OPERATIONS MANAGEMENT MBA EXAM QUESTION AND ANSWER

OPERATIONS MANAGEMENT MBA EXAM QUESTION AND ANSWER

OPERATIONS MANAGEMENT

1. (a) Draw a systems view diagram of any service organization of your choice. Identify its various

components. Explain its interdisciplinary nature. 10

The organization chart is a diagram showing graphically the relation of one official to another, or others, of a company. It is also used to show the relation of one department to another, or others, or of one function of an organization to another, or others. This chart is valuable in that it enables one to visualize a complete organization, by means of the picture it presents.

A company's organizational chart typically illustrates relations between people within an organization. Such relations might include managers to sub-workers, directors to managing directors, chief executive officer to various departments, and so forth. When an organization chart grows too large it can be split into smaller charts for separate departments within the organization. The different types of organization charts include:

• Hierarchical
• Matrix
• Flat (also known as Horizontal)

There is no accepted form for making organization charts other than putting the principal official, department or function first, or at the head of the sheet, and the others below, in the order of their rank. The titles of officials and sometimes their names are enclosed in boxes or circles. Lines are generally drawn from one box or circle to another to show the relation of one official or department to the others.^[

Human resource Department

The role of Human resource department is in charge of recruiting, training, and the dismissal of employees in an organisation.

·         Recruitment and selection

·         Training programmes

Training programs are held by the HRD to improve the employees skills, as well as to motivate them.
There are three main types of training :

1.      Induction training

2.      On-the- job training

3.      Off-the-job training

·         Manpower Planning

The HR department needs to think ahead and establish the number and skills of the workforce required by the business in the future. Failure to do this could lead to too few or too many staff or staff with inappropriate needs.

·         Dismissal and Redundancy (retrenchment)

Dismissal is where a worker is told to leave their job due to unsatisfactory work or behaviour.
Redundancy is when the business needs to reduce the number of employees either because it is closing down a branch or needs to reduce costs due to falling profits. It may also be due to technological improvements, and the workers are no longer needed.

Marketing department

These are the main section of the market departments:

·         Sales department is responsible for the sales and distribution of the products to the different regions.

·         Research & Department is responsible for market research and testing new products to make sure that they are suitable to be sold.

·         Promotion department decides on the type of promotion method for the products, arranges advertisements and the advertising media used.

·         Distribution department transports the products to the market.

Finance Department

·         Book keeping procedures
Keeping records of the purchases and sales made by a business as well as capital spending.

·         Preparing Final Accounts
Profit and loss account and Balance Sheets

·         Providing management information
Managers require ongoing financial information to enable them to make better decisions.

·         Management of wages
The wages section of the finance department will be responsible for calculating the wages and salaries of employees and organising the collection of income tax and national insurance for the Inland Revenue.

·         Raising Finance
The finance department will also be responsible for the technical details of how a business raises finance e.g. through loans, and the repayment of interest on that finance. In addition it will supervise the payment of dividends to shareholders.

Service science, management, and engineering (SSME) is a term introduced by IBM to describe service science, an interdisciplinary approach to the study, design, and implementation of services systems – complex systems in which specific arrangements of people and technologies take actions that provide value for others. More precisely, SSME has been defined as the application of science, management, and engineering disciplines to tasks that one organization beneficially performs for and with another.
Today, SSME is a call for academia, industry, and governments to focus on becoming more systematic about innovation in the service sector, which is the largest sector of the economy in most industrialized nations, and is fast becoming the largest sector in developing nations as well. SSME is also a proposed academic discipline and research area that would complement – rather than replace – the many disciplines that contribute to knowledge about service. The interdisciplinary nature of the field calls for a curriculum and competencies to advance the development and contribution of the field of SSME

(b) What are the major characteristics of a Production system? Discuss some of its upcoming issues

that provide economies in production and efficiency in the performance of the system. 10

A production system holds some characteristics, those are
given below-

System discrimination:
We know production system is involved on input and output it does not
consist with any waiter connection involving its all phase that is connecting
with the technology. All other phases that are related with the manufacturing are a production system environment. And this definition system normally called system discrimination.

Interrelationship among system: we know that production is a
process and it has a way to perform. And those have a close relationship with each other. This is familiar as a interrelationship.

Stratum formulation: A production system normally consists
with hierarchy of the organization. And those are related with the size of the
organization and the function of the organization. And stratum normally related with the size, hierarchy, and the function of the organization.

Specialization of function: if the production system expands
its area of production and large number of hierarchy and start each performing specialized function. Then the interrogation function of the specialization will give you the maximum output or benefit.

Increase of entropy: we know that everything is changing in
our life day by day. We need to cope with those changes. We will change our old employee by the new ones, we will replace our machine by new machine and we will change our technology by new technology for stability of our production.

Isofinality: Here we have a aim to reaching goals and to reach goals we will use various kinds of way there is no boundary to make a function in such a way. Here the main topic is to gain the ultimate goal. And here there will be lots of approaches to converting the inputs to outputs.

Issues in the system are:

1. Natural factors: like climatic conditions, soil type affect production. Production can be diminished due to natural calamities like flood, drought etc.
2. Technical progress: Can positively influence production. Use of improved variety, fertilizers, insecticides etc. can give us more production.
3. Political factors: also affect production positively or negatively. Decisions pertaining to taxation, investment or fiscal. Policies of Govt. influence production.
4. Infrastructure facilities: Like transport, credit, storage etc. are also equally important to have more production.
5. Character of people: determines productivity. The hard workers and sincere workers always produce more and hence it is very important factor which influences production.

2. (a) Explain with examples, how the TQM concept can integrate design engineering, manufacturing

and service. 10

Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations.

Total Quality Management, TQM, is a method by which management and employees can become involved in the continuous improvement of the production of goods and services. It is a combination of quality and management tools aimed at increasing business and reducing losses due to wasteful practices.

Some of the companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.

 
TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design, engineering, and production, customer service, etc.) to focus on meeting customer needs and organizational objectives.

TQM views an organization as a collection of processes. It maintains that organizations must strive to continuously improve these processes by incorporating the knowledge and experiences of workers. The simple objective of TQM is "Do the right things, right the first time, every time". TQM is infinitely variable and adaptable. Although originally applied to manufacturing operations, and for a number of years only used in that area, TQM is now becoming recognized as a generic management tool, just as applicable in service and public sector organizations. There are a number of evolutionary strands, with different sectors creating their own versions from the common ancestor. TQM is the foundation for activities, hich include:

·         Commitment by senior management and all employees

·         Meeting customer requirements

·         Reducing development cycle times

·         Just In Time/Demand Flow Manufacturing

·         Improvement teams

·         Reducing product and service costs

·         Systems to facilitate improvement

·         Line Management ownership

·         Employee involvement and empowerment

·         Recognition and celebration

·         Challenging quantified goals and benchmarking

·         Focus on processes / improvement plans

·         Specific incorporation in strategic planning

This shows that TQM must be practiced in all activities, by all personnel, in Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.

 

The core of TQM is the customer-supplier interfaces, both externally and internally, and at each interface lie a number of processes. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organization to create total quality. These are the foundations of TQM, and they are supported by the key management functions of people, processes and systems in the organization.

(b) What are process capability studies ? Explain the process capability index with applications to a

real life example. 10

Process capability studies is a process is a unique combination of tools, materials, methods, and people engaged in producing a measurable output; for example a manufacturing line for machine parts. All processes have inherent statistical variability which can be evaluated by statistical methods.

The Process Capability is a measurable property of a process to the specification, expressed as a process capability index (e.g., C_pk or C_pm) or as a process performance index (e.g., P_pk or P_pm). The output of this measurement is usually illustrated by a histogram and calculations that predict how many parts will be produced out of specification (OOS).

Two parts of process capability are: 1) Measure the variability of the output of a process, and 2) Compare that variability with a proposed specification or product tolerance.

The input of a process usually has at least one or more measurable characteristics that are used to specify outputs. These can be analyzed statistically; where the output data shows a normal distribution the process can be described by the process mean (average) and the standard deviation.

A process needs to be established with appropriate process controls in place. A control chart analysis is used to determine whether the process is "in statistical control". If the process is not in statistical control then capability has no meaning. Therefore the process capability involves only common cause variation and not special cause variation.

A batch of data needs to be obtained from the measured output of the process. The more data that is included the more precise the result, however an estimate can be achieved with as few as 17 data points. This should include the normal variety of production conditions, materials, and people in the process. With a manufactured product, it is common to include at least three different production runs, including start-ups.

The process mean (average) and standard deviation are calculated. With a normal distribution, the "tails" can extend well beyond plus and minus three standard deviations, but this interval should contain about 99.73% of production output. Therefore for a normal distribution of data the process capability is often described as the relationship between six standard deviations and the required specification.

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