Total pages: 10 Subject Code: BGPGDT206

NOIDA INSTITUTE OF ENGINEERING AND TECHNOLOGY, GREATER NOIDA, G.B NAGAR

(An Autonomous Institute Affiliated to AKTU, Lucknow) / (MCA Institute)
Course: PGDM
SEM: IV - THEORY EXAMINATION (2024- 2025)
SOLUTION
Subject Name -OPERATION MANAGEMENT Total Marks:60

General Instructions for Solution & Assesment of Answer sheets.

1. Assessment of answer books of semester end examination shall be done by appointed evaluators only.
2. Award step-wise marks for each solved question.
3. Marks to be awarded in the column provided.

Awarded
SECTION – A Marks
15
1. Attempt all parts:- (SOLUTION)
1-a. (b) Lowering costs and accessing specialized skills 1
1-b. (a) Time Series Analysis 1
1-c. (b) Time Study 1
1-d. (c) Marketing 1
1-e. (b) To ensure workers can adapt to new methods and technologies 1
2. Attempt all parts:- (SOLUTION)
2.a. To efficiently utilize resources to produce goods and services.-1 2
To ensure high quality and timely delivery to meet customer satisfaction.-1
2.b. To reduce the cost of products or services without compromising quality.-1 2
To improve the functional performance of a product or process.-1
2.c. Time Study is a work measurement technique where the time taken by a worker 2
to complete a task is recorded and analysed to establish a standard time.-1
Objectives: To set fair work standards, improve productivity, and plan capacity
and labour requirements.-`1

Page 1 of 12
2.d. Supply chain drivers are key logistical and cross-functional elements that influence the 2
performance of a supply chain.-1
Two major drivers: Facilities and Inventory-1

2.e. Continuous improvement helps a TQM-based organization to enhance product 2

quality, increase customer satisfaction, and stay competitive by constantly
refining processes and eliminating inefficiencies.
SECTION – B 15
3. (SOLUTION) of all questions
3-a. Process Layout:-2.5 5
Advantage: High flexibility — suitable for producing a variety of food
products like snacks, bakery items, etc.
Disadvantage: Material handling is complicated and production time is longer
due to movement between departments.
Product Layout:-2.5
Advantage: Very efficient for producing large quantities of standardized food
items (e.g., packaged bread, biscuits).
Disadvantage: Difficult and expensive to modify the layout if there is a change
in product type.
3-b.  Efficiency:-2 5
o Mass production is more efficient as it continuously produces
the same product (e.g., soda bottling).
o Batch production faces downtime when switching between
product types (e.g., baking different types of cakes).
 Flexibility:-2
o Batch production offers more flexibility to manufacture different
products in small lots.
o Mass production lacks flexibility once the production line is set.
 Cost:-1
o Batch production has a higher cost per unit because setup costs
occur more frequently.
o Mass production achieves lower costs due to economies of scale.

3-c.  step 1: Record the observed time taken by a worker to complete a task 5
(average of several cycles).-2
 Step 2: Adjust the observed time with the performance rating to find
Normal Time:-1

Page 2 of 12
 Normal Time=Observed Time Performance Rating\text{Normal Time} =
\text{Observed Time} \times \text{Performance
Rating}Normal Time=Observed Time Performance Rating
 Step 3: Calculate Standard Time by adding allowances for fatigue,
delays, etc.:-2
Standard Time=Normal Time×(1+Allowance %)\text{Standard Time} =
\text{Normal Time} \times (1 + \text{Allowance
\%})Standard Time=Normal Time×(1+Allowance %)
Example: If observed time = 5 min, rating = 120%, allowance = 10%,
Normal Time = 5 × 1.2 = 6 min;
Standard Time = 6 × 1.1 = 6.6 min.-1

3-d.  Advantages:-1.5 5
o AI improves forecasting, inventory control, and route
optimization.
o Blockchain ensures transparency and builds trust through
traceable records.
o IoT devices enable real-time tracking of goods in transit.
 Challenges:-1.5
o High setup and maintenance costs.
o Risk of cyberattacks and data privacy issues.
 Example: Walmart uses Blockchain to trace food products quickly,
reducing the time needed to track contaminated goods from days to
seconds.-2

3-e.  Plan: Analyse the current situation, identify problems, and develop an 5
improvement plan.-1
 Do: Implement the planned changes on a small scale to test
effectiveness and gather data.-1
 Check & Act: Compare the results with the planned objectives. If
successful, apply the change permanently; if not, revise and reattempt.-1
Example: A company uses PDCA to reduce machine downtime by testing a
new maintenance schedule.-2

SECTION – C 30
4. (SOLUTION) of all questions
4-a. Process Layout (also called Functional Layout) 6
Justification:
1. Flexibility for Custom Orders:-1
o Custom-made furniture involves different sizes, designs, and
finishes.
o Process layout allows flexibility to handle varied customer
requirements efficiently.
2. Grouping of Similar Activities:-1
o Machines and workstations like cutting, polishing, assembly,
and painting can be grouped by function, allowing specialized
treatment for each piece.
3. Better Utilization of Equipment:-1
o Different jobs use different machines; process layout maximizes
machine utilization and reduces idle time.
4. Easy Modifications:-1
o As new furniture designs or techniques are introduced, the
layout can be adjusted easily without major disruptions.
5. Skilled Labor Use:-1

Page 3 of 12
 o Skilled workers at each station can handle customization better,
improving product quality.
6. Cost-effective for Variety Production:-1
o Though material movement may be higher, the process layout
saves costs for companies focusing on variety rather than
volume.

4.b Key Factors to Consider: 6

1. Product Type and Volume:-1
o If producing standardized electronics (like mobile phones), a
Product Layout is ideal for mass production and speed.
o If producing varied, customized electronics (like specialized
medical devices), a Process Layout offers flexibility.
2. Space Requirements:-1
o Ensure enough space for future expansion, machine installation,
inventory storage, and worker movement without congestion.
3. Material Handling Efficiency:-1
o The layout should minimize the movement of components and
finished goods to reduce time and costs.
4. Safety and Regulatory Compliance:-1
o Electronics manufacturing involves sensitive equipment; the
layout must ensure fire safety, anti-static controls, and easy
emergency exits.
5. Integration of Technology:-1
o Plan space for automated equipment, IoT integration, assembly
lines, and testing stations to improve efficiency and quality.
6. Employee Comfort and Productivity:-1
o Workstations should be ergonomic, with proper ventilation,
lighting, and amenities to ensure higher employee satisfaction
and productivity.
Reasoned Argument:
 Choosing the right layout directly impacts production efficiency,
quality control, operating cost, and employee morale.
 A Product Layout may be suitable if the company focuses on mass
production of similar products.
 However, if the company produces multiple models or frequently
updates products (common in electronics), a Flexible or Cellular
Layout (small self-contained production cells) could be even better,
combining the benefits of efficiency and flexibility.

5.
5-a. To determine if the bakery’s current production capacity can handle the 30% 6
increase, we would follow these steps:
1. Analyze Current Capacity:-1
o Find out the maximum number of units the bakery can produce
per day/week/month under normal working conditions.
o Check the number of operating hours, number of ovens,
workforce strength, and supply chain speed.
2. Calculate Current Utilization Rate:-1
o Utilization = (Actual Output / Maximum Possible Output) × 100
o A bakery already operating at 90–95% capacity may struggle to
handle an additional 30% demand.
3. Forecast Future Demand:-1
o Estimate the total new demand based on a 30% increase.

Page 4 of 12
 o Example: If current monthly sales = 10,000 units → Future
expected = 13,000 units.
4. Compare Capacity to New Demand:-1
o If the bakery’s maximum capacity is only 11,000 units, then the
bakery cannot meet the future demand.
5. Identify Capacity Gaps:-1
o If a gap exists, determine how much additional capacity is
needed — in terms of equipment, manpower, or shift
adjustments.
6. Consider Expansion Options:-1
o Short-term: Overtime work, adding extra shifts, outsourcing part
production.
o Long-term: Investing in new machinery, hiring more workers,
expanding premises.

5-b. Time Series Analysis:-1 6

 Based on historical sales data collected over months or years.
 Techniques like Moving Averages, Exponential Smoothing, and Trend
Analysis can forecast future sales by identifying patterns like
seasonality or long-term growth.
 Example: Higher sales before festivals like Diwali or Christmas.
Regression Analysis:-1
 Examines the relationship between sales and influencing factors such as
price, promotions, holidays, and weather.
 Example: Sales of ice creams are positively correlated with higher
temperatures.
Causal Models:-1
 Involves identifying key variables (e.g., marketing spending, competitor
pricing) that influence sales and creating mathematical models to predict
future demand.
Moving Average Method:-1
 Takes the average sales over a specific number of past periods (e.g., 3-
month or 6-month moving averages) to smoothen out short-term
fluctuations and project future demand.
Exponential Smoothing:-1
 Gives more weight to recent sales data while still considering past data.
 Useful for short-term forecasts and quickly adjusting to market changes.
Econometric Models:-1
 More complex models that combine economic indicators (GDP growth,
employment rates) with sales history to predict sales in broader
economic conditions.

6. (SOLUTION) of all questions

6-a. Unnecessary Reaching:-1 6
 Workers often extend their arms too far to reach packaging materials or
products.
 This increases fatigue and cycle time, as every extra inch traveled by the
hand wastes energy.
Frequent Bending or Twisting:-1
 Bending to pick up packaging boxes placed below waist level or
twisting the torso to reach items placed awkwardly.
 This leads to physical strain, increasing the risk of musculoskeletal
disorders.
Using Two Hands for Separate Tasks:-1

Page 5 of 12
  If one hand is idle while the other works (e.g., one hand picks the food
item while the other waits), it violates the principle that both hands
should move simultaneously and symmetrically.
Poor Material Arrangement:-1
 Materials not positioned at optimal heights or within the worker’s
normal work area (the semi-circle area within easy arm reach) cause
excessive hand movements and time wastage.
Handling One Item at a Time:-1
 Workers handling and packaging items individually when batch
handling (picking multiple units together) could be faster and more
efficient.
Searching for Tools or Materials:-1
 If tools like tape dispensers, labels, or gloves are not kept consistently in
the same accessible place, workers spend time searching, leading to
unnecessary hand and body movements.

6-b. Workplace layout optimization significantly reduces fatigue in a retail 6

cashier's workstation through the following ways:
1. Proper Equipment Placement:-1
o Positioning scanners, cash drawers, and receipt printers within
easy reach minimizes excessive bending, twisting, and
stretching.
o Reduces arm and shoulder strain over long shifts.
2. Ergonomic Counter Height:-1
o Counters should be at an appropriate height to prevent cashiers
from hunching or overreaching.
o Proper posture minimizes back pain, neck stiffness, and overall
physical stress.
3. Efficient Movement Patterns:-1
o Optimized layouts ensure that frequent tasks (scanning, bagging,
cash handling) require minimal movement.
o This conserves energy, allowing cashiers to work longer hours
with less fatigue.
4. Provision of Adjustable Seating or Anti-fatigue Mats:-1
o Allowing cashiers to alternate between sitting and standing helps
distribute body pressure and reduces leg and foot fatigue.
o Anti-fatigue mats provide cushioning, reducing the impact of
standing for long periods.
5. Clear Visual Lines:-1
o A clear view of customers and displays without awkward head-
turning improves attention and reduces mental fatigue caused by
repetitive physical adjustments.
6. Streamlined Workflow:-1
o Layouts designed for a logical, easy workflow (product scanning
→ payment → bagging) eliminate unnecessary steps and mental
load, promoting efficiency and reducing emotional exhaustion.

7. (SOLUTION) of all questions

7-a. Impact of Outsourcing on Supply Chain Efficiency and Cost-Effectiveness: 6
Advantages:-2.5

Page 6 of 12
 Cost Savings:
Outsourcing production or services to countries with lower labor and
operational costs reduces overall expenses.
Access to Expertise:
Specialized vendors often have advanced technologies and skilled manpower,
improving product quality and operational efficiency.
Scalability and Flexibility:
Companies can quickly scale operations up or down based on demand without
heavy investment in fixed assets.
Focus on Core Activities:
Outsourcing non-core activities (like packaging, logistics, IT services) enables
companies to concentrate resources on core competencies (e.g., innovation,
marketing).
Challenges:-2.5
Loss of Control:
Outsourcing partners may not always meet required quality or delivery
standards, impacting the brand reputation.
Supply Chain Risks:
Global outsourcing increases the risk of disruptions (e.g., political instability,
natural disasters, pandemics).
Communication Issues:
Differences in time zones, languages, and cultures can create
misunderstandings and coordination delays.
Example:-1
Apple Inc. outsources the manufacturing of its iPhones to companies like
Foxconn in China.
Benefit: Lower manufacturing costs and access to mass production expertise.
Challenge: Apple faces criticism over labor practices and supply chain
vulnerability (e.g., during COVID-19 disruptions).

7-b. Inventory Management Optimization:-1 6

 Inventory is a major supply chain driver.
 Implement safety stocks, reorder points, and dynamic inventory tracking
to ensure products are available when needed.
 Use demand forecasting to adjust inventory levels appropriately for
seasonal or fluctuating demand.
Improved Information Flow:-1

Page 7 of 12
  Information is another key driver.
 Real-time data sharing between suppliers, warehouses, and retailers
ensures visibility into inventory levels.
 Use ERP (Enterprise Resource Planning) systems or cloud-based
inventory software to prevent surprises.
Enhancing Facilities Management:-1
 Facilities such as warehouses must be strategically located and managed
to support quick replenishment.
 Faster processing at distribution centers helps maintain stock
availability across retail outlets.
Transportation Efficiency:-1
 Transportation should be reliable and responsive.
 Flexible shipping contracts with multiple logistics partners help
expedite urgent shipments and minimize stockout impact.
Use of Sourcing Strategies:-1
 Sourcing flexibility allows the company to rely on multiple suppliers
instead of just one.
 Dual sourcing ensures that if one supplier fails, another can fill the gap,
maintaining supply continuity.
Effective Pricing and Demand Management:-1
 Pricing can influence demand patterns.
 Running promotions carefully and forecasting their impact prevents
sudden spikes that lead to stockouts.

8.
8-a. Statistical Process Control (SPC) is a key tool used in Total Quality 6
Management (TQM) to monitor and control process quality. It helps in
identifying variations in processes that can affect product quality, allowing for
corrective actions before defects occur. Here’s how SPC is implemented in
TQM:-1
1. Control Charts:-1
Example: In an automobile manufacturing plant, control charts are used to
monitor the diameter of the holes drilled into engine components.
Implementation: Operators measure the hole diameter at regular intervals and
plot the results on a control chart. If the measurements fall within the control
limits (upper and lower), the process is stable. If measurements fall outside
these limits, corrective actions are taken to fix the issue before producing faulty
components.
2. Process Capability Analysis:-1
Example: A bakery might use SPC to ensure the weight of each loaf of bread is
consistent with specifications.
Implementation: The bakery collects data on the weights of loaves over time
and analyzes the process capability (Cp or Cpk). This analysis shows whether

Page 8 of 12
 the process is capable of consistently producing loaves within the desired
weight range. If the process isn’t capable, adjustments like recalibrating the
machine are made to ensure consistent quality.
3. Pareto Analysis (80/20 Rule):-1
Example: In a clothing factory, SPC might be used to identify the most
common defects in fabric during the production process (e.g., wrinkles, color
mismatches, or tears).
Implementation: A Pareto chart is created to display the frequency of each
defect. The analysis might show that 80% of defects are caused by just a few
issues, allowing management to prioritize and address the most critical
problems first.
4. Sampling and Inspections:-1
Example: A food processing company uses SPC to monitor the cleanliness of
packaging machinery.
Implementation: They sample and inspect equipment regularly to ensure it
operates within acceptable limits. By using statistical sampling methods (like
acceptance sampling), the company can determine whether equipment meets
the hygiene standards or if it needs adjustment.
5. Cause-and-Effect (Fishbone) Diagram:-1
Example: A company manufacturing plastic parts uses SPC and a fishbone
diagram to analyze defects in product finish.
Implementation: SPC data reveals that certain batches of plastic parts have
poor surface finishes. The cause-and-effect diagram is used to identify root
causes, like improper material handling, machine malfunctions, or incorrect
temperature settings. Once identified, corrective actions are implemented.

8-b. Advantages of Implementing TQM in a Small Business: 6

1. Improved Product/Service Quality:
Example: A small bakery that adopts TQM principles can systematically
monitor ingredient quality, baking processes, and packaging.
Impact: By focusing on quality at every step, the bakery ensures that customers
consistently receive fresh, high-quality products, leading to higher customer
satisfaction and loyalty.
2. Customer Satisfaction and Retention:
Example: A local coffee shop implements TQM by training staff to improve
service speed and consistency.
Impact: TQM’s customer-centric approach helps build a loyal customer base,
as customers appreciate consistent quality and service.
3. Operational Efficiency:
Example: A small manufacturing company uses TQM to streamline its
production processes, reducing waste and defects.
Impact: Through continuous improvement, the business reduces costs
associated with errors, rework, and inefficiencies.
4. Employee Involvement and Motivation:
Example: A small IT services firm involves all employees in quality circles,
encouraging them to contribute ideas on improving service delivery.
Impact: TQM fosters a culture of collaboration and accountability, leading to
greater employee engagement and motivation.
5. Competitive Advantage:
Example: A small local restaurant adopts TQM by focusing on maintaining
high-quality ingredients and consistent cooking standards.
Impact: By consistently delivering quality products, the restaurant gains a
competitive edge in a crowded market, which can help it differentiate itself
from competitors.
Disadvantages of Implementing TQM in a Small Business:

Page 9 of 12
 1. Initial Investment and Time-Consuming Implementation:
Example: A small company might face challenges in training employees and
implementing the necessary systems for TQM, especially if resources are
limited.
Impact: The initial setup for TQM can be time-consuming and may require
significant investment in training and system improvements, which may strain
small businesses with limited budgets.
2. Resistance to Change:
Example: Employees in a small business might resist new processes or quality
control measures, especially if they are not familiar with them.
Impact: Resistance to change can slow down the implementation of TQM and
reduce its effectiveness, as employees may not fully embrace the new culture of
continuous improvement.
3. Overemphasis on Processes and Documentation:
Example: A small business owner may focus too much on documentation,
policies, and procedures at the expense of innovation or customer interaction.
Impact: TQM’s structured processes can sometimes be overwhelming for
small businesses that may need to remain agile and flexible in their operations.
4. Resource Constraints:
Example: A small business with limited staff may struggle to allocate
sufficient time and personnel for the constant quality checks required by TQM.
Impact: Small businesses may find it challenging to allocate enough resources
for regular monitoring and continuous improvement initiatives, leading to
burnout or compromised quality.
5. Risk of Overcomplexity:
Example: A small business may overcomplicate its processes by trying to
adopt too many quality management tools at once.
Impact: Overcomplicating operations can lead to inefficiency and confusion,
negating the benefits of TQM.
YOU CAN CONSIDER ANY THREE THREE POINTS FORM EACH SECTION FOR 1 MARKS

SOLUTION PREPARED BY: (Head Examiner)

(Moderator)

ERP ID - 2K24F315
ERP ID - ……………………………

Full Name – ASHISH DIWAKAR Full Name – ASHISH DIWAKAR

Department – PGDM Department -PGDM

Date of Uploading – 28-04-25 Signature with date -28-04-25

Signature with date –

Page 10 of 12
Page 11 of 12
S.No. Name of Evaluators Signature

1 KANIKA SAINI

Page 12 of 12