Note for Operations Management - I - OM1 By Manoj Kumar Rout
- Operations Management - I - OM1
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BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES, BHUBANESWAR, ODISHA BIJ Probable Questions On OPERATION MANAGMENT-I 1) What is the major function of MPR? The main purposes of MRP system are to control inventory levels. Assign operating priorities for items and plan capacity to load the production system which is; Inventory: order the right item, order in the right quantity and order at the right time in order to receive the supplies at the right time. Priorities: order with the right due date and keep the due date valid. Capacity: plan for a complete load, plan an accurate load and plan for adequate time to view future load. 2) What is productivity? And what is the relationship between productions? A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs is known as productivity. Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Productivity is a critical determinant of cost efficiency. The relationship between productions & productivity is that the effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input. 3) What is carrying cost? Carrying costs are the costs of holding inventory and include maintenance, specifically in regard to perishable items, and storage costs. Carrying cost, carrying cost of inventory or holding cost refers to the total cost of holding inventory. This includes warehousing costs such as rent, utilities and salaries, financial costs such as opportunity cost, and inventory costs related to perishability, shrinkage (leakage) and insurance. 4) What is the objective of computer aided quality control? The main objectives of the CAQC (computer aided quality control) are to improve the quality of the product, increase the productivity in the inspection process and reduce the lead times in manufacturing. The implementation of CAQC in the company results in the major change in the way the process of quality control is carried out in the company. 5) What is forecast error? A forecast error is the difference between the actual or real and the predicted or forecast value of a time series or any other phenomenon of interest. Since the forecast error is derived from the same scale of 1|Page
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BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES, BHUBANESWAR, ODISHA BIJ data, comparisons between the forecast errors of different series can only be made when the series are on the same scale. Forecast Error = | A – F | Forecast Error as Percentage = | A – F | / A Where: A = Actual demand & F = Forecast demand. 6) What does ISO stand for? Where it is situated? ISO stands for the International Standards Organization. ISO is a voluntary organization whose members are recognized authorities on standards, each one representing one country. Members meet annually at a General Assembly to discuss ISO's strategic objectives. The organization is coordinated by a Central Secretariat based in Geneva. 7) What do you mean by De-coupling inventory? A "decoupled" inventory consists of inventory stock set aside in the event of a slowdown or stoppage in production. Decoupling inventory cushions the company's inventory against potential issues in the production line. These issues can occur when one part of the production line work s at a different speed than another. Decoupling inventory involves separating inventory within a manufacturing process so that the inventory associated with one stage of a manufacturing process does not slow down other parts of the process. In simple terms, decoupling inventory is a safety stock of sorts. Much like safety stock, it establishes a buffer between product demand and product supply and is used in work-in-process inventories. Where safety stock is seen as a buffer against increased external demand, decoupling inventory is the buffer against increased internal demand. 8) In which ways is the simple exponential smoothing method better than the simple moving average method? The only difference between an exponential moving average and a simple moving average is the sensitivity each one shows to changes in the data used in its calculation. More specifically, the exponential moving average (EMA) gives a higher weighting to recent prices, while the simple moving average (SMA) assigns equal weighting to all values. The two averages are similar because they are interpreted in the same manner and are both commonly used by technical traders to smooth out price fluctuations. 9) What is a service blue print? A service blueprint is an operational planning tool that provides guidance on how a service will be provided, specifying the physical evidence, staff actions, and support systems / infrastructure needed to deliver the service across its different channels. 2|Page
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BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES, BHUBANESWAR, ODISHA BIJ The service blueprint is a technique originally used for service design and innovation, but has also found applications in diagnosing problems with operational efficiency. The service blueprint is an applied process chart which shows the service delivery process from the customer's perspective. The service blueprint has become one of the most widely used tools to manage service operations, service design and service positioning. 10) What are the inputs and outputs of MRP? 11) What is reverse stock? List the factors that determine safety stock. A reverse stock split is a type of corporate action in which a company reduces the total number of its outstanding shares in the open market. A reverse stock split involves the company dividing its existing total quantity of shares by a number such as 5 or 10, which would then be called a 1-for-5 or 1-for-10 reverse split, respectively. A reverse stock split is also known as a stock consolidation, stock merge or share rollback, and is the opposite exercise of stock split where a share is divided (split) into multiple parts. In finance, a reverse stock split or reverse split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares. 12) What is Delphi method/technique? The Delphi method is a forecasting process framework based on the results of several rounds of questionnaires sent to a panel of experts. Several rounds of questionnaires are sent out, and the anonymous responses are aggregated and shared with the group after each round. Delphi is based on the principle that forecasts (or decisions) from a structured group of individuals are more accurate than those from unstructured groups. 3|Page
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BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES, BHUBANESWAR, ODISHA BIJ The technique can also be adapted for use in face-to-face meetings, and is then called mini-Delphi or Estimate-Talk-Estimate (ETE). Delphi has been widely used for business forecasting and has certain advantages over another structured forecasting approach, prediction markets. 13) What do you mean by Reverse Engineering? Reverse engineering, also called back engineering, is the process by which a man-made object is deconstructed to reveal its designs, architecture, or to extract knowledge from the object; similar to scientific research, the only difference being that scientific research is about a natural phenomenon. Reverse engineering is taking apart an object to see how it works in order to duplicate or enhance the object. Reverse engineering is applicable in the fields of mechanical engineering, electronic engineering, software engineering, chemical engineering, and systems biology etc. 14) What is continuous review system and period review system of inventory control? In a continuous inventory system, a continual record of the inventory level for every item is maintained. Whenever the inventory on hand decreases to a predetermined level, referred to as the reorder point, a new order is placed to replenish the stock of inventory. The order that is placed is for a fixed amount that minimizes the total inventory costs. This amount, called the economic order quantity. In a periodic inventory system, the inventory on hand is counted at specific time intervals; for example, every week or at the end of each month. After the inventory in stock is determined, an order is placed for an amount that will bring inventory back up to a desired level. In this system the inventory level is not monitored at all during the time interval between orders, so it has the advantage of little or no required record keeping. This typically results in larger inventory levels for a periodic inventory system than in a continuous system to guard against unexpected stock-outs early in the fixed period. Such a system also requires that a new order quantity be determined each time a periodic order is made. 15) What are the types of demand pattern in forecasting? There are several types of demand forecasting methods business leaders utilize. Among the qualitative methods are the Delphi Method and intentions surveys. Quantitative methods include the time series analysis and conjoint analysis. 16) What do you mean by BOM (Bill of Material)? A bill of materials or product structure (sometimes bill of material, BOM or associated list) is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product. 4|Page
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