PRODUCTION DESIGN AND DEVELOPMENT IIBM EXAM ANSWER
PRODUCTION DESIGN AND DEVELOPMENT IIBM EXAM QUESTION AND ANSWERS PROVIDED
CONTACT
DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Examination Paper of Production Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Product Design & Development
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice & Short Answer type questions.
Answer all the questions.
Part One carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. The concept of a contract book is detailed by
a. Wheelwright
b. Clark
c. Both (a) & (b)
d. None of the above
2. BOM stands for Bill of Materials.(T/F)
3. Concept screening is based on a method developed by the late Stuart Pugh in the 1980s and is often
called ______________
4. _____________ is used when increased resolution will better differentiate among company concepts.
5. ________________are the first products produced by the entire production process.
6. The first commercial free-form fabrication system was introduced by 3D Systems.
a. 1984
b. 1986
c. 1964
d. 1948
7. Concepts are turned over the customer, client, or some other external entity for selection is called
a. Intuition
b. Pros and Cons
c. External decision
d. Decision materials
8. A Russian problem-solving methodology called TRIZ began to be disseminated in Europe and in the
United States in the
a. 1998
b. 1997
c. 1976
d. 1990
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IIBM Institute of Business Management
9. Functional elements of a Product Architecture are ___________& _____________
10. ______________ is a key determinant of the economic success of a product.
Part Two:
1. What is “Control Drawings”.
2. Write short note on “Resource Allocation”.
3. Write short note on “Product Variety”.
4. What is “Project Risk Plan”
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
New Product Development At Smart India Ltd.
Ajay Kumar, the Vice-President, (Sales) of a leading Delhi based bicycle manufacturer of the country
called SMART LTD., was wondering at the increase in the quantum of Traffic on roads during the last 10
years, while glancing outside his office window. But not much had changed in his company in th23e year
2001. His company‟s market share was dwindling since the last 10 years, though the profits and sales
were showing an increasing trend. The threat of cheap imports was also knocking at the doors. The
competitors were using marketing strategies to the hilt in order to get larger chunk of market share. The
things were not showing improving trend despite the continuous efforts by the company. SMART LTD.
was equally poised with RUSH LTD. in respect of market share just 10 years back. Now the ground
realties were very much adverse to SMART LTD.. While RUSH LTD. was having a market share of
about 45 per cent, SMART LTD. lagged behind with only about half i.e. 23 percent closely followed by
CLIMB LTD. with 20 per cent. The rapid erosion in the market share of SMART LTD. was of concern to
Ajay Kumar, who was trying to find out ways to stop the downfall. The problem of losing market share
had become more prominent keeping in view that the bicycle business was a volume led business to an
extent. To make the matters worse, the credit rating agency had downgraded the debt instrument issued by
the company in view of a possible feud between the family members of the promoter and the majority
share holders.
An important factor in the bicycle market, which had recently gained importance, was the increasing
demand for different types of bicycles among youth, particularly those of the sports variety. Unlike in the
END OF SECTION A
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IIBM Institute of Business Management
past, improved technology had led to newer varieties of bicycle ranging from the very basic to the 21 gear
models. Such value added products also provide better profit margins. Also, some manufacturers had
started rolling out products provide better profit margins. Also, some manufacturers had started rolling
out products that were not strictly bicycles but had similar technological inputs. These included exercise
bicycles popularly found in the clubs and gymnasiums. At the plant level, the top post was that of the
Joint President and was held by one of the family members. Most of the decisions were subject to the gut
feel of the Joint President.
Though perceived as „a poor man‟s product‟, the scenario was changing of late. Earlier the product was
positioned using only one plank i.e., cost effective transport utility vehicle. Now the market was being
segmented multidimensionally by all the players. Age, benefit, income, occasions etc. were the added
criteria. SMART LTD. had come up with bikes for kids, city bikes, mountain bikes and classics. This
reflected the changing needs of buyers as well. CLIMB LTD. had segmented market on the basis of
usage, road bikes, mountain bikes and tandems. SMART LTD. had also jumped to the bandwagon
recently and had introduced bikes in ladies, kids, adventure and health segments. The trend was to
increasingly use the platform of health, fun, sports etc., to increase the penetration into the market. Once
the leader in the bicycle industry had 35 models in the market with about eight colour variants for each.
The competitor RUSH LTD. had about 45 models in the market with more colour variants.
The financial stakes of introducing of a new product in the bicycle industry ranged from Rs 45000 to
a couple of lakhs. The manufacturing process of bicycle was composed of many sub-assemblies. The
synergic use of these sub-assemblies helped in reaping economies of scale. To remain to the competition,
it was imperative to introduce innovative products that could meet the differentiated needs in a better
fashion. Ajay Kumar, the Vice President (Sales) had seen a bike in a foreign magazine and had sent the
picture of the same 6 months back to design and development department. The feasibility report was still
awaited from the design and development department. He appraised the Vice-President (Production)
regarding the issue but the things still had to be sorted out. Ghanshyam, the HOD(Sales Department) had
visited Taiwan and brought designs of four bicycles which could be manufactured by the company. But
his sales division suggested that those bikes would be out of reach for the poor, therefor, the idea could
not be taken up. He was very enthusiastic over a project to launch a new bike for fun loving people. After
detailed deliberations with the production and design development department for about 8 months, the
proposal was sent to the top management for approval. He was sad, as the file was pending for about 2
months with his boss. While Ajay Kumar was pondering over the issues, his colleague from the finance
department entered into the room and said, “I was watching a movie on HBO last night, I saw a very
different kind of bike in it. Did you view it?” Ajay Kumar replied in negative and wondered what could
be the right approach for product development. He was also concerned with the time involved in the
process of development of new products.
Ajay while passing by the market simply gazed at the bicycle showroom on his way and appreciated
the speed at which the competitors were able to come up with various colour variants. Recently, Ajay
Kumar also discussed with the Vice-President (Production) regarding the experimentation with some new
colours. The officer agreed with his new proposal and assured that the same shall be forwarded to the top
management for a final decision. Ajay kumar prepared himself to wait for a long time as his experience
curve suggested. One of the only solacing fact for Ajay Kumar was the success of the bike „football‟
which they launched on the eve of soccer world cup. The bike was an instant success. A friend of Ajay
Kumar, who worked with him till last year, called upon him. He remembered how enthusiastically he was
explaining his new challenging job. He was very happy about the confidence the management had put in
him. He was also being sent abroad on training by his new employers. The sales department had
subjectively come up with the multdimensional mapping of the three major players on two relevant
attributes.
The company planned to come up with a new campaign focusing upon the environment friendliness
of bicycle over motor bikes that use fossil fuels. The government also promised to aid the concern in this
effort. One of the main strengths of SMART LTD. was its undisputed leadership in the rural areas. The
company did not intend to lose it. His main rival was also closing in for the rural market. SMART LTD.
Examination Paper of Production Management
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IIBM Institute of Business Management
had initiated a restructuring exercise in 1999-2000, whereby, three new wholly owned subsidiaries were
created, each being named after the respective cycle manufacturing locations, namely, SMART LTD.
(Delhi), SMART LTD. (Gujarat) and SMART LTD. (Andhra Pradesh). Although the originally stated
intention of setting up these subsidiaries was to treat them as profit centers, current developments indicate
the likelihood of distribution of assets and liabilities into these companies.
Ajay Kumar was quite confident of the quality of the bicycles manufactured as the steel used for the
sale was produced by one of its own unit. The firm had also bagged an international award for its quality
standards. The sales figures had gone up from 250 crores in the year 1995 to 350 crores in the year 1998.
The inflow of foreign exchange showed a steady increase from 100 to 120 during the same period.
SMART LTD. was exporting bikes to more than 35 countries.
Questions:
1. How new product development process be improved at SMART LTD?
2. What strategies should be used by SMART LTD. to increase its market share.
Caselet 2
Swastik Cycles Limited
Swastik Cycles Limited was a key manufacturer of a wide variety of cycles. Its products were available
almost all over the country and were also exported. It was the second largest bicycles selling organisation
followed by Star Cycles. The total turnover of the company was Rs 400 crores during the year 1999-2000
and its market share in the year 2000-2001 was about 24%, whereas Star Cycle had captured about 46%
of the total market in the same year, rest of the market was shared by all other brands. The company had
classified its entire products into.
1. Utility segment: popularly called as the standard cycles, widely used by milkmen, hawkers, and other
lower income group people.
2. Fancy cycles: multi coloured bicycles with modern features like gear changing, stylish handle, slim
frame etc., used by kids, teenagers and sportsmen.
3. Health segment: health maintaining products i.e., walker, cycle etc., for all age group had been put
under this categorys.
The company had its strength in the utility segment and was accepted as the market leader, whereas in
other segments, it had yet to prove itself. In other segments i.e., fancy cycle segment, health segment the
Star Cycle was far ahead. The company was striving to fight the stiff competition from domestic players.
It also anticipated the competition from Chinese players who were expected to enter the Indian market
with low cost products. On account of heavy import duties levied by the government in the budget of
2001-2002, the chances of their invading the domestic market were, however, substantially minimized.
Now, the company had confined itself to win over the domestic players in these segments. The major
issue for a company was that despite their presence in the fancy cycles the segment for last 10 years they
were not able to attract the target market and the sales were lagging behind. The immediate requirement
was to push the sales of these two segments.
The company had been trying to push sales through their dealers network all over the country which
was the only intermediatory between the company and the customers. In order to fresh the desired sales
company had the policy of offering monetary and non-monetary incentives in the form of rebates on
target lifting.
In addition to it, the company also offered incentives like foreign trips to Bangkok etc. and free passes
of mega events. The company also went for some other sales promotion activities the like point of
Examination Paper of Production Management
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IIBM Institute of Business Management
purchase (POP), joint promotion schemes (JPS) with dealers, in which the dealers offered gifts on every
purchase to their customers and the cost incurred was born jointly by the company and the dealer
concerned. Cycle races organised by schools and educational institutes were other promotional measures
adopted by the company.
The company had invested marginally in advertising. They ran the show through print media and the
advertisement on the electronic media was very low. Decision making regarding promotional activities
was centralized with the corporate office, whereas, other decisions regarding sales, R&D and production
could be taken by the respective units. The field force comprising of sales executives and field officers
who were in constant touch with the dealers and the customers for getting their feedbacks regarding sales
promotion strategies, used to send the feedbacks to the corporate office for further processing and
decision making. This consumed time and little was left with the particular unit to decide.
The changing trends in the markets gave enough scope to make the bicycle popular amongst the elite
class in the form of health maintaining products, pollution free vehicles etc. Though the company was
making efforts to tap this newly emerging customer group by offering them health maintaining cycles,
stylish racing cycles, yet it was a hard task for the company because it had not made any strategy to reach
the customers directly to bring about awareness of the products. To improve its market share and
maximize sales, a lot was required to be done by the company to devise the marketing strategies if it was
to cope up with the changed market scenario and the strategies adopted by its competitors.
Questions:
1. Discuss key problem faced by Swastik Cycles?
2. Design an appropriate marketing strategy comprising of all the essentials to overcome this problem.
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. Many product development teams separate the “looks like” prototype from the “works like”
prototype. They do this because integrating both function and from is difficult in the early phase of
development. What are the strengths and weaknesses of this approach? For what types of products
might this approach be dangerous?
2. The argument for the motorcycle architecture is that it allows for a lighter motorcycle than the more
modular alternative. What are the other advantages and disadvantages? Which approach is likely to
cost less to manufacture?
END OF SECTION B
END OF SECTION C
Examination Paper of Production Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Quantitative Techniques
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice questions & Short Answer type questions.
Answer all the questions.
Part One carries 0.5 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. The value of 3n+4 - 6.3n+1 is
a. 27.3n+1
b. 21.3n-1
c. 21.3n+1
d. 27.3n-1
e. 21.3-n-1
2. The value of x which satisfies the question x/2-x/4=x-9 is
a. 12
b. 14
c. 16
d. 18
e. 20
3. The sum of 5ax-7by+cz and ax+2by-cz is
a. 6ax+5by
b. 6ax-5by
c. 6ax+5by-2cz
d. 6ax-5by-cz
e. 6ax-5by+2cz.
4. The product of 3x-5 and 2x+7 is
a. 6x2-11x-35
b. 6x2-11x+35
c. 6x2+11x-35
d. 6x2 +10x-35
e. 6x2+11x+35
5. The 37th term in the series -2.8, 0, 2.8,…. Is
a. 98
b. 89
c. 87
d. 78
e. 68
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IIBM Institute of Business Management
6. The sum of the series 14, 64, 114, … to 20 terms is
a. 7890
b. 8970
c. 9780
d. 10820
e. 10920
7. The last term in the series 2, 4, 8, … to 9 terms is
a. 612
b. 512
c. 412
d. 312
e. 212
8. If an unbiased coin is tossed 3 times then the probability that at least one head occurs is
a. 0.875
b. 0.5
c. 0.375
d. 0.125
e. 0.1.
9. Again in continuation with the above question the probability that 3 heads result is
a. 0.100
b. 0.125
c. 0.250
d. 0.500
e. 0.875
10. The line y=5-10x cuts the y axis at_________ and has slope________
a. (0,10), -5
b. (0,-10), 5
c. (0,5), -10
d. (0,-5), 10
e. (0,5), 10
11. If y=F(x) is the equation of a line then the slope at (5,2) is given by
a. F‟(2)
b. F‟(5)
c. F(2)
d. F(5)
e. None of the above
12. Slope of the line passing through the points (4,4) and (5,5) is
a. 1
b. 9
c. 1/9
d. 20
e. 1/20
13. An „Ogive‟ is
a. A graph of ungrouped data
Examination Paper of Production Management
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IIBM Institute of Business Management
b. A graph of grouped data
c. A graph of cumulative frequencies
d. A graph of ranges of fractiles
e. A graph with rectangles as opposed to a line graph.
14. If p=3x4 + 9xy + y3 then ∂p/∂y is given by
a. 12x3+9x
b. 12x3+9x+3y2
c. 9x+3y2
d. 9y+3y3
e. 12x3+9y+3y2
15. For a function f(x), f‟(x)=0 at x=a then „a‟ is a point of minima if
a. F(a)<0
b. F(a)=0
c. F‟‟(a)=0
d. F‟‟(a)< 0
e. F‟‟(a)>0
16. The function 2x2 + 3x +2 has a
a. Maximum value at x = - 3/4
b. Minimum value at x = - 2
c. Maximum value at x = -3/2
d. Minimum value at x = -3/4
e. The equation has no maxima and minima.
17. The probability of getting exactly 3 heads in four tosses of a fair coin is
a. 1/2
b. 1/4
c. 1/8
d. 1/10
e. 1/16
18. In multiple regression, the number of normal equations will be
a. Two
b. Three
c. One
d. More than three
e. More than or equal to three
19. The index of industrial production is an example of
a. Price index
b. Value index
c. Quality index
d. Relative index
e. Industrial production index
20. As the sample size is increased, the standard error of the mean would
a. Increase
b. Decrease
c. Remain unchanged
Examination Paper of Production Management
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IIBM Institute of Business Management
d. May or may not increase
e. The value of sample mean would be lot closer of population mean
Part Two:
1. What do you understand by „Infeasibility‟ of the solution?
2. Write about „Big – M‟ method for minimization.
3. Write about the „Classical Economic Order Quantity (EOQ) models.
4. Write a short note on „Interfering Float‟.
Section B: Practical Problems (40 marks)
This section consists of Practical Problems.
Answer all the questions.
Each Practical Problems carries 20 marks.
1. A car retailer thinks that a 40,000 mile claim for tire life by the manufacturer is too high. She
carefully records the mileage obtained from a sample of 64 such tires. The mean turns out to be
38,500 miles. The standard deviation of the life of all tires of this type has previously been
calculated by the manufacturer to be 7,600 miles. Assuming that the mileage is normally
distributed, determine the largest significance level at which we should accept the manufacturer‟s
mileage claim, that is, at which we would not conclude the mileage is significantly less than
40,000 miles.
2. Consider the following data:
Output Total Cost
(in lakhs of units) (in lakhs of rupees)
5 140
7 155
9 170
11 180
14 200
17 230
20 240
22 260
24 275
28 310
Identify the fixed and variable cost components using the least squares method.
END OF SECTION A
Examination Paper of Production Management
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IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. In a recent survey, senior company executives in five metros has ranked two former finance ministers
Mr. Manmohan Singh and Mr. P. Chindambaram as first and second and the present finance minister
Mr. Yashwant Sinha in third position as regarding their popularity.In this, an example of sampling
survey? Discuss about necessity of sampling and the different methods of sampling?
2. “Index numbers are an indispensible tool in day to day life. Comment. Also, explain with examples
how index numbers provide a summary measurement of movements of a large number of economic
variables. Is there a possibility that, their method of computation could give a distorted picture of
reality?
S-2-300813
END OF SECTION B
END OF SECTION C
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Product Design & Development
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice & Short Answer type questions.
Answer all the questions.
Part One carries 1 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. The concept of a contract book is detailed by
a. Wheelwright
b. Clark
c. Both (a) & (b)
d. None of the above
2. BOM stands for Bill of Materials.(T/F)
3. Concept screening is based on a method developed by the late Stuart Pugh in the 1980s and is often
called ______________
4. _____________ is used when increased resolution will better differentiate among company concepts.
5. ________________are the first products produced by the entire production process.
6. The first commercial free-form fabrication system was introduced by 3D Systems.
a. 1984
b. 1986
c. 1964
d. 1948
7. Concepts are turned over the customer, client, or some other external entity for selection is called
a. Intuition
b. Pros and Cons
c. External decision
d. Decision materials
8. A Russian problem-solving methodology called TRIZ began to be disseminated in Europe and in the
United States in the
a. 1998
b. 1997
c. 1976
d. 1990
Examination Paper of Production Management
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IIBM Institute of Business Management
9. Functional elements of a Product Architecture are ___________& _____________
10. ______________ is a key determinant of the economic success of a product.
Part Two:
1. What is “Control Drawings”.
2. Write short note on “Resource Allocation”.
3. Write short note on “Product Variety”.
4. What is “Project Risk Plan”
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
New Product Development At Smart India Ltd.
Ajay Kumar, the Vice-President, (Sales) of a leading Delhi based bicycle manufacturer of the country
called SMART LTD., was wondering at the increase in the quantum of Traffic on roads during the last 10
years, while glancing outside his office window. But not much had changed in his company in th23e year
2001. His company‟s market share was dwindling since the last 10 years, though the profits and sales
were showing an increasing trend. The threat of cheap imports was also knocking at the doors. The
competitors were using marketing strategies to the hilt in order to get larger chunk of market share. The
things were not showing improving trend despite the continuous efforts by the company. SMART LTD.
was equally poised with RUSH LTD. in respect of market share just 10 years back. Now the ground
realties were very much adverse to SMART LTD.. While RUSH LTD. was having a market share of
about 45 per cent, SMART LTD. lagged behind with only about half i.e. 23 percent closely followed by
CLIMB LTD. with 20 per cent. The rapid erosion in the market share of SMART LTD. was of concern to
Ajay Kumar, who was trying to find out ways to stop the downfall. The problem of losing market share
had become more prominent keeping in view that the bicycle business was a volume led business to an
extent. To make the matters worse, the credit rating agency had downgraded the debt instrument issued by
the company in view of a possible feud between the family members of the promoter and the majority
share holders.
An important factor in the bicycle market, which had recently gained importance, was the increasing
demand for different types of bicycles among youth, particularly those of the sports variety. Unlike in the
END OF SECTION A
Examination Paper of Production Management
3
IIBM Institute of Business Management
past, improved technology had led to newer varieties of bicycle ranging from the very basic to the 21 gear
models. Such value added products also provide better profit margins. Also, some manufacturers had
started rolling out products provide better profit margins. Also, some manufacturers had started rolling
out products that were not strictly bicycles but had similar technological inputs. These included exercise
bicycles popularly found in the clubs and gymnasiums. At the plant level, the top post was that of the
Joint President and was held by one of the family members. Most of the decisions were subject to the gut
feel of the Joint President.
Though perceived as „a poor man‟s product‟, the scenario was changing of late. Earlier the product was
positioned using only one plank i.e., cost effective transport utility vehicle. Now the market was being
segmented multidimensionally by all the players. Age, benefit, income, occasions etc. were the added
criteria. SMART LTD. had come up with bikes for kids, city bikes, mountain bikes and classics. This
reflected the changing needs of buyers as well. CLIMB LTD. had segmented market on the basis of
usage, road bikes, mountain bikes and tandems. SMART LTD. had also jumped to the bandwagon
recently and had introduced bikes in ladies, kids, adventure and health segments. The trend was to
increasingly use the platform of health, fun, sports etc., to increase the penetration into the market. Once
the leader in the bicycle industry had 35 models in the market with about eight colour variants for each.
The competitor RUSH LTD. had about 45 models in the market with more colour variants.
The financial stakes of introducing of a new product in the bicycle industry ranged from Rs 45000 to
a couple of lakhs. The manufacturing process of bicycle was composed of many sub-assemblies. The
synergic use of these sub-assemblies helped in reaping economies of scale. To remain to the competition,
it was imperative to introduce innovative products that could meet the differentiated needs in a better
fashion. Ajay Kumar, the Vice President (Sales) had seen a bike in a foreign magazine and had sent the
picture of the same 6 months back to design and development department. The feasibility report was still
awaited from the design and development department. He appraised the Vice-President (Production)
regarding the issue but the things still had to be sorted out. Ghanshyam, the HOD(Sales Department) had
visited Taiwan and brought designs of four bicycles which could be manufactured by the company. But
his sales division suggested that those bikes would be out of reach for the poor, therefor, the idea could
not be taken up. He was very enthusiastic over a project to launch a new bike for fun loving people. After
detailed deliberations with the production and design development department for about 8 months, the
proposal was sent to the top management for approval. He was sad, as the file was pending for about 2
months with his boss. While Ajay Kumar was pondering over the issues, his colleague from the finance
department entered into the room and said, “I was watching a movie on HBO last night, I saw a very
different kind of bike in it. Did you view it?” Ajay Kumar replied in negative and wondered what could
be the right approach for product development. He was also concerned with the time involved in the
process of development of new products.
Ajay while passing by the market simply gazed at the bicycle showroom on his way and appreciated
the speed at which the competitors were able to come up with various colour variants. Recently, Ajay
Kumar also discussed with the Vice-President (Production) regarding the experimentation with some new
colours. The officer agreed with his new proposal and assured that the same shall be forwarded to the top
management for a final decision. Ajay kumar prepared himself to wait for a long time as his experience
curve suggested. One of the only solacing fact for Ajay Kumar was the success of the bike „football‟
which they launched on the eve of soccer world cup. The bike was an instant success. A friend of Ajay
Kumar, who worked with him till last year, called upon him. He remembered how enthusiastically he was
explaining his new challenging job. He was very happy about the confidence the management had put in
him. He was also being sent abroad on training by his new employers. The sales department had
subjectively come up with the multdimensional mapping of the three major players on two relevant
attributes.
The company planned to come up with a new campaign focusing upon the environment friendliness
of bicycle over motor bikes that use fossil fuels. The government also promised to aid the concern in this
effort. One of the main strengths of SMART LTD. was its undisputed leadership in the rural areas. The
company did not intend to lose it. His main rival was also closing in for the rural market. SMART LTD.
Examination Paper of Production Management
4
IIBM Institute of Business Management
had initiated a restructuring exercise in 1999-2000, whereby, three new wholly owned subsidiaries were
created, each being named after the respective cycle manufacturing locations, namely, SMART LTD.
(Delhi), SMART LTD. (Gujarat) and SMART LTD. (Andhra Pradesh). Although the originally stated
intention of setting up these subsidiaries was to treat them as profit centers, current developments indicate
the likelihood of distribution of assets and liabilities into these companies.
Ajay Kumar was quite confident of the quality of the bicycles manufactured as the steel used for the
sale was produced by one of its own unit. The firm had also bagged an international award for its quality
standards. The sales figures had gone up from 250 crores in the year 1995 to 350 crores in the year 1998.
The inflow of foreign exchange showed a steady increase from 100 to 120 during the same period.
SMART LTD. was exporting bikes to more than 35 countries.
Questions:
1. How new product development process be improved at SMART LTD?
2. What strategies should be used by SMART LTD. to increase its market share.
Caselet 2
Swastik Cycles Limited
Swastik Cycles Limited was a key manufacturer of a wide variety of cycles. Its products were available
almost all over the country and were also exported. It was the second largest bicycles selling organisation
followed by Star Cycles. The total turnover of the company was Rs 400 crores during the year 1999-2000
and its market share in the year 2000-2001 was about 24%, whereas Star Cycle had captured about 46%
of the total market in the same year, rest of the market was shared by all other brands. The company had
classified its entire products into.
1. Utility segment: popularly called as the standard cycles, widely used by milkmen, hawkers, and other
lower income group people.
2. Fancy cycles: multi coloured bicycles with modern features like gear changing, stylish handle, slim
frame etc., used by kids, teenagers and sportsmen.
3. Health segment: health maintaining products i.e., walker, cycle etc., for all age group had been put
under this categorys.
The company had its strength in the utility segment and was accepted as the market leader, whereas in
other segments, it had yet to prove itself. In other segments i.e., fancy cycle segment, health segment the
Star Cycle was far ahead. The company was striving to fight the stiff competition from domestic players.
It also anticipated the competition from Chinese players who were expected to enter the Indian market
with low cost products. On account of heavy import duties levied by the government in the budget of
2001-2002, the chances of their invading the domestic market were, however, substantially minimized.
Now, the company had confined itself to win over the domestic players in these segments. The major
issue for a company was that despite their presence in the fancy cycles the segment for last 10 years they
were not able to attract the target market and the sales were lagging behind. The immediate requirement
was to push the sales of these two segments.
The company had been trying to push sales through their dealers network all over the country which
was the only intermediatory between the company and the customers. In order to fresh the desired sales
company had the policy of offering monetary and non-monetary incentives in the form of rebates on
target lifting.
In addition to it, the company also offered incentives like foreign trips to Bangkok etc. and free passes
of mega events. The company also went for some other sales promotion activities the like point of
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purchase (POP), joint promotion schemes (JPS) with dealers, in which the dealers offered gifts on every
purchase to their customers and the cost incurred was born jointly by the company and the dealer
concerned. Cycle races organised by schools and educational institutes were other promotional measures
adopted by the company.
The company had invested marginally in advertising. They ran the show through print media and the
advertisement on the electronic media was very low. Decision making regarding promotional activities
was centralized with the corporate office, whereas, other decisions regarding sales, R&D and production
could be taken by the respective units. The field force comprising of sales executives and field officers
who were in constant touch with the dealers and the customers for getting their feedbacks regarding sales
promotion strategies, used to send the feedbacks to the corporate office for further processing and
decision making. This consumed time and little was left with the particular unit to decide.
The changing trends in the markets gave enough scope to make the bicycle popular amongst the elite
class in the form of health maintaining products, pollution free vehicles etc. Though the company was
making efforts to tap this newly emerging customer group by offering them health maintaining cycles,
stylish racing cycles, yet it was a hard task for the company because it had not made any strategy to reach
the customers directly to bring about awareness of the products. To improve its market share and
maximize sales, a lot was required to be done by the company to devise the marketing strategies if it was
to cope up with the changed market scenario and the strategies adopted by its competitors.
Questions:
1. Discuss key problem faced by Swastik Cycles?
2. Design an appropriate marketing strategy comprising of all the essentials to overcome this problem.
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. Many product development teams separate the “looks like” prototype from the “works like”
prototype. They do this because integrating both function and from is difficult in the early phase of
development. What are the strengths and weaknesses of this approach? For what types of products
might this approach be dangerous?
2. The argument for the motorcycle architecture is that it allows for a lighter motorcycle than the more
modular alternative. What are the other advantages and disadvantages? Which approach is likely to
cost less to manufacture?
END OF SECTION B
END OF SECTION C
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IIBM Institute of Business Management
Examination Paper MM.100
Quantitative Techniques
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice questions & Short Answer type questions.
Answer all the questions.
Part One carries 0.5 mark each & Part Two carries 5 marks each.
Part One:
Multiple Choices:
1. The value of 3n+4 - 6.3n+1 is
a. 27.3n+1
b. 21.3n-1
c. 21.3n+1
d. 27.3n-1
e. 21.3-n-1
2. The value of x which satisfies the question x/2-x/4=x-9 is
a. 12
b. 14
c. 16
d. 18
e. 20
3. The sum of 5ax-7by+cz and ax+2by-cz is
a. 6ax+5by
b. 6ax-5by
c. 6ax+5by-2cz
d. 6ax-5by-cz
e. 6ax-5by+2cz.
4. The product of 3x-5 and 2x+7 is
a. 6x2-11x-35
b. 6x2-11x+35
c. 6x2+11x-35
d. 6x2 +10x-35
e. 6x2+11x+35
5. The 37th term in the series -2.8, 0, 2.8,…. Is
a. 98
b. 89
c. 87
d. 78
e. 68
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6. The sum of the series 14, 64, 114, … to 20 terms is
a. 7890
b. 8970
c. 9780
d. 10820
e. 10920
7. The last term in the series 2, 4, 8, … to 9 terms is
a. 612
b. 512
c. 412
d. 312
e. 212
8. If an unbiased coin is tossed 3 times then the probability that at least one head occurs is
a. 0.875
b. 0.5
c. 0.375
d. 0.125
e. 0.1.
9. Again in continuation with the above question the probability that 3 heads result is
a. 0.100
b. 0.125
c. 0.250
d. 0.500
e. 0.875
10. The line y=5-10x cuts the y axis at_________ and has slope________
a. (0,10), -5
b. (0,-10), 5
c. (0,5), -10
d. (0,-5), 10
e. (0,5), 10
11. If y=F(x) is the equation of a line then the slope at (5,2) is given by
a. F‟(2)
b. F‟(5)
c. F(2)
d. F(5)
e. None of the above
12. Slope of the line passing through the points (4,4) and (5,5) is
a. 1
b. 9
c. 1/9
d. 20
e. 1/20
13. An „Ogive‟ is
a. A graph of ungrouped data
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b. A graph of grouped data
c. A graph of cumulative frequencies
d. A graph of ranges of fractiles
e. A graph with rectangles as opposed to a line graph.
14. If p=3x4 + 9xy + y3 then ∂p/∂y is given by
a. 12x3+9x
b. 12x3+9x+3y2
c. 9x+3y2
d. 9y+3y3
e. 12x3+9y+3y2
15. For a function f(x), f‟(x)=0 at x=a then „a‟ is a point of minima if
a. F(a)<0
b. F(a)=0
c. F‟‟(a)=0
d. F‟‟(a)< 0
e. F‟‟(a)>0
16. The function 2x2 + 3x +2 has a
a. Maximum value at x = - 3/4
b. Minimum value at x = - 2
c. Maximum value at x = -3/2
d. Minimum value at x = -3/4
e. The equation has no maxima and minima.
17. The probability of getting exactly 3 heads in four tosses of a fair coin is
a. 1/2
b. 1/4
c. 1/8
d. 1/10
e. 1/16
18. In multiple regression, the number of normal equations will be
a. Two
b. Three
c. One
d. More than three
e. More than or equal to three
19. The index of industrial production is an example of
a. Price index
b. Value index
c. Quality index
d. Relative index
e. Industrial production index
20. As the sample size is increased, the standard error of the mean would
a. Increase
b. Decrease
c. Remain unchanged
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d. May or may not increase
e. The value of sample mean would be lot closer of population mean
Part Two:
1. What do you understand by „Infeasibility‟ of the solution?
2. Write about „Big – M‟ method for minimization.
3. Write about the „Classical Economic Order Quantity (EOQ) models.
4. Write a short note on „Interfering Float‟.
Section B: Practical Problems (40 marks)
This section consists of Practical Problems.
Answer all the questions.
Each Practical Problems carries 20 marks.
1. A car retailer thinks that a 40,000 mile claim for tire life by the manufacturer is too high. She
carefully records the mileage obtained from a sample of 64 such tires. The mean turns out to be
38,500 miles. The standard deviation of the life of all tires of this type has previously been
calculated by the manufacturer to be 7,600 miles. Assuming that the mileage is normally
distributed, determine the largest significance level at which we should accept the manufacturer‟s
mileage claim, that is, at which we would not conclude the mileage is significantly less than
40,000 miles.
2. Consider the following data:
Output Total Cost
(in lakhs of units) (in lakhs of rupees)
5 140
7 155
9 170
11 180
14 200
17 230
20 240
22 260
24 275
28 310
Identify the fixed and variable cost components using the least squares method.
END OF SECTION A
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Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. In a recent survey, senior company executives in five metros has ranked two former finance ministers
Mr. Manmohan Singh and Mr. P. Chindambaram as first and second and the present finance minister
Mr. Yashwant Sinha in third position as regarding their popularity.In this, an example of sampling
survey? Discuss about necessity of sampling and the different methods of sampling?
2. “Index numbers are an indispensible tool in day to day life. Comment. Also, explain with examples
how index numbers provide a summary measurement of movements of a large number of economic
variables. Is there a possibility that, their method of computation could give a distorted picture of
reality?
S-2-300813
END OF SECTION B
END OF SECTION C
