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Production and Operations Management

Subject Code-B107 Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choice & Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. Production and Operations Management concerns itself with the conversion of:
a. Outputs in to inputs
b. Inputs in to outputs
c. Outputs in to outputs
d. None of the above
2. Continuous Production is
a. The last operation to the finished product
b. The first operation to the finished product
c. The mid operation to the finished product
d. None of the above
3. Independent demand is
a. Demand that is controlled by the company
b. Demand that is controlled by the customer
c. Demand that is not controlled by the company
d. All of the above
4. Enterprise Resource Planning (ERP) has been defined as a
a. Complete Enterprise wide business solution
b. Complete Enterprise narrow business solution
c. a & b
d. None of the above
5. CAD stands for
a. Computer Architecture Design
b. Computer Aided Design
c. Computer Aided Drafting
d. All of the above
6. Delphi method is the most widely used and accurate method of
a. Demand forecasts
b. Exponential forecasts
Examination Paper of Production and Operations Management
IIBM Institute of Business Management
c. Technological forecasts
d. All of the above
7. JIT/Kanban systems help eliminate __________
a. Increase the number of products
b. Increase the amount of raw materials
c. Increase the amount of energy
d. All of the above
8. PPSCS stands for
a. Project Planning Scheduling & Control System
b. Project Planning Sequencing & Control System
c. Production Planning Scheduling & Control System
d. None of the above
9. Process layout is also known as.
a. Group layout
b. Line layout
c. Product layout
d. Functional layout
10. Time study is a ______ technique for recording the times and rate of working
a. Standard times
b. Work measurement
c. Allowances
d. None of the above
Part Two:
1. Define Job Shop Production.
2. What do you understand by „Quality Control‟?
3. What do you mean by materiel handling?
4. Define ABC analysis.
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Examination Paper of Production and Operations Management
IIBM Institute of Business Management
Caselet 1
Company Background
The Bronson Insurance Group was originally founded in 1900 in Auxvasse, Missouri, by James Bronson.
The Bronson Group owns a variety of companies that underwrite personal and commercial insurance
policies. Annual sales of the Bronson Group are $100 million. In recent years, the company has suffered
operating losses. In 1990, the company was heavily invested in computer hardware and software. One of
the problems the Bronson Group faced (as well as many insurance companies) was a conflict between
established manual procedures and the relatively recent (within the past 20 years) introduction of
computer equipment. This conflict was illustrated by the fact that much information was captured on
computer but paper files were still kept for practical and legal reasons.
File Clerks
The file department employed 20 file clerks who pulled files from stacks, refilled used files, and delivered
files to various departments including commercial lines, personal lines, and claims. Once a file clerk
received the file. Clerks delivered files to underwriters on an hourly basis throughout the day. The average
file clerk was paid $8,300 per year. One special file clerk was used full time to search for requested files
that another file clerk had not been able to find in the expected place. It was estimated that 40 percent of
the requested files were these “no hit” files requiring a search. Often these “no hit” files were eventually
found stacked in the requester‟s office. The primary “customers” of the file clerks were underwriters and
claims attorneys.
Company management and operations analysts were consistently told that the greatest problem in the
company was the inability of file clerks to supply files in a speedy fashion. The entire company from top to
bottom viewed the productivity and effectiveness of the department as unacceptable. An underwriter used
20-50 files per day. Because of their distrust of the files department, underwriters tended to hoard often
used files. A count by operations analysts found that each underwriter kept from 100-200 files in his or her
office at any one time. An underwriter would request a file by computer and work on other business until
the file was received. Benson employed 25 underwriters.
Management Information System
Upper management was deeply concerned about this problem. The MIS department had suggested using
video disks as a possible solution. A video disk system was found that would be sufficient for the
companies needs at a cost of about $12 million. It was estimated that the system would take two years to
install and make compatible with existing information systems. Another, less attractive was using
microfilm. A microfilm system would require underwriters to go to a single keyboard to request paper
copies of files. The cost of a microfilm system was $5 million.
1. What do you recommend? Should the company implement one of the new technologies, if yes,
Examination Paper of Production and Operations Management
IIBM Institute of Business Management
2. An operations analyst suggested that company employees shared a “dump on the clerks”
mentality. Explain.
Caselet 2
Harrison T. Wenk III is 43, married, and has two children, ages 10 and 14. He has a master‟s degree
in education and teachers junior high school music in a small town in Ohio. Harrison‟s father passed
away two months ago, leaving his only child an unusual business opportunity. According to his
father‟s will, Harrison has 12 months to become active in the family food-catering business, Kare-
Full Katering, Inc., or it will be sold to two key employees for a reasonable and fair price. If Harrison
becomes involved, the two employees have the option to purchase a significant, but less than
majority, interest in the firm. Harrison‟s only involvement with this business, which his grandfather
established, was as an hourly employee during high school and college summers. He is confident that
he could learn and perhaps enjoy the marketing side of the business, and that he could retain the longtime
head of accounting/finance. But he would never really enjoy day-to-day operations. In fact, he
doesn‟t understand what operations management really involves. In 1991 Kare-Full Katering, Inc. had
$3.75 million in sales in central Ohio. Net profit after taxes was $ 105,000, the eleventh consecutive
year of profitable operations and the seventeenth in the last 20 years. There are 210 employees in this
labor-intense business. Institutional contracts account for over 70 percent of sales and include partial
food services for three colleges, six commercial establishments) primarily manufacturing plants and
banks), two long -term care facilities, and five grade schools. Some customer location employs a
permanent operations manager; others are served from the main kitchens of Kare-Full Katering.
Harrison believes that if he becomes active in the business, one of the two key employees, the vice
president of operations, will leave the firm. Harrison has decided to complete the final two months of
this school year and then spend the summer around Kare-Full Katering – as well as institutions with
their own food services – to assess whether he wants to become involved in the business. He is
particularly interested in finding out as much as possible about operations. Harrison believes he owes
it to his wife and children to fairly evaluate this opportunity.
1. Prepare a worksheet of operations activities that Harrison should inquire about this summer.
2. If you were Harrison, what would you do? Why?
Section C: Applied Theory (30 marks)
 This Section Consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
Examination Paper of Production and Operations Management
IIBM Institute of Business Management
1. What do you mean by Tactical Planning? What are the mathematical approaches to aggregate
2. What is the concept of forecasting in operation? List the different types of forecasting methods.