MID-TERM EXAM

Program:

Spring

BBA

Course Name:

Operations Management

Instructors Name:
Course Code:

Jawad Bhatti
BA-3607

Roll. No:

Class:

6A

Duration:

2 hours

2015

Total Marks:
30
Date: 07th March, 2015

Date:

IMPORTANT instructions:
Read all questions carefully first and then ask for clarifications.
Question paper related queries will not be entertained after 15 minutes incase of
hourly/test exams and 30 minutes for mid-term/final exam after start of paper.
Do not write any thing on question paper unless until specifically asked for.
Marks of each question are mentioned at the end of each question.
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Section A (10 marks)

Q.1. What is the role of operations management with other departments of the organization?
Explain your answer with reference to the Business Information Flow. (2 Marks)
Q.2. Explain how we can compete on Cost if it is our most important competitive priority. (2
Marks)
Q.3. Explain the difference between intermittent and repetitive operations in detail. (2 Marks)
Q.4. How can we counteract the effects created by bullwhip? (2 marks)
Q.5. Explain the four categories in which cost of quality can be separated. (2 Marks)
Section B (15 marks)
Q. 1. A television manufacturer has presented the following data for the past three years in its
annual report. As a potential investor, you are interested in calculating yearly productivity and year
to year productivity gains as one of several factors in your investment analysis.
2012
Unit
sales

2013

television4,000,000 5,000,000

2014
6,000,000

Employees

150,000

130,000

120,000

$ Sales
(billions$)

$30,000

$40,000

$50,000

Cost of Sales
(billions)

$10,000

$13,000

$17,000

2012

2013

2014

Partial Prod. Measure

Unit Television Sales/Employee
Year-to-year Improvement
Multifactor Prod. Measures
Total Cost Productivity
Year-to-year Improvement
(3 Marks)
Q. 2. Moazzam and Irfan decide to open a donut shop. Their first decision is whether they should
make the donuts on-site or buy the donuts from a supplier. If they buy from the supplier they will
need air-tight containers at a fixed cost of Rs: 300,000 annually. They can buy the donuts for Rs:
70/- each. If they make the donuts in-house they will need a small kitchen at a fixed cost of Rs:
1,000,000 annually. It will cost them Rs: 50 per donut to make. They believe they will sell
500,000 donuts.
(a) Should Moazzam and Irfan make or buy the donuts from the supplier? Support your answer
with detailed calculations.
(b) What is the quantity (of donuts) on which there will be no difference whether they make or
buy?
(3 Marks)
Q. 3. A company is planning to establish a chain of movie theaters. It estimates that each new
theater will cost approximately Rs: 100 million. The theaters will hold 450 people and will have 4
showings each day with average ticket prices at Rs: 300. They estimate that concession sales will
average Rs: 200 per patron. The variable costs in labor and material are estimated to be 70 per
patron. They will be open 365 days each year.
(a) What must average occupancy be to break-even?
(b) What is the gross profit if they sell 500,000 tickets?
(3 Marks)
Q. 4. Give a practical example in which a business became efficient by changing from traditional
purchasing process to e-purchasing. (3 Marks)
Q. 5. Give a practical example of any incident which took place in an organization which supports
the theory of Pareto Analysis. (3 Marks)

Section C (5 marks 0.5 each) (True/False To be answered in the answer sheet)

Q. 1. High customer contact is required in services.
Q. 2. OM has many faces and names such as V. P. Operations, Director of Supply Chains,
Manufacturing Manager, etc.
Q. 3. Volume flexibility means that you are able to ramp production up and down to match market
demands.
Q. 4. Environmental Scanning, Mission and Core Competencies are three inputs required to create
Business Strategy.
Q. 5. In concurrent engineering process all functions form a design team that develops
specifications, involves customers early, solves potential problems, reduces costs and shortens time
to market.
Q. 6. Product variety is small in intermittent operations.
Q. 7. Subscription Revenue Model provides users with information on services and products;
provides opportunity for suppliers to advertise.
Q. 8. You can outsource the process if it costs less even if it is critical to your businesss success.
Q. 9. If a product is fit for use it does not mean that it is defining Quality.
Q. 10. Flowcharts are often not the first step in process re-engineering.

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Instructors Signature
Signature

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