production & operation management set 2

8/6/2019 Production & Operation Management Set 2

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ASSIGNMENTSMBA 2nd SEM

Subject Code MB0044PRODUCTION & OPERATIONS MANAGEMENT

Set 2

Q1. Explain Logical Process Modelling and Physical Process Modelling. What arethe ingredients of business process?Ans.

Logical Process Modelling Logical Process Modeling is the representation of putting together all the activities of

business process in details and making a representation of them. The initial data collectedneed to be arrange in a logical manner so that, links are made between nodes for makingfor the workflow smooth. The steps to be followed to make the work smoother are given

below:1. Capture relevant data in detail to be acted upon.2. Establish controls and limit access to the data during processes execution

3. Determine which task in the process is to be done and also the subsequent task in thatprocess.

4. Make sure that all the relevant data is available for all the tasks.5. Make the relevant and appropriate data available for that task.6. Establish a mechanism to indicate acceptance of the results after every task or process.This is to have an assurance that flow is going ahead with accomplishments in the desired

path. Some of these activities may occur in a sequential order whereas, some of them run parallel. There may even be circular paths, like re-work loops. Complexities arise whenthe processes activities are not connected together.Logical processes model consists of only the business activities and shows theconnectivity among them. The process model is a representation of the business activities

different from the technology dependent ones. Thus, we have a model that is singularlystructured only for business activities. Computer programmes are also present in the totalsystem. This allows the business oriented executives to be in control of the inputs,

processes and outputs. The logical process model improves, control on the access to data.It also identifies, who is in possession of data at different nodes in the dataflow network that has been structured. A few of the logical modeling formats are given below.1. Process Descriptions with task sequences and data addresses.2. Flow chart with various activities and relationships3. Flow diagrams4. Function hierarchies5. Function dependency diagram

Every business activity, when considered as a logical process model, can be represented by a diagram, it can be decomposed and meaningful names can be given to the details.Verb and noun form combinations can be used to describe at each level. Nouns give thename of the activity uniquely and are used for the entire model meaning the sameactivity.

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PHYSICAL PROCESS MODELLING Physical process modeling is concerned with the actual design of data base meeting therequirement of the business. Physical modeling deals with the conversion of the logicalmodel into a relation model. Object gets defined at the schema level. The objects here aretables created on the basis of entities and attributes. A database is defined for the

business. All the information is put together to make the database software specific. Thismeans that the objects during physical modeling vary on the database software beingused. The outcomes are server model diagrams showing tables and relationships with adatabase.

BELOW ARE THE INGREDIENTS OF BUSINESS PROCESS.The ingredients that might be used in a business process can be briefly outlined as shown

below. The data which accomplishes the desired business objective. Acquisition, storage, distribution, and control of data which undertakes the process

acrosstasks.

Persons, teams, and organizational units which helps to perform and achieve the tasks. Decision which enhances the value of data during the process.

Q.2 Explain Project Management Knowledge Areas. With an example explain work breakdown structure.Ans. The knowledge areas of project management are the following:

Project integration management, cost management, communications management. Project scope management, quality management, risk management. Project time management, human management, procurement management. For a project to be successful, it is necessary to understand its relationship with other

management disciplines. Other management supporting disciplines are business legalissues, strategic planning, logistics, human resource management, and domainknowledge.

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WORK BREAK DOWN STRUCTURE.The entire process of a project may be considered to be made up on number of sub

process placed in different stage called the work breakdown structure (WBS).

WBS is the technique to analysis the content of work and cost by breaking it down intoits component parts. Projects key stages from the highest level of the WBS, which is thenused to show the details at the lower levels of the project. Each key stage comprises manytasks identified at the start of planning and later this list will have to be validated.WBS is produced by identifying the key elements, breaking each element down intocomponent parts and continuing to breakdown until manageable work packages haveidentified. These can then be allocated to the appropriate person. The WBS does notshown dependencies other than a grouping under the key stages. It is not time based-there is no timescale on the drawing. Chart showing the example of work break downstructure. A Work Breakdown Structure is a results-oriented family tree that captures all thework of a project in an organized way. It is often portrayed graphically as a hierarchical tree,however, it can also be a tabular list of "element" categories and tasks or the indented task listthat appears in your Gantt chart schedule. As a very simple example, Figure 1 shows a WBS for ahypothetical banquet.

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EXAMPLE -2

Q.3 Take an example of any product or project and explain project management lifecycle.

Ans. A life cycle of a project consists of the following steps. Understanding the scope of the project. Establishing objectives of the projects Formulating and planning various activities. Executing the project Monitoring and controlling the project resources. Closing and post completion analysis

Phases of Project Management Life Cycle.Project management life cycle has six phases:1. Analysis and evaluation phase.2. Marketing phase3. Design phase4. Execution phase5. Control-inspecting, testing, and delivery phase6. Closure and post completion analysis phase.

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1. Analysis And Evaluation Phase: Analysis and evaluation phase is the initial phase of any project. In this phase, information is collected from the customer pertaining to the

project. From the collected information, the requirements of the project are analyzed.According to the customer requirement, the entire project is planned in a strategicmanner. The project manager conducts the analysis of the problem and submits a detailed

report to the top management.2. Marketing Phase: A project proposal is prepared by a group of people including the project manager. This proposal has to contain the strategic adopted to market the productto the customer.3. Design Phase : Design phase involves the study of inputs and outputs of the various

project stages.a. Inputs received consist of project feasibility study, preliminary project evaluationdetails, project proposal, and customer interviews.b. Outputs produced consist of system design specifications, functional specificationsof the project, design specifications of the project and project plan.4. Execution Phase: In execution phase, the project manager and the term members work

on the project objectives as per the plan. At every stage during the execution, reports are prepared.5. Control- Inspecting Testing and Delivery Phase: During this phase, the project teamsworks under the guidance of the project manager. The project manager has to ensure thatthe team working under him is implementing the project designs accurately. The projecthas to be tracked or monitored through its cost, manpower, and schedule. The projectmanager has to ensure ways of managing the customer and marketing the future work, aswell as ways to perform quality control work 6. Closure and Post Completion Analysis Phase: Upon satisfactory completion anddelivery of the intended product or service the staff performance has to be evaluated. The

project manager has to document the lessons from the project. Reports on projectfeedback are to be prepared and analyzed. A project execution report is to be prepared.Let us have a quick recap of what is involved in the above phasesa. Analysis and evaluation phase: The preparation stage involves the preparation andapproval of project outline, project plan, and project budget.b. Assigning task to the team members: The next stage involves selecting and briefingthe project team about the proposals, followed by discussions on the roles andresponsibilities of the project member and the organization.c. Feasibility study: The feasibility or research stage establishes whether the project isfeasible or not and establishes the risk factors likely to be faced during the course of the project execution and the related key factors to overcome the problemd. Execution phase: A detailed definition and plan for the project and its execution is

prepared by the team and coordinated by the project manager.e. Implementation stage: The implementation stage involves the execution of the

project as per the plan, this also involves careful monitoring of the project progressand managing the changes, if any, within the scope of the project framework.7. Closure and post completion analysis phase: The final stage involves satisfactorydeliveryof the product/service to the customers. Upon completion, a project review is to beconducted by the project manager along with team member, sponsors, and customer. A

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project review process involves discussions about the progress, performance, hurdles thatwere overcome and problems faced, so that, such instances could be avoided in future

projects.

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Q.4 Explain PMIS. What Is Difference Between Key Success Factor (KSF) AndKnowledge (K) Factor? Explain With Examples.

Ans.PMIS (Project Management Information System)An information system is mainly aimed at providing the management at different levelswith information related to the system of the organization. It helps in maintainingdiscipline in the system. An information system dealing with project management tasks isthe project management information system. It helps in decision making in arriving atoptimum allocation of resources. The information system is based on a database of theorganization. A project management information system also holds schedule, scope

changes, risk assessment and actual results. The information is communicated tomanagers at different levels of the organization depending upon the need. Let us find howa project management information system is used by different stakeholders.

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The four major aspects of a PMIS are:1. Providing information to the major stakeholder.2. Assisting the team members, stakeholders, managers with necessary information and

summary of the information shared to the higher level managers.3. Assisting the manager in doing what if analysis about project staffing, proposed

staffing changes and total allocation of resources.4. Helping organizational learning by helping the members of the organizations leanabout

project management .Usually, the team members, and not the systems administrators of the company, developa goodPMIS. Organizations tend to allocate such responsibility by rotation among memberswith a welldesigned and structured data entry and analytical format.

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Example of Key success factor According to TeachMeFinance.com , a turnkey project is "a project in which a

builder/developer contracts to construct a completed facility that includes all items necessary for use andoccupancy."

Unfortunately, many turnkey businesses never capture the interest of the buyers. Whether you're building in brick and mortar or building in computer code, there are several factors critical tothesuccess of your turnkey project.

Know the BusinessSeveral businesses can be set up as turnkey businesses, from food service to copymanagement to telemarketing and sales. Whichever you decide, it is important to have anintimate knowledge of the business you are building. One key factor in a successfulturnkey business is being able to anticipate the needs and desires of the potential owners

before they are brought on board. A salesman, for example, looking to purchase a turnkeysales business will need an office as a base of operations; but since so much of the sales

process is done through phones, computers and other electronic devices, the turnkeydeveloper may want to include additional power outlets in the construction of the

building, or desks with onboard power strips and surge protectors. These smalladditions can make a turnkey project a success.

Know the AreaInternet businesses often have nationwide access to clientele, but brick-and-mortar turnkey operations sometimes run into trouble in areas poorly suited to the service theyoffer. For example, an outdoor food service stand opening in Wilkes-Barre,Pennsylvania, will not do as much business (at least during the winter months) as oneopening in an Orlando, Florida, theme park. Knowing the area where you areconstructing your turnkey business includes knowing the weather conditions, thedominant demographic, the current popularity and number of businesses like the one youare creating and the average income of the public. Planning a turnkey business that usesthese factors to its advantage will make the business more readily sellable.

Make ConnectionsTurnkey businesses are designed to be ready to operate as soon as the buyer takesownership. Still, once they are sold, many businesses of this type run into problems whenit comes to resupplying, logistics and advertising. Because of this, many buyers are waryof turnkey operations. One way to quell any "down the road" fears is to have this part of the infrastructure accounted for. Make contact with businesses which help advertise

businesses, ship products, supply copy paper and any other stock the owner mightrequire. Obtain discounts from as many as possible.

Example of Knowledge (k) factor ABSTRACT Most organizations are aware that in todays highly competitive environment managingeffectively their knowledge is the only way to achieve a sustainable competitiveadvantage. One of the primary areas to which knowledge management can be applied isthe field of project management. An increasing number of business sectors are adopting a

project approach to carry out a range of essential activities where valuable knowledge isgained. Knowledge from projects is an important resource for further projects, because

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projects solve innovative and interdisciplinary tasks. However, the majority of organizations do not manage the information gained through past projects. Failure totransfer knowledge from past to future projects leads to wasted activity and unnecessaryexpenses by reinventing the wheel. Therefore, knowledge management is a criticalsuccess factor for many projects. The purpose of this Management Report is to approach

knowledge management from the perspective of project management. The main objectiveis to define how knowledge management can be enhanced within a project by analyzingsuitable tools and relevant theories. The research is based on the high-speed train projectXY of the company XXX. This project is an important milestone for XXX to improve itsmarket position in Spain. The knowledge gained through the XY project will be the keyfactor for the success of the further high-speed train projects. The main finding of thecase study highlights that there is a lack of formal knowledge management activities atthe project. The project team focuses mainly on personal interaction for transferringknowledge and information technology is not used to its full potential. A hybrid approachto knowledge management for project environments is suggested, taking into accounttechnical as well as human-specific aspects. The main recommendation is to determine a

knowledge management strategy, which preferably focuses on transferring tacitknowledge and gives information technology a support function. Other areas of improvement are creating an open and constructive project culture, including knowledgeinitiatives in reward systems and fostering documented project review sessions. Finally,general conclusions are provided to answer the main research question of thismanagement report.

Q.5 Explain the seven principal of supply chain management. Take an example of any product in the market and explain the scenario of Bullwhip effect. Ans:Seven Principles Of SCM are:1. Group customer by needs: Effective SCM groups customers by distinct service needs,regardless of industry and then tailors services to those particular segments.2. Customize the logistics networks: In designing their logistic network, companies needtofocus on the service requirement and profit potential of the customer segments identified.3. Listen to signals of market demand and plan accordingly: sales and operations

plannersmust monitor the entire supply chain to detect early warning signals of changingcustomersdemand and needs. This demand driven approach leads to more consistent forecast andoptimal resource allocation.4. Differentiate the product closer to the customer: companies today no longer canafford tostockpile inventory to compensate for possible forecasting errors. Instead, they need to

postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively tochanges in customer needs.

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5. Strategically manage the sources of supply: By working closely with their keysuppliers toreduce the overall costs of owning materials and services, SCM maximizes profit margins

both for themselves and their suppliers.6. Develop a supply chain wide technology strategy: As one of the cornerstones of

successfulSCM, information technology must be able to support multiple levels of decisionsmaking.It also should afford a clear view and ability to measure the flow of products,services and information.7. Adopt channel spanning performance measures: Excellent supply chain performancemeasurement systems do more than just monitor internal functions. They apply

performance criteria to every link in the supply chain-criteria that both service andfinancial metrics.

BULLWHIP EFFECT IN SCM An organization will always have up and downs. It is necessary that the managers of theorganization keeps track of the market conditions and analyzes the changes. They must

take decisions on the resources and make necessary changes within the organization tomeet the market demands. Failing to do so may results in wild swings in the orders. Thismay adversely affect the functioning of the organization resulting in lack of coordinationand trust among supply chain members. The changes may affect the information and mayled to demand amplification in the supply chain. The Bullwhip effect is the uncertaintycaused from distorted information flowing up and down the supply chain. This has itsaffect on almost all the industries, poses a risk to firms that experience large variations indemand, and also that firm which are dependent on suppliers, distributors and retailers. A

bullwhip effect may arise because of: Increase in the lead time of the project due to increase in variability of demand Increase in the stocks to accommodate the increase demand arising out of

complicated demand models and forecasting techniques.

Reduced service levels in the organization. Inefficient allocation of resources. Increased transportation cost.

How to prevent it?Bullwhip effect may be avoided by one or more of the following measures:

Avoid multiple demand forecasting. Breaking the single order into number of batches of orders. Stabilize the prices; avoid the risk involved in overstocking by maintaining a proper

stock Reduce the variability and uncertainty in point of sale (POS) and sharing information Reduce the lead time in the stages of the project Always keep analyzing the past figures and track current and future levels of

requirement. Enhance the operational efficiency and outsourcing logistics to a capable and

efficient agency

Example of one product the effect Bullwhip theory.

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The beer game was developed at MIT by the Systems Dynamic Group in the 1960s. Thegame involves a simple production/distribution system for a single brand of beer. Thereare three players in the game including a retailer, a wholesaler, and a marketing director at the brewery. Each player's goal is to maximize profit. A truck driver delivers beer onceeach week to the retailer. Then the retailer places an order

with the trucker who returns the order to the wholesaler. There's a four week lag betweenordering and receiving the beer. The retailer and wholesaler do not communicate directly.The retailer sells hundreds of products and the wholesaler distributes many products to alarge number of customers. The following represents the results of a typical beer game:-3.1 The Retailer Week 1: Lover's Beer is not very popular but the retailer sells four cases per week onaverage. Because the lead time is four weeks, the retailer attempts to keep twelve cases inthe store by ordering four cases each Monday when the trucker makes a delivery.Week 2: The retailer's sales of Lover's beer doubles to eight cases, so on Monday, heorders 8 cases.Week 3: The retailer sells 8 cases. The trucker delivers four cases. To be safe, the retailer

decides to order 12 cases of Lover's beer.Week 4: The retailer learns from some of his younger customers that a music videoappearing on TV shows a group singing "I'll take on last sip of Lover's beer and run intothe sun." The retailer assumes that this explains the increased demand for the product.The trucker delivers 5 cases. The retailer is nearly sold out, so he orders 16 cases.Week 5: The retailer sells the last case, but receives 7 cases. All 7 cases are sold by theend of the week. So again on Monday the retailer orders 16 cases.Week 6: Customers are looking for Lover's beer. Some put their names on a list to becalled when the beer comes in. The trucker delivers only 6 cases and all are sold by theweekend. The retailer orders another 16 cases.Week 7 : The trucker delivers 7 cases. The retailer is frustrated, but orders another 16cases.Week 8 : The trucker delivers 5 cases and tells the retailer the beer is backlogged. Theretailer is really getting irritated with the wholesaler, but orders 24 cases.3.2 The Wholesaler The wholesaler distributes many brands of beer to a large number of retailers, but he isthe only distributor of Lover's beer. The wholesaler orders 4 truckloads from the brewerytruck driver each week and receives the beer after a 4 week lag. The wholesaler's policyis to keep 12 truckloads in inventory on a continuous basis.Week 6: By week 6 the wholesaler is out of Lover's beer and responds by ordering 30truckloads from the brewery.Week 8: By the 8th week most stores are ordering 3 or 4 times more Lovers' beer thantheir regular amounts.Week 9: The wholesaler orders more Lovers beer, but gets only 6 truckloads.Week 10: Only 8 truckloads are delivered, so the wholesaler orders 40.Week 11: Only 12 truckloads are received, and there are 77 truckloads in backlog, so thewholesaler orders 40 more truckloads.Week 12: The wholesaler orders 60 more truckloads of Lover's beer. It appears that the

beer is becoming more popular from week to week.Week 13: There is still a huge backlog.

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Weeks 14-15: The wholesaler receives larger shipments from the brewery, but ordersfrom retailers begin to drop off.Week 16: The trucker delivers 55 truckloads from the brewery, but the wholesaler getszero orders from retailers. So he stops ordering from the brewery.Week 17: The wholesaler receives another 60 truckloads. Retailers order zero. The

wholesaler orders zero. The brewery keeps sending beer.3.3 The BreweryThe brewery is small but has a reputation for producing high quality beer. Lover's beer isonly one of several products produced at the brewery.Week 6: New orders come in for 40 gross. It takes two weeks to brew the beer.Week 14: Orders continue to come in and the brewery has not been able to catch up onthe backlogged orders. The marketing manager begins to wonder how much bonus hewill get for increasing sales so dramatically.Week 16: The brewery catches up on the backlog, but orders begin to drop off.Week 18: By week 18 there are no new orders for Lover's beer.Week 19: The brewery has 100 gross of Lover's beer in stock, but no orders. So the

brewery stops producing Lover's beer.Weeks 20-23 . No orders. At this point all the players blame each other for the excessinventory. Conversations with wholesale and retailer reveal an inventory of 93 cases atthe retailer and 220 truckloads at the wholesaler. The marketing manager figures it willtake the wholesaler a year to sell the Lover's beer he has in stock. The retailers must bethe problem. The retailer explains that demand increased from 4 cases per week to 8cases. The wholesaler and marketing manager think demand mushroomed after that, andthen fell off, but the retailer explains that didn't happen. Demand stayed at 8 cases per week. Since he didn't get the beer he ordered, he kept ordering more in an attempt to keepup with the demand. The marketing manager plans his resignation.3.4 Lessons from the Beer Game1. The structure of a system influences behavior. Systems cause their own problems, not external

forces or individual errors.2. Human systems include the way in which people make decisions.3. People tend to focus on their own decisions and ignore how these decisions affect others.3.5 Lessons Related to the Learning Disabilities1. People do not understand how their actions affect others.2. So they tend to blame each other for problems.3. Becoming proactive causes more problems.4. The problems build gradually, so people don't realize there is a problem until its toolate.5. People don't learn from their experience because the effects of their actions occur

somewhere else in the system.

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Q6. Time taken by three machines on five jobs in a factory is tabulated below intable below. Find out the optimal sequence to be followed to minimize the idle timetaken by the jobs on the machines.

Ans. Consider M1 and M3

JOB = D E C A B

Job Machine1(M1)

Machine2(M2)

Machine3(M3)

A 6 8 7B 4 5 3C 5 5 7

D 3 4 6E 4 3 4

Job Machine1(M1)

Machine3(M3)

A 6 7B 4 3C 5 7

D 3 6E 4 4

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production & operation management set 2

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