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Question Paper
Operations Management - II (MB242): October 2007
• Answer all questions.
• Marks are indicated against each question.

1. Which of the following SCM enablers’ basic objective is to prepare an organization’s processes in such a
way that they are able to understand and react to customer requirements fast?
(a) Alignment
(b) Customer-supplier focus
(c) Design
(d) Measurement
(e) Participation.
(1 mark)
2. Which of the following is not an advantage derived by firms through the usage of Computer Aided
Manufacturing (CAM)?
(a) Reliable information inputs
(b) Consistent product quality
(c) High labor turnover
(d) Improvement in production rate
(e) Reduction in labor costs.
(1 mark)
3. Management of materials is very significant in a firm. Which of the following is not one of the
objectives of a firm, accomplished through materials management?
(a) Obtain least possible prices for materials purchased
(b) Maintain low inventory turnover
(c) Ensure continuous availability of materials for production
(d) Maintain cordial relations with suppliers
(e) Keep searching for new products and materials.
(1 mark)
4. Which of the following types of organizations lay emphasis on preventive maintenance to avoid frequent
equipment breakdowns, as the failure of a component of equipment results in the entire production
system or major part of it remaining idle?
I. Product-focused organizations.
II. Process-focused organizations.
III. Highly automated production units.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (III) above
(e) Both (II) and (III) above.
(1 mark)
5. Improving the SCM system with the help of SCM leadership component requires managers to form
different functional domains that interact with the supply chain to constitute the leadership component.
These functions include
I. Materials.
II. Manufacturing operations.
III. Manufacturing engineering.
IV. Design engineering.
(a) Both (I) and (II) above
(b) Both (III) and (IV) above
(c) (I), (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
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6. If a firm reduces its costs on materials, the return on investment of the firm increases considerably.
‘Materials’ here refer to
(a) Current assets
(b) Fixed assets
(c) Total assets
(d) Fictitious assets
(e) Quick assets.

(1 mark)
7. An MRP system disassembles the end product into component parts and subassemblies, based on the
demand for the end product. In which of the following industries are the expected level of benefits low?
(a) Assemble-to-stock
(b) Fabricate-to-stock
(c) Process
(d) Assemble-to-order
(e) Manufacturer-to-order.
(1 mark)
8. Irregular preventive maintenance activities, which detect the problems while the equipment is still
performing at a satisfactory level is condition-based, including tasks such as
I. Repairs.
II. Overhauls.
III. Cleaning of spills.
IV. Cleaning of dust collectors.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) (I), (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
9. With respect to the purchasing department’s function in an organization, some firms hire external
specialists to negotiate purchasing terms and conditions called as
(a) Purchase negotiators
(b) Purchase consultants
(c) Contract consultants
(d) Negotiators
(e) Consultants.
(1 mark)
10. Global organizations require information about customers, suppliers, competitors, and other macro
economic factors, in addition to factors like market size, capability of the subsidiary etc. for
(a) Market selection
(b) Product development
(c) Resource allocation
(d) Technology choice
(e) Product promotion.
(1 mark)
11. Information required by an MRP system, to operate successfully in translating the demand for end
products into raw material and component requirements include(s)
I. Demand forecasts.
II. Capacity information.
III. Customer orders pending for future deliveries.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
12. Which of the following is/are considered being the potential sources of confusion with regard to network
modeling?
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I. Time estimates.
II. Schedule of activities.
III. Activity variance.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) Both (II) and (III) above.
(1 mark)

13. Computing the storage capacity required in the production department and adjusting it to maintain a
smooth flow of work, is the task performed by
(a) Purchasing department
(b) Receiving department
(c) Production department
(d) Raw materials inventory department
(e) Finished goods inventory department.
(1 mark)
14. ERP packages provide one-stop solutions to all business processes requirements. Many extensive ERP
systems incorporate business process solution(s) such as
I. Customer Relationship Management (CRM).
II. Supply Chain Management (SCM).
III. Warehouse Management.
(a) Only (II) above
(b) Both (I) and (II) above
(c) Both (I) and (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
15. Which of the following is not a component that makes up a typical Flexible Manufacturing System
(FMS)?
(a) An automated loading system
(b) An unloading system
(c) Robots
(d) A central computer that integrates the whole process
(e) Two or more machining centers.
(1 mark)
16. Calculate the completion time (TE) of the project, from the given information.

Activity to tm tp
1–2 4 6 8
2–3 6 9 12
2–4 5 7 9
3–5 2 4 6
4–5 7 9 11
5–6 6 10 14

(a) 26 weeks
(b) 32 weeks
(c) 34 weeks
(d) 29 weeks
(e) 30 weeks.
(3 marks)
17. Which of the following operational issues is dependent on various factors like level of demand for the
products or services the company is planning to provide, the market for which the product is being
developed for, the guidelines and regulations of the country that the company is operating in, the
infrastructure near the location, and the availability of required manpower?
(a) Capacity
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(b) Technology
(c) Facilities
(d) Innovation
(e) Workforce.
(1 mark)
18. Materials receiving report is prepared by the receiving department to process incoming shipments of
materials. Which of the following is/are the departments which use the receiving report as the basis for
carrying on their activities?
I. Accounts department.
II. Manufacturing department.
III. Marketing department.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) Both (I) and (III) above.
(1 mark)

19. Which of the following is not an advantage of Project Evaluation and Review Technique (PERT)?
(a) Provides a graphical display of project activities
(b) Ideal for tactical and operational level planning
(c) Handling of situations in which two or more projects share available resources
(d) Provides a ‘what if’ analysis on project activities
(e) Effective in planning single project activities in any type of industry.
(1 mark)
20. Which of the following statements relating to business process reengineering is false?
(a) Advocates complete overhaul of the existing systems and processes in an organization
(b) Increases productivity
(c) Reduces costs
(d) Provides a general overview of the operations of a business
(e) Improves business practices.
(1 mark)
21. Consider the following network (duration in weeks):

2 5
17 12 10 10

1 10 4 7

25 3 5 8
3 6
The critical path of this network is
(a) 1–2–4–5–7
(b) 1–2–3–4–5–7
(c) 1–2–4–6–7
(d) 1–2–3–4–6–7
(e) 1 – 3 – 4 – 5 – 7.
(2 marks)
22. The objective of the inventory control function in materials management is to maintain stock of materials
in various stages of production, in the desired quantities to minimize the overall cost of production. The
inventory control function is represented in
(a) Shipping department
(b) Purchasing department
(c) Distribution centers and warehouses
(d) Production department
(e) Receiving department.
(1 mark)
23. Firms usually follow the practice of breakdown maintenance for non-critical equipment. Which of the
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following is also referred to as breakdown maintenance?

(a) Preventive maintenance
(b) Remedial maintenance
(c) Predictive maintenance
(d) Civil maintenance
(e) Electrical maintenance.
(1 mark)
24. A Kanban system uses three types of cards to initiate material transactions. Which of the following is/are
the cards that describe the list of materials needed for continuing the production process?
I. Production authorization card.
II. Vendor authorization card.
III. Conveyance authorization card.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) Both (II) and (III) above.
(1 mark)
25. Which of the following is calculated using the formula
Goods/services produced (output)
Quantity of raw material and components used (input)

(a) Single factor productivity

(b) Multifactor productivity
(c) Labor productivity
(d) Material productivity
(e) Total productivity.
(1 mark)
26. Which of the following is a diagrammatic representation of different business systems and processes,
and their interconnections and interdependencies that defines the activities performed and workflow
structure in a broad manner?
(a) Business model
(b) Integrated data model
(c) Workload charts
(d) Scheduling charts
(e) Bills of Material.
(1 mark)
27. Which of the following is not concerned with the activity of routing and developing routing sheets?
(a) Routing sheets specify the skills required by an operator to perform the specific jobs
(b) Routing sheets provide information such as the list of operations to be performed by an operator
(c) Production requirements are considered while drawing up the routing sheets
(d) Routing determines when the work is to be done
(e) Layout structure is considered while drawing up routing sheets.
(1 mark)
28. In which of the following categories, do robots perform a set of operations according to the instructions
given in the program, based on data fed into them through devices like punched tapes, data cards and
digital switches?
(a) Physically operated robots
(b) Fixed sequence robots
(c) Numerical control robots
(d) Playback robots
(e) Intelligent robots.
(1 mark)
29. Proper production planning based on actual requirements, results in which of the following advantages
of Electronic Supply Chain Management?
(a) Cost saving
(b) Reduction in inventory levels
(c) Reduction in procurement costs
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(d) Reduction in stock-out costs

(e) Reduced involvement of purchasing department.
(1 mark)
30. Which of the following is/are the measure(s) adopted by service firms in measuring productivity?
I. Number of customers served in a given time period.
II. Maintenance of time sheets by service professionals.
III. A comparison of the service provided with past achieved results.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (I) and (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
31. From the information given below, identify the activity that needs to be crashed first, if the critical path
of the project is 1 – 2 – 3 – 4 – 5 – 6.
Activity Normal Time Crash Time Normal Cost Crash Cost
1–2 2 1 1500 1800
1–3 3 1 1200 1600
2–3 5 4 1200 1300
2–6 6 4 1400 1800
3–4 3 2 1000 1100
4–5 3 1 1000 1300
4–6 2 2 1100 1500
5–6 5 3 1800 1900

(a) (1 – 2)
(b) (2 – 3)
(c) (3 – 4)
(d) (4 – 5)
(e) (5 – 6).
(2 marks)
32. Which of the following statements is false relating to partial productivity?
(a) It is also termed as single factor productivity
(b) It is also termed as multifactor productivity
(c) It includes all the factors of production
(d) It is referred as labor productivity index
(e) It includes a single factor or a combination of factors.
(1 mark)
33. Which of the following systems used to integrate the entire supply chain, gives rise to a truly virtual
corporation that facilitates real time information flow between various supply chain partners?
(a) Supply Chain Management
(b) Electronic Supply Chain Management
(c) Business Process Reengineering
(d) Customer Requirement Planning
(e) Enterprise Resource Planning.
(1 mark)
34. Inputs, processing and outputs are the three elements common to all available variants of MRP system.
The MRP system inputs include
I. Master production schedule.
II. Bills of material.
III. Inventory records file.
IV. Work Breakdown Structure.
(a) Only (I) above
(b) Both (I) and (II) above
(c) Both (II) and (IV) above
(d) (I), (II) and (III) above
(e) (I), (II) and (IV) above.
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(1 mark)
35. Total Quality Management (TQM) is a philosophy that seeks organization-wide improvement through
the involvement of every individual in the organization. Which of the following is not one of the various
tools and techniques used to give shape to TQM philosophy?
(a) Kaizen
(b) Kanban
(c) Quality circles
(d) Quality Improvement Teams
(e) Total Productivity Management.
(1 mark)
36. Firms that practice JIT production systems maintain long-term business relationships with a few selected
suppliers. In this process, firms may also invite suppliers’ representatives to participate and suggest
I. Design review.
II. New designs.
III. Methods for improving productivity.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
37. Drawing up operations schedule requires the operations managers to understand the type of operation.
The type of operations that use the Gantt charts for scheduling are
(a) Job operations
(b) Continuous operations
(c) Labor-intensive operations
(d) Service operations
(e) Fabricating operations.
(1 mark)
38. Facilities management involves managing all the facilities that come under the purview of an
organization to enable the organization to function more efficiently. Facilities management encompasses
which of the following managerial functions?
(a) Human resources management
(b) Financial management
(c) Management of information technology
(d) Maintenance management
(e) Customer relationship management.
(1 mark)
39. Which of the following statements is false regarding offsetting, a step in the MRP information
processing system?
(a) It uses information obtained from explosion process
(b) It is used to determine the planned order releases
(c) It is used to determine the change in due dates
(d) It helps in determining the gross product requirement for items at the next lower level in the
product structure chart
(e) It uses the information obtained from netting process.
(1 mark)
40. Which of the following statements is false regarding the ‘bathtub curve’ used for assisting in decisions
regarding maintenance requirements?
(a) Illustrates the different stages of a piece of equipment
(b) Illustrates the probability of failure during a particular stage
(c) It can be used to study the failure rates characteristic of new equipment
(d) It is always considered to be the most effective indicator of the failure rates of equipment
(e) It can be used to study the failure rates characteristic of old equipment.
(1 mark)
41. Which of the following is the dispatching rule used in scheduling the production activities of a firm that
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does not prioritize the jobs according to their relative importance because all jobs are treated as equally
important?
(a) Earliest due date
(b) Longest processing time
(c) Shortest processing time
(d) First in, first serve
(e) Slack time remaining.
(1 mark)
42. Which of the following is/are the condition(s) for crashing a selected activity to the maximum possible
extent?
I. The activity is at its minimum possible value.
II. The time reduced is equal to the smallest slack value of the non-critical activities.
III. The reduced time is equal to the desired project completion time.
IV. The time reduced is equal to the smallest slack value of the critical activities.
(a) Both (I) and (II) above
(b) Both (I) and (III) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) (I), (II) and (IV) above.
(1 mark)
43. In which of the following stages of a typical ERP implementation program are performance standards set
for each process, by using benchmarking techniques?
(a) Identify the needs for the ERP package
(b) Evaluating the “as-is” situation of the business
(c) Decisions about the desired “would-be” situation for the business
(d) Reengineering of business processes to achieve the desired results
(e) Evaluation of available ERP packages.
(1 mark)
44. Which of the following range of activities that form a part of the facilities management department
encompass the activities of planning and designing of physical facilities?
(a) Facilities planning and forecasting
(b) Architectural planning and design
(c) Workplace planning, allocation and management
(d) Operations, maintenance and repair
(e) Alteration, renovation and workplace installation.
(1 mark)
45. The documents which empower the purchase department to procure a specific quantity of inventory
items required within a specified period are
(a) Planned orders
(b) Order releases
(c) Planning reports
(d) Performance reports
(e) Exception reports.
(1 mark)
46. Manufacturing line workers and staff supervisors carry out operations control functions involving
various activities. Which of the following is not one of those activities?
(a) Purchasing parts and components
(b) Executing work orders
(c) Monitoring material movements
(d) Reviewing the purchasing activities
(e) Checking worker performance.
(1 mark)
47. Which of the following dimensions of quality describes the probability of a product malfunctioning
within a given period?
(a) Performance
(b) Features
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(c) Reliability
(d) Perceived quality
(e) Conformance.
(1 mark)
48. A combination of complementary skills and knowledge bases embedded in a group or team that result in
the ability to execute one or more critical processes to a world-class standard is defined as
(a) Comparative advantage
(b) Core competence
(c) Proprietary technology
(d) Process efficiency
(e) Operations strategy.
(1 mark)
49. Implementing an MRP system involves high costs and technical complexities. In addition to this,
organizations need to spend considerable effort on various issues, which do not include costs involving
(a) Maintaining the software
(b) Validating
(c) Recruiting
(d) Testing
(e) Eliminating possible errors.
(1 mark)
50. Which of the following is not a function of facilities managers?
(a) Recruiting and hiring people
(b) Conducting and participating in planning activities
(c) Guiding the middle management in improving the work atmosphere
(d) Acting as change agents
(e) Developing and maintaining a controlling center.
(1 mark)
51. Major developments in microelectronics and computer technology have led to significant advances in
robotics. Which of the following are the tasks that one-armed robots are capable of doing?
I. Lifting.
II. Welding.
III. Assembling parts.
IV. Spray painting.
(a) Both (I) and (II) above
(b) Both (I) and (IV) above
(c) (I), (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
52. The materials requirement planning system, like any other management information system, can be
expanded to support other functions. Which of the following is not a function that is supported by an
MRP system?
(a) Engineering
(b) Production
(c) Recruiting
(d) Purchasing
(e) Finance.
(1 mark)
53. Production process involves a series of activities, formulated after detailed technical and engineering
analysis of all the components of a particular product, and development of a prototype of the product.
Prototype testing helps organizations in identifying
I. Shortcomings.
II. Defects.
III. Faults in the products.
(a) Only (II) above
(b) Only (III) above
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(c) Both (I) and (II) above

(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
54. From the product structure tree given below, calculate the number of units of F required to manufacture
240 units of A. The on-hand inventory available is 120 units of subassembly B and 80 units of
subassembly C.

B(2) C(3)

D(1) E(2) G(2) H(2)

F(2)
F(3) I(1)

(a) 2,640 units

(b) 1,890 units
(c) 2,280 units
(d) 2,860 units
(e) 1,920 units.
(2 marks)
55. Which of the following are considered the key drivers of supply chain management that help determine
not only the responsiveness and effectiveness, but also the strategic fit of the supply chain?
I. Inventory.
II. Transportation.
III. Facilities.
IV. Information.
(a) Both (I) and (II) above
(b) Both (II) and (III) above
(c) (I), (II) and (III) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
56. Following are the means ( X ) and range (R) of ten samples each of size 10.

Sample 1 2 3 4 5 6 7 8 9 10

X 52 46 39 45 41 50 38 43 55 49
R 8 6 4 5 4 7 4 5 9 6
(Conversion factors for sample size 10 are given as A2 = 0.308, D3 = 0.223, D4 = 1.777)

The CL for the R-chart is

(a) 5.80
(b) 1.29
(c) 10.31
(d) 7.09
(e) 16.11.
(1 mark)
57. A firm engaged in manufacturing bulbs of three models P, Q and R carries out three functions: setup
work, fabrication and assembling. From the table given below, calculate the number of employees
required for carrying out the setup work, fabrication and assembling functions respectively.
Production Rate (units per hour)
Product Volume
Setup work Fabrication Assembling
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P 120 3.75 2 2.5

Q 180 2.5 3 3.75
R 240 3 2.5 5
(Assuming each employee works for 8 hours a day).
(a) 25, 23, 27
(b) 23, 27, 18
(c) 18, 25, 20
(d) 23, 25, 18
(e) 27, 23, 18.
(3 marks)
58. Which of the following is/are the basic type(s) of robot applications?
I. Processing.
II. Manipulation.
III. Pick-and-place.
(a) Only (III) above
(b) Both (I) and (II) above
(c) Both (I) and (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
59. Which of the following is one of the seven SCM components that provides the SCM system direction,
designs and assists in deployment and improvement of the SCM system?
(a) SCM strategy
(b) SCM leadership
(c) Operational planning
(d) Order-to-delivery process
(e) Business relationship management.
(1 mark)
60. Which of the following involves capturing data regarding the flow of items through automatic means
such as bar coding, and using this information in planning and scheduling production activities?
(a) CAD
(b) Direct CAM
(c) Indirect CAM
(d) FMS
(e) CIM.
(1 mark)
61. In the ABC classification system of materials management technique, the materials are classified based
on
(a) Type of material
(b) Quantity used
(c) Cost per unit
(d) Usage value
(e) Availability of materials.
(1 mark)
62. Productivity, one of the major concerns of managers in organizations, is believed to be affected by
several factors. Which of the following is/are the factor(s)?
I. Bottlenecks in the production process.
II. Training programs.
III. Total production cycle time.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
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63. A computerized system that helps the customers and suppliers or departments within the same
organization to share and transmit information electronically in real time using standardized forms of
electronic documents is known as
(a) Electronic Data Interchange
(b) Computer Integrated Manufacturing
(c) Computer Aided Manufacturing
(d) Flexible Manufacturing Systems
(e) Artificial Intelligence.
(1 mark)
64. Which of the following statements is false with respect to total quality control in JIT firms?
(a) They use a concept known as “immediate customer”
(b) Only items of acceptable quality are delivered to the immediate customer
(c) JIT firms maintain separate departments for correcting defects
(d) In JIT manufacturing systems, each worker is trained in quality principles and testing procedures
(e) JIT firms conduct surveys to produce high-quality products.
(1 mark)
65. The impediment which emphasizes that an organization’s globalized activities may become
uneconomical due to the need for customization of products and services is
(a) Economic impediment
(b) Managerial impediment
(c) Cultural impediment
(d) Technical impediment
(e) Institutional impediment.
(1 mark)
66. Inputs for measuring the productivity can also be viewed in terms of costs associated, in addition to
various other categories. Which of the following is not one of those categories of costs?
(a) Material costs
(b) Transportation costs
(c) After sales costs
(d) Direct costs
(e) Overheads.
(1 mark)
67. Which of the following statements is false about scheduling?
(a) Maximizes customer satisfaction
(b) Minimizes service delays
(c) Provides firms a competitive advantage
(d) Scheduling high capacity results in incomplete jobs
(e) Proper scheduling can increase the profitability of firms.
(1 mark)
68. The probabilities of failure after maintenance for a machine in the spindles section of a machine tools
firm are given in the following table:

Quarters after maintenance 1 2 3 4 5

Probabilities of break-down 0.1 0.2 0.3 0.1 0.3
If there are 22 identical machines in the plant, the average cost of preventive maintenance is Rs.750 and
the cost of remedial maintenance per machine is Rs.4,200, then calculate the expected number of
breakdowns in the 4th quarter and the average total cost of maintenance per month.
(a) 14.32, Rs.23,928
(b) 18.86, Rs. 5,982
(c) 14.32, Rs. 5,982
(d) 18.32, Rs.23,928
(e) 18.86, Rs. 5,928.
(3 marks)
69. Which of the following is not a principle of supply chain management?
(a) Segment customers based on service needs
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(b) Customize the logistics network

(c) Plan based on market demand
(d) Reducing employee turnover
(e) Devise a complete supply chain performance measure.
(1 mark)
70. Which of the following is a Japanese practice that suggests discontinuing the production process because
of existence of a problem?
(a) Andon
(b) Poka-yoke
(c) Jikoda
(d) Just In Time
(e) Total Quality Management.
(1 mark)
71. Mr. Mohan, the operations manager of BIL Ltd. is in the process of scheduling the work times of the
employees. If he gives the employees an option to select their work hours from a list of available shifts,
this approach is called as
(a) Flextour
(b) Flextime
(c) Staggered times
(d) Compressed workweek
(e) Part time.
(1 mark)
72. Organizations, both large and small, and suppliers as well benefit from JIT systems. Which of the
following is not a benefit that suppliers accrue from using JIT systems?
(a) A long-term guaranteed contract for supply of materials
(b) A steady and continuous demand for their materials
(c) Less expenditure on promotional activities
(d) Improvement in the quality of product or service
(e) Timely payment for materials supplied.
(1 mark)
73. Ajay Electricals Ltd. has five different jobs in process with delivery requirements as shown below.
Today is Day 51, and the company uses the critical-ratio scheduling technique. Rank the jobs according
to priority.

A B C D E
Planned days 58 61 65 70 67
Work remaining in days 9 15 13 18 16

(a) B, A, E, D, C
(b) B, A, D, E, C
(c) B, A, C, D, E
(d) D, E, A, B, C
(e) A, B, D, E, C.
(2 marks)
74. Quantitative performance, also called productivity, is the output produced using a given set of inputs.
Productivity provides a good measure of performance at which of the following level(s)?
I. National.
II. Industry.
III. Individual business level.
(a) Only (I) above
(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
(1 mark)
75. Which of the following statements is/are refer to the Activity-On-Arrow convention for representing a
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project in a network?
I. Activities are represented by circles with arrows linking them together to show the order of their
performance.
II. Activities are represented by arrows.
III. Events are used to connect predecessor and successor activities.
IV. The activities are identified with a number or name.
(a) Both (II) and (III) above
(b) Both (II) and (IV) above
(c) (I), (II) and (III) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
76. Forward and backward scheduling are the two methods used for the scheduling of operations. Which of
the following statements is true about backward scheduling?
(a) It is used in fabrication operations
(b) The work-in-process inventory is high in this method
(c) Orders are scheduled according to their due dates
(d) Jobs are completed before they are required at the subsequent work centers
(e) Orders are scheduled starting from the date of production.
(1 mark)
77. Following JIT production systems enables firms to minimize the movement of materials by placing the
equipment in cells. A cell is defined as
(a) Grouping of several types of machines in which each machine performs a single operation
repeatedly
(b) Grouping of several types of machines in which each machine performs an operation only once
(c) Grouping of several types of machines in which several machines perform a single operation
repeatedly
(d) Grouping of several types of machines in which each machine performs a number of similar
operations repeatedly
(e) Grouping of several types of machines in which several machines perform a series of similar
operations repeatedly.
(1 mark)
78. The small parts division of a manufacturing organization dealing in heavy machinery received 5 job
orders – A, B, C, D and E to prepare screws of varying sizes, for 2 different machines.
From the following information, develop the order in which jobs are to be processed using the
dispatching rule – slack time remaining and also calculate the average delay of a job.
Job (In order of arrival) Processing Times (days) Due date (Days hence)
A 4 7
B 6 8
C 3 5
D 5 6
E 2 4

(a) D – E – C – B – A, 5.8 days

(b) D – C – B – E – A, 6.2 days
(c) D – B – C – E – A, 3.5 days
(d) E – C – D – B – A, 4.6 days
(e) E – B – D – C – A, 7.0 days.
(3 marks)
79. Which of the following forces shaping the supply chain focuses on finding a balance between cost and
quality, and customization and availability without compromising on any one of
them?
(a) Consumer demand
(b) Globalization
(c) Competition
(d) Information and communication
(e) Environment.
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(1 mark)
80. JIT, in spite of being a powerful tool for reducing the firm’s inventory and improving productivity, the
implementation of JIT principles is difficult due to certain barriers. Which of the following is not one of
those barriers?
(a) Difficulty in accomplishing zero lead-time
(b) Zero safety stock
(c) Zero stock-out costs
(d) Zero idle time
(e) Worker’s resistance to change.
(1 mark)
81. Which of the following is/are the procedure(s) adopted by firms that enable them in the conversion of
internal setup activities into external setup activities?
I. Heating.
II. Cleaning.
III. Streamline work.
IV. Fabricating.
(a) Only (III) above
(b) Both (I) and (II) above
(c) Both (II) and (IV) above
(d) (I), (II) and (III) above
(e) (I), (II) and (IV) above.
(1 mark)
82. The machine tools division of HMT Ltd. has two job orders, A to produce 600 nuts of 2mm and B to
produce equal number (600) of bolts. Both these orders have to be processed on two machines M1 and
M2. The route sheets for the jobs, which should be ready in the next 8 hours with the machines starting
processing from now, are given below.
Job X Route sheet Job Y Route sheet
Routing Processing Routing Processing
Machine Machine
sequence time (Hours) sequence time (Hours)
1 M1 2 1 M2 2
2 M2 1 2 M1 2
3 M1 3 3 M2 1
Total 6 Total 5
The latest time to start the two jobs as to finish them by the end of 8 hours using backward scheduling is

(a) 2nd hour for Job X, 5th hour for Job Y

(b) 2nd hour for both Job X and Job Y
(c) 7th hour for Job X, 5th hour for Job Y
(d) 3rd hour for Job X, 5th hour for Job Y
(e) 7th hour for Job X, 4th hour for Job Y.
(2 marks)
83 Which of the following quality dimensions is influenced by individual preferences and is used to cater to
a niche market?
(a) Performance
(b) Serviceability
(c) Aesthetics
(d) Perceived quality
(e) Features.
(1 mark)
84. Which of the following services come under the scope of facilities management?
I. Waste management.
II. Water treatment and management.
III. Asset protection services.
IV. Health facilities management.
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(a) Both (I) and (II) above

(b) Both (I) and (III) above
(c) Both (III) and (IV) above
(d) (I), (II) and (III) above
(e) All (I), (II), (III) and (IV) above.
(1 mark)
85. Given below is the data relating to number of defectives in each sample in the production process of a
manufacturing firm. Calculate the control limits (UCL, LCL and CL) if the size of sample is given as 25.

Sample 1 2 3 4 5 6 7 8 9 10
Number of
2 3 2 1 1 3 1 4 1 2
defectives

(a) 0.2879, 0.0827 and 0.19 respectively

(b) 0.2429, 0 and 0.08 respectively
(c) 0.2429, 0.0827 and 0.16 respectively
(d) 0.2429, 0 and 0.16 respectively
(e) 0.2879, 0 and 0.19 respectively.
(2 marks)
86. Globalization can be defined as the removal of trade barriers between an economy and other economies.
Which of the following is not one of those barriers?
(a) Goods or services
(b) Capital
(c) Currency
(d) Knowledge
(e) Information.
(1 mark)
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Suggested Answers
Operations Management - II (MB242): October 2007
1. Answer : (b)
Reason : The basic objective of customer-supplier focus is to prepare an organization’s processes in such a w
that they are able to understand and react to customer requirements fast.
2. Answer : (c)
Reason : Benefits of using CAM:
• Reliable information inputs
• Consistent product quality
• Reduction in labor costs
• Better control and management of equipment and materials
• Improvement in production rate.
High labor turnover is not an advantage of CAM.
3. Answer : (b)
Reason : Materials management helps accomplish the following objectives of a firm:
• Obtain the least possible prices for materials purchased.
• Maintain high inventory turnover so that less capital is tied up in inventory, i.e. help increase t
effective utilization of the firm’s capital.
• Ensure the availability of materials required to continue production, when there are disruptions
supply.
• Maintain cordial relations with suppliers and supplying firms.
• Maintain records along with well-planned administrative controls and periodic audits that discoura
corruption.
• Keep searching for the new products and materials that can help the firm run efficiently.
From the above points, we can infer that maintaining high inventory turnover is an objective of materi
management, but not maintaining low inventory turnover.
4. Answer : (d)
Reason : Product-focused organizations and highly automated production units emphasize preventive maintenan
to avoid frequent equipment breakdowns, as the failure of a component of equipment results in the ent
production system or major part of it remaining idle. On the other hand, process-focused organizations l
greater emphasis on efficient remedial maintenance.
5. Answer : (e)
Reason : SCM leadership component provides SCM system direction, designs and assists in deployment a
improvement of the SCM system. Managers form different functional domains that interact with t
supply chain to constitute the leadership component. These functions include materials, purchasin
quality, manufacturing operations, manufacturing engineering, design engineering and marketing.
6. Answer : (a)
Reason : Current assets are the materials, the reduction in the cost of which increases the return on investment
the firm considerably.
7. Answer : (b)
Reason : MRP is useful for organizations involved in the production of complex products, organizations worki
with shorter delivery schedules, job-shops and assemble-to-order organizations.
The expected level of benefits are low for the fabricate-to-stock and fabricate-to-order industries.
From the above information, option (b) is correct.
8. Answer : (c)
Reason : Irregular preventive maintenance includes tasks like repairs, overhauls, and cleaning of spills. The set
irregular preventive maintenance activities, which detects problems while the equipment is s
performing at a satisfactory level, is referred to as predictive maintenance. Preventive maintenance
time-based whereas predictive maintenance is condition-based.
9. Answer : (c)
Reason : Some firms hire external specialists, called contract consultants to negotiate purchasing terms and
conditions.
10. Answer : (a)
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Reason : Market selection for global organizations requires considerable attention to factors like market size, t
capability of the subsidiary, the value of experience that can be gained there and so on. Information abo
customers, suppliers, competitors, and other macro economic factors is also necessary for mark
selection.
11. Answer : (e)
Reason : An MRP system requires the following information to operate successfully:
• Customer orders pending for future deliveries and unfinished orders that must be completed in t
planned production period
• Demand forecasts that specify the quantity of products demanded and the time period in which the
demands are to be satisfied
• Capacity information that helps in anticipating and correcting resource shortages
• Details of the dependent demand inventory items at the various stages of the transformation process
• Changes in inventory requirements due to product design changes expected during the planning tim
period
• Available level of inventories at the beginning of the planning time period
• Quantities of ordered, purchased, or contracted inventory items that an organization expects to recei
during the planning time period.
12. Answer : (d)
Reason : Network scheduling is a effective yet a complex tool for managers to understand and apply. The tim
estimates and activity variance are some of the potential sources of confusion in network modeling.
13. Answer : (c)
Reason : Computing the storage capacity required in the production department and adjusting it to maintain
smooth flow of work, is the task performed by the production department.
14. Answer : (e)
Reason : ERP packages, now provide one-stop solutions to all business processes requirements. Nowadays many
extensive ERP systems incorporate Customer Relationship Management (CRM), Supply Chain
Management (SCM), warehouse management and other business process solutions.
15. Answer : (c)
Reason : The components that make up a typical FMS are:
• An automated loading system to load materials
• Two or more machining centers, which are automated to change tools by themselves
• A system to move materials in between machining centers
• An unloading system
• A central computer that integrates the whole process.
Robots do not form a component of the FMS.
16. Answer : (b)
Reason : The network diagram for the given information is as follows:

Activity to tm tp te
1–2 4 6 8 6
2–3 6 9 12 9
2–4 5 7 9 7
3–5 2 4 6 4
4–5 7 9 11 9
5–6 6 10 14 10
t o + 4t m + t p
Where te is calculated using the formula, te = 6
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The critical path of the given network is 1 – 2 – 4 – 5 – 6.

Completion time (TE) = Sum of all the expected mean times (te) on the critical path.
∴ TE for the above project = 6 + 7 + 9 + 10 = 32 weeks.
17. Answer : (c)
Reason : Facility decisions are taken after checking the suitability of a location. The suitability of a location
dependent on the various factors: level of demand for the products or services the company is planning
provide, the markets for which the product is being developed for, the guidelines and regulations of t
country that the company is operating in, the infrastructure near the location, and the availability
required manpower.
18. Answer : (d)
Reason : On the basis of the receiving report prepared by the receiving department, the warehousing department
arranges store space, the manufacturing department schedules production processes; and the accounts
department makes payments to vendors.
19. Answer : (c)
Reason : PERT method of project planning cannot effectively handle situations in which two or more proje
share available resources. Hence, this is not an advantage of PERT.
All the other statements are advantages of PERT.
20. Answer : (d)
Reason : Business Process Reengineering (BPR) advocates the complete overhaul of the existing systems a
processes in an organization in order to increase productivity, reduce costs and improve busine
practices.
Providing a general overview of the business without going into the technical details of the proces
and systems is an objective of business modeling.
21. Answer : (b)
Reason :
Path Duration
1–2 –4–5–7 17 + 12 + 10 + 10 = 49 weeks
1–2 –4–6–7 17 + 12 + 5 + 8 = 42 weeks
1–3 –4–5–7 25 + 3 + 10 + 10 = 48 weeks
1–3 –4–6–7 25 + 3 + 5 + 8 = 41 weeks
1–2–3–4–5–7 17 + 10 + 3 + 10 + 10 = 50 weeks
1–2–3–4–6–7 17 + 10 + 3 + 5 + 8 = 43 weeks
Critical path has the maximum time estimate. So, 1 – 2 – 3 – 4 – 5 – 7 is the critical path.
22. Answer : (d)
Reason : The inventory control function is represented in three departments:
• Raw materials inventory department
• Production department and
• Finished goods inventory department.
23. Answer : (b)
Reason : Remedial maintenance is carried out when a machine or equipment breaks down or is malfunctionin
Remedial maintenance is also referred to as ‘breakdown maintenance’ or ‘ ‘corrective maintenance’.
24. Answer : (a)
Reason : The production authorization card authorizes the production department to start the production proce
and describes the product’s name, identification number and description and the list of materials need
for continuing the production process.
25. Answer : (b)
Goods and/or services produced (output)
Reason : Multifactor productivity = Quantity of raw material and components used (input)
Multifactor productivity uses a combination of factors. It takes into consideration more than one fac
of production such as labor and materials.
26. Answer : (a)
Reason : A business model is a diagrammatic representation of different business systems and processes, and th
interconnections and interdependencies. The purpose of business modeling is to provide a gene
overview of the operations of a business without going into the technical details of the processes a
systems.
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27. Answer : (d)

Reason : The sequence of operations and processes to be followed in order to produce a particular product
explained through routing. It determines what work is to be done, where and how it is to be done, bu
does not determine when the work is to be done.
The routing sheets, in addition to providing detailed information about the sequence in which a produ
is manufactured, may also provide information such as the list of operations to be performed by
operator and the skills required to perform these jobs. The production requirements of a product and t
layout structure are the important considerations for drawing up routing sheets.
28. Answer : (c)
Reason : Numerical control robots (NC robots) perform a set of operations based on numerical data that is fed in
them through devices like punched tapes, data cards and digital switches.
29. Answer : (d)
Reason : ESCM ensures that the organizations get timely and accurate forecasts with regard to product or service
demand. This allows proper production planning based on actual requirements, resulting in reduced cyc
time for production activities and reduction in stock-out costs.
30. Answer : (b)
Reason : Measuring productivity in a service organization is based on the number of tasks performed, or t
number of customers served in a given time period.
Other measures include a comparison of the service provided with established company, industry,
customer quality standards. In cases where the task is routine and involves minimal customization, t
quantity of work, as for example, the number of service calls made per day, the number of quer
handled, or the number of customers served, is used as a measure.
In order to measure productivity, service professionals maintain time-sheets to indicate the amount
time spent on a given task.
The service provided is compared with the established company, industry, or customer quality standar
but not with the past (previously) achieved results.
31. Answer : (e)
Crash cost - Normal cost
Reason : Time-Cost Slope = Normal time - Crash time
Activity Normal Time Crash Time Normal Cost Crash Cost Time-Cost Slope
300
1–2 2 1 1500 1800 = 300
1
400
1–3 3 1 1200 1600 = 200
2
100
2–3 5 4 1200 1300 = 100
1
400
2–6 6 4 1400 1800 = 200
2
100
3–4 3 2 1000 1100 = 100
1
300
4–5 3 1 1000 1300 = 150
2
400
4–6 2 2 1100 1500 = ∝
0
100
5–6 5 3 1800 1900 = 50
2
The critical path activity with the smallest time-cost ratio is selected and crashed first.
∴ From the above calculations, we can infer that activity (5 – 6) has the smallest time-cost slope, a
needs to be crashed first.
32. Answer : (c)
Reason : Productivity can be measured in relation to a single factor (single factor productivity), a combination
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factors (multifactor productivity), or all the factors taken together (total productivity). Single factor productivity a
multifactor productivity can also be termed as partial productivity as all the factors of production a
not considered while calculating productivity.
The partial productivity ratio is also referred to as the labor productivity index or output per work-ho
ratio.
Hence, from the above points, we can infer that option (c) is the answer.
33. Answer : (b)
Reason : Electronic Supply Chain Management (ESCM) system makes use of Internet technologies to integrate t
entire supply chain, from the raw materials supplier to the end-user of the product. Therefore, it results
a truly virtual corporation that allows contact with any customer or supplier at any time, by facilitati
real time information flow between various supply chain partners.
Hence, from above discussion, we can infer that option (b) is correct.
34. Answer : (d)
Reason : Inputs of an MRP system include master production schedule, bills of material, and inventory records
file.
35. Answer : (b)
Reason : Kanban is one of the most widely used materials management methods. In order to use a Kanban system
firms should necessarily store their materials and other inventory items in a single-use container like tra
or boxes. A card (also called Kanban) is attached to each container mainly to initiate transactions, as it
defines the requirement of inventory items to continue the production process.
Hence, from the above, we can infer that Kanban is not a tool used for team building and employ
empowerment, but is used for managing materials.
36. Answer : (e)
Reason : Firms that practice JIT production systems require reliable suppliers who can supply high-qual
components and materials in the required quantities. Therefore, JIT firms maintain long-term busine
relationships with a few selected suppliers. Firms may also invite their suppliers’ representatives
participate in design review, to suggest new designs, and methods for improving product quality
productivity.
37. Answer : (a)
Reason : The operations manager may use methods like Gantt charts, job sequencing methods and critical ratio t
schedule the job operations.
38. Answer : (d)
Reason : Facilities management encompasses maintenance management and is one of the functions that a
undertaken by a facilities manager.
39. Answer : (c)
Reason : The MRP system in the process of offsetting, uses the information obtained from explosion and netti
process to determine planned order releases. The planned order releases for the finished product
component becomes the gross product requirement for items at the next lower level in the produ
structure chart.
40. Answer : (d)
Reason : The bathtub curve illustrates the different stages of a piece of equipment and the probability of failu
during a particular stage. It can be used not only to study the failure rates characteristic of new equipme
but can also be applied for old equipment.
The bathtub curve may not always be an effective indicator of the failure rates of equipment.
41. Answer : (d)
Reason : Firms that use the rule of First in, first serve, process their jobs in the order of their arrival. In firms th
use this rule, jobs are not prioritized according to their relative importance because all jobs are treated
equally important.
42. Answer : (d)
Reason : The selected activity is crashed to the maximum possible extent until one of the conditions given below
satisfied.
I. The activity time is at its minimum possible value.
II. The time reduced is equal to the smallest slack value of the non-critical activities.
III. The reduced time is equal to the desired project completion time.
Hence, option (d) is correct.
43 Answer : (c)
Reason : Once the structure of the current processes is identified, the next stage involves the identification
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desired attributes for each of the processes. Performance standards are set for each process by using benchmarki
techniques.
44. Answer : (b)
Reason : Architectural/Engineering planning and design, an important function in facilities manageme
encompasses activities of planning and designing of physical facilities (building, manufacturing plan
showrooms, outlets etc.).
45. Answer : (b)
Reason : Order releases are the documents that empower the purchase department to procure a specific quantity
inventory items required within a specified period.
46. Answer : (d)
Reason : The activities of the operations control function includes reviewing the distribution activities, but n
reviewing the purchasing activities.
47. Answer : (c)
Reason : Reliability is the dimension of quality that describes the probability of a product malfunctioning within
given period.
48. Answer : (b)
Reason : Kevin P Coyne, Stephen J D Hall and Patricia Gorman Clifford defined core competence in T
McKinsey Quarterly (1997), as a combination of complementary skills and knowledge bases embedded
a group or team that result in the ability to execute one or more critical processes to a world-cla
standard.
49. Answer : (c)
Reason : In addition to the high costs and technical complexities in the implementation of an MRP syste
organizations need to spend a considerable effort on installing necessary equipment (computers), traini
personnel, modifying the software to serve their specific needs, validating, testing, and eliminati
possible errors, and maintaining the software.
It does not include the cost of recruiting the personnel.
50. Answer : (c)
Reason : The functions of facilities managers include guiding the employees and top management in developi
innovative ways of improving the work atmosphere in the facilities, but not guiding the midd
management.
51. Answer : (e)
Reason : Major developments in microelectronics and computer technology have led to significant advances
robotics. For example, in the automobile industry, the introduction of computer-controlled one-arm
robotic devices has helped in the automation of the assembly line, with the one-armed robots bei
capable of doing several tasks such as
• Lifting.
• Welding.
• Assembling parts.
• Spray painting.
52. Answer : (c)
Reason : The materials requirement planning system, like any other management information system, can
expanded to support other functions like engineering, production, finance, marketing and purchasin
Recruiting is not a function of MRP system.
53. Answer : (e)
Reason : The production process involves a series of activities, which is formulated after detailed technical a
engineering analysis. Engineering drawings are initially drawn for each component of the product. The
individual components are then tested to see if they are technically compatible with other components
the product. Once all the components of a particular product are identified, a prototype of the product
made to test the performance of the product.
Through prototype testing, organizations identify shortcomings, defects and faults in the products.
54. Answer : (a)
Reason : For every unit of A, 2 units of B and 3 units of C are required.
Quantity of A to be produced = 240 units
∴Quantity of B required to produce 240 units of A = 480 units
Available inventory of B = 120 units
Quantity of B to be produced = Quantity required – Available inventory = 360 units
2 units of F are required to produce one unit of B. Hence, 720 units of F are required to produce 360 un
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of B.
∴Quantity of C required to produce 240 units of A = 720 units
Available inventory of C = 80 units
Quantity of C to be produced = Quantity required – Available inventory = 640 units
3 units of F are required to produce one unit of C. Hence, 1,920 units of F are required to produce 6
units of C.
∴Total quantity of F required to produce 240 units of A = 720 + 1920 = 2,640 units.
55. Answer : (e)
Reason : Supply chain management has become one of the key areas that organizations are focusing on to redu
costs and improve the efficiency of the production process. Four key drivers of supply chain performan
are inventory, transportation, facilities and information. They help not only the responsiveness a
effectiveness, but also the strategic fit of the supply chain.
56. Answer : (a)
Reason : Control limits for R-chart is given by the formula:
CL = R

8+6+4+5+4+7+4+5+9+6
∴For the given information, R = 10 = 5.8
∴ CL =5.8
57. Answer : (b)
Reason : Based on the information given, the time required for completing each function of all models of bulbs
calculated as follows:
Product Processing Times Total Time
Setup work Fabrication Assembling
P 32 60 48 140
Q 72 60 48 180
R 80 96 48 224
Total 184 216 144 544
Volume
The processing times for each function are calculated using the formula - Production Rate
The number of employees required can be obtained by dividing the total number of hours with 8, as t
number of hours an employee works per day is assumed to be 8 hours.
184
∴ Number of employees required for setup work = 8 = 23
216
Number of employees required for fabricating work = 8 = 27

144
Number of employees required for fabricating work = 8 = 18.
58. Answer : (c)
Reason : The two basic types of robot applications are ‘processing’ and ‘pick-and-place’. In a processi
application, the robot works as a tool by performing a job on the product (cutting, screwing etc.) th
moves to the robot. In a pick-and-place application, the robot moves the product (e.g. loading a
unloading of materials).
59. Answer : (b)
Reason : The seven SCM components are:
• SCM leadership
• SCM strategy
• Operational planning
• Business relationship management
• Order-to-delivery process
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• Quality and performance management

• Human resources management.
SCM leadership provides SCM system direction, designs and assists in deployment and
improvement of the SCM system.
60. Answer : (c)
Reason : The use of computers to indirectly support manufacturing operations is often referred to as Indirect CA
It involves capturing data regarding the flow of items through automatic means such as bar coding, a
using this information in planning and scheduling production activities.
61. Answer : (d)
Reason : In ABC classification system of materials management, the materials manager classifies the materials
to three categories: ‘A’, ‘B’, and ‘C’ on the basis of value of consumption (also called usage value). T
technique of materials management does not consider the availability of materials.
62. Answer : (e)
Reason : Several factors that are believed to affect the productivity in an organization are:
• Bottlenecks in the production process can hamper productivity.
• Training programs affect productivity. The time spent by the employees in learning new technolo
reduces their productivity as the time spent by the employees in learning new technology reduc
their productivity as the time spent on training eats into the total effective work time.
• The total production cycle time has an impact on total productivity.
• The productivity of an organization may also suffer if social and legal obligations make it necessa
for it to employ people without adequate skills.
• Workers often believe that their employers are exploiting them by increasing their workload fro
time to time on the pretext of improving productivity. Therefore, they resort to strikes, there
leading to loss of productivity.
63. Answer : (a)
Reason : EDI is a system, wherein standardized forms of electronic documents are transferred between two
computer systems. Customers and suppliers or departments within the same organization can share and
transmit information electronically in real time using EDI.
64. Answer : (c)
Reason : JIT firms do not maintain separate departments for correcting defects. Each employee has to identify a
correct his or her own mistakes and send it to his or her immediate customer. Every worker analyses t
types and sources of errors and then develops methods to prevent them in the future. In case a work
delivers a defective item or an improperly finished item to his immediate customer, the worker w
identifies the defect is authorized to stop the process and take necessary actions thereafter.
Hence, option (c) is false.
65. Answer : (a)
Reason : Through globalization, organizations can achieve economies of scale. But when customers’ requireme
in different national markets are totally different, an organization’s globalized activities may becom
uneconomical due to the need for customization of products and services, emphasized as econom
impediments.
66. Answer : (c)
Reason : After sales costs does not form a category of cost in quantifying the inputs, in the calculation
productivity.
67. Answer : (d)
Reason : If a firm schedules too much capacity, the facilities may remain idle, resulting in wastage of resourc
Scheduling low capacity may result in incomplete jobs at the specified time, resulting in poor service
customers.
68. Answer : (b)
Reason : Bt = N (P1 + P2 + P3 + … + P4) + Bt-1 P1 + Bt-2 P2 + …+ B1 Pt-1
N = 22 and t = 4
B1 = NP1 = 22 × 0.1 = 2.2

B2 = N ( P1 + P2 ) + B1 P1 = 22 ( 0.1 + 0.2 ) + 2.2 ( 0.1) = 6.6 + 0.22 = 6.82

B3 = N ( P1 + P2 + P3 ) + B2 P1 + B1 P2 = 22 ( 0.1 + 0.2 + 0.3 ) + 6.82 ( 0.1) + 2.2 ( 0.2 )

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= 13.2 + 0.682 + 0.44 = 14.322 ; 14.32

B4 = N ( P1 + P2 + P3 + P4 ) + B3 P1 + B2 P2 + B1 P3
= 22 ( 0.1 + 0.2 + 0.3 + 0.1) + 14.32 ( 0.1) + 6.82 ( 0.2 ) + 2.2 ( 0.3)
= 22 ( 0.7 ) + 14.32 ( 0.1) + 6.82 ( 0.2 ) + 2.2 ( 0.3)
= 15.4 + 1.432 + 1.364 + 0.66 = 18.856 ; 18.86
Hence, expected number of breakdowns in the 4th quarter = 18.86
Total cost of maintenance for every 4 quarters = TC(
= CP N + CR B
( 750 × 22 ) + ( 4200 × 18.86 ) = 16500 + 79212 = Rs. 95,712
Average total cost per period = TC(t) / t
∴Average total cost per quarter = TC (t) / t = 95712 / 4 = Rs. 23,928.
∴Average total cost per month = Average total cost per quarter / t = 23928 / 4 = Rs.5,982.
69. Answer : (d)
Reason : Reducing employee turnover is not a principle of supply chain management.
70. Answer : (a)
Reason : Firms use a practice of discontinuing the production, if they faced any problem. In Japanese, this pract
is called ‘Andon’.
71. Answer : (c)
Reason : Staggered times is the option given to employees, where the employees can select their work hours fro
a list of available shifts.
72. Answer : (d)
Reason : Improvement in the quality of product or service is an operational benefit that firms derive from the u
of JIT systems. It is not a benefit that suppliers derive from using JIT systems.
73. Answer : (a)
Reason : Critical ratio = Planned time remaining / Actual work remaining.
Planned time remaining = Planned days (-) Time elapsed since beginning the work.
Jobs Planned time Actual work Critical Ratio Priority Order
remaining remaining
A 58 – 51 = 7 9 7 / 9 = 0.78 B
B 61 – 51 = 10 15 10 / 15 = 0.67 A
C 65 – 51 = 14 13 14 / 13 = 1.08 E
D 70 – 51 = 19 18 19 / 18 = 1.06 D
E 67 – 51 = 16 16 16 / 16 = 1 C
The lower the critical ratio, the higher the priority needed in sequencing the job in the next day
production activities. From the table, it can be observed that job B has the lowest critical ratio and hen
the highest priority, while job C has the highest critical ratio (ahead of schedule) and thus the low
priority.
74. Answer : (e)
Reason : Performance can be split into qualitative and quantitative performance. Quantitative performance, a
called productivity, is the output produced using a given set of inputs. The prosperity of nations a
organizations alike is considered dependent on their comparative productivity. Productivity provides
good measure of performance at the national, industry, or individual business level.
75. Answer : (d)
Reason : According to the AOA convention, the following statements are true:
• Activities are represented by arrows.
• Nodes called as events, are used to connect predecessor and successor activities.
• The activities are identified with a number or name.
76. Answer : (c)
Reason : The backward scheduling method schedules orders according to their due dates. The operations manag
obtains the due dates for the job orders and develops the schedule backwards, thereby determining t
latest point when the production activity can be started in order to complete the order on time.
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77. Answer : (a)

Reason : Firms that produce the same product repeatedly can benefit by following JIT production systems. Sin
the process of production is repetitive, movement of materials can be minimized by placing the equipme
in cells, where a cell is a grouping of several types of machines in which each machine performs a sing
operation repeatedly.
78. Answer : (a)
Reason : According to the rule of Slack Time Remaining, the jobs with the shortest slack time are dispatched fir
Slack Time = Due Date (–) Processing Times.
Slack times for the five jobs are:
A: 7 – 4 = 3
B: 8 – 6 = 2
C: 5 – 3 = 2
D: 6 – 5 = 1
E: 4 – 2 = 2
As the slack times for the jobs B, C and E are same, these jobs are planned based on their processi
times i.e., the job with the smallest processing time is planned first.
Therefore, the order of the jobs according to their slack time remaining is
D – E – C – B – A.
The average delay of a job is calculated as follows:
Job sequence Processing Time Due date Time Flow Delay
D 5 6 0+5=5 0
E 2 4 5+2=7 3
C 3 5 7 + 3 = 10 5
B 6 8 10 + 6 = 16 8
A 4 7 16 + 4 = 20 13
The average delay of a job = (0 + 3 + 5 + 8 + 13)/5 = 29/5 = 5.8 days
79. Answer : (a)
Reason : Consumer demand is the force shaping the supply chain management that emphasizes that the key foc
of an organization is to find a balance between cost and quality, and customization and availabil
without compromising on any one of them. The objective of supply chain management is to keep t
customers satisfied by providing them with what they want, when they want it and at a price they c
afford.
80. Answer : (c)
Reason : The implementation of JIT principles is difficult as it has to overcome the following barriers:
• Workers’ resistance to change
• Difficulty in accomplishing zero lead-time
• Zero safety stock
• Zero idle time.
Zero stock-out costs is not a barrier of JIT implementation.
81. Answer : (d)
Reason : Some procedures that enable the conversion of internal setup activities into external setup activities are
• Heating
• Cleaning
• Streamline work.
Fabricating is not one of the procedures that enable the conversion of internal setup activities into extern
setup activities
82. Answer : (b)
Reason : Backward Scheduling:
Time 1 2 3 4 5 6 7 8
(Hrs)
M1 X1 X1 Y2 Y2 X3 X3 X3
M2 Y1 Y1 X2 Y3
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Here, the job of producing 600 nuts can start latest in the 2nd hour, and the job for producing 600 bo
also can start latest in the 2nd hour, using the given sequence and machines so as to finish them by the e
of 8 hours.
83. Answer : (c)
Reason : The aesthetics value of a product or service is influenced by individual preferences. Companies use t
quality dimension to cater to a niche market.
84. Answer : (e)
Reason : Apart from janitorial and maintenance services, other complex services like waste management, water
treatment and management, asset protection services, health facilities management, etc. have come unde
the scope of facilities management.
85. Answer : (b)
Reason : n = 25, N = 10.
Sample 1 2 3 4 5 6 7 8 9 10
Number of
defectives 2 3 2 1 1 3 1 4 1 2
(c)
Fraction
defective 0.08 0.12 0.08 0.04 0.04 0.12 0.04 0.16 0.04 0.08
(p)
c Number of defectives
=
Fraction defective (p) = n Sample size

∑p 0.8
P= N = 10 = 0.08
Control limits for the P-chart or the fraction defective chart for the given data are

P+3
(
P 1− P ) 0.08 + 3
0.08 (1 − 0.08 )
UCL = n = 25

0.0736
= 0.08 + 3 25 = 0.08 + 3 0.002944
= 0.08 + 3 (0.0543) = 0.08 + 0.1629 = 0.2429

P−3
(
P 1− P ) 0.08 − 3
0.08 (1 − 0.08 )
LCL = n = 25

0.0736
= 0.08 – 3 25 = 0.08 – 3 0.002944
= 0.08 – 3 (0.0543) = 0.08 - 0.1629 = - 0.0827
LCL cannot be negative (-ve), so it should be taken as zero.
CL = P = 0.08.
86. Answer : (c)
Reason : Globalization can be defined as the removal of trade barriers between an economy and other economi
The barriers can be in the form of restriction of the flow of goods or services, capital, informatio
knowledge, and ideas between economies. Currency is not a barrier between an economy and oth
economies, as every economy’s currency can be converted into the standard currency i.e., dollar.
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