Question bank for the subject

“operations management”
1. Define production/operation management. What r the various components of
production/operations management? S2/U1
2. What r the predefined objectives of production management? S4/U1
3. What is productivity? What r the factors which affect productivity? S5/U1
4. What is a method study? What are the steps involved in the method study?
S6/U1
5. What are the 5 types of manufacturing processes possible? S7/U1
6. What are the various types of plant layouts possible? S8-13/ U1
7. What are the major differences between product & service?

S14/U2
8. What r the major characteristics of services? S15/U2
9. What r the different ways services can be classified? S17/U2
10. How is service capacity planned? S23/U2
11. Explain the main service quality gaps outlined by the SERVQUAL model?
S24/U2
12. Describe the various dimensions of quality of service?
13. How many steps are involved in the process of “Production Planning & Control?

S4/U3
14. What is “aggregate production planning” and how is it designed? S9/U3
15. What is “inventory”? What are the various types of inventories that need to be managed?

S10/U3
16. What is the EOQ model of inventory control? What is the EOQ formula to calculate
optimal order quantity? S11/U3
Case analysis on EOQ :
Case 1

A retail store sells a particular product at a rate of 500 units per month. The cost to place an order
is Rs.100, and the carrying cost per unit per year is Rs.2. The annual demand for the product is
6,000 units. Calculate the EOQ, the number of orders per year, and the total annual inventory
cost.
Solution: Step 1: Calculate the EOQ using the formula: EOQ = √((2 * D * S) / H)
Where: D = Annual demand S = Cost to place an order H = Carrying cost per unit per year
Given: D = 6,000 units S = Rs.100 H = Rs.2
EOQ = √((2 * 6,000 * 100) / 2) = √(1,200,000) ≈ 1,095 units
Step 2: Calculate the number of orders per year using the formula: Number of orders = D / EOQ
Number of orders = 6,000 / 1,095 ≈ 5.48 orders per year
Since you cannot have a fraction of an order, round it up to the nearest whole number: Number
of orders = 6 orders per year
Step 3: Calculate the total annual inventory cost using the formula: Total cost = (D * S) / EOQ +
(EOQ * H) / 2
Total cost = (6,000 * 100) / 1,095 + (1,095 * 2) / 2 Total cost = 54,794 + 1,095 Total cost =
Rs.55,889
Therefore, the Economic Order Quantity (EOQ) for this particular scenario is approximately
1,095 units. The number of orders per year is 6, and the total annual inventory cost is Rs.55,889.

Case 2 :

A company sells a particular product at a rate of 10,000 units per year. The cost per order is
Rs.100, and the carrying cost per unit per year is Rs.2. What is the optimal order quantity using
the EOQ formula?
Solution 1: Given: Annual demand (D) = 10,000 units Cost per order (S) = Rs.100 Carrying cost
per unit per year (H) = Rs.2
The EOQ formula is: EOQ = √((2DS)/H)
Substituting the given values: EOQ = √((2 * 10,000 * $100)/$2) EOQ = √((2,000,000)/2) EOQ =
√(1,000,000) EOQ ≈ 1,000 units
Therefore, the optimal order quantity using the EOQ formula is approximately 1,000 units.

Case 3

A company has an annual demand of 20,000 units for a product. The ordering cost is Rs.80 per
order, and the carrying cost is Rs.4 per unit per year. What are the total inventory costs at the
EOQ?
Solution 2: Given: Annual demand (D) = 20,000 units Cost per order (S) = Rs.80 Carrying cost
per unit per year (H) = Rs.4
First, let's calculate the EOQ using the formula from the previous problem: EOQ = √((2DS)/H)
EOQ = √((2 * 20,000 * 80)/4) EOQ = √((3,200,000)/4) EOQ = √(800,000) EOQ ≈ 894 units.
The total inventory cost consists of the ordering cost and the carrying cost. To calculate the total
inventory cost at the EOQ, we can use the following formula: Total inventory cost = (D/Q) * S +
(Q/2) * H
Substituting the given values: Total inventory cost = (20,000/894) * 80 + (894/2) * 4 Total
inventory cost ≈ 1,791 + 1,786 Total inventory cost ≈ Rs.3,577
Therefore, the total inventory costs at the EOQ are approximately Rs.3,577.
These examples demonstrate how to calculate the optimal order quantity using the EOQ formula
and determine the total inventory costs at the EOQ. Keep in mind that these calculations are
based on the assumptions and parameters provided in each problem.

17. What is the ABC inventory control technique? S12/U3

Case analysis on ABC IC technique:

Case :
A company has 500 different inventory items with their annual usage and unit costs given as
follows:
Item | Annual Usage (units) | Unit Cost (Rs.)
Item A | 100 | Rs.10 Item B | 200 | Rs.20 Item C | 400 | Rs.5 Item D | 50 | Rs.30 Item E | 150 |
Rs.8
Using the ABC inventory control technique, categorise these items into A, B, and C categories
based on their annual usage value.
Solution: To categorise the items using the ABC inventory control technique, we need to
calculate the annual usage value (AU) for each item. The annual usage value is obtained by
multiplying the annual usage of an item by its unit cost.
Item | Annual Usage (units) | Unit Cost (Rs.) | Annual Usage Value (Rs.)
Item A | 100 | Rs.10 | Rs.1,000 Item B | 200 | Rs.20 | Rs.4,000 Item C | 400 | Rs.5 | Rs.2,000 Item
D | 50 | Rs.30 | Rs.1,500 Item E | 150 | Rs.8 | Rs.1,200
Next, we need to rank the items based on their annual usage value in descending order.
Rank | Item | Annual Usage Value (Rs.)
1 | Item B | Rs.4,000 2 | Item C | Rs.2,000 3 | Item D | Rs.1,500 4 | Item A | Rs.1,000 5 | Item E |
Rs.1,200
Finally, we can categorize the items into A, B, and C categories based on their cumulative annual
usage value. Typically, the top 20% of the items are classified as A, the next 30% as B, and the
remaining 50% as C.
In this case, the top item (Item B) accounts for Rs.4,000, which is 40% of the total annual usage
value (Rs.4,000 + Rs.2,000 + Rs.1,500 + Rs.1,000 + Rs.1,200 = Rs.9,700). Therefore, Item B
falls into the A category. The next two items (Item C and Item D) account for Rs.2,000 and
Rs.1,500, respectively, which is 35% of the total annual usage value. Thus, they fall into the B
category. The remaining two items (Item A and Item E) account for Rs.1,000 and Rs.1,200,
respectively, which is 25% of the total annual usage value. Therefore, they fall into the C
category.
Categorized items:
Category A:
 Item B
Category B:
 Item C
 Item D
Category C:
 Item A
 Item E
By using the ABC inventory control technique, we have categorised the items into three
categories based on their annual usage value, allowing the company to prioritise and manage its
inventory more effectively.

18. What are the key components of supply chain management? S2/U4
19. What are the benefits of effective supply chain management? S4/U4
20. What is the SCOR model of SCM? What are the major processes it follows in
SCM? What are the KPIs of the SCOR model? S5/U4
21. What are the major SC drivers? S7/U4
22. How do you measure SC performance? S9/U4
23. What is the difference between core and reverse SC ? What are the key activities
involved in core and reverse SC ? S11/U4
24. What are the key elements involved in maintaining a smooth-running global SC ? S13/U4
25. What is the difference between inbound and outbound logistics? What are the key
Activities involved in inbound and outbound logistics? S15/U4
26. What is the “bullwhip” effect in SC ? What are the factors which cause this effect ?
What can be the consequences of the “bullwhip” effect? S17/U4

27. What is the difference between push and pull system? What are their key
characteristics? S19/U4
28. What are the core principles of lean manufacturing? What are the various tools applied
in lean manufacturing? S21/U4
29. What are the key characteristics of agile manufacturing? S23/U4
30. What are the key roles IT plays in SCM ? S25/U4
31. What are the key aspects and objectives of demand forecasting in SCM ? S27/U4
32. What are the key principles of TQM ? S29/U5
33. Describe the 14 key principles of Deming’s which form part of TQM S31/U5
34. What are the processes involved in Duren’s quality trilogy? S33/U5
35. What are the steps involved in PDCA cycle also known as Deming’s cycle? S34/U5
36. What are the key principles and characteristics of Kaizen TQM method ? S36/U5
37. What are quality circles which form part of TQM ? S38/U5
38. What ate 7 QC tools ? S40/U5
39. What are the main clauses of ISO 9000-2000 ? S43/U5
40. What are the key principles of Six Sigma methodology ? S45/U5
41. What are the key roles and responsibilities in Six Sigma methodology? S46/U5
42. What are the key Principles of Total Productive Maintenance (TPM) ?
What are its benefits? S47/U5
43. What is the 5S method in TQM ? What are its key benefits ? S49/U5