MBAR Management Information System

MBA-II YEAR

Paper Code:               MBA-207

Paper Title:                MANAGEMENT INFORMATION SYSTEM

Q. 1.    Answer all the questions:

(i)What are the characteristic of internal and external information that is used in managerial decision making?

Ans:- The type of information required by decision makers in a company is directly related to:

 Resources: Profitability, sales, product quality brand associations, existing overall brand, relative cost of this new product, employee capability, product portfolio analysis

 Capabilities: Goal: To identify internal strategic strengths, weaknesses, problems, constraints and uncertainties

The External Analysis takes a look at the opportunities and threats existing your organizations environment. Both opportunities and threats are independent from the organization.

 Competitive analysis: Identify completely, put in strategic groups, evaluate performance, image, their objectives, strategies, culture, cost structure, strengths, weakness

 Market analysis: Overall size, projected grow th, profitability, entry barriers, cost structure, distribution system, trends, key success factors

 Environmental analysis: Technological, governmental, economic, cultural, demographic, scenarios, information-need areas Goa.

(ii)What are the support functions provided by decision support system?

Ans:- DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, and personal knowledge, or business models to identify and solve problems and make decisions.

.(iii)What are the applications of Artificial Intelligence System?

Ans:- artificial intelligence (AI) has revolutionized information technology. The new economy of information technology has shaped the way we are living. This special issue aims to report the latest advances in every aspect of artificial intelligence technology, including machine learning, data mining, computer vision, multigene systems, evolutionary computation, and fuzzy logic.

 Artificial neural network

 Touching , Smelling Listening , Tasting , and Eating. These Perceptual activities incorporation into Intelligent Computer System is concerned with the areas of Natural Language Understanding & Processing and Computer Vision mainly. The are two major Challenges in the application area of Perception.

(iv)What is ACID test?

Ans:- Most stringent test of the reliability. So called because since ancient times acid is applied to assess the purity of a piece of gold (pure gold is unaffected by dilute acids)..

Short-term assets minus accounts receivable and inventory, divided by short-term liabilities. This is a test of a company’s ability to meet its immediate cash requirements. It is one of the more common business ratios used by financial analysts.

(v)What is the significance of ERP system?

Ans:- “Enterprise Resource Planning: An accounting oriented information system for identifying and planning the enterprise-wide resources to make, ship and account for customer orders.”Again in Internet encyclopedia, it has defined as “An enterprise planning system is an integrated computer-based application used to manage internal and external resources, including tangible assets, financial resources, material and human resources”

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)

Q. 3.    Explain the various stages of System Development Life Cycle.

ANS- The System Development Lifecycle (SDLC) is a guideline for developing systems that involves the following phases:

Planning– is required to determine the feasibility of whether the project should proceed or not. Firstly, we identify the problem to be solved by investigating the issue, then establish a team and finally we develop appropriate documentation (e.g. Project Charter/ Business Case).

Analysis– is required to understand and document the user’s needs for the system. System requirements are studied and structured.  This stage refines project goals into defined functions and operation of the intended application and analyse end-user information needs.

Design– Describes how the system will fulfil the user requirements. In this stage we convert the recommended solution to system specifications. During the logical design phase, a prototype should be formed, if possible. The detailed design phase modifies the logical design and produces a final detailed design, which includes technology choices, specifies a system architecture, meets all system goals for performance, and still has all of the application functionality and behaviour specified in the logical design.

Implementation– In this stage we convert our physical system specifications into a working and reliable solution. We do this by coding, integration and testing, and installation.

Maintenance– We systematically repair and improve the information system during this stage.

Q. 4.    What are the different types of threats to companies Intranet?

ANS- Here is a list of 10 intranet security issues and what a user and organization do to resolv e them:

1. Network security threats- Internal and external threats are common. Some are deliberate threats while others are not. It's best to use a f irewall and some sort of security software like McAf ee Network Threat Response.
2. Security breaches. There are times when an intranet will encounter suspicious traffic, such as spam, phishing, spyware, adware and malware, so deploying an effective email filter (and firewall) can help block the suspicious traffic from entering the network.
3. Network attacks. There have been several cases reported ofan intranet being attacked. A network-based intrusion prevention system(IPS) or an intrusion detection prevention system(IDPS) can offer great protection. They also can be deployed for monitoring network traffic and d etecting and preventing well-known threats and attacks.
4. Unauthorized access. This happens much too often when an internal or external user (not authorized) gains access to data and corporate informati on stored on an intranet. It may be wise to use some type of authentication like passwords, smart cards, or biometrics; in addition, to deploying a bastion host before a user has access to the intranet.
5. Misuse of user privileges. Too often are users gaining unauthorized access to systems from the Intranet. Businesses may want to use some type of intranet monitoring software to see what their employees are doing on the intranet or on their own PCs.
6. Violations of security policies. At times, users will make illegal attempt to penetrate the network without clearance and permission. Internal users must understand what happens when someone v iolates the policy in attempt to protect internal IT sy stems on the intranet.
7.  Malicious content. Intranet users are vulnerable to malicious content(viruses, worms, and Trojan Horses) that attach themselves on emails. Bus inesses and users alike must remember to always maintain and update their security software on every PC and server on an intranet to ensure protection.
8. Usability problems. There are users who still improperly use the intranet. They do not know how to search, retrieve, send or share data and information; often, doing more harm than good on the private network. Some users may need formal training.
9. Weak passwords. Users tend to use weak passwords, write down passwords, never change them, or forget them. Network administrators must enco urage users to overcome these issues and have themuse hard-to-guess passwords, as well as not to share them, or write themdown.
10. Lack of encryption. Many times unsecured "confidential"data is shown to unauthorized users because they do not use encryption. Using SSL digit al certificates can help secure the Intranet.

Internal Assignment No. 2

Q. 1.    Answer all the questions:

(i)         What are the different data transmission modes?

Ans- Transmission mode refers to the mechanism of transferring of data between two devices connected over a network. It is also called Communication Mode. These modes direct the direction of flow of information. There are three types of transmission modes. They are:

1.      Simplex Mode

2.      Half duplex Mode

3.      Full duplex Mode

(ii)        How does LAN differs from WAN?

Ans- A Local area network (LAN) is a computer network that interconnects computers in a limited area such as a home, school, computer laboratory, or office building using network media.

A wide area network (WAN) is a network that covers a broad area (i.e., any telecommunications network that links across metropolitan, regional, or national boundaries) using private or public network transports. 

(iii)       What are the features of Search engine?

An s- Search engines are increasing dramatically for both personal and professional use. It has become necessary for users to understand the differences between the search engines in order to achieve the highest satisfaction .And therefore it is important to evaluate and compare search engines in the pursuit of one search engine that will satisfy all the needs of the user. The aim of this paper is to provide information about the work and the results of the search engines. This paper represents the various evaluation methodologies to estimate the capabilities of search engines. This would help users to assess and determine the appropriate search engine to search depends on their own needs.

(iv)       What is the role of DSS in managerial decision making?

Ans- Decision Support System:

A Decision Support System is an integrated set of computer tools allowing a decision maker to interact directly with computer to retrieve information useful in making semi structured and unstructured decisions. Example of this decisions include such things as merger and acquisition decisions, plant expansion, new product decisions portfolio management and marketing decisions.

Decision making is a fundamental managerial activity. It may be conceptualized as consisting of four stages: intelligence, design, choice and implementation.

Important aspects of the Decision Support System:

1)         The most important consideration is the Decision Support System's ease of use -

2)         The ability to access information

3)         The ideal Decision Support System in sharp contrast to previous method of designing applications

4)         To adequately support the human element, this highly adaptive support capability

5)         The organizations need to access original data sometimes

6)         The Decision Support Generator

 (v)       Define ECRM?

Ans- The eCRM or electronic customer relationship management encompasses all the CRM functions with the use of the net environment i.e., intranet, extranet and internet. Electronic CRM concerns all forms of managing relationships with customers making use of information technology (IT). eCRM is enterprises using IT to integrate internal organization resources and external "marketing" strategies to understand and fulfill their customers needs. Comparing with traditional CRM, the integrated information for eCRM intraorganizational collaboration can be more efficient to communicate with customers

Q. 2.    Explain the role of TPS in supply chain management.

ANS- Transaction processing system (TPS), an information system (IS) mostly used by managers in operational management to record internal transactions, economic events that occur within an organization and external transactions where the business event took place outside the organization to make operational decision. TPS supports different tasks by setting a set of rules and guidelines that specify the ways to capture or collect, process and store any transaction in a form of data or information.

Supply chain management system(SCMs),it also can be referred to as Enterprise Resources Planning(ERP). This system involved the information of any business processes that related to the activities of producing and selling the final goods or services, such as the activities take part in the producing goods involved marketing to after-the-sale services; Industries which provide services might include document management, monitoring customer's portfolio and others.

1. Rapid response: In order to shorten the waiting time of the users, TPSs are modified to process transactions instantly to ensure the data will be available in the shortest waiting time.

2. Reliability: Due to the involvement of cash, the reliability of TPS has to be in place. TPSs have to be designed in a way to avoid the transactions slip past the net in the same time remain themselves operating permanently. Also the failure rate has to be remained within the tolerance levels. With that comprehensive safeguards and disaster recovery systems have to be incorporated by the designed TPSs.

3. Inflexibility: Mistakes or errors can occur once the steps alter. To maximize the efficiency of the TPS, transactions have to be processed in the same order. With that, TPS interfaces have to be designed so that the identical data for each transaction can be acquired.

4. Controlled Processing: Transaction processing monitor is found at every end of the computer to ensure that the transactions are correctly inputted. Still it requires human controls on it. TPSs can be used even in modify the data and fraudulent the transactions. 

Q. 3.    What are the different types f information required at various levels of management for decision making?

ANS- Information, as required at different levels of manage­ment can be classified as operational, tactical and strategic.

1. Operational information:

Operational information relates to the day-to-day operations of the organisation and thus, is useful in ex­ercising control over the operations that are repetitive in nature. Since such activities are controlled at lower levels of management, operational information is needed by the lower management.

For example, the information regarding the cash position on day-to-day basis is monitored and controlled at the lower levels of manage­ment. Similarly, in marketing function, daily and weekly sales in­formation is used by lower level manager to monitor the perform­ance of the sales force.

It may be noted that operational informa­tion pertains to activities that are easily measurable by specific standards. The operational information mainly relates to current and historical performance, and is based primarily on internal sources of data. The predictive element in operational information is quite low and if at all it is there, it has a short term horizon.

2. Tactical information:

Tactical information helps middle level man­agers allocating resources and establishing controls to implement the top level plans of the organisation. For example, information regarding the alternative sources of funds and their uses in the short run, opportunities for deployment of surplus funds in short- term securities, etc. may be required at the middle levels of man­agement.

The tactical information is generally predictive, focusing on short-term trends. It may be partly current and partly histori­cal, and may come from internal as well as external sources.

3. Strategic information:

While the operational information is needed to find out how the given activity can be performed better, strategic information is needed for making choices among the busi­ness options.

The strategic information helps in identifying and evaluating these options so that a manager makes informed choices which are different from the competitors and the limita­tions of what the rivals are doing or planning to do. Such choices are made by leaders only.

Strategic information is used by man­agers to define goals and priorities, initiate new programmes and develop policies for acquisition and use of corporate resources. For example, information regarding the long-term needs of funds for on-going and future projects of the company may be used by top level managers in taking decision regarding going public or approaching financial institutions for term loan.

MBAR Research Methodology for Management Decision

MBA-206

1) Explain quantitative and qualitative research.

ANS- Quantitative methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational techniques. Qualitative is primarily used to discover and gain an in-depth understanding of individual experiences, thoughts, opinions, and trends, and to dig deeper into the problem at hand.

2) What is probability sampling?

ANS- A probability sampling method is any method of sampling that utilizes some form of random selection. In order to have a random selection method, you must set up some process or procedure that assures that the different units in your population have equal probabilities of being chosen. Humans have long practiced various forms of random selection, such as picking a name out of a hat, or choosing the short straw. These days, we tend to use computers as the mechanism for generating random numbers as the basis for random selection.

3) What is a Hypothesis?

ANS- It is a testable statement about the relationship between two or more variables or a proposed explanation for some observed phenomenon. In a scientific experiment or study, the hypothesis is a brief summation of the researcher's prediction of the study's findings, which may be supported or not by the outcome. Hypothesis testing is the core of the scientific method.

4) Explain graphic rating scale?

ANS- Graphic Rating Scale is a type of performance appraisal method. In this method traits or behaviours that are important for effective performance are listed out and each employee is rated against these traits. The rating helps employers to quantify the behaviours displayed by its employees.

5) What is ANOVA?

ANS- ANOVA or Analysis of Variance is a group of statistical models to test if there exists a significant difference between means. It tests whether the means of various groups are equal or not. In ANOVA, the variance observed in a particular variable is partitioned into different components based on the sources of variation

Q. 2 Explain the research process in detail.

ANS- Dissertation markers expect the explanation of research process to be included in Methodology chapter. A typical research process comprises the following stages:

 1. Selecting the research area. You are expected to state that you have selected the research area due to professional and personal interests in the area and this statement must be true. The importance of this first stage in the research process is often underestimated by many students. If you find research area and research problem that is genuinely interesting to you it is for sure that the whole process of writing your dissertation will be much easier. Therefore, it is never too early to start thinking about the research area for your dissertation.

2. Formulating research aim, objectives and research questions or developing hypotheses. The choice between the formulation of research questions and the development of hypotheses depends on your research approach as it is discussed further below in more details. Appropriate research aims and objectives or hypotheses usually result from several attempts and revisions and these need to be mentioned in Methodology chapter. It is critically important to get your research questions or hypotheses confirmed by your supervisor before moving forward with the work.

3. Conducting the literature review. Literature review is usually the longest stage in the research process. Actually, the literature review starts even before the formulation of research aims and objective; because you have to check if exactly the same research problem has been addressed before. Nevertheless, the main part of the literature review is conducted after the formulation of research aim and objectives. You have to use a wide range of secondary data sources such as books, newspapers, magazines, journals, online articles etc.

4. Selecting methods of data collection. Data collection method(s) need to be selected on the basis of critically analyzing advantages and disadvantages associated with several alternative data collection methods. In studies involving primary data collection, in-depth discussions of advantages and disadvantages of selected primary data collection method(s) need to be included in methodology.

5. Collecting the primary data. Primary data collection needs to be preceded by a great level of preparation and pilot data collection may be required in case of questionnaires. Primary data collection is not a compulsory stage for all dissertations and you will skip this stage if you are conducting a desk-based research.

6. Data analysis. Analysis of data plays an important role in the achievement of research aim and objectives. Data analysis methods vary between secondary and primary studies, as well as, between qualitative and quantitative studies.

7. Reaching conclusions. Conclusions relate to the level of achievement of research aims and objectives. In this final part of your dissertation you will have to justify why you think that research aims and objectives have been achieved. Conclusions also need to cover research limitations and suggestions for future research.

8. Completing the research. Following all of the stages described above, and organizing separate chapters into one file leads to the completion of the first draft. The first draft of your dissertation needs to be prepared at least one month before the submission deadline. This is because you will need to have sufficient amount of time to address feedback of your supervisor.

Q.4 Explain the significance of a research report and narrate the various steps involved read and writing such a report.

ANS- SIGNIFICANCE OF REPORT WRITING Research report is considered a major component of the research study for the research task remains incomplete tillthe report has been presented and/or written. As a matter of fact even the most brilliant hypothesis, highly well designed and conducted research study, and the most striking generalizations and findings are of little value unless they are effectively communicated to others. The purpose of research is not well served unless the findings are made known to others. Research results must invariably enter the general store of knowledge. All this explains the significance of writing research report. There are people who do not consider writing of report as an integral part of the research process. But the general opinionis in favour of treating the presentation of research results or the writing of report as part and parcel of the research project. Writing of report is the last step in a research study and requires a set of skills somewhat different from those called for in respect of the earlier stages of research. This task should be accomplished by the researcher with utmost care; he may seek the assistance and guidance of experts for the purpose. Different Steps In Writing Report Research reports are the product of slow, painstaking, accurate inductive work. The usual steps involved in writing report are: 1. logical analysis of the subject-matter; 2. preparation of the final outline; 3. preparation of the rough draft; 4. rewriting and polishing; 5. preparation of the final bibliography; and 6. writing the final draft. Though all these steps are self explanatory, yet a brief mention of each one of these will be appropriate for better understanding. Logical analysis of the subject matter: It is the first step which is primarily concerned with the development of a subject. There are two ways in which to develop a subject (a) logically and (b) chronologically. The logical development is made on the basis of mental connections and associations between the one thing and another by means of analysis. Logical treatment often consists in developing the material from the simple possible to the most complex structures. Chronological development is based on a connection or sequence in time or occurrence. The directions for doing or making something usually follow the chronological order. Preparation of the final outline: It is the next step in writing the research report “Outlines are the framework upon which long written works are constructed. They are an aid to the logical organisation of the material and a reminder of the points to be stressed inthe report.”

Internal Assignment No. 2

Q. 1.    Answer all the questions:

1) What is descriptive research?

ANS- Descriptive research does not fit neatly into the definition of either quantitative or qualitative research methodologies, but instead it can utilize elements of both, often within the same study. The term descriptive research refers to the type of research question, design, and data analysis that will be applied to a given topic. Descriptive statistics tell what is, while inferential statistics try to determine cause and effect.

2) Explain non-probability sampling.

ANS- Non-probability sampling is a sampling technique where the odds of any member being selected for a sample cannot be calculated. It’s the opposite of probability sampling, where you can calculate the odds. In addition, probability sampling involves random selection, while non-probability sampling does not–it relies on the subjective judgement of the researcher.

3) What is multivariate techniques?

ANS- Multivariate techniques are statistical methods that measure relationships among variables. They attempt to model reality where each situation, product or decision involves more than a single variable. For example, the decision to purchase a car may take into consideration price, safety features, color and functionality. Modern society has collected masses of data in every field, but the ability to use that data to obtain a clear picture of what is going on and make intelligent decisions is still a challenge.

4) Define Null hypothesis and alternative hypothesis.

ANS- A null hypothesis is a hypothesis that says there is no statistical significance between the two variables in the hypothesis. It is the hypothesis that the researcher is trying to disprove. In the example, Susie's null hypothesis would be something like this: There is no statistically significant relationship between the type of water I feed the flowers and growth of the flowers. A researcher is challenged by the null hypothesis and usually wants to disprove it, to demonstrate that there is a statistically-significant relationship between the two variables in the hypothesis.

5) What is chi-square test? Write its formula.

A chi-square test for independence compares two variables in a contingency table to see if they are related. In a more general sense, it tests to see whether distributions of categorical variables differ from each another. A very small chi square test statistic means that your observed data fits your expected data extremely well. In other words, there is a relationship. A very large chi square test statistic means that the data does not fit very well. In other words, there isn’t a relationship.

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)

Q. 2 State merits and demerits in collecting data of a questionnaire. Describe main aspects of a questionnaire.

ANS- In this method a questionnaire is sent (mailed) to the concerned respondents who are expected to read, understand and reply on their own and return the questionnaire. It consists of a number of questions printed on typed in a definite order on a form on set of forms. It is advisable to conduct a `Pilot study’ which is the rehearsal of the main survey by experts for testing the questionnaire for weaknesses of the questions and techniques used.

Advantages –

⦁ Free from bias of interviewer

⦁ Respondents have adequate time to give

⦁ Respondents have adequate time to give answers

⦁ Respondents are easily and conveniently approachable

⦁ Large samples can be used to be more reliable

Limitations –

⦁ Low rate of return of duly filled questionnaire

⦁ Control over questions is lost once it is sent

⦁ It is inflexible once sent

⦁ Possibility of ambiguous or omission of replies

⦁ Time taking and slow process

Q.3 Discuss the characteristics of hypothesis. Explain type I and type II errors in the context of testing of hypothesis.

ANS- Hypothesis is used as a step in the procedure of induction. Before the inductive generalization, usually a hypothesis is framed.

It is a stage of making a probable supposition. It is not the only use of hypothesis. Hypotheses are used very frequently by the natural scientists; it is also a probable supposition to explain certain facts or phenomena whose explanations are not known.

Characteristics of hypothesis:

i) Hypothesis is an attempt at an explanation of certain puzzled facts.

ii) It is a probable explanation or presupposition of a cause.

iii) No hypothesis is certain or definite at the stage of assumption.

iv) Through hypothesis facts are organized in a systematic manner.

It is possible through systematization of involved facts.

v) Formation of hypothesis is keenly connected with the verification of it.

No hypothesis test is 100% certain. Because the test is based on probabilities, there is always a chance of making an incorrect conclusion. When you do a hypothesis test, two types of errors are possible: type I and type II. The risks of these two errors are inversely related and determined by the level of significance and the power for the test. Therefore, you should determine which error has more severe consequences for your situation before you define their risks.

Type I error

When the null hypothesis is true and you reject it, you make a type I error. The probability of making a type I error is α, which is the level of significance you set for your hypothesis test. An α of 0.05 indicates that you are willing to accept a 5% chance that you are wrong when you reject the null hypothesis. To lower this risk, you must use a lower value for α. However, using a lower value for alpha means that you will be less likely to detect a true difference if one really exists.

Type II error

When the null hypothesis is false and you fail to reject it, you make a type II error. The probability of making a type II error is β, which depends on the power of the test. You can decrease your risk of committing a type II error by ensuring your test has enough power. You can do this by ensuring your sample size is large enough to detect a practical difference when one truly exists.

MBAR Production & Operation Management

Internal Assignment No. 1        Paper Title:   Production and Operations Management

Q. 1.    Answer all the questions:

(i)         Define operations management.

ANS- Operations management involves planning, organizing, and supervising processes, and make necessary improvements for higher profitability. The adjustments in the everyday operations have to support the company’s strategic goals, so they are preceded by deep analysis and measurement of the current processes.

(ii)        Name any four factors affecting plant location.

ANS- The leading factors affecting plant location are as follows:

1. Selection of Region

2. Site Selection

3. Current Trends in Pant Location

4. The Design of Factory Plant Building.

(iii)       Draw the input output process diagram.

(iv)     What are the qualitative factor analysis models?

ANS- - A company's businessmodeland competitive advantage are a key component of qualitative analysis. ... The idea behind quantitativeanalysisis to measure things; the idea behindqualitative analysisis to understandthem.

(v)        Write  the different types of facility layout.

ANS- There are threetypesof workflow layouts that managers can choose from: Process layout: arranged in departments (e.g., hospitals). Productlayout: production line (e.g., a car assemblyplant). Fixed-positionlayout:building a large item (e.g., jumbo jet).

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)

Q. 2.    Explain the concept of ABC analysis with an example.

ANS- The main use of ABC analysis is to improve your ability to deal with large and complex data sets by breaking them down into three segments. These segments define the priority of the data within whatever area you are using them in.

Once the data is broken down into segments, it is easier to focus on the data and use it in a meaningful way. Breaking down the data into these segments makes specific issues in the data more obvious. It also helps in prioritizing the different segments.

For example, ABC analysis can be used to segment your customers and break down customer-specific data.

First, you would divide the customers into each of the three categories based on the sales volume the customer provides. Then, you would consider how that volume relates to your margin contribution.

If you segment the customers successfully, the customers with the most value will go into the high priority category A, while less important customers would be placed in the bottom category C. Customers that are somewhere in between will stay in category B.

The segmentation allows you to pinpoint your most valuable customers. It then allows you to examine them separately so that you can form a plan of action. When you can look at things in three different categories, it is easier to allocate your resources in a more strategic way than it is if you’re flitting back and forth between charts or just trying to make sense of heaps of raw data. The benefit of taking this extra step is that it makes it easier to analyze the data strategically which in turn makes it easier to maximize your profits.

ABC analysis is also an excellent tool for inventory control. It is particularly useful for determining which of your inventory items impact your inventory cost the most. It also provides a framework for determining the best ways to manage and control your inventory.

Using ABC analysis in inventory control includes the same principles used in customer segmentation. Essentially, not every item in your inventory has equal value. You’ll use this method to determine the real value of each item in your inventory and then place it into the A, B or C category based on its importance.

Q. 3.    What do you understand by capacity planning?  Explain the decision tree modeling for   capacity expansion.

ANS- Capacity planning is one of the key aspects of operations management as it determines the amount of goods or services which can be produced within a given time duration. Too less capacity indicates that customers won't be satisfied and too much capacity would result in the operation being under-utilized with resultant high fixed costs and also affecting breakeven and profitability. A company, when it has to increase its capacity it has various options to consider, from working overtime to building a new facility or a plant. Forecasting demand is critical to capacity planning and companies can adopt different strategies of capacity planning, to ensure customer satisfaction and maintain the operations well within their budget and other constraints. Short term capacity planning is very important for any company be it a product based or a service based company especially when there are seasonal demands, as those demands are totally unpredictable and there can't a permanent plan in place for short term capacity planning for seasonal demands. Momentary plans like employee overtime, subcontracting have to be considered and the best among them and that incur least cost have to be selected and implemented and this has been discussed in detail in this project.

In this case, the resources take a long time to acquire and dipose. e.g., building, equipment, etc. Intermediate Range Monthly or quarterly planning. Capacity may vary due to hiring, layoff, new tools and changes, or subcontracting. Short Range Less than a month. This is tied into weekly or daily process and involves making adjustments to decrease variance between planned and actual output.

Decision trees are useful whenever we have to evaluate interdependent decisions that must be made in sequence and when there is uncertainty about events. For that reason, they are especially useful for evaluating capacity expansion alternatives given that future demand is uncertain. Remember that our main decision is whether to purchase a large facility or a small one with the possibility of expansion later. You can see that the decision to expand later is dependent on choosing a small facility now. Which alternative ends up being best will depend on whether demand turns out to be high or low. Unfortunately, we can only forecast future demand and have to incur some risks.

A decision tree is a diagram that models the alternatives being considered and the possible outcomes. Decision trees help by giving structure to a series of decisions and providing an objective way of evaluating alternatives. Decision trees contain the following information:

Decision points. These are the points in time when decisions, such as whether or not to expand, are made. They are represented by squares, called “nodes.”

Decision alternatives. Buying a large facility and buying a small facility are two decision alternatives. They are represented by “branches” or arrows leaving a decision point. ...

Internal Assignment No. 2

Q. 1.    Answer all the questions:

(i)         What are two major responsibilities of operations manager?

ANS- An operations manager is in charge of directing the company's daily activities for the benefit of employees, management, investors and customers. This requires organizing and synchronizing the activities of various managers and departments within a company and making sure the schedules, meetings and goals of each department work in harmony.

(ii)        What do you understand by CPM?

ANS- The critical path method (CPM) is a step-by-step methodology, technique or algorithm for planning projects with numerous activities that involve complex, interdependent interactions. CPM is an important tool for project management because it identifies critical and non-critical tasks to prevent conflicts and bottlenecks. CPM is often applied to the analysis of a project network logic diagram to produce maximum practical efficiency.

(iii)       Write the concept of EOQ.

ANS- EOQ is the acronym for economic order quantity. The economic order quantity is the optimum quantity of goods to be purchased at one time in order to minimize the annual total costs of ordering and carrying or holding items in inventory.

EOQ is also referred to as the optimum lot size.

The formula to calculate the economic order quantity is the square root of [(2 times the annual demand in units times the incremental cost to process an order) divided by (the incremental annual cost per unit to carry an item in inventory)].

(iv)       What are the types of costs to be considered for Inventory Management?

·         ANS- Purchase Costs.

·         Processing Costs. ...

·         Distribution Costs. ...

·         Inventory Holding Costs. ...

·         Losses From Shrinkage.

(v)        What is work study or Work Measurement?

ANS- Attempts to measure work and to establish work standards have always resulted in reactions, promoted criticism and generally have been the topic of considerable controversy among the managements and work force/workers.

It gives feeling to the workers that standards may result in more effective control and they may be required to do hard work for lesser wages. Management feels that the use of standards may lead workers to work hard which may result in higher wage bills.

Application of techniques designed to establish the time for qualified operator/worker to carry out a specified job at a defined level of performance is called the work measurement.

Q. 2.    ”Explain any 5 difference between PERT and CPM.

ANS- The most important differences between PERT and CPM are provided below:

1. PERT is a project management technique, whereby planning, scheduling, organising, coordinating and controlling of uncertain activities is done. CPM is a statistical technique of project management in which planning, scheduling, organising, coordination and control of well-defined activities takes place.
2. PERT is a technique of planning and control of time. Unlike CPM, which is a method to control costs and time.
3. While PERT is evolved as research and development project, CPM evolved as construction project.
4. PERT is set according to events while CPM is aligned towards activities.
5. A deterministic model is used in CPM. Conversely, PERT uses probabilistic model.
6. There are three times estimates in PERT i.e. optimistic time (to), most likely time ™, pessimistic time (tp). On the other hand, there is only one estimate in CPM.
7. PERT technique is best suited for a high precision time estimate, whereas CPM is appropriate for a reasonable time estimate.
8. PERT deals with unpredictable activities, but CPM deals with predictable activities.
9. PERT is used where the nature of the job is non-repetitive. In contrast to, CPM involves the job of repetitive nature.
10. There is a demarcation between critical and non-critical activities in CPM, which is not in the case of PERT.

Q. 4.    What is MRP? Write the objectives and advantages of MRP.

ANS- MRP as either Material Requirements Planning or Manufacturing Resource Planning (MRP II) is a methodology which has been around for nearly 30 years. For a good reason, people ask, what are the advantages and what are the disadvantages of MRP. Still, even though being one of the predominant ways in organizing inventory and production planning, it surely has its benefits and drawbacks.

OBJECTIVES OF MRP

The objectives of an MRP system are to determine the quantity and timing of material requirements and to keep priorities updated and valid.

o    Determine the quantity and timing of material requirements.Your company uses MRP to determine what to order (it checks the BOM), how much to order (it uses the lot size rule for the specific item), when to place the order (it looks at when the material is needed and backward-schedules to account for lead time), and when to schedule delivery (it schedules the material to arrive just as it is needed).

o    Maintain priorities. Your company also uses MRP to keep priorities updated and valid. Requirements change. Customers change order quantities and/or timing. Suppliers deliver late and/or the wrong quantities. Unexpected scrap results from manufacturing. Equipment breaks down and production is delayed. In an ever-changing environment, you use an MRP system to respond to changes in the daily environment, to reorganize priorities, and to keep plans current and viable.

The Advantages of MRP

The advantages of using MRP in manufacturing management and production planning come directly from the very nature of it:

• On time availability of the right materials required for production.
• Little, if any, excess inventory (our customers report that inventory reduced by 14% on average).
• Timely delivery of manufactured goods to your customers (increased by 17%).
• Optimal use of manufacturing resources (equipment downtime reduced 14%).
• Decrease in capital cost due to decreased inventory levels and optimal use of production resources.
• Collecting the business data for analysis and better planning.