1

204- OPERATIONS AND SUPPLY CHAIN MANAGEMENT

Q1) Attempt any five out of eight following questions.

a) Define logistic management

Logistic management, also known as logistics management, is the process of

strategically planning, implementing, and controlling the flow and storage of
goods, services, and related information from the point of origin to the point of
consumption in order to meet customer requirements. It involves the
coordination of various activities such as procurement, production, inventory
management, transportation, warehousing, and distribution to ensure that
products are delivered to the right place, at the right time, and in the right
condition, all while minimizing costs and maximizing efficiency. Logistics
management plays a critical role in supply chain management, ensuring the
smooth functioning of the entire supply chain network..

b) Recall the concept of Internal Customer.

The concept of an "internal customer" refers to individuals or departments within

an organization who rely on the products, services, or information provided by
other individuals or departments within the same organization to carry out their
own responsibilities effectively. In essence, it's the idea that within a company,
every individual or department serves as both a provider and a recipient of
goods, services, or information.

For example, in a manufacturing company, the production department might be

considered the internal customer of the procurement department, as it relies on
the procurement team to provide the necessary raw materials and components
for production. Similarly, the marketing department might be the internal
customer of the design team, as it depends on the design team to create
marketing materials.
 2

c) Enlist the any four key principles of TQM.

1. Customer Focus: TQM emphasizes understanding and meeting customer needs

and expectations. This involves identifying the needs of both internal and external
customers, gathering feedback, and incorporating customer requirements into all
aspects of the organization's operations.

2. Continuous Improvement: TQM promotes the idea of continuous improvement

in all processes, products, and services. This involves constantly seeking ways to
enhance quality, efficiency, and effectiveness through methods such as Kaizen
(continuous improvement), Six Sigma, and Lean methodologies.

3. Employee Involvement: TQM recognizes that employees are valuable resources

who play a crucial role in achieving quality objectives. It encourages the
involvement of all employees in quality improvement initiatives, empowering
them to identify problems, suggest solutions, and participate in decision-making
processes.

4. Process Approach: TQM advocates for a systematic and process-oriented

approach to managing quality. This involves identifying and understanding key
processes within the organization, establishing clear objectives and performance
metrics for each process, and continuously monitoring and analyzing process
performance to drive improvement.

d) List 2 examples of Batch Production.

1. Bakery Production: In a bakery, items like bread, cookies, and pastries are often produced
in batches. For instance, a batch of bread may involve mixing the ingredients, kneading
the dough, allowing it to rise, shaping the loaves, baking them together in an oven, and
then cooling and packaging them. The bakery may produce several batches of different
types of bread throughout the day, depending on demand.

2. Pharmaceutical Manufacturing: Pharmaceutical products, such as tablets or capsules, are

often produced in batches. Each batch may involve mixing the active pharmaceutical
ingredients (APIs) with excipients, compressing or encapsulating the mixture into the
desired form, and then packaging the finished products. Pharmaceutical manufacturers
 3

e) Define Process Layout.

A process layout, also known as a functional layout or a job shop layout, is a facility
layout design in which similar machines or operations are grouped together based on
their functions or processes. In a process layout, equipment, workstations, and
departments are arranged according to the sequence of operations involved in
manufacturing a product or providing a service.

Unlike a product layout, where the layout is organized around the assembly line and the
flow of the product, a process layout is more flexible and adaptable to various product
types and production volumes. This layout allows for greater versatility in handling a
variety of products or services, as different processes can be performed in different
areas of the facility.

f) Give the roles of Production Planning and Control. (PPC)

Production Planning and Control (PPC) plays a crucial role in ensuring the smooth and
efficient operation of manufacturing processes. Here are some of the key roles of PPC:

1. Demand Forecasting: PPC involves analyzing historical data and market trends to
forecast demand for products or services. By accurately predicting demand, PPC helps in
planning production schedules and inventory levels to meet customer requirements
while minimizing excess inventory or shortages.

2. Production Planning: PPC is responsible for developing detailed production plans that
specify what products will be produced, when they will be produced, and in what
quantities. This involves coordinating with various departments such as sales, marketing,
and operations to align production schedules with customer orders and available
resources.

3. Capacity Planning: PPC assesses the production capacity of facilities and resources to
ensure that production schedules can be met efficiently. It involves identifying potential
bottlenecks, optimizing resource utilization, and making adjustments to production
plans as needed to balance capacity with demand.

4. Scheduling: PPC creates detailed production schedules that specify the sequence and
timing of operations required to produce each product. This includes scheduling
machine time, allocating manpower, and coordinating material flow to ensure that
production runs smoothly and on time..
 4

g) Define Scheduling.
Scheduling is the process of determining the timing and sequence of tasks or activities
within a project, production process, or operation. It involves allocating resources, such
as time, manpower, equipment, and materials, to specific tasks or activities in a
systematic and efficient manner to achieve predetermined objectives.

In various contexts, scheduling may involve:

1. Project Scheduling: In project management, scheduling involves creating a timeline or

schedule that outlines the start and finish dates for each task or activity within a project.
It helps project managers coordinate and prioritize activities, allocate resources
effectively, and track progress to ensure that the project is completed on time and
within budget.

2. Production Scheduling: In manufacturing, scheduling involves planning and

coordinating the timing and sequence of production activities, such as machine
operations, assembly processes, and material handling. Production scheduling aims to
optimize resource utilization, minimize idle time, and ensure that production targets are
met while meeting customer demand and maintaining product quality.

3. Employee Scheduling: In workforce management, scheduling involves assigning work

shifts, tasks, or responsibilities to employees based on factors such as availability, skills,
and workload requirements. Employee scheduling aims to balance staffing levels with
demand, ensure adequate coverage during peak hours, and accommodate employee
preferences and constraints.

4. Transportation Scheduling: In logistics and transportation, scheduling involves

planning and coordinating the movement of goods, vehicles, or passengers from one
location to another. It includes scheduling routes, assigning vehicles or carriers, and
optimizing delivery or travel times to minimize costs, reduce transit times, and maximize
efficiency.
 5

h) State the full of VED and GOLF

VED stands for Vital, Essential, and Desirable. It is a classification system used in
inventory management to categorize items based on their importance and criticality to the
operation of a business.

GOLF stands for Goals, Objectives, Limitations, and Functions. It is a framework used in
project management to define and clarify project requirements, objectives, constraints,
and scope.

Q2) Attempt any two out of Three following questions.

 6

a) Identify and Express Ethical and Environmental Issues in operations management.

Ethical Issues:

1. Labor Practices: Ethical concerns may arise regarding labor practices within supply
chains, such as the use of child labor, forced labor, or unsafe working conditions.
Operations managers must ensure that labor practices comply with ethical standards
and labor laws to protect the rights and well-being of workers.

2. Fair Wages and Working Conditions: Ensuring fair wages, benefits, and safe working
conditions for employees is essential. Ethical operations management involves
promoting fair labor practices, providing adequate training and support, and fostering a
positive work environment.

3. Supplier Relationships: Ethical sourcing and supplier relationships are critical in

operations management. Businesses should prioritize working with suppliers who
adhere to ethical standards, promote sustainability, and respect human rights
throughout their supply chains.

Environmental Issues:

1. Pollution and Emissions: Operations management activities, such as manufacturing

processes and transportation, can contribute to pollution and greenhouse gas
emissions. Minimizing environmental impact through cleaner production methods,
energy efficiency measures, and emissions reduction strategies is essential for
sustainable operations.

2. Resource Depletion: Operations management involves the use of natural resources such
as water, energy, and raw materials. Sustainable operations require responsible resource
management practices to minimize waste, conserve resources, and promote recycling
and reuse.

3. Waste Management: Proper waste management is crucial to minimize the

environmental impact of operations. Operations managers should implement waste
reduction initiatives, implement recycling programs, and ensure proper disposal of
hazardous materials to mitigate environmental pollution and promote sustainability.
 7

b) Explain service Blue Printing.

1. Customer Actions: This component represents the actions taken by customers as they
interact with the service. It includes activities such as making inquiries, placing orders,
receiving services, and providing feedback.

2. Frontstage: Frontstage activities are visible to customers and involve direct interactions
between customers and service providers. These activities may include customer service
interactions, service delivery processes, and physical or digital touchpoints where
customers interact with the service.

3. Backstage: Backstage activities are internal processes and operations that occur behind
the scenes to support frontstage activities. These may include service preparation,
resource allocation, employee training, and administrative tasks necessary to deliver the
service.

4. Support Processes: Support processes include the systems, technology, and

infrastructure that enable the delivery of the service. This may include information
systems, communication channels, equipment, facilities, and other resources needed to
support frontstage and backstage activities.

5. Physical Evidence: Physical evidence refers to the tangible elements that customers
encounter during the service delivery process. This may include physical facilities,
equipment, signage, branding, packaging, and other tangible cues that shape the
customer's perception of the service experience.

Service blueprinting typically involves the following steps:

1. Identify the Service: Define the specific service or process that will be mapped and
identify the key customer interactions and touchpoints.

2. Map the Customer Journey: Document the sequence of customer actions, interactions,
and touchpoints involved in the service delivery process.

3. Map Frontstage and Backstage Activities: Identify and map the frontstage activities
visible to customers, as well as the backstage activities and support processes that occur
behind the scenes.

4. Include Physical Evidence: Document the physical evidence and tangible elements that
contribute to the service experience, such as facilities, equipment, and branding.
 8

c) Explain the Key issues of Supply Chain Management.

1. Demand Forecasting and Planning: Accurately forecasting demand is essential for

effective supply chain management. However, demand forecasting can be challenging
due to factors such as changing customer preferences, market dynamics, and external
influences. Poor demand forecasting can lead to inventory imbalances, stockouts, or
excess inventory, impacting overall supply chain efficiency.

2. Inventory Management: Effective inventory management is critical for balancing

supply and demand, minimizing carrying costs, and maximizing customer service levels.
Inventory management issues such as stockouts, overstocking, obsolescence, and
inventory inaccuracies can result in lost sales, increased costs, and reduced profitability.

3. Supplier Relationship Management: Building and maintaining strong relationships

with suppliers is essential for ensuring a reliable and efficient supply chain. Issues such
as supplier quality problems, delivery delays, capacity constraints, and supply chain
disruptions can impact production schedules, customer satisfaction, and overall supply
chain performance.

4. Logistics and Transportation: Efficient logistics and transportation are vital for the
timely and cost-effective movement of goods through the supply chain. Challenges such
as transportation delays, congestion, capacity constraints, rising fuel costs, and
regulatory compliance issues can disrupt supply chain operations and increase
transportation costs.

5. Information Visibility and Technology: Access to real-time information and visibility

across the supply chain is crucial for effective decision-making and coordination. Issues
such as data silos, information gaps, and inadequate technology infrastructure can
hinder information visibility and collaboration, leading to inefficiencies and delays in the
supply chain.

6. Risk Management and Resilience: Supply chains are vulnerable to various risks,
including natural disasters, geopolitical instability, labor disputes, and disruptions in the
global economy. Developing risk management strategies, building resilience, and
implementing contingency plans are essential for mitigating risks and ensuring supply
chain continuity.

7. Sustainability and Ethical Practices: Increasingly, businesses are focusing on

sustainability and ethical practices throughout the supply chain. Issues such as
environmental impact, social responsibility, ethical sourcing, and labor practices are
 9

Q3) a) “Stop Making assumptions regarding the production and start planning your
capacity”. Interpret the statement with respect to Home Appliances.

Interpreting the statement "Stop making assumptions regarding the production and
start planning your capacity" with respect to home appliances involves recognizing the
importance of strategic capacity planning in the manufacturing of these products.

Home appliances, such as refrigerators, washing machines, dishwashers, and ovens, are
essential items for households, and their production requires careful planning to meet
consumer demand effectively. Here's how the statement applies to the context of home
appliances:

1. Avoiding Assumptions: In the manufacturing of home appliances, assumptions about

consumer demand, production capabilities, and market trends can lead to inefficiencies
and disruptions in the supply chain. Relying solely on assumptions without data-driven
insights can result in overproduction, excess inventory, stockouts, or production
bottlenecks.

2. Strategic Capacity Planning: Instead of making assumptions, manufacturers of home

appliances need to engage in strategic capacity planning. This involves analyzing
historical sales data, market trends, and customer preferences to forecast demand
accurately. Based on demand forecasts, manufacturers can then plan their production
capacity, allocate resources, and adjust production schedules accordingly to meet
consumer demand in a timely and efficient manner.

3. Optimizing Production Efficiency: Capacity planning allows home appliance

manufacturers to optimize production efficiency by matching production capacity with
actual demand. By aligning production capacity with market requirements,
manufacturers can minimize production costs, reduce lead times, and improve overall
operational performance.

4. Investing in Flexibility: Capacity planning also involves considering factors such as

seasonality, product lifecycles, and market volatility. Manufacturers need to invest in
flexible production systems and agile supply chains that can quickly adapt to changes in
demand and market conditions. This flexibility allows manufacturers to scale production
capacity up or down as needed, reducing the risk of overcapacity or undercapacity.

5. Meeting Customer Expectations: Effective capacity planning ensures that home

appliance manufacturers can consistently meet customer expectations for product
 10

b) Appraise the enablers of Supply Chain.

1. Information Technology (IT) Systems: Advanced information technology systems,

such as Enterprise Resource Planning (ERP), Supply Chain Management (SCM) software,
and Electronic Data Interchange (EDI), play a crucial role in enabling communication,
collaboration, and coordination among supply chain partners. These systems provide
real-time visibility, data analytics, and decision support tools that enhance operational
efficiency and facilitate informed decision-making across the supply chain.

2. Collaborative Relationships: Collaborative relationships and partnerships among

supply chain stakeholders, including suppliers, manufacturers, distributors, and retailers,
are essential for effective supply chain management. Building trust, fostering open
communication, and aligning goals and incentives help create a collaborative ecosystem
that promotes innovation, flexibility, and responsiveness to customer needs.

3. Supply Chain Visibility: Supply chain visibility refers to the ability to track and monitor
the movement of goods, information, and finances throughout the supply chain.
Enhanced visibility enables stakeholders to anticipate and mitigate disruptions, optimize
inventory levels, and improve demand forecasting accuracy. Technologies such as RFID,
GPS, and IoT sensors provide real-time visibility into supply chain activities, enhancing
transparency and control.

4. Lean and Agile Practices: Lean and agile practices focus on eliminating waste,
improving efficiency, and enhancing flexibility in supply chain operations. Lean
principles, such as just-in-time (JIT) inventory management and continuous
improvement, help streamline processes and reduce lead times. Agile practices, such as
quick response to changing customer demands and market trends, enable supply chains
to adapt rapidly to disruptions and uncertainties.

5. Supplier and Vendor Management: Effective supplier and vendor management

practices are essential for ensuring a reliable and efficient supply chain. This involves
selecting the right suppliers, establishing mutually beneficial relationships, and
implementing performance metrics and monitoring mechanisms to assess supplier
performance and manage risks effectively.

6. Risk Management Strategies: Supply chain risk management involves identifying,

assessing, and mitigating risks that may impact supply chain performance and resilience.
Proactive risk management strategies, such as diversifying suppliers, implementing
business continuity plans, and investing in supply chain resilience, help minimize the
 11

Q4) a) Categorise the following component in A, B and C Categories. [10]

Component Annual Cost Per Unit In

Name Demand rs

C1 3000 50

C2 4000 12

C3 1500 15

C4 6000 10

C5 1000 20

C6 500 500

C7 300 1500

C8 600 2

C9 1750 10

C10 2500 5

A Category: High-value items with high annual costs but low demand. B Category:
Moderate-value items with moderate annual costs and moderate demand. C Category:
Low-value items with low annual costs but high demand.

Let's categorize the components based on their annual cost per unit and demand:

1. Calculate Annual Cost (Annual Demand * Annual Cost per unit):

 C1: 50 * 3000 = 150,000

 C2: 12 * 4000 = 48,000
 C3: 15 * 1500 = 22,500
 C4: 10 * 6000 = 60,000
 C5: 20 * 1000 = 20,000
 C6: 500 * 500 = 250,000
 12

 C7: 1500 * 300 = 450,000

 C8: 2 * 600 = 1,200
 C9: 10 * 1750 = 17,500
 C10: 5 * 2500 = 12,500

2. Rank the Components Based on Annual Cost:

 Highest to Lowest: C7, C6, C1, C4, C2, C3, C5, C9, C10, C8

3. Calculate Cumulative Percentage of Annual Cost:

 Total Annual Cost: 150000 + 48000 + 22500 + 60000 + 20000 + 250000 + 450000 +
1200 + 17500 + 12500 = 1002200
 Cumulative Percentage:
 C1: 150,000 / 1,002,200 = 14.97%
 C2: (150,000 + 48,000) / 1,002,200 = 19.97%
 C3: (150,000 + 48,000 + 22,500) / 1,002,200 = 40.44%
 C4: (150,000 + 48,000 + 22,500 + 60,000) / 1,002,200 = 46.38%
 C5: (150,000 + 48,000 + 22,500 + 60,000 + 20,000) / 1,002,200 = 48.36%
 C6: (150,000 + 48,000 + 22,500 + 60,000 + 20,000 + 250,000) / 1,002,200 = 73.29%
 C7: (150,000 + 48,000 + 22,500 + 60,000 + 20,000 + 250,000 + 450,000) / 1,002,200 =
91.22%
 C8: (150,000 + 48,000 + 22,500 + 60,000 + 20,000 + 250,000 + 450,000 + 1,200) /
1,002,200 = 91.34%
 C9: (150,000 + 48,000 + 22,500 + 60,000 + 20,000 + 250,000 + 450,000 + 1,200 +
17,500) / 1,002,200 = 92.09%
 C10: (150,000 + 48,000 + 22,500 + 60,000 + 20,000 + 250,000 + 450,000 + 1,200 +
17,500 + 12,500) / 1,002,200 = 92.91%

Based on the cumulative percentage, we can categorize the components as follows:

A Category: C1, C2, C3, C4, C5 (Totaling to 48.36%) B Category: C6, C7, C8, C9 (Totaling
to 43.87%) C Category: C10 (Totaling to 92.91%)
 13

b) Categorise the various Inventory cost Appraise EOQ by using graphical

representation.
To categorize the various inventory costs and appraise the Economic Order Quantity
(EOQ) using graphical representation, we first need to understand the components of
inventory costs and how they relate to the EOQ model.

Ordering Costs (Setup Costs): These are the costs associated with placing and
receiving an order, such as order processing, transportation, and handling costs.
Ordering costs are generally fixed per order and decrease as the order quantity
increases.

1. Holding Costs (Carrying Costs): These are the costs associated with holding or
carrying inventory over time, including storage costs, insurance, obsolescence, and
financing costs. Holding costs are generally proportional to the level of inventory held
and increase as the order quantity increases.

2. Shortage Costs (Stockout Costs): These are the costs incurred when demand exceeds
inventory availability, resulting in stockouts. Shortage costs may include lost sales,
backordering costs, and damage to customer relationships. Shortage costs typically
increase as the order quantity decreases.

Here's how we can categorize the various inventory costs and appraise the EOQ using
graphical representation:

1. Graphical Representation: Plot the total inventory cost curve, which is the sum of
ordering costs and holding costs, against various order quantities.

2. Identify EOQ: The EOQ is the order quantity at which the total inventory cost curve is
minimized. It occurs at the point where the ordering costs and holding costs are equal.

3. Categorize Inventory Costs:

 Ordering Costs: These costs are represented by the upward-sloping portion of the total
inventory cost curve. They decrease as order quantity increases.
 Holding Costs: These costs are represented by the downward-sloping portion of the
total inventory cost curve. They increase as order quantity increases.

4. Optimization: Determine the EOQ that minimizes the total inventory costs by
identifying the order quantity at which ordering costs and holding costs are equal.
 14

Q5) a) Design the service system for online Banking operations. (Consider
assumptions).

1. User Interface (UI): Develop an intuitive and user-friendly interface for the online
banking platform accessible via web browsers and mobile devices. The UI should include
features such as login/logout, account overview, transaction history, fund transfers, bill
payments, and account management.

2. Registration and Authentication: Implement a secure registration process for new

users, requiring them to provide personal information and create login credentials
(username/password). Use multi-factor authentication methods (e.g., SMS OTP,
biometrics) to verify user identity and enhance security.

3. Account Management: Allow users to view and manage their accounts online. Provide
features for checking balances, viewing account statements, downloading transaction
history, setting up alerts, and updating personal information.

4. Transaction Services: Enable users to perform various banking transactions online,

including fund transfers between accounts (internal and external), bill payments (utilities,
credit cards, loans), and setting up recurring payments or transfers.

5. Mobile Banking App: Develop a mobile banking application compatible with iOS and
Android devices, offering similar features as the web-based platform. Ensure seamless
integration with the online banking system, allowing users to access their accounts and
perform transactions on-the-go.

6. Security Measures: Implement robust security measures to protect user data and
prevent unauthorized access. This includes encryption of sensitive information, SSL/TLS
protocols for secure communication, firewalls, intrusion detection systems, and regular
security audits.

7. Customer Support: Provide multiple channels for customer support, including live chat,
email support, and a dedicated customer service hotline. Offer self-service options such
as FAQs, tutorials, and troubleshooting guides to assist users with common issues.

8. Financial Tools and Resources: Offer additional features and resources to help users
manage their finances effectively. This may include budgeting tools, financial calculators,
investment tracking, educational resources, and personalized recommendations based
on user preferences and financial goals.
 15

b) Compose generalized Supply Chain Model for computer Accessories manufacturing

company. (Consider assumptions).

1. Suppliers: The supply chain begins with suppliers who provide raw materials,
components, and parts needed for manufacturing computer accessories. Suppliers may
include manufacturers of plastic components, electronic components, packaging
materials, and other inputs required for production.

2. Manufacturing Facilities: The company operates manufacturing facilities where

computer accessories are produced. This includes processes such as injection molding
for plastic components, PCB assembly for electronic components, assembly lines for
product assembly, and quality control inspections.

3. Distribution Centers/Warehouses: Finished products are transported from

manufacturing facilities to distribution centers or warehouses for storage and inventory
management. Distribution centers may be strategically located to serve regional or
global markets efficiently.

4. Transportation and Logistics: Transportation plays a critical role in the supply chain,
with various modes of transportation used to move products between manufacturing
facilities, distribution centers, and customers. This may include trucking, air freight,
ocean freight, and rail transport, depending on the distance and urgency of delivery.

5. Retailers/Distributors: Computer accessories are distributed to retailers, distributors, or

resellers who sell the products to end customers. These may include online retailers,
brick-and-mortar stores, electronics retailers, and specialty computer accessory stores.

6. End Customers: End customers purchase computer accessories for personal or business
use. They may include individual consumers, businesses, educational institutions, and
government organizations.

Assumptions:

 The company manufactures a variety of computer accessories, including but not limited
to keyboards, mice, USB drives, laptop bags, and laptop cooling pads.
 The supply chain model assumes a traditional manufacturing and distribution setup,
rather than a direct-to-consumer or e-commerce model.
 The model does not include after-sales service and support, which may involve warranty
services, repairs, and product returns.
 16

Key Processes:

 Demand Planning and Forecasting: Forecasting customer demand for different types of
computer accessories to optimize production and inventory levels.
 Procurement and Supplier Management: Sourcing raw materials, components, and parts
from suppliers, negotiating contracts, and managing supplier relationships.
 Production Planning and Manufacturing: Planning production schedules, allocating
resources, and managing production processes to meet customer demand efficiently.
 Inventory Management: Managing inventory levels at distribution centers, warehouses,
and retail locations to minimize stockouts and excess inventory.
 Order Fulfillment and Logistics: Processing customer orders, picking and packing
products, and coordinating transportation to deliver products to customers on time.
 Quality Control and Assurance: Implementing quality control measures throughout the
manufacturing process to ensure product quality and reliability.
 Customer Relationship Management: Building and maintaining relationships with
retailers, distributors, and end customers to understand their needs and preferences and
provide excellent service.
 17

204 : OPERATIONS AND SUPPLY CHAIN MANAGEMENT

Q1) Solve any five out of eight following sub question. [10]
a) Enlist any four key principles of TQM.

1. Customer Focus: TQM emphasizes understanding and meeting customer needs and
expectations. Organizations strive to identify their customers, both internal and external,
and gather feedback to understand their requirements. By focusing on customer
satisfaction, organizations can improve product quality, service delivery, and overall
performance.

2. Continuous Improvement: TQM promotes a culture of continuous improvement in all

aspects of the organization. This involves identifying opportunities for improvement,
implementing changes to processes and systems, and measuring the results to drive
further enhancements. Continuous improvement methodologies such as Kaizen, Six
Sigma, and Lean are commonly used to systematically improve quality, efficiency, and
effectiveness.

3. Employee Involvement: TQM recognizes that employees are valuable resources who
play a crucial role in achieving quality objectives. Organizations encourage employee
involvement and empowerment by fostering a culture of collaboration, communication,
and participation. Employees are encouraged to contribute ideas, identify problems, and
take ownership of quality improvement initiatives.

4. Process Approach: TQM advocates for a systematic and process-oriented approach to

managing quality. Organizations identify key processes that impact product or service
quality, establish clear objectives and performance metrics, and continuously monitor
and analyze process performance. By focusing on process improvement and
optimization, organizations can achieve consistent and predictable outcomes while
minimizing variation and waste.
 18

b) List any four functions of Supply Chain Management.

1. Procurement: Procurement involves the acquisition of goods and services from external
suppliers to meet the organization's needs. This function includes activities such as
supplier selection, negotiation of contracts and pricing, order placement, and supplier
relationship management. Effective procurement practices help ensure that the
organization obtains quality products and services at the best possible value.

2. Inventory Management: Inventory management focuses on optimizing inventory

levels to meet customer demand while minimizing carrying costs and stockouts. This
function involves activities such as inventory planning, demand forecasting, stock
replenishment, and inventory control. By maintaining optimal inventory levels,
organizations can improve customer service, reduce holding costs, and enhance
operational efficiency.

3. Logistics and Distribution: Logistics and distribution involve the movement and
storage of goods from suppliers to customers. This function encompasses activities such
as transportation, warehousing, order fulfillment, and distribution network design.
Logistics and distribution play a critical role in ensuring timely delivery of products,
optimizing transportation routes, and managing distribution channels to meet customer
requirements efficiently.

4. Demand Planning and Forecasting: Demand planning and forecasting involve

predicting customer demand for products or services to facilitate production and
inventory management decisions. This function utilizes historical sales data, market
trends, and customer feedback to forecast future demand accurately. By forecasting
demand accurately, organizations can optimize production schedules, reduce inventory
costs, and improve customer satisfaction.
 19

c) Examine the concept of 5S.

1. Seiri (Sort): The first step involves sorting through items in the workplace and
distinguishing between necessary and unnecessary items. Unnecessary items are
removed or disposed of, leaving only essential items in the workspace. This helps reduce
clutter, streamline operations, and improve workflow efficiency.

2. Seiton (Set in order): After sorting, the next step is to arrange the remaining items in a
systematic and organized manner. Each item is assigned a specific location based on
frequency of use, accessibility, and ergonomic considerations. Clear labeling, color
coding, and visual cues are often used to designate storage locations and ensure
consistency.

3. Seiso (Shine): The third step focuses on cleanliness and hygiene in the workplace.
Employees are responsible for maintaining a clean and orderly workspace by regularly
cleaning and inspecting equipment, tools, and work areas. This helps prevent accidents,
reduce downtime, and create a safe and healthy work environment.

4. Seiketsu (Standardize): Standardization involves establishing standardized procedures,

guidelines, and visual controls to sustain the improvements made in the previous steps.
This ensures consistency in workplace organization and cleanliness practices across the
organization. Standardized procedures help reinforce good habits, facilitate training,
and maintain a culture of continuous improvement.

5. Shitsuke (Sustain): The final step is to sustain the improvements achieved through 5S
by fostering a culture of discipline, ownership, and continuous improvement. Employees
are encouraged to adhere to the 5S principles consistently, identify opportunities for
further improvement, and actively participate in maintaining a clean and organized
workplace. Regular audits, performance metrics, and feedback mechanisms are often
used to monitor and reinforce adherence to 5S practices.
 20

d) Memorize and reproduce the examples of various inventory costs. .

1. Ordering Costs (Setup Costs):

 Cost of placing orders with suppliers.

 Cost of processing purchase orders.
 Cost of transportation and handling for inbound shipments.
 Cost of quality inspections upon receipt of goods.

2. Holding Costs (Carrying Costs):

 Cost of warehousing or storage facilities.

 Cost of insurance for inventory.
 Cost of inventory obsolescence or spoilage.
 Opportunity cost of capital tied up in inventory.
 Cost of inventory shrinkage or theft.

3. Shortage Costs (Stockout Costs):

 Cost of lost sales or revenue due to stockouts.

 Cost of expediting orders to replenish inventory.
 Cost of backorders or expedited shipping to fulfill customer orders.
 Cost of dissatisfied customers and potential loss of future business.

4. Quality Costs:

 Cost of inspecting and testing raw materials or finished goods.

 Cost of rework or scrap due to defective products.
 Cost of warranty repairs or replacements for defective products.
 Cost of customer returns or refunds for quality issues.

5. Transportation Costs:

 Cost of inbound transportation for raw materials or components.

 Cost of outbound transportation for finished goods to distribution centers or customers.
 21

 Cost of fuel, maintenance, and depreciation for transportation vehicles.

 Cost of customs duties or tariffs for international shipments.

6. Storage Costs:

 Cost of renting or leasing warehouse space.

 Cost of utilities such as electricity, heating, and cooling for warehouses.
 Cost of materials handling equipment such as forklifts, pallet jacks, and conveyor belts.
 Cost of inventory management systems and software.

7. Excess Inventory Costs:

 Cost of holding excess inventory beyond demand requirements.

 Cost of markdowns or discounts to liquidate excess inventory.
 Cost of storage space and handling for excess inventory.
 Cost of financing or borrowing to fund excess inventory.
 22

e) Describe the concept of Kaizen.

1. Incremental Improvement: Kaizen encourages employees at all levels of an

organization to identify opportunities for improvement in their daily work and make
small, incremental changes to address them. These improvements can be as simple as
organizing workstations, standardizing procedures, or streamlining workflows.

2. Employee Involvement: Kaizen places a strong emphasis on involving employees in

the improvement process. Employees are encouraged to contribute ideas, suggestions,
and solutions to problems they encounter in their work. By empowering employees to
take ownership of improvement initiatives, organizations can tap into their knowledge,
experience, and creativity to drive positive change.

3. Continuous Learning: Kaizen promotes a culture of continuous learning and

development within an organization. It encourages employees to seek out opportunities
for learning and skill development, whether through formal training programs, on-the-
job experience, or cross-functional collaboration. Continuous learning enables
employees to acquire new skills, knowledge, and perspectives that contribute to
ongoing improvement efforts.

4. Elimination of Waste: Central to the Kaizen philosophy is the identification and

elimination of waste (muda) in processes and systems. This includes any activity or
practice that does not add value to the customer or organization. Examples of waste in
manufacturing include overproduction, excess inventory, unnecessary motion, defects,
and waiting times. By eliminating waste, organizations can improve efficiency, reduce
costs, and enhance customer satisfaction.

5. Standardization and Standard Work: Kaizen emphasizes the importance of

standardizing processes and procedures to ensure consistency, reliability, and
repeatability. Standard work involves documenting and following best practices, setting
clear expectations, and continuously improving upon them based on feedback and
results. Standardization helps organizations achieve stability, predictability, and
continuous improvement in their operations.

6. PDCA Cycle: The Plan-Do-Check-Act (PDCA) cycle is a fundamental principle of Kaizen.

It provides a structured framework for problem-solving and improvement by guiding
organizations through a cycle of planning, implementing, evaluating, and adjusting
initiatives. The PDCA cycle encourages iterative experimentation and learning, allowing
organizations to test hypotheses, gather data, and make informed decisions to drive
continuous improvement.
 23

f) Enumerate any four characteristics of product quality.

1. Performance: Performance refers to how well a product performs its intended function
or purpose. It involves meeting specified requirements, standards, or specifications for
functionality, reliability, durability, and efficiency. A high-quality product consistently
delivers reliable performance under normal operating conditions and meets or exceeds
customer expectations for effectiveness and efficiency.

2. Reliability: Reliability refers to the consistency and dependability of a product to

perform its intended function over time and under various operating conditions. A
reliable product exhibits minimal variation or deviation in performance and is free from
defects or failures that could compromise its functionality or safety. Customers value
reliability as it ensures consistent performance and minimizes the risk of downtime or
disruptions.

3. Durability: Durability refers to the ability of a product to withstand wear, tear, or

damage over time and maintain its performance and functionality over its expected
lifespan. A durable product is built with high-quality materials, components, and
construction techniques that resist degradation, corrosion, or mechanical failure.
Customers value durability as it ensures long-term value, reduces the need for frequent
repairs or replacements, and enhances product longevity.

4. Features and Specifications: Features and specifications refer to the specific attributes,
characteristics, or capabilities of a product that differentiate it from competing products
and meet the needs and preferences of customers. A high-quality product offers
desirable features, functionalities, and performance attributes that provide value and
utility to customers. Features and specifications may include design aesthetics, technical
capabilities, customization options, and compatibility with other products or systems.
 24

g) List any four functions of PPC.

1. Production Planning: Production planning involves determining what products to

produce, in what quantities, and when to produce them to meet customer demand
while optimizing resource utilization. This function includes activities such as forecasting
demand, creating production schedules, and allocating resources (such as manpower,
materials, and equipment) to meet production targets. Effective production planning
ensures that production capacity is utilized efficiently and that customer orders are
fulfilled on time.

2. Inventory Management: Inventory management is a key aspect of PPC that involves

monitoring and controlling inventory levels throughout the production process. PPC
functions include determining optimal inventory levels, establishing reorder points and
reorder quantities, and implementing inventory control policies to minimize carrying
costs while ensuring adequate stock availability to meet production requirements.
Effective inventory management helps optimize working capital, reduce carrying costs,
and minimize stockouts or excess inventory.

3. Shop Floor Control: Shop floor control involves coordinating and managing
production activities on the shop floor to ensure smooth and efficient operations. PPC
functions include scheduling production orders, monitoring work progress, coordinating
workflow between different production processes or workstations, and resolving any
issues or bottlenecks that may arise during production. Effective shop floor control helps
maximize productivity, minimize downtime, and maintain quality standards throughout
the production process.

4. Quality Control: Quality control is an essential function of PPC that involves monitoring
and ensuring the quality of products throughout the production process. PPC functions
include implementing quality control measures, conducting inspections and tests at
various stages of production, and implementing corrective actions to address any
deviations from quality standards. Effective quality control helps prevent defects, reduce
rework or scrap, and ensure that products meet customer specifications and
expectations.
 25

h) State the concept of quality with respect to manufacturer’s perspective.

1. Conformance to Specifications: Quality, for manufacturers, often begins with meeting

or exceeding the specifications and standards set for their products. This involves
ensuring that the products are designed, engineered, and manufactured to meet the
agreed-upon criteria for dimensions, materials, performance, reliability, and other
attributes. Conformance to specifications is essential for ensuring that products meet
customer requirements and expectations.

2. Fitness for Use: Manufacturers aim to produce products that are fit for their intended
use or purpose. This goes beyond simply meeting technical specifications and involves
considering factors such as usability, functionality, performance, and reliability from the
end-user's perspective. Products that are easy to use, perform as expected, and meet
the needs of customers are considered to have high quality from the manufacturer's
standpoint.

3. Durability and Reliability: Manufacturers strive to produce products that are durable
and reliable, capable of withstanding normal wear and tear and performing consistently
over their expected lifespan. Durability refers to the ability of a product to withstand use
and environmental conditions without deteriorating, while reliability refers to the
consistency and dependability of product performance over time. Products that are
durable and reliable contribute to customer satisfaction and loyalty.

4. Cost-Effectiveness: Quality from the manufacturer's perspective also involves achieving

the right balance between product quality and cost. Manufacturers aim to produce
high-quality products at a competitive cost that allows them to achieve profitability and
remain viable in the marketplace. This may involve optimizing manufacturing processes,
sourcing materials efficiently, and minimizing waste and defects to achieve the desired
level of quality at an affordable cost.

5. Continuous Improvement: Manufacturers recognize that achieving and maintaining

quality is an ongoing process that requires continuous improvement and adaptation to
changing customer needs, technological advancements, and market conditions.
Manufacturers invest in quality management systems, process improvements, and
employee training to drive continuous improvement in product quality, efficiency, and
customer satisfaction.
 26

Q2) Solve any two of the following sub questions :

a) Differentiate Continuous and Intermittent Operations Process.

1. Continuous Operations Process:

 Production Flow: In a continuous operations process, production flows continuously

without interruption, and the output is produced in a constant, steady stream.
Production is often carried out round-the-clock, 24/7.
 Equipment Utilization: Continuous operations typically involve specialized equipment
and machinery that operate continuously at high speeds and volumes to produce large
quantities of standardized products.
 Product Variety: Continuous processes are best suited for producing large volumes of
standardized products with little variation. Products are typically uniform and mass-
produced.
 Examples: Industries that commonly use continuous operations include oil refining,
chemical processing, power generation, steel production, and food processing.

2. Intermittent Operations Process:

 Production Flow: In an intermittent operations process, production occurs in batches

or cycles, with periods of activity followed by periods of downtime or changeover
between different products or batches.
 Equipment Utilization: Intermittent operations involve flexible equipment and
machinery that can be reconfigured or adjusted to accommodate different products or
production runs. Equipment utilization may vary depending on the production schedule
and product mix.
 Product Variety: Intermittent processes are suitable for producing a wide variety of
products in smaller quantities, including customized or made-to-order products.
Products may vary in size, shape, or configuration.
 Examples: Industries that commonly use intermittent operations include automotive
manufacturing, aerospace manufacturing, electronics assembly, and job shops
producing custom-made products.
 27

b) Distinguish Product Layout and Process Layout.

1. Product Layout:

 Arrangement: In a product layout, also known as a line layout or assembly line layout,
equipment and workstations are arranged in a linear sequence according to the steps
involved in the production of a specific product. Each workstation is dedicated to
performing a specific task in the production process.
 Workflow: Production flows in a straight line from one workstation to the next, with
each workstation performing a specialized task or operation. The product moves along
the line, undergoing sequential operations until it is completed.
 High Volume, Low Variety: Product layouts are best suited for high-volume
production of standardized products with little variation. They are highly efficient for
mass production and can achieve high levels of productivity and output.
 Examples: Industries that commonly use product layouts include automotive assembly
plants, electronics manufacturing, and food processing facilities.

2. Process Layout:

 Arrangement: In a process layout, also known as a functional layout or job shop layout,
equipment and workstations are grouped together based on the similarity of their
functions or processes. Each department or area is dedicated to performing a specific
type of operation or process.
 Workflow: Production flows in a more flexible and non-linear manner, with materials
and products moving between different departments or work areas based on the
specific operations required. There is less emphasis on a strict sequence of operations.
 Low Volume, High Variety: Process layouts are suitable for low-volume production of
a wide variety of products with diverse requirements. They offer flexibility to
accommodate custom orders, prototypes, or products with unique specifications.
 Examples: Industries that commonly use process layouts include job shops, custom
manufacturing facilities, hospitals, and restaurants.
 28

c) Infer various reasons behind the Capacity Planning.

1. Meeting Customer Demand: Capacity planning ensures that an organization has

sufficient production capacity to meet customer demand for its products or services. By
aligning production capacity with forecasted demand, organizations can prevent
stockouts, backorders, and lost sales, thereby enhancing customer satisfaction and
loyalty.

2. Optimizing Resource Utilization: Capacity planning helps organizations optimize the

utilization of resources such as labor, machinery, equipment, and facilities. By matching
production capacity with demand levels, organizations can minimize idle time, reduce
underutilization of resources, and improve overall operational efficiency.

3. Minimizing Costs: Effective capacity planning allows organizations to minimize costs

associated with overcapacity or undercapacity. Overcapacity leads to unnecessary costs
such as idle equipment, excess inventory, and higher operating expenses, while
undercapacity can result in missed revenue opportunities and potential customer
dissatisfaction. Capacity planning helps organizations strike the right balance between
costs and capacity to maximize profitability.

4. Supporting Strategic Objectives: Capacity planning plays a crucial role in supporting

an organization's strategic objectives and growth initiatives. It enables organizations to
anticipate and prepare for changes in market demand, technological advancements, and
competitive pressures. Capacity planning helps organizations adapt to market dynamics,
expand into new markets, introduce new products, and capitalize on growth
opportunities.

5. Improving Flexibility and Responsiveness: Capacity planning enhances an

organization's ability to respond quickly and effectively to changes in demand, market
conditions, and customer preferences. By having the right level of capacity in place,
organizations can adjust production levels, ramp up or scale down operations, and
reallocate resources as needed to maintain agility and competitiveness.

6. Ensuring Long-Term Sustainability: Capacity planning supports the long-term

sustainability and viability of an organization by ensuring that it has the resources and
capabilities to meet future demand and growth projections. By investing in capacity
expansion, technology upgrades, and infrastructure improvements, organizations can
position themselves for long-term success and resilience in the marketplace.
 29

b) Illustrate the concept of fore casting as a planning Tool

1. Identifying Objectives: The first step in using forecasting as a planning tool is to

identify the objectives or goals that the organization aims to achieve. These objectives
may include predicting future sales, demand for products or services, resource
requirements, financial performance, or market trends.

2. Data Collection: Organizations gather historical data and relevant information related
to the variables being forecasted. This data may include past sales data, customer
trends, economic indicators, market research, and industry reports. The quality and
accuracy of the data collected are critical for generating reliable forecasts.

3. Selecting Forecasting Methods: Organizations select appropriate forecasting methods

or techniques based on the nature of the data, the level of accuracy required, and the
forecast horizon. Common forecasting methods include time series analysis, regression
analysis, causal modeling, and qualitative methods such as expert judgment and market
research.

4. Data Analysis and Modeling: Organizations analyze the collected data using statistical
techniques and mathematical models to identify patterns, trends, and relationships. This
analysis helps organizations understand the underlying factors influencing the variables
being forecasted and develop predictive models to forecast future values.

5. Generating Forecasts: Based on the analysis and modeling, organizations generate

forecasts for the variables of interest, such as future sales volumes, customer demand,
production requirements, or financial performance. Forecasts may be expressed as
numerical values, probability distributions, or qualitative assessments, depending on the
forecasting method used.

6. Validation and Evaluation: Organizations validate and evaluate the accuracy and
reliability of the forecasts by comparing them to actual outcomes over time. This
involves monitoring forecast accuracy, tracking deviations from predicted values, and
identifying any factors or assumptions that may have contributed to forecast errors.

7. Incorporating Forecasts into Planning: Finally, organizations incorporate the forecasts

into their planning processes to develop strategies, allocate resources, set targets, and
make decisions. Forecasts provide valuable insights and guidance for decision-makers,
helping them anticipate future opportunities and challenges and formulate effective
plans to achieve organizational objectives.
 30

b) List any four functions of Supply Chain Management.

1. Procurement: Procurement involves the acquisition of goods and services from external
suppliers to support the organization's operations. This function includes activities such
as supplier selection, negotiation of contracts, order placement, and supplier
relationship management. Effective procurement practices help ensure that the
organization obtains quality products and services at the best possible value, while also
managing risks and maintaining supplier relationships.

2. Inventory Management: Inventory management focuses on optimizing inventory

levels to meet customer demand while minimizing carrying costs and stockouts. This
function involves activities such as demand forecasting, inventory planning, stock
replenishment, and inventory control. By maintaining optimal inventory levels,
organizations can improve customer service, reduce holding costs, and enhance
operational efficiency.

3. Logistics and Distribution: Logistics and distribution involve the movement and
storage of goods from suppliers to customers. This function encompasses activities such
as transportation, warehousing, order fulfillment, and distribution network design.
Logistics and distribution play a critical role in ensuring timely delivery of products,
optimizing transportation routes, and managing distribution channels to meet customer
requirements efficiently.

4. Demand Planning and Forecasting: Demand planning and forecasting involve

predicting customer demand for products or services to facilitate production and
inventory management decisions. This function utilizes historical sales data, market
trends, and customer feedback to forecast future demand accurately. By forecasting
demand accurately, organizations can optimize production schedules, reduce inventory
costs, and improve customer satisfaction.
 31

b) Compose service blue printing for any one of the following : [10]
i) Travel & Tourism Company ii) Restaurant

Let's compose a service blueprint for a restaurant:

Service Blueprint for a Restaurant:

1. Customer Actions:

 Enters the restaurant.

 Waits to be seated (if necessary).
 Reviews the menu.
 Places an order with the server.
 Waits for food to be served.
 Enjoys the meal.
 Requests the check.
 Pays the bill.
 Leaves the restaurant.

2. Frontstage Contact Employee Actions:

 Greets customers upon arrival.

 Guides customers to available tables.
 Provides menus and offers recommendations.
 Takes orders from customers.
 Communicates special requests to the kitchen.
 Serves food and beverages.
 Checks on customers during the meal.
 Presents the bill.
 Processes payment.
 Bids farewell to customers.

3. Backstage Contact Employee Actions:

 32

 Prepares ingredients and sets up kitchen stations.

 Cooks food according to orders.
 Assembles dishes and garnishes plates.
 Coordinates with servers for order pickup.
 Cleans and maintains kitchen equipment.
 Replenishes food and beverage supplies.
 Communicates with front-of-house staff regarding menu updates or specials.
 Assists with dishwashing and cleaning.

4. Support Processes:

 Inventory management: Ordering ingredients, storing perishables, and managing

inventory levels.
 Staff scheduling: Scheduling shifts for kitchen and front-of-house staff based on
anticipated demand.
 Menu development: Creating and updating menus, including pricing and descriptions.
 Training and development: Providing training to staff on service standards, menu items,
and customer interaction.
 Quality control: Monitoring food quality, presentation, and customer satisfaction.
 Maintenance: Conducting regular maintenance of kitchen equipment, dining area, and
facilities.
 Marketing and promotions: Planning and executing marketing campaigns, promotions,
and special events to attract customers.
 Supplier relationships: Managing relationships with food and beverage suppliers,
negotiating contracts, and ensuring timely deliveries.

5. Physical Evidence:

 Restaurant exterior and interior design.

 Layout of tables and seating arrangements.
 Menu design and presentation.
 Quality of food and presentation on plates.
 Cleanliness and ambiance of the dining area.
 33

 Staff uniforms and appearance.

 Signage and branding elements.
 Payment processing systems.
 Restroom facilities.

6. Customer Interactions:

 Interaction with host/hostess upon arrival.

 Interaction with servers to place orders and request assistance.
 Interaction with kitchen staff for special requests or dietary restrictions.
 Interaction with cashier or server for bill payment.
 Overall interaction with staff to ensure a positive dining experience.