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At Johns Dry Cleaning, it takes an average of 3 hours to dry clean & press a shirt, with value-added time
estimated at 105 min. Workers are paid for a 7-hour workday but work 6 hr. / day, accounting for breaks and
lunch. Jacky completes 24 shirts per day, while the industry standard is 26 for a comparable facility. Calculate
the process velocity, labor utilization and efficiency for the organization.

Ans- Process Velocity = (Throughput Time)/(Value-added time)

= (210 minutes/shirt)/(105 minutes/shirt) = 2

Labor Utilization = (Time in Use)/(Time Available)

= (6 hr)/(7 hr) = .857 or 85.7%

Efficiency = (Actual Output)/(Standard Output)

= (24 shirts/day)/(26 shirts/day) = .923 or 92.3%

2. Explain the different performance measures for scheduling and sequencing.

Ans- Scheduling is to establish the timing of the use of equipment, facilities, and human activities in an
organization. The objective is to achieve tradeoffs among conflicting goals, which include efficient
utilization of staff, equipment, and facilities, and minimization of customer waiting time, inventories,
and process times.
Operations scheduling is the allocation of resources over time to perform a collection of tasks.
Examples of resources: Workers, Machines, Tools
Examples of tasks: Operations that bring some physical changes to material in order to eventually
manufacture products
Setups such as walking to reach the workplace, obtaining and returning tools, setting the required jigs
and fixtures, positioning and inspecting material, cleaning etc.
Demand scheduling: A type of scheduling whereby customers are assigned to a definite time for
order fulfillment.
Workforce scheduling: A type of scheduling that determines when employees work.
Operations scheduling: A type of scheduling in which jobs are assigned to workstations or
employees are assigned to jobs for specified time periods.

Performance measures for scheduling

Job flow time: The amount of time a job spends in the service or manufacturing system. Also
referred to as throughput time or time spent in the system, including service.
Makespan: The total amount of time required to complete a group of jobs.
Past due (Tardiness): The amount of time by which a job missed its due date or the percentage of
total jobs processed over some period of time that missed their due dates.
Utilization: The percentage of work time that is productively spent by an employee or machine.

Sequencing is concerned with determining both the order in which jobs are processed at various work
centers and the order in which jobs are processed at individual workstations within the work centers.
When work centers are heavily loaded, the order of processing can be very important in terms of costs
associated with jobs waiting for processing and in terms of idle time at the work centers.
Performance measures for sequencing
Job flow time: Job flow time is the length of time that begins when a job arrives at the shop, workstation,
or work center, and ends when it leaves the shop, workstation, or work center. It includes not only actual
processing time but also any time waiting to be processed, transportation time between operations, and
any waiting time related to equipment breakdowns, unavailable parts, quality problems, and so on. The
average flow time for a group of jobs is equal to the total flow time for the jobs divided by the number of
Job lateness: This is the length of time the job completion date is expected to exceed the date the job was
due or promised to a customer. If we only record differences for jobs with completion times that exceed
due dates, and assign zeros to jobs that are early, the term we use to refer to that is job tardiness.
Makespan: Makespan is the total time needed to complete a group of jobs. It is the length of time
between the start of the first job in the group and the completion of the last job in the group.
Average number of jobs: Jobs that are in a shop are considered to be work-in-process inventory. The
average work-in-process for a group of jobs can be computed using the following formula:

3. Explain the importance of holding inventory with reference to the Bullwhip Effect.

Ans- The bullwhip effect can be explained as an occurrence detected by the supply chain where orders
sent to the manufacturer and supplier create larger variance then the sales to the end customer. These
irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply
chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply
chain will over or underestimate the product demand resulting in exaggerated fluctuations.

What contributes to the bullwhip effect?

There are many factors said to cause or contribute to the bullwhip effect in supply chains; the following
list names a few:
Disorganization between each supply chain link; with ordering larger or smaller amounts of a product
than is needed due to an over or under reaction to the supply chain beforehand.
Lack of communication between each link in the supply chain makes it difficult for processes to run
smoothly. Managers can perceive a product demand quite differently within different links of the
supply chain and therefore order different quantities.
Free return policies; customers may intentionally overstate demands due to shortages and then cancel
when the supply becomes adequate again, without return forfeit retailers will continue to exaggerate
their needs and cancel orders; resulting in excess material.
Order batching; companies may not immediately place an order with their supplier; often accumulating
the demand first. Companies may order weekly or even monthly. This creates variability in the demand
as there may for instance be a surge in demand at some stage followed by no demand after.
Price variations special discounts and other cost changes can upset regular buying patterns; buyers
want to take advantage on discounts offered during a short time period, this can cause uneven
production and distorted demand information.
Demand information relying on past demand information to estimate current demand information of a
product does not take into account any fluctuations that may occur in demand over a period of time.
4. What are the assumptions made when conducting a break-even analysis?

Ans- Break-even quantity: Level of production that equates total costs to total revenues
One product is involved
Everything produced can be sold
Variable cost per unit is the same with volume
Fixed costs do not change with volume
Revenue per unit constant with volume
Revenue per unit exceeds variable cost per unit

5. Draw and explain the Product-Process grid. Provide local examples for each type of process.


Product design considerations must include the process

Intermittent processes:
Processes used to produce a variety of products with different processing requirements
in lower volumes. (such as healthcare facility)
Repetitive processes:
Processes used to produce one or a few standardized products in high volume. (such as a
cafeteria, or car wash)

Process types can be:

Project process make a one-at-a-time product exactly to customer specifications
Batch process small quantities of product in groups or batches based on customer
orders or specifications
Line process large quantities of a standard product
Continuous process very high volumes of a fully standard product

6. For an existing organization in Dubai and an international brand, describe the 4 main functions of production
and planning control.

Ans- 4 main functions of Production and Planning Control:

Planning deciding in advance what to how, when to do, and how to do it.
Routing the path the product will take on the assembly line to go from raw materials to
finished goods.
Scheduling the time and date for each operation, and also determines when products
will be ready
Dispatching after routing and scheduling is done, dispatching is the go signal to start
the process (executing the task)

Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.
Planning bridges the gap from where we are, to where we want to go. It makes it possible for things
to occur which would not otherwise happen.

Routing may be defined as the selection of path, which each part of the product will follow,
which being transformed from raw material to finished products. Routing determines the most
advantageous path to be followed for department to department and machine to machine till raw
material gets its final shape.

Scheduling determines the programme for the operations. Scheduling may be defined as 'the
fixation of time and date for each operation' as well as it determines the sequence of operations to
be followed.

Dispatching is concerned with the starting the processes. It gives necessary authority so as to
start a particular work, which has been already been planned under Routing and Scheduling.
Therefore, dispatching is Release of orders and instruction for the starting of production for any
item in acceptance with the Route sheet and Schedule Charts.

7. In aggregate production planning, what are the capacity options the management can consider when they are
interested in increasing / decreasing the production capacity of the organization?

Ans- Aggregate planning is the process of planning the quantity and timing of output over the intermediate
range (often 3 to 18 months) by adjusting the production rate, employment, inventory, and other
controllable variables. Aggregate planning links long-range and short-range planning activities.

Capacity options:
Hire and lay off workers: The extent to which operations are labor intensive determines the
impact that changes in the workforce level will have on capacity. Of the cost involved in this
option, hiring cost includes recruitment, screening, and training to bring new workers "up to
speed." And, quality may suffer. Some savings may occur if workers who have recently been laid
off are rehired. Layoff costs include severance pay, the cost of realigning the remaining
workforce, potential bad feelings toward the firm on the part of workers who have been laid off,
and some loss of morale for workers who are retained (i.e., in spite of company assurance, some
workers will believe that in time they too may be laid off). In addition, other factors having
impacts on this option include the availability of (in particular, skilled) workers and the contracts
of unions.
Overtime / slack time: The use of overtime can be especially attractive in dealing seasonal
demand peaks by reducing the need to hire and train people who will have to be laid off during
the off-season. Moreover, in situations with crews, it is often necessary to use a full crew rather
than to hire one or two additional people. It should be noted that some union contractors allow
workers to refuse overtime. Some people may not appreciate having to work on short notice or
the fluctuations in income. Overtime could also result in lower productivity, poor quality, more
accidents, and increased payroll costs. Slack time can result in less efficient use of machines and
other fixed assets. Some organizations use slack time for training. It also gives workers time for
problem solving and process improvement, while retaining skilled workers.
Part-time workers: The use of part-time workers depends on the nature of the work, training and
skills needed, and union agreements. It costs less than regular workers in hourly wages and
fringe benefits. Unions may regard such workers unfavorably because they typically do not pay
union dues and may lessen the power of unions. Contract workers, also called independent
contractors, have different pay scales and no benefits. They can be added or subtracted from the
workforce with greater ease than regular workers, giving companies greater flexibility in
adjusting the size of workforce.
Inventories: Inventory can be built up during periods when production capacity exceeds demand
and drawn down in periods when demand exceeds capacity. Inventory involves holding or
carrying those goods as inventory until they are needed. The cost is tied up that could be
invested elsewhere. Additional cost includes insurance, obsolescence, deterioration, spoilage,
breakage, and so on. Although services tend not to make use of inventories to alter capacity
requirements, a portion of the services can be done during slack periods (e.g., organize the
Subcontracting: Subtracting enables planners to acquire temporary capacity with great flexibility.
Factors to consider include availability capacity, relative expertise, quality considerations, cost,
and the amount and stability of demand. As an alternative to subcontracting, an organization
might consider outsourcing: contracting with another organization to supply some portion of the
goods or services on a regular basis.

8. Explain the various kind of costs involved in inventory management, and discuss how mismanagement of each
can escalate the cost of the product.

Ans- Carrying cost

cost of holding an item in inventory
Ordering cost
cost of replenishing inventory
Shortage cost
temporary or permanent loss of sales when demand cannot be met

9. Johnsons Rule + Gantt Chart for Johnsons Rule

Ans- Johnson's rule is a technique that managers can use to minimize the makespan for a group of jobs
to be processed on two machines or at two successive work centers (sometimes referred to as a two-
machine flow shop). It also minimizes the total idle time at the work centers.

The schedule minimizes the idle time of workstation 2 and gives the fastest repair time for all five
motors. No other sequence will produce a lower makespan.

Gantt Chart for the Morris Machine Company Repair Schedule


1 M2 M1 M4 M5 M3 Idleavailable
(4)) (12) (15) (10) (5) for further work

2 Idle M2
(5) Idle M1
0 5 10 15 20 25 30 35 40 45 50 55 60 65

10. Assumptions for Johnsons Rule

Ans- For the technique to work, several conditions must be satisfied:

Job time (including setup and processing) must be known and constant for each job at each work center.
Job times must be independent of the job sequence.
All jobs must follow the same two-step work sequence.
Job priorities can not be used.
All units in a job must be completed at the first work center before the job moves on to the second work

Determination of the optimum sequence involves these steps:

List the jobs and their times at each work center.
Select the job with the shortest time. If the shortest time is at the first work center, schedule
that job first; if the time is at the second work center, schedule the job last. Break ties arbitrarily.
Eliminate the job and its time from further consideration.
Repeat steps 2 and 3, working toward the center of the sequence until all jobs have been

11. Discuss the 9 knowledge areas of Project Management, and apply it to an organization in Dubai.

Ans- Project Management: The application of knowledge, skills, tools and techniques to project
activities to meet project requirements.
9 Knowledge areas:

The key competencies that project managers must develop.

Four core knowledge areas lead to specific project objectives (scope, time, cost, and
Four facilitating knowledge areas are the means through which the project objectives are
achieved (human resources, communication, risk, and procurement management).
One knowledge area (project integration management) affects and is affected by all of
the other knowledge areas.
All knowledge areas are important!

12. Learn how to prepare a Master Production Schedule.

Ans- A master schedule indicates the quantity and timing (i.e., delivery times) for a product, or a group
of products, but it does not show planned production. The master production schedule (MPS), as
illustrated below, indicates the quantity and timing of planned production, taking into account desired
delivery quantity and timing as well as on-hand inventory.
MPS example

A company that makes industrial pumps wants to prepare a master production schedule for June
and July.
Marketing has forecasted demand of 120 pumps for June and 160 pumps for July.
o By evenly distributing over the four weeks in each month, we have 30 per week in June and
40 per week in July.
Now, suppose that there are currently 64 pumps in inventory and there are customer orders that
have been committed and must be filled. These inputs result in the following table.
Production batch size is 70 units.

Step1 : If no production is planned, projected inventory becomes negative from week 3. This is a signal
that production is needed to replenish inventory.

Step 2:
As a result of the negative projected inventory, we need to have production in weeks 3, 5, 7 and 8.

Step 3:

After MPS is created, it is now possible to determine the amount of inventory that is uncommitted, and
hence available to promise. A "look-ahead" procedure sums booked orders week by week until (but not
including) a week in which there is an MPS amount. For the first week, this procedure results in
summing customer orders of 33 (week 1) and 20 (week 2) to obtain 53. Then, the amount is subtracted
from the beginning inventory of 64 pumps plus the MPS in the two week 1 to obtain the amount that is
available to promise, i.e., 64 + 0 - (33+20) = 11. For weeks other than the first week, the beginning
inventory drops out of the computation, and ATP is the look-ahead quantity subtracted from the MPS
quantity. Thus, for week 3, the promised amounts are 10+4=14, and the ATP is 70-14=56. The same
procedure is applied to weeks 5, 7, and 8 and we have the following table.
The ATP in week 1 is not committed and it can be delivered in either week 1 or 2, or part of it can be
delivered in week 1 and part of it in week 2. As additional orders are booked, these would be entered in
the schedule, and the ATP amounts would be updated to reflect these orders.
Marketing can use the ATP amounts to provide realistic delivery dates to customers.

13. Difference between continuous inventory management system and the periodic inventory management system
Ans- An inventory control system controls the level of inventory by determining how much to order and
when to order. There are two types of inventory systems: Continuous system and Periodic system.
Continuous system (fixed-order-quantity)
constant amount ordered when inventory declines to predetermined level
Periodic system (fixed-time-period)
order placed for variable amount after fixed passage of time

The major differences between continuous and periodic inventory system:

1. The inventory system in which there is real time recording of the receipts and issues of inventory is
known as Continuous Inventory System also known as perpetual system. Periodic Inventory System
tracks the details of inventory movement at periodic intervals.

2. The Perpetual Inventory System is based on book records while Periodic Inventory System, takes
physical verification as its base.

3. In Perpetual Inventory System the records are updated continuously, i.e. as the stock transaction takes
place. Whereas in Periodic Inventory System the records are updated after a short duration.

4. In Perpetual Inventory System, real-time information about Inventory and Cost of sales is provided
whereas the Periodic Inventory System provides information about Inventory and Cost of goods sold.

5. In Perpetual Inventory System, the loss of goods is included in closing inventory. Conversely, in Periodic
Inventory System the same is included in Cost of Goods Sold.

6. In Perpetual Inventory System, there is no interference in the regular workflow at the time of stock taking
and verification while in Periodic Inventory System, the regular business operations may have to be

14. Importance of WBS and sample WBS for an event

Ans-Breaks large project into manageable units

Total project
Milestones (completion of an important set of work packages)
Major activities (summary tasks)
Work packages (tasks, activities, work elements)

Helps to:
Identify all work needing to be done
Logically organize work so that is can be scheduled
Assign work to team members
Identify resources needed
Communicate what has to be done
Organize work using milestones

15. Why is holding inventory crucial?

Ans- 1. To stabilise 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.

2. 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.

3. 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.

4. 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 the organizations have to maintain inventory.

5. 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.

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.

16. Intermittent vs Repetitive Processes

Ans- Intermittent processes:

Processes used to produce a variety of products with different processing requirements
in lower volumes. (such as healthcare facility)
Repetitive processes:
Processes used to produce one or a few standardized products in high volume. (such as a
cafeteria, or car wash)

17. Priority Rules used in Sequencing

Ans- The rules generally rest on the following assumptions.

The set of jobs is known; no new jobs arrive after processing begins; and no jobs are canceled.
Setup time is independent of processing sequence.
Setup time is deterministic.
Processing time is deterministic rather than variable.
There will be no interruptions in processing such as machine breakdowns, accidents, or work illness.
Job time usually includes setup and processing times. Jobs that require similar setups can lead to reduced
setup times, if the sequencing rule takes this into account (the rules here do not).
Due dates may be the result of delivery times promised to customers, MRP processing, or managerial
decisions. They are subject to revision and must be kept current to give meaning to sequencing choices. It
should be noted that due date associated with all rules except S/O and CR are for the operation about to
be performed; due dates for S/O and CR are typically final due dates for orders rather than intermediate,
departmental deadlines.