IMPORTANT QUESTIONS (KEY NOTES)

UNIT 1 INTRODUCTION TO OPERATION MANAGEMENT

1. Elucidate historical development of operations management has evolved over time,
nature and importance of operations management. Historical Development of Operations
Management:
Operations management as a distinct field emerged during the Industrial Revolution in the late18th
century when factories started employing mass production methods. However, its formal development
can be traced back to the early 20th century. Key milestones in its evolution include:-
✓ Scientific Management (late 19th - early 20th century): Pioneered by Frederick W. Taylor, this
approach focused on optimizing individual tasks and work processes to improve efficiency.-
✓ Human Relations Movement (1920s - 1930s): Elton Mayo and others emphasized the importance
of human factors and employee motivation in enhancing productivity.-
✓ Total Quality Management (TQM) (1950s - 1960s): Focused on quality improvement across sall
aspects of an organization, not just production.-
✓ Lean Thinking (1990s): Inspired by the Toyota Production System, Lean emphasizes eliminating
waste and continuous improvement.-
✓ Six Sigma (1980s - 1990s): A data-driven methodology aiming to reduce defects and variations in
processes
2. Nature and Importance of Operations Management:
✓ Operations management involves the design, planning, execution, and control
of processes that transform inputs (such as raw materials, labor, and capital) into goods and services.
Its key components include production planning, inventory management, quality control, supply
chain management, and process optimization.
✓ The importance of operations management lies in its ability to drive efficiency, quality, and
competitiveness within an organization. Effective operations management can lead to cost reduction,
improved customer satisfaction, faster delivery times, and enhanced flexibility to adapt to market
demands
3. Explain in detail the transformation process of operations management and operations
strategy. The Transformation Process in Operations Management:
The transformation process is a fundamental concept in operations management, describing how inputs
are converted into outputs. It involves the following stages:
a. Input: This stage involves gathering and assembling all the necessary resources to start
the production process. Inputs include raw materials, labor, equipment, technology, and
information.
b. Transformation: During this stage, inputs are processed or transformed into the final output,
which could be goods or services. Transformation methods can vary widely depending on the
industry and the nature of the product or service.
c. Output: The output represents the end result of the transformation process. For manufacturing
companies, the output is typically a tangible product, while service-based organizations produce
intangible outputs like experiences, advice, or knowledge.
d. Feedback: This stage involves obtaining data and feedback about the output and, if necessary,
making adjustments to improve the process and overall performance.

4. Operations Strategy:
✓ Operations strategy is the set of decisions and actions an organization takes to achieve specific
long-term goals related to its operations. It aligns operational capabilities with overall business
objectives. Key elements of operations strategy include:
a. Design: Deciding on the optimal configuration of resources, processes, and technology to meet
customer demands and achieve competitive advantage.
 b. Infrastructure: Developing the necessary facilities, technology, and organizational structure to
support operations effectively.
c. Capacity Planning: Determining the capacity needed to meet demand while considering factors like
economies of scale, seasonality, and growth projections.
d. Quality Management: Implementing practices and systems to ensure the production of high-quality
goods or delivery of high-quality services.
e. Supply Chain Management: Managing the end-to-end flow of materials, information, and services to
ensure a smooth and efficient supply chain.
f. Innovation: Identifying opportunities for improvement, adopting new technologies, and developing
innovative products or services

5. Discuss in detail about functions, challenges, current priorities, and recent trends in
operations Management

Operations management encompasses various functions that work together to ensure smooth operations
and production. The key functions are:

a. Production Planning: Determining what, when, and how much to produce to meet customer demand
while optimizing resources.

b. Inventory Management: Maintaining appropriate inventory levels to prevent stockouts oroverstockin

g while minimizing holding costs.

c. Quality Control: Ensuring products or services meet predetermined quality standards through testing
and inspection.

d. Process Design and Improvement: Creating efficient processes and continuously improving them to
enhance productivity and reduce waste.

e. Supply Chain Management: Managing the flow of goods and services from suppliers to customers,
including sourcing, logistics, and distribution.

f. Capacity Planning: Assessing and planning for the capacity needed to meet present and future
demand.

g. Maintenance and Reliability: Ensuring that equipment and machinery are well-maintained to
minimize downtime and disruptions

6. Challenges in Operations Management:

- Globalization: Operating in a global market requires handling diverse cultures, regulations, and supply
chain complexities.
- Technology Integration: Adopting and integrating new technologies, such as automation and AI, while
maintaining compatibility with existing systems
- Sustainability: Balancing economic goals with environmental and social responsibility.
- Supply Chain Risks: Managing disruptions caused by natural disasters, political instability ,or supplier
issues.
- Customer Expectations: Meeting ever-increasing customer demands for faster delivery, customization,
and quality
7. Current Priorities and Recent Trends in Operations Management:
- Digital Transformation: Leveraging technologies like IoT, big data analytics, and AI for smarter
decision-making and process optimization.
- Sustainability and Green Operations: Focusing on eco-friendly practices, waste reduction, and energy
efficiency.
- Agile and Flexible Operations: Being responsive to changing market demands and disruptions through
agility and flexibility.
- E-commerce and Omnichannel Fulfillment: Adapting operations to meet the growing demand for
online shopping and seamless customer experiences
.- Circular Economy: Emphasizing the reuse, remanufacturing, and recycling of products to minimize
waste and resource consumption.

8. Explain in detail the principles and framework of World Class Manufacturing

✓ World Class Manufacturing (WCM) is a comprehensive management philosophy and

methodology aimed at achieving the highest levels of efficiency, quality, and competitiveness in
manufacturing. Developed by Fiat in the 1980s, WCM has been adopted and adapted by various
companies worldwide. The principles and framework of WCM include

Principles of World Class Manufacturing:

1. Employee Empowerment: Empowering employees at all levels to take ownership of their work,
identify improvement opportunities, and contribute to the overall success of the organization.
2. Continuous Improvement: Pursuing a culture of continuous improvement in all processes, products,
and services through the elimination of waste and inefficiencies.
3. Total Quality Management (TQM): Focusing on delivering high-quality products or services
consistently, meeting customer requirements, and reducing defects to near-zero levels
4. Total Productive Maintenance (TPM): Involving all employees in the maintenance and care
of equipment to maximize overall equipment effectiveness (OEE) and minimize downtime.

5. Just-in-Time (JIT): Adopting JIT principles to produce and deliver products in the right quantities, at
the right time, and at the right place to minimize inventory costs and waste.

6. Lean Manufacturing: Implementing lean principles to optimize processes, reduce waste, and improve
overall efficiency.

7. Supplier Involvement: Collaborating closely with suppliers to ensure a smooth and efficient supply
chain, with a focus on quality, cost, and delivery

Framework of World Class Manufacturing:

WCM typically involves a structured implementation framework, which includes several
stages:
1.Assessment and Planning: Evaluate the current state of operations and identify areas for improvement.
Develop a comprehensive plan to implement WCM principles.
2.Training and Education: Train employees at all levels on the principles and methodologies of WCM
to create a shared understanding and commitment to the transformation.
3. Implementation: Begin implementing WCM practices and methodologies in specific areas, such as
production lines or departments, gradually expanding to the entire organization
4. Monitoring and Measurement: Establish performance metrics and key performance indicators (KPIs)
to monitor progress and identify areas for further improvement.
5. Continuous Improvement: Continuously review and optimize processes, products, and practices
based on data-driven insights and feedback from employees and customers.

6. Recognition and Rewards: Acknowledge and reward employees and teams for their contributions to
the successful implementation of WCM.

9. Differentiate the services and goods in detail. Differences between Services and Goods:
1. Intangibility:
✓ Goods: Goods are tangible products that can be seen, touched, and physically possessed. They
have a physical form and can be stored, inventoried, and transported.
✓ Services: Services, on the other hand, are intangible. They cannot be seen or touched and do not
have a physical presence. Services are experienced or consumed at the time they are produced
and cannot be stored or inventoried.
2. Production and Consumption:
✓ Goods: Goods are typically produced first and then consumed later. They can be produced in
advance and stored for future consumption.
✓ Services: Services are produced and consumed simultaneously. They are created and delivered in
real-time, directly to the customer.
3. Heterogeneity:
✓ Goods: Goods are usually standardized and have consistent quality and features. A unit of
a particular good is generally identical to another unit of the same good.
✓ Services: Services are often heterogeneous, meaning they can vary in quality and delivery from
one provider to another or even from one interaction to another with the same provider.
4. Perishability:
✓ Goods: Goods are generally not perishable. They can be stored for an extended period without
losing their value or quality.
✓ Services: Services are perishable. If not consumed at the time of production, they are lost, and
their value cannot be stored for future use
5. Customer Participation:
✓ Goods: Customer involvement in the production of goods is usually minimal. The customer may
be involved in the selection and purchase of the product, but the actual production occurs
independently.
✓ Services: In many service processes, customer participation is essential. Customers often actively
participate in the co-creation of the service experience, influencing the outcome.
6. Ownership and Transfer:
✓ Goods: Goods are typically owned by the customer after purchase. The customer can transfer
ownership to another party through sale or gift.
✓ Services: Services are experienced and utilized but not owned by the customer. They cannot be
transferred to another party.
7. Evaluation of Quality:
✓ Goods: The quality of goods can often be evaluated before purchase through inspection, testing,
or reviews.
✓ Services: The quality of services is often evaluated based on the customer's experience after they
have been delivered. This evaluation may be subjective and influenced by individual perceptions
10. Illustrate a system perspective of the Operation Management.

11. Explain the Scope of Operation Management.

12.What are the Recent Trends in OM?

13.Characteristics of OM.
 IMPORTANT QUESTIONS (KEY NOTES)
UNIT 2 INTRODUCTION TO OPERATION MANAGEMENT

1. Explain in types of capacity planning and capacity alternatives. Types of Capacity

Planning and Capacity Alternatives:
Capacity planning is the process of determining the capacity required to meet present and future needs of
an organization. There are three main types of capacity planning:
a) Lead Strategy: Involves increasing capacity in anticipation of an increase in demand.
b) Lag Strategy: Involves increasing capacity only after the demand has increased, tominimize the risk
of overcapacity.
c) Match Strategy: Involves increasing capacity in small increments to match the rate of demand growth.

Capacity alternatives refer to the options available to manage capacity effectively. They include:
✓ Expansion: Increasing the capacity by adding new facilities, equipment, or technology.
✓ Reducing Capacity: Downsizing or decommissioning certain facilities or processes
✓ Subcontracting: Outsourcing part of the production process to other companies.
✓ Shifting Demand: Encouraging customers to use products or services during off-peak hours.
✓ Improving Efficiency: Enhancing the productivity and utilization of existing resources

2. Discuss in details on tools for capacity planning. Tools for Capacity Planning:
Capacity planning requires the use of various tools and techniques to make informed decisions. Some
common tools for capacity planning include:
a)Demand Forecasting: Analyzing historical data and market trends to predict future demand.
b) Resource Utilization Analysis: Assessing how efficiently existing resources are being utilized.
c) Decision Trees: Using a graphical representation to assess different capacity options and their
potential outcomes.
d) Linear Programming: Mathematical modeling to optimize resource allocation and capacity
utilization.
e) Queuing Theory: Analyzing waiting lines to optimize resource allocation and reduce bottlenecks.
f) Simulation: Creating a virtual model of the system to test different capacity scenarios and their
effects.
3. Describe the strategies for sourcing, procurement and explain methods of sourcing.
Strategies for Sourcing, Procurement, and Methods of Sourcing:
✓ Sourcing refers to the process of identifying and selecting suppliers to obtain goods and services
for an organization. Strategies for sourcing and procurement include:
a) Single Sourcing: Working with a single supplier for a particular product or service to leverage volume
and establish strong relationships.
b) Multiple Sourcing: Engaging with multiple suppliers to diversify risk and ensure a competitive
market.
c) Global Sourcing: Sourcing goods and services from international suppliers to access cost-effective
options and unique capabilities.
d) Insourcing: Producing goods or services internally using the organization's resources and capabilities.
e) Outsourcing: Contracting an external supplier to provide goods or services that were previously
produced internally.

Methods of sourcing involve the actual process of acquiring goods and services, such as:

a) Request for Quotation (RFQ): Inviting suppliers to submit quotes for products or services.
b) Request for Proposal (RFP): Inviting suppliers to propose solutions or ideas for a specific project or
need.
c) Electronic Procurement (e-Procurement): Utilizing digital platforms to streamline the procurement
process.
d) Reverse Auctions: Suppliers compete to win a contract by bidding the lowest price.
e) Supplier Relationship Management (SRM): Building and managing strong relationships with key
suppliers for mutual benefits.

4. Discuss on factors influencing Make/Buy decisions & vendor management process.

Factors influencing Make/Buy decisions & vendor management process:
Make/Buy decisions refer to the process of deciding whether a company should produce a particular
product or service internally (Make) or purchase it from an external vendor (Buy).Several factors
influence these decisions and the vendor management process:
Factors influencing Make/Buy decisions:
1. Core Competency: Companies are more likely to make decisions based on their core competencies. If
a product or service is directly related to the core capabilities of the company, it is often more feasible to
produce it in-house.
2. Cost Considerations: Cost is a crucial factor in the Make/Buy decision. Companies must compare the
cost of producing internally (including direct and indirect costs) with the cost of buying from external
vendors.
3. Capacity and Resources: The available capacity and resources of the company play a significant role.
If a company has excess production capacity, it may lean towards producing internally. Conversely, if
resources are limited, outsourcing may be a more viable option.
4. Technological Expertise: The complexity of the product or service and the required technological
expertise can influence the decision. If advanced technology or specialized skills are needed, outsourcing
might be a better choice.
5. Market Demand and Volume: The expected demand and volume of the product or service can impact
the decision. High demand may justify internal production to maintain control oversupply, while low
demand may make outsourcing more economical.
6. Risk and Control: Companies may prefer to keep strategic processes in-house to maintain control over
quality and intellectual property. Outsourcing could introduce risks related to quality, confidentiality, or
dependence on external vendors.
7. Time-to-Market: If speed is crucial, companies might choose to buy from vendors who already have
the product or service available rather than developing it from scratch.

5. Vendor Management Process:

✓ The vendor management process involves the activities required to identify, assess, select, and
maintain relationships with vendors who supply goods or services to the organization. Here arethe
key steps in the vendor management process:
1. Vendor Identification: The first step is to identify potential vendors that can meet the company's
requirements. This can be done through market research, referrals, or vendor databases.
2. Vendor Assessment: Once potential vendors are identified, an assessment is conducted to evaluate
their capabilities, reputation, financial stability, and track record. This may involve reviewing references,
conducting site visits, and analyzing their performance history.
3. Vendor Selection Criteria: Vendor selection criteria are established based on the company's needs
and priorities. Common criteria include cost, quality, reliability, experience, technical expertise, and the
ability to meet deadlines.
4. Request for Proposal (RFP): A formal RFP is prepared and sent to shortlisted vendors, outlining the
company's requirements, expectations, and evaluation criteria.
5. Proposal Evaluation: Vendors respond to the RFP with their proposals. The company evaluates these
proposals against the predetermined criteria to select the most suitable vendor.
6. Negotiation and Contracting: Once a preferred vendor is identified, contract negotiation stake place.
This involves discussing terms, pricing, delivery schedules, and other relevant details.
7. Performance Monitoring: After the contract is signed, the company monitors the
vendor's performance regularly. Key performance indicators (KPIs) are established to measure andensure
that the vendor meets expectations.
8. Relationship Management: Building a strong relationship with the vendor is essential for successful
cooperation. Regular communication, feedback sessions, and resolving issues promptly contribute to a
healthy vendor relationship.
9. Risk Management: Companies should proactively identify and manage potential risk sassociated with
the vendor, such as supply chain disruptions, quality issues, or data breaches.
10. Continual Improvement: The vendor management process is an ongoing effort. Companies should
continuously evaluate vendor performance and seek opportunities for improvement to optimize the supply
chain and achieve business goals.

6. Describe the process of procurement & explain vendor selection criteria in detail.

Procurement is the process of acquiring goods, services, or works from external sources to fulfill the
needs of an organization or project. It involves various stages, from identifying requirements to selecting
vendors and managing contracts. Below is a detailed explanation of the procurement process and vendor
selection criteria:
*1. Identification of Requirements:* The procurement process begins with the identification of the
organization's needs. This could be anything from raw materials and equipment to services like IT support
or consulting. The requirements should be clearly defined and documented to avoid any
misunderstandings later in the process.

*2. Market Research:* After identifying the requirements, the next step is to conduct market research.
This involves gathering information about potential vendors, their products/services, pricing,
reputation, and any other relevant details. The goal is to identify a pool of qualified vendors who can meet
the organization's needs.

*3. Request for Proposal (RFP) or Request for Quotation (RFQ):* Based on the market research, the
organization will issue an RFP or RFQ to the selected vendors. An RFP is more common for complex or
high-value procurements, while an RFQ is used for simpler and standardized purchases. The document
outlines the specific requirements, evaluation criteria, terms and conditions, and other relevant
information

.*4. Vendor Evaluation:* The received proposals or quotations need to be thoroughly evaluated. The
evaluation process typically involves a cross-functional team that reviews and scores each proposal based
on predetermined criteria. The evaluation criteria may include:-
*Technical Capabilities:* Does the vendor have the necessary skills, experience, and resources to meet
the requirements?-
*Financial Stability:* Is the vendor financially stable and capable of fulfilling the contract?-
*Reputation and References:* What is the vendor's track record in terms of quality, reliability, and
customer satisfaction? Contacting references can help verify this information.-
*Price and Value for Money:* Is the proposed price reasonable in relation to the quality of
goods/services offered?-
*Compliance and Legal Considerations:* Does the vendor meet all legal and regulatory requirements?
Are they compliant with industry standards?
*5. Shortlisting:* Based on the evaluation, a shortlist of potential vendors is created. These are the
suppliers who have scored well in the evaluation and are most likely to meet the organization's needs
effectively.

*6. Negotiation and Final Selection:* The organization may enter into negotiations with the shortlisted
vendors to finalize the terms and conditions of the contract, including pricing, delivery timelines, and
other relevant details. After negotiations, the organization selects the vendor that best meets its
requirements at a reasonable cost.

*7. Contracting and Award:* Once the vendor is selected, a formal contract is drawn up and awarded to
the chosen vendor. The contract outlines all the agreed-upon terms and conditions ,including deliverables,
payment schedules, warranties, and other contractual obligations.

*8. Contract Management:* After the contract is awarded, the organization must actively manage the
relationship with the vendor throughout the contract's duration. This involves monitoring performance,
resolving any issues that arise, and ensuring compliance with the contract terms.

*9. Performance Evaluation:* Regular performance evaluations are conducted to assess the vendor's
performance against the agreed-upon metrics and to identify any areas for improvement.

7. Describe the steps involved in selecting the facility location.

8. Explain the Location Model.

9. Capacity Planning levels and explain the types of capacity?

10. Describe the Developing Capacity Alternatives.

 IMPORTANT QUESTIONS (KEY NOTES)
UNIT 3 INTRODUCTION TO OPERATION MANAGEMENT

1. Discuss the criteria, elements, approaches of product design*Criteria, Elements, and

Approaches of Product Design:*
Product design is the process of creating new products or improving existing ones to meetspecific criteria
and fulfill customer needs. The key criteria, elements, and approaches of product design are as follows:
*Criteria of Product Design:*
- Functionality: The product should perform its intended function effectively.
- Aesthetics: The appearance and design of the product should be appealing to customers.
- Cost-effectiveness: Design should consider production costs and overall affordability.
- Reliability: The product should be dependable and durable over its expected life.
- Ergonomics: Design should consider user comfort and usability.
Safety: The product should meet safety standards and not pose risks to users.- Environmental impact:
Design should consider sustainability and eco-friendliness.

*Elements of Product Design:*

- Conceptualization: Generating ideas and concepts for the product.

- Research and Analysis: Understanding customer needs, market trends, and competition.
- Prototyping: Creating physical or digital models to test and refine the design.
- Testing and Validation: Evaluating the product's performance and gathering feedback.
- Final Design: Developing detailed plans and specifications for production.

*Approaches to Product Design:*

- User-Centered Design: Focusing on the needs and preferences of end-users.

- Concurrent Engineering: Involving multiple teams from different disciplinessimultaneously.
- Modular Design: Creating products with interchangeable components for customization.
- Sustainable Design: Emphasizing eco-friendly materials and processes.
-Design for Manufacturing (DFM): Optimizing the design for ease of production.

2. Explain the steps involved in new product development and sate gate approach*Steps in
New Product Development and Stage-Gate Approach:*Steps in New Product
Development:

- Idea Generation: Generating new product ideas through brainstorming, market research ,etc.
- Idea Screening: Evaluating and filtering ideas based on feasibility, profitability, and fit with company
goals.
- Concept Development: Developing detailed product concepts and prototypes.- Business Analysis:
Analyzing the potential market, demand, costs, and revenue projections.
- Product Development: Creating a final product design and developing a functional prototype.
- Test Marketing: Launching the product in a limited market to gather feedback and identify issues.
- Commercialization: Full-scale production, marketing, and product launch.

*Stage-Gate Approach:*
The Stage-Gate approach is a project management technique used in new product development. It
involves breaking the development process into distinct stages (or gates) with defined criteria for moving
from one stage to the next. Each gate represents a checkpoint where the project team assesses the progress
and decides whether to continue, modify, or terminate the project. This approach helps reduce risks and
allows companies to allocate resources effectively.

3. Elaborate the product life cycle and Tools for efficient development.*Product Life Cycle and
Tools for Efficient Development:*Product Life Cycle:*
The product life cycle is the progression of a product through different stages of its existence in the
market. These stages are:-
-Introduction: The product is launched, and sales begin to grow slowly.
- Growth: Sales increase at an accelerating rate, and the product gains market acceptance.
- Maturity: Sales peak, and the product reaches its maximum market share.
- Decline: Sales start to decrease due to market saturation or the introduction of better alternatives.

*Tools for Efficient Product Development:*

- Computer-Aided Design (CAD): Software to create and modify digital designs.
- Computer-Aided Engineering (CAE): Software to simulate and analyze product performance.
- Rapid Prototyping: Techniques like 3D printing to quickly create physical prototypes.
- Value Analysis/Value Engineering (VA/VE): A systematic approach to improve product value.
- Project Management Software: Tools to manage and track product development projects.

4. Explain types of process designs and techniques for process analysis*Types of Process Designs
and Techniques for Process Analysis:**Types of Process Designs:*
- Job Shop: A flexible process design where products are made to order in small batches.
- Batch Production: Producing goods in batches based on customer demand or schedule.
- Assembly Line: A linear production system where products move along a line with specific tasks
performed at each station.
- Continuous Flow: A highly automated process with a continuous flow of products, common
in industries like chemicals and utilities.

*Techniques for Process Analysis:*

- Process Mapping: Visual representation of the entire process flow to identify inefficiencies.
- Value Stream Mapping (VSM): A lean manufacturing technique to analyze the flow of materials and
information
.- Statistical Process Control (SPC): Using statistical methods to monitor and control process variations.
- Time and Motion Study: Analyzing work tasks and time taken to identify process improvements.
- Six Sigma: A data-driven approach to reduce defects and improve process quality

5. Briefly explain the facility layout principles and its types.*Facility Layout Principles and
Types:*

*Facility Layout Principles:*

- Flexibility: Designing layouts that can adapt to changing production requirements.
- Flow: Ensuring smooth movement of materials, information, and workers.
- Space Utilization: Efficiently using available space to optimize productivity.
- Safety: Ensuring a safe working environment for employees and visitors.
- Ergonomics: Designing workstations to reduce physical strain and improve productivity.
*Types of Facility Layouts:*
- Process Layout: Grouping similar equipment and functions together
.- Product Layout (Line Layout): Arranging equipment in a sequence based on the production process.
- Cellular Layout: Organizing workstations into cells to handle a specific set of products or tasks.
- Fixed-Position Layout: Bringing materials and resources to a stationary work location (common in
construction projects)
.- Combination Layout: A mix of different layout types to meet specific production needs.

6. Explain the concept of planning tools and techniques

*Concept of Planning Tools and Techniques:
*Planning tools and techniques help organizations streamline their processes and make informed
decisions. Some of the key planning tools and techniques include:

*SWOT Analysis:* Evaluates an organization's Strengths, Weaknesses, Opportunities, andThreats to

inform strategic planning
.-*PESTEL Analysis:* Assesses the Political, Economic, Social, Technological,Environmental, and Legal
factors influencing a business environment.- *Gantt Chart:* A visual representation of project tasks and
their timelines, used for project scheduling and progress tracking.
- *Critical Path Method (CPM):* A project management technique to identify the longestsequence of
tasks that determine the project's duration
.- *Decision Trees:* A graphical representation of decisions and their potential outcomes toaid in
decision-making under uncertainty.
- *Forecasting:* Predicting future trends and events to make informed plans and allocateresources
effectively
.- *Benchmarks:* Comparing performance against industry standards or competitors toidentify areas for
improvement.
 IMPORTANT QUESTIONS (KEY NOTES)
UNIT 4 INTRODUCTION TO OPERATION MANAGEMENT

1. Describe briefly on objective and steps of demand forecasting qualitative and

quantitative methods of demand forecasting.

a. Objective:
The objective of demand forecasting is to estimate future customer demand for a product or service.
Accurate demand forecasting helps businesses plan production, manage inventory, set pricing strategies,
and make informed decisions to meet customer demands effectively.

b. Steps of Qualitative Demand Forecasting:

Qualitative methods rely on subjective judgments and expert opinions.
The steps involved are:
- Market Research: Conducting surveys, interviews, and focus groups to gather data from potential
customers
- Delphi Method: A panel of experts provides independent forecasts, and their opinions are aggregated
anonymously until a consensus is reached.
- Jury of Executive Opinion: Gathering opinions from key executives within the organization.
- Sales Force Composite: Sales representatives provide their estimates based on their knowledge of the
market.

c. Steps of Quantitative Demand Forecasting:

Quantitative methods use historical data and statistical techniques to predict future demand.
The steps are:
- Data Collection: Gather historical sales data, market trends, and any other relevant information.
- Data Analysis: Apply statistical methods such as time-series analysis, regression analysis, moving
averages, etc., to identify patterns and trends.
- Model Selection: Choose the appropriate forecasting model based on the characteristics of the data and
the forecast horizon.
- Forecasting: Generate future demand estimates using the selected model.

2. Explain about objectives and techniques of inventory control (EOQ and ABC)
a. Objectives:
The objectives of inventory control are to maintain adequate stock levels to meet customerdemand,
minimize carrying costs, reduce stockouts, and optimize the use of resources.
b. Economic Order Quantity (EOQ) Technique:
EOQ helps determine the optimal order quantity that minimizes total inventory costs by balancing
ordering costs and carrying costs. The formula for EOQ is:
EOQ = √[(2 * Demand * Ordering Cost) / Carrying Cost per unit]
c. ABC Analysis:
ABC analysis categorizes inventory items into three groups based on their value and importance:
- A-items: High-value items that represent a small portion of the inventory but contribute to asignificant
portion of the overall value.
- B-items: Moderate-value items with moderate importance.
- C-items: Low-value items that constitute a large portion of the inventory but individuallycontribute less
value.

3. Describe phases, functions and techniques of production planning and controlling

a. Phases:
- Planning Phase: Involves defining production objectives, creating production plans, and allocating
resources.
-Execution Phase: Involves implementing the production plans and managing day-to-dayoperations
- Control Phase: Involves monitoring actual performance, comparing it with planned objectives, and
taking corrective actions as needed.

b. Functions:
- Demand Forecasting: Estimating future demand to plan production accordingly.
- Capacity Planning: Determining the capacity needed to meet production requirements
- Scheduling: Creating a detailed timetable for production activities.
- Inventory Management: Ensuring the availability of raw materials and finished goods.

c. Techniques:
- Material Requirement Planning (MRP): Using computer-based systems to plan and control the
procurement and production of materials.
- Just-in-Time (JIT): Minimizing inventory by receiving materials just before they are needed in
production.
- Kanban: A signaling system that triggers the replenishment of materials based on actual consumption.

4. Explain in details about the objectives, functions and techniques of Scheduling project
management.
a. Objectives:
The objectives of project scheduling are to ensure the timely completion of the project, allocate resources
effectively, and identify critical tasks that may impact the project's duration.
b. Functions:
- Task Sequencing: Determining the order in which project tasks should be executed.
- Resource Allocation: Assigning resources (labor, equipment, materials) to tasks.
- Time Estimation: Estimating the duration of each task.
- Critical Path Analysis: Identifying the critical path, which includes tasks with no slack and determines
the project’s minimum duration
c. Techniques:
- Gantt Charts: Visual representations of project schedules that show task durations and overlaps.
- Critical Path Method (CPM): A network-based technique that identifies the critical path andhelps
prioritize activities.
- Program Evaluation and Review Technique (PERT): A probabilistic approach that considers
uncertainties in task durations to estimate project completion time.

5. Explain the objectives of inventory management and types of inventory cost

a. Objectives:
The objectives of inventory management are to ensure adequate stock levels to meet customer demand,
avoid stock outs, reduce carrying costs, and minimize the cost of holding inventory.
b. Types of Inventory Cost:
- Holding (Carrying) Cost: The cost of storing inventory, including warehousing, insurance, and
obsolescence.
- Ordering Cost: The cost of placing and processing orders for inventory replenishment.
- Shortage Cost: The cost of stockouts, including potential loss of sales, customer dissatisfaction, and
emergency ordering costs.

6. Writes notes on Capacity constrained resource and synchronous manufacturing

- Capacity Constrained Resource: This refers to a resource in a production system that cannot meet the
demand placed upon it. It acts as a bottleneck, limiting the overall output of the system. To optimize
production, it's essential to identify and address these constraints to maximize resource utilization and
overall productivity.
- Synchronous Manufacturing: Synchronous manufacturing is an approach to production that focuses
on maintaining a smooth and balanced flow of materials and information through out the production
process. It emphasizes reducing or eliminating bottlenecks and minimizing work in progress to achieve
higher efficiency and shorter lead times. Synchronous manufacturing aims to achieve a continuous flow
of production and aligning all processes with the rate of customer demand. It is closely related to the
concepts of Just-in-Time (JIT) and Lean Manufacturing.
 IMPORTANT QUESTIONS (KEY NOTES)
UNIT 5 INTRODUCTION TO OPERATION MANAGEMENT

1.Illustrate the contribution quality gurus and TQM philosophies in detail.

Contribution of Quality Gurus and TQM Philosophies:

a. W. Edwards Deming:

W. Edwards Deming is considered one of the pioneers in the field of Total Quality Management (TQM).
His contributions include:

- The Deming Cycle (PDCA Cycle): Also known as the Plan-Do-Check-Act cycle, it provides a
systematic approach to continuous improvement
.- The 14 Points for Management: A set of guiding principles for managers to transform their
organizations and improve quality.
- The System of Profound Knowledge: A holistic approach that emphasizes understanding variation,
psychology, theory of knowledge, and the appreciation for systems.

b. Joseph M. Juran:

Juran was another influential figure in quality management, known for his contributions such as:
- The Juran Trilogy: A three-step approach to managing quality, including quality planning, quality
control, and quality improvement.
- The Pareto Principle (80/20 Rule): States that a significant portion of problems (80%) are caused by a
small number of root causes (20%).

c. Philip B. Crosby:

Crosby focused on prevention rather than detection of defects. His contributions include:
- The concept of Zero Defects: The idea that organizations should strive for error-free products and
processes.
- The Four Absolutes of Quality Management: Quality is defined as conformance to requirements,
there is no such thing as a quality problem, prevention is the only solution, and measuring quality costs
less than not measuring it.

d. Kaoru Ishikawa:

Ishikawa is known for promoting the concept of quality circles and developing the fish bone diagram
(Ishikawa diagram) to identify root causes of problems.

e. Genichi Taguchi:

Taguchi emphasized robust design and developed statistical methods to improve product and process
quality.

2. Explain in details about Quality Management tools.

✓ Quality management tools are techniques used to analyze data, identify problems, and make
informed decisions to improve quality. Some common quality management tools include:
a. Flowcharts: Visual representations of processes to understand the sequence of activities and identify
areas for improvement.
b. Fishbone Diagram (Ishikawa Diagram): Used to identify potential causes of a problem by
categorizing them into different factors.
c. Pareto Chart: A bar chart that prioritizes problems or causes by showing their frequency or impact in
descending order.
d. Histogram: A graphical representation of data distribution to understand process variations.
e. Control Charts: Used to monitor process stability and identify variations over time.
f. Scatter Diagrams: Illustrate the relationship between two variables to identify potential correlations
g. 5 Whys: A simple technique to identify the root cause of a problem by repeatedly asking
"why" to uncover deeper issues.
h. Benchmarking: Comparing an organization's performance with industry best practices to
identify areas for improvement
.i. Statistical Process Control (SPC): Using statistical techniques to monitor and control processes to
ensure they meet quality standards

3. Discuss on quality certification and awards.Quality Certification and Awards:

Quality certification and awards are recognition programs given to organizations that demonstrate a
commitment to quality and excellence. Some well-known certifications and awards include:
a. ISO (International Organization for Standardization) Certifications: ISO 9001 is the most
common certification for quality management systems. It sets criteria for a systematic and customer-
focused approach to ensure consistent product/service quality.
b. Malcolm Baldrige National Quality Award (MBNQA): An award established by the U.S.
government to promote quality excellence in various industries.
c. European Foundation for Quality Management (EFQM) Excellence Model: A framework hat
helps organizations assess their overall performance and identify areas for improvement.
d. Deming Prize: A Japanese award recognizing businesses for excellence in quality management.
e. Shingo Prize: An award for organizations that achieve world-class operational excellence.

4. Explain about lean manufacturing tools and techniques.Lean Manufacturing Tools and
Techniques:

Lean manufacturing aims to eliminate waste, increase efficiency, and improve overall productivity. Some
key tools and techniques used in lean manufacturing are:
a. Value Stream Mapping (VSM): A visual tool that analyzes the flow of materials and information in a
process to identify areas of waste and opportunities for improvement.
b. 5S: A method for workplace organization, involving Sort, Set in Order, Shine, Standardize, and
Sustain.
c. Kanban : A pull-based inventory control system that ensures materials are replenished only when
needed.
d. Just-in-Time (JIT): JIT focuses on producing goods or providing services at the exact time they are
needed, minimizing inventory and waste.
e. Poka-Yoke: Also known as mistake-proofing, it involves designing processes to prevent errors or
defects.
f. Single-Minute Exchange of Die (SMED): Techniques to reduce setup and changeover times in
production processes.
g. Kaizen: Continuous improvement involving small, incremental changes made by employees at all
levels.
5. Explain on Objectives, Elements and importance of JIT. Objectives, Elements, and
Importance of JIT: Objectives of JIT:

- Eliminate waste: JIT aims to reduce inventory, waiting times, overproduction, and any othernon-value-
added activities.
- Improve efficiency: By focusing on reducing lead times and setup times, JIT increases production
efficiency.
- Enhance flexibility: JIT allows companies to respond quickly to changes in customer demand.

Elements of JIT:

- Pull System: Production is based on actual customer demand, and items are only produced when they
are needed downstream
- Continuous Improvement: Encouraging employees to identify and eliminate problems on an ongoing
basis.
- Jidoka: Giving machines and operators the ability to detect defects and stop production automatically.
- Kanban: Using visual cues (cards, bins) to signal the need for more materials or production.

Importance of JIT:

- Reduced inventory carrying costs.

- Lower storage space requirements.
- Faster response to customer demand changes.
- Improved quality due to immediate detection and correction of defects.
- Increased efficiency and productivity

6. Explain about tools for continuous improvement and process and implementation of Six
Sigma. Tools for Continuous Improvement and Implementation of Six Sigma:

a. DMAIC: DMAIC is the core methodology used in Six Sigma projects. It stands for Define, Measure,
Analyze, Improve, and Control. It provides a structured approach for problem-solving and process
improvement.
b. SIPOC Diagram: SIPOC stands for Suppliers, Inputs, Process, Outputs, and Customers. It helps in
understanding the scope and boundaries of a process and its interactions with external factors.
c. Root Cause Analysis (RCA): Techniques like 5 Whys, Fishbone Diagrams, and Pareto Analysis are
used to identify the underlying causes of problems.
d. Design of Experiments (DOE): DOE is used to systematically manipulate variables and identify
optimal process settings that lead to the desired outcomes.
e. Statistical Tools: Six Sigma heavily relies on various statistical tools like hypothesis testing,
regression analysis, control charts, and process capability analysis.
f. Kaizen Events: Short-term, focused improvement activities involving a cross-functional team to make
rapid improvements in a specific process.
g. Poka-Yoke: Mistake-proofing techniques to prevent errors from occurring or to detect the mearly.
h. Control Plans: Documents that outline the key process steps, potential failure modes, and control
measures to ensure the sustained performance of the improved process.
The implementation of Six Sigma involves defining projects based on organizational goals, selecting the
right team members, collecting and analyzing data, identifying root causes, implementing improvements,
and putting controls in place to sustain improvements over time
The goal is to reduce process variations and defects, ultimately leading to better customersatisfaction and
business performance