ASSIGNMENT

Name Registration No. Learning Center Learning Center Code Course Subject Semester Module No. Date of submission Marks awarded :Prateek Nepalia :1208002806 :INFOWAYS COMPUTER INSTITUTE :01856 : MBA : Operation Management : III : : 2/12/2013 :

Directorate of Distance Education Sikkim Manipal University II floor, Syndicate House Manipal 576104

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Ques.1) What are the effects of Global Competition on the industries in India? Global Competition Quality, Customer Service and Cost Challenges Advanced Technologies Conclusion Ans:1) Due to rapid globalization, industries in most countries are facing intense competition. Developed countries look for new markets for their products in new countries as their own home markets are maturing, while the emerging economies churn out superior products offered at lower prices since the industries in their countries look for larger markets. Tremendous growth in transportation and communication has made accessing the modern and distant market easier. On the other hand, the same high population, coupled with improved education levels and experience in many industries. 1. Quality, Customer Service and Cost Challenges:-Spiraling competition and great strides in innovation have literally made (prospective) customers to behave like kings. Due to the awareness of the choices available for them, customers demand for quality of products. Consequently, many companies today are no more satisfied with delivering acceptable quality but strive for perfect product and service quality. Companies are now striving to meet the customers needs and meet the ideal of perfect quality that is the concept of Total Quality Management(TQM).TQM also focuses on continuous improvement of quality which, in turn, calls for empowering all those who are involved in making and delivering the products. Another area of pressure on companies is that of costs and prices. Industry has found ways to reduce cost and to increase scope of fixing prices in the market. Automakers concentrate productivity and retailers try to leverage such aspects as economies of scale, huge discounts on large scale purchases and other Supply Chain practices to reduce costs dramatically and thus, effectively compete in the market place. Other measures such as restructuring, downsizing, outsourcing, have become popular among companies in their attempts to keep costs low. Labor-intensive industries have resorted to off-shoring their activities 2. Advanced Technologies:-Both manufacturing, as well as service industries has experienced far-reaching impact on their operations because of automation. The initial disadvantages of high investments in automation are outweighed by not only lower manpower costs, but also by improved productivity, improved quality, reduced wastage and scrap, quicker response to customers and more frequent introduction of new products and services.

One of the examples of automation is Computer and Software Technology. Computer applications and software have helped companies replace laborintensive processes such as payroll, billing, sales order processing, inventory control, etc. with computerized software. Integrated ERP software systems facilitate real-time data and information to support decision making. However, competitive advantage resulting out of a companys automation does not last long since competitors invariably duplicate such innovations. Ques:2) How is Economies of Scope different from Economies of Scale? Explanation of Economies of Scope and Economies of Scale Differences Examples Conclusion Ans:2)Economies of Scope :-Many businesses, due to the competitive market, are forced to broaden into manufacture of different types of products, and achieve higher volumes only through the variety of products. Efficient and flexible operations systems can develop this process. Economies of Scale :-The concept of Economies of Scale can be explained by considering a situation where a manufacturing facility has been just set up, and the necessary raw materials, power connections, work force, etc. have all been organized, and the company is all set to commence manufacture. Difference, Examples and Conclusion:It should be appreciated that even before the first unit is produced, the company is incurring certain costs such as rent for the premises, the fixed portion of salaries, usage of electricity and power for general lighting, air-conditioning and running of equipments such as compressors, filters, etc. These generate the fixed costs of operations. In other words, if the scale of operations increases, then the unit cost of manufacture comes down. This aspect is referred to as the Economies of Scale. The advantages of leveraging the economies of scope let us consider an automobile company manufacturing only one type of automobile. Even if this particular model is selling successfully, the manufacturer would find it extremely difficult to compete effectively in a market where many leading automobile companies manufacture and offer to the customers a wide variety of automobiles. Typically, taking up manufacture of another model of automobile would involve large investments in alternate plant and machinery. All this would

considerably add to the cost of the second model. However, if the company employs flexible manufacturing systems consisting of machinery and equipments which can take up processing different type of components, and also a set of workmen who can efficiently operate in both cases. "Economies of Scope and Home Healthcare," that economies of scope will be present if a firm can produce many, different product lines at a given output level with a lower price than a combination of separate firms, each producing a single product with the similar output level. Economies of scope and economies of scale differ from each other. The difference is that, if an organization or firm receives a cost advantage by producing a complementary variety of products with a concentration on a core competency. However, economies of scope and scale are often interdependent and positively correlated. Ques.3) List and explain the six basic steps involved in preparing a forecast 1. Understand and specify the purpose of the forecast 2. Establish a time-horizon of the forecast 3. Select the suitable forecasting technique 4. Mobilize relevant data and analyze the same 5. Prepare the forecast 6. Monitor the accuracy of the forecast Ans.3) The forecasting process consists of six basic steps: 1. Understand and specify the purpose of the forecast: It is necessary to express for what purpose and when the forecast is to be used so that the level of detail and accuracy required, and the resources that can be justified can be examined. For example, if the firm is interested in introducing a new product within the next six months, or if the production department want to plan next month production to meet the market demand, or, if the top management looking at diversifying into new areas of business. 2. Establish a time-horizon of the forecast: The longer the time-horizon of forecast, the less is its accuracy likely to be. At the same time, the kind of decision to be made would decide the time horizon for which the forecast is required.. 3. Select the suitable forecasting technique: The next step after identifying the purpose, time-horizon, and the nature of data is to choose an appropriate model. To help do this, a sample set of data relating to earlier period can be picked up and a quick analysis can be done to examine the presence of seasonal or cyclical effect. Information about existence of such patterns helps in selecting the appropriate model for consideration. Each model will involve

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certain parameters that are to be determined. Based on the sample data, the parameters of the selected model have to be established, after which the logic could be used for forecasting. Mobilise relevant data and analyse the same: The quality and quantity of data that a firm can mobilise for forecasting purposes will limit the accuracy in forecasting. Therefore, it is vital to know the type of data required and the normal sources through which data can be obtained. Prepare the forecast: While preparing a forecast you should follow few things which are very crucial. They are: Be very practical in estimating the forecast. You should choose the right technique for forecasting. Monitor the accuracy of the forecast: A forecast has to be monitored to determine whether it is giving required results. Monitoring a forecast includes: Checking the forecast regularly against actual data that is present or against the historical data. Monitoring the operations for getting better results. Adjusting the forecast as the information flows, in case of absence of historical data.

Ques.4) Explain Johnsons rule for sequencing and how it is different from CDS algorithm Purpose or use of algorithm Steps to be taken Differences Conclusion Ans.4)Johnsons Algorithm of Sequencing:-This algorithm is used for sequencing of n jobs through two work centers. The purpose is to minimize idle time on machines and reduce the total time taken for completing all the jobs. There are no priority rules since all jobs have equal priority. The steps to be taken are: i) Choose the job which has the shortest processing time in any of the two work centers. ii) If it happens to be on machine 1, then load it first; if it is on machine 2, allot it for loading last. iii) Eliminate this job. Continue this till all jobs have been allotted.

Example: Time on

Time 1 Hr. is on M/c1 load it first. Cancel the row which contains 1 and 3.25. The job is C. Next, time 1.25 is on M/c1. Load job F next. The next is 1.5 which is on M/c. 2. Load it last. The job is E, continue .The loading sequence is given in the box below In case the period on two machines for any of the jobs is the same, you may choose either of them for applying the above rule. CDS Algorithm for n jobs on m machines This algorithm given by Campbell, Dudek and Smith, gives m-1 solutions and we can choose the most optimal between them. We will use the Johnsons rule by converting the number of machines from m to 2, by considering differing combinations like 1 and m, then1+2, then M-1 and M, then 1+2+3 and a M-2, M-1 and M, and so on. This process is useful, when the numbers of machines is small. We will work out a problem where we have 4 machines.

Perform the following steps: i) Take column M1 and M4, ignoring M2 and M3. Get the sequence by applying Johnsons rule.

ii) Next Combine M1 and M2 Make it as one machine MX and combine M3 and M4 and call it MY. Get the sequence. iii) Next Combine M1 and M2 and M3 and call it MC. Similarly combine M2 and M3 and M4. Call it MD. Find the sequence. iv) Calculate the total time taken to process all jobs A, B C, D and E. Choose whichever given the total time. The first table will be

Calculate the total time taken when this sequence is followed. Remember, that except for M1, other machines may have to wait to start their operations, until the previous operation is over. Ques.5) How does Crosbys absolute of quality differ from Demings principles? Similarities between the two to understand the need of differentiating Differences in approach Conclusion Ans.5)Crosbys Absolutes of Quality:-Crosby lays emphasis on top management commitment and responsibility for designing the system so that, defects are not inevitable. He requested that there should be no restriction on spending for achieving the best quality. In the long run, maintaining quality is easier and cheaper or economical rather than compromising on its achievement. Crosbys absolutes are listed below: Quality is conformance to requirements not goodness. Prevention, not appraisal, is the path to quality. Quality is measured as the price paid for non-conformance and as indexes. Quality originates in all factions. Crosby has also given 14 points similar to those of Deming. His approach stresses on, increasing awareness, measurement of quality, error cause removal, corrective action, and continuously reinforcing the system, so that advantages derived are not lost over time. The ingredients of the vaccine are commitment and communication.

Deming Wheel:-Deming wheel or PDSA Cycle, as it is called is a constant quality enhancing model; it consists of a logical sequence of four repetitive steps for constant enhancement and learning Demings approach is summarised in his 14 points. 1. Constancy of purpose for continuous improvement. 2. Adopt the TQM philosophy for economic purposes. 3. Do not depend on inspection to deliver quality. 4. Do not award any business based on price alone. 5. Improve the system of production and service constantly. 6. Conduct meaningful training on the job. 7. Adopt modern methods of supervision and leadership. 8. Eliminate fear from the minds of every individual, connected with the organization. 9. Remove barriers between departments and people. 10. Do not exhort, repeat slogans, and put up posters. 11. Do not set up numerical quotas and work standards. 12. Give pride of workmanship to the workmen. 13. Education and training to be given vigorously. 14. State and show top managements commitment, for better quality and productivity. Deming with the help of the above principles gave a four step approach to ensure a purposeful journey of TQM.

Plan means that a problem is detected, processes are stated and relevant theories are checked out. Do means that the plan is implemented on a trial basis. All inputs are correctly measured and recorded. Check means that the trials taken according to the plan are in accordance with the expected results. Act means that regular production is started, so that quality outcomes are assured when the above steps are satisfying. Ques.6) Analyze the various types of Probability distribution? Brief description of Discrete Distribution and Continuous Distribution Discrete Distribution Vs. Continuous Distribution Conclusion Ans.6) A sample is a collection of measurements selected from some larger source or population. Thus, a probability distribution is a mathematical model that relates the value of the variable, with the probability of occurrence of that value in the population. Types of Probability Distribution Generally, a probability distribution is called discrete, if it is characterized by a probability mass function. Thus, the distribution of a random variable X is discrete. X is called a discrete random variable if:

As u runs through the set of all possible values of X. There are two types of Probability Distribution: Discrete Distribution Continuous Distribution 1. Discrete Distribution: When the parameter being measured can only take on certain values, such as the integers 0, 1, 2, the probability distribution is called a discrete distribution. For example, the distribution of the number of nonconformities or defects in printed circuit boards would be a discrete distribution. A discrete probability can take on only a limited number of values, which can be listed. The function pi=P(X=Xi) or p(x), is called the probability function or more precisely probability mass function (p.m.f) of the random variable X.

There are two types of Discrete Probability Distributions. They are as follows: Binomial (Bernoulli) Distribution Poisson Distribution 2. Continuous distributions: When the variable being measured is expressed on a continuous scale, its probability distribution is called a continuous distribution. The probability distribution of piston-ring diameter is continuous. A frequency polygon gets smoother & smoother as the sample size gets larger, and the class intervals becomes more numerous and narrower. Ultimately, the density polygon becomes a smooth curve called, the density curve. The function that defines the curve is called the probability density function. Thus, in a continuous probability distribution, the variable under consideration is allowed to take on any value within a given range, so we cannot list all the possible values. A function p(x) is said to be the probability density function of the continuous random variable X, if it satisfies the following properties: p(x) 0, for all x in the interval [a,b] For 2 distinct numbers c & d in the interval [a, b] P (c X d) = [Area under the probability curve between the ordinates (vertical lines) at x=c & x=d] Total area under the probability curve is 1, i.e., P (a X b) = 1 There are various types of Continuous Probability Distributions. They are as follows: Normal Distribution Exponential Distribution Poisson Distribution