Operations Management likely exam questions and answers

 

Operations Management

Bus 815

Question 1

a)      Explain with examples the four types of qualitative forecasting techniques

 Delphi Technique:  The main objective of the Delphi technique is to construct consensus forecasts from a group in a structured manner. The technique involves a repeated cycle of questionnaires presented to a panel of select experts. The independent answers provided by the expert team are then forwarded to the facilitator to analyze and summarize the opinions.

Market Research:  Market research is a popular qualitative forecasting method used in business. It forecasts future demand through consumer surveys and questionnaires. Businesses apply this technique to gain valuable insights from consumers when, for example, introducing a new product into the market. It differs from the Delphi technique because public opinions are considered here to glean insights, and not just those of experts. Market research methodologies also change according to evolving market challenges.

Panel consensus method:  Panel consensus is a qualitative forecasting technique that brings all the internal experts of an organization together for an open discussion about a product or service. Anyone may speak up, and the meeting will end when a consensus is reached. The accuracy of the forecast is ex post facto verified against actual sales data.It is also known by other terminologies such as forecasting averaging, model averaging, ensemble averaging, or expert aggregation. This method differs from Delphi or market research in involving only the experts internal to the organization.

 Visionary forecasting:  In contrast to using group think, visionary forecasting is usually based on the individual opinion or judgement of an experienced and respected individual in the field. In this method, a set of future scenarios is usually determined by the “visionary” based on past events. It is therefore based on subjective guesswork and somewhat non-scientific

 b)     Discuss the benefits of just-in-time production system

Industries that practice JIT manufacturing often experience advantages and benefits such as:

More cost-efficient production.

Continuous quality improvement.

Waste Elimination.

Improve productivity.

Improve supplier relationships.

Improve storage space used.

Reduce costs associated with storage.

Reduce manufacturing time.

 

Question 2

a)      Discuss the major parties to a project

The management structure of sizable projects usually involves four major parties: the owner, the construction manager, the designer, and the contractor.

 

b)     For business organizations to succeed in this era, they need to change their culture to imbibe Total Quality Management (TQM).  Give reasons why organization must switch  to TQM

 

TQM can have an important and beneficial effect on employee and organizational development. By having all employees focus on quality management and continuous improvement, companies can establish and uphold cultural values that create long-term success to both customers and the organization itself. TQM’s focus on quality helps identify skills deficiencies in employees, along with the necessary training, education or mentoring to address those deficiencies. With a focus on teamwork, TQM leads to the creation of cross-functional teams and knowledge sharing. The increased communication and coordination across disparate groups deepens institutional knowledge and gives companies more flexibility in deploying personnel. The benefits of TQM include:

Less product defects. One of the principles of TQM is that creation of products and services is done right the first time. This means that products ship with fewer defects, which reduce product recalls, future customer support overhead and product fixes.

Satisfied customers. High-quality products that meet customers’ needs results in higher customer satisfaction. High customer satisfaction, in turn, can lead to increased market share, revenue growth via upsell and word-of-mouth marketing initiated by customers.

Lower costs. As a result of less product defects, companies save cost in customer support, product replacements, field service and the creation of product fixes. The cost savings flow to the bottom line, creating higher profit margins.

Well-defined cultural values. Organizations that practice TQM develop and nurture core values around quality management and continuous improvement. The TQM mindset pervades across all aspects of an organization, from hiring to internal processes to product development.

Question 3

a)      What are the major factors affecting the choice of locating production facilitates?

Several factors that influence location positioning include the location of raw materials, proximity to the market, climate, and culture.  Conversely,  the selection of a region or area in which plant is to be installed requires the consideration of the following:

·         Availability of Raw Materials: ...

·         Proximity to Markets: ...

·         Transport Facilities: ...

·         Availability of Power, Fuel or Gas: ...

·         Water Supply: ...

·         Disposal Facility for Waste Products: ...

·         Climatic and Atmospheric Conditions

Question 4

a). Identify and discuss the major goals of process management in modern day business

Sol: It ensures that the workflows are seamless and employees can accomplish their tasks with minimum to no hiccups. The main goal is to ensure business process compliance, a high level of governance, data integrity, and efficiency

Qiz: Production is characterized with some constraints.  What are these constraints and how can they be tacked?

Sol: There are a number of limiting factors that determine the quantity and nature of output that a producer is able to achieve within a given time period. These are the constraints on production. The main external constraint is the extent of the market. Larger markets offer the opportunity to produce on a large scale and to benefit from the resultant unit cost reductions. Goods in mass markets such as chocolate bars and razors allow scale economies for large-scale producers, thus encouraging companies like Cadbury’s Kraft (confectionery), and Gillette and Bic (razors) to supply the market.

Another important external constraint is the ability of a producer to gain access to appropriate resources such as the finance to purchase and run a modern production facility.

Internal constraints include:

1.      The existing scale and capacity of buildings and machinery used in the production process. For example, the ability to meet new orders depends on having appropriate spare capacity.

2.      The availability, skills and training of the labour force. Modern specialist products often require extensive training before the staff are able to produce new goods effectively.

3.      Access to an adequate supply of parts and raw materials. A business that is able to supply appropriate quantities of goods and services to customers ‘just in time’ also needs to have access to supplies and materials ‘just in time’. This is why it is so important for modern companies such as Nissan to build excellent relationships with suppliers.

4.      Time. Careful planning to give sufficient time for the production process to meet customer requirements. Time has to be given priority in planning resource utilization.

5.      Finance. Healthy cash flow is essential if the business is to respond to changing demands and requirements in production activity. Investment funding may be necessary if new plants and facilities are needed

 

Question 6:  What are the objectives of a good plant layout?

Sol: A properly planned plant layout aims at achieving the following objectives: To achieve economies in handling of raw materials, work in- progress and finished goods. To reduce the quantum of work-in-progress. To have most effective and optimum utilisation of available floor space.

 

Question 7: Identify and discuss the drivers of supply chain management:

Sol: Five supply chain drivers, Production, Inventory, Location, Transportation, and Information, influence the performance of the supply chain. Companies can develop and manage these drivers to emphasize the ideal balance between responsiveness and efficiency, depending on your business and financial requirements.

Question 8:

Briefly explain  the following:

1.      Location:  Location Decision in operation management is finding an ideal geographical region to install a Facility or Plant. It is a vital component in facility planning as it greatly impacts the organization's Profitability, Cost and Success

 

2.      Plant Layout: Plant layout is a plan for effective utilisation of facilities for the manufacture of products; involving a most efficient and economical arrangement of machines, materials, personnel, storage space and all supporting services, within available floor space.

3.      Capacity Planning: Capacity planning is the process of evaluating all available production resources, including machinery, staffing, and work centers to understand if the manufacturer will be able to meet customer demand now and in the future

Question 9: Job analysis helps managers to determine duties, responsibilities, physical and emotional skills for a given job.  Discuss the process of job analysis

Sol: Job analysis is the process of studying a job to determine which activities and responsibilities it includes, its relative importance to other jobs, the qualifications necessary for performance of the job and the conditions under which the work is performed. The process of job analysis are:

• Identification of Job Analysis Purpose: Well any process is futile until its purpose is not identified and defined. Therefore, the first step in the process is to determine its need and desired output. Spending human efforts, energy as well as money is useless until HR managers don’t know why data is to be collected and what is to be done with it.
• Who Will Conduct Job Analysis: The second most important step in the process of job analysis is to decide who will conduct it. Some companies prefer getting it done by their own HR department while some hire job analysis consultants. Job analysis consultants may prove to be extremely helpful as they offer unbiased advice, guidelines and methods. They don’t have any personal likes and dislikes when it comes to analyze a job.
• How to Conduct the Process: Deciding the way in which job analysis process needs to be conducted is surely the next step. A planned approach about how to carry the whole process is required in order to investigate a specific job.
• Strategic Decision Making: Now is the time to make strategic decision. It’s about deciding the extent of employee involvement in the process, the level of details to be collected and recorded, sources from where data is to be collected, data collection methods, the processing of information and segregation of collected data.
• Training of Job Analyst: Next is to train the job analyst about how to conduct the process and use the selected methods for collection and recoding of job data.
• Preparation of Job Analysis Process: Communicating it within the organization is the next step. HR managers need to communicate the whole thing properly so that employees offer their full support to the job analyst. The stage also involves preparation of documents, questionnaires, interviews and feedback forms.
• Data Collection: Next is to collect job-related data including educational qualifications of employees, skills and abilities required to perform the job, working conditions, job activities, reporting hierarchy, required human traits, job activities, duties and responsibilities involved and employee behaviour.
• Documentation, Verification and Review: Proper documentation is done to verify the authenticity of collected data and then review it. This is the final information that is used to describe a specific job.
• Developing Job Description and Job Specification: Now is the time to segregate the collected data in to useful information. Job Description describes the roles, activities, duties and responsibilities of the job while job specification is a statement of educational qualification, experience, personal traits and skills required to perform the job

Question 10:  Workforce management is a strategic tool in creating competitive advantage in business.  As a management consultant, explain the basic concept of workforce management to your novice client:

Sol: Workforce management (WFM) is the way in which employers strategically allocate people and resources, track attendance and comply with constantly changing workplace laws and regulations. Ultimately, the objectives are to optimize productivity and reduce risk

Workforce Management (WFM) is a set of processes meant to maximize the performance levels and competency for an organization. Workforce refers to the total number of people who are employed in a specific company, or are working on a specific task — i.e. human resources and, as the very definition suggests, the concept of workforce management is closely related to the optimization of workers’ productivity.  This set of processes (WFM) involves all activities meant to build and maintain a productive workforce, and further improve their efficiency and productivity levels.

Question 11: Capacity planning plays a very significant role in operations management.  Discuss

Sol: Capacity planning is a vital part of operations management that should be tailored to the specific needs of each company. When done correctly, capacity planning can help businesses avoid the costs of over- or under-capacity and ensure they have the resources required to meet future demand.

 The capacity planning process begins with forecasting future demand. Once the forecast is complete, capacity can be planned based on the expected demand. The goal is to have enough capacity to meet customer demand without incurring high costs.

Types of Capacity Planning In Operations Management

Capacity planning determines the production capacity needed by an organisation to meet changing demands for its products or services. The purpose of capacity planning is to ensure that the necessary resources are available when they are needed. There are four types of capacity planning in operations management:

i.                    Resource Capacity Planning

ii.                  Project Capacity Planning

iii.                Team Capacity Planning

iv.                 HR Capacity Planning