TECHNICAL UNIVERSITY OF KENYA (TUK)

UNIVERSITY EXAMINATIONS FEBRUARY 2016

FIRST YEAR FIRST SEMESTER EXAMINATION FOR
MASTER OF TECHNOLOGY (MTech) IN MECHANICAL ENGINEERING TECHNOLOGY
EMMU 7141 MANUFACTURING ENGINEERING AND PRODUCTION MANAGEMENT

DATE:

TIME: 3 HOURS

INSTRUCTIONS TO CANDIDATES
You should have the following for this examination.
Answer book-let.
Mathematical tables/calculator.

This paper contains EIGHT questions.

Answer any FIVE Questions
All Questions have equal marks
Maximum marks for each part of a question are as indicated.

Page 1 of 25

Q1. a) Explain what is forecasting and its importance in industry.

(3 marks)

b) Explain the steps involved in capacity planning. Explain EITHER the long-term OR
the short-term capacity planning strategies.
(7 marks)
c) A company intends to buy a machine having a capacity to produce 198,000 good
parts per annum. The machine constitutes a part of the total product line. The system
efficiency of the product line is 90%.
(3 marks)
i)
ii)

Find the system capacity;

If the time required in producing each part is 100 seconds and the machine
works for 2,200 hours per year. If the utilization of the machine is 65% and
the efficiency of the machine is 85%, compute the output of the machine;
iii) Calculate the number of machines required?
d) Three components are to be manufactured on centre lathes:
i)
Calculate the number of lathes required to produce the components if the
plant works for 50 hours per week, four weeks a month.
ii)
Calculate the number of lathes required assuming the machine efficiency of
75% and operator efficiency of 80%.
iii)
How do you reduce the number of machines?
The following information is given:
Component Type
A
B
C
Total Machining Time per Lot
30min
60min
40mi
n
Setup Time per component
2min
3min
4min
Batch/lot Size
350
400
600
Quantity Demand per Month
2000
4000
3000
(7 marks)
(a) Forecasting is the process of estimating a variable, such as the sale of the firm at some future date.
Forecasting is important to business firm/industry, government, and non-profit organization as a
method of reducing the risk and uncertainty inherent in most managerial decisions. A firm must decide
how much of each product to produce, what price to charge, and how much to spend on advertising,
and planning for the growth of the firm.

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Modern organizations require short-term, medium-term and long-term forecasts, depending on the
specific application. Short-term forecasts are needed for the scheduling of personnel, production
and transportation. Medium-term forecasts are needed to determine future resource requirements,
in order to purchase raw materials, hire personnel, or buy machinery and equipment. Long-term
forecasts are used in strategic planning; such decisions must take account of market opportunities,
environmental factors and internal resources.
(3 marks)
(b) Steps Involved in Capacity Planning: Capacity planning is concerned with defining the longterm and the short-term capacity needs of the organization and determining how those needs will be
satisfied. Capacity planning decisions are taken based upon the consumer demand (market) and this is
merged with the human, material and financial resources of the organization. The steps involved in
capacity planning are shown in the figure below.
Environment
al Scanning

Implementatio
n

Demand
Forecasting

Select
the Best
Plans

Estimation of
Present
Capacity
Quantitative and
Economic Analysis of
Various Plans

Alternative
Capacity Plans to
meet Demand

[2 marks]

Long-Term and Short-Term Capacity Strategies

(i) Long-term capacity strategies: Long-term capacity requirements are more difficult to determine
because the future demand and technology are uncertain. Forecasting for Five or Ten years into the
future is more risky and difficult. Even sometimes company's today's products may not be existing in
the future. Long range capacity requirements are dependent on marketing plans, product development
and life-cycle of the product. Long-term capacity planning is concerned with accommodating major
changes that affect overall level of the output in long-term (more than one year). Marketing
environmental assessment and implementing the long-term capacity plans in a systematic manner are
the major responsibilities of management.
The long-term capacity strategies used are:
Multiple products: Companys produce more than one product using the same facilities in
order to increase the profit. The manufacturing of multiple products will reduce the risk of
failure. Having more than one product helps the capacity planners to do a better job. Because
products are in different stages of their life-cycles, it is easy to schedule them to get maximum
capacity utilization.
Phasing in Capacity: In high technology industries where technology developments are very
fast, the rate of obsolescence is high. The products should be brought into the market quickly.
The time to construct the facilities will be long and there is no much time as the products
should be introduced into the market quickly. Here the solution is phase in capacity on modular
basis. Some commitment is made for building funds and men towards facilities over a period of
3-5 years. This is an effective way of capitalizing on technological breakthrough.
Phasing out capacity: The outdated manufacturing facilities cause excessive plant closures
and down time. The impact of closures is not limited to only fixed costs of plant and machinery.
Thus, the phasing out here is done with humanistic way without affecting the community. The
phasing out options makes alternative arrangements for men like shifting them to other jobs
and/or to other locations, compensating the employees, etc.
Page 3 of 25

[5 marks]
(ii) Short-term capacity strategies: Managers often use forecasts of product demand to estimate the
short-term workload the facility must handle. Managers looking ahead up to 12 months, anticipate
output requirements for different products, and services. Managers then compare requirements with
existing capacity and then take decisions as to when the capacity adjustments are needed.
For short term periods of up to one year, fundamental capacity is fixed. Major facilities will not be
changed. Many short term adjustments for increasing or decreasing capacity are possible. The
adjustments to be required depend upon the conversion process like whether it is capital intensive or
labour intensive or whether product can be stored as inventory.
Capital intensive processes depend on physical facilities, plant and equipment. Short-term capacity
can be modified by operating these facilities more or less intensively than normal. In labour intensive
processes short-term capacity can be changed by laying off or hiring people or by giving overtime to
workers. The strategies for changing capacity also depend upon how long the product can be stored
as inventory.
The short-term capacity strategies are:
Inventories: Stock finished goods during slack periods to meet the demand during peak
periods.
Backlogs: During peak periods, the willing customers are requested to wait, and their orders
are after the peak period demand.
Employment level (hiring and firing): Hire additional employees during peak demand period
and layoff employees as demand decreases.
Employee training: Develop multi-skilled employees through training so that they can be
rotated among different jobs. The multi-skilling helps as an alternative to hiring employees.
Workforce utilization: Employees are made to work overtime during peak hours and work
fewer hours during slack hours (flexible work hours).
Subcontracting: During peak periods, hire the capacity of other firms temporarily to make the
component parts or products.
Process design: Change job content by redesigning the job.
Maintenance: Temporarily discontinue routine maintenance so that this time can be utilized
for production.
[5 marks]
(c) (i) System Capacity = (Actual output per annum /System efficiency
= 198,000/0.90 = 220,000 units/annum = 220,000/2,200 = 100 units/hr
(ii) Output per annum = Unit capacity x % utilization x efficiency
= Unit capacity = (60 x 60 sec)/100 sec per unit = 36 units
Output per hour = 36 x 0.65 x 0.85 = 19.89 units 20 units.
(iii) Number of machines required = System capacity/Output per hour = 100/20 = 5 machines
[3 marks]
(d) Number of machines required
i) Total time required for produce the components on the centre lathe is given by:
Total time required = Machining time + Setup time.
For component A
Total time required = Setup time + operation time

Page 4 of 25

= 69.52 hours

For component B,

Total time required =

For component C,

= 210 hours

Total time required =

= 203.33 hours
Total time required to process all the three components
= 69.52 + 210 + 203.33 = 482.85 hours
Total number of hours available per month = 50 x 4 = 200 hours.
No. of lathes required = (Total time required)/(Total numbers of hours available)
= 482.85/200 = 2.4 i.e. 3 lathes
ii) Assuming a machine efficiency of 75% and operator efficiency of 80%, the number of machine
required are: Total time required per month = 482.85/(0.75 x 0.80) = 804.75 hours,
Number of lathes required = 804.75/200 = 4 machines
(iii) Reduction in number of machines
By introducing a second and third shift, the number of hours available will be increased and
hence the number of lathes required will be reduced.
By increasing the utilization of the lathe. The availability of the machine will be increased by
proper maintenance which reduces the break down and hence the down time. The production
time will be increased and hence the plant utilization.
[7 marks]

Q2. (a) Describe five main phases of a project life cycle.

(5 marks)

(b) Discuss the nature and importance of a work breakdown structure in project
management.
(4 marks)
(c) The activities involved in a small project are given below along with relevant
information and conditions. Construct the network and determine:
i. The length of each path,
ii. The critical path,
iii. The expected length of the project,
iv. Amount of slack time for each path, and
v. The float for each activity.
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Condition: Activity 4-6 cannot be started before both activities 1-3 and 1-4 are
completed; Activity 6-7 cannot be started before both activities 2-5 and 4-6 are
completed.
Activity 1-2
1-3
1- 4
2-5
4-6
5-7
6-7
7-8
Duratio 28
10
6
6
14
4
6
4
n
(Days)
(11 marks)
(a) Project Life Cycle: The size, length, and scope of projects vary widely according to the nature and
purpose of the project. Nevertheless, all projects have something in common: They go through a life
cycle, which typically consists of five phases.
i) Concept, at which point the organization recognizes the need for a project or responds to a
request for a proposal from a potential customer or client;
ii)Feasibility analysis, which examines the expected costs, benefits, and risks of undertaking the
project;
iii) Planning, which spells out the details of the work and provides estimates of the necessary
human resources, time, and cost;
iv) Execution, during which the project itself is done. This phase often accounts for the majority of
time and resources consumed by a project;
v) Termination, during which closure is achieved. Termination can involve reassigning personnel
and dealing with any leftover materials, equipment (e.g., selling or transferring equipment), and
any other resources associated with the project.
[5 marks]
(b) Work Breakdown Schedule: Because large projects usually involve a very large number of
activities, planners need some way to determine exactly what will need to be done so that they can
realistically estimate how long it will take to complete the various elements of the project and how
much it will cost. This is often accomplished by developing a work breakdown structure (WBS),
which is a hierarchical listing of what must be done during the project. This methodology establishes a
logical framework for identifying the required activities for the project:
i) The first step in developing the work breakdown structure is to identify the major elements of
the project.
ii) The next step is to identify the major supporting activities for each of the major elements.
iii) Then, each major supporting activity is broken down into a list of the activities that will be
needed to accomplish it.
iv) The work breakdown structure becomes the focal point for planning the project.
[4 marks]
(c) The Network Diagram
Activit
y
1-2 (C)
1-3 (B)
1-4 (A)
2-5 (D)
4-6 (E)

Immediate
Predecessor

Duration
in weeks

1-2
1-3,1-4

14
10
6
6
14

Page 6 of 25

5-7 (G)
6-7 F)
7-8 (H)

2-5
2-5, 4-6
4-6, 5-7

4
6
4

ES Earliest start; EF Earliest Finish; LS Latest start; LF Latest finish;

Slack = LF EF

i) The lengths of the paths are: A-E-F-H =6+14+6+4 = 30 weeks;

C-D-G-H = 14+6+4+4 = 28 weeks;
C-D-F-H =14+6+6+4 = 30 weeks; and
B-E-F-H = 10+14+6+4 = 34 weeks.
ii) Critical path is: B-E-F-H
iii) The expected length of the project (duration) = 10+14+6+4 = 34 weeks
iv) Amount of slack time for each path:
A-E-F-H = 34 - 30 = 4 weeks;
C-D-G-H = 34 - 28 = 6 weeks;
C-D-F-H = 34 - 30 = 4 weeks; and
B-E-F-H = 34 34 = 0.
v) The float for each activity is as shown on the table below.
Activity
A
B
C
D
E
F
G
H
D1
D2

Duration
6
10
14
6
14
6
4
4
0
0

ES
0
0
0
14
10
24
20
30
10
20

EF
6
10
14
20
24
30
24
34
10
20

LS
4
0
4
18
10
24
26
30
10
24

LF
10
10
18
24
24
30
30
34
10
24

Slack
4
0
4
4
0
0
6
0
0
4
[11 marks]

Q3. (a) Describe the four stages that are necessary for the success of TQM
implementation process.
(6 marks)
Page 7 of 25

(b) State and explain five principles that all enterprises are expected to adhere to for the
successful TQM implementation.
(5 marks)
(c) List any five basic quality control tools and describe any three of them. (6 marks)
(d) Outline the relationship between Quality and Productivity.

(3 marks)

(a) Stages of Implementation of TQM

The process of implementing TQM in an organization can be organized in the following four stages:
(i) Identification and Preparation
This stage is concerned with identifying and collecting information about the organization in the
prime areas where improvement will have most impact on the organizations performance and
preparing the detailed basic work for the improvement of the organizations activities. It is also
important to find out the cost of quality, which incorporates the total cost of waste, error correction,
failure appraisal and prevention in the organization. It is also required to understand the views and
opinions of the customers, suppliers the managers and the employees. The differences between their
views and opinions will provide an idea of the scale of the problem and task ahead. The measurements of the cost of quality made at the beginning of the TQM process can be compared with
measurement at a later stage to establish the achieved improvements. The initial measurements of the
costs will also indicate the potential areas for improvement and direct efforts towards the areas where
they are most needed. All data and information must therefore be identified, prepared and summarized
in a manner to ensure that the managers get the correct information to make their decision.
(ii) Management Understanding
This step is concerned with making sure that the management understands the objective and
methodology of TQM and is ready to adopt them all the time. For many companies, TQM means a
major change in the management practice and it is difficult to implement over a short period of time.
However, to make a significant change in management practice, it is necessary to educate the managers
in their understanding and approach to TQM. Once they have mastered the principle and practice of
TQM the managers can then demonstrate their total commitment and take the lead in the quality
improvement process.
(iii) Scheme for Improvement
This stage is concerned with identifying quality issues and affects a resolution of them by management
led improvement activities. To develop quality improvement scheme, it is necessary to identify the
quality problems in each division, in each department and throughout the whole organization. A
scheme of training for improvement can be established after the realization of the following aspects of
the organization. They are:
Purpose of the department,
Customers and suppliers relationship,
Meeting customer needs,
Problem causes and best solutions,
Prevention of recurring problems,
Customer satisfaction,
Priorities for improving efficiency
At this stage it is essential to know that any scheme for improvement requires substantial investment in
training, management time and communication.
(iv) Critical Analysis
Page 8 of 25

This stage starts with new targets and. take the complete improvement process to everybody indicating
supplier and customer links in the quality chain. It also obtains information about progress and
consolidates success. To focus quality aspects, everybody in the organization must assess the TQM
process. It is essential to incorporate the perception of both internal and external customers. It is also
important to ensure that everybody in the organization gets some feedback of the success on a regular
basis and at the same time the individual and team contributions are given the recognition. Setting up
of new targets as required by customers at this stage will automatically upgrade the quality standard of
the organization and maintain the competitive position in the market place.
[6 marks]
(b) Major Principles of Total Quality Management (TQM)
Different companies have different approaches to implementing TQM. However, the following
principles must be adhered to by all enterprises for the successful TQM implementation:
1. Continuous improvement. TQM is a long-term process that entails achieving improvements in
the company's operations. This means that management should establish targets for improvement
and measure progress by using reliable criteria. The quest for quality and better service to the
customer should be a continual, never-ending one. Competitors will seek to provide better
service and customers will come to expect it. Hence, to cease improvement efforts will likely
lead to loss of competitive advantage and a decreased level of customer satisfaction.
2. Customer focus. In TQM, the customer is believed to be the ultimate judge of quality.
Therefore, the company must remain close to the customer and understand how he or she views
and judges quality.
3. Strategic planning and leadership. Achieving quality and market leadership requires a viable
competitive strategy that outlines goals and desired outcomes. Moreover, senior executives
should be responsible for introducing and supporting TQM programs.
4. Competitive benchmarking. This means identifying companies or other organizations that are
the best at something and then modeling your own organization after them. The company need
not be in the same line of business as yours.
5. Employee empowerment. TQM is based on humanistic management principles that suggest
employee involvement and participation is essential for success. Giving workers the
responsibility for improvements and the authority to make changes to accomplish them provides
strong motivation for employees. This puts decision making into the hands of those who are
closest to the job and have considerable insight into problems and solutions. Empowered to
bring about changes in their workplace, employees can creatively contribute to their company's
well-being.
6. Teamwork approach. The use of teams for problem solving and to achieve consensus takes
advantage of group thinking, gets people involved, and promotes a spirit of cooperation and
shared values among employees. Further, teamwork creates opportunities for learning and
exchanging ideas.
7. Knowledge of tools. Everyone in the organization is trained in the use of quality control and
improvement tools.
Any five = 1x5 = 5
[5 marks]

(c) Quality control tools:

Page 9 of 25

There are seven basic quality tools used in organizations: Flow charts, Histogram, Cause and
Effect Diagram, Check Sheet, Scatter Diagram, Control Charts, and Pareto Charts. Most
organizations use quality tools for various purposes related to controlling and assuring quality.
1. Flow Charts
This is used for analyzing a sequence of events. The tool maps out a sequence of events that take
place sequentially or in parallel. The flow chart can be used to understand a complex process in order
to find the relationships and dependencies between events, e.g.,

2. Histogram
Histogram is used for illustrating the frequency and the extent in the context of two variables.
Histogram is a chart with columns. This represents the distribution by mean. If the histogram is
normal, the graph takes the shape of a bell curve. If it is not normal, it may take different shapes based
on the condition of the distribution. Histogram can be used to measure something against another
thing. Always, it should be two variables, say X and Y, e.g.,

Page 10 of 25

3. Cause and Effect Diagram

Cause and effect diagrams (Ishikawa Diagram) are used for understanding organizational or business
problem causes. Organizations face problems every day and it is required to understand the causes of
these problems in order to solve them effectively. Cause and effect diagrams exercise is usually
teamwork. A brainstorming session is required in order to come up with an effective cause and effect
diagram. All the main components of a problem area are listed and possible causes from each area is
listed. Then, most likely causes of the problems are identified to carry out further analysis.

4. Check Sheet
A check sheet can be introduced as the most basic tool for quality. A check sheet is basically used for
gathering and organizing data. When this is done with the help of software packages such as
Microsoft Excel, you can derive further analysis graphs and automate through macros available.
Therefore, it is always a good idea to use a software check sheet for information gathering and
organizing needs.

Page 11 of 25

5. Scatter Diagram
When it comes to the values of two variables, scatter diagrams are the best way to present. Scatter
diagrams present the relationship between two variables and illustrate the results on a Cartesian plane.
Then, further analysis, such as trend analysis can be performed on the values. In these diagrams, one
variable denotes one axis and another variable denotes the other axis.

6. Control Charts
Control chart is the best tool for monitoring the performance of a process. These types of charts can
be used for monitoring any processes related to function of the organization. These charts allow you
to identify the following conditions related to the process that has been monitored:
Page 12 of 25

Stability of the process

Predictability of the process

Identification of common cause of variation

Special conditions where the monitoring party needs to react

7. Pareto Charts
Pareto charts are used for identifying a set of priorities. You can chart any number of issues/variables
related to a specific concern and record the number of occurrences. This way you can figure out the
parameters that have the highest impact on the specific concern. This helps you to work on the
propriety issues in order to get the condition under control.

(Any three 2 x 3 = 6marks)

(d) The relationship between Quality and Productivity.
When quality increases, the productivity also improves. This is because wastes and rework are
reduced, and inputs are optimally utilized. Higher productivity enables an organization to reduce price
Page 13 of 25

and gain competitive advantage both in terms of price and quality. Customers also feel happy as they
get value for their money. Since organizations bottom line improves, it raises the satisfaction level of
all stakeholders, including employees. Saving the cost of quality will have an immediate effect on the
enhanced productivity of an organization. All these establish that quality and productivity are indirectly
related.
[3 marks]

Q4. Write short notes on the following:

a) Material Requirement planning
b) Materials handling
c) Difference between Financial and Management accounting
d) Contract administration
e) Business Process Reengineering (BPR)
f) JIT and its characteristics

(4 marks)
(3 marks)
(4 marks)
(3 marks)
(3 marks)
(3 marks)

a) Material Requirement planning

Material requirements planning (MRP) is a computer-based inventory management system designed to
assist production managers in scheduling and placing orders for items of dependent demand.
Dependent demand items are components of finished goodssuch as raw materials, component parts,
and subassembliesfor which the amount of inventory needed depends on the level of production of
the final product. For example, in a plant that manufactured bicycles, dependent demand inventory
items might include aluminum, tires, seats, and bike chains.
MRP works backward from a production plan for finished goods to develop requirements for
components and raw materials. MRP begins with a schedule for finished goods that is converted into a
schedule of requirements for the subassemblies, the component parts, and the raw materials needed to
produce the final product within the established schedule. MRP is designed to answer three
questions: what is needed? how much is needed? and when is it needed?"
MRP breaks down inventory requirements into planning periods so that production can be completed
in a timely manner while inventory levelsand related carrying costsare kept to a minimum.
Implemented and used properly, it can help production managers to plan for capacity needs and
allocate production time. But MRP systems can be time consuming and costly to implement, which
may put them out of range for some small businesses.
(4 marks)
b) Materials handling
Material handling is the movement, protection, storage and control of materials and products
throughout manufacturing, warehousing, distribution, consumption and disposal. Material handling
incorporates a wide range of manual, semi-automated and automated equipment and systems that
support logistics and make the supply chain work. Their application helps with Forecasting, Resource
allocation, Production planning, Flow and process management, Inventory management and control,
Customer delivery, and After-sales support and service. A companys material handling system and
processes are put in place to improve customer service, reduce inventory, shorten delivery time, and
Page 14 of 25

lower overall handling costs in manufacturing, distribution and transportation. On an average, 20% of
production cost is spent on material handling system.
(3 marks)
c) Difference between Financial and Cost accounting
Accounting is the process of identifying, measuring and communicating economic information to
permit informed judgements and decisions by users of the information. Keeping track of records and
creating a summary of financial transactions is called bookkeeping; when this information is produced
and displayed in reports for the use of the public outside the company, this process is called Financial
Accounting. The main purpose of financial accounting is to prepare profit and loss account and
balance sheet for reporting to owners or shareholders and other outside agencies. The main objectives
of financial accounting are to disclose the end results of the business, and the financial condition of the
business on a particular date.
On the other hand Cost Accounting is the process of identifying, analyzing, recording and presenting
financial information that is used internally by the management for planning, decision making and
control. The main purpose of cost accounting is to provide detailed cost information to management
i.e. internal users. The main objective of managerial accounting is to help management by providing
information that is used to plan, set goals and evaluate these goals.
(4 marks)
d) Contract management or contract administration is the management of contracts made with
customers, vendors, partners, or employees. The personnel involved in Contract Administration is
required to negotiate, support and manage contracts effectively. Contract management includes
negotiating the terms and conditions in contracts and ensuring compliance with the terms and
conditions, as well as documenting and agreeing on any changes or amendments that may arise during
its implementation or execution. It can be summarized as the process of systematically and efficiently
managing contract creation, execution, and analysis for the purpose of maximizing financial and
operational performance and minimizing risk.
(3 marks)
e) Business Process Reengineering (BPR)
Business Process Reengineering (BPR) is the practice of rethinking and redesigning the way work is
done to better support an organization's mission and reduce costs. BPR seeks to help companies
radically restructure their organizations by focusing on the ground-up design of their business
processes. Re-engineering emphasized a holistic focus on business objectives and how processes
related to them, encouraging full-scale recreation of processes rather than iterative optimization of subprocesses. Reengineering starts with a high-level assessment of the organization's mission, strategic
goals, and customer needs. Basic questions are asked, such as "Does our mission need to be redefined?
Are our strategic goals aligned with our mission? Who are our customers?" An organization may find
that it is operating on questionable assumptions, particularly in terms of the wants and needs of its
customers. Only after the organization rethinks what it should be doing, does it go on to decide how
best to do it.
(3 marks)

(f) Just-In-Time (JIT)

Page 15 of 25

Just-In-Time (JIT) manufacturing is a process by which companies dont keep lots of excess
inventory; instead, they manufacture a product as an order comes in. It is a management philosophy of
continuous and forced problem solving. The objective of JIT manufacturing system is to:

Eliminate waste that is, minimize the amount of equipment, materials, parts, space, and
workers time, which adds a great value to the product
Increase productivity

Characteristics of JIT: The consequent savings are to be utilized for reducing cost and rendering
better service to the customer. The seven wastes to be eliminated according to JIT are over production,
Inventory, Waiting time, Movement, Effort, Defective products, and Over processing.
(3 marks)

Q5. a) Briefly describe any five managerial functions in an Industrial Organization.

(7marks)
b) Define Industrial Engineering and State its basic objectives.
(3marks)
c) Outline the main functions of Industrial Engineers
(4marks)
d) Explain the relationship between worker Motivation and Productivity. What can be
done by management to increase personnel productivity?
(5 marks)

(a) Managerial functions in an organization:

i) Planning determines the mission and goals of the business, including the ways in which the
goals are to be attained, and the resources needed for this task. It includes determining the
future position of the business, and guidelines or plans on how that position is to be reached
ii) Organising-developing a framework or organisational structure to indicate how personnel,
equipment and materials are to be employed to attain the predetermined goals
iii) Staffing - staffing involves manning the organization structure through proper and effective
selection, appraisal and development of the personnels to fill the roles assigned to the
employers/workforce.
iv) Directing or Leading entails giving orders to the human resources of the business and
motivating them to direct their actions in conformity with the goals and plans
v) Control means that managers should constantly check whether the business is properly on
course toward the accomplishment of its goals. Controlling involves Establishing standards of
performance, Measuring current performance and comparing it against the established standard,
and Taking corrective action that does not meet the standard.
vi) Co-ordination is the unification, integration, synchronization of the efforts of group members
so as to provide unity of action in the pursuit of common goals. Coordination helps to Maintain
Good Human Relations, Unify Efforts, Promote Mutual Understanding, and Get Concurrence
Any five functions 1 x 5
(7 marks)
(b) Definition of Industrial Engineering: It is a branch of engineering dealing with the optimization
of complex processes or systems. It is concerned with the development, improvement, implementation
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and evaluation of integrated systems of people, money, knowledge, information, equipment, energy,
materials, analysis and synthesis, as well as the mathematical, physical and social sciences.
The basic objectives of Industrial Engineering departments are:
i) To establish methods for improving the operations and controlling the production costs, and
ii) To develop programmes for reducing these costs.
(3marks)
(c) Main functions of Industrial Engineers
i) Industrial engineers (IEs) apply science, mathematics, and engineering methods to complex
system integration and operations.
ii) Industrial engineers use their knowledge and skills to improve systematic processes through
the use of statistical analysis, interpersonal communication, design, planning, quality
control, operations management, computer simulation, and problem solving.
iii) Industrial engineers are the only engineering professionals trained specifically to be
productivity and quality improvement specialists.
iv) Industrial engineers figure out how to do things better: They engineer processes and systems
that improve quality and productivity; and they work to eliminate waste of time, money,
materials, energy and other commodities.
(4marks)
(d) Relationship between Motivation and Productivity
The success of every organization is dependent upon the employees work performance, loyalty,
commitment, etc. The best way to ensure employees' commitment and loyalty is motivation. If
employees are fully satisfied with their job and highly motivated then work performance, efficiency
and productivity level increase. Motivation requires discovering and understanding employee drives
and needs, since it originates within an individual:
i) Employee motivation is directly linked to employee commitment, personnel productivity and
business profits.
ii) Motivation levels within the workplace have a direct impact on employee productivity.
iii) Most employees need motivation to feel good about their jobs and perform optimally.
iv) Unmotivated employees are likely to spread little or no effort in their job.
v) The employees were highly motivated due to intrinsic motivational factors like: Recognition,
self-satisfaction, etc.
(3 marks)
Suggestions for increasing personnel productivity through motivation are depicted below:
i)
Consistently provide career advancement and development opportunities of employees.
ii)
Paying performance related bonuses and financial incentives or rewards.
iii)
Run employees personalize recognition programs, such as: Gift vouchers, tickets to a concert.
iv)
Given more responsibility and make all employees feel their jobs are important.
(2 marks)
Q6. (a) Define work design, and state what is involved in it. Describe the components of work study,
and state its importance.
(5 marks)
(b) State the relationships between Job evaluation and merit rating

(2 marks)

(c) Describe the two methods of wage payments.

(4 marks)

(d) State what you understand by incentive scheme, and explain the different types of incentive
schemes used by enterprises.
marks)
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(4

(e) Examine the Concept of Job Analysis and Job Description. Explain briefly how job analysis and
job description are important for Human Resource Planning, Selection, Performance Appraisal and
Training.
(5 marks)
(a) Work Study forms the basis for work system design. The purpose of work design is to identify the
most effective means of achieving necessary functions. Work design involves job design, work
measurement and the establishment of time standards and worker compensation.
[1 marks]
Work Study is encompassed by two techniques - method study and work measurement (time study):
i) Method study is the systematic recording and critical examination of existing and proposed
ways of doing work, as a means of developing and applying easier and methods and reducing
costs.
ii) Work measurement (or Time study) is the application of techniques designed to establish the
time for a qualified worker to carry out a specified job at a defined level of performance.
Work study aims at improving the existing and proposed ways of doing work and establishing standard
times for work performance.
[2 marks]
Importance of Work-Study
i) Work study is a means of enhancing the production efficiency (productivity) of the firm by
elimination of waste and unnecessary operations.
ii) It is a technique to identify non-value adding operations by investigation of all the factors
affecting the job.
iii) It is the only accurate and systematic procedure oriented technique to establish time standards.
iv) It is going to contribute to the profit as the savings will start immediately and continue
throughout the life of the product.
v) It is applied universally.
[2 marks]
(b) The relationships between Job evaluation and merit rating:
Job evaluation is a process to determine in a systematic manner and analytically the worth of each job
in the organization based upon the set of carefully selected factors such as skill, effort and
responsibility demanded by the job and translating these worth of jobs into monetary terms (i.e., pay
and wages). Job evaluation aims at providing a means of establishing a wage structure acceptable to
both workers and management.
Job evaluation evaluates the job and the merit rating assesses the worth of a person performing the
job. Merit rating is also called the performance appraisal. It evaluates and controls, and reviews the
performance. Both job evaluation and performance appraisal are aimed at systematically determining
the wage rates paid to the employees
[2 marks]
(c) Methods of wage payments
There are two basic methods of wage payments or compensation:
i) Wage payment on time basis: Under this method, wages are paid to the employee based the time
for which he/she works. In this system the workers are paid for the time they work irrespective of
output. This system is applicable where output is not quantifiable and it is not the criteria of payment,
where work is of not repetitive type.
[2 marks]
ii) Wage payment on the basis of output (piece rate system): In this system, wages are paid
employees in relation to the output produced. This method is very convenient where each individual
worker is capable of performing his work without any dependence on the other workers and the output
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produced will be quantifiable. This method can be applied where output is standardized, and the work
is of repetitive nature.
[2 marks]
(d) Incentive Schemes
Incentive schemes are intended to increase workers motivation by allowing them proportionately
higher returns from greater efforts. A wage incentive plan is a method of payment which directly
relates earning to production. This is a system that enables workers to increase their earning by
maintaining or exceeding an established standard of performance. Incentive Schemes are the tools
management use to stimulate the production by encouraging workers to produce more than average in
accordance with their productivity. Incentive plans are of two basic types: Financial incentives, which
comprise rewards that are paid to the employees efforts in cash; and Non-financial incentives, which
comprise non-monetary incentives (other than cash e.g., gift items, discount coupons, special holidays,
etc.)
[4 marks]
(e) Job analysis is the systematic study of jobs to determine what activities and responsibilities they
include, their relative importance in comparison with other jobs, the personal qualifications necessary
for performance of the jobs and the conditions under which the work is performed. An important
concept in job analysis is that an evaluation is conducted of the job, not the person doing the job (even
though some job analysis data may be collected from incumbents).

Job description is a very useful document that describes a list of a jobs duties, functions, roles, and
tasks, reporting relationships, working conditions and supervisory responsibilities etc., it is one product
of job analysis.

The success of every organization is dependent upon the performance of its employees. Ideally, all of
the jobs in an organization should interrelate to optimize the achievement of the organizations
mission, goals and objectives. As a result, job analysis (and by extension job description) is considered
by many HR practice leaders to be a pivotal aspect of effective human resources administration and
planning. It has the potential to impact every major core competency area of HR, for better or for
worse, depending on the adequacy of the underlying job analysis practices in place within the
organization. Job analysis data can and are used to identify the knowledge, skills and expertise required
to effectively perform job assignments, establish criteria for selection and promotions, design
objectives for training and development programs, develop the standards for the measurement of
performance, and/or assist with the determination of pay classification levels.
[5 marks]

Q7. (a) Define and explain in detail what is meant by Material Management. (2marks)
(b) Describe five main steps in the purchasing cycle of a manufacturing plant.(7 marks)
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(c) What are the primary reasons for holding inventory?

(2marks)

(d) State any six selective inventory control techniques and discuss any three of them.
(4 marks)

(e) What do you understand by Economic Order Quantity (EOQ)? A motor vehicle
repair workshop purchases 9000 similar spares per year for servicing of Toyota cars.
They pay KES 500/= per spare, KES 1,500/= fixed charge every time they order, and an
inventory cost per spare held averaging KES 300/= per year. In the workshop is
operated for 300 days in a year determine:
i) the EOQ
ii) Number of orders per year
iii) Length of Order cycle
iv) The total cost
Show that the EOQ is always in the best order for the workshop
(3 marks)
(a) Definition of Material Management
Materials Management is the planning, directing, controlling and coordinating those activities which
are concerned with materials and inventory requirements, from the point of their inception to their
introduction into the manufacturing process. Thus, material management is an important function of an
organization covering various aspects of input process, i.e., it deals with raw materials, procurement of
machines and other equipments necessary for the production process and spare parts for the
maintenance of the plant. Thus in a production process materials management can be considered as an
preliminary to transformation process.
Materials Management involves planning and programming for the procurement of material and
capital goods of desired quality and specification at reasonable price and at the required time. It is also
concerned with market exploration for the items to be purchased to have up to date information, stores
and stock control, inspection of the material received in the enterprise, transportation and material
handling operations related to materials and many other functions.
[2 marks]
(b) The purchasing cycle begins with a request from within the organization to purchase material,
equipment, supplies, or other items from outside the organization, and the cycle ends when the
purchasing department is notified that a shipment has been received in satisfactory condition. The main
steps in the cycle are:
i)
The requisition is received by purchasing: The requisition includes (a) a description of the item
or material desired, (b) the quantity and quality necessary, (c) desired delivery dates, and (d)
who is requesting the purchase.
ii)
A supplier is selected: The purchasing department must identify suppliers who have the
capability of supplying the desired goods. If no suppliers are currently listed in the files, new
ones must be sought. Vendor ratings may be referred to in choosing among vendors, or
perhaps rating information can be relayed to the vendor with the thought of upgrading future
performance.
iii) The order is placed with a vendor: If the order involves a large expenditure, particularly for a
one-time purchase of equipment, for example, vendors will usually be asked to bid on the job,
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iv)

v)

and operating and design personnel may be asked to assist in negotiations with a vendor.
Large-volume, continuous-usage items may be covered by blanket purchase orders, which
often involve annual negotiation of prices with deliveries subject to request throughout the
year. Moderate-volume items may also have blanket purchase orders, or they may be handled
on an individual basis. Small purchases may be handled directly between the operating unit
requesting the item and the supplier, although some control must be exercised over those
purchases or else they could get out of hand.
Monitoring orders: Routine follow-up on orders, particularly large orders or those with lengthy
delivery schedules, allows the purchasing department to foresee delays and relay this
information to the appropriate operating units. Likewise, changes in quantity and delivery
needs of the operating units must be relayed to suppliers so they have time to adjust their
plans.
Receiving orders: Incoming shipments from vendors must be checked for quality and quantity.
Purchasing, accounting, and the operating unit that requested the goods must be notified. If the
goods are not received in satisfactory condition, they may have to be returned to the supplier
for credit or replacement, or subjected to detailed inspection. Again, purchasing, accounting,
and the operating unit must be notified. In either case, vendor evaluation records must be
updated.
[7 marks]

(c) Reason for Keeping Inventories

(i)
To stabilize production: The demand for an item fluctuates because of the number of factors
e.g., seasonality, production schedule etc. The inventories (raw materials and components)
should be made available to the production as per the demand failing which results in stock out
and the production stoppage takes place for want of materials. Hence, the inventory is kept to
take care of this fluctuation so that the production is smooth.
(ii)
To take advantage of price discounts: Usually the manufacturers offer discount for bulk
buying and to gain this price advantage the materials are bought in bulk even though it is not
required immediately. Thus, inventory is maintained to gain economy in purchasing.
(iii)
To meet the demand during the replenishment period: The lead-time for procurement of
materials depends upon many factors like location of the source, demand supply condition, etc.
So inventory is maintained to meet the demand during the procurement (replenishment) period.
(iv)
To prevent loss of orders (sales): In this competitive scenario, one has to meet the delivery
schedules at 100 per cent service level, means they cannot afford to miss the delivery schedule,
which may result in loss of sales. To avoid this organizations have to maintain inventories.
(v)
To keep pace with changing market conditions: The organizations have to anticipate the
changing market sentiments and they have to stock materials in anticipation of non-availability
of materials or sudden increase in prices.
Other reasons: Sometimes the organizations have to stock materials due to other reasons like
suppliers minimum quantity condition, seasonal availability of materials or sudden increase in prices.
[2 marks]
(d) Inventory control techniques
Some of the most important techniques of inventory control system are: i) Setting up of various stock
levels. ii) Preparations of inventory budgets. iii). Maintaining perpetual inventory system. iv)
Establishing proper purchase procedures. v) Inventory turnover ratios, and vi) ABC analysis.

Page 21 of 25

i)

Setting up of various stock levels:

To avoid over-stocking and under stocking of materials, the management has to decide about the
maximum level, minimum level, re-order level, danger level and average level of materials to be kept
in the store.
ii)

Preparation of Inventory Budgets:

Organizations having huge material requirement normally prepare purchase budgets. The purchase
budget should be prepared well in advance. The budget for production and consumable material and
for capital and maintenance material should be separately prepared.
Sales budget generally provide the basis for preparation of production plans. Therefore, the first step in
the preparation of a purchase budget is the establishment of sales budget.
iii)

Maintaining Perpetual Inventory System:

This is another technique to exercise control over inventory. It is also known as automatic inventory
system. The basic objective of this system is to make available details about the quantity and value of
stock of each item at all times. Thus, this system provides a rigid control over stock of materials as
physical stock can be regularly verified with the stock records kept in the stores and the cost office.
iv)

Establishing Proper Purchase Procedures:

A proper purchase procedure has to be established and adopted to ensure necessary inventory control.
The steps involved are (a) Purchase Requisition, (b) Inviting Quotations, (c) Schedule of Quotations,
(d) Approving the supplier, (e) Purchase Order.
v)

Inventory Turnover Ratio:

These are calculated to minimize the inventory by the use of the following formula - Inventory
Turnover Ratio = Cost of goods consumed/sold during the period/Average inventory held during the
period. The ratio indicates how quickly the inventory is used for production. Higher the ratio, shorter
will be the duration of inventory at the factory. It is the index of efficiency of material management.
Perpetual inventory control system - In a large b essential to have information about continuous
availability of different types of materials and stores purchased, issued and their balance in hand. The
perpetual inventory control system enables the manufacturer to know about the availability of these
materials and stores without undergoing the cumbersome process of physical stock taking.
vi)

ABC analysis:

In order to exercise effective control over materials, A.B.C. (Always Better Control) method is of
immense use. Under this method materials are classified into three categories in accordance with their
respective values. Group A constitutes costly items which may be only 10 to 20% of the total items
but account for about 50% of the total value of the stores. A greater degree of control is exercised to
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preserve these items. Group B consists of items which constitutes 20 to 30% of the store items and
represent about 30% of the total value of stores. A reasonable degree of care may be taken in order to
control these items. In the last category i.e. group Q about 70 to 80% of the items is covered costing
about 20% of the total value. This can be referred to as residuary category.
[4 marks]
(e) Economic Order Quantity (EOQ)
The economic order quantity (EOQ) is the order quantity that minimizes total holding and ordering
costs for the year. Even if all the assumptions dont hold exactly, the EOQ gives us a good indication of
whether or not current order quantities are reasonable.
Calculation:
Let, = purchase unit price = KES 500/=;
= Economic Order Quantity (EOQ) = Q (Order
quantity); = annual demand quantity = 9000 units;
= fixed cost per order, setup cost = KES 1500/=;
= annual holding cost per unit = KES 300/=
i)
EOQ = Q* = 2 DK / h = 2 x 9000 x 1500/300 = 300 spares
ii)
iii)
iv)

To = Number of orders per year = D/EOQ = 9000/300 = 30 orders

Length of order cycle = EOQ/To = 300/30 = 10 days
Total cost, TC = PD + DK/EOQ + hQ*/2 = 500x9000 + 9000x1500/300 + 300x300/2
= 4,500,000 + 45,000 + 45,000
= KES 4,590,000/=

If the order quantity is, say 350 units (i.e., more than EOQ): TC = KES 4,591,071.43,
and If the order quantity is, say 280 units (i.e., less than EOQ): TC = KES 4,590,214.29;
in both cases TC is more than KES 4,590,000/= when Q = Q* (EOQ), thus showing that
the EOQ is always in the best order for the workshop
[3 marks]
Q8. a) State the importance of the techniques and tools used in Product Design and Development.
These techniques and tools are classified into two broad groups: Techniques and Tools for Design
Improvement; and Computational Techniques and Tools. List all of them under their respective
classification.
[6 marks]
(b) List all the steps necessary for product development, and discuss any three.
[5 marks]
(c) What is the difference between value analysis and value engineering?
[3 marks]
(d) What is difference between creative idea and innovation?
[3 marks]
(e) How are ergonomic considerations useful in product design?
[3 marks]
a) Techniques and tools used in product design and development
Product design contributes greatly to the improvement of competitiveness, because it permits reduction
of costs, increase of quality, and often, shortening of the time necessary to get the product on the
market. The product, in turn, generally satisfies customers necessities and demands. The techniques
and tools that are currently in use in Product Design and Development can be classified into two broad
groups: Techniques and Tools for Design Improvement; and Computational Techniques and Tools.
[2 marks]
1. Techniques and Tools for Design Improvement
These provide the company with analytical techniques and tools designed to analyze the product
concept in the context of its restrictions. Main techniques of this group are: i) Concurrent Engineering;
ii) Quality Function Deployment (QFD); iii) Design for (DfX); iv) Failure Mode and Effects Analysis
(FMEA)
[2 marks]
2. Computational Techniques and Tools
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These are techniques that support design integration through shared product and process models, and
databases. The advantages of using effectively Computational Techniques and Tools are to allow
different teams to share information and to manage all data required to proceed on the process. Main
techniques of this group are: i) Aided (CAx) Systems; ii) Engineering/Product Based Data
Management (E/P BDM); iii) Knowledge Based Engineering (KBE); iv) Finite Element Analysis
(FEA); v) Rapid Prototyping (RP)
[2 marks]
(b) The steps necessary for product development
Product development steps vary based on the nature of the business and the management style, but
most businesses follow seven main steps in the development process; these are Product Idea
Brainstorming, Evaluate the Ideas, Market Evaluation, Analysis, Prototype and Marketing, Market
Testing and Prepare for Launch
[2 marks]
i)
Product Idea Brainstorming
The first step is to generate an idea for the product. Ask employees, especially those who deal with
customers regularly, for product ideas. Survey customers for feedback on existing products. Examine
your industry to see whether there are areas where useful products do not exist. Create an online survey
for your customers or social media fans to take. List all ideas for a new product.
ii)
Evaluate the Ideas
Make a list of product ideas and share it with the appropriate decision-makers in the company, such as
the management team. Discuss the pros and cons of each idea and narrow the list to just a handful of
the best ideas, based on their potential to generate revenue, as well as the time and resources you have
to actually create the products.
iii)
Market Evaluation
Seek feedback from customers, employees and partners on which idea is most appealing. Ask
customers for feedback via email or phone calls. Send an email to partners and employees and ask
which of the products seems most useful or valuable. Whittle the list to just one or two product ideas.
iv)
Analysis
Analyze the remaining product idea from a business perspective. Determine how much, if any,
competition exists for similar products. Determine the demand for the product, and estimate all costs
affiliated with the product, such as development costs and operational costs, to help determine the
profit margin.
v)
Prototype and Marketing
Develop a prototype of the product, and then share it with a handful of good customers and key
partners. Ask them to try it out and provide feedback. The marketing team should use that feedback to
craft marketing messages and developing marketing campaign ideas, such as email campaigns,
websites, billboards or posters. Base the marketing messages on the most common positive comments
or reactions from customers and partners during the prototype evaluation.
vi)
Market Testing
Make adjustments to the prototype or develop a new version, if necessary. Develop additional
prototypes for market testing. Do a small product release in select areas. See whether the product sells
well, and evaluate why sales are high or low. Evaluate the price and the effectiveness of the marketing
messages. A small launch helps determine what needs to be done before an official launch.
vii)
Prepare for Launch
Begin production for the first round of the product launch. Evaluate how many products to produce
based on your market testing and demand for the product. Advertise and speak to product distributors
about ordering the product, if the product will be sold in stores.
Any two to be described 2x 1 = 3
[3marks]
(c) What is the difference between value analysis and value engineering?
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Value Analysis can be defined as a process of systematic review that is applied to existing product
designs in order to compare the function of the product required by a customer to meet their
requirements at the lowest cost consistent with the specified performance and reliability needed.
Value engineering is the term applied to value analysis done at the design and prototype stage of a
product; the potentials of saving are a more in case value analysis is done at design stage. Other
advantages are that any changes at this stage are less costly than to effect the same at a latter stage,
when the production is in full swing.
[3marks]
(d) Difference between Creativity and Innovation
Its easy to get confused between creativity and innovation. In many ways they rely on each other. To
be creative, an individual, group, or company must be able to come up with new ideas. But to be
innovative, they need to act on these ideas.
Creativity: Creativity can be a form of expression, a way of solving problems, or the creation of new
ideas. As the name suggests, creativity is about creation. Its about harnessing the power of the mind to
conceive new ideas, products plans, thought experiments, tastes, sensations, or art. Anyone can be
creative, and in any context.
Innovation: Innovation, on the other hand, needs stability and establishment. Its about changing a
common or long-standing process by improving it. Its only by having a status quo in existence that
you can develop it in order to innovate. So, while creativity and innovation share strong links, the
processes are entirely different. Innovation is about taking newly created ideas and developing them
into something useful and practical. In many ways, innovation is the process of converting theory into
action.
[3marks]
(e) Ergonomic considerations useful in product design
Ergonomics is a science focused on the study of human fit, and decreased fatigue and discomfort
through product design. Ergonomics applied to office furniture design requires that we take into
consideration how the products we design fit the people that are using them. At work, at school, or at
home, when products fit the user, the result can be more comfort, higher productivity, and less stress.
Ergonomics can be an integral part of design, manufacturing, and use. Knowing how the study of
anthropometry, posture, repetitive motion, and workspace design affects the user is critical to a better
understanding of ergonomics as they relate to end-user needs.
Anthropometry is the science that measures the range of body sizes in a population. When designing
products it is important to remember that people come in many sizes and shapes. Anthropometric data
varies considerably between regional populations. For example, Scandinavian populations tend to be
taller, while Asian and Italian populations tend to be shorter. There are common postures found in the
office environment that can be considered when designing workplace products or space; these postures
are Standing, Sitting, Reaching and Moving.
[3 marks]

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