Semester – IV 

[2875] – 406Oct 2005

M.B.A. (semester -IV)404 D: PRODUCTION AND MATERIALS SPECIALIZATION INVENTORY

MANAGEMENTTime : 3 Hours]     [Max. Mark: 60

Note:1)                 Attempt any six questions.2)                 All questions carry equal marks. 

Q2) The balance sheet of ABC company shows opening and closing stocks of inventories at Rs. 23.5  lakhs and Rs. 26.5 lakhs respectively. The Profit & Loss account for the same year indicates Rs. 18 lakhs as profit before taxes. Total capital deployed during the year is Rs. 90 lakhs A study carried out in the area of inventory management revealed that the company had accumulated a considerable number of obsolete and dormant stock which had locked up company’s productive capital of Rs. 2,62,500. The discussion with materials Manager that the disposal of such items is likely to tech 40% of original value of these items. The last issue of certain items was as late as 3 years.

               The insurance on the stock is Rs. 12,500.

               Total storage area = 6000 sq.ft.

               Construction cost = Rs. 100 per sq.ft.

               Expected life of building = 40 yrs.

               Maintenance cost of stores = Rs. 24,068.

Calculate inventory carrying cost assuming interest rate at 14%.

 

Q3) The price per unit the item = Rs. 3. Average monthly consumption = 100 nos. Inventory carrying cost is 20% of average inventory investment. Procurement cost is Rs. 40 purchase order. Using the above data derive the by step formula EOQ.

 

Q4) A manufacture requires 500 nos. of castings per month. However 10% extra castings need to procured to compensate for rejections during manufacture. Presently the manufacturer purchases the manufacturer purchases the material every quarter. The procurement cost and the inventory carrying cost have been estimated at Rs. 50per order and 24% of average inventory investment. If the price per unit is Rs. 11-

a)                             Calculate EOQ.

b)                              What is the total cost of existing inventory policy?

c)                              How much can the manufacturer save by switching over to EOQ purchases.

 

Q5)    Annual consumption of item = 60,000.          Price per unit = Rs. 1/-          Inventory carrying cost = 18% of average inventory investment.Procurement cost = Rs. 36 per purchase order.

a)                 Calculate EOQ.b)                  What quantity should be ordered and received under the following

buying conditions –1)           supplier’s minimum order quantity = 10,000 nos.2)            Lead time 2 weeks.3)           Packing size per box = 1000 nos.4)           Shelf life = 6 months.5)           Staggered delivery in not acceptable to supplier.

c)            What quality should be ordered and received if the supplier agrees to supply the item in staggered lots of any size, provided a bulk order indicating confirmed delivery schedule is placed.

 Q6) Using the following figures explain the working of two-bin system.

          a) Monthly consumption of an item = 100 nos.

          b) EOQ = 500 nos.

          c) Lead time = 2 months.

          d) Safety Stock = ‘m’

 

Q7)    Explain the impact of low inventory on ability to carry out engineering changes quickly.

 

Q8)    What is a bottleneck machine. Why is it necessary to squeeze out maximum capacity from the bottleneck machine? What are the different methods of squeezing out maximum capacity from the bottleneck machine?

Semester IV Total no of question

8                                                                   total no pager 2                             [2975]-406

 M.B.A

May 2006(INVENTORY MANAGEMENT)

(404-D) Production and material management specialization(Semester-IV)

Time 3 hour                                                              Max marks 60

Notes1) Solve any four questions.

2) All question carry equal marks.      1)     What are the needs of Inventories? Give merit and demerit of Inventory

management2)     Derive EOQ formula.

An industry purchases crank-shaft at the rate Rs 25 per unit. The annual consumption of cran shaft is 18000 Nos. if the ordering cost is Rs 250 per order and carring cost is 25% P.a. what would be the EQP?3)     Explain following inventory control analysis with characteristics of each method.

a)     ABC analysisb)      XYZ analysisc)      VED analysisd)     SDE analysise)     JIT

4)     Discuss in detail meaning and type of Replenishment system in inventory management?

5)     Discuss the role of WIP inventory in the following manufacturing systema)     job manufacturingb)      project manufacturingc)      mass manufacturingd)     process manufacturinge)     batch manufacturing

6)     “In the era of world class manufacturing, Inventory management become very necessary activity”. Justify.

7)     For a fixed order quantity system the following parameters are givenConsumption        -        10000 unitsUnit cost                  -      Rs 1/unitReorder cost          - Rs 12/orderCarring cost           - Rs 0.24/unit.

                 Past lead times 15 days, 25 days, 13 days, 14 days, 30 days, 17 days is the re order level?

8)     write a short notes (any three):a)     MRPb)      Computerization in Inventory Control.c)      Techniques of Inventory Checking’s.d)     Service level Inventory Control.e)     Role of Inventory management in PPC.

 

Semester – IV

Total No. of Questions: 7]                                         [Total No. of Pages :2

 MAY 2007

[3175]-407M.B.A. (Semester- IV) (New) '7

404 - (D): INVENTORY MANAGEMENT (2005 Pattern) .Time: 3 Hours                                                                         Max. Marks:

70 Instructions to the candidates:1) Answer any 5 questions.       .2) Neat diagrams must be drawn wherever necessary.3) All questions carry equal marks. Q l) Define inventory and list types of inventories. How does inventory contribute to the value adding activities of a firm? When should inventory be considered a symptom of waste? !2) Explain what do you understand by E.O.Q.? What are the assumptions of the EOQ model? How sensitive is EOQ to variations in demand or costs? Q3) Describe the salient features of Fixed Order Quantity Model and Fixed Time Period model and explain their significance. 'Q4) A regional warehouse purchases hand tools from various suppliers and then distributes them on demand tq retailers in the region. The warehouse operates five days per week, 52 weeks per year. Only when it is open can orders be received. The following data are estimated for 3/8" hand drills with double insulation and variable speeds: a) Average daily demand = 100 drillsb) Standard deviation of daily demand = 30 drillsc) Lead time = 3 daysd) Holding cost = Rs. 9.40/ unit / yeare) Ordering cost = Rs. 35 per orderf) Cycle service level = 92% The warehouse uses a continuous review system.Answer the following based on the above data:i) What order quantity and re-order point should be used?ii) If onhand inventory is 40 units, there is one open order for 440 drills, and there are no backorders, should a new order be placed? Q5) Describe the relationship between manufacturing lead time and work in progress in a batch production environment. What are the strategies / techniques which could be used to reduce WIP 

Q6) Explain the use of Distribution Resource Planning to manage inventories in multiple locations. Q7) Write notes on any two: a) Activities adding to the cost of inventory.b) Excess inventory: A road block to World Class Manufacturing. c) Inventory turnover and productivity.d) Computerization in inventory management.

Semester – IVDecember 2008

P866[3475] - 407

M.B.A. (Sem. - IV) INVENTORY MANAGEMENT(404 D) - Production & Material Specialisation (2005 Pattern)

 Time: 3 Hours]                                                                   [Max.

Marks :70 

Instructions to the candidates:-1)     Answer any five questions.2)     All questions carry equal marks.

 Q. l) Explain the importance & essentials of Inventory Management. What are       the problems in Inventory Management. Q. 2) What do you understand by EOQ. Explain EOQ model with quantity         discount. Q. 3) Outline an approach to improve inventory turnover ratio for an automobile         industry.

,Q. 4) What is the relationship between machine set up time & WIP. What are         the techniques which could be used to reduce WIP. Q. 5) Explain the concept of Distribution Inventory Planning & Control. Q. 6) Discuss how excess inventory can be a roadblock to world class         manufacturing and the importance of requirement planning for Inventory        Control. Q. 7) Write short notes on (any two):a) Computerisation in Inventory Management.b) Vendor managed inventory.c) Inventory turnover & productivity.

M.B.A. (Sem. - IV)

404(D): INVENTORY MANAGEMENT

(2005 Pattern) (New)May 2008Time: 3 Hour                                                               

                    [Max. Marks: 70Instructions to the candidates:

1) Answer any 5 questions.2) Neat diagrams must be drawn wherever necessary.

       3) All questions carry equal marks.

Ql) Explain the concept of inventory. Can organizations achieve' Zero Inventory'

       level. Why or why not?

Q2) Mis Accurate Instruments is the purchasing agent for Hindustan Valve Company

which sells industrial valves and fluid control devices. One of the most popular

valve is the VOO? which has an annual demand of 4000 units. The cost of each

valve is Rs. 90 and the inventory carrying cost is estimated to be 100/0 of the

cost of each valve. 11/s Accurate has made a study of the costs of placing an

order and estimated it as Rs. 25 per order. It takes 5 working days for an order

to arrive from the supplier. The demand per week for valves is approximately

80. Estimate:

a) What is the E.O.Q.?

b) What is the re-order point?

c) What is the total annual inventory cost?

d) What is the optimal number of orders per year?

e) What is the optimal number of days between any two orders, assuming

250 working days per year?

Q3) Explain the meaning of transit stock, cycle stock and anticipation stocks.

       Discuss means to reduce anyone of them.

Q4) Taking an example of a white good manufacturing organization explain the

       measures you would use to determine inventory performance.

Q5) List various inventory models that you are aware of. Discuss in detail proba

       bilistic inventory models.

Q6rComment upon the impact ofreducedlsetup time and lead times on levels of

       WIP & productivity in a complex manufacturing environment.

Q 7) Write notes on any two:

a) ABC analysis.

b) Distribution Resource Planning.

c) Application of IT in inventory management.

d) Inventory turns and productivity. 

Semester – IV  Total No. of Questions: 8]                                                [Total No. of Pages:

1MAY 2009

P705[3575]-407 M.B.A. (Sem. - IV)

404 D": INVENTORY MANAGEMENT (Production & Materials Specialisation) (2005 Pattern)

 Time: 3 Hours}                                                                         [Max. Marks:

70Instructions to the candidates:

1) Solve any Five questions.2) All questions carry equal marks.

   Q1) What do you mean by an Inventory? Discuss the various elements of Inventory

Cost?   Q2) "ABC Analysis and EOQ are complementary to each other". Comment.   Q3) Compare and contrast fixed order quantity inventory system

with Fixed interval inventory system.   Q4) Discuss the nature, benefits and constrains of distribution inventory planning

with a suitable example of a Large FMCG company.   Q5) "Work in process inventory is directly proportional to the Length of production

cycle". Comment on this statement.   Q6) Establish the relation 'between lIT, MRP, DRP and WCM.   Q7) Discuss the role of computer in Inventory Management.   Q8) Write a short notes on (Any two) :

a) Rotable spare part inventory.b) Service level inventory.c) Lead Time.d) Assumption in EOQ.

Semester – IV 

Total no. of cases: 5]                                                    [Total no. of pages: 7 

P 410                                             [2875] - 411 

M.B.A. (Sem IV)Oct 2005

PRODUCTION & MATERIALS SPECIALIZATION-CASE STUDYUnit Course No. 407(D) NEW

Time: 3 Hours]                                                                                    [Max. Marks: 60

N.B.:1) Attempt any two questions from section.            2) All questions carry equal marks. SECTION-I Q1) CASE I: PELICAN AIRCON LTD. Manufacturers domestic air conditioners. Value of annual sales of PILICAN is over 40 crs. 65% of the total sales take place during summer. The pelican recently acquired a new company- atul food products ltd. (AFPL), a well established company manufacturing a wide range of food products like instant foods, pickles, ketchup.total no. of products manufactured at AFPL are over 200. AFPL is located at a distance of 200 km from the head office and works of pelican at the same place. Here, assembly and testing activities are carried out. 40% of the components are manufactures in-house the balance is purchased from vendors. At pelican ERP software package has been in use for materials and production planning. The production plan is relatively stable with few variations except Suring summer season. The products are manufactured ageist order and forecast. At AFPL, despite of availability of adequate capacity, deliveries to the customers often gets delayed. Many times products demanded by the customers often get delayed. Products were out of stocks at the same time inventory level of finished goods and work in progress is high. The monthly production plan undergor\es many changes due to accommodating requirements of customers throughout the month. MD of pelican asked the planning manager Mr. sanjay joshi to suggest a suitable planning system for AFPL. Questions: 

1. Suggest a methodology for accessing planning effectiveness and identify areas of weakness.

2.  What factors Mr. Joshi should consider for evolving structure and system for production planning.

3. What should joshi suggest?    Q2) CASE II: Chemtech inc. manufacturers and distributes chemicals at a plant and onsite distribution centre in the western region ofIndia.Chemtech’s purchasing manager is currently rethinking the firm’s relationship with Potash inc., a major supplier. Potash has frequently delivered late, delivered the wrong order, or back ordered chemtech supplies.historically; chemtech has dealt with supply problems by simply changing suppliers. The purchasing manager thinks that it may be time to consider additional charges. Potash is one of chemtechs main suppliers. It holds a large inventory but some slow moving items must be ordered fromEurope with up to 3 months of lead time. When chemtech places an urgent order for these items, potash must order the items from Europe.chemtech pressures potash about the slow delivery time, so potash appears to let chemtech down repeatedly. Potash’s management wonders whether the business with chemtech is worth keeping.chemtech is a major client, but the constant threat of loosing their business disrupts potash’s operations. Top management may change the customer bate to one that focuses on long term customers and relies less on cemtech.   The current process works like this. At the beginning of the each month, chemtech customers estimate their requirements for the next month. through the month they pay the orders to the chemtech marketing dept.representatives from marketing dept. relay the forecasts to the logistics dept.chemtechs purchasing department then orders from suppliers like potash.chemtechs customers often place expedited orders, which cannot always be met because the stock is already reserved for other customers.    Questions:  1. What are chemtechs logistical problems?   

2. How can chemtech improve its logical operations?   3. What options are available to potash in the short-term and long term?

   Q3) Case III

Mr. A K Rao has recently joined Topaz Fasteners Ltd (TFL), a manufacturer of specialty fasteners as Management Quality. He observed that maximum number of customer complaints were on supplies of High Tensile Stud. Mr. Rao also noted that failure of these studs attracts huge warranty claims. The major complaints reported are as under:

1.                                                     Breakage of studs.

2.                                                     Poor threading.

3.                                                     Variation in length and diameter of the studs.

The studs were used in assembling Valve body at the customer’s works. The customers besides visual inspection, was checking following parameters on sampling basis: hardness on Hardness Tester, threading by using thread gauge and dimensions by Vernier and Micrometer. Mr. Rao gathered information on existing inspection system at TFL, which is as under.

SI

No.

STAGE PARTICULARS INSPECTON

1. Raw Material Visual 100 %

Dimensional 5 % Sample, Micrometers

Chemical analysis Each lot

    Mechanical Properties

Test Report to accompany each supply

2. Cutting Length First Piece and Vernier.

3.     First Piece and Random inspection using Vernier,

Micrometer

4. Threading Thread dimensions

and visual

First piece and petrol inspection using an old thread gauge.

5. Heat Treatment Hardness 10% sample on Rockwell Hardness Tester.

Questions:

1. Based on the above information, what changes will you recommend in the inspection system to Mr. Rao?

2. Which QC tools can be used to identify causes of Quality problems of stud?

 

Q 4) Wolf motors:

          John wolf, president of wolf motors, had just returned to his office after visiting the companies newly acquired automotive dealership. It was the fourth “wolf Motors dealership in a network hat served a metropolitan area of 400000 people. Beyond the metropolitan eared, but within a minute drive, were another 500000 people. Each of the dealership in the network marketed a different make of automobile and historically had operatic autonomously.

          Wolf was particularly excited about this new dealership because it was the first “auto supermarket” in the network. Auto supermarkets differed from traditional auto dealership in that they sold multiple makes of automobiles at the same location. The new dealership sold a full line of Chevrolets, Nissand and Volkaswagens.

          Starting 15 years ago with the purchase of a bankrupt ford dealership, wolf motors had grown steadily ion size and in reputation. Wolf attributed this success to three highly interdependent factors. The first was volume by maintaining a high volume of sales and turning over inventory rapidly, economies of scale could be achieved, which reduced costs and provided customers with a large selection. The second factor was a marketing approach called the “hassle free buying experience”. Listed on each automobile was the “on we price –lowest price”. Customers came in browsed and compared prices without being approached by palsy sales persons. If they had questions or were ready to buy, a walk to a customer service desk produced a knowledgeable salespersons to asset them. Finally and wolf thought perhaps most important, was the after sale service. Wolf motors had established a solid reputation for servicing, diagnosing, and repairing vehicles correctly, in a timely manner, the first time.

High quality service after the sale depended on three essential components. First was the presence of a highly qualified, well-trained staff of service technicians. Second was the use of latest tools and technologies to support diagnosis and repaint activities. And third was the availability of the full range of parts and material s necessary to complete the service and repairs without delay. Wolf invested in training and equipment to ensure that the trained personnel and technology were provided. What he worried about as wolf motors grew, was he continued availability of the right parts and materials. This concern caused him to focus on the purchasing function and management of the service parts and materials flows.

Wolf thought back on the stories in the newspapers business pages describing the failure of companies that hadn’t planned appropriately for growth. These copies outgrew their exiting policies, procedures, and control systems. Lacking a plan to update their systems. The companies experience

a myriad of problems that led to inefficiencies and an inability to complete effectively. He didn’t want this to happen to wolf motors.

Each of the four dealerships purchased its own service parts and materials. Purchases were based on forecasts derived from historical demand data. Which accounted for factors such as seasonality? Batteried and alternators had a higher failure rate in the inter, and air-conditioner parts were in higher demand during the summer. Similarly, Freon was needed in the spring to service air conditioner for the summer months, whereas antifreeze was in demand in the fall to winterize automobiles. Forecasts also were adjusted for special vehicle sale and service promotions. Promotions for automobile sales meant an increased need for materials used to prep new cars. Dealers also would have special service promotions.

One thing that made the purchase of service parts and materials so difficult was the tremendous number of different pats that had to be kept ion hand. Some of these parts would be used to service customer automobiles, and others would be sold over the counter. Some ad tpo be purchased from the automobile manufactures or their certified wholesalers to support the “guaranteed Gm parts “promotion. Still other parts and materials such as oils, lubricants, and fan belts could be purchased from any number of suppliers. Purchasing and to remember then the successes of the dealership dependent on (1)lowering cost to support the hassle-free, one price-lowest price concept and (2) providing the right parts at the right time to support fast, reliable after-sale service.

As wolf thought about the purchasing of service parts and materials, tow thing s kept going through his mind: the amount of space available for parts storage and the level of financial resources available to invest in service parts and materials. The acquisition of the auto supermarket dealership put an increased strain on the both factor with the need to support three different automobile lines at the same facilities. Investment dollars were becoming scarce, and space was at a premium. Wolf wondered what could be done in the purchasing area to address some of these concerns and alleviate some of the pressures

Questions

1.                 What recommendations would you make to john Wolf? With respect to structuring the purchasing function for the Wolf Motors dealership network?

2.                 How might purchasing policies and procedures differ as the dealerships purchase different types of service parts and materials (e.g. lubricants versus genuine GM parts)?

3.                 How can inventory management concepts help John Wolf reduce investment and space requirements while maintaining adequate service levels?

Q5) Artwood Products

     Artwood Products was founded in 1998 by Mr. Dilip Tahil at Noida to design and manufacture wooden furniture.

The Product range included dressing table, office tables, shelves, sofa, bed etc. The material used for manufacturing the furniture was teakwood, rosewood and other convention wood.

Mr. Dilip Tahil had spent several years at Europe a designer of furniture. He knew that critical factor in acceptance of furniture is quality and workmanship. Hence, since inception, he employed highly skilled workmen, used the best material and never compromised on quality.

Initially, he focused his efforts on custom built furniture. With innovative designs and high quality workmanship, sales started growing rapidly.

In view of wide range of products and all products being custom built, general purpose plant/machinery were deployed. The layout of plant was process type layout.

As the manufacturing of the manufacturing of the furniture was as per customers’ orders, finished goods stock was not maintained. Based on confirmation of orders, a bill of material was prepared for the order. Considering existing stock of material and inventory in pipeline, a plan was prepared for the order. Considering existing stock of material and inventory in pipeline, a purchase plan was prepared with due consideration to safety stock and lead time.

With acceptance of the Artwood products by the market, Mr. Dilip Tahil introduced standard furniture into the market, which get very good response.

The standard furniture was sold rough distributors. It is necessary to keep stock of furniture to cater to sudden requirement of the furniture from the customers. The standard furniture was being sold under the brand name.

“Artwood ”. The workman still requirement for manufacturing standard furniture was not as high as that for custom built furniture.

Both custom built and standard furniture was manufactured in the same plant. The sales turnover of Artwood Products is currently at the level of 4 cores rupees. Approximately. 60% of the sales are that of standard furniture. Though turnover has increased, Dilip Tahil is worried about some of the problems he is facing.

Customer complaints on delay in delivery are increasing. The deliveries were delayed for both custom built and standard furniture. Tahil got a sample study carried out for two months and was shocked to know that only 15% of the total deliveries were on time.

Artwood’s profitability has considerably eroded. Blockage of funds in inventory, longer manufacturing cycle time, poor quality of products are some of the major reasons of higher manufacturing cycle time, poor quality of products are some of the major reasons of the higher cost and shrinking profits.

An analysis of average time required to deliver custom built furniture indicates increase in time by 25% over last two years for comparable products.

Entire shop floor was congested due to piles of work in progress. Finished goods store is overflowing due to excess inventory of standard furniture. In view of higher level of activity, large quantity of seasoned timber was procured and stored in raw material store.

One of reasons delays in delivery was non-availability of matching parts in the assembly section. Many times assembly workers were idle waiting for receipt of parts/components for assembly for products.

A work sampling study of machine shop indicated average utilization of machines at 46%. Over 20% of the machine down time was attributable to frequent changes in machine setup and 5% due to non-availability of material.

It was also said that labor productivity had fallen. Workers did not work sincerely. It was difficult to assess worker efficiency due to absence of output norms.

Questions:

1.                 What should Dilip Tahil do in short and long term?

2.                 Will an Industrial Engineering study to establish output norm for each operation help solve problems faced by Dilip Tahil? State reasons for your answer.

3.                 Which management concepts/techniques can be adopted in such a situation?

Semester IV 

Total no of question 5                                                                  total no pager 7

 2975]-411

May 2006  

MBA (Sem- IV)CASE STUDIES IN PRODUCTION AND MATERIALS

( PRODUCTION AND MATERIALS SPECIALIZATION)UNIT COUSE 407 (D)

Time 3 hour                                                              max marks 60

Notes1)     Attempt three question in all as follows;2)     Attempt one case from question 1 & question 2 ( 30 marks)

3)     Attempt any two question out of the question number 3,4 & 5 ( 15 marks each)

4)     Make suitable assumptions wherever necessary & state them clearly.5)     Use of calculators is allowed.  

1)     CASE : WESTERN APPLIANCESWestern appliance manufactures electric appliances like mixer, heater. It has plans to introduce a new line of Electric shavers of special design. Unfortunately no commercially available fractional horsepower motor was fitting in to the design. Hence the company has to get the motor developed for the shaver.       The purchase manager of Western appliances discussed the problem with all the existing supplies of electric motor. One of the old suppliers, exdel electrical Pvt Ltd(EEPL) have not only shown interest in the development of the motor but also submitted a technical proposal outlining approach to design custom built motor to the purchase manager The purchase manager was quite impressed with the approach of EEPL. He obtained proposals from other motor suppliers and on comparing all the proposals; the contract for development and supply of motor was awarded to the firm. EEPL developed successfully the shaver motor on “no charge basis”. As per policy the developmental cost is recovered on supply against orders. A purchase contract was placed with EEPL of supply of motors. The price of motor was m arginally higher than the equivalent comparable motors. The western appliances knew vendor has made substantial investment in tooling, dies and The contract was renewed with the vendor for wubsequent tow for supply of 100000 nos. of motors without calling despite request from other suppliers of motors to allow to bid supply. Though EEPL has done an excellent job, western was wondering how long the vendor should supply propertary basis. Questions:  

a)     Has purchases manager handled the purchasing of motor what could be alternative way of handling the purchase?

b)      Should western appliances have called for competitive elaborate?c)      What should the purchase manager now do?  

2)     CASE“Have you handed over the splinted shafts to assembly? Deo, production manager(PM) from his foreman no sooner the entered former’s cabin. “NO sir! There is a problem in that lot and I have come to of the same”. Said the foreman sheepishly. “What is the problem now?” shouted PM. Yesterday, I instruction to the shift engineer to get the remaining operations and his report here clearly reads that the pieces have been final inspection after all the necessary operation.”

 

“That he did sir but in some of the pieces the root diameter and splint width is oversize”. Justified the foreman.  “Get such pieces reworked and do you need my instructions for this?” Said PM raising his voice further. “Rework is not possible since the extension piece has been sawed off. Actually he(shift engineer) should have got the pieces inspected before getting the extension pieces removed”. Said the foreman confidently this time. “Ask the fellow to see me. Last time also, if I remember correctly, it was he who sent axle shafts for heat treatment without inspection and some of the pieces had to be scrapped because later at the final inspection keyway was found missing. And yet on another occasion he allowed blanks of the sliding gear to be sent for gear hobbling without blank inspection and a hob costing Rs 6000 broke into pieces as the diameter in  one of blanks was over size. This time I am not going to spare him. He must be sent home. I hate people who do not use their brains”.  “But what do we do now? Gear boxes cannot be dispatched. Splinted shafts were only item of shortage.” Enquired the foreman. “ Ask quality control whether some of the pieces can be accepted under deviation. If required, I shall ring up Chaudhary ( Manager quality control) and PM turned to pick up the phone.                           (Foreman leaves)‘Useless fellows! They will never use their brains,’ muttered PM and then turning to the visitor friend he asked. Do you too get useless fellows, Mr. Virmani?                         We too ger dumb like your shift engineer. Said Virmani, but possibility of occurqance of such events at our works is very we, at Rathod engineering works, believe that controls and must be built up into the system. We have instruction manuals, for each department. As per procuction control manual, after process has been finalized, a team consisting of personnel from planning, manufacturing and q;uality control must meet to the stages of inspection and the inspection methods. For their important stages of inspection with reasons have been provided PPC manual. Further, every operating. Our heat treatment shop will preceding and succeeding operating . by a forwarding note duly by the stage inspection. Similary, gear shop supervisor will not gear blanks if they have not been stamped by the stage even our draqing of ciritcal operation ( a critical operation one after which no rework is possible) reads a warning like “Please ensure the components under processing carries mark failing which do not perform the operation. I think we too need a manual like yours and we must prepare it put yourself in place of PM and1) identify major causes of rejection.

2)  highlight important stages of inspection and the degects, can be eliminated by each of these inspection stages.extent of inspection (sampling or cent per cent) to be carried at each of these stages.3) You have been entrusted the task of developin g the suggest how you will approach the task.

 

2)     CASE: STOP WATCH TIME STUDY

Stop watch study was carried out on cylindrical grinding operation. The elements of the operation and related data is as given below

Element Element description

Observed time in minutes

Rating in % Remarks

A Pick up job and tighten carrier and position

0.20 90  

B Grind diameter to size

0.80 100  

C Spark off 0.06 100  

D Withdraw wheel to clear the job

0.05 100  

E Measure diameter

0.20 85 Once in five pieces

F Loosen carrier and keep the job aside

0.15 90  

G Dress wheel 0.40 90 Once in twenty pieces

Total allowances- 15%

Q!) What is the standard time of the job?

Q2) If worker is producing 250 jobs a shift what is his efficiency.

Q3) If company has received order for 25000 grinding jobs per month, calculate      manpower and machines required. The company already has one grinding machine.

 

 Q4) CASE: SABRE ENTERPRISES Sabre enterprises are growing organization specializing in manufacture of spare parts for plant and machines.sabre enterprises started the business as vendor for machining cast iron castings. Every day metal/scrap rejected material is collected in bin and stored in compartment at scrap yard. Other scrap like paper waste, waste packing box etc are dumped in a scrap yard in a separate compartment. Once in four months scrap buyer used to visit the factory and collect the scrap. However sabre expanded its activities from a variety of material like brass, gunmetal, mild steel, cast iron, etc.the total scrap generated is about 10 tons per year. Now the scrap is being segregated as ferrous and non ferrous and non metallic scrap and stored in scrap yard method of disposing scrap through scrap dealer remains unchanged. Storekeeper coordinates scrap disposal activities. The price of scrap keeps fluctuating in the market due to number of environmental factors. Sabre has a new materials manager who feels that existing system scrap disposal needs to be changed. What should he do? Q5) CASE: THE BETTER LATE THAN NEVER BID Lisa Evans, supply manager for central teachers college, issued a invitation to bid covering furnishing and installing metal lockers in the men’s gym. There men’s respective bids were received from reputated suppliers, ranging from $ 32500 to 437300.there was no public bid opening. Lisa was concerned that pairie manufacturing, inc., which had done most of other locker jobs at central, failed to bid. Expecting the pairie would have been the low bidder, lisa decided to find out what happened. upon talking to pairies sales manager’s learned that the bid request had been assigned to new employee who has misplaced it and missed the closing date. Since Lisa felt that prairie misplaced it provided the winning bid and certainly, any savings would

Help Central’s tight budget-she decided to declare the entire bid price unreasonable, cancel all bids and rebid the job.

On the second round of bidding, a low bid of $26750 was submitted by Prairie. Lisa was delighted that she had made the right decision and proceeded to make the award to Prairie.

3)     Did Lisa do the right thing? Was it ethical? Should she be commended for saving $6000?

4)     Would it have made any difference. If the original opening had been public?

5)     How might this look to the original bidders?

6)     How Lisa should have handled the bid purchase.

Total No. of Questions: 8]                                                     Total No. of Pages: 1

MAY 2007[3175]-422

M.B.A. (Semester - IV) (New)(407-D) PRODUCTION & MATERIALS SPECIALIZATION 407 - D:

MATERIALS REQUIREMENT PLANNING (2005 Pattern)Time: 3 Hours                                                                            [Max.

Marks: 70 Instructions to the candidates:1) Answer any five questions.2) All questions carry equal marks. Q l) Explain meaning of Material Requirement Planning and state its objectives.      Describe advantages of application of MRP over EOQ model.Q2) Describe MRP process in details taking an example of an organization      manufacturing a wide range of compressors. Q3) Explain the meaning and types of bill of materials. Discuss the effect of error/      mistakes in bill of materials on effectiveness of MRP. Q4) Describe relationship between Production Plan and Master Production Schedule.      Explain the proces~ of evolving Master Production Schedule. Q5) Enlist lot sizing techniques and explain with example application of any two      techniques. Q6) Explain the Likely causes of failure of implementation of MRP" system in a       manufacturing organization. State management actions which would tacilitate      effective implementation of the MRP system. Q7) "Advances in Information TechnQlogy (IT) facilitated effectiveness ofMRP

          system", Discuss.Q8) Write notes on any two of the followings:a) Safety stock considerations in MRP.b) Limitations of MRP.c) Updating inventory records.d) Future of MRP.

Semester – IV P430                                                    Oct 2007

. [3275]-412M.B.A.

.PRODUCTION & MATERIALS SPECIALIZATION(407 D) Materials Requirement Planning

(Sem. - IV) (New) (2005 Pattern)Time: 3 Hours]                                                                   [Max. Marks: 70

 Instructions to the candidates: 1) Answer any Five questions. 2)All questions carry equal marks. Ql) Discuss the paradox of inventory management for manufacturing organizations. Q2) Explain the role of Material Requirement Planning System in meeting Manufacturing  objectives. Q3) Explain with examples how gross requirement and net requirements of material is determined in MRP system.      . Q4) Discuss the data requirements for MRP planning and implementation. Q5) "Master Production Schedule (MPS) drives the MRP system". Discuss. Q6) Describe various outputs of MRP system and their utility in manufactming      organizations. Q7) Enlist lot sizing techniques and explain application of any two techniques. Q8) Write notes on any two of the following:          a) Modular Bill of Material.

          b) MRP - pun or push system.          c) Future of MRP.          d) Prerequisites of MRP.

Semester – IVDecember 2008

[3475] - 412P812 M.B.A. (Sem. - IV)

(407 D) PRODUCTION & MATERIALS SPECIALIZATIONCase Studies In Production & Materials Management

(2005 Pattern)Time: 3 Hours]                                                                               Max. Marks

:60 Instructions to the candidates:1) Answer any 4 questions.2) All questions carry equal marks.3) Your answers will be valued as a whole. Q. l) Case: SDC CORPORATION  SDC Corporation is a large, high-technology manufacturer of sophisticated electromechanical devices. Its current manufacturing operations are diversified between several major product lines. Recently, SDC developed a new product line centered around the production of an electronic tracking device. The tracking device is placed in fleet vehicles such as taxi cabs, delivery trucks, and courier vans. During operation, it emits an electronic signal that is monitored at a central tracking console located near the dispatcher. To facilitate a rapid entry into the market, SDC decided to rely on Hangsu Manufacturing Company in Japan to provide four critical electromechanical switching devices. Hangsu has a proven record of accomplishment in supplying these components for, Japanese applications. Hangsu had produced 40,000 of these components used in a similar tracking device in Japan. At the time of the decision, the exchange rate was acceptable. 

SDC had experience selling finished goods on the international market; however, this was the firm's first attempt to use foreign subcontractors. SDC decided to use MTC, a Japanese trading company, to negotiate the initial agreement with Hangsu. The agreement was negotiated, and Hangsu supplied the components in accordance with the SDC performance specification. SDC has only one major competitor in the tracking device market. The total domestic market is estimated to be 100,000 units. SDC had already won one contract with Fleetway Trucking for 2,700 units, contingent on a successful pilot test of 100 units. Unfortunately, Fleetway subsequently terminated the contract due to nonperformance of the test units. The operating problem was attributed to failure of the Japanese components to perform according to specification. Nationwide Cab Service awarded another contract for 1,000 units to SDC. Having heard about Fleetway's problem, however, Nationwide placed the contract "on hold" pending the outcome of a more stringent pilot test to be performed by SDC. SDC deals directly with Hangsu on technical and production problems. MTC operates as Hangsu's representative for all financial and contractual decisions. SDC feels that the device's operating problems are confined to the four components produced by Hangsu. To resolve the problem, SDC has requested that Hangsu rework the components contained in the original 2,700 units, and ensure that the next 1,000 units fully meet the performance specification. Relations with MTC/Hangsu have deteriorated somewhat now. Hangsu feels that the SDC specification has been extensively modified and does not reflect the original design agreed on for the components. With over 40,000 similar tracking devices operating successfully in Japan - all using the Hangsu components - Hangsu is confident that it has met all specification requirements. Frustrated by the inability to reach an agreement, Tom Decker, supply manager for SDC, has decided to withhold $1 million from MTC/Hangsu to establish a better negotiating position. In addition, deterioration of the yen/dollar exchange rate has made future dealings with Hangsu uncertain, at best. Tom Decker realizes that the Japanese will negotiate with a long-term perspective (four to five years) in mind, while he is being pressured to address SDC's current bottom-line difficulties. Questions:

1)     How could Tom Decker have avoided the problems encountered with Hangsu?  Discuss in detail.

     2)  What negotiation skills should Decker rely on to achieve SDC's objectives?     3)  How can Decker get the 3,700 units reworked to meet specification?   Q2) Case: ROCHESTER MANUFACTURING CORPORATION 

Rochester Manufacturing Corporation (RMC) was considering moving some of its production from traditional, numerically controlled machines to a flexible machining system (FMS).Its traditional numerical control machines have been operating in a high-variety, low-volume, intermittent manner. Machine utilization, as near as it can determine, is hovering around 10%. The machine tool salespeople and a consulting firm want to put the machines together in an FMS. They believe that a $3,000,000 expenditure on machinery and the transfer machines will handle about 30% of RMC's work. The firm has not yet entered all its parts into a comprehensive group technology system, but believes that the 30% is a good estimate. This 30% fits very nicely into a "family." A reduction, because of higher utilization, should take place in the number of pieces of machinery. The firm should be able to go from fifteen to about four machines and personnel should go from fifteen to perhaps as low as three. Similarly, flood space reduction will go from 20,000 feet to about 6,000. Output of orders should also improve with this family of parts being processed in 1 to 2 days rather than 7 to 10. Inventory reduction is estimated to yield a one-time $750,000 savings, and annual labor savings should be in the neighborhood of $300,000. Although the projections all look very positive, an analysis of the project's return on the investment showed it to be between 10% and 15% per year. The company has traditionally had an expectation that projects should yield well over 1,5% and have payback periods of substantially less than 5 years. Questions: 1) As a production manager for RMC, what do you recommend? Why?2) Prepare a case by a conservative plant manager for maintaining the status quo until    the returns are more obvious.3) Prepare the case for an optimistic sales manager that you should move ahead with

the FMS now. Q3) Case: FOUR SQUARE LUMBER MILL Jon Johansen was the supplies buyer at Four Square’s Valdosta plant. One day he sat examining a traveling requisition (TR) card for ten carborundum saw blades. The specified blade was made in Switzerland and is obtainable through a mill supply house in Birmingham at a cost of $225 each, EO.B. Birmingham. Jon observed on the TR that some 110 blades were ordered a year. The requisition specified that no substitutes were permitted. Even so, Jon decided to see if any money could be saved through alternative sourcing. He contacted two of his better mill supply sources to see what they could do. Both suppliers indicated that the Dipson 412 blade was every bit as good as its Swiss counterpart. Based on an annual purchase of eighty or more blades, one supplier quoted a unit price of$112.50 per blade. (The second supplier's price was $115.00.) Both prices were EO.B. Valdosta.

 Jon then contacted Sam Sharpe, the foreman of sawing operations at Four Square. Jon explained the potential savings and asked Sam to give the American blade a try. Sam. was certain that the Dipson blade would not stand up to the Swiss blade. After several minutes of trying to convince Sam of the desirability of buying the Dipson 412, Jon said that he thought that they really should give it a try. Sam left in a good humor saying, "O.K., but I know it won't work." Jon ordered ten Dipson blades. He included a provision that any unused blades could be returned for credit if the Dipson did not prove to be equal to the Swiss blade. Two days after the blades arrived, Sam entered Jon's office. Sam was grinning from ear to ear, holding a saw blade in each hand. Both blades were burned as a result of the excess heat generated during the cutting operation. Jon was convinced that the boys in the yard had treated the blades unfairly to ensure that they would fail. Questions: 1) What could Jon have done to avoid this situation?2) What should Jon do now?3) What should Four Square Lumber Mill management should do from short and long term perspective. Q4) Case: POLYESTER FILAMENT YARN PLANT AT RELIANCE The manufacture of Polyester Filament Yarn (PFY) is done in three stages. In the first stage, the pre-polymerization activities include feeding in the required chemicals and catalysts for further processing. The second stage is Continuous Polymerization (CP). During this stage, the polymer is created in molten form by a CP unit and sent for spinning. The molten polymer enters into the spinning machine through packs. Packs are small cylindrical assemblies packed with steel powder and act as filters. When the molten polymer passes through the pack, the impurities contained in it are removed. The polymer finally enters the spinning machine, where it is finally wound on bobbins. There are metering pumps to monitor the flow of the polymer as it comes out of the CP unit. There are 64 meters pumps that monitor the flow of polymer into each spinning machine. A single inverter controls all the 64 metering pumps. Disrupting the production for certain changeover requirements is unavoidable. Changeovers are necessitated by the need for changing the packs, as packs have a finite life. Since packs act as filters over a period of time, impurities accumulate in the pack and this increases the pressure. When the pressure reaches a threshold level, the metering pumps will not be able to function properly. At this stage, the production needs to be disrupted for a pack change. A pack changeover involves the following steps: First, the metering pumps are stopped and the CP unit throughput is reduced. After the existing packs are removed, the pre-fabricated ready to use packs are pre headed to 280300°C and then inserted. The metering

pumps are then started and the CP unit's throughput is restored to its original value over a period of time. The losses due to this are many. The CP unit works continuously, as stopping it will jeopardize the entire production unit in the following ways. During the time the system is put on hold, the entire molten polymer produced will be wasted. There will also be losses due to quality until the CP unit stabilizes. Normally when there is a throughput fluctuation, the viscosity of the polymer is altered and this results in waste and downgraded quality of finished products. Similarly, after every disruption, the polymer takes about two and a half hours to change from bright to semi dull. The output during this entire period also is wasted, Questions:1) Identify and discuss factors/issues which influence productivity in above case.2) Application of which management techniques/approaches would help in increasing     output and how? Explain.3) Which information is required to make decision for increasing output and resource    utilization. Q5} Case: SMITH-JONES ELECTRONICS CORPORATION Mr. George Brown was promoted in January to the position of senior procurement specialist, a supply management position at Smith-Jones Electronics Corporation, a Fortune 100 company in the northeastern United States. Within the first few months on the job, he found it difficult to do his work well and wondered what action to take. Company BackgroundThe Smith-Jones Electronics Corporation was a forty-year-old electronics manufacturing company selling in three primary markets: defense electronics, commercial aviation, and consumer appliances. The company was a financially sound multiplant organization. Current sales were $6 billion, and the company was enjoying a rapid growth rate, according to Mr. Brown. It was a multinational company with 77,000 employees worldwide. Supply Management PracticesSupply management at Smith-Jones was conducted primarily in a decentralized mode. Staff functions such as large contract supply management, training, policy and procedure administration, and consulting on an as-needed basis were centralized in a corporate supply management department. Supply research was conducted using resources outside the company, mainly supplier surveys. Plants had a dotted line responsibility to the corporate supply manager. Mr. George BrownMr. George Brown was a supply professional with more than thirty years of supply management experience. Before joining Smith-Jones over fifteen years ago, he was

employed by two large companies in the same industry. When, his predecessor left Smith-Jones to work for another firm, Mr. Brown was promoted from purchasing manager in the data systems group to his current position as senior supply specialist. Challenges to Improving Supply Management's OperationsA short time after Mr. Brown began his new assignment as senior supply management specialist he became disturbed about the difficulties, he encountered in attempting to do his j ob well. Drawing on his substantial supply management experience to evaluate job performance, he was able to identify those areas that he felt needed improvement. He concluded that they could be classified as a lack of effective supply management methods. For example, he found that production was not being supported in a timely fashion. In general, production management perceived supply management as conducting price auctions and not as professionals making a contribution. A lack of effective criteria for an in-depth evaluation of responses to requests for quotation resulted in bids being awarded to low bidders without considering other factors, such as quality, that impact on cost. This perception was further reinforced by an unusually large incidence of late deliveries. Cost comparisons with the then current market activity revealed that prices being paid were too high. Supply managers were reacting to requisitions as they were generated. Due to lacx of coordination among plant supply managers, they were not making effective use of the company's buying power since they were operating independently of each other. Consequently, they were left to buy at the mercy of the marketplace. He found that a major contributing factor was that there were too few internal resources available to supply managers. The company did not have a strategic supply management plan to provide direction for the supply group. Attempts to collect meaningful data were not successful because the collection of data was inconsistent and usually incomplete throughout the supply management community. Requests for forecasts could not be complied with since there was no internal base for developing supply forecasts. The only forecast data available in the supply management group was that supplied in response to requests to potential suppliers. Markets were not monitored by supply managers. The absence of current market status, prediction of future market conditions, and an accurate forecast prevented supply managers from reacting to market conditions to assure consistent sources of supply at competitive prices. Difficulties in assessing department productivity were encountered because the lack of credible data did not allow measurement of performance. However, evei1 if such data were generated, their usefulness would be restricted by lack of historical data on performance. Without historical data for use as a base or an index, any attempt to measure productivity would yield flawed results. Proper use of suppliers as resources could not be realized since no vehicle existed to obtain, verify, and use data obtained from them. There was no formal supplier recognition program to encourage and reward supplier participation in performance, achievements, product development, cost containment, market awareness, and, when appropriate, brainstorming. Some internal resistance to change existed due to a lack of understanding of how to react to market conditions. The one encouraging area Mr. Brown discovered was quality. There were few complaints about incoming quality and it was not considered an

issue. He realized that any initiative for change would have to come from him-and he wondered where to start. Questions: 1) Identify and discuss the basic issues in this case.2) Suggest an approach for making supply function more effective with focus on management tools and techniques. Q6) Case: Creative Engineering 'Pvt Ltd: Creative Engineering Pvt Ltd's prices are high and the vendor is not in a position to reduce the prices further. Super Fasteners Ltd. are already exporting similar products and have ambitious plan for expansion. Super fastners Ltd have the capability, infrastructure and resources to meet the requirement of Bonnet Stud. However, Mr. Joshi was wondering whether Super Fasteners Ltd, itself may become competitor to FIL by virtue of access to' information Creative Engineers Pvt Ltd's infrastructure in terms of skilled personnel in Quality were inadequate. Besides, they do not have enough experience in Salt Bath type heat treatment process. The cost of Bonnet Stud manufactured in house works out to Rs.30.50 per stud. The importer is paying $.70 per Stud. At Rs. 48 per dollar conversion rate, the price in rupees works out to Rs.33.60 per stud. In view of the global competition and rupee likely stablising against dollar, the price offered may further reduce. Mr. Joshi prefers to have one source of supply of Bonnet Stud, if bought from outside. However, distinct advantages like quality, delivery, flexibility and control in case of inhouse manufacturing too deserves serious consideration in view of criticality of the bonnet stud.Questions:1) Should Mr. Joshi make the Bonnet Stud in house or buy from vendor?2) What factors should be considered by Mr. Joshi while making make-or-buy    decision?3) In case if Mr. Joshi decided to buy from a vendor, on which vendor should he place    order and why?4) Is the practice of single source for supplies is desirable? Give reasons. 

 PRODUCTION & MATERIALS MANAGEMENT

                                                    SPECIALIZATION'

407 (D) - Materials Requirement Planning

(2005 Pattern) (Sem. - IV) (New)Time: 3 Hours                                                                   {Max. Marks :70

   Instructions to the candidates:

        1) Attempt any five questions.

        2) All questions carry equal marks.

 

Ql) a)"In the era of Globalisation, inventories are the Liability to the organisation."

Justify. Do you agree?

       b)Differentiate between order point inventory system and MRP inventory

system.

 

Q2) Discuss in detail Prerequisites and Assumptions for MRP.

 

Q3) Discuss in detail methodology for Master Production schedule?

 

Q4) Discuss the practical considerations required in Lot sizing decision? What are

the components of master production schedule?

 

Q5) What is Bill of Materials? Discuss the modularization of Bill of Materials

with example.

 

Q6)  What are the objectives and role of MPS and BOM in MRP?

 

Q7) Explain the uses of MRP output? Discuss planning versus Execution aspects Of

MRP system?

 

Q8) In the fast changing era of Globalisation and technological development,

what      would be the role MRP to play?

 Total No. of Questions: 8]                                                 [Total No. of

Pages: 1 

MAY 2009P1276         [3575] - 412

M.B.A. (Sem. - IV)407 (D) : MATERIAL REQUIREMENT PLANNING (Production & Materials

Specialization) (2005 Pattern)Time: 3 Hours}                                                                         [Max. Marks:

70Instructions to the candidates:

1)       Answer any five questions.2)       All questions carry equal marks. Ql) Discuss whether MRP system is:a) An alternative or complementary to order point method.b) Inventory control technique or scheduling technique or both: inventory control    and scheduling technique. Q2) Draw a diagram / sketch of MRP process and describe          a) Outputs of MRP.          b) Uses of outputs. Q3) Explain following prerequisites for effective implementation of MRP system.          a) Managerial prerequisites. .    b) Information prerequisites. Q4) Describe with example modular bill of material and its uses. Q5) a) . Explain the meaning and objectives of MPS.b)       Describe the effect of frequent changes in MPS on MRP systeln effectiveness. Q6) Describe any three lot sizing techniques and state their advantages. Q7) Discuss issues involved in developing valid inputs in MRP system. Q8) Write notes ~m any two of the following:a) Future of MRP.b) Regeneration and Net change in MRP.c) Safety stock considerations in MRP.d) MRP ass Ulnptions.

  [Total No. of Cases: 3]        MAY 2007P756                                                [3175]-427

M.B.A. (Sem. - IV)

(408D) PRODUCTION AND MATERIALS SPECIALIZATION(Revised Syllabus) (New) (Paper - II)

Unit Course 408 (D) CasesTime: 3 Hours                                                                  [Max. Marks: 70] Instructions to the candidates:1) Attempt any two cases.2) All cases carry equal marks.  Case No.1

Renuka Machines Manufacturing Corporation.Renuka Thomas, President of Renuka Machines Manufacturing Corporation (RMMC), is concerned about company's choice of suppliers for cleaning brushes, which are used in the company's data processing equipment. Renuka occasionally plays Tennis with Sheela George, President of George Machine Company (GMC), one of the company's suppliers of cleaning brushes.Recently, Sheela complained to Renuka that her company has been having difficulty in getting traditional share of Renuka's brush business. On the last buy, Sheela's company failed to get any business, even though Sheela believed she was the low bidder. Renuka tells Sheela that normally she does not get into the details of procurement, but she promises to ask her purchasing manager Dannis Chako to investigate.The next day morning Renuka calls Dannis Chako and tells him of Sheela's complaint. He said, he does not want to influence the company's procurement policies, but he does not feel that"Renuka should investigate to make sure that Sheela's firm was treated fairly.Purchasing Manager Dannis discovers that Sheela George Machine Company was indeed low bidder on the last buying. Quotations for an order of 20,000 units were as under:Sheela George Machine Company Rs. 2.22Data Matics Electronics Company Rs. 2.23Royal Tools and Machine Company Rs. 2.25Royal and Data Matics each got orders for 10,000 pieces. Royal has done considerable development work on brushes, while Sheela and Data Matics have done very little. The quality and delivery records of the three suppliers on the last ten orders for the brush are shown below. Renuka Machine's mfg. quality control department has set an acceptable quality level of 3 percent on the brush: 

Supplier Quantity Quantity Delivery

  Ordered Defective  

Royal 4,000 122 One week early

Data Matics 4,000 92 One week late

Sheela 3,000 12"0 On time

Sheela 6,000 162 Two weeks late

Royal 4,000 38 On time

Data Matics 5,000 29 One week early

Sheela 2,000 88 1000 pieces on time, 1000

      pieces four weeks late

Data Matics 6,000 98 Two weeks late

Royal 4,000 45 One week early

Sheela 5,000 162 One week late

 Questions:i) Is Dannic Chaco justified in eliminating Sheela Machine Company as a supplier of   brushes? ii) In what respect is the complaint from Sheela Machine Company justified? iii) Prepare a report for Renuka Thomas explaining the decision to eliminate Sheela     Machine Company as a supplier, use quantitative data as much as possible to     support your answer.                                                                           [35] Case No.2Bagwan Computer CompanyThe Bagwan Computer Company (BCC) was established in 1991. It has two engineering graduates of Osmania University. The company has maintained as excellent growth record. Today annual sales of the company is 5 crores.Companies pricing policy is to skim the market-that is when it introduces new product, it prices the product to quickly recoup R & D investments. The company gets a sizable profit. When profit goes down, the company is in a position to launch a new product which is more profitable than the item replaces.The overall strategy has two key resources. One is highly competent R & D group and the other is the ability to convert ideas into marketable hardware quickly. The purchasing department of 'BCe' ensures advanced technology and availability of vendors for all items.Jimmy Carter, manager of materials of 'BCC', just received a memo reminding him that the annual corporate planning retreat is to be held in five weeks at the company's placement centre. This reminding memo with a recent with a important 'BCe' 's suppliers caused Jimmy to recall the current shortages of memory chips. Jimmy decided to review the firm's present suppliers ability to meet profitable changes in advanced technology which lead to increases in demand over the next five years.Questions:

i) What areas should Jimmy investigate?ii) What action should Jimmy take, if present suppliers appear to be unable    to meet future requirements?iii) Should materials management, in the absence of materials management     function; be part of the "long-range planning activity? Why or why     not?                                                                                                   [35]  Case No.3

Decker Television and Radio CorporationDecker Television and Radio Corporation of Mumbai has always specialized in high quality electronic equipment. The company was established in 1956; and its first product of a radio-phonograph combination designed to retail for Rs. 3,000 each. In 1959, the company produced its first TV set. It did not compete with mass producers of TV sets as its design emphasized qualitypractically all sales went to six distributors in India, namely Delhi, Chennai, ;: ~Calcutta, Hyderabad, Bangalore andGwalior. In 1979 the company broadened its line and introduced colour TV. Again the emphasis was on quality not price.The colour TV product was immediate successful and the company started growing. By 1962 there were six hundred employees, compared to less than hundred just ten years earlier. Bon Decker the company's founder felt that the company grown to the point where it could profit from an integrated materials activity. He promoted his purchasing agent Samual Devid to materials manager. He made him responsible for inventory control, shipping, receiving and traffic and purchasing also.Samual Devid in turn hired Vicky George as a traffic expert. She explained to Vicky George when she hired him that she herself knew very little about traffic management but was certain that more savings could be made as the company spending Rs. five lakh per year on transportation services.Prior to the creation of independent materials department, traffic had been something of step-child in the Decker organization. The sales department was responsible for all outbound shipment. All shipments were made bythe shipping and trucking company a well known company in South-east. ~ Inbound shipments were the responsibility of the purchasing department. .-<f~ As Samual Devid puts it, "I buy from suppliers within a 600 miles of !'. Mumbai and require all vendors to quote F.O.B./F.O.R. our plant. This makes it easier to compare bids of competing suppliers and makes the vendor responsible for delivery to our plant on the date we request it. It also gives vendor an incentive to combine shipment in one geographical area and therefore keep his costs down."WhileSamual Devid is convinced that this approach may have been themost economic one while the Decker Company was small, she is open toany suggestion that Vicky George may have for improvement. Questions:i)   Prepare a programme of traffic management for Decker Television     and Radio Corporation.ii)  What should Vicky George's duties and responsibilities as traffic     manager be?iii) Suggest specific areas of investigation to reduce the company's

     transportation cost.                                                         [35]

*********************************Semester – IV

P434                                                          Oct 2007

[3275]-417M.B.A.

(408 D) CASES IN PRODUCTION & MATERIALS MANAGEMENTProduction & Materials Specialisation

(Sem. - IV) (New) (2005 Pattern)Time: 3 Hours]                                                            [Max. Marks: 70

 Instructions to the candidates:   1) Answer one question from section 1 and two questions from section II.   2) Figures to the right indicate full marks.   3) Use of logarithmic tables, slide rule, Mollier charts, electronic pocket       calculator and steam tables is allowed.

SECTION - I Q 1 ) FALCON INDUSTRIES LTDFalcon Industries Ltd (FIL) commenced in 1985 at Bangalore to manufacture and supply high precision auto components like crank shafts to cater to the requirements of Ashok Leyland, TVS Group etc. That company in a short time built reputation for quality and timely delivery. This led to rapid growth of business. The company under the leadership of Mr. Pankaj Roy, its MD, increased capacity, developed manufacturing capability ab~orbing and developed competence in product design. FIL had developed several products for defence application for HAL, BEL and BEML. It also developed and supplied valves for ONGC for their pipeline project. Since early 90s, FIL started feeling true competition to their products. One of the weakness of FIL was high cost of manufacturing and long delivery time. New young organizations were offering lesser prices and shorter delivery thereby hurting FIL's business. As a response, FIL focused on export market hunting for value added products. It succeeded in bagging a huge export order for delivering 20,000 valves in first year besides spare requirement for ,an importer in USA. The valves were required for pipeline project in Canada and as replacement for pipeline in Gulf and Latin American countries. While FIL has inhouse capability to manufacture most of the components, it has decided to outsource many of them. Mr. Roy made Mr. Ravi Joshi, asenior manager purchase responsible for all project purchases. Mr. Joshi could take decisions on outsourcing and place orders on vendors for most of the.

outsourced components. In case of one component, Bonnet Stud, Mr. Joshi has run into problems: Bonnet stud is a threaded component, made from mild steel bar of 24mm diameter. The manufacturing process involves bar cutting, machining, threading, heat treatment and phosphating operation. The heat treatment process is salt bath type. In a furnace, salt is heated upto its melting point and the components are immersed in the salt bath at a temperature for a specified period for hardening. In hardening process, the material acquires high hardness due to change in metallurgical structure of the material. The hardened material is dipped in a oil bath for quenching and subsequently put in another furnace with molten salt for a I?rocess called tempering. After tempering the material is air quenched. By the process of hardening, quenching and tempering the material get required mechanical properties. Hardness of the Bonet Stud should be within the range of 25- 30 on Rockwell Scale (Rh). Maintaining hardness within the range is one of the critical .e a requirement. The component (Bonetstud) should not crack till one year after installation. If it cracks, FIL will have to pay llakh dollar toward warranty claims to the customer. Improper heat treatment, high hardness, poor quality raw material are generally the common causes for cracks/ breakage of Bonet Studs. Mr. Ravi Joshi Contacted several vendors for supply of Bonet Stud. After initial screening of offers, he short listed three suppliers. The other vendors were not considered due to factors like insufficient capacity, lack of adequate testing facilities etc.The three vendors and summary of their offer is as under:1 Name Creative

EngineeringSuper Fastners Ltd Atlas

Engineering    Pvt Ltd   Products Ltd      .  2 Location Hyderabad Coimbatore Bangalore3 Basic Price Rs 30.00 Rs 24.50 Rs 21.004 Discount 5% against order

for10% discount on 10% discount

on    10,000 or more single order of

5000single order of 4000

      Studs studs5 Credit 30 days 45 days 60days6 Delivery Ex - work Ex-work At FIL7 Transport Price excludes

transportPrice excludes. Transport

expenses    charges transport charges will be borne

by AEPI8 Taxes/Duties Borne FIL Borne FIL Borne FIL9 Quality CQ for Telco

suppliesISO - 9000:2000 ISe -

9000:2000  certification      

10

RM Testing . Spark Test . Spark Test Test will be carried

        out outside    . Wet Test . Wet Test      . Crack detection . Crack detection      (test inhouse

facility)(test inhouse facility)

 

11

Finished Sample testing - 100 % hardness checking

 

  goods   for lots upto 500 nos till 3

 

  inspection   despatches        - Subsequently on

sample 

      Basis        - For other

parameters, 

      checking on sample basis

 

12

Minimum 2000 500 300

  Order        Quantity      Among the three suppliers, Mr. Joshi has experience of dealing with Atlas Engineering Products Ltd.. The quality of supply has been rather inconsistent and occasionally the deliveries were delayed. Creative Engineering Pvt Ltd' s prices are high and the vendor is not in a position to reduce the prices further. Super Fasteners Ltd. are already exporting similar products and have ambitious plan for expansion. Super fastners Ltd have the capability, infrastructure and resources to meet the requirement of Bonnet Stud.However, Mr Joshi was wondering whether Super Fasteners Ltd, itself may become competitor to FIL by virtue of access to information Creative Engineers Pvt Ltd's infrastructure in terms of skilled personnel in Quality were inadequate. Besides, they do not have enough experience in Salt. Bath i> type heat treatment process. The cost of Bonnet Stud manufactured in house works out to Rs.30.50 per stud. The importer is paying $.70 per Stud. At Rs 48 per dollar conversion rate, the price in rupees works out to Rs. 33.60 per stud. In view of the global competition and rupee likely stablising against dollar, the price offered may further reduce. Mr Joshi prefers to have one source of supply of Bonnet Stud, if bought from outside. However, distinct advantages like quality, deliyery, flexibility and control in case of inhouse manufacturing too deserves serious consideration in view of criticality of the bonnet stud. Questions:    i) Should Mr Joshi make the Bonnet stud in house or buy from vendor?

     ii) What factors should be considered by Mr Joshi while making make        or-buy decision?   iii) In case if Mr Joshi decided to buy from a vendor, on which vendor should        he place order and why?   iv) Is the practice of single source for supplies is desirable? Give reasons.  [34] Q2) Study the following case carefully and answer the below given questions.

Case Study- Smart chefSituation'Smart Chef' is an Indian subsidiary of French Company in the Czech Republic that assembles small household appliances, including coffee makers, toasters, and food mixers. These products are sold principally in the European Union and some parts of the eastern India About 65% of the components used in the assembly operation are purchased from suppliers in lot, and this leads to a considerable amount of a raw material inventory in the work center In addition, the layout, scheduling, line balancing and the' fact that assembly is performed in lot sizes of 150 units, engenders a certain amount of in-process inventory. The parent company Smart Chef has been concerned about the rising product cost of the finished products, which has led to reduced profit margins. (Household appliances are very competitive and increasing prices is not a viable option.) One of the demands of the parent company has been to review the inventory man~gement practices of Smart Chef. Two areas which Smart Chef is currently investigating are economic order quantity purchasing, and ABC analysis.          Purchasing EOQAt present the company purchases copper wire for a certain appliance under economic order quantities based on the information given in Table 1. The supplier of copper wire is proposing a discount of Re. l/kg. if Smart chef purchases in lot sizes of 2000 kg, rather than the calcu~ated EOQ. ABC analysisFor a particular series of referenced products, The number of units of different inventory items used a year, and the unit cost are as show in Table 2. Table 1. Smart Chef Purchasing EOQ______________________________________________________________________________ Annual demand for copper wire                    12,000 kgs.  Price                                                              Rs.75 per kg Order Cost.                                                    Rs. 100 per order Inventory Carrying Cost                          5% of Average Inventory Investment______________________________________________________________________________Table 2. Smart Chef -- Inventory consumption data

Inventory No. of units Unit Price Rs.item Code consumed/year  

1001 2 15001002 100 4001003 10 2001004 100 100

  -  1005 10 5001006 100 40001007 200 351008 900 101009 20 4001010 4000 751011 10 1001012 100 5001013 1000 151014 20 10001015 100 9001016 100 801017 7 10001018 1000 111019 100 901020 50' 100

I] Discuss some of the requirements that would help to improve inventory

management in this situation, Consider all the elements in the supply chain

from purchasing, assembly, to storage and distribution of the finished

product.

Ii] In the case of the purchase of the copper wire should Smart Chef take ~ <"

advantage of the price discount? Use calculation to ju~tify your response. :

      Required:

 iii) In the inventory items indicated, to which of the two should Smart     Chef give the maximum management attention? To which should the      least attention be given?                                                               [34]

SECTION – II

Q3) Construct X and R charts for the following data:

Sample No.                      Observations                             1                                      27     23      36      242                                              30      17      27      32               3                                      21     44      22      28               4                                              40      21      29      24               5                                               51     34      17      '10    6                                      33     30      28      22               7                                              30      22      18      12               8                                              35      48      20      47               9                                              20      34      15      42               

10                                            22      50      45      41               11                                            34      22      36      44               12                                            32'     48      32      33               13                                            34      32      28      38               14                                            31      24      14      20               15                                            32      31      29      15 Given: For samples of size 4 : A2 = 0.729, D3 = 0, D4 = 2.282.    [18]      Q4)  You have been appointed as Logistics manager of a medium sized organisation having a sales turnover of Rs. 72 crore in year ended Mar. 2003. The working capital of the company is under strain because of overdue outstandings, inaccurate optimistic forecasting resulting in high inventories and hopes of bagging huge institutional orders. The company makes products which have lead time of maximum 15 days to manufacture and except for 5 ingredients which are imported all others have a procurement lead time of 2 weeks maximum. The imported items require a lead time of 6 weeks. Present day Finished product inventories represent on an average Rs. 9 crores at Cost of goods which are approximately 60 % of Sales. Customers are complaining of receiving goods considerably late, with shortages in shipments and errors in billing. Sometilnes wrong products are also  despatched. The billing is manually done. The audit report for the company was recorded as unsatisfactory. A considerable amount of money in the inventory is locked up in slow moving goods which have piled on and occupy vital space in the organisation. Employee morale is low. The MD of the firm is ,looking upto you to help him turnaround the organisation and bring orderliness and efficiency. Suggest what all measures you will take to inlprove the fortunes of the company. (Prepare a quantitative and qualitative analysis and examine production planning and inventory control measures and custOlner service attributes.Make and state valid assumptions if necessary.)     [18] Q5)  AZON INSTRUMENTS Azon Instruments has a regular requirement of test tubes. Ravi, Purchase ~ Manager of Azon ,has been buying the test tubes from a single source -Star ;0 Glass Traders. Star has been supplying test tubes on average landed cost of Rs. 45 per dozen. Ravi sourced a new vendor- Trident Glass and has asked' them to send most competitive offer. ~Trident has quoted the following price terms:          . Shipping Terms:       F.O.B. (Free On Board) Sellers Plant (Buyer'                                Responsibility for transport, insurance etc.                                once goods leave seller's plant)List Price in Rs./dozen :

 Order Quantity in Dozens List Price per Dozens100 dozens or less 70.00 Rs.Between 101 and 1000 dozens 67.50 Rs.Above 1000 dozens 65.00 Rs. Trade Discount: 25% Cash Discount: 2 % On receipt of offer Ravi places an order of 2000 dozens of test tube on Trident. The cost of transporting the appliances by truck was 3000 Rs. Only one truck was sufficient for carrying this load of test tubes. The cost -:'~ of insurance varies with the amount insured. Insurance premium was Rs. ... 500 for insured amount up to Rs. 50,000, Rs 750 for insured amount ranging from Rs. 50,000 to 1,00,000 and Rs. 1,000 for insured amount between Rs. 1,00,000 to 1,50,000.Questions:        i) How much amount Azon spent on this purchase?       ii) Can the prices of Trident be called competitive.? Elaborate.      iii) Has Ravi taken right decision to place order on Trident? Comment.

December 2008Semester – IV

P8I5[3475] - 417 M.B.A. (Sem. - IV)

(408 D) CASES IN PRODUCTION & MATERIALS MANAGEMENT PRODUCTION & MATERIALS SPECIALISATION (2005 Pattern) (New)

Time: 3 Hours]                                                                              [Max. Marks :70

 1) Answer any Two cases.2) Figures to tlte right indicate full marks.3) Use of calculator is allowed. Ql) Case: 1 Global Technology Inc A project team has been organized at Global Technology Inc (GTI) to design and develop slightly different version of one of the firm's industrial robots. The new robot is named RAMOV (Random Access Mobile Orthogonal Vision) robot. One of the GTI's most important customers wants to see the demonstration, technical proposal and cost proposal in 2 months. The project team listed activities, determined order of activities and estimated how much time each activity would take. This information about activities is presented in the table below; 

ActivityCode

ActivityImmediate

predecessor

ActivityDurationin days

A Design RAMOV - 20

B Build Prototype unit A 10

C Perform test on prototype B 8

D Estimate material cost A 11

E Refine RAMOV design C,D 7

F Demonstrate RAMOV to customer E 6

G Estimate labour cost D 12

H Prepare technical proposal E 13

I Deliver proposal to customer G, H, F 5

           i)      Draw a Network Diagram for the RAMOV project.        ii)     Identify critical path, critical activity and compute project duration.        iii)     Compute slack for each activity.

 iv)    What additional infqrmation the Project Team needs to have if it decides                 to shorten the project duration.                                                  [35] Q2) Case: 2 SABRE ENTERPRISE Sabre Enterprise is growing organization specializing in manufacture of spare parts for plant and machines. Sabre enterprises started their business as vendor for machining Cast Iron castings. Every day metal scrap/rejected material is collected in bin and stored in a compartment at scrap yard. Other scrap like paper waste, waste packing box etc are dumped in the scrap yard in a separate compartment. Once in four months scrap buyer used to visit the factory and collect the scrap. However Sabre expanded its activities from CI Castings machining to manufacturing spares from a variety of material like brass, gunmetal, mild steel, Cast Iron etc. The total scrap generated is about 10 Tons per year. Now the scrap is being segregated as ferrous and nonferrous and nonmetallic scrap and stored in scrap yard. Method of disposing scrap through scrap dealer remains unchanged. Storekeeper coordinates scrap disposal activities. The price of scrap keeps fluctuating in the market due to a number of environmental factors. Sabre has a new Materials Manager who feels that existing system of scrap disposal needs to be changed. What should he do?                                                      [35] Q3) Case: 3

 STOP WATCH TIME STUDY Stop Watch Time Study was carried out on Cylindrical grinding operation. The elements of the operation and related data is as given below: 

Element Element DescriptionObserved Time

in MinutesRating

in%Remarks

APick up job and tighten

carrier and position0.20 90  

B Grind Diameter to size 0.80 100  

C Spark off 0.06 100  

DWithdraw wheel to

clear the job0.05 100  

E Measure diameter 0.20 85Once in

fivepieces

FLoosen carrier and keep

the job aside.0.15 90  

G Dress wheel 0.40 90Once intwentypieces

Total allowances -15%        i)      What is the Standard Time of the job?        ii)      If worker is producing 250 jobs a shift what is his efficiency.

iv)                If company has received order for 25,000 grinding jobs per month, calculate manpower and machines required. The company already has one grinding machine.                                                                    [35]

Semester – IV

P612

[3375]-417 M.B.A. (Sem. - IV)

(408 D) CASE STUDIES PRODUCTION & OPERATION & MATERIALS

MANAGEMENT CASE STUDIES PRODUCTION & MATERIALS SPECIALISATION

(New) (2005 Pattern)Time: 3 Hours                                                                    Max. Marks: 70

Instructions to the candidates:

      1) Answer any two cases.

      2) Figures to the right indicate full marks.

      3) Use of calculator is allowed.

Ql) Case: 1

         Global Technology Inc                                                                        [35]

A project team has been organized at Global Technology Inc (G TI) to design

and develop slightly different version of one of the firm's industrial robots.

The new robot is named RAMOV (Random Access Mobile Orthogonal Vision)

robot. One of the GTI's most important customers wants to see the

demonstration, technical proposal and cost proposal in 2 months. The project

team listed activities, determined order of activities and estimated how much

time each activity would take. This information about activities is presented in

the table below:

 ActivityCode

Activity Immediatepredecessor

ActivityDurationin days

A Design RAMO V - 20B Build Prototype unit A 10C Perform test on prototype B 8D Estimate material cost A 11E Refine RAMOV design C,D 7F Demonstrate RAMOV to customer E 6G Estimate labour cost D 12H Prepare technical proposal E 13I Deliver proposal to customer G,H,F 5

i) Draw a Network Diagram for the RAMOV project.

ii) Identify critical path, critic~l activity. and compute project duration.

iii) Compute slack for each activity. .

iv) What additional information the Project Team needs to have if it decides

to shorten the project duration.

Q2) Case: 2

         Sabre Enterprise                                                                                [35]

Sabre Enterprise is growing organization specializing in manufacture of spare

parts for plant and machines. Sabre enterprises started their business as

vendor for machining Cast Iron castings. Every day metal scrap/rejected

material is collected in bin and stored in a compartment at scrap yard. Other

scrap like paper waste, waste packing box etc are dumped in the scrap yard

in a separate compartment. Once in four months scrap buyer used to visit

the factory and collect the scrap.

However Sabre expanded its activities from CI Castings machining to

manufacturing spares from a variety of material like brass, gunmetal, mild

steel, Cast Iron etc. The total scrap generated is about 10 Tons per year. Now

the scrap is being segregated as ferrous and nonferrous and nonmetallic

scrap and stored in scrap yard. Method of disposing scrap through scrap

dealer remains unchanged. Storekeeper coordinates scrap disposal activities.

The price of scrap keeps fluctuating in the market due to a number of

environmental factors.

         Sabre has a new Materials Manager who feels that existing system of

        Scrap disposal needs to be changed. What should he do?

Q3) Case: 3

         Stop Watch Time Study                                                                     [35]

Stop Watch Time Study was carried out on Cylindrical grinding operation. The

elements of the operation and related data is as given below 

Element Element Description Observed Time Rating Remarks    in Minutes in%  A Pick up job and tighten 0.20 90    carrier and position      B Grind Diameter to size 0.80 100  C Spark off 0.06 100  D Withdraw wheel to clear 0.05 100    the job      E Measure diameter 0.20 85 Once in        five        pIecesF Loosen carrier and keep 0.15 90    the job aside      G Dress wheel 0.40 90 Once in        twenty        pIeces

 Total allowances - 15%

i) What is the Standard Time of the job?

ii) Ifworker is producing 250 jobs a shift what is his efficiency?

iii) If company has received order for 25,000 grinding jobs per month, calculate

manpower and machines required. The company already has one grinding machine. 

Semester – IV 

Total No. of questions: 3)                                             [Total No. of Pages: 6 MAY 2009

P713 [3575]-417M.B.A. (Semester -. IV)

(408-D) PRODUCTION AND MATERIALS SPECIALIZATION  (CASES)(2005 Pattern)

 Time: 3 Hours}                                                                         [Max. Marks: 70Instructions to the candidates:

1) Answer any two• questions.2) All questions carry equal marks.

 Q1) Case - 1VIJAY ENGINEERING WORKS   "How much time shall we need Mr. Kulkarni" asked Khanna, Manager Quality Contwl and the leader of the disposal cell."Everything has been lined up, Sir. Each component has been reinspected and defects have either been written on the component itself or on the tag attached to the component. We have to merely take a decision what to accept and what not to accept" answered Kulkarni while keeping pace with his departmental head.The formation of disposal cell at the Vijay Engineering Works was Khanna's idea in one of the meeting when a row was created by the production chief over the senior inspector's decision to get a lot of worm shafts gas cut because no grinding allowance was left in turning (i.e, bearing diameters had gone undersize by 0.10).Production Manager Mr. Puri on that day was unusually harsh. He pounched on the chief, no sooner the meeting started. "Before the meeting starts I want to know as to how did son-of-the-bitch take a decision to gas cut the lot of worm shafts? Will his father meet the target?""Hold your tongue, Mr. Puri. You can't abuse my people just because they have done their jobs," said Khanna. "What job? Scrapping of pieces is what you call quality control, Mr.Khanna? Quality control should be productive and not destructive," said Puri, still fuming."Is accepting non-conforming materials, quality control, Mr. Puri? If you allow your boys to produce junk and then expect quality control to accept it, sorry we can't do that," retorted Khanna."What is happening to both of you. Do senior people behave like this?" intervened Materials Manager."Ask him why did he abuse my assistant?" said Khanna pointing his finger towards Puri."Should I garland him because he destroyed Rs. 50,000 worth of materials." shouted Puri."Yes, do that. Poor fellow deserves it. At least that lambu (tall man) had the guts to do it. And mind it, after that he came and told me.""And you approved of his action?"

"Yes, I approved of it. Why did you ask people to let pieces go for further operations having known that these pieces were kept aside at the preheat treatment inspection. You made your boys, like thieves, remove those pieces and sent them for heat treatment. And it was after this, my inspector went to heat treatment shop, got those pieces removed and destroyed to make you and your people realise that Quality Control will not take things lying low.""Don't put allegations. I did not give any instructions. It is your imagination. ""Ask your foreman, Mr. Puri. He gave your name.""If your allegation is true, Mr. Puri, I give you my work that the bastard will be set right.""Please, do that. I am happy that you realise now.""Now that the misunderstanding has been cleared" intervened Materials Manager, "shall we conduct today's meeting.""I think not before laying down the system to prevent such occurrences" suggested Mr. Purl, "and let Q.C. give the system."Put yourself in place of Mr. Khanna and suggest the system of disposal of non-conforming materials. Also suggest as to how defectives can be reduced by proper allocation of stages of inspection? Q2) Case - 2RATHOD ENGINEERING WORKS"Have you handed over the splinded shafts to assembly?" enquired Deo, Production Manager from his foreman no sooner the latter entered former's cabin."No sir! There is a problem in that lot and I come to inform you of the same.""What is the bloody problem now?" shouted PM. "Yesterday, I gave instructions to the shift engineer to get the remaining operations done and his report here reads that the pieces have been kept for final inspection after all operations. ""That he did sir but in some of the pieces the root diameter and spline width is oversize.""Get such pieces reworked and do you need my instructions for this?" "Rework is not possible since the extension piece has been sawed off.Actually he ( shift engineer) should have got the pieces inspected before getting the extension pieces removed.""Ask the bloody fellow to see me. Last time also, ifI remember correctly, it was he who sent axle shafts for head treatment without inspection and some of the pieces had to be scrapped because later at the final inspection keyway was found to be missing. And yet on another occasion he allowed blanks of the sliding gear to go for gear hobbing without blank inspection and a hob costing Rs. 6000 broke into pieces since the diameter in one such blank was over size. This time I am not going to spare him. He must be sent home. I hate people who do not use brains.""But what do we do now? Gear boxes cannot be despatched. Splined shafts was only item of shortage.""Ask Quality Control whether some of the pieces can be accepted under deviation. If required, I shall ring up Chaudhary(Manager Quality Control)."(Foreman leaves)"Useless  fellows! They will never use their brains," muttered PM and then turning to the visitor friend he asked." do you too get useless fellows, Mr. Vinnani?"  

"We too get dumbs like your shift engineer" said Virmani, "but the possibility of occurrence of such events at our work is very remote. We, at Rathod Engineering works, believe that controls and safeguards must be built up into the system. We have instruction manuals, one for each department. As per production control manual, after the process has been finalised, a team consisting of personnel from Process Planning, Manufacturing and Quality Control must meet to finalise the stages of inspection and the inspection methods. For their guidance, important stages of inspection with reasons have been provided in the PPC manual. Further, every operational drawing spells out the preceding and succeeding operation. Our heat treatment shop will not accept a lot unless it is accompanied by a forwarding note duly signed by the stage inspection. Similarly, gear shop supervisor will not accept gear blanks if they have not been stamped by the stage inspection. Even our drawings of critical operations (a critical operation being one after which no . rework is possible) reads a warning like this: Please ensure the components under processing carries inspection mark failing which do not perform the operation.""I think we too needs a manual like yours and we must prepare i1'fast!" Put yourself in place of PM andi) identify major "causes of rejection."ii) highlight important stages of inspection and the defects which can be eliminated by each of these inspection stages.iii) Suggest the extent of inspection (sampling or cent percent) to be carried out at each of these stages. Q3) Case - 3RALHON GROUP OF INDUSTRIES"Many a companies in India are mismanaged but not the way this firm of Ralhon Group of Industries is!" told Mirza to his wife over the dining table."But other day you said that there is going. to be lot of challenge and excitement in the new job" enquired Waheeda, Mirza'swife. "That was the impression then. Today's meeting with functional heads has made me change my opinion. My god, what a lousy way to express feelingsl The way they raised their voices and put allegations on each other! Anyone could have gone mad listening to them, each of them trying to speak at the same time."Mirza then nan-ated the deliberations of his first meeting with the functional heads"after joining as a chief executive. Those present in the meeting included Sales Manager (SM), Production Manager (PM), Materials Manager (MM) and Finance Manager (FM) and Quality Control Manager (QM).      SM :"Production department promised to deliver 5,00 water pumps bythe end of this week. Now they can't even deliver 100. What do I tell the customer? This is third time in this month that I am asked to revise the delivery ~ate and if tomorrow orders are cancelled nobody shall blame me .... "         PM: Interrupting, "What can I do? Machine shop could not supply water

pump housing firstly because the damn housings came late and there were blow holes all over. Perhaps, we could still maintain the delivery period if we had pump shafts for which bar stock material is yet to be received. Also fitting section ... " MM: Interrupting, "Am I a magician or do I have a magic lamp to get you supplies as

and when you want? Everyone knows that there is a such thing called lead time. Why should production control sleep over the requirements and ... ?

 PPC: Shouting, "Don't put allegations. Sales communicated the requirements only

two weeks back. Everything in this company is urgent. Overnight production programmes are changed and then sales people talk of customer's service and materials people talk of lead time. And if I plan procurement in advance then management talks of excess inventory and 20% inventory carrying cost..."

         FM: Interrupting, "No advance purchases. From where I am going toget the money to pay suppliers ... "         PM: Continuing, "Fittings section is already understaffed. And then theseApril-May months is marriage season. Since last six months I have been requesting personnel department to recruit few fitters but do they ever bother. Even if I put complete section on overtime I still can't. .. "         FM: Shouting, "No, no, no! you can't give overtime. Already margin onthis pump is negligible ... "         PM:  Interrupting, "Am I responsible?"        The Chief executive bapged the table "stop stop it! I had enough of your nonsense. Each one of you is self centered. All of you can go. The meeting is adjourned."     Waheeda laughed and asked Mirza, "So my young executive what you intend to do now?" Mirza eyed his wife. "Tomorrow, I shall meet each of these managers separately and ask him 10-12 questions to complete my investigations. Based on the information, I shall decided the future course of action."a) From the text of the case, bring out the major weaknesses of the firm.b) If you were Mr. Mirza, what 10 questions would you ask the functional head from    the following departments?i)  Salesii) Productioniii) Production Planning & Control and iv) Finance.