UNIVBRSITY OF COLOMBO, SRI LANKAFaculty of Management & Finance

Postgraduate & Mid-career Development UnitMaster of Business Administration (Semester Il-first half) Examination - September,2010

MBA 538- Operations ManagementThree (03) Hours

Answer Any FIVE QuestionsNotes on both sides of A'4 paper are allowed.Use a separate answer book for each part

This paper consists of Seven (07) Questions in Five (05) printed pages

PART - IQ1.i. What ar - and similarities between products and services?

(04 Marks)ii. Whal - .rcsign approach in product design? How is it different from the

clas ,--rrtlol design approach? (05 Marks)

iii. Differentiate the following product strategies and give an example product for each.

(a) make-to-stock(b) make-to-order

Explain how you would choose among these strategies.

Discuss the suitability of mass production and job shop in each strategy.(07 Marks)

iv. How should a firm change its process at different stages of the product life cycle?(04 Marks)

(Total20 marks)

l l .

i l 1 .

Q2.i. What is meant by the capacity of a facility? In what ways can the capacity of a facility

be measured? Why is capacity requirements planning required for a facility?

:j (05 Marks)

Strategic capacity planning is a key for competitiveness? Elaborate this statement.(04 Marks)

Amila Electronics is considering two locations: Campaha and Negambo for its audioequipment factory. At Gampaha, the fixed cost of the factory is estimated at Rs Imillion and the variable cost is Rs 1,200 per audio equipment manufactured. AtNegombo, the fixed cost of the factory is estimated at Rs 1.2 million and the variablecost isRs 1,100 per audio equipment manufactured. The selling price of the equipmentwill be Rs 3,000 per unit irrespective of the place of manufacture. Decide whichlocation is best for the factory under different demand levels using break-even analysis.

(l I Marks)(Total20 marks)

Give at least two examples of organizations that have predominantly product, process,and fixed-position layouts.

(06 Marks)

What is a cellular layout? How is it different from a process layout?(04 Marks)

Given below are tasks involved and their time requirements in producing a consumerproduct.

Task Task time (Seconds) Precedins taskA 20 NoneB 40 AC l 3 BD l0 BE 8 BF l5 C,D,EG 60 AH 75 GI 60 HJ 55 F,'

Total 356

Q3.i .

l l ,

u l .

Line processing is adopted in production.

(a) Ifthe projected rate ofproductionper unit?

is 40 units per hour, what would be the cycle time

(03 Marks)

(b) Determine the most efficient production line to meet the production requirementsgiven in (a) above showing the allocation of tasks among workstations.

(07 Marks)(Total20 marks)

Q4.i. What are the objectives of aggregate planning, and discuss the relevant cost component

involved with them.(08 Marks)

ii. Following figures (Rs.'000) shows the sales during the past six months of the XYZcompany.

JanuaryFebruaryMarchAprilMayJune

(Rs . '000)215223232234240247

Using exponential smoothing method, forecast the sales for April through July forthe company. (Assume that forecast for March is 200 units and a= 0.2).

(08 Marks)What is the main weakness of using exponential smoothing method with datapatterned like above? Suggest an improved time-series method to forecast thesales. (You are not expected to re-compute forecast using the suggested method).

(04 marks)(Total20 Marks)

Qs.i. What is the difference between sporadic problems and chronic problems in the context of

quality management?(06 Marks)

ii. "lf your employees are asked to increase the quality of output, the quantity of output willbe suffered." Discuss this statement.

(06 Marks)

iii. Lean manufacturing focuses on elimination of waste. Explain four lean tools which areused to eliminate waste.

(08 Marks)(Total20 marks)

(a)

(b)

PART.II

Q6.i. One of the inputs for MRP is Master Production Schedule (MPS) and MPS is derived

from Aggregate Planning (AP). Explain with an example how you can convert an APoutput to a MPS.

(04 Marks)ii. Develop an MRP output for product Q with the product structures given below:

There is an order for 200 units.of product Q in period 7. The lead time of eachcomponent and materials in the structure has been given in the figure.

The on-hand quantities and safety stocks maintained for the items are given in the tablebelow:

Items a c D E

On-hand Quantity 6 20 0 30

Safety Stock 6 0 0 0

There are no open orders for anyare the same as net requirements,What should be the size of thereleased?

items. The lot size or order quantity for items Q and Cwhile the lot size for D is 200 units and E is 500 units.orders for each item and when should the orders be

(16 Marks)(Total20 marks)

ii. Discuss steps involved in implementing supply chain practices inorsanization.

Q7.

i. Compare a traditional organization with a supply chain practicing organization in thecontext of inventory management, inventory flows, cost, information, and risk andplanning.

(04 Marks)

a manufacturing

(04 Marks)

Don Carolis PLC operates 52 weeks per year, and the cost of goods sold last year was$6,500,000. The firm has eight inventory items: four raw materials, two work-in-process items, and two finished goods. The table below shows last year's inventoryrecords of these items, along with their unit cost values.

InventoryCategory

PartNumber

OpeningInventory forthe Period

ClosingInventory forthe Period

AverageUnit Cost ($)

Raw materials RM-I 18,000 22,000 2.00RM-2 6,000 4.000 3.00RM-3 2.500 3.500 5.00RM-4 1.000 l ,000 10.00

Work-in-process

WIP-I 8.000 4,000 r8 .00wlP-2 5,000 I 1,000 21.00

Finishedgoods

FG-I 1.500 500 33.00FG-2 700 300 42.00

(a)

(b)

(c)

What was the average aggregate inventory value?

How many.weeks of supply the firm had last year?

What was the inventorv turnover last vear?

(05 Marks)

(04 Marks)

(03 Marks)(Total20 marks)

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