ISBM EXAM CASE STUDY ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Subject : Marketing Management
Case Studies
Case (20
Marks)
When HLL introduced Lifebuoy in the Indian market in 1895 (110 years ago) it was positioned as the soap that would destroy germs
and keep the body healthy. The brand found the going tough especially in rural markets where most people were accustomed to
without any soap. HLL then decided to project lifebuoy as soap for hand wash. The approach seemed is pay off. By 1900 Lifebuoy
had established itself as soap for hand wash. At this stage, the brand’s inherent properties were expanded and lifebuoy was
repositioned as bath soap. Health remained the benefit proposition. “Where there is lifebuoy, there is health”, become a popular
jingle in rural India. The brand was also projected on the plank of economy. Much later, in 1964, the brand was re- launched with a
change in shape and wrapper design. Lifebuoy started associated with sports. The health and body fitness dimension got reinforced
HLL had many requirements to meet. It had to tap same of the emergency market needs. It had to play down the image of lifebuoy as
villagers soap and it had to embrace to earnings from lifebuoy brand in the long term. HLL decided to meet these needs through line
extensions such as: Lifebuoy personal, Lifebuoy plus, Lifebuoy gold, liquid lifebuoy and lifebuoy active.
Answer the following question.
Q1. How did HLL Position lifebuoy in the beginning?
Q2. What was the geographical focus and why?
Q3. Explain why the brand was going tough in the market?
Q4. What are your views about HLL’s building line extensions?
Case (20
Marks)
Sunshine Lumieres was established in 1992 in Bangalore, India to manufacture lamps mainly for household use. The company was
established by Dr. Srinath Kashyap who had extensive experience in the lamp industry with the major multinational manufacturers in
India and overseas. Sunshine was involved till now in manufacturing and supplying lamps for consumer and household use under
various brands for the leading lamp companies. Dr. Kashyap was involved in looking after the manufacturing and marketing
functions while his wife looked after the Finances and the HR functions. The Company had a total of 50 employees and grossed
revenue of Rs.9 crores in 2005. The market in India was large and growing due to the increasing affluence and the massive rural
electrification programmes of the Government. Post liberalization in 1992; the market dynamics slowly started changing due to
increased competition from leading brands looking to capture larger market shares. Dr Kashyap felt it was time to diversify this
business and get into newer product segments. The lamp industry can be classified into various segments like: Consumer household
Lamps Industrial & Commercial lamps Specialty lamps like high intensity lamps used in Medical & Office Equipment Automotive
lamps Miniature lamps Energy efficient lamps like CFL lamps, LED lamps etc. While the large MNCs were present in all segments,
most local manufacturers were involved in the consumer and household lighting. Typically, household lamps sold at around US$0.25
per piece at the retail level while the Industrial and commercial lamps sold at prices upwards of US$25 per piece retail. Sunshine
lumeries hired Dr. Mohan Das, a bright Engineer from IIT and MBA from a leading Business school. After working in some leading
companies, Mohan felt it was time for him to exploit his innovative skills and create world class products. In a very short span of
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time after joining Sunshine, Dr. Das was able to produce some very interesting and technologically advanced products. Dr. Kashyap
felt that over time , in low value products like lamps, the large MNC’s would be forced to give way to players from developing
countries like China and India, who would over time establish the products under their own brands. Establishing the Sunshine brand
over time was therefore vital for the future. Meanwhile, Mohan had designed a slew of new and innovative products – comparable
with the best in their class in the world, in the energy efficient and Industrial lamp categories. Given suitable financial investments,
these could take the company’s revenues to over Rs.100 crores by 2008 between the domestic and export markets. As he looked out
of his office window, enjoying the light drizzle and cool breeze of Bangalore, Dr. Kashyap’s realized that he was at a point of
inflexion. If the current opportunities were exploited fully, it could lead to great fortunes for himself and his family. He could even
take the company public and unlock the value of his holdings. However, it would also mean that Sunshine would have to evolve into
a professionally managed company and have a larger number of employees. He wondered how he should go about structuring his
Sales and Distribution organization so as to grow manifold both domestically and overseas within the next three years before taking
the company public. Dr. Kashyap was convinced that he needed to seek professional advice. He invited Dr. Vasant Rao, an old friend
and leading Management expert in Bangalore to visit his office for a discussion on a broad game plan.
Answer the following question.
Q1. How Dr. Kashyap should go about professionalizing & restructuring his organization?
Q2. Should the sales be organized on geographic or product basis?
Q3. Should be distribution be common for all products?
Q4. Should he have his own Sales and Distribution organizations in some countries?
Case (20
Marks)
Kaggi’s Food Co (KFC) is a large producer & seller of edible oils, flour, pulses, spices & some other food items. Over past ten years
KFC could establish itself well with popular brand names for its produce. Oil brand “Sunrise” from KFC is very popular as low fat,
healthy cooking medium. KFC has three mills, one each in Meerut, Dehradun & Lucknow. To avail tax benefit only spices are
procured from small manufacturers who carry out their operations under strict supervision of KFC quality team. All other items are
manufactured in company’s own mills. SO far entire produce of KFC is sold easily in northern region of seven states through loyal
set of distributors & retailers. For past three years KFC has started feeling the pressure of competition, more in oil & flour brands.
Apart from bundling free soap, detergent, pet jar etc., competitors have increased distributor & retailer margins on volume off take.
The young and professional management team of KFC is confident of achieving targets and enjoying the scene. KFC mills are not
very modern ; nevertheless, they are maintained well. Breakdowns and production stoppages are very rare. KFC has recently bought
a large salt manufacturing facility in a coastal town. This mill produces good quality common salt on contract basis for two different
brands. The previous owner found this arrangement very neat with assured and quick turn over-even though the profit margin is low.
KFC did not wish to change the arrangement immediately, but thought building own brand for salt will not be difficult. It will
increase profit margin also. Added attraction is that branded salt can easily be sold through existing channel. Market for branded salt
is already over crowed. There are many national and local brands. The leading brand TATA is there for over 30years. There are other
big national brands with deep pockets for promotion such as Nirma, T-series, Dandi, Catch etc. Each brand is trying to take a
particular but different position. While common planks are crystal clear, white & free flow, the special positions are iodized, triple
refined, from the house of TATA etc. Prices & packing are almost same. Only Dandi & Catch are costlier. Catch sells in dispensable
container of 400 gms also
Answer the following question.
Q1. What core product is Kaggi’s Food selling when it sells edible oils?
Q2. Carry out a SWOT analysis for Kaggi’s Food.
Q3. Suggest some differentiators to build up competitive advantages for KFC’s brand of salt
Q4. What will you suggest to ensure trial & feedback from customers of salt during launch?
Case (20
Marks)
Mr. Ramaswamy after completing post-graduation from IIM, Ahmedabad in 2006 worked for MNC for about one year. However, he
soon realized that he is not meant for doing job for someone and he decided to go for restaurant business. His vision is to establish
chain of restaurants in all major cities of the world. To make the dream come true , he started with a small restaurant in Mumbai and
selected location having dense office area. The residential area is far from the office area. He initially started with luxury type of
restaurant with lot of rich ambience and interior with high priced menu. After lapse of nine months, the restaurant failed to fetch the
customers. He started analyzing where the things have gone wrong. His restaurant is quality restaurant and still failing. After
analysis, he could make out following observations: a) Restaurant is located in office area and all the office staff leaves mostly
around 8 pm. They bring their lunch with them. b) Residential area is far which is consisting of mostly middle class families. c)
Spending capacity of customers is low. d) Business visitors are also less because of the nature of corporate offices. After due
thought, he changed the restaurant into a fast-food outlet. Soon, it started fetching the customers and he is having happy time now.
However, he feels that there is low profit margin and less growth opportunities, if he does not do anything. Now to enhance growth,
he is planning for awarding franchisees to other outlets in the city and beyond.
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Answer the following question.
Q1. In your opinion, is the decision of changing luxury restaurant into fast food outlet is correct one? If yes, how and
why the decision is correct?
Q2. Please help him to work out franchisee network and pricing strategies. What advertising and promotional methods
do you suggest to attract and retain the customers?
Operations Management
Answer the following question.
Q1.
14. Ilhan Dalci is president of Ilhandir Manufacturing, a producer of Go-Kart Tires. Dalci makes 1000 tires per tires
per day with the following resources: Labour: 400 hours at 12.50 MU/hr Raw Material: 20 000 kgs/day at 1MU/kg
Energy: 5 000 MU/day Capital: 10 000 MU/day a. What is the labour productivity for these tires at Ilhandir
Manufacturing? b. What is the multifactor productivity for these tires at Ilhandir Manufacturing? c. What is the
percent change in multifactor productivity if Ilhandir can reduce energy bill by 1000 MU without cutting production or
changing any other inputs?
(10
marks)
Q2. Magusa Metal Works produces cast bronze valves on an assembly line. On a recent day, 160 valves were produced
during an 8-hour shift. Calculate the productivity of the line.
(10
marks)
Q3.
11. Ahmet Uslu makes wooden boxes in which to ship motorcycles. Ahmet and his three employees invest 40 hours
per day making the 120 boxes. a. What is their productivity? b. Ahmet and his employees have discussed redesigning
the process to improve efficiency. If they can increase the rate to 125 per day, what would be their new productivity? c.
What would be their increase in productivity?
(10
marks)
Q4.
Haldun LOP, the production manager of LOP Chemicals, in Gazimagusa, TRNC, is preparing his quarterly report
which is to include a productivity analysis for his department. One of the inputs is production data prepared by
Meltem SERIN, his operation analyst. The report, which she gave him this morning, showed the following: 2005 2006
Production (units) 4 500 6 000 Raw Material Used (barrels of Petroleum by-products) 700 900 Labour Hours ` 22 000
28 000 Capital Cost applied to the Department (MU) 375 000 620 000 Haldun LOP wondered if his productivity had
increased at all. He called Meltem into his office and conveyed the above information to her and asked her to proceed
with preparing this part of the report. (Include your interpretations for each productivity figure)
(10
marks)
Q5.
Ilhan’s, a local bakery, is worried about increased costs – particularly energy. Last year’s records can provide a fairly
good estimate of the parameters for this year. Ilhan Balci, the owner, does not believe things have changed much, but
he did invest an additional 3 000 MU for modifications to the bakery’s ovens to make them more energy efficient. The
modifications were supposed to make the ovens at least 15 % more efficient. I. Balci has asked you, as a brilliant
graduate of EMU, to check the energy savings of the new ovens and also look over other measures of the bakery’s
productivity to see if the modifications were beneficial. You have the following data to work with: Last Year Now
Production (dozen) 1 500 1 500 Labour (hours) 350 325 Capital Investment (MU) 15 000 18 000 Energy (kw-hrs) 3
000 2 750
(10
marks)
Q6.
The Cool-Tech Co. produces various types of fans. In May, the company produced 1728 window fans at a standard
price of 40 MU. The Co. has 12 direct labour employees whose compensation (including wages and fringe benefits)
amounts to 21 MU/hour. During May, window fans were produced on 9 working days 9of 8 hours each), and other
products were produced on other days. a. Determine the productivity of the window fans. b. In June, the Cool-Tech
Co. produced 1 730 fans in 10 working days. What is the percentage in labour productivity of windows from May?
(10
marks)
Q7.
1. Suzan has a part-time “cottage-industry” producing seasonal plywood yard ornaments for resale at local craft fairs
and bazaars. She currently works a total of 4 hours per day to produce 10 ornaments. a. What is her productivity? b.
She thinks that by redesigning the ornaments and switching from use of a wood glue to a hot-glue gun she can
increase her production to 20 ornaments per day. What is her new productivity? c. What is her percentage increase (or
decrease) in productivity?
(10
marks)
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Q8. What are the advantages and limitations of planning? (10
marks)
Quantitative Methods
Case Studies
A monte Carlo Case Study (20
Marks)
Laura,' a 57 year old unmarried woman, earns around 68,000 dollars per year with expenditure of 37,500 dollars. She hit away
14,000 dollars each year and collected 330,000 dollars in her RRSP and TFSA, and also a rented apartment worth 250,000 dollars.
She has a iixed pension given by her employer, although it is not indicated to price rise, and Is entitled to get complete benefits of
Canada Pension Plan and Old Age Security, for retirement. She did not have a very competent portfolio: one fourth of cash is there,
and most of it was in contracted sector ETFs, single stocks and business bonds. Due to wrong entry of ETFs in the account,
unnecessary taxes were charged. Even before reconstructing Laura's portfolio,"he had to make certain that it matched with.her
financial aims. Laura's main aim was to ascertain if she could retire before the age of 65, maybe as early as 60, therefore she had to
know if her investments could produce enough flow of cash after she retires. Monte Carlo may show a top possibility of success with
the allotment of equity of 70% ot 80%. Through a risky questionnaire and art open interview, Justin Ill 'ascertain that Laura was the
best person for a portfolio of 60% fixed income and 40% equities. . Through Monte Carlo software, Justin entered the current
portfolio . size of Laura, her rate of savings, projected retirement expenditure, and other employer income and government pensions.
If Laura feels that working till the age of 63 was unpleasant, she could go for the reproduction again and with different estimation.
Increasing her anticipated returns or bringing down the rate of inflation, is only a thought, therefore, she will have to make some
stronger decisions: she will have to making some more savings, or bring down her rate of planned expenses after retirement.
Amazingly, by bringing up the allotment to fixed salary could increase her opportunity to succeed: in spite of th returns being lower
than the equities, the volatility is also less, which lessens the risk of helpless decline in the early years. At last, Laura decided to work
for 6 more years and plan her retirement at the age of 63. After this, Justin decided to help her make a fresh ETF portfolio to match
that goal: it was finalized at 30% short term business bonds, 30% GICs, and the rest of it was divided among Canadian, L'S and
global equities. Laura was able to make a notified decision through the Monte Carlo simulation, but this wasn't the end of the
procedure. In two or three years time, she will have to visit the location again to see that she is still on the right path of her retirement
goal, as many issues like, loss of job, a legacy, new connections, increase in the interest rates, all these could bring a change in the
main suppusitions 1 ; and she will have to redo her plans. The possibilities are different before the age of 63. For each added year
that Laura works, her portfolio will addition instead of a decrease and this will lead to a thrilling difference: the success rate will rise
up by 25% points if she continues to work till the age of 61 instead of 60.
Answer the following question.
Q1. How much was Laura earning at the age of 57? (Hint: 68,000 dollars per year)
CASE STUDY (20
Marks)
The cost of fuel in running of an engine is proportional to the square of the speed and is Rs 48 per hour for speed of 16 kilometers
per hour. Other expenses amount to Rs 300 per hour. What is the most economical speed?
Answer the following question.
Q1. What is most economical speed?
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Q2. What is a chi-square test?
Q3. What is sampling and what are its uses.
Q4. Is there any alternative formula to find the value of Chi-square?
Finoplastika Industries Ltd, Nigeria (20
Marks)
Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series of studies, and 2)
Both the aims need the plan of the viewed time series data is recognized and somewhat officially explained: A time series is said to
be a 'collection of observations made in sequence with time'. For example: recording level of daily rainfall, periodical total domestic
product of US, and monthly strength of the. workers in Marine Corps for a specific rank and MOS. The evaluation of time series
gives instruments for picking a symbolic model and delivering forecasts. There are two sorts of times series data: • Continuous: in
this the data consists of study at every moment, for example, seismic movement recorded on a seismogram. • Discrete: the data
contains recordings taken at different periods ,like, statistics of each month crime. Until the data is absolutely haphazard, studies in
time series are usually related to each and the following studies could be partly ascertain by the last values. For instance, the reasons
pertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on the next day's
climate. Hence, the observations of the past temperature are helpful for predicting temperatures for the following days. • A time
series can be deterministic if there are no haphazard or feasible features but goes in a set and foreseeable manner. The data gathered
during the classical physics experiment like showing Newton's Law of Motion, is one example of a deterministic time series. The
stochastic type of series is more appropriate to the econometric function. Stochastic variables contain undefined or arbitrary
viewpoint. Though the worth of each study cannot be precisely foreseen, calculating the various observations could follow the
expected method. These methods can be explained through the statistical models. According to these models, studies differ
erratically on the underlying mean value whtch is the role of time. Time series data can be put in the following categories: one or
more performance factors; trend, seasonality, cyclical function and random sound. Various kinds of time series predicting models
give forecasts through extrapolating the previous performance of the values of a specified \'l!riable of interest. Consecutive study in
econometric times series are generally not free and forecast can be made on the basis of last observations. Although precise
predictions can be made with deterministic time series, predictions of stochastic time series are restricted to 'conditional statements
regarding the future on the basis of particular hypothesis.' Armstrong (2001) says, "The basic Assumption is that the variable ui!!
continue in the future as it has behaved in the past. " Particularly, the time series predictions are suitable for stochastic type of data in
which the fundamental root cause of variation like, trend, cyclical performance, seasonality, and uneven variations, do not change
radically m time. Therefore, modeling is considered to be more suitable temporarily instead of permanent predictions.
Answer the following question.
Q1.
Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by the series of
studies, and, both the aims need the plan of the viewed time series data is recognized and somewhat officially
explained)
CASE STUDY (20
Marks)
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is
c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.
Answer the following question.
Q1. Find the value of x.
Q2. In using regression analysis for making predictions what are the assumptions involved.
Q3. What is a simple linear regression model?
Q4. What is a scatter diagram method?
CONTACT:
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Subject : Marketing Management
Case Studies
Case (20
Marks)
When HLL introduced Lifebuoy in the Indian market in 1895 (110 years ago) it was positioned as the soap that would destroy germs
and keep the body healthy. The brand found the going tough especially in rural markets where most people were accustomed to
without any soap. HLL then decided to project lifebuoy as soap for hand wash. The approach seemed is pay off. By 1900 Lifebuoy
had established itself as soap for hand wash. At this stage, the brand’s inherent properties were expanded and lifebuoy was
repositioned as bath soap. Health remained the benefit proposition. “Where there is lifebuoy, there is health”, become a popular
jingle in rural India. The brand was also projected on the plank of economy. Much later, in 1964, the brand was re- launched with a
change in shape and wrapper design. Lifebuoy started associated with sports. The health and body fitness dimension got reinforced
HLL had many requirements to meet. It had to tap same of the emergency market needs. It had to play down the image of lifebuoy as
villagers soap and it had to embrace to earnings from lifebuoy brand in the long term. HLL decided to meet these needs through line
extensions such as: Lifebuoy personal, Lifebuoy plus, Lifebuoy gold, liquid lifebuoy and lifebuoy active.
Answer the following question.
Q1. How did HLL Position lifebuoy in the beginning?
Q2. What was the geographical focus and why?
Q3. Explain why the brand was going tough in the market?
Q4. What are your views about HLL’s building line extensions?
Case (20
Marks)
Sunshine Lumieres was established in 1992 in Bangalore, India to manufacture lamps mainly for household use. The company was
established by Dr. Srinath Kashyap who had extensive experience in the lamp industry with the major multinational manufacturers in
India and overseas. Sunshine was involved till now in manufacturing and supplying lamps for consumer and household use under
various brands for the leading lamp companies. Dr. Kashyap was involved in looking after the manufacturing and marketing
functions while his wife looked after the Finances and the HR functions. The Company had a total of 50 employees and grossed
revenue of Rs.9 crores in 2005. The market in India was large and growing due to the increasing affluence and the massive rural
electrification programmes of the Government. Post liberalization in 1992; the market dynamics slowly started changing due to
increased competition from leading brands looking to capture larger market shares. Dr Kashyap felt it was time to diversify this
business and get into newer product segments. The lamp industry can be classified into various segments like: Consumer household
Lamps Industrial & Commercial lamps Specialty lamps like high intensity lamps used in Medical & Office Equipment Automotive
lamps Miniature lamps Energy efficient lamps like CFL lamps, LED lamps etc. While the large MNCs were present in all segments,
most local manufacturers were involved in the consumer and household lighting. Typically, household lamps sold at around US$0.25
per piece at the retail level while the Industrial and commercial lamps sold at prices upwards of US$25 per piece retail. Sunshine
lumeries hired Dr. Mohan Das, a bright Engineer from IIT and MBA from a leading Business school. After working in some leading
companies, Mohan felt it was time for him to exploit his innovative skills and create world class products. In a very short span of
10/23/2018 Aeren Foundation
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time after joining Sunshine, Dr. Das was able to produce some very interesting and technologically advanced products. Dr. Kashyap
felt that over time , in low value products like lamps, the large MNC’s would be forced to give way to players from developing
countries like China and India, who would over time establish the products under their own brands. Establishing the Sunshine brand
over time was therefore vital for the future. Meanwhile, Mohan had designed a slew of new and innovative products – comparable
with the best in their class in the world, in the energy efficient and Industrial lamp categories. Given suitable financial investments,
these could take the company’s revenues to over Rs.100 crores by 2008 between the domestic and export markets. As he looked out
of his office window, enjoying the light drizzle and cool breeze of Bangalore, Dr. Kashyap’s realized that he was at a point of
inflexion. If the current opportunities were exploited fully, it could lead to great fortunes for himself and his family. He could even
take the company public and unlock the value of his holdings. However, it would also mean that Sunshine would have to evolve into
a professionally managed company and have a larger number of employees. He wondered how he should go about structuring his
Sales and Distribution organization so as to grow manifold both domestically and overseas within the next three years before taking
the company public. Dr. Kashyap was convinced that he needed to seek professional advice. He invited Dr. Vasant Rao, an old friend
and leading Management expert in Bangalore to visit his office for a discussion on a broad game plan.
Answer the following question.
Q1. How Dr. Kashyap should go about professionalizing & restructuring his organization?
Q2. Should the sales be organized on geographic or product basis?
Q3. Should be distribution be common for all products?
Q4. Should he have his own Sales and Distribution organizations in some countries?
Case (20
Marks)
Kaggi’s Food Co (KFC) is a large producer & seller of edible oils, flour, pulses, spices & some other food items. Over past ten years
KFC could establish itself well with popular brand names for its produce. Oil brand “Sunrise” from KFC is very popular as low fat,
healthy cooking medium. KFC has three mills, one each in Meerut, Dehradun & Lucknow. To avail tax benefit only spices are
procured from small manufacturers who carry out their operations under strict supervision of KFC quality team. All other items are
manufactured in company’s own mills. SO far entire produce of KFC is sold easily in northern region of seven states through loyal
set of distributors & retailers. For past three years KFC has started feeling the pressure of competition, more in oil & flour brands.
Apart from bundling free soap, detergent, pet jar etc., competitors have increased distributor & retailer margins on volume off take.
The young and professional management team of KFC is confident of achieving targets and enjoying the scene. KFC mills are not
very modern ; nevertheless, they are maintained well. Breakdowns and production stoppages are very rare. KFC has recently bought
a large salt manufacturing facility in a coastal town. This mill produces good quality common salt on contract basis for two different
brands. The previous owner found this arrangement very neat with assured and quick turn over-even though the profit margin is low.
KFC did not wish to change the arrangement immediately, but thought building own brand for salt will not be difficult. It will
increase profit margin also. Added attraction is that branded salt can easily be sold through existing channel. Market for branded salt
is already over crowed. There are many national and local brands. The leading brand TATA is there for over 30years. There are other
big national brands with deep pockets for promotion such as Nirma, T-series, Dandi, Catch etc. Each brand is trying to take a
particular but different position. While common planks are crystal clear, white & free flow, the special positions are iodized, triple
refined, from the house of TATA etc. Prices & packing are almost same. Only Dandi & Catch are costlier. Catch sells in dispensable
container of 400 gms also
Answer the following question.
Q1. What core product is Kaggi’s Food selling when it sells edible oils?
Q2. Carry out a SWOT analysis for Kaggi’s Food.
Q3. Suggest some differentiators to build up competitive advantages for KFC’s brand of salt
Q4. What will you suggest to ensure trial & feedback from customers of salt during launch?
Case (20
Marks)
Mr. Ramaswamy after completing post-graduation from IIM, Ahmedabad in 2006 worked for MNC for about one year. However, he
soon realized that he is not meant for doing job for someone and he decided to go for restaurant business. His vision is to establish
chain of restaurants in all major cities of the world. To make the dream come true , he started with a small restaurant in Mumbai and
selected location having dense office area. The residential area is far from the office area. He initially started with luxury type of
restaurant with lot of rich ambience and interior with high priced menu. After lapse of nine months, the restaurant failed to fetch the
customers. He started analyzing where the things have gone wrong. His restaurant is quality restaurant and still failing. After
analysis, he could make out following observations: a) Restaurant is located in office area and all the office staff leaves mostly
around 8 pm. They bring their lunch with them. b) Residential area is far which is consisting of mostly middle class families. c)
Spending capacity of customers is low. d) Business visitors are also less because of the nature of corporate offices. After due
thought, he changed the restaurant into a fast-food outlet. Soon, it started fetching the customers and he is having happy time now.
However, he feels that there is low profit margin and less growth opportunities, if he does not do anything. Now to enhance growth,
he is planning for awarding franchisees to other outlets in the city and beyond.
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Answer the following question.
Q1. In your opinion, is the decision of changing luxury restaurant into fast food outlet is correct one? If yes, how and
why the decision is correct?
Q2. Please help him to work out franchisee network and pricing strategies. What advertising and promotional methods
do you suggest to attract and retain the customers?
Operations Management
Answer the following question.
Q1.
14. Ilhan Dalci is president of Ilhandir Manufacturing, a producer of Go-Kart Tires. Dalci makes 1000 tires per tires
per day with the following resources: Labour: 400 hours at 12.50 MU/hr Raw Material: 20 000 kgs/day at 1MU/kg
Energy: 5 000 MU/day Capital: 10 000 MU/day a. What is the labour productivity for these tires at Ilhandir
Manufacturing? b. What is the multifactor productivity for these tires at Ilhandir Manufacturing? c. What is the
percent change in multifactor productivity if Ilhandir can reduce energy bill by 1000 MU without cutting production or
changing any other inputs?
(10
marks)
Q2. Magusa Metal Works produces cast bronze valves on an assembly line. On a recent day, 160 valves were produced
during an 8-hour shift. Calculate the productivity of the line.
(10
marks)
Q3.
11. Ahmet Uslu makes wooden boxes in which to ship motorcycles. Ahmet and his three employees invest 40 hours
per day making the 120 boxes. a. What is their productivity? b. Ahmet and his employees have discussed redesigning
the process to improve efficiency. If they can increase the rate to 125 per day, what would be their new productivity? c.
What would be their increase in productivity?
(10
marks)
Q4.
Haldun LOP, the production manager of LOP Chemicals, in Gazimagusa, TRNC, is preparing his quarterly report
which is to include a productivity analysis for his department. One of the inputs is production data prepared by
Meltem SERIN, his operation analyst. The report, which she gave him this morning, showed the following: 2005 2006
Production (units) 4 500 6 000 Raw Material Used (barrels of Petroleum by-products) 700 900 Labour Hours ` 22 000
28 000 Capital Cost applied to the Department (MU) 375 000 620 000 Haldun LOP wondered if his productivity had
increased at all. He called Meltem into his office and conveyed the above information to her and asked her to proceed
with preparing this part of the report. (Include your interpretations for each productivity figure)
(10
marks)
Q5.
Ilhan’s, a local bakery, is worried about increased costs – particularly energy. Last year’s records can provide a fairly
good estimate of the parameters for this year. Ilhan Balci, the owner, does not believe things have changed much, but
he did invest an additional 3 000 MU for modifications to the bakery’s ovens to make them more energy efficient. The
modifications were supposed to make the ovens at least 15 % more efficient. I. Balci has asked you, as a brilliant
graduate of EMU, to check the energy savings of the new ovens and also look over other measures of the bakery’s
productivity to see if the modifications were beneficial. You have the following data to work with: Last Year Now
Production (dozen) 1 500 1 500 Labour (hours) 350 325 Capital Investment (MU) 15 000 18 000 Energy (kw-hrs) 3
000 2 750
(10
marks)
Q6.
The Cool-Tech Co. produces various types of fans. In May, the company produced 1728 window fans at a standard
price of 40 MU. The Co. has 12 direct labour employees whose compensation (including wages and fringe benefits)
amounts to 21 MU/hour. During May, window fans were produced on 9 working days 9of 8 hours each), and other
products were produced on other days. a. Determine the productivity of the window fans. b. In June, the Cool-Tech
Co. produced 1 730 fans in 10 working days. What is the percentage in labour productivity of windows from May?
(10
marks)
Q7.
1. Suzan has a part-time “cottage-industry” producing seasonal plywood yard ornaments for resale at local craft fairs
and bazaars. She currently works a total of 4 hours per day to produce 10 ornaments. a. What is her productivity? b.
She thinks that by redesigning the ornaments and switching from use of a wood glue to a hot-glue gun she can
increase her production to 20 ornaments per day. What is her new productivity? c. What is her percentage increase (or
decrease) in productivity?
(10
marks)
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Q8. What are the advantages and limitations of planning? (10
marks)
Quantitative Methods
Case Studies
A monte Carlo Case Study (20
Marks)
Laura,' a 57 year old unmarried woman, earns around 68,000 dollars per year with expenditure of 37,500 dollars. She hit away
14,000 dollars each year and collected 330,000 dollars in her RRSP and TFSA, and also a rented apartment worth 250,000 dollars.
She has a iixed pension given by her employer, although it is not indicated to price rise, and Is entitled to get complete benefits of
Canada Pension Plan and Old Age Security, for retirement. She did not have a very competent portfolio: one fourth of cash is there,
and most of it was in contracted sector ETFs, single stocks and business bonds. Due to wrong entry of ETFs in the account,
unnecessary taxes were charged. Even before reconstructing Laura's portfolio,"he had to make certain that it matched with.her
financial aims. Laura's main aim was to ascertain if she could retire before the age of 65, maybe as early as 60, therefore she had to
know if her investments could produce enough flow of cash after she retires. Monte Carlo may show a top possibility of success with
the allotment of equity of 70% ot 80%. Through a risky questionnaire and art open interview, Justin Ill 'ascertain that Laura was the
best person for a portfolio of 60% fixed income and 40% equities. . Through Monte Carlo software, Justin entered the current
portfolio . size of Laura, her rate of savings, projected retirement expenditure, and other employer income and government pensions.
If Laura feels that working till the age of 63 was unpleasant, she could go for the reproduction again and with different estimation.
Increasing her anticipated returns or bringing down the rate of inflation, is only a thought, therefore, she will have to make some
stronger decisions: she will have to making some more savings, or bring down her rate of planned expenses after retirement.
Amazingly, by bringing up the allotment to fixed salary could increase her opportunity to succeed: in spite of th returns being lower
than the equities, the volatility is also less, which lessens the risk of helpless decline in the early years. At last, Laura decided to work
for 6 more years and plan her retirement at the age of 63. After this, Justin decided to help her make a fresh ETF portfolio to match
that goal: it was finalized at 30% short term business bonds, 30% GICs, and the rest of it was divided among Canadian, L'S and
global equities. Laura was able to make a notified decision through the Monte Carlo simulation, but this wasn't the end of the
procedure. In two or three years time, she will have to visit the location again to see that she is still on the right path of her retirement
goal, as many issues like, loss of job, a legacy, new connections, increase in the interest rates, all these could bring a change in the
main suppusitions 1 ; and she will have to redo her plans. The possibilities are different before the age of 63. For each added year
that Laura works, her portfolio will addition instead of a decrease and this will lead to a thrilling difference: the success rate will rise
up by 25% points if she continues to work till the age of 61 instead of 60.
Answer the following question.
Q1. How much was Laura earning at the age of 57? (Hint: 68,000 dollars per year)
CASE STUDY (20
Marks)
The cost of fuel in running of an engine is proportional to the square of the speed and is Rs 48 per hour for speed of 16 kilometers
per hour. Other expenses amount to Rs 300 per hour. What is the most economical speed?
Answer the following question.
Q1. What is most economical speed?
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Q2. What is a chi-square test?
Q3. What is sampling and what are its uses.
Q4. Is there any alternative formula to find the value of Chi-square?
Finoplastika Industries Ltd, Nigeria (20
Marks)
Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series of studies, and 2)
Both the aims need the plan of the viewed time series data is recognized and somewhat officially explained: A time series is said to
be a 'collection of observations made in sequence with time'. For example: recording level of daily rainfall, periodical total domestic
product of US, and monthly strength of the. workers in Marine Corps for a specific rank and MOS. The evaluation of time series
gives instruments for picking a symbolic model and delivering forecasts. There are two sorts of times series data: • Continuous: in
this the data consists of study at every moment, for example, seismic movement recorded on a seismogram. • Discrete: the data
contains recordings taken at different periods ,like, statistics of each month crime. Until the data is absolutely haphazard, studies in
time series are usually related to each and the following studies could be partly ascertain by the last values. For instance, the reasons
pertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on the next day's
climate. Hence, the observations of the past temperature are helpful for predicting temperatures for the following days. • A time
series can be deterministic if there are no haphazard or feasible features but goes in a set and foreseeable manner. The data gathered
during the classical physics experiment like showing Newton's Law of Motion, is one example of a deterministic time series. The
stochastic type of series is more appropriate to the econometric function. Stochastic variables contain undefined or arbitrary
viewpoint. Though the worth of each study cannot be precisely foreseen, calculating the various observations could follow the
expected method. These methods can be explained through the statistical models. According to these models, studies differ
erratically on the underlying mean value whtch is the role of time. Time series data can be put in the following categories: one or
more performance factors; trend, seasonality, cyclical function and random sound. Various kinds of time series predicting models
give forecasts through extrapolating the previous performance of the values of a specified \'l!riable of interest. Consecutive study in
econometric times series are generally not free and forecast can be made on the basis of last observations. Although precise
predictions can be made with deterministic time series, predictions of stochastic time series are restricted to 'conditional statements
regarding the future on the basis of particular hypothesis.' Armstrong (2001) says, "The basic Assumption is that the variable ui!!
continue in the future as it has behaved in the past. " Particularly, the time series predictions are suitable for stochastic type of data in
which the fundamental root cause of variation like, trend, cyclical performance, seasonality, and uneven variations, do not change
radically m time. Therefore, modeling is considered to be more suitable temporarily instead of permanent predictions.
Answer the following question.
Q1.
Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by the series of
studies, and, both the aims need the plan of the viewed time series data is recognized and somewhat officially
explained)
CASE STUDY (20
Marks)
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is
c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.
Answer the following question.
Q1. Find the value of x.
Q2. In using regression analysis for making predictions what are the assumptions involved.
Q3. What is a simple linear regression model?
Q4. What is a scatter diagram method?
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