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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 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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BIJU PATNAIK INSTITUTE OF IT & MANAGEMENT STUDIES, BHUBANESWAR, ODISHA BIJ 17) What is Cellular production system? Cellular production system is a process of manufacturing which is a subsection of just -in-time manufacturing and lean manufacturing encompassing group technology. The goal of cellular manufacturing is to move as quickly as possible, make a wide variety of similar products, while making as little waste as possible. 18) What is the implication of using small alpha (α) in forecasting? Here, demand is level with only random variations around some average. The forecast Ft+1 for the upcoming period is the estimate of average level Lt at the end of period t. Where, α = the smoothing constant, is between 0 and 1. 19) Write down the generalized methodology form localized break –even analysis.  Break-even analysis seeks to investigate the in­terrelationships among a firm’s sales revenue or to-tal turnover, cost, and profits as they relate to al-ternate levels of output. A profit-maximizing firm’s initial objective is to cover all costs, and thus to reach the break-even point, and make net profit thereafter.  The break-even point refers to the level of output at which total revenue equals total cost. Management is no doubt interested in this level of output. How-ever, it is much more interested in the broad question of what happens to profits (or losses) at various rates of output.  Therefore, the primary objective of using break-even charts as an analytical device is to study the effects of changes in output and sales on total revenue, total cost, and ultimately on total profit.  Break-even analysis is a very generalized ap-proach for dealing with a wide variety of questions associated with profit planning and forecasting. 20) List the element of operational part of FMS. “A flexible manufacturing system consists of two subsystems:” 1. Physical subsystem 2. Control subsystem Physical subsystem includes the following elements: 1) Workstations 2) Storage-retrieval systems 3) Material handling systems. 5|Page

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