SRILANKA

UNIVERSITYOF COLOIUBO,
AND FINANCE
FACULT'YOF MANAGEIVTENT
Unit
& Mid-careerDevelopment
Postgraduate
Masterof BusinessAdministration(MBA) SemesterII FirsGhalfExamination- October,201I

MBA 538 - Operations Management

'

Three(03)Hours

at leastpgg$il questionfromeachpart.
in all, selec:ting
AnswerFive (0$ Questions
All questions
carryequalmarks.
answerbooksandhandedoverto
Answersto part-[ andpart-II shouldbe writtenin separate
separately.
supervisor
Noteson bothsidesof A4 sizepaperareallorved.
on 05 printedpages
Thispaperconsistof 07 questions
Fart -I
f. i. Traditionallycost is the perforrnansemeasureof [Link],presentlythe cost is
not adequate to measure the success of operaticns. What are the other important
performanceobjectivesto be achievedin operations?
Discusswhat OperationsManagementtoois and techniquesyou would useto achievethese
objectives.
(09 marks)
ii. A companyis trying to decidewhetherto buy a part from supplier,producethe part while
usingmanualassembly,or prodncethe part rvithin an [Link]
dataon which decisionis made:

Buy

Produce-Manuai

--llr"e*!ry---

250.000

Annualvolumeof

250,000

Variablecostoer unit

Rs.750.000
Rs.00
Rs.10.50 Rs.8.95

Produce-automated

Assembl

a.
b.

Basedon this data,which alternativeu,ouldyou proposeasthe bestone?

At what annualvolume of the part would the companybe indifferentto buyingthe part
assembly?
or producingthe part with automatecl
(l I marks)
(Total20 Marks)

7. i. Why should operationsmanagersgive emphasison job enrichmentand socio-technical

to job design?
approaches
(07 marks)
ii. A work study officer practicesthe following methodto estimatestandardtime for sewing
operationsin job design. Five operatorsare assignedto carr-vout the operationto be
[Link] operatorperformsthe task ten times. Then mean operationtime is taken
and otherallowancesare addedto get the standardtime. What arc the shortcomingsof this
approach?How do you improve this approachto obtain betterestimateon standardtime
of the operations?
(07 marks)
in job design.
iii. Explainbriefly the importanbeof ergonomic(humanfactors)considerations
(06 marks)
(Total20 Marks)

3. i. Describevariousdemandforecastingoptionsavailablein the following situations:

(04 marks)
(a) Long rangeforecastingfor a new product.
(04 marks)

product.
(b) Short-rangeforecastingfor an established

[Link] Apparels Pvt. Ltd. producesladies..iacketsfor the Europeanmarket. The orders

receivedby the companyfor years2007and 2008are as follows.
Period
(in 2007)
Jan- Mar
Apr- June
July - Sep
Oct - Dec

OrderQurrntity
('000s)

4 5 .0

2s.a
28.5

36.s

Period
(in 2008)
Jan- Mar
Apr- June
July - Sep
Oct - Dec

Order Quantity
('000s)

43.5
26.4
30.0
37.0

Managementof the companyexpectsthat the total salesvolume in2009 will be 20% less
than that of 2008 due to economiccrisis in the [Link] order quantitiesfor the
four quartersofyear 2049.
(12 marks)
(Totnl20 Marks)

4, i. What arethe factorsto be consideredin selectinglocationsfor the following institutions?

a.
b.
c.

A garmentfactory
An internetcafe
An internationalschool
(05 marks)

ii. State two techniquesthat you would use in selecting plant location? Explain what
difficultiesyou may face in usingthesetechniques.
(04 arks)
ii. An assemblyline is to be designeclto operate7 '/z hours per day and supply a steady
demandof 300 units per day. T'he tasl: and their perfbrmancetimes are shown in the
followins table.

Task
A
B
C

D
E
F

Time
Task I Ferformance
Prececling
(secon4-{|
60
L
40
45
A
A
10
30
B
ll r n
("
l____-

_t__

p--

c ___L__

K
L

|
L
F__ __l___

r{,J
I.K

!g

50

2a__l

?s_:

20
25

a, Draw the precedencediagram

b. What is the cycle time?
to give an efficient line.
c . Assisnthe tasksinto r,vorkstations

t.

(03 marks)
(01mark)
(05marks)
(Total20Marks)

i. Total Quality Management ('IQM), Just In Time (JIT), Kaizen and 55 are the
organizationalpracticesdevelopedin thc [Link] of them and discusshow
they contribute to organizationalperfbrmance.
(10 marks)

business
prioritiesin the present
aretwo kevcornpetitive
ii. Deliveryspeedanddependability
Pianning(EI{P)systemhelpsto achievethese
[Link],EnterpriseResource
priorities.
competitive
(10marks)
(Total20Marks)

firt-II
6. i. Raw material S has an annual unifoim demandof 500 units. Cost of placing an order is
constantand it is estimatedas $5. The nraterialholding cost of S is estimatedas $2 per unit
per [Link] EOQ of materialS fcr a constantleadtime. It is assumedthat the cost
of materialS remainsconstantover the 1rcriodand all the demandsare satisfiedwithin the
[Link] is the total annrul cost at EOQ?
(04 arks)
ii. Discussthe evolutionof ERP{iom the conceptof MRP.
(03 arks)
iii. A productP hasa leadtime of 3 daysto assembleit. f he sub-assemblies
usedfor this are
one unit of Q and two units of R. The rnanufacturinglead times of Q and R are 2 daysand
I day [Link] is requiredto consume5 units of raw material S to manufacturea
single unit of Q while the rnanufacturingof one unit of R needs one unit of T. The
'f
purchasinglead time of S and are 2 days each. Draw the product tree structureof the
productP indicatingthe quantityrequirementand leadtirnesfor eachitem.
(04 marks)
iv. What do you understandfrom the term 'Modular IIOM'? Identify a modular BOM existsin
the productstructuredrawn for P in the abovequestion.
(02 arks)
v. Thereis demandfbr 53 units of productP abovein period 8. T'heon hand quantitiesof the
itemsaregiven in thetablebeiow:
P
0n hand Quantity

JJ

l5

25

l0

The lot size or order quantity fcrr items P, Q and R are the same as net requirements,
rvhile the lot size fcrr S is to be taken as the EOQ calculatedin the first part of this
questionand T is 75 units. What shouldbe the size of the ordersfor eachitem and when
shouldthe [Link]?
(07 marks)
(Total20 Marks)

7. i. Discussbriefly with exampleshow Dell Computersachieveda successfulsupply chain

practiceswith nearto zero inventorylevels.
management
(03 marks)

ii. Whena supply chain evaluationteamof an organizationwantedto analysesthe practicein

the pastyear,the financernanagerof the firm providedthe following datato the team'

Amountin USD
6.300.000
5.400.000
900,000
450,000

Descgp!!94_
Salesturnover
Costof soodssold

_---

450"000
200.000
250,000
50.000

The firm had its own distribution centreand the averagefinished goods availablelast year
was USD280,[Link] firm had USD750,000 wofth of fixed [Link] averageraw
There were somefinished goodsat the
materialstocksavailablelast year was 1JSD350,000.
factory which had an averagevalue of {JSD200,[Link] long term debt of the firm was
USD300,[Link] productiorlfloor had an averageWIP value of USD500,000.Assuming50
businessweekswere for the pastyear,expresstotal inventoryas,'
o Weeksof supply
o Inventory turnover

(06 marks)

iii. What are objectives of scheduling in a shop floor environment?How a shop floor
professionalcan measurethe performanceof scheduling?

(05marks)

of'theirrequiredtimes'
iv. Thefollowinglist ofjobs in a shopfloor includesestimates

Daysto Delivery
Promise
7

a
J

t0

-7 (Late)
7
-8 ([Link])

Job

RequiredTime
(Days)

SlackTime
5
4
I
11
4
9
z

Use the Shortest ProcessingTime (SPT) rule to schedulethesejobs. Tabulatethe

scheduleand calculatethe meanflow time.

(05marks)
(Total20Marks)