Sidhesh Prabhu Roll No: 122 Div:C

ASSIGNMENT-2 (OM_MA2)
Q.1 A) what are the characteristics of Services and give examples.
Ans: Service is an intangible commodity provided in return of some consideration. Some of the characteristics of services are: 1. Intangible - Services cannot be seen. 2. Inseparable - it cannot be separated from delivery. 3. Perishability - unlike other physical goods services cannot be stored for lifelong 4. Variability - the service outputs are variable 5. Simultaneity Its a simultaneous activity of service receiving and consuming. Q.2 B) Explain Process Selection types and list differences between

Intermittent and Continuous Operations with examples Ans: Process selection can be classified into four types: 1. Project process in this type of process only one product is manufactured at a time. 2. Batch process Small quantity of products ranging in same batch or group are manufactured. 3. Line process In this type large quantity of standard products are manufactured. 4. Continuous process High quantity of fully standard goods are manufactured.

Intermittent Operation Variety Quantity Time requiremen t Degree of specializati on WIP Inventory level Critical
1

Continuous Operation Small High quantity of few goods Low

Large Small Individual High

Less specialized

Specialization can be found due to less number of products Low level of WIP

High level of WIP

Labor

Capital

resource Standardiz ation Low level of standardization High level of standardization

Example: A snacks centre & Kunjvihar Vapada pav.

Q.1 C) There is guest house in Mumbai suburb and it has a capacity of 20 rooms where 3 can be accommodated in each room and other basic residing facilities. Currently the overall occupancy is low. You are to provide capacity plan for the owner.
Ans: The term capacity means the total or maximum output rate, and the term occupancy means the utility of the capacity, so In the given case the current capacity of the guest house is 60 (20*3), but since the overall occupancy is low, he can convert those rooms into room for 2. Say for example if his room rent is Rs.6000/day and lets assume the guest house is occupied by 30 people his earnings would be Rs.60,000 (60000*30/3). So in the other case if he makes the room for two he can charge Rs. 5000/daywhich will give him total earning of Rs. 75,000. (5000*30/2)

Q.2 A) Draw Process Flow Analysis diagram for buying movie tickets

in multiplex complex consisting of 4 cinema halls.

BEGI N Customer visits the ticket counter

LOST SALE Possible problem

NO

Keep waiting

YES
Long queue Ask for movie YES ticket

NO Possible problem LOST SALE

Alternate show?

Ticket available

NO

YES

Purchase ticket

YES END

Q.2 B) why business have moved from individual Functions execution towards Process Engineering. Illustrate with examples Ans: Process engineering focuses on design, operation control and optimization of resources through the use of computer based methods. Whereas Function execution refers to service, through which you can execute application functions on a single member, in parallel on a subset of members, or in parallel on all members of a distributed system. Optimization and efficiency of process engineering is one of the reasons, also the process engineering helps in hiring specialized skills, business are moving towards process engineering from individual functions. Example : Lijjat papad, in the initial stage of starting the business it was 1 person doing the whole work from the start till end, but now it has a process, the steps in which it goes, the marketing, the distribution everything goes in a designed process.

Q.2 C) what are different facilities types? What are the factors (in bullets) that you consider in location for various businesses:Ans: The various types of facilities are 1. Heavy-manufacturing facilities This facility is required for heavy industry, it requires large space an are costly compared to other facility types

2. Light Industry facilities This facility type is required for small scale industries or chain businesses which have light activities and is comparatively cheaper. 3. Retail and service facilities This is required for small business like local shops, retail shops, outlets, etc, they are the cheapest of all facility type but easy and effective. Factors to be considered for: A. Starbucks Coffee outlet : The cost of the land Transportation cost Proximity to customer The demographic environment B. Gold & Diamond jewellery manufacturing : Land cost Security concern Labor availability Proximity to market C. Ford cars from manufacturing factory to distribution outlet : Shipment mode Means of waste disposal Labor availability Transportation facility Proximity to market

Q. 3 A) Explain Level, Chase and Hybrid Types Aggregate plans with basic examples. Ans: In Level aggregate plan the workforce is maintained the constant irrespective of demand. It is often used in case of Make-to-stock products. But it gives rise to the problem of back orders. Example: Appliances. In Chase aggregate plans the workforce is hired according to and as require for production since the production is done only upto the level of demand. Example: Fireworks Company Hybrid aggregate plan is the combination of both level and chase aggregate plan. It may use level workforce with overtime and temporary basis. It is useful in inventory buildup and backorder clearing. Example: Textile industry 4

Q. 3 B) what are the advantages & disadvantages of using ERP? Ans: ERP stands for Enterprise Resource Planning; it integrates internal and external management information of entire business say, finance, accounts, marketing, sales, manufacturing, etc. It is used to manage all the activities in an organization efficiently.

Advantages of ERP are: ERP helps in making the overall smooth process of the organization. It improves the quality and efficiency. It gives better output to all the stakeholders of the organization. It makes decision making process easy for upper level management. It makes company agile, which means company becomes flexible and is ready to or adapt to change. Disadvantage of ERP are: High cost is associated with ERP support, maintenance and upgrades. Dependency level on technology will increase. Customization is problematic. ERP can cost us more than other less integrated/comprehensive solution. Extensive training is required which may also affect daily operations.

Q. 3 C) Explain terms like Reorder, safety stock, EoQ, Break even Analysis with examples Ans: 1. Reorder: The dictionary meaning of term reorder means to request, something to be supplied again. It is a repeated order for same product or service. Reorder point is a point where a new order is placed. It is expressed as R=dL Where, R=> Reorder point, d=> Demand rate per period, L=> Lead time. Example: Lead time (L)- 10 days Demand rate per day (d) 50 units Reorder point (R) - ? Find R = 50*10 = 500 units Here the reorder point will be at 500 units. 5

2. Safety Stock: (Also known as buffer stock) it is the level of extra stock maintained to eliminate the risk of stockout due to any uncertainties in supply and demand. It serves as the insurance against stockouts. Example: In a snacks centre the daily requirement of oil is 10 liters. But still to avoid any problem of shortage or unavailability the shop maintains stock of 30liters of oil i.e. safety stock of 2 days i.e. (30-10)/10 3. EoQ: Economic order quantity is the optimal order quantity where the total inventory cost will be minimum. EOQ applies only when demand for a product is constant over the year and each new order is delivered in full when inventory reaches zero. Example: Annual reqd qty (Q) - 10000 units Cost per order (Co) Rs. 100 Cost per unit (CU) Rs. 1000 Carrying cost (CC) 2% of CU Carrying cost per unit 20/unit

Economic order quantity = = Root of (20000*100) / (1000*20) = Root of 100 = 10 units. 4. Break even analysis: It is a point where the total cost and total revenue is equal. It is a point of no profits no loss. A business is said to be at breakeven point when TC =TR (Total cost = total revenue). The sale above or below this point determines the profit or loss for any period. Example: Lets find the breakeven point for ABC co.ltd Fixed cost (FC) - 100000 Variable cost (VC) - 100/unit Selling price (SP) - 1000/unit Break even (X) - ? Find X = FC / (SP-VC) = 100000 / (1000-100) = 100000 / 900 = 111.11 6

So on selling (approximately) 112 units the company reaches its breakeven point. Q. 3 D) why seasonal variations to be considered in Forecasting (in brief)? Ans: Seasonal variation is the component of measuring quantity of interest for product for certain time intervals say week, months, or quarters but less than a year. Due to seasonal variation there is constant increase or decrease in demand. Study of Seasonal variation helps in : Understanding the impact of season on sales and demand for any product or service It gives the seasonal pattern study To evaluate current sales and its effect in future. Input planning can be done with the help of this study. Manpower, inventory and financial needs can be arranged accordingly. Thus it is very much important to consider seasonal variation in forecasting. ii

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