be manufactured in the plan period of going into details of the scheduling of
different manufacturing activities required to attain the planned production levels. The
aggregate production will also not specify details such as the dates when material ordered
against individual customer orders will be ready for delivery. The aggregate production plan
is designed to establish overall production targets and as input for planning availability of
other inputs and supporting activities to meet the production targets. The aggregate plans
then form the basis of more comprehensive products such as daily and weekly production
schedules and customer delivery schedules.
The prime objective of Aggregate Production Planning is to judge company policies and
management inputs linked to operations, distribution and marketing, materials, accounting
and finance, engineering and human resources to reduce the price and increase revenue,
enhance customer service, lessen inventory investment, decrease changes in production
rates, reduce changes in work-force levels, boost utilization of plant and equipment.
Costs relevant to aggregate production planning:

 Basic production costs: material costs, direct labor costs, and overhead costs. It is
customary to divide these costs into variable and fixed costs.
 Costs associated with changes in the production rate: Costs involved in hiring, training, and
laying off personnel, as well as overtime compensations.
 Inventory related costs. Aggregate production planning models may be supportive as
decision support systems and to appraise proposals in union negotiations.
 Techniques of Aggregate Planning
Various techniques are used to perform the task of aggregate planning. Usually, there are
two categories: Informal trial-and-error techniques and mathematical techniques. In
practice, informal techniques are more commonly used. However, a substantial amount of
research has been done to mathematical techniques, but still, they are not as extensively
used, they often serve as a basis for comparing the effectiveness of alternative techniques
for aggregate planning.
There are several steps in the general procedure for aggregate planning:
 Determine the demand for each period.
 Determine capacities (regular time, overtime, subcontracting) for each period.
 Identify a company or departmental policies that are pertinent (e.g., maintain a safety stock
of 5 percent of demand, maintain a reasonably stable workforce).
 Determine unit costs for regular time, overtime, subcontracting, holding inventories,
backorders, layoffs, and other relevant costs.
 Develop alternative plans and compute the cost for each activity.
 If satisfactory plans emerge, select the one that best satisfies objectives. Otherwise, return
to step 5.
Procedure for Aggregate Planning
It can be useful to employ a worksheet or spreadsheet to summarize demand, capacity, and
cost for each plan. Additionally, graphs can be used to guide the development of
alternatives. Among all methods, the spreadsheet solver approach is the most appropriate
for industries because the solver on spreadsheet software is readily available on virtually all
personal computers, the APP model is comparatively easy to devise in a spreadsheet
format, and lastly, the results are easy to construe. There are certain guidelines for
developing an optimal aggregate production plan using a spreadsheet solver. First of all,
necessary data must be collected for developing Aggregate production planning mode.
Secondly, formulate the APP model in the spreadsheet format. The next step is to appraise
the obtained solutions. This can be done by presenting the constructed spreadsheet
aggregate production planning model and its solutions to related departments of the
company such as production, personnel, planning, sales and marketing, and warehousing,
and judge whether the solutions are satisfactory. The comparison between the existing
aggregate production plan and the optimal plan generated from the Aggregate production
planning model may be done in the financial term. If the solution is not satisfactory, the
values of some input parameters may need to be reconsidered or the constraints may need
to be customized. The spreadsheet APP model will be changed until the solutions are
acceptable. The last step is to implement the aggregate production plan. After the
spreadsheet APP model is agreeably developed and solved, the obtained solutions can be
implemented. During the execution of the aggregate production plan, some parameters of
the model may be altered such as demands, productivity rates, related costs, number of
workers, and inventory levels. These parameters should be modernized regularly and the
APP model is solved to resolve the revised aggregate production plan.
 Steps for Developing the Aggregate Production Plan

To summarize, aggregate production planning is an effectual approach to operations

management and concentrate to satisfy demand as it relates to production, labor force,
inventory, and other models. Aggregate production planning can attach to facility planning
with scheduling decisions. Aggregate production planning assists to lessen production
costs, the effect of variant demand, cost of inventory and labor costs. Aggregate production
planning also exploits plant and equipment utilization and profits. The efficiency of
aggregate production planning is a production plan that indicates how many workers are
needed in each period, the amount and type of production (such as regular, overtime,
subcontracting, etc.), and the units to be produced, stored, and back-ordered per month or
per quarter. Aggregate production planning is also a constructive tool to create and assess
alternatives such as the adjustment of the labor force through hire/fire/layoff/overtime, the
use of subcontractors, anticipatory inventory, and even the development of corresponding
products and pricing strategies.
Factors Affecting Aggregate Planning
Aggregate planning is an operational activity critical to the organization as it looks to
balance long-term strategic planning with short term production success. Following
factors are critical before an aggregate planning process can actually start;
 Complete information is required for available production facilities and raw materials.
 A solid demand forecast covering the medium-range period
 Financial planning surrounding the production cost which includes raw material, labor,
inventory planning, etc.
 Organization policy around labor management, quality management, etc.
 For aggregate planning to be a success, the following inputs are required;
 An aggregate demand forecast for the relevant period
 Evaluation of all the available means to manage capacity planning like subcontracting,
outsourcing, etc.
 Existing operational status of the workforce (number, skill set, etc.), inventory level and
production efficiency
Aggregate planning will ensure that the organization can plan for workforce level, inventory
level and production rate in line with its strategic goal and objective.
Aggregate planning is an Operational Tool
Aggregate planning helps achieve the balance between operation goal, financial goal and
overall strategic objective of the organization. It serves as a platform to manage capacity
and demand planning.
In a scenario where demand is not matching the capacity, an organization can try to
balance both by pricing, promotion, order management, and new demand creation.
In the scenario where capacity is not matching demand, an organization can try to balance
both by various alternatives such as.
 Laying off/hiring excess/inadequate excess/inadequate excess/inadequate workforce until
demand decrease/increase.
 Including overtime as part of scheduling thereby creating additional capacity.
 Hiring a temporary workforce for a fixed period or outsourcing activity to a sub-contractor.
Importance of Aggregate Planning
Aggregate planning plays an important part in achieving the long-term objectives of the
organization. Aggregate planning helps in:
 Achieving financial goals by reducing overall variable cost and improving the bottom line
 Maximum utilization of the available production facility
 Provide customer delight by matching demand and reducing wait time for customers
 Reduce investment in inventory stocking
 Able to meet scheduling goals thereby creating a happy and satisfied workforce
Aggregate Planning Strategies
There are three types of aggregate planning strategies available for an organization to
choose from. They are as follows.
1. Level StrategyAs the name suggests, the level strategy looks to maintain a steady
production rate and workforce level. In this strategy, an organization requires a robust
forecast demand to increase or decrease production in anticipation of lower or higher
 customer demand. The advantage of the level strategy is a steady workforce. A
disadvantage of level strategy is high inventory and increase backlogs.
2. Chase StrategyAs the name suggests, the chase strategy looks to dynamically match
demand with production. Advantage of chase strategy is lower inventory levels and
backlogs. A disadvantage is lower productivity, quality, and a depressed workforce.
3. Hybrid StrategyAs the name suggests, the hybrid strategy looks to balance between level
strategy and chase strategy.

(C ) MASTER PRODUCTION SCHEDULING

MATER PRODUCTION SCHEDULE & MRP

A master production schedule (MPS) delineates what products a
manufacturer will produce, when and in what quantities. An MPS links
sales demand with manufacturing capacity. The purpose of master
production scheduling is to create a realistic plan that minimizes
overstock while maximizing on-time delivery.
What Is a Master Production Schedule?
A master production schedule (MPS) outlines which products will be manufactured and
when they are made. This schedule outlines the various processes and resources needed
to make production move forward smoothly while identifying potential bottlenecks and
creating plans to avoid them.
A master production schedule is critical in manufacturing, as it can be the difference
between an organization making a profit or experiencing a loss in revenue. To make sure
you don’t miss anything, there are several data sources you can use as input for the
development of a master production schedule. Here are some of the most commonly used
ones.
 Aggregate planning: This method allows organizations to create
manufacturing plans that focus on uninterrupted production in periods from six
to 18 months. Using aggregate planning as input is a great way to create a
master production schedule.
 Stock inventory level: You’ll need to know your current inventory levels to
create an efficient production schedule that minimizes inventory costs down
and meets customer demand.
  Production capacity: This is the maximum output that can be achieved by
your organization in terms of manufactured goods. It’s essential to know this
before creating a master production schedule.
 Material requirements planning: This is a system that’s used to calculate the
components and materials necessary to manufacture a product. The basic
inputs include a master production schedule, inventory status file and bill of
materials.
To create an effective master production schedule, it’s important to use the right project
management software. ProjectManager’s Gantt charts, kanban boards, and project
calendars allow you to create an interactive MPS so you can assign work, track timelines
and collaborate with your team
Use ProjectManager’s Gantt chart to create an MPS for your team.Learn more
Why Should You Use a Master Production Schedule?
Having a plan that can forecast the demand for your product over a period of time is the
primary purpose of a master production schedule. However, there are other key important
roles that a MPS plays in manufacturing and production planning.
The main functions of a master production schedule include:
 Planning: Balancing market demand to materials, labor and the capacity of
your equipment to deliver the goods.
 Make adjustments to schedule: Schedules need to have a contingency for
unexpected delays or mistakes that stop the flow of product.
 Prevent stockouts: Planning for capacity requirements to maintain the output
of production.
 Improve efficiency and control costs: The better the plan, the more likely
you’ll stay on schedule and identify potential efficiencies.
Another function is to keep your commitments to your customer base. Manufacturing only
works when it serves its customers on time and within budget.
When you have the right master production schedule process, your demand flows
smoother, lead times improve, communication is standardized, requirements are prioritized
and production is stabilized.
How to Create a Master Production Schedule
When making a master production schedule, you need to follow a process to fulfill the
function of the schedule. The best way to do that is by following these steps.
1. Start with a demand plan, which maps the demands that your master
production schedule is going to respond to.
 2. Identify the raw materials you’ll need and secure a supply chain to deliver
those materials to your production.
3. Develop a proposal of the master production schedule to make sure the
schedule can meet its requirements.
4. Make any calculations necessary to see if it can meet the demands of your
master production schedule draft. These calculations should continue
throughout the process to make sure you’re always meeting demand.
5. Once you’ve tested the draft and it meets your requirements, you can ensure
that it aligns with your customer service, resources and the investment you’ve
made into inventory.
6. The next step is making sure you clearly communicate the production schedule
to everyone involved in the manufacturing process. You want to make
sure your team is on the same page.
7. Return to your schedule to see if your supply is balanced with demand. It
should tell you whether you need to increase or decrease production. This
ensures you produce the orders generated by your sales team and deliver
them on time and with the expected quality.

What Should Be Included in a Master Production

Schedule?
Before you make your master production schedule, you need a demand plan to understand
what your customers want. A demand plan depends on accurate historical sales data, which
helps you figure out what demand will be in the coming weeks. The demand plan must be
regularly reviewed and updated.
It’s helpful to have what’s called a safety stock stored in case demand unexpectedly spikes.
This will carry you through the period while you update your master production schedule.
Don’t neglect to replenish your safety stock after you use it.
The master production schedule will include these parts.
 Product list: A listing of all the products you make.
 Variation sublist: You want a column with variations, such as sizes or colors.
 Dates: Any schedule must have dates to accurately forecast demand and
delivery. It’s best to break your schedule into months and weeks and adjust as
needed.
 Production quantities: This is the number of units you’re going to
manufacture each week. Be sure to include how many units of each variation
are made up of the total number.
Master Production Schedule Template
Our free master production schedule template is a great tool to get started with production
planning. It can be easily customized to fit your business’s needs.

Benefits of Using a Master Production Schedule

Using a master production schedule is a necessity for manufacturing businesses. The better
you understand your manufacturing process, the better you can meet the changing
demands of your customer base. Here are some of the main benefits of using one.
 Helps with demand planning
 Helps with inventory management
 Helps with production staffing
 Prevents stockouts
 Facilitates maintenance planning
 Helps create better estimates for procurement
A master production schedule also serves as a channel for communication between the
sales and manufacturing teams. Because this is a continuous dialogue, the master
production schedule is flexible and open to change as needed.
To summarize, it’s a plan for making whatever commodity your organization produces. It
schedules the production of that commodity, but also includes the staffing and inventory that
are required. The plan itself is determined by the demand for the product, and this
information is provided by sales.

UNIT-3
Q.8 DETAIL NOTE ON MAINTENANCE MANAGEMENT.

Maintenance Management is the process of maintaining a company's assets and resources

while controlling time and costs, ensuring maximum efficiency of the manufacturing process.

Maintenance Management
Maintenance management is defined as the process of maintaining a company's assets
and resources while controlling time and costs, thereby ensuring maximum efficiency of
the manufacturing process. Maintenance management has gone from an archaic,
tedious, handwritten process to a computerized maintenance management system
(CMMS) — a software that plans, tracks, measures and optimizes all forms of a
maintenance program in one central system.
Maintenance management isn't just a software system — it's a combination of software,
best practices and trained personnel, all focused on the same goal. Maintenance
management programs are highly customizable and centered around the type(s) of
maintenance employed at a plant. Whether you're using a condition-based maintenance
program like predictive maintenance or a more time-based maintenance program
like preventive maintenance, it's important to focus your program on the type of
maintenance used and its role within your organization.
Improving maintenance management should be a continuous goal for any company with
machine assets, but there is no one-size-fits-all solution. If you need additional support
or expertise in the process of shifting your matntenance management practices,
bringing in reputable reliability and maintenance experts like those at IDCON could help
you idetify opportunities and create an achievable plan for improvement.
Why Maintenance Management Is Important
Maintenance management is vital in ensuring the long-term success of your
maintenance program by monitoring quality assurance, maintaining operational
efficiency and keeping assets in optimum running order. Properly maintained assets
and resources keep your production stable and greatly minimize the chances for
unplanned downtime. Unplanned downtime causes a snowball effect, leading to a spike
in unexpected costs associated with things like repairs (overtime labor, spare parts,
etc.), delayed shipments, lost revenue or complete breakdowns of machines.
Maintenance management helps improve the operational efficiency of plant facilities,
which contributes to revenue by decreasing operating costs and improving the quality
(and quantity) of manufactured products. In addition to cost savings, other benefits
include improved workplace safety, enhanced productivity and minimized human error.

The Objectives of Maintenance Management

All forms of maintenance management share the common objective of analyzing
production and finding the best practices and processes within a specific field.
Analyzing reports from a CMMS, for example, lets you control costs, schedule work
properly and efficiently, and ensure failures and breakdowns are kept to a minimum.
The main objectives of maintenance management include:
 Cost control/budgeting: Maintenance management tools provide managers
with the necessary information to properly allocate funds from the budget. Cost
control is important because some costs are a better use of the company's funds
than others. For instance, a maintenance manager might need to buy a
replacement part for an asset. She might have to choose between a cheaper part
that's less durable and a more expensive, longer-lasting part.
 Scheduling work/allocating resources: Scheduling work and allocating time
and labor resources so they're at their most productive plays a key role in
efficiency. Maintenance management gives a manager an ultimate
understanding of the overall process to help decide priority levels of various
activities. For example, if the maintenance manager needs to verify the timely
delivery of a product, she might be inclined to prioritize forklift maintenance to
ensure the product can be moved around the warehouse and onto the delivery
truck without interruption.
 Compliance and regulations: Maintenance management tools help
organizations comply with regulations at the local, state and federal levels. For
instance, it may seem like the cheaper option to assign one operator to a
 particular asset, even though the law states two employees should be assigned
for safety reasons.
 Minimize downtime/loss: A good maintenance management program helps
mitigate the loss of productive time due to failure by establishing a planned
maintenance program. Fewer production stoppages mean less lost revenue.
 Extend asset life: Organizations invest heavily in machinery. Maintenance
management programs help ensure equipment and infrastructure are always in
good condition. Regular maintenance extends the useful life of machinery,
facilities and other components by minimizing wear and tear.
 Enhance equipment: Spinning off the objective of extending the life of assets,
maintenance management also enhances existing equipment through
modifications, extensions or new low-cost items.
 Training: Maintenance management programs should include training
personnel in specific maintenance skills, improving operational safety, advising
on the acquisition, installation and operation of machinery, and enhancing the
quality of the finished product.
 Uncover maintenance trends: Looking into historical data helps managers get
a clear picture of what exactly goes on during day-to-day operations. CMMS
software, for example, can uncover things like why an asset seems to be
consistently underperforming.

Q.9 DISCUSSES WORK STUDY, METHODS STUDY & WORK MEASUREMENT.

Meaning of Work Study

The survival and growth of a manufacturing organization depend on its productivity. It is the
ability of the organization to achieve the same or better output by using the same amount of
input. It provides a great advantage to the organization as compared to its competitor.
Advantages like less cost of production, less price of the products, high profits, a better image in
the market, etc.
Work-study helps the company to increase its productivity. Work-study is a combination of
tools and techniques ( method study and work measurement ) used to analyze that how work
will be executed. It ensures that all the factors of production utilize in an effective manner.
Work-study deals with the human being and their handling of other factors of production of the
company.
Work-study involves analyzing and evaluating the best method of doing the work and then
develop a standard for performing the job. It helps in diving the work into small parts and then
tries to complete the work in the shortest time with maintaining the quality of the product. It
will increase the productivity of the company.

Objective of Work Study

1.) To analyze the present method of doing a job for developing a new and better way.
2.) Optimum utilization of resources.
3.) Establishing a standard time for performing the job.
4.) To increase productivity by ensuring the best possible use of human, machine, and material
resources.
5.) To achieve the best quality product and service at the minimum possible cost.
6.) Identification of wasteful activity.
7.) Creating coordination among different factors of production.
8.) Smooth production process and enhance job satisfaction of the workforce.

Techniques of Work Study

1.) Method Study
2.) Work Measurement

1.) Method Study

Method study includes the study or critical examination of the existing way of doing the work.
The reason behind this study is to find, develop, and apply the easier and effective method of
doing the work. It helps in reducing cost and unnecessary activity. In other words, it is a process
of examining all the activities to find a simple way of doing it.
2. ) Work Measurement
It involves methods and tools used to analyze the time in which work is executed. It includes
examination and developing the standard time in which the work will get completed. Standard
time is the time taken by the well-trained workforce to produce one unit.
Advantages of Work Study
1.) Increased productivity and operational efficiency.
2.) Reduced manufacturing costs.
3.) Better manpower planning.
4.) Reduced material handling costs.
5.) Provides a standard of performance to measure the efficiency of work.
6.) Provides better job satisfaction to employees
7.) Increase profit.
8.) Improve the image of the organization.
9.) Reduce wastage.
10.) Better worker-management relations.
What is Method Study?
Method study is a systematic method of analyzing the manufacturing
procedure of doing a job including human movements involved in it. In other
words, it is the process of analyzing the methods and finding the best
possible method which involves minimum time, not make fatigue to the
workers and increase productivity. That’s why it is also termed as work
simplification.
Method study is generally done by eliminating all unnecessary
motions involve in a certain manufacturing procedure or by changing the
sequence of operation or change the whole process.
Method Study procedure
1. Select the work which deserves to work-study and define
the objective we need to achieve. Generally objective is to reduce
the manufacturing cost, reduce bottlenecks or reduce fatigue of the
worker with the aim of increase the efficiency.
2. Record all the relevant data which are essential for the method in
chart form to obtain a more clear picture of the respective methods.
Process of recording can be easily done with the help of the following
aids-
 Process and multiple activity charts (Outline process chart, Flow
Process chart, Two-handed process chart)
 Making Diagrams, (Flow diagram, string diagram, calligraphy and
Cronocyclegraph diagram)
 Motion and Memomotion studies, (Simo Chart)
 Making Models.
3. Examine all the recorded data in sequence. During the Critical
examination process number of question can be asked, like –
 Purpose of the event,
 Who does it? ,
 The place where it is done? ,
 How?
 When the event is done?
 How differently we can be done? etc.
4. Develop the best method of doing the event from the Critical
Examination and record the method. But we have to keep in mind
that Developed method should be practical, safe, economical and
effective at the same time.
5. Install the finally developed method or improve the method. The
installation process involves three
phases, Planning, Arranging and Implementing. During the
planning and arranging phase programme of installation, making time
table, the necessary arrangement of resources, equipment, tools are
made. In the implementation or actual installation phase, the
developed method is introduced as the standard practice.
 6. Maintain the new method, and ensure the proper functioning of the
installed method by periodic inspection and verification. the aim of
check and verification is to ensure if the method is being practised the
same or it has deviated from the authorized one. Take the views of
workers, supervisors it helps to explore further improvements.
What is Work Measurement in Work-
Study?
Work measurement is one of the two foundational components of work study
in industrial engineering. It focuses on establishing the standard time it
should take a qualified worker to complete a specific task using the most
efficient method identified through method study (the other half of work
study).
Here’s a breakdown of work measurement in work-study:
 Focus: Determining the time a qualified worker needs to complete a
task at a defined level of performance.
 Techniques: Common techniques include:
 Time Studies: An analyst directly observes and records the time
taken for specific tasks by a worker.
 Predetermined Motion Time Systems (PTS): Assigns standard
time values to basic human motions, allowing for quicker estimation of
task times.
 Benefits:
 Provides a benchmark for evaluating worker performance and
identifying areas for improvement.
 Sets realistic production targets based on achievable timeframes.
 Enables effective scheduling and planning of production activities.
 Forms the basis for establishing fair and reliable incentive pay
schemes for workers.
In essence, work measurement helps quantify the efficiency gains achieved
through method study. It provides a data-driven approach to ensure tasks
are completed within a reasonable timeframe while considering worker
capabilities.
Conclusion
Work study plays a critical role in optimizing industrial processes. Through
method study, engineers meticulously analyze current methods, identifying
inefficiencies and bottlenecks. This paves the way for designing and
implementing improved methods that eliminate unnecessary steps and
streamline workflow. The result? Significantly increased productivity with less
time and resources wasted.

Q.10 WRITE A DETAIL NOTE ON MATERIAL MANAGEMENT

 Materials management is an aspect of supply chain management and planning. The
primary purpose of materials management is to ensure that manufacturers have all
the raw materials they need to make goods.
Materials management also focuses on ensuring that no components are wasted
and optimizing inventory maintenance and management. While materials
management requires understanding what materials are needed and where to
source them, it is also heavily involved in inventory management and storage.
Many industries incorporate and rely on high-quality materials management,
including process manufacturing, construction, hospitals and healthcare, textiles, oil
and gas, pharmaceuticals, and more. Any industry involved in the movement and
supply of many raw materials requires material management expertise.
Materials management can save organizations and manufacturers lots of work,
money, and time. Supplying the right quality of materials to the right places at the
correct times can be extremely difficult for individual companies and organizations.
This difficulty is part of the reason why many companies decide to outsource or
create specialized material management departments.
INDIRECT MATERIALS AND DIRECT MATERIALS
Materials managers deal with both direct materials and indirect materials. Direct
materials are the components that cost the most and are the most essential to the
production line. Indirect materials include raw materials, natural resources, and other
supplies needed to create products.
Indirect materials are less cost intensive than direct materials and involve less
measurement. Examples of indirect materials include gloves, PPE, and maintenance
supplies.

MATERIALS MANAGEMENT DEFINITION

At its core, materials management is the process of ensuring the correct materials
get to the right people at the right time.
Materials management is also referred to as asset management, hardware
management, property management, and material handling. How material
management is referred to and how it is defined can shift depending on the industry.

MATERIALS MANAGEMENT PROCESS

The process of materials management includes all steps from purchasing materials
to receiving materials. This includes storage and warehousing, transport, and
receiving. Each step has its own goals and process.

 Purchasing: Purchasing the right amount of goods is important for two reasons. First, it ensures the end-user
has everything they need to operate. Second, this process can minimize the amount invested in storage and
stored inventory.
 Storage: The goal of storage is to invest in the correct amount of warehousing space in the right places to
facilitate the transport of goods in the next step. Storage can also act as a buffer between material production
and materials used to mitigate the effect of shortages or material product mistakes.
 Transport: Transporting the correct materials to manufacturers or others at the right time is such a large and
involved process that some companies occasionally separate it into its own department.
 Receiving: Receiving in materials management involves checking and distributing components to the correct
customers.
BENEFITS OF MATERIALS
MANAGEMENT
Well-executed materials management can be transformative for manufacturers and
other industries. There are countless benefits, many of which are industry-specific.
Some benefits are more ubiquitous, however, such as the ability to perform just-in-
time inventory control, reduce material waste, increase inventory accuracy, and
optimize material transport.
JIT INVENTORY MANAGEMENT
Accurate materials management can allow for just-in-time inventory management
(JIT). JIT is an inventory management style that involves delivering components
right as needed, i.e., just in time.
JIT allows companies and organizations to minimize the amount of inventory they
hold before it is needed, reducing risk. Overall, JIT is an excellent way for
companies to reduce risk, save money, and improve efficiency if done correctly.
JIT would be difficult for manufacturers and organizations to perform without the
oversight of specialized or outsourced materials management, which can handle the
smaller, more frequent storage orders and supply chain risks.
One of the most significant risks of JIT is that it magnifies the impact of differences
between planned and actual results. Designating the job of material management
can mitigate some of these risks. Dedicated materials managers will be able to
anticipate material requirements more accurately than non-dedicated departments,
making JIT a more reasonable solution.
REDUCTION OF MATERIAL WASTE
By overseeing inventory and managing the timing of material delivery, material
managers can reduce receiving errors and waste. Reducing waste is important to
save costs and conserve resources.
INCREASED INVENTORY ACCURACY
Knowledge of accurate direct material inventory levels can help increase production
efficiency and reduce inventory loss. Preventing the loss of materials is an essential
step in reducing the cost of raw materials.
OPTIMIZATION OF MATERIAL TRANSPORT
By creating specialized materials management departments and focusing on better
management techniques, production companies can fully optimize the transportation
of materials and the supply chain.
This optimization is done by choosing the correct storage locations and using good
transportation techniques. Optimizing material transport can help provide a more
consistent raw material flow for manufacturers.

UNIT-4
 Q.11 WHAT DO YOU MEAN BY INVENTORY MANAGEMENT. DISCUSS ITS OBJECTIVES,
FACTORS&PROCESS OR INVENTORY CONTROL TECHNIQUES IN DETAIL.
ANS What Is Inventory Management?
Inventory management helps companies identify which and how much stock to order at
what time. It tracks inventory from purchase to the sale of goods. The practice identifies and
responds to trends to ensure there’s always enough stock to fulfill customer orders and
proper warning of a shortage.
Once sold, inventory becomes revenue. Before it sells, inventory (although reported as an
asset on the balance sheet) ties up cash. Therefore, too much stock costs money and
reduces cash flow.
One measurement of good inventory management is inventory turnover. An accounting
measurement, inventory turnover reflects how often stock is sold in a period. A business
does not want more stock than sales. Poor inventory turnover can lead to deadstock, or
unsold stock.

Why Is Inventory Management Important?

Inventory management is vital to a company’s health because it helps make sure there is
rarely too much or too little stock on hand, limiting the risk of stockouts and inaccurate
records.
Public companies must track inventory as a requirement for compliance with Securities and
Exchange Commission (SEC) rules and the Sarbanes-Oxley (SOX) Act. Companies must
document their management processes to prove compliance.
Benefits of Inventory Management
The two main benefits of inventory management are that it ensures you’re able to fulfill
incoming or open orders and raises profits. Inventory management also:
 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. This also allows you to keep less
stock at each location (store, warehouse), as you’re able to pull from anywhere to fulfill
orders — all of this decreases costs tied up in inventory and decreases the amount of stock
that goes unsold before it’s obsolete.
 Improves Cash Flow:
With proper inventory management, you spend money on inventory that sells, so cash is
always moving through the business.
 Satisfies Customers:
One element of developing loyal customers is ensuring they receive the items they want
without waiting.
 Inventory Management Challenges
The primary challenges of inventory management are having too much inventory and not
being able to sell it, not having enough inventory to fulfill orders, and not understanding
what items you have in inventory and where they’re located. Other obstacles include:
 Getting Accurate Stock Details:
If you don’t have accurate stock details,there’s no way to know when to refill stock or which
stock moves well.
 Poor Processes:
Outdated or manual processes can make work error-prone and slow down operations.
 Changing Customer Demand:
Customer tastes and needs change constantly. If your system can’t track trends, how will
you know when their preferences change and why?
 Using Warehouse Space Well:
Staff wastes time if like products are hard to locate. Mastering inventory management can
help eliminate this challenge.
Learn more about the challenges and benefits of inventory management.
What Is Inventory?
Inventory is the raw materials, components and finished goods a company sells or uses in
production. Accounting considers inventory an asset. Accountants use the information
about stock levels to record the correct valuations on the balance sheet.
Learn more about inventory in the article “What Is Inventory?”.
Inventory vs. Stock
Inventory is often called stock in retail businesses: Managers frequently use the term “stock
on hand” to refer to products like apparel and housewares. Across industries, “inventory”
more broadly refers to stored sales goods and raw materials and parts used in production.
Some people also say that the word “stock” is used more commonly in the U.K. to refer to
inventory. While there is a difference between the two, the terms inventory and stock are
often interchangeable.
What Are the Different Types of Inventory?
There are 12 different types of inventory: raw materials, work-in-progress (WIP), finished
goods, decoupling inventory, safety stock, packing materials, cycle inventory, service
inventory, transit, theoretical, excess and maintenance, repair and operations (MRO). Some
people do not recognize MRO as a type of inventory.
Inventory Management Process
If you produce on demand, the inventory management process starts when a company
receives a customer order and continues until the order ships. Otherwise, the process
 begins when you forecast your demand and then place POs for the required raw materials
or components. Other parts of the process include analyzing sales trends and organizing
the storage of products in warehouses.
How Inventory Management Works
The goal of inventory management is to understand stock levels and stock’s location in
warehouses. Inventory management software tracks the flow of products from supplier
through the production process to the customer. In the warehouse, inventory management
tracks stock receipt, picking, packing and shipping.
Inventory Management Techniques and Terms
Some inventory management techniques use formulas and analysis to plan stock. Others
rely on procedures. All methods aim to improve accuracy. The techniques a company uses
depend on its needs and stock.
Find out which technique works best for your business by reading the guide to inventory
management techniques. Here’s a summary of them:
 ABC Analysis:
This method works by identifying the most and least popular types of stock.
 Batch Tracking:
This method groups similar items to track expiration dates and trace defective items.
 Bulk Shipments:
This method considers unpacked materials that suppliers load directly into ships or trucks. It
involves buying, storing and shipping inventory in bulk.
 Consignment:
When practicing consignment inventory management, your business won’t pay its supplier
until a given product is sold. That supplier also retains ownership of the inventory until your
company sells it.
 Cross-Docking:
Using this method, you’ll unload items directly from a supplier truck to the delivery truck.
Warehousing is essentially eliminated.
 Demand Forecasting:
This form of predictive analytics helps predict customer demand.
 Dropshipping:
In the practice of dropshipping, the supplier ships items directly from its warehouse to the
customer.
 Economic Order Quantity (EOQ):
This formula shows exactly how much inventory a company should order to reduce holding
and other costs.
 FIFO and LIFO:
First in, first out (FIFO) means you move the oldest stock first. Last in, first out (LIFO)
considers that prices always rise, so the most recently-purchased inventory is the most
expensive and thus sold first.
 Just-In-Time Inventory (JIT):
Companies use this method in an effort to maintain the lowest stock levels possible before a
refill.
 Lean Manufacturing:
This methodology focuses on removing waste or any item that does not provide value to the
customer from the manufacturing system.
 Materials Requirements Planning (MRP):
This system handles planning, scheduling and inventory control for manufacturing.
 Minimum Order Quantity:
A company that relies on minimum order quantity will order minimum amounts of inventory
from wholesalers in each order to keep costs low.
 Reorder Point Formula:
Businesses use this formula to find the minimum amount of stock they should have before
reordering, then manage their inventory accordingly.
 Perpetual Inventory Management:
This technique entails recording stock sales and usage in real-time. Read “The Definitive
Guide to Perpetual Inventory” to learn more about this practice.
 Safety Stock:
An inventory management ethos that prioritizes safety stock will ensure there’s always extra
stock set aside in case the company can’t replenish those items.
 Six Sigma:
This is a data-based method for removing waste from businesses as it relates to inventory.
 Lean Six Sigma:
This method combines lean management and Six Sigma practices to remove waste and
raise efficiency.

Q.12 (A) JUST-IN-TIME

The just-in-time (JIT) inventory system is a management strategy that aligns raw-
material orders from suppliers directly with production schedules. Companies employ
this inventory strategy to increase efficiency and decrease waste by receiving goods
only as they need them for the production process, which reduces inventory costs. This
method requires producers to forecast demand accurately.
 Just-in-time (JIT) manufacturing is also known as the Toyota Production
System (TPS) because the car manufacturer adopted the system in the 1970s.1
 Kanban is a scheduling system often used in conjunction with JIT to avoid
overcapacity of work-in-process.
 The success of the JIT production process relies on steady production, high-
quality workmanship, no machine breakdowns, and reliable suppliers.
 The terms short-cycle manufacturing, used by Motorola, and continuous-flow
manufacturing, used by IBM, are synonymous with the JIT system.
How Does Just-in-Time Inventory (JIT) Work?
The just-in-time (JIT) inventory system minimizes inventory and increases efficiency .
JIT production systems cut inventory costs because manufacturers receive materials
and parts as needed for production and do not have to pay storage costs.
Manufacturers are also not left with unwanted inventory if an order is canceled or not
fulfilled.
One example of a JIT inventory system is a car manufacturer that operates with low
inventory levels but heavily relies on its supply chain to deliver the parts it requires to
build cars on an as-needed basis. Consequently, the manufacturer orders the parts
required to assemble the vehicles only after an order is received.
For JIT manufacturing to succeed, companies must have steady production, high-
quality workmanship, glitch-free plant machinery, and reliable suppliers.
FAST FACT
The just-in-time inventory system is different from the just-in-case system, where
producers hold sufficient inventories to have enough products to absorb maximum
market demand.
Advantages and Disadvantages of JIT
JIT inventory systems have several advantages over traditional models. Production
runs are short, which means that manufacturers can quickly move from one product to
another. Also, this method reduces costs by minimizing warehouse needs. Companies
also spend less money on raw materials because they buy just enough resources to
make the ordered products and no more.
.
The disadvantages of JIT inventory systems involve potential disruptions in the supply
chain. If a raw-materials supplier has a breakdown and cannot deliver the goods
promptly, this could conceivably stall the entire production line. A sudden unexpected
order for goods may delay the delivery of finished products to end clients.

(B) TOTAL QUALITY MANAGEMENT

Total Quality Management is a management approach that focuses on delivering

products and services with the highest quality to maximize customer satisfaction and
meet regulatory standards. Total quality management is an organization-wide effort for
continuous improvement. That improvement can be defined as an employee’s ability to
provide on-demand products and services that are of value to their customers, even as
their needs change.
That’s the “quality” in total quality management. The “total” indicates that the effort is
one that touches every inch of every employee of an organization. As a methodology,
however, total quality management has no widely agreed-upon approach. It does,
though, draw from other tools and techniques, such as project quality control, quality
assurance and testing, and others.
To make sure you’re delivering quality to your customers, you need to be able to
monitor the processes you’re using to create the product or service you’re making for
them. ProjectManager is online work and project management software that tracks real-
time data with its live dashboards, which monitor six project metrics automatically.
There’s no setup. It’s ready when you are. Get started with ProjectManager for free
today.

Why Is Total Quality Management Important?

Total quality management is important for several reasons. First, it fosters a culture of
continuous improvement and customer satisfaction, leading to higher-quality products
and services. When customers are satisfied, they’re more likely to be loyal and can help
spread positive messages about your company.
It also streamlines processes and eliminates waste, helping to reduce errors and
increase productivity. Not only does this translate into cost savings, but it also
contributes to the idea that preventing problems is usually less expensive than fixing
them.
Finally, TQM helps organizations gain a competitive advantage in the marketplace.
They can deliver high-quality products and services and are better positioned to attract
and retain customers.
Total Quality Management Principles
Just as the definitions of total quality management (TQM) differ, so do its principles.
However, we’ve gathered the most important TQM principles for you below.
 Customer Focused: The definition of quality lies with the customer, and all
efforts to achieve success in the organization lead to customer
satisfaction.
 Total Employee Involvement: The effort is not isolated to one department of
an organization. To be successful in its objective of customer satisfaction,
there must be a common goal for all aspects of business and for each
employee.
 Process Oriented: Process thinking is fundamental to total quality
management; the internal steps a company takes directly result in the
external output delivered to the customers.
 Integrated System: Basically, regardless of the size or complexity of the
organization, all its distinct parts must work together.
 Strategic and Systemic Approach: Using strategic planning to create a
strategic plan that integrates quality as a core component of the company
is a way to structure total quality management into an organization’s
mission.
  Continual Improvement: The mantra for total quality improvement is
customer satisfaction, but that is not a one-shot goal: the act of improving
quality for the customer is a process without an end.
 Fact-Based Decision Making: In order to know if an organization is meeting
its objectives, there must be data on performance, and those metrics
must be collected and analyzed with accuracy and without prejudice. (For
more on this, learn how to use data to be a better manager.)
 Communications: It’s impossible to maintain a successful TQM approach
without an effective communication plan. Communication plans make
sure that every department is aware of what they and others are
responsible for, so they can coordinate operations to achieve their
common goal.
Total Quality Management Methodologies
Being able to deliver total quality management requires methodology. There isn’t just
one way to manage quality in your project. There are several approaches you can take.
A few of them are listed below.
Lean Manufacturing
Lean manufacturing is a type of lean projection that comes from Japan, specifically, the
car manufacturer Toyota. It’s all about targeting and eliminating what it calls muda or
waste, in order to add value and maintain quality.
Six Sigma
Six Sigma is another quality management methodology that is directed towards
improving current processes, products or services. It does this by finding and removing
any defects in order to streamline quality control.
ISO 9000
ISO 9000 is a set of international standards focused on quality management and quality
assurance. It was created to help companies document quality system elements that
they needed to maintain an efficient quality system.
How to Implement Total Quality Management in 4
Steps
Getting started with total quality management requires that the top management learns
about the methodology, and then commits to it as one of the organization’s strategies.
The organization writ large must then assess its customer satisfaction and quality
management systems.
One of the easiest methods to implement TQM is called PDCA. PDCA stands for Plan,
Do, Check and Act. It’s a four-step management method to control the continuous
improvement of processes and products.

1. Plan
Planning includes identifying and understanding the problem or opportunity as it relates
to TQM. From the information you’ve gathered, come up with ideas and develop the
best into an implementation plan.
2. Do
With a planned solution, you can now test it and build a pilot program to see if you
achieve the quality improvements you expected. Document the results.
3. Check
Here you’ll analyze the results of your pilot program against what you expected to
achieve. If you’ve met those criteria move on to the next step. However, if you’ve fallen
short, then you need to return to step one.
4. Adjust
Once you’ve tested and are satisfied with the solution, you can implement it at full scale.
This process is a loop, however, with no beginning or end. The success is only the new
baseline of which you’ll again test to improve.
The need for active management participation is critical to the success of any total
quality management plan. This is done by creating steering committees to make sure
everyone is working together to improve quality.
There is also the formation of ad hoc cross-functional teams that are responsible for
addressing the immediate process issues. There are also standing cross-functional
teams that have similar responsibilities, only those are over the long term.
Total Quality Management Systems & Tools
When it comes to analyzing quality-related issues, the U.S. Navy employed the seven
basic tools of quality. This is a fixed set of graphical techniques identified as being most
helpful in troubleshooting quality-related issues. These tools are often used in Six
Sigma as well.
The seven tools for TQM are:
 Check sheet used to collect data in real time
 Control chart to determine if a process is in a state of control
 Stratification (or flow or run) chart to sample a group
 Pareto chart, which is both a bar and line graph that assess the most
frequently occurring defects by category
 Histogram to roughly assess the probability distribution of a given
variable by depicting the frequencies of observations occurring in certain
ranges of value
 Cause-and-effect diagram
 Scatter diagram to display the value for two in a set of data

(C ) ISO-9000
The International Organization for Standardization (ISO) is an independent, non-
governmental organization made up of members from the national standards bodies of
over 160 countries that set international standards related to products and services. ISO
has published over 13,000 standards. The ISO 9000 series of standards, related to
quality management, is perhaps the most widely known and impactful of any standards
issued by ISO.
The ISO 9000 definition is a description of a quality management system. The object of
the ISO 9000 family of standards is to provide organizations with the guidance and tools
needed to ensure that their products and services meet external requirements and drive
consistent quality improvement.
ISO 9001 Standard
The ISO 9001 standard is a document that describes all of the requirements needed in
order to create and maintain a quality management system as described in ISO 9000.
This is a subtle difference between ISO 9000 and ISO 9001 that some fail to recognize.
So, to explicitly point it out, the difference between the two (ISO 9000 vs 9001) is
summarized as the definition of quality management system (ISO 9000) and
requirements needed to meet that definition (ISO 9001).
Both the ISO 9000 and 9001 standards are based on a number of quality management
principles including a strong customer focus, the motivation, and implication of top
management, the process approach and continual improvement. The seven quality
management principles include the following as described by the ISO:
 Customer focus – Quality management primarily focuses on meeting customer
requirements and striving to exceed customer expectations.
 Leadership – Helping leaders to establish unity of purpose and direction at all levels and
to create conditions to engage members of the organization in achieving the
organization’s quality objectives.
 Engagement of people – Obtaining and maintaining (at all levels throughout the
organization) competent, empowered, and engaged people to enhance the organization’s
capability to create and deliver value.
 Process approach – Delivering consistent and predictable results through the use of
effective and efficient activities that are understood and managed as interrelated
processes that function as a coherent system.
 Improvement – Maintaining an ongoing, organization-wide focus on improvement.
 Evidence-based decision making – Using the analysis and evaluation of data and
information in the decision making process to produce desired results.
 Relationship management – Managing the organization’s relationships with related
parties, such as partners or vendors, for sustained success.
ISO 9000 or 9001
One misconception is that ISO 9000 or 9001 is only for manufactures or large
organizations. As a principles-based standard, ISO 9001 can be applied to any
organization regardless of what type or size it may be. The standard defines the
requirements, but it does not dictate the method of application. The latest version of the
standard has been specifically designed to be more accessible to organizations outside
the manufacturing sector.
As with anything, there are ISO 9000/9001 pros and cons. The application of ISO 9001
when implementing a quality management system can provide the following benefits the
organizations:
 Clear understanding of your objectives and new business opportunities.
 Identifying and addressing the risks associated with your organization.
 Renewed emphasis on putting your customers first.
 Meeting the necessary statutory and regulatory requirements.
 Organizational and process alignment to increase productivity and efficiency.

ISO 9000 Certification

If you are researching the ISO 9000 requirements or how to become ISO 9000 certified,
you should really be focused on ISO 9001. You see an organization cannot become
ISO 9000 certified. First issued in 1987 and last updated in 2015, ISO 9001 is the
standard that sets out the criteria for a quality management system and is also the only
standard within ISO 9000 that an organization can certify to. Therefore, it is incorrect to
say that an organization is ISO 9000 compliant. However, a business can be ISO 9001
certified or compliant. While an ISO 9001 certification is not regulatory requirement, ISO
reports that “over one million companies and organizations in over 170 countries have
certified to ISO 9001.”
An organization must demonstrate the following in order to be ISO 9001 certified:
 The company follows the guidelines within the ISO 9001 standard;
 The company meets its own requirements;
 The company meets its customer requirements and statutory and regulatory
requirements; and
 The company maintains documentation of its performance.
An ISO 9001 certification can enhance an organization’s credibility as it shows
customers that the organization’s products and services meet quality expectations.
Additionally, there are some instances where an ISO 9001 certification is required or
legally mandated for businesses in some industries.

How to Become ISO 9001 Certified

The ISO 9001 certification process requires an organization to implement ISO
9001:2015 requirements. Once implemented, an organization must successfully
complete registrar’s audit to confirm that the organization system meets those
requirements.
The auditor will interview management and staff within the organization to determine
whether or not they understand their role and responsibilities in complying with the ISO
9001 standards. The auditor will also examine the organization’s documentation to
validate compliance with the ISO 9001 requirements. The auditor will then prepare a
detailed report that details the parts of the standard that the organization did not meet.
The organization will need to agree to correct any problems within a specified time
frame. The organization executes remedial activities to ensure that all problems are
corrected. Once these gaps are addressed and confirmed by the auditor, the
organization can then be certified.
In order to maintain the ISO 9001 certification, the organization must continue with
regular surveillance and recertification audits.
Conclusion
So, what is ISO 9000? In short, it is a principle-based international standard that
describes a quality management system that organizations can use to be more efficient
and improve customer satisfaction. ISO 9001 is a standard, against which one may be
certified, that specifies the requirements an entity needs to meet in order to achieve a
quality management system within their organization.

(D) STATISTICAL QUALITY CONTROL

Statistical Quality Control (SQC) is a methodology used to monitor and control the quality of
products or services. SQC uses statistical tools and techniques to measure and analyze the
data gathered during manufacturing or service delivery to ensure that the products or services
meet or exceed customer expectations.
 Statistical Quality Control aims to identify and eliminate defects or variations in production
processes, improving product or service quality and reducing waste. By analyzing data, SQC
can help identify patterns and trends that can be used to make data-driven decisions that
improve overall quality and productivity. SQC is widely used across many industries, including
manufacturing, healthcare, and service industries.

Example of Statistical Quality Control (SQC)

 Let’s say you own a bakery that makes chocolate chip cookies. You want to ensure that
your cookies are consistently delicious and meet your quality standards, so you decide
to implement statistical quality control.
 To do this, you start by measuring the weight of each cookie that comes out of the oven.
You record the weight of each cookie and plot the data on a control chart, which has a
center line representing the average weight of the cookies and upper and lower control
limits representing acceptable weight ranges.
 As you continue to make cookies, you keep plotting the weight data on the control chart.
If the weight of a cookie falls outside the upper or lower control limit, you investigate to
identify the cause of the deviation. For example, if a cookie is too heavy, you might
check to see if you’re using too much dough or if your oven temperature is too high.
 By monitoring the weight of your cookies using statistical quality control, you can identify
and correct any problems in your baking process. This helps ensure that your cookies
are consistently delicious and meet your quality standards.
What are the Different Types of Statistical Quality Control?
There are several types of Statistical Quality Control techniques, here are some examples and
relatable scenarios for each of them:

Control Charts
Control charts are a graphical representation of process data over time that helps to identify any
changes or variations in the data. For example, a manufacturing plant can use control charts to
monitor the weight of the products being produced, and detect any deviations in the weight from
the established standards.

Acceptance Sampling
This technique involves taking a sample of products from a batch or lot and inspecting them to
determine if they meet the quality standards. For example, a food manufacturer can randomly
select a few packets of its products and inspect them for freshness, texture, and taste.

Statistical Process Control (SPC)

Failure Mode and Effects Analysis (FMEA)
FMEA is a systematic approach to identifying potential failures in a product or process, and
taking proactive measures to prevent those failures. For example, an automobile manufacturer
can use FMEA to identify potential failure modes in the engine, and take measures to prevent
those failures from occurring.

Statistical Quality Control vs Statistical

Process Control: What Sets Them Apart?
Advantages of Statistical Quality Control
 Identifies and corrects defects.
 SQC helps to identify and correct defects early in the process. This prevents costly
rework and reduces waste, improving overall efficiency and productivity.
Improves consistency
SQC ensures that products or services are produced consistently, meeting the same quality
standards each time. This leads to increased customer satisfaction and brand loyalty.

Reduces variability
By monitoring and controlling the process, SQC reduces the variability of the product or service,
resulting in fewer defects and less waste.

Improves decision-making
SQC provides data and insights that can help organizations make informed decisions about
process improvements, quality control, and resource allocation.

Enhances employee involvement

SQC involves employees in the quality control process, empowering them to take ownership of
their work and identify opportunities for improvement.

Ensures compliance
SQC helps organizations comply with regulatory requirements and standards by ensuring that
their products or services meet the required quality specifications.

Conclusion
Statistical Quality Control (SQC) is an essential tool for any business looking to make data-
driven decisions and achieve success in today’s competitive market. By implementing SQC, you
can monitor and control your business processes, ensuring that your products or services meet
the required quality standards. This not only reduces costs associated with defects, rework, and
lost productivity but also improves customer satisfaction and loyalty.

Q.13 (A) PURCHASE MANAGEMENT

Purchasing management involves procuring goods from suppliers to meet inventory and
customer demand. Purchase management process includes receiving purchase
requests, raising orders, receiving goods, clearing invoices, processing payments, and
maintaining records.
Importance of purchase management
A streamlined purchase management process helps maintain optimized inventory and
run your business efficiently without stock-outs. Below are a few functions of purchase
management you can explore:
Guaranteeing availability of sufficient inventory
In retail businesses, continuous availability of items in racks is vital to ensure a smooth
customer shopping experience. Process of purchase management should be done at the
right time, and refilling should happen before items get stocked out to ensure racks are
always filled with necessary items as per customer needs.
Ensuring raw materials are ready for production
In order to ensure demand for each variant of private labeled items is met at every
store, production planning should be done efficiently. For that, bulk items should be
purchased from suppliers in advance and less frequently, so the items are ready for
transfer when needed.
Efficient maintenance of transactions
Purchase management system can be effective only when all the transactions are
recorded and available to refer to in the future. Maintaining records of purchases helps
track orders, deliveries, and material inwards. These purchase transactions tracked as
reports help interpret past data and predict demand better.
Assuring transparency in purchases
Transparent purchase management process reduces confusion and miscommunication
between different teams in a retail business. When purchases are documented
transparently with a streamlined purchase management system, all team members are
aware of where the money is spent, and it enables them to plan inventory, warehouse
operations, refilling, transfers, and clearance sales with discounts or offers.
Purchasing required items at best price
The primary objective of the purchase team is to source and procure top-quality items at
the best possible price during the purchase management process. This is possible only
when information about multiple suppliers providing the item, previous purchase history,
and purchase margins are known so you can make well-informed purchase decisions.
Meeting standards and statutory needs
The purchase management process involves a mutual agreement of payment and
logistics terms, discounts, taxes, delivery dates, and other terms and conditions with
suppliers. During conflicts with suppliers, recorded purchase transactions can help win
arguments. Purchase management helps businesses meet the statutory needs of
accounting and auditing, too.
Make the relevant data available to other teams
The purchase management team is interlinked with multiple teams like warehouse,
finance, and sourcing. Therefore, it's necessary for them to have easy accessibility of
purchase-related data to complete their operations. Such cross functional access to
purchasing management information helps them review, analyze, and control data to
make important decisions for the business.

Purchase management process: 6 essential steps

1. Receiving a purchase request
A purchase request with item details, specifications, purpose, and quantity is sent by the
inventory or warehouse team to the purchase management team. This document will be
verified and validated before raising an actual purchase order.
2. Creating a purchase order
Once a supplier is shortlisted and items to procure are finalized, a formal purchase
order for the necessary items is raised with details like item descriptions, quantities,
UOM, payment terms, expected delivery dates, freight charges, and agreed terms and
conditions.
3. Approval of purchase order
In order to ensure a purchase doesn't exceed the budget, purchase orders are
scrutinized by the purchase manager or business owner before being sent to suppliers.
They have the freedom to approve completely, approve partially, suggest changes, or
reject the purchase request considering the impact the purchase will make on the
business.
4. Receipt and inspection of items
After the purchase order is raised from a purchase management system, the supplier
gets the items ready, does the shipment, and delivers them at the store or warehouse.
The purchasing management team inspects the delivered items for adherence to the
specifications and quality standards, notes down any deviations, and processes
the goods receipt note (GRN) to add the items to the available inventory.
5. Invoice approval
A copy of the invoice will be sent by email, post, or physically handed over along with
the shipped items by the supplier. The purchasing management team compares items
and their quantities in terms of ordered versus delivered; validates the value of the PO
raised and invoice value; and discusses the quality, items and quantity mismatches, and
payment adjustments with the supplier.
6. Processing payments
After the invoice approval, payment is initiated to the supplier as per the agreed terms
and time to maintain a good relationship with the supplier. It marks the end of purchase
management process. While making the payment, returns, refunds, and pending
collections are considered and paid accordingly for accurate accounting and audit
compliance.

Benefits of purchase management

Increased efficiency
Purchase management helps streamline the purchase process, eliminate human errors,
and standardize routine tasks. Consolidated purchases with a comprehensive purchase
management system help reduce the efforts, minimize planning time, assure faster
execution, and improve purchase efficiency.
Reduced costs
Purchasing management reduces expenses for the business strategically through
efficient negotiations, ordering with better gatekeeper margins, and getting a better price
for bulk purchases. Operationally, purchase management aids in reducing
waste, minimizing inventory carrying costs, avoiding duplicate purchases, and overlapping
orders.
Improved compliance
Having a purchase management process ensures compliance with regulatory laws,
quality standards, and ethical standards such as anti-bribery laws, shipping and
packaging conditions, faulty or damaged item protection, compliance audits, theft
protection, and audit trails.
Better decision-making
Tracking purchases efficiently through purchase history and insightful reports ensures
only the right products are ordered, from the correct supplier, at the right time, and for
the lowest price. It helps to delve further into stock movement, and make optimized
purchases thereby avoiding stockouts as well as overstocking.
Better supplier control
A purchase management system allows businesses to manage multiple suppliers,
monitor their service levels, provide feedback, and improve their performance. It helps
to maintain and achieve the scheme targets and maintain better supplier relationships,
assuring favorable pricing, better service, agreeable terms, and early access to new
products.
Mitigating risk
Purchase management process helps businesses identify and mitigate risks linked to
procurement, such as poor supplier performance, quality issues, supply chain
disruptions, pricing hikes, and delayed deliveries by preparing contingency plans and
expanding the supplier base.

(B) STORE MANAGEMENT

Store management refers to the administrative process of maintaining and operating a

retail business or store. It encompasses a variety of responsibilities, including
inventory control, staff management, and customer service. Effective store
management ensures that the store operates smoothly and efficiently, meets sales
targets, and provides a pleasant shopping experience for customers.
By managing the logistics of product stocking and staff coordination, store managers
help create an environment conducive to sales growth and customer satisfaction.
What is the Purpose of Store Management?
The primary purpose of store management is to drive the business towards
profitability while maintaining high customer satisfaction standards. Store
management aims to optimise various aspects of the store’s operations, such as:
1. Inventory Management: Ensuring the inventory is well-stocked, organised,
and aligned with consumer demand to prevent overstocking or stockouts.
2. Staff Management: Recruiting, training, and managing staff effectively to
ensure they are motivated and knowledgeable.
3. Customer Service: Enhancing the customer experience through efficient
service, resolving complaints, and ensuring a pleasant store environment.
4. Sales Maximisation: Implementing strategies to increase sales, such as
promotions, effective merchandising, and loyalty programs.
5. Cost Control: Minimising waste and reducing costs without compromising the
quality of goods or customer experience.
Effective store management increases customer loyalty, increases sales, and
ultimately increases the business's profitability.
What is the Process of Store Management [Steps]
Successful store management follows a detailed and systematic process designed to
optimise the efficiency and effectiveness of store operations. The key steps involved
are:
 1. Planning: This initial step involves setting precise objectives for daily
operations, establishing sales targets, and planning the necessary staffing
requirements. Effective planning also includes forecasting demand to ensure
the store is prepared for customer needs.
2. Organising: Once planning is complete, organising the store’s physical layout
and staff scheduling are critical. This step ensures that resources are allocated
efficiently and the store layout is optimised for maximum customer
engagement and sales.
3. Staffing: This involves hiring skilled staff, providing the necessary training, and
fostering a positive work environment. Effective staffing ensures the store
operates smoothly and staff are motivated and capable of delivering excellent
customer service.
4. Directing: Store managers must provide clear direction and leadership, set
performance standards, and communicate effectively with the team to ensure
everyone is aligned with the store’s goals. This includes daily briefings and
regular feedback sessions.
5. Controlling: Monitoring the store’s operations is essential. This includes
managing inventory, overseeing financial transactions, and ensuring the store
adheres to set budgets and operational standards.
6. Evaluating: Regular evaluation of staff performance and store operations is
crucial. This helps identify improvement areas, assess the effectiveness of
current strategies, and determine the success of marketing and sales
campaigns.
7. Adjusting: Based on the evaluations, adjustments may be necessary to
address challenges, seize new opportunities, or shift strategies to better meet
the store’s objectives.
By following these steps, store management can significantly enhance operational
efficiency, improve customer satisfaction, and increase profitability.
Software Used for Store Management
To streamline operations and enhance efficiency, various specialised software tools
are utilised in-store management:
 Inventory Management Software: This tool helps managers keep track of
stock levels, manage orders, and automate restocking processes. It ensures the
store maintains optimal inventory levels according to customer demand and
seasonal trends.
 POS Software: Point of Sale (POS) systems are crucial for managing sales
transactions. They help process sales quickly, maintain accurate sales records,
and integrate these transactions with inventory changes.
 Sales Analysis Tools: These software solutions provide managers with
insights into sales trends, customer preferences, and overall market dynamics.
This data is vital for making informed decisions about product placement,
promotions, and pricing strategies.
 Payroll Systems: Payroll software efficiently manages employee wages,
bonuses, and deductions. This ensures timely and accurate payments and helps
maintain comprehensive records for financial audits and planning.

(C ) ACCEPTANCE SAMPLING

Acceptance sampling is a statistical technique used to inspect the quality of

a batch of products. This quality control mechanism is applied to samples
 taken from the product batch. It involves comparing the number of defective
pieces and the predefined acceptance number to accept or reject the batch.
The concept was popularised by Harold F. Dodge and Harry G. Romig from
Bell Labs during World War II. The United States military then used the
acceptance sampling method to test bullets. Furthermore, American
statistician Walter A. Shewhart penned his work on acceptance sampling in
the book "Statistical Methods from the Viewpoint of Quality Control" in 1939.
 The acceptance sampling method is to inspect or test the quality of a batch of
products or services using statistical sampling.
 It is categorized into three types: Single sampling plan, double sampling plan, and
multiple or sequential sampling plan.
 It saves time and money as fewer items are tested to conclude. In addition, the
people who perform the sampling test can easily be trained. Hence it is an easy and
affordable method of inspection.
 It does not assure the quality of the complete set of products from which the
sample is derived.
Acceptance Sampling In Quality Control Explained
Acceptance sampling is a statistical method for evaluating if a batch of a
product is fit for usage or not. In other words, it is the process of sampling
applied to a whole batch of products received to determine the acceptability.
The purpose is to ensure that the batch or lot meets a specific standard,
which may vary depending on the company or industry.
In this methodology, random sampling is done from a group of products, and
the sample products are tested. Decisions about whether to accept or reject
the lot are made based on the sample test results. It is a compromise made
between a complete inspection and no inspection.
Although this method aids in determining whether or not to accept a batch of
a product, it is not an accurate estimation of the overall lot quality. Typically,
the manufacturer gives the consumer a few samples from the lot. Then, the
lot is approved by the consumer if there are fewer defects than the
acceptable number.
Types Of Acceptance Sampling
There are three main types of the acceptance sampling plan, which are
discussed below:
1. Single Sampling Plan
A single sampling strategy involves selecting a sample from the batch and
testing it to see if it meets certain quality criteria. In other words, check
whether the defective items are not above the acceptable limit. If the lot fails
to meet the set criteria, the entire lot is rejected. This type of plan is
employed for inspecting products produced in small batches.
2. Double Sampling Plan
A double sampling strategy involves selecting two samples from the lot and
comparing them to see if they fulfill a predetermined quality standard. The
method sets two acceptance numbers. The lot is accepted if the defective
pieces are less than the smallest acceptance number (first acceptance
number).
At the same time, the lot is rejected if the defective pieces are greater than
the largest acceptance number (second acceptance number). A second
sample is drawn if the number of defective pieces falls between the first and
second acceptance numbers. Finally, the lot is accepted if the total number
of defective pieces from two samples exceeds the second acceptance
number.
3. Multiple or Sequential Sampling Plan
In multiple sampling, more than two samples will be used to arrive at a
decision. For example, sequential sampling can have several samples.
Following the sampling of the group, the test is carried out to determine
whether or not it has passed a quality criterion. If it does not exceed the
threshold limit, the procedure is repeated.
Example
Let us look at the acceptance sampling example to understand the concept
better:
Manufacturer ABC Ltd sends a lot of 20,000 artificial flower bouquets to XYZ
Ltd., an event management company. XYZ planned to conduct a quality
check on the received bouquets. However, since inspecting and evaluating
each bouquet will take time and money, they decided to use the acceptance
sampling by attributes method. By using the method, XYZ Ltd strategizes a
plan to inspect 30 bouquets.
Following the method, they randomly selected 60 flower bouquets from a lot
of 20,000 flower bouquets. Then, they decided to accept the sample if the
defective bouquets were below four. But, if there are more than three
defects, XYZ Ltd. will reject the sample and sends the flower bouquets back
to ABC Ltd.
Advantages
Some of the significant advantages of acceptance sampling are the
following:
 First, it is an affordable method of inspection since the number of items that
are tested is quite low in number.
 Less handling of the products indicates that the scope for the damage is low.
 The chances of inspection errors are low.
 An easy method to check quality and conformity with standards. If there are
more defective items than the acceptable number, the entire lot will be
rejected, pushing the manufacturer to improve the quality.
 The sampling method does not require much inspection time, workforce, and
specialists to conduct the process.