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INNOVATION & ENTREPRENEURSHIP – KEY POINTS MATERIAL
AS PER IDE UNIVERSITY OF MADRAS SYLLABUS AS OF 2023-25
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Note: These are just the key points to understand the concept and revise faster and not the entire content for
the answers. Please include your own concepts too and add with these points which enhances your answers
and the marks. All the best for us!

UNIT I: INTRODUCTION

2 MARKS QUESTIONS (50 words each)

1. Define Operations Management.
Operations Management involves planning, organizing, and supervising processes to produce goods
and services efficiently. It manages inputs like materials and labor through transformation processes to
deliver outputs like products or services.
2. Mention any two objectives of Operations Management.
Two key objectives are:
o To produce goods/services of right quality and quantity.
o To ensure cost-efficiency and timely delivery.
3. What is a ‘System Perspective’ in Operations Management?
It views operations as a system comprising interrelated inputs, processes, and outputs. It emphasizes
managing inputs through a transformation process to deliver desired outputs efficiently.
4. State any two challenges in Operations Management.
o Globalization
o Sustainability
5. Give two differences between Long-term and Short-term issues in Operations.
Long-term issues relate to strategic decisions like capacity planning. Short-term issues involve routine
decisions like scheduling or inventory control.
6. What are Make or Buy decisions?
It involves deciding whether to manufacture a product/component internally (make) or procure it from
external suppliers (buy) based on cost, capability, and strategy.
7. Define Capacity Planning.
Capacity Planning is determining the production capacity needed to meet changing demands. It
ensures that resources are effectively utilized without under or overutilization.
8. What is a Crossover Chart?
A Crossover Chart helps in comparing total costs of different production processes across varying
levels of output to choose the most cost-effective one.
9. Name any two types of production processes.
o Job Production
o Batch Production
10. Mention two types of charts used in Operations Management.
• Gantt Chart
• Control Chart

6 MARKS QUESTIONS (250 words each)

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1. Explain the Nature and Scope of Operations Management.

Operations Management (OM) deals with managing resources that produce goods and services. It
applies to both manufacturing and service industries. OM involves activities like product design,
process selection, capacity planning, quality control, and logistics.
o Nature: OM converts inputs (materials, labor) into outputs (products/services) efficiently. It is
goal-oriented, multidisciplinary, and applies across industries.
o Scope: It includes product selection and design, process planning, capacity planning, plant
location/layout, inventory control, and quality assurance.
OM helps in achieving organizational objectives by aligning operations with strategic goals.
2. Discuss the key functions of Operations Management.
Key functions include:
o Finance: Ensuring effective use of financial resources in operations.
o Planning: Organizing resources and scheduling production.
o Product Design: Ensuring the product meets customer needs.
o Forecasting: Estimating demand to plan resources.
o Quality Management: Maintaining product/service standards.
o Supply Chain Configuration: Managing raw materials to final delivery.
o These functions help enhance productivity, reduce costs, and improve customer satisfaction.
3. What are the major challenges in Operations Management?
o Globalization: Competing globally with quality and price efficiency.
o Sustainability: Managing operations with social, economic, and environmental balance.
o Ethics: Ensuring responsible practices in production.
o Communication: Effectively conveying plans across departments.
o System Design: Building robust systems for efficient operations.
4. Explain the historical development of Operations Management.
Operations evolved from craft production and the Industrial Revolution to scientific management
(Taylor, Fayol), assembly lines (Ford), Gantt charts, and modern quality movements (TQM, ISO). Recent
developments include ERP systems, predictive maintenance, and Industry 4.0 technologies.
5. Write a short note on Manufacturing Trends in India.
India is emerging as a global manufacturing hub with initiatives like ‘Make in India’. Trends include:
o IoT and predictive maintenance
o Use of ERP and big data
o 3D printing and automation
o Shift from B2B to B2B2C
o Emphasis on skill development and sustainability
10 MARKS QUESTION
1. Explain the Nature, Scope, Objectives, and Functions of Operations Management.
Operations Management (OM) is a vital discipline that focuses on managing the processes that convert inputs
into outputs in the form of goods and services. It is essential for achieving organizational efficiency,
competitiveness, and customer satisfaction. In today’s complex business environment, OM has expanded
beyond manufacturing to include services, making it a core function in every organization.

NATURE OF OPERATIONS MANAGEMENT

Operations Management deals with the transformation process.
It manages all activities involved in converting raw materials, human effort, and capital into finished goods or
services. The nature of OM is both technical and managerial. It integrates various functional areas such as
finance, marketing, and HR to ensure seamless coordination of production and service delivery.
It is applicable in both manufacturing and service sectors. While in manufacturing, OM focuses on tangible
goods like machinery or apparel, in service sectors like banking or hospitality, it emphasizes timely, efficient,
and quality service delivery.

SCOPE OF OPERATIONS MANAGEMENT

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Operations Management has a wide scope, covering numerous aspects of production and service systems.
1. Product Design and Process Planning: OM ensures that products are designed in alignment with
market demand and organizational capabilities. It also includes planning the right processes to
manufacture or deliver the product effectively.
2. Capacity Planning: This involves assessing the production capacity needed to meet changing demand.
Decisions on facility expansion, machine upgrades, or shift arrangements fall under this scope.
3. Plant Location and Layout: OM includes strategic decisions on where to establish a plant and how to
layout the facility to optimize workflow, reduce wastage, and enhance productivity.
4. Inventory Management: Managing raw materials, components, and finished goods to ensure
availability while minimizing carrying costs is a key responsibility.
5. Production Planning and Control (PPC): Ensures that production happens according to schedule,
within budget, and with the required quality.
6. Quality Control: Setting quality standards, inspecting processes, and ensuring that outputs meet the
required specifications is a critical component.
7. Maintenance Management: OM ensures that all machinery and tools are maintained regularly to
prevent breakdowns and minimize downtime.

OBJECTIVES OF OPERATIONS MANAGEMENT

The objectives of OM guide all operational decisions and strategies.
1. Effectiveness Objective: Delivering the right product or service that meets customer needs.
2. Efficiency Objective: Minimizing resource consumption while maximizing output.
3. Quality Objective: Ensuring that goods and services meet predetermined quality standards.
4. Cost Objective: Reducing the cost of production or service delivery without compromising on quality.
5. Lead Time Objective: Reducing delays, idle time, and throughput time to increase responsiveness to
market demands.
6. Capacity Utilization Objective: Maximizing the use of available resources such as labor, machines,
and materials.

FUNCTIONS OF OPERATIONS MANAGEMENT

OM involves a range of managerial and technical functions that help streamline business operations.
1. Planning: This includes forecasting demand, setting goals, scheduling production, and preparing for
contingencies. It ensures that the organization is well-prepared to meet customer needs.
2. Organizing: It refers to allocating resources, assigning responsibilities, and creating structures that
support efficient workflow.
3. Directing: OM requires guiding employees, coordinating departments, and providing leadership to
achieve operational goals.
4. Controlling: Monitoring performance against set standards and taking corrective actions is key to
ensuring desired outcomes.
5. Forecasting: Estimating future demand based on past data and market trends helps in better resource
planning and minimizing waste.
6. Design of Product and Services: OM ensures that the product is designed with quality, cost,
functionality, and customer preference in mind.
7. Supply Chain Management: Coordinating with suppliers, managing logistics, and ensuring timely
delivery to customers is a core OM function.
8. Quality Management: OM focuses on continuous improvement (Kaizen), Total Quality Management
(TQM), and Six Sigma practices to maintain high-quality output.
9. Cost Control and Reduction: It involves identifying cost centers and eliminating inefficiencies in
processes to maintain profitability.
2. Discuss the Manufacturing Trends in India in detail.
India’s manufacturing sector is rapidly transforming with global integration and government support:
• Policy Support: Make in India, GST, industrial corridors, and FDI initiatives.
• Technology Integration: IoT, AI, and Big Data are enabling smart factories.

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• ERP Systems: Helping small and medium enterprises streamline operations.

• B2B2C Shift: Manufacturers are selling directly to consumers via e-commerce.
• Predictive Maintenance: Reducing downtime and increasing efficiency.
• 3D Printing: Allowing faster and cost-effective prototyping.
• Reshoring: Bringing manufacturing back to India due to rising foreign labor costs.
• Skill Challenges: Need for tech-savvy workforce; training programs are increasing.
These trends show India’s growing role in global manufacturing, aiming for sustainability, innovation,
and customer-centricity.
3. Explain the System Perspective of Operations Management and highlight its relevance.
Operations Management (OM) is most effective when approached from a system perspective, which treats
the organization as a whole made up of interrelated parts. Rather than optimizing individual departments in
isolation, this approach emphasizes coordination, integration, and efficiency across all functions. The system
perspective is essential to improving productivity, meeting customer needs, and achieving strategic goals.

CONCEPT OF A SYSTEM
A system is a set of interrelated components working together to achieve a common goal.
In OM, the organization is viewed as a system where each part (like procurement, production, HR, finance,
marketing) contributes to the transformation of inputs into outputs. Any change in one component can affect
the whole system, so understanding these interdependencies is crucial.

INPUTS IN OPERATIONS SYSTEM

Inputs are the resources used in production or service delivery.
These include:
• Human Resources: Labor, skills, and expertise.
• Materials: Raw materials, components, and parts.
• Capital: Machinery, tools, equipment, and buildings.
• Information: Data and feedback used for decision-making.
Efficient management of inputs ensures that resources are used optimally and not wasted, which is a
foundational concern of Operations Management.

TRANSFORMATION PROCESS
This is the core of the system perspective where inputs are converted into outputs.
• Manufacturing Transformation: Involves activities such as machining, assembling, and finishing to
create physical products.
• Service Transformation: Involves customer interaction, customization, and timely delivery.
• Support Functions: Include maintenance, inventory control, and quality assurance that facilitate the
transformation.
The focus here is on enhancing value addition while minimizing waste and inefficiencies.

OUTPUTS AND FEEDBACK

Outputs are the final products or services delivered to customers.
• These must meet customer expectations in terms of quality, quantity, and timeliness.
• Feedback loops are essential: Customer reviews, performance data, and market reactions are used to
make improvements in processes and systems.
Feedback ensures the system evolves and adapts to changes in the external environment.

SYSTEM BOUNDARY AND ENVIRONMENT

Every system operates within a defined boundary and is influenced by its external environment.
• The system boundary separates internal processes from external factors.
• The environment includes suppliers, customers, regulatory bodies, competitors, and socio-economic
forces.

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4. Discuss the various challenges in Operations Management.

Operations Management (OM) today faces numerous complex challenges due to technological disruptions,
global market dynamics, and growing expectations from stakeholders. These challenges require operations
managers to stay agile, informed, and responsive to ensure organizational efficiency and customer
satisfaction.
Below are the major challenges in Operations Management, explained in detail:

Globalization
Globalization has expanded competition beyond local markets to a global scale.
Operations managers must now deal with global supply chains, international quality standards, and varied
cultural and regulatory environments. It demands better logistics, sourcing strategies, and cost control to stay
competitive globally.

Sustainability
Sustainability emphasizes balancing profit with social and environmental responsibility.
OM must integrate green practices like energy efficiency, waste reduction, and ethical sourcing. Operations are
now evaluated based on their environmental impact, requiring the adoption of sustainable production and
distribution practices.

Ethical Conduct
Ethical behavior in operations is essential to protect customers, employees, and society.
Operations managers must ensure ethical sourcing, avoid exploitation, maintain transparency, and comply
with laws. Any ethical lapse—like poor labor conditions or quality fraud—can severely damage a company’s
reputation.

Ineffective Communication
Poor communication can lead to coordination issues, errors, and low morale.
Operations require smooth communication between departments, teams, suppliers, and customers.
Managers must master oral, written, and non-verbal communication to ensure operational harmony and
minimize misunderstandings.

System Design Complexity

Designing robust systems that handle complex processes and real-time changes is a challenge.
From facility layout to process automation, every system must be designed to ensure flexibility, scalability, and
consistency. A poorly designed system increases downtime, costs, and inefficiencies.

Demand Uncertainty
Fluctuations in customer demand make forecasting and planning difficult.
Operations must be flexible enough to handle sudden changes without stockouts or overproduction. Use of
predictive analytics and responsive supply chains is crucial to manage this uncertainty.

Inventory and Supply Chain Disruptions

Supply chain breakdowns—due to geopolitical tensions, pandemics, or natural disasters—affect operations.
Managing inventory levels, vendor relationships, and logistics under uncertainty is a growing concern, making
supply chain resilience a priority.

Technology Integration
Rapid technological advances demand constant upgrading of systems and processes.
Operations managers must integrate AI, IoT, automation, and data analytics into operations while managing the
learning curve and cost of implementation.

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UNIT II: FACILITY DESIGN

2 MARKS QUESTIONS (Approx. 50 words)

1. What is plant location?
Plant location refers to selecting a geographical site for setting up manufacturing units, considering
factors like proximity to raw materials, labor availability, market access, and costs.
2. Mention two location analysis techniques.
o Center of Gravity Method
o Factor Rating Method
3. What is a multiplant location decision?
It involves setting up more than one plant in different regions to serve multiple markets efficiently and
reduce logistic costs.
4. Mention any two trends in plant location.
o Preference for SEZs and industrial clusters
o Shift toward logistics-friendly regions near ports/highways
5. Define plant layout.
Plant layout is the physical arrangement of machinery, equipment, and workflow within the production
facility to optimize efficiency and safety.
6. List any two principles of a good layout.
o Shortest travel path for materials
o Flexibility for future modifications
7. Mention any two basic types of plant layout.
o Product layout
o Process layout
8. What is material handling?
It refers to the movement, storage, protection, and control of materials throughout the manufacturing
and distribution process.
9. Mention two material handling equipment.
o Forklifts
o Overhead cranes
10. What is ergonomics in job design?
Ergonomics is the science of designing jobs and workplaces that suit workers’ physical and
psychological capabilities, improving safety and productivity.

6 MARKS QUESTIONS (Approx. 250 words)

1. Explain the factors to be considered in plant location.

Several factors influence the decision of where to locate a plant:
• Proximity to Market: Reduces delivery time and logistics cost.
• Availability of Raw Materials: Locating near raw material sources lowers transport cost.
• Labor Availability: Skilled and affordable labor is a key consideration.
• Infrastructure: Roads, electricity, water, and communication must be readily available.
• Government Policies: Incentives, tax benefits, and regulations affect decision-making.
• Climate and Environmental Conditions: Suitable weather and pollution norms matter for some
industries.
• Cost Considerations: Land, labor, and operational costs must be economically feasible.

2. Describe the principles of a good plant layout.

A good plant layout follows these principles:
• Integration of Workflow: Materials, machines, and workers must be well-coordinated.
• Shortest Travel Path: Materials should move the least possible distance.
• Flexibility: The layout should accommodate changes in products/processes.

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• Utilization of Space: Optimal use of floor and vertical space.

• Safety and Comfort: Design should ensure worker safety and job satisfaction.
• Smooth Supervision and Maintenance: Easier access for monitoring and repairs.

3. Explain the basic types of plant layouts.

• Product Layout: Machines are arranged in sequence of production; ideal for mass production.
• Process Layout: Equipment grouped by function; suitable for batch/custom jobs.
• Fixed Position Layout: The product remains stationary; equipment/workers move around it.
• Group/Cellular Layout: Machines are grouped to produce similar items; used in lean manufacturing.

4. What are the principles of material handling?

Material handling must:
• Minimize Movement: Reduce unnecessary transport of materials.
• Use Gravity: Rely on gravity flow where possible.
• Avoid Rehandling: Material should be moved only once, if possible.
• Ensure Safety: Movement systems should be safe for workers.
• Enhance Productivity: Mechanize repetitive handling to save time and effort.
• Select Right Equipment: Choose cost-effective and appropriate tools.
• Optimize Layout: Design the plant for easy and direct material flow.

5. Briefly explain the role of ergonomics in job design.

Ergonomics ensures the job fits the worker:
• Designing Tools and Workstations: Tools should minimize strain and repetitive motion.
• Reducing Fatigue: Proper postures and breaks enhance long-term productivity.
• Safety Enhancements: Reduces injuries and improves compliance.
• Improved Morale: A comfortable worker is more motivated and efficient.
• Adaptability: Ergonomic systems are more flexible for diverse workers.

10 MARKS QUESTIONS (Approx. 500+ words)

1. Explain the steps and techniques used in Plant Location decisions.

Plant location decisions significantly influence a firm's efficiency, cost structure, and market responsiveness.
To choose the best site, organizations follow structured approaches:
Steps in Location Decision
1. Choose the General Region
Consider climate, industrial infrastructure, and proximity to customers or suppliers.
For example, automobile industries may prefer regions like Pune or Chennai due to supplier hubs.
2. Select the Community
Assess labor availability, education levels, housing, and community services.
3. Choose the Specific Site
Evaluate land cost, zoning laws, environmental regulations, and accessibility.
4. Conduct Cost-Benefit Analysis
Compare long-term cost implications for multiple locations using decision techniques.

Techniques of Location Analysis

1. Factor Rating Method
o Assign weights to location factors (e.g., labor, transport).
o Rate each site and compute total scores.
o The site with the highest score is chosen.
2. Center of Gravity Method
o Uses coordinates and transport volume to find a central location.
o Ideal for warehouses/distribution centers.

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3. Break-Even Analysis
o Compares fixed and variable costs at different volumes for each site.
o The site with the lowest cost at expected output is preferred.
4. Cost-Profit-Volume Analysis
o Examines how cost varies with output across multiple sites.
o Helps in understanding risk and return.

Multiplant Location Decision

Companies may choose multiple locations for:
• Market proximity
• Production specialization
• Political/regional balance
• Transport and cost advantages
• Redundancy and risk management

Trends in Plant Location

• Industrial Corridors and SEZs: Many companies prefer government-supported zones.
• Logistics-Centric Sites: Plants near ports/highways for faster delivery.
• Tech Hub Clustering: Proximity to R&D centers or IT clusters for high-tech industries.
• Sustainability: Firms now consider environmental impact and carbon footprint.

2. Explain the principles and types of Plant Layouts with reference to layout factors and ergonomics.
A plant layout is a blueprint for arranging equipment, departments, and workers within a facility. It determines
how materials flow and how efficiently work is done.

Principles of Good Layout

1. Minimum Movement: Reduce travel distance of men and material.
2. Safety and Comfort: Design to avoid accidents and improve job satisfaction.
3. Future Flexibility: Enable expansion or change in operations.
4. Economical Handling: Materials and tools should be easy to reach.
5. Effective Supervision: Layout should allow easy monitoring.

Layout Factors
• Type of Production: Batch or mass production determines layout type.
• Product Nature: Size, weight, and volume impact space needs.
• Material Flow: The path and direction of material movement.
• Equipment Availability: Space and utilities for machines.
• Space Constraints: Land size, zoning, and expansion scope.

Types of Layouts
1. Product Layout: Sequential arrangement—best for repetitive manufacturing.
2. Process Layout: Function-based grouping—ideal for varied/custom production.
3. Fixed Position Layout: Product stays in one place—used for large-scale items.
4. Group Layout: Based on product families—supports lean systems.

Principles of Material Handling

• Eliminate unnecessary movement
• Choose right equipment
• Ensure safety and efficiency
• Automate wherever possible
• Plan layout to minimize handling

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Role of Ergonomics
• Workstation Design: Adjust heights, angles, and reach zones to reduce fatigue.
• Tool Design: Use lightweight, well-gripped tools.
• Task Rotation: Avoid repetitive strain by diversifying tasks.
• Lighting and Temperature: Optimize for comfort and alertness.
• Worker Satisfaction: Ergonomic design leads to better morale and efficiency.

UNIT III: INVENTORY CONTROL AND MAINTENANCE

2 MARKS QUESTIONS (Approx. 50 words)

1. What is Economic Order Quantity (EOQ)?
EOQ is the optimal quantity that minimizes total inventory costs, including ordering and holding costs.
2. Define Reorder Point.
The inventory level at which a new order must be placed to avoid stockout during lead time.
3. What is Safety Stock?
Extra inventory kept to avoid shortages due to demand or lead time variability.
4. What is ABC Classification?
It categorizes inventory into A (high value), B (medium value), and C (low value) for control purposes.
5. What is Economic Batch Quantity (EBQ)?
EBQ is used in batch production where goods are produced and stored; it minimizes total setup and
holding costs.
6. What is MRP?
Material Requirements Planning is a system for planning inventory needs based on production
schedules.
7. What is Just-In-Time (JIT)?
JIT is an inventory strategy where materials are received just in time for production, minimizing storage.
8. What is preventive maintenance?
Maintenance done regularly to avoid equipment breakdown and ensure continuous operation.
9. Define breakdown maintenance.
Reactive maintenance performed after a machine or system fails.
10. What is codification of stock?
Systematic naming and numbering of inventory items for easy identification and control.

6 MARKS QUESTIONS (Approx. 250 words)

1. Explain the components of inventory costs.

Inventory costs are broadly categorized as:
• Ordering Cost: Cost incurred every time an order is placed (e.g., paperwork, transportation).
• Holding Cost: Cost of storing inventory (e.g., warehousing, insurance, depreciation).
• Shortage Cost: Losses due to stockouts like lost sales or delayed production.
• Purchase Cost: The actual cost of goods purchased from suppliers.
Efficient inventory management balances all these costs to optimize overall expense.

2. What is ABC Classification? How is it useful?

ABC Classification helps prioritize inventory management efforts:
• A Items: High value, low quantity—tight control required.
• B Items: Moderate value and control.
• C Items: Low value, high quantity—simpler control.
Uses:
• Focus on high-value items
• Efficient stock audit

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• Better resource allocation

• Improved inventory turnover

3. Explain the differences between Preventive and Breakdown Maintenance.

Aspect Preventive Breakdown
Definition Scheduled maintenance to avoid failures Maintenance after equipment fails
Cost Planned and spread out Often higher due to emergencies
Downtime Reduced Increased
Reliability Improved Unpredictable
Suitability Critical machinery Less critical equipment
Preventive maintenance enhances reliability and extends equipment life.

4. Explain the concept and need for Safety Stock.

Safety stock is the buffer maintained to avoid stockouts. It's necessary when:
• Demand is unpredictable
• Lead time fluctuates
• There’s a risk of supplier delays
It ensures smooth operations, improves customer satisfaction, and helps avoid production halts.

5. What is codification and classification of stock?

• Codification: Assigning alphanumeric codes to items for easy tracking and control.
• Classification: Grouping items based on use, type, or value (e.g., raw materials, tools, spares).
Benefits include efficient stock handling, better planning, and simplified audits.

10 MARKS QUESTIONS (Approx. 500+ words)

1. Explain EOQ, EBQ, Reorder Point, Safety Stock, and Inventory Costs.
Inventory control ensures the right stock is available at the right time, quantity, and cost. Key inventory
concepts are:
Economic Order Quantity (EOQ)
EOQ determines the order size that minimizes total inventory cost.
• Formula:
EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS
Where:
D = Demand, S = Ordering cost, H = Holding cost
• Benefits:
o Reduces total cost
o Balances ordering and holding costs
o Avoids stockouts and overstocking

Economic Batch Quantity (EBQ)

Used when products are manufactured in batches rather than ordered.
• Formula:
EBQ=2DSH(1−d/p)EBQ = \sqrt{\frac{2DS}{H(1 - d/p)}}EBQ=H(1−d/p)2DS
d = daily demand, p = daily production rate
• Ideal for: In-house production environments with setup time and cost.

Reorder Point
Reorder Point = Lead time × Daily usage rate
• Purpose:
o Trigger new order placement

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o Avoid stockouts during lead time

o Based on consistent lead time and demand

Safety Stock
Safety stock acts as a buffer to absorb demand and lead time variability.
• Calculation:
Based on desired service level and variability in demand/lead time.
• Advantages:
o Ensures availability
o Reduces lost sales
o Supports service level targets
Inventory Costs
1. Ordering Costs: Fixed costs for placing and processing orders.
2. Holding Costs: Cost of carrying inventory—includes rent, insurance, deterioration.
3. Stockout Costs: Cost from inability to meet demand—lost goodwill, rush shipping.
4. Purchase Costs: Direct item cost; sometimes discounts offered for bulk purchases.

2. Explain MRP, JIT, ABC Classification, and implications of Supply Chain Management.
Effective inventory control uses strategic tools and practices:
Materials Requirement Planning (MRP)
MRP is a software-based system for production planning and inventory control.
• Functions:
o Calculates material needs based on production schedule
o Considers inventory levels and lead times
o Ensures timely purchase and production
• Advantages:
o Avoids overstocking
o Aligns inventory with demand
o Reduces wastage

Just-In-Time (JIT)
JIT reduces inventory levels by ordering goods only when needed.
• Key Concepts:
o Zero inventory
o High quality and timely supply
o Streamlined production
• Benefits:
o Reduces holding costs
o Improves cash flow
o Minimizes wastage and space usage
• Challenges:
o Requires dependable suppliers
o Risk of stockouts if delays occur

ABC Classification
• A Items: 10–15% of items, 70–80% of value
• B Items: 30% of items, 15% of value
• C Items: 50–60% of items, 5–10% of value
Purpose: Focus resources on critical inventory, reduce cost, and simplify control.

Implications of Supply Chain Management (SCM)

• Inventory Visibility: Real-time tracking enables better control.

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• Cost Efficiency: Coordinated supply chain reduces holding, transport, and delay costs.
• Demand Forecasting: Helps plan production and procurement.
• Supplier Relationships: Reliable SCM ensures timely inputs and improves JIT performance.
• Global Sourcing: SCM adapts to complex international networks.
SCM plays a pivotal role in ensuring smooth and economical inventory flow.

3. Explain Group vs Individual Replacement, Breakdown Time Distribution, and Maintenance Procedures.

Group vs Individual Replacement

Aspect Individual Group
Timing Replace on failure Replace all at fixed time
Cost Higher for large numbers Lower for bulk replacements
Use When failure is random For cost-effective bulk parts (e.g., bulbs)

Breakdown Time Distribution

• Definition: Statistical distribution of time between equipment failures
• Common Distributions:
o Exponential
o Weibull
• Use: Helps forecast maintenance needs and plan replacements

Maintenance Cost Balance

• Goal: Balance preventive costs with failure costs
• Too much maintenance: Wastes time/resources
• Too little maintenance: Increases downtime
Optimal balance ensures reliability without over-investing in maintenance.

Procedure for Maintenance

1. Identify critical equipment
2. Create preventive maintenance schedules
3. Maintain logs and records
4. Train operators for basic upkeep
5. Use sensors for predictive maintenance
6. Review performance and update plans regularly
Well-planned maintenance reduces costs, prevents breakdowns, and enhances equipment life.

UNIT IV: DESIGN OF WORK SYSTEMS AND QUALITY CONTROL

2 MARKS QUESTIONS (Approx. 50 words)

1. What is work study?
Work study is a systematic examination of work processes to improve productivity and efficiency by
optimizing methods and measuring performance.
2. What is method study?
Method study is the analysis of how a task is performed to develop a more efficient and safe method of
execution.
3. Define motion study.
Motion study analyzes body movements during work to eliminate unnecessary motions and reduce
fatigue.

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4. What is time study?

Time study is the process of determining the standard time required to perform a task using a
stopwatch and observing a qualified worker.
5. What is performance rating?
A factor used to adjust the observed time in time study based on the speed and effort level of the
worker compared to a standard.
6. Define allowance factor.
An added time margin in time study to cover personal needs, fatigue, and unavoidable delays.
7. What is standard time?
The total time allowed to complete a task, including normal time and allowances.
8. What is work sampling?
A technique that involves random observations of work over time to determine the proportion of time
spent on different activities.
9. What is acceptance sampling?
A statistical method of inspecting a sample from a batch to decide whether to accept or reject the
entire lot.
10. What is an Operating Characteristic (OC) Curve?
A graph showing the probability of accepting lots at various quality levels during acceptance sampling.

6 MARKS QUESTIONS (Approx. 250 words)

1. Explain the objectives and procedure of work study.

Objectives:
• Improve productivity and efficiency
• Eliminate unnecessary tasks
• Standardize best practices
• Set fair work targets
• Improve resource utilization
Procedure:
1. Select the job/process to study
2. Record current methods and times
3. Examine critically (why, what, how, when, where)
4. Develop better methods
5. Measure time using time study or sampling
6. Define standard time
7. Implement and monitor improvements

2. Differentiate between method study and motion study.

Aspect Method Study Motion Study
Objective Improve the method of doing work Eliminate unnecessary body movements
Focus Task steps and sequence Human motions involved in task
Tools Used Flowcharts, process charts SIMO charts, camera analysis
Outcome More effective process Less fatigue, improved efficiency
Both are part of work study and aim to enhance productivity.

3. Explain time study, performance rating, and allowance factors.

• Time Study: Uses stopwatch to determine time taken for a task. Observations are averaged to find
normal time.
• Performance Rating: Adjusts observed time based on worker speed vs. standard (e.g., 120% fast →
adjust time down).
• Allowances:

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o Personal: Breaks for personal needs

o Fatigue: Rest due to physical/mental strain
o Delay: Time lost in unavoidable interruptions
Standard Time = Normal Time + Allowances

4. What is work sampling and how is it useful?

Work sampling is a statistical method where random observations are taken over time to determine how a
worker spends time.
Uses:
• Identify time spent on productive vs. non-productive tasks
• Plan workload distribution
• Improve time allocation
• Useful in non-repetitive jobs
Formula Example:
Proportion=Number of observations in activityTotal observations\text{Proportion} = \frac{\text{Number of
observations in activity}}{\text{Total
observations}}Proportion=Total observationsNumber of observations in activity

5. Explain the types of inspection in quality control.

1. Incoming Inspection: Checks raw materials before production
2. In-process Inspection: Conducted during production to detect early errors
3. Final Inspection: Done after production before dispatch
4. Statistical Inspection: Uses sampling techniques to accept or reject lots
Each inspection type improves product quality and reduces waste or recalls.

10 MARKS QUESTIONS (Approx. 500+ words)

1. Explain method study and motion study in detail, including procedure and tools.
Method Study
Method study aims to improve the way a job is done. It looks at the task itself—steps, tools, sequence—to
eliminate inefficiencies.
Procedure:
1. Select the Task: Choose a repetitive or problematic task.
2. Record: Use process charts, flow diagrams to map the current method.
3. Examine: Ask questions like Why? What? How? When?
4. Develop: Create a better method based on efficiency, safety, and comfort.
5. Evaluate and Install: Trial and implement the new method.
6. Maintain: Train staff and monitor changes.
Tools Used:
• Process chart
• Flow diagram
• Operation analysis chart

Motion Study
Motion study focuses on human movements. It analyzes body motions to remove unnecessary movements,
reduce fatigue, and save time.
Objectives:
• Improve ergonomics
• Simplify job motions
• Ensure safety and reduce effort
• Improve speed and reduce fatigue
Tools Used:

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• SIMO Chart (Simultaneous Motion Chart)

• Micro-motion studies using camera recordings
• Therbligs (basic motion elements identified by Gilbreths)

Combined Benefits of Method and Motion Study:

• Standardized efficient methods
• Reduced cycle time
• Higher productivity
• Better workplace design
• Safer, healthier work environment

2. Describe time study, performance rating, standard time, allowance factors, and work sampling.
Time and motion studies help determine labor standards.

Time Study
Uses stopwatch to record task times.
Steps:
• Select the job
• Break into elements
• Record time for each
• Take average and apply performance rating
• Add allowances to get standard time

Performance Rating
Worker speed is compared to a benchmark (normal pace = 100%).
• If worker is faster (e.g., 120%), time is reduced.
• Ensures fairness in time measurement.

Allowance Factors
Extra time is added to normal time to allow for:
• Personal Time: Restroom, water
• Fatigue: Physical/mental strain
• Delays: Tool change, minor breakdowns
Standard Time = Normal Time + Allowances

Work Sampling
Estimates the proportion of time spent on tasks by randomly observing work over time.
Uses:
• Non-repetitive jobs
• Long-cycle tasks
• Support activities
Example:
If 60 out of 100 observations show productive work → 60% utilization.

3. Explain the purpose of inspection and quality control, types of inspection, acceptance sampling, OC
curve, and control charts.

Purpose of Inspection and Quality Control

• Detect defects early
• Ensure customer satisfaction
• Prevent faulty product delivery
• Maintain process standards

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• Reduce wastage and rework

Types of Inspection
• Incoming: Checks raw materials
• In-process: Ongoing monitoring
• Final: Verifies finished product
• Statistical: Sample-based decisions

Acceptance Sampling
Statistical method where a sample is inspected to accept/reject the entire lot.
Advantages:
• Saves time and cost
• Practical for large volumes
Drawback:
• Risk of accepting bad or rejecting good batches

Operating Characteristic (OC) Curve

Graph shows the probability of accepting lots at different defect levels.
• Helps managers visualize the risk of acceptance/rejection
• Shows producer and consumer risks
• Ideal OC curve has a sharp slope

Control Charts
Used to monitor process variation.
1. Variables Charts: For measurable data
o X-bar Chart: Average of samples
o R Chart: Range within samples
2. Attributes Charts: For countable data
o P Chart: Defective proportion
o C Chart: Defects per unit
Purpose: Identify trends, shifts, or out-of-control processes.

UNIT V: SERVICE OPERATIONS MANAGEMENT

2 MARKS QUESTIONS (Approx. 50 words)

1. What is Services Management?
Services Management involves planning, organizing, and controlling resources to deliver quality service
experiences and satisfy customers efficiently.
2. Define service encounter.
A service encounter is the interaction between the customer and service provider during the delivery of
a service.
3. What is service blueprinting?
Service blueprinting is a visual mapping technique that outlines the service process, customer
interactions, and support systems.
4. What is meant by service process?
It refers to the series of activities involved in delivering a service to the customer.
5. Mention any two types of services.
o Professional services (e.g., consulting)
o Mass services (e.g., banking)

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6. What is waiting line analysis?

Also called queuing theory, it studies customer waiting lines to improve service efficiency and reduce
delays.
7. Define service facility layout.
The physical arrangement of equipment, counters, seating, and workflow in a service center to optimize
experience and efficiency.
8. What is productivity?
Productivity is the ratio of output to input in a system, indicating operational efficiency.
9. What is service delivery?
It is the actual performance and execution of a service, meeting customer expectations in real-time.
10. Mention two goals of designing service organizations.
• Enhance customer satisfaction
• Improve operational efficiency

6 MARKS QUESTIONS (Approx. 250 words)

1. Explain the nature and types of services.

Nature of Services:
• Intangibility: Services can’t be touched or stored.
• Inseparability: Service production and consumption occur simultaneously.
• Perishability: Services cannot be inventoried or stored.
• Heterogeneity: Service quality can vary by provider or customer.
Types of Services:
1. Professional Services: Customized and knowledge-based (e.g., legal, medical).
2. Mass Services: Standardized and high-volume (e.g., transport, banking).
3. Service Shops: Mix of customization and volume (e.g., car repair).
4. People vs. Equipment-based Services: Classified by delivery mechanism.
Understanding service types helps managers design appropriate delivery systems and layouts.

2. Describe the components of a service encounter.

A service encounter is the point where the service provider and customer interact. Components include:
• Customer Contact: The degree of physical or virtual interaction (e.g., face-to-face or online).
• Service Provider Behavior: Courtesy, responsiveness, and professionalism.
• Physical Environment: Ambience, cleanliness, comfort of the service area.
• Time and Duration: How long the interaction lasts and its efficiency.
• Technology Use: Digital tools, self-service kiosks, or chatbots.
Effective service encounters create positive impressions, brand loyalty, and customer satisfaction.

3. What is service blueprinting? What are its key elements?

Service blueprinting is a diagram that visualizes the service delivery process.
Key Elements:
• Customer Actions: Steps the customer takes during service.
• Frontstage (Visible Contact): Employee actions visible to the customer.
• Backstage (Invisible Contact): Internal processes not seen by the customer.
• Support Processes: Activities from other departments that aid delivery.
• Lines of Interaction: Boundaries between customer and provider.
• Lines of Visibility: Differentiate visible and hidden tasks.
Benefits:
• Clarifies roles and processes
• Identifies bottlenecks
• Helps in training and process redesign

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4. Explain the importance of service facility layout.

A good layout in service organizations ensures:
• Efficient Workflow: Minimizes unnecessary movement or delay.
• Customer Comfort: Seating, signage, and ambience improve satisfaction.
• Operational Control: Smooth coordination between departments.
• Flexibility: Easy modification for demand fluctuations.
• Technology Integration: Space for devices like self-check-ins.
Examples include banks (teller queues), hospitals (departmental layouts), and restaurants (kitchen-dining
layout).

5. Describe the concept of waiting line analysis.

Waiting line analysis or queuing theory studies how customers wait for service.
Key Elements:
• Arrival Rate (λ): Average number of customers arriving.
• Service Rate (μ): Average number served per time unit.
• Queue Discipline: Order in which customers are served (e.g., FIFO).
• Number of Servers: Affects wait times and customer experience.
Use:
• Design counters or tellers
• Predict wait times
• Reduce customer dissatisfaction
It helps balance cost of capacity and waiting time.

10 MARKS QUESTIONS (Approx. 500+ words)

1. Explain service design and layout considerations, including service delivery, facility location, and
service processes.
Service Design Overview
Service design defines how services are created, planned, and delivered. It includes facility layout, service
flow, employee roles, and customer interaction.

Designing Service Organizations

Design involves:
• Service Concept: What is being offered? (e.g., fast food vs. fine dining)
• Target Market: Who is it for?
• Process Design: Steps involved in service delivery
• Capacity Planning: Handling peak demand
• Technology Use: Online portals, kiosks, CRM systems

Facility Location
Location impacts cost, accessibility, and customer volume.
Factors include:
• Proximity to customers
• Rent and utilities
• Competitor presence
• Accessibility by transport
• Demographics and foot traffic
E.g., Coffee chains select high-visibility urban corners.

Facility Layout
Layout must ensure:
• Smooth customer flow

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• Efficient staff movement

• Comfort and aesthetics
• Visibility of services (e.g., open kitchen, visible teller desk)
Types of Layouts:
• Fixed-Position Layout: For customized services (e.g., surgeries)
• Process Layout: For varied services (e.g., hospitals)
• Product Layout: Repetitive services (e.g., drive-thrus)
Service Processes
A service process is a series of steps to deliver service from start to finish. It includes:
• Customer Request
• Order Processing
• Service Execution
• Feedback Collection
A good process reduces delays and ensures consistency.
Service Delivery
It is the execution of services as designed.
• Front-office Delivery: Visible to customers (e.g., cashier interaction)
• Back-office Support: Invisible but essential (e.g., kitchen or server systems)
• Delivery Channels: In-person, online, phone, mobile app
Consistency, speed, and empathy are vital in service delivery.

2. Explain waiting line analysis and service improvement techniques with examples.
Waiting line analysis helps optimize customer wait times and resource allocation.
Elements of a Queue
• Customer Population: Finite or infinite
• Arrival Pattern: Poisson (random) is common
• Service Mechanism: Single or multiple servers
• Queue Discipline: FIFO, LIFO, priority

Key Metrics
• Average number in system (L)
• Average time in system (W)
• Utilization rate = λ / (s × μ)
where λ = arrival rate, μ = service rate, s = servers

Service Improvement Techniques

1. Increase Service Speed: Train staff, automate processes
2. Add More Service Channels: Additional counters or self-check kiosks
3. Segment Customers: VIP lanes, express checkouts
4. Inform and Engage: Display wait times, offer entertainment
5. Redesign Process: Remove bottlenecks, parallel processing

Practical Applications
• Hospitals: Prioritize emergency patients
• Banks: Token-based systems reduce perceived wait
• Call Centres: Route calls based on customer history

Benefits
• Enhanced customer satisfaction
• Reduced walkouts
• Better resource use
• Data-driven decision-making

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