Spring 2015 Exam July/Aug 2015

Masters of Business Administration

Semester 2
MB0044 PRODUCTION AND OPERATION
MANAGEMENT
Assignments
BK ID: B1627
Q.1: Write short notes on:

Environmental scanning as a basis for strategic decision making

Tools for implementation of operations

Differentiation strategies as a basis of decision making

Core competencies as a basis of decision making

Ans. 1
Environmental scanning as a basis for strategic decision making:

The business environment of any organisation includes the industry, marketplace,

governmental agencies, society, ecology, technology, and others. Organisations
should be aware of the business environment in which the firm exists, and have
to compete continually by exhibiting potential for opportunities and threats.
Being aware of those, and their impact on the firm by a process of analysis, is
called environmental scanning.
Tools for implementation of operations:

All functions in the organisation including administration, finance, materials,

purchase, marketing, production, logistics, communication, and others can be
considered as operations. The reason is that all of them use some inputs like

materials or information either on a person-to-person basis or

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through a flow line. They are required to use some process and convert them into
outputs usable in the next stage of the value chain.
Differentiation strategies as a basis of decision making:

Differentiation is a process by which a company distinguishes itself from its

competitors

and their offerings. The process

includes adding a set of

differentiators, which are meaningful, and adds value for the customer. The
differences should be perceived by the customer as important, distinctive,
superior, and affordable. Further, the differentiators have to make the o pa ys
offeri gs (the products and services) profitable.
Core competencies as a basis of decision making:
Each organization is

started by an entrepreneur or a

small group of

entrepreneurs. The objective is to use their unique strengths to create and

develop an organisation. These unique strengths are the core-competencies of
the organization.
Outline of the main points of the topic:
For any topic work to be undertaken, it is good practice to prepare an outline of
the topic. The outline is the template of the topic preparation.
Analyse the topic:
Analysis the procedure to monitor and control of project is a must.
Conclude with your opinion:
The opinion of a group of experts should be collected and used as an estimate to
obtain the forecast.
Q.2: Answer the following questions:
1. What is forecasting?
2. What are the benefits of forecasting?

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3. What are the cost implications of forecasting?

4. List the different types of forecasting methods.
Ans.2

Definition of Forecasting:

Forecasting is an art because subjective assessment coupled with historical and

contemporary judgment is required to improve the accuracy of forecasts. It is a
science because wide variety of numerical methods are used to obtain a number
or several numbers and f urther analysed using mathematical models to
ascertain the accuracy of forecast.
b. Benefits of forecasting:

Forecasting basically helps to overcome the uncertainty about the demand and
thus provides a workable solution. Without the forecast, no production function
can be taken up. Hence, it can be stated that forecasting helps to:
1

Improve employee relations

Improve materials management

Get better use of capital and facilities

Improve customer service

c. Discuss the cost implications of forecasting:

Forecasting requires special efforts and involves inputs from experts which cost a
lot to the companies. Well-trained experts and associations substantially invest in
human resources and hence charge their clients for the service rendered. Thus,
forecasting

done

in-house

or

carried

out

externally

requires

significant

investments. Thus, it can be said that more the efforts put for forecasting, more
will be the cost of forecasting. Because of improved accuracy and better

judgment,
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the losses that would occur because of poor forecasting would decrease as more
efforts are put in for forecasting. Hence, higher the efforts, lower will be the
losses. Because effort is a direct function of forecasting, this cost goes up with
increase in the forecasting efforts.
d. List the forecasting methods based on the context or focus:

The forecasting methods can be classified based on the context or focus. The
different forecasting methods are discussed below. Based on the type of
database, the forecasting methods can be classified into 2.
They are:
1

Quantitative (Statistical forecasting)

Qualitative (Subjective estimation)

Based on the forecast time period, the forecasting methods can be

classified into 3. They are:
1

Short range up to 1 year

Medium range 1 to 3 years

Long range 5 years or more

Based on the methodology, the forecasting methods can be classified into 3.

They are:
1

Time series methods

Causal methods

Predictive methods (Qualitative methods)

Q.3: Describe the process of value analysis.

Ans.
a. Data gathering:

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All relevant information concerned with the product and the parts that go to make
it are collected. The concerns at this stage are the raw materials used, its
dimensions, characteristics, availability, lead time, price, mode of transport,
storage, and the rate of consumption. All questions regarding each of them are
asked. The available information I s recorded and when information is not
available, tags can be attached for information gathering at a later date. No
information

should

be

considered

unimportant

or

irrelevant.

It

will

be

advantageous to record the source of information. Classification will be helpful.

b. Analysis and valuation of functions:

The function of each part is listed. They are categorised as basic functions and
secondary functions. The description should be cryptic two or three words. If
there are many functions that any part has to perform weightage may be given
to each of them. Considered with the cost of the part and the weight, each
function gets a value attached to it. Table 14.2 depicts a brief about the key
questions, techniques, and tasks that need to be performed in step 2.
c. Idea generation and evaluation of substitutes:

Having collected the data and analysed them and knowing the relative
importance of the functions, the next step is to identify the material or process
that is amenable to the application of value engineering. Since there are a
number of factors to be considered and to break away from the conventional
thinking, brain storming is preferred. Ideas are allowed to be submitted to the
group for discussion. A few of them will turn out to be worth more detailed
evaluation.
d. Implementation and regulation:

The decision taken after evaluation is conveyed to the top management and

clearances are obtained for implementation. Teams are formed for each
implementation and concerned persons are involved and educated about the
impending change. Their cooperation is necessary for the change to be
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effective. If any small changes are necessary when a few trials are taken, they
should be considered. After successful implementation, the change material
change or the process change becomes the new norm or standard for further
operations. The methodology adopted is on the lines of continuous improvement.

Q.4: What do ou understand

alan e does not e ist?

line alan ing ? What happens if line

Q5. Explain the steps to set data in logical order so that the
business process may be defined. List the ingredients of a business
process.

Q.6: Describe the post implementation review of a project. Explain the

tools that may be considered for post implementation review.

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