Semester II Examination Papers
IIBM Institute of Business Management
IIBM Institute of Business Management
Semester-II Examination Paper MM.100
Production and Operation Management
Section A: Objective Type (30 marks)
This section consists of Multiple choice questions & Short Notes
type questions.
Answer all the questions.
Part One questions carry 1 mark each & Part Two questions carry 5
marks each.
Part One:
Multiple choices:
1. If the number of restrictions on sources be ‘a’ and the
number of restrictions on destinations be
‘b’ then with the use of ‘stepping stone procedure’, the
number of ‘used cells’ will be
a. a+b+1
b. a+b+2
c. a-b-1
d. a+b-1
2. Value of smoothing coefficient ‘α’ lies
a. Between 1 and ∞
b. Between 0 and 1
c. Between -1 and 1
d. Between 1 and 2
3. Forecasting error is
a. The difference between forecasted demand and actual
demand
b. The ratio of forecasted demand and actual demand
c. The difference between the standard forecast demand and
the evaluated forecast demand
d. Ratio of standard forecast demand and the evaluated
forecast demand
4. For forecasting the analyzers plot the demand data on a
time scale, study the plot and then look
for the consistent patterns. Now what does the high noise
mean to these patterns
a. Many of the point lie away from the pattern
b. Most of the points lie close to the pattern
c. All the points lie on the pattern
d. None
5. Payback period is
a. The length of time after which the production starts
b. The length of time after which the selling starts
c. The length of time required to recover the investment
d. The length of time for which firm bears replacement of
the good.
Semester II Examination Papers
IIBM Institute of Business Management
6. Salvage value is the income from
a. Selling an asset
b. Buying an asset
c. Bargaining in selling
d. Price raised stock
7. On total factor basis ‘Productivity’ is given by x/y,
where ‘y’ is
a. Labor + Capital +Materials
b. Labor + Capital + Materials + Energy
c. Capital
d. Capital + Materials
8. Economic efficiency is given by
a. Input /output
b. Input /100
c. (Output-input)/input
d. Output /input
9. This implies an effective management that ensures an
organization’s long-term commitment to
the continuous improvement of quality.
a. Quality management
b. Strategic management
c. Total quality management
d. Operations management
10. This techniques for improving productivity involves
analyzing the operations of the product or
service, estimate the value of each operation, and modifying
(or) improving that operation so that
the cost is lowered.
a. Value engineering
b. Time-event network
c. Work simplifications
d. Quality circles
Part Two:
1. What are the different types of models in production and
operation management?
2. Define ‘Depreciation’.
3. What do you understand by ‘Bias’?
4. What are ‘Learning curves’?
END OF SECTION A
Semester II Examination Papers
IIBM Institute of Business Management
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit
200 to 250 words).
Caselet 1
COMPANY BACKGROUND
The Bronson Insurance Group was originally founded in 1900
in Auxvasse, Missouri, by James Bronson.
The Bronson Group owns a variety of companies that
underwrite personal and commercial insurance
policies. Annual sales of the Bronson Group are $100
million. In recent years, the company has suffered
operating losses. In 1990, the company was heavily invested
in computer hardware and software. One of
the problems the Bronson Group faced (as well as many
insurance companies) was a conflict between
established manual procedures and the relatively recent
(within the past 20 years) introduction of
computer equipment. This conflict was illustrated by the
fact that much information was captured on
computer but paper files were still kept for practical and
legal reasons.
FILE CLERKS
The file department employed 20 file clerks who pulled files
from stacks, refilled used files, and delivered
files to various departments including commercial lines,
personal lines, and claims. Once a file clerk
received the file. Clerks delivered files to underwriters on
an hourly basis throughout the day. The
average file clerk was paid $8,300 per year. One special
file clerk was used full time to search for
requested files that another file clerk had not been able to
find in the expected place. It was estimated that
40 percent of the requested files were these “no hit” files
requiring a search. Often these “no hit” files
were eventually found stacked in the requester’s office. The
primary “customers” of the file clerks were
underwriters and claims attorneys.
UNDERWRITING
Company management and operations analysts were consistently
told that the greatest problem in the
company was the inability of file clerks to supply files in
a speedy fashion. The entire company from top
to bottom viewed the productivity and effectiveness of the
department as unacceptable. An underwriter
used 20-50 files per day. Because of their distrust of the
files department, underwriters tended to hoard
often used files. A count by operations analysts found that
each underwriter kept from 100-200 files in his
or her office at any one time. An underwriter would request
a file by computer and work on other
business until the file was received. Benson employed 25
underwriters.
MANAGEMENT INFORMATION SYSTEM
Upper management was deeply concerned about this problem.
The MIS department had suggested using
video disks as a possible solution. A video disk system was
found that would be sufficient for the
Semester II Examination Papers
IIBM Institute of Business Management
companies needs at a cost of about $12 million. It was
estimated that the system would take two years to
install and make compatible with existing information
systems. Another, less attractive was using
microfilm. A microfilm system would require underwriters to
go to a single keyboard to request paper
copies of files. The cost of a microfilm system was $5
million.
1. What do you recommend? Should the company implement one
of the new technologies? Why or
why not?
2. An operations analyst suggested that company employees
shared a “dump on the clerks”
mentality. Explain.
Caselet 2
Harrison T. Wenk III is 43, married, and has two children,
ages 10 and 14. He has a master’s degree
in education and teachers junior high school music in a
small town in Ohio. Harrison’s father passed
away two months ago, leaving his only child an unusual
business opportunity. According to his
father’s will, Harrison has 12 months to become active in
the family food-catering business, Kare-
Full Katering, Inc., or it will be sold to two key employees
for a reasonable and fair price. If
Harrison becomes involved, the two employees have the option
to purchase a significant, but less
than majority, interest in the firm. Harrison’s only
involvement with this business, which his
grandfather established, was as an hourly employee during
high school and college summers. He is
confident that he could learn and perhaps enjoy the
marketing side of the business, and that he could
retain the long-time head of accounting/finance. But he
would never really enjoy day-to-day
operations. In fact, he doesn’t understand what operations
management really involves. In 1991
Kare-Full Katering, Inc. had $3.75 million in sales in
central Ohio. Net profit after taxes was $
105,000, the eleventh consecutive year of profitable
operations and the seventeenth in the last 20
years. There are 210 employees in this labor-intense
business. Institutional contracts account for
over 70 percent of sales and include partial food services
for three colleges, six commercial
establishments) primarily manufacturing plants and banks),
two long -term care facilities, and five
grade schools. Some customer location employs a permanent
operations manager; others are served
from the main kitchens of Kare-Full Katering. Harrison
believes that if he becomes active in the
business, one of the two key employees, the vice president
of operations, will leave the
firm.Harrison has decided to complete the final two months
of this school year and then spend the
summer around Kare-Full Katering – as well as institutions
with their own food services – to assess
whether he wants to become involved in the business. He is
particularly interested in finding out as
much as possible about operations. Harrison believes he owes
it to his wife and children to fairly
evaluate this opportunity.
1. Prepare a worksheet of operations activities that
Harrison should inquire about this summer.
2. If you were Harrison, what would you do? Why?
END OF SECTION B
Semester II Examination Papers
IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
1. Productivity is an important tool for mangers as it helps
them to track progress toward the more
efficient use of resources in producing goods and services.
Elucidate.
2. In additional to operations research, what are the other
tools and techniques used by organizations
to improve productivity?
END OF SECTION C
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