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OPERATIONS MANAGEMENT

CASE-1 (16 Marks)
Bloomsday Outfitters produces T-shirts for road races. They need to acquire some new stamping
machines to produce 30,000 good T-shirts per month. Their plant operates 200 hours per month, but
the new machines will be used for T-shirts only 60 percent of the time and the output usually includes
5 percent that are “seconds” and unusable. The stamping operation takes 1 minute per T-shirt, and the
stamping machines are expected to have 90 percent efficiency considering adjustments, changeover of
patterns, and unavoidable downtime. How many stamping machines are required?
CASE-2 (16 Marks)
In the table given below the Distribution Manager is expected to service these DCs as per the demands
placed. If the actual sales after completing week one is as follows, what would be the quantities that
would need amendment as far as Distribution Manager is concerned to service for week two and
onwards?
After week one the actual sales to Forecasted sales for week one ratio is as under: Mumbai did 80 % of
forecast , Lucknow did 75 % of forecast Kolkata did 60 % of week one forecast Chennai did 125 % of
forecast and Delhi did 150 % of week one forecast
Note : Kolkata will receive transit stocks in week 2 .
3 | P a g e
CASE-3 (16 Marks)
After working for 30 years, Ramjee Somjee Dutt opted for VRS and started a courier company and did
very well in the first four years. He was now looking for expansion of his business and decided to
venture into Road transportation business between Chennai and Mumbai and Mumbai and Delhi as he
felt that he could do well on this line. However before taking a final decision he hires your
Management Consultant firm formed by yourself. He has requested you to work out the Price to quote
his clients for these two routes considering the costs involved. He expects to earn a minimum profit of
Rs 1000 per day per truck after meeting all expenses. Your analysis of market conditions tell you the
following:
Vehicle cost Rs 7 lacs Depreciation 15 % Maintenance costs per day Rs 150 Drivers monthly Salary
Rs 5000 : Attendants monthly salary Rs 3000 . Misc expenses Rs 200 per day. Driver allowance is Rs
125 per day and attendant gets Rs 75. Diesel cost per liter is Rs 25 and the vehicle gives an average
mileage of 4 km to a liter. The Financial institutions offer loans at 10 % interest pa, which Ramjee has
been negotiating. It has been observed that on an average the vehicle covers 400 km per day. The
distance between Mumbai to Delhi is 1500 km and Mumbai to Chennai is 1350 km. The driver gets
rest day in Mumbai only for one day after they return from any trip.
CASE-4 (16 Marks)
A company is operating in two unrelated businesses. The first one is making common salt, which is
sold in one-kilogram consumer packs. The second business is making readymade garments. The owner
of the businesses has decided to implement Materials Requirement Planning (MRP) in one of the two
businesses, which is likely to give him greater benefit. Assuming that the current turnover and profits
of both the units are comparable, compare the relative benefits and limitations of Materials
Requirement Planning (MRP) for these two businesses.
CASE-5 (16 Marks)
A Manufacturer of motorcycles buys spark plugs at Rs.15 each. Now he wishes to manufacture the
plugs in his own factory. The estimated cost for the manufacture of spark plugs is around
Rs.50,000=00 and the variable cost comes to Rs.5 per spark plug. The Production Manager advises the
Manufacturer that the factory should go for manufacturing instead of procuring them from the open
market.
List out reasons for the decision of the Production Manager backed up by the necessary data.