Quiz

Instructions: Answer each question in 2-3 sentences.

1.What is the purpose of the Critical Ratio technique in scheduling?

2.Explain the difference between a 'push' and 'pull' system in production.

3.What are the key components of an MRP (Material Requirements Planning) system?

4.Define the term "economic order quantity" (EOQ) and what it is designed to minimize.

5.What is the main goal of Value Analysis?

6.What is a Gantt chart and what does it illustrate?

7.Describe the three categories of items in ABC analysis and their control implications.

8.Explain the concept of "crashing" a project in PERT/CPM.

9.What is the primary difference between management and administration?

10.What are the three ways that the value of a product can be increased through value analysis?

Quiz Answer Key

1. The Critical Ratio technique helps determine the status of specific jobs, establishes relative
priorities among them, and dynamically tracks job progress by comparing the time remaining to the
work remaining. It is useful in both make-to-order and stock jobs and adjusts to demand and job
progress changes.

2. A push system initiates production based on demand forecasts, pushing materials through the
process. A pull system, used in JIT, initiates production based on actual customer orders, pulling
materials as needed.

3. Key components of MRP include a product structure file (Bill of Materials), a master production
schedule, and an inventory master file. These components help determine what is needed, how
much is needed, and when it is needed for production.

4. Economic Order Quantity (EOQ) is the order size that minimizes the total cost of inventory,
balancing ordering costs and carrying costs. The goal is to find the most cost-effective quantity to
order.

5. The main goal of Value Analysis is to improve the value of a product or service by examining its
functions and costs, ultimately reducing costs and/or increasing the value of the product to the
customer.

6. A Gantt chart is a visual tool that illustrates the relationship between project activities and time,
showing the sequence and duration of each task. It helps in project scheduling, tracking, and
communication.

7. ABC analysis categorizes inventory into A (high-value, tight control), B (medium-value, moderate
control), and C (low-value, simple controls). This classification helps to focus control efforts on the
most important items.
8. "Crashing" a project in PERT/CPM refers to the process of shortening the project duration by
adding resources to critical activities. This involves additional costs, and managers must balance cost
increases with schedule reductions.

9. Administration determines objectives and policies while management plans and executes the work
to meet the objectives set by administration. Administration frames policies and management
executes the policies and programs.

10. The value of a product can be increased by retaining the value but reducing the cost; retaining
the cost but increasing the value; or increasing the cost if necessary, but increasing the value much
more than the cost.

Essay Questions

1. Compare and contrast the use of PERT and CPM in project management. In what situations would
each be most appropriate? Discuss the specific methodologies and calculations involved with these
approaches.

2. Evaluate the role of inventory management in supply chain optimization. Analyze how techniques
such as EOQ, ABC analysis, and reorder point calculations contribute to overall efficiency and cost
reduction.

3. Discuss the principles of Just-In-Time (JIT) manufacturing and its impact on waste reduction and
efficiency. Explore the various elements of JIT, such as pull systems, small lot sizes, and continuous
improvement and how they create improvements in manufacturing.

4. Describe the purpose and process of value analysis. Explain how the DARSIRI method can be
applied to a product redesign to enhance its value to the customer.

5. Analyze the impact of effective scheduling on production efficiency and project success. What are
some of the most effective scheduling techniques, such as Gantt charts and critical ratio method, and
in what situations are they best used?

Glossary

ABC Analysis: An inventory categorization method that divides items into three categories (A, B, C)
based on their value and consumption. A items are high-value and require tight control, C items are
low-value with minimal control, and B items are intermediate.

Accountability: The obligation of a subordinate to properly perform the assigned duty.

Activity (PERT/CPM): A task or work element that takes time and resources in a project.

Administration: The function of determining objectives and framing policies for an organization.

Authority: The legitimate power assigned to a manager to make decisions, issue orders, and allocate
resources to achieve organizational objectives.

Bill of Materials (BOM): A list of parts, components, and materials required to build a product.

Carrying Costs: The costs associated with holding inventory, such as storage, insurance,
obsolescence, and interest.

Cellular Manufacturing: A layout where machines are grouped into cells that produce similar
products, reducing travel distance and improving flow.
Continuous Improvement: A philosophy of ongoing efforts to improve products, processes, and
services over time.

Cost Control: The process of monitoring and regulating expenditures by comparing actual
performance to a set standard, investigating variances and taking corrective action.

CPM (Critical Path Method): A project management technique used to manage time in a project,
which determines the longest sequence of activities that must be completed to finish the project.

Critical Path: The longest sequence of activities in a project that determines the shortest possible
completion time, with activities having zero total float.

Critical Ratio: A scheduling technique that calculates job priority by dividing the time remaining until
the due date by the work remaining.

Crashing (PERT/CPM): The process of shortening project duration by adding resources to critical path
activities, which typically involves additional costs.

DARSIRI Method: A systematic approach to value engineering focusing on the reconsideration of cost
and quality, focusing on data collection, analysis, and implementation.

Delegation of Authority: The granting of authority to subordinates to operate within prescribed

Dispatching: The process of putting a production plan into effect by releasing and guiding
manufacturing orders in the sequence determined by route sheets and schedules.

Economic Order Quantity (EOQ): The optimal order quantity that minimizes the total cost of
inventory, balancing ordering and carrying costs.

Esteem Value: The enhanced value associated with a brand or product, created through marketing,
reflecting snob appeal or secondary value.

Float (Slack): The amount of time an activity can be delayed without delaying the project completion
date.

FSN Analysis: A method for classifying inventory based on movement, into fast-moving (F), slow-
moving (S), and non-moving (N) items.

Gantt Chart: A visual tool used in project management that illustrates the relationship between
project activities and time, showing the duration of each task.

Just-In-Time (JIT): A manufacturing philosophy focused on producing the right items of the right
quantity and quality, at the right place and time, based on a pull system of production to minimize
waste and inventory.

Management: The creation and maintenance of an internal environment where individuals working
together in groups can perform efficiently and effectively towards the attainment of group goals.

Material Requirements Planning (MRP): A production planning, scheduling, and inventory control
system used to manage manufacturing processes by determining what is needed, how much is
needed, and when it is needed.

Ordering Costs: The costs associated with placing an order, such as administrative, transportation,
and processing fees.
PERT (Program Evaluation and Review Technique): A project management technique using a
network diagram to plan, schedule, and control activities within a project.

Planning: The systematic approach to setting out to do activities that fulfil a future goal.

Pull System: A production system where materials are pulled through the process as needed, based
on actual customer orders.

Push System: A production system where materials are pushed through the process based on
demand forecasts.

Pyrolysis: Thermal degradation of waste in the absence of air to produce char, pyrolysis oil and
syngas.

Reorder Level: The inventory level at which a new order is placed to replenish stock, calculated to
prevent shortages.

Responsibility: The obligation of a subordinate to properly perform the assigned duty when work is
delegated.

Scheduling: The determining of time and date when each operation is to be commenced and
completed.

Supply Chain Management (SCM): The process of managing the flow of goods, services, and
information from the point of origin (raw materials) to the end customer.

Use Value: The primary or basic value of a product, based on its essential function.

Value Analysis (VA): A systematic approach to improve the value of a product or service by
examining its functions and costs.

Variance Analysis: The investigation of the difference between actual and planned behavior, such as
budgeted sales versus actual sales.

VED Analysis: An inventory classification method dividing items into vital (V), essential (E), and
desirable (D) based on their criticality and impact on operations.

Waste Management: Activities and actions required to manage waste from its inception to its final
disposal, including collection, transport, treatment, and disposal.