CIE-1 PPC Solved - BFGBFD PDF

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MCQs (from 1.1 to 1.10 ) 1.1 An explanatory forecasting technique in which the analyst must select independent variables that help determine the dependent variable is called A. exponential smoothing. C. trend analysis B. regression analysis D. moving average method 1.2 Operations generated forecasts often not to do with A. Inventory requirements C. Time requirements B. Resource needs D. Sales 1.3 Which of the following is not true for forecasting? A. Forecasts are rarely perfect B. The underlying casual system will remain same in the future C. Forecast for group of items is accurate than individual item D. Short range forecasts are less accurate than long range forecasts 1.4 Which of the following is not a forecasting technique? A. Judgemental C. Time horizon B. Time series D. Associative 1.5 Short term regular variations related to the calendar or time of day is known as A. Trend C. Cycles B. Seasonality D. Random variations 1.6 The correct sequence of operations in production planning and control is A. B. C. D.

Routing-Scheduling-Dispatching-Follow up Scheduling-Routing- Dispatching-Follow up Dispatching-Routing-Scheduling- Follow up Routing-Scheduling-Follow up-Dispatching

1.7 In which type of production system the unit cost of production is low? A. Combined production

C. Intermittent production

B. Continuous production D. Custom production 1.8 The function of _______________ involves the decision when, what, how, and why to produce goods A. production planning.

C. method analysis

B. production control. D. quality control. 1.9 Chances of accidents are more in_______________ manufacturing system A. Continuous

C. Hybrid

B. Intermittent D. Job Shop 1.10 Job shop and batch processing are differentiated on the basis of: A. Job requirements C. Volume of output B. Degree of standardization D. Both (b) and (c) Q2 a) With the help of a simple flow diagram . Discuss in details about the f unctions of production planning and control. (5M)

Q2 b) Discuss the

functional and operational aspects of product design with suitable examples. (5M) 1.Functi o nal Aspect: •

the marketing possibilities of a product have been explored, the functional scope of the product has to be carefully analysed and properly defined. The definition of the objective of a product does speak about the complete functional scope of the product. •

A mixer, grinder, for example, has a clearly defined objective to grind and mix or shake the various items. Basically the mixer consists of a motor and a speed control unit but it has to be designed so as to serve with all attachments. Now the customer has to decide and define the functional aspect of the food mixer unit compatible with his requirements, taste and paying capacity.

•

Similarly in other products, the functional scope of the product/unit may be in the form of detachable accessories attachments and the usage can be left to the customer decision. So the functional aspect is concerned with the ease and efficiency of the product performance.

W h e n

2. Operational Aspect: •

After knowing the functional aspect of a product, it is relevant to consider the operational aspect. It is not important only that the product should function properly but is should also be easy to understand and simple to operate.

•

Sometimes the product has to be suitable for various operational conditions and very often it is subjected to varying degrees of expertise of workers or operators. With this trend for increased versatility of products, the products should be designed in such a way that by using basic attachments it should be possible to build a suitable combination for specific purposes.

Q3 a) List out the planning functions and controlling functions separately, explain them briefly. 1. PLANNING FUNCTION The planning function starts once the task to be accomplished is specified, with the analysis of four M’s, i.e., Machines, Methods, Materials and Manpower. This is followed by process planning (routing). Both short-term (near future) and long-term planning are considered. Standardization, simplification of products and processes are given due consideration. 2. CONTROL FUNCTION Control phase is effected by dispatching, inspection and expediting materials control, analysis of work-in-process. Finally, evaluation makes the PPC cycle complete and corrective actions are taken through a feedback from analysis. A good communication, and feedback system is essential to enhance and ensure effectiveness of PPC. Parameters for PPC The functions of PPC can be explained with the following parameters: Materials: Raw materials, finished parts and bought out components should be made available in required quantities and at required time to ensure the correct start and end for each operation resulting in uninterrupted production. The function includes the specification of materials (quality and quantity) delivery dates, variety reduction (standardization) procurement and make or buy decisions. 2. Machines and equipment:This function is related with the detailed analysis of available production facilities, equipment down time, maintenance policy procedure and schedules. Concerned with economy of jigs and fixtures, equipment availability. Thus, the duties include the analysis of facilities and making their availability with minimum down time because of breakdowns. 3. Methods: This function is concerned with the analysis of alternatives and selection of the best method with due consideration to constraints imposed. Developing specifications for processes is an important aspect of PPC and determination of sequence of operations. 4. Process planning (Routing): It is concerned with selection of path or route which the raw material should follow to get transformed into finished product. The duties include: 1.

a. b.

Fixation of path of travel giving due consideration to layout. Breaking down of operations to define each operation in detail.

c. 5.

Deciding the set up time and process time for each operation. Estimating: Once the overall method and sequence of operations is fixed and process sheet for each operation is available, then the operations times are estimated. This function is carried out using extensive analysis of operations along with methods and routing and a standard time for operation are established using work measurement techniques. 6. Loading and scheduling: Scheduling is concerned with preparation of machine loads and fixation of starting and completion dates for each of the operations. Machines have to be loaded according to their capability of performing the given task and according to their capacity. Thus the duties include: a. b. c. 7.

Loading, the machines as per their capability and capacity. Determining the start and completion times for each operation. To coordinate with sales department regarding delivery schedules. Dispatching: This is the execution phase of planning. It is the process of setting production activities in motion through release of orders and instructions. It authorizes the start of production activities by releasing materials, components, tools, fixtures and instruction sheets to the operator. The activities involved are:

a. b. c. d.

To assign definite work to definite machines, work centers and men. To issue required materials from stores. To issue jigs, fixtures and make them available at correct point of use. Release necessary work orders, time tickets, etc., to authorize timely start of operations. e. To record start and finish time of each job on each machine or by each man. 8. Expediting: This is the control tool that keeps a close observation on the progress of the work. It is logical step after dispatching which is called ‘follow-up’. It coordinates extensively to execute the production plan. Progressing function can be divided into three parts, i.e., follow up of materials, follow up of work-in-process and follow up of assembly. The duties include: a.

Identification of bottlenecks and delays and interruptions because of which the production schedule may be disrupted. b. To devise action plans (remedies) for correcting the errors. c. To see that production rate is in line with schedule. 9. Inspection: It is a major control tool. Though the aspects of quality control are the separate function, this is of very much important to PPC both for the execution of the current plans and its scope for future planning. This forms the basis for knowing the limitations with respects to methods, processes, etc., which is very much useful for evaluation phase. 10. Evaluation: This stage though neglected is a crucial to the improvement of productive efficiency. A thorough analysis of all the factors influencing the production planning and control helps to identify the weak spots and the corrective action with respect to pre-planning and planning will be effected by a feedback. The success of this step depends on the communication, data and information gathering and analysis.

Q3 b) A firm uses simple exponential smoothing with  = 0.3 to forecast demand. The forecast for the first week of January was 500 units, whereas actual turned out to be 450 units. i) Forecast the demand for the second week of January. ii) Assume that the actual demand during the second week of January turned out to be 550 units. Forecast the demand up to February third week, assuming the subsequent demands as 475, 450, 470, 525, and 470 units. Solution:-

i)

Forecast the demand for the second week of January.

Period

Actual Demand

Forecast

January (week 1)

450

500

Ft-1 = 500 At-1 = 450  = 0.3 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 500 +0.3[450-500] Ft = 485 ii) Assume that the actual demand during the second week of January turned out to be 550 units. Forecast the demand up to February third week, assuming the subsequent demands as 475, 450, 470, 525, and 470 units.

Period

Actual Demand

Forecast

January (week 1)

450

500

January (week 2)

550

505 (calculated)

January (week 3)

475

January (week 4)

450

February (week 1)

470

February (week 2)

525

February (week 3)

470

January (week 2) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 485 +0.3[550-485] Ft = 504.5 = 505 unit

February (week 1) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 483 +0.3[470-483] Ft = 479.1 = 480 unit

January (week 3) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 505 +0.3[475-505] Ft = 496 unit

February (week 2) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 480 +0.3[525-480] Ft = 493.5= 494 unit

January (week 4) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 496 +0.3[450-496] Ft = 483 unit

February (week 3) Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 494 +0.3[470-494] Ft = 486.8= 487 unit

Q4 Forecast the production for next two years when the production quantity for last ten years is as follows: 200, 225, 235, 240, 255, 260, 265, 275, 270, 271 Use the following methods and comment on results (i) Moving average ( 3 Years and 5 Years) (ii) Exponential smoothing for α = 0.3 and 0.7. Solution:i)

Period

Moving average ( 3 Years and 5 Years)

Actual Demand

Forecast using 3 years

Forecast using 5 years

moving average

moving average

1

200

--

--

2

225

200

--

3

235

225

--

4

240

220

--

5

255

233.33

--

6

260

243.33

231

7

265

251.66

243

8

275

260

251

9

270

266.66

259

10

271

270

265

Forecast using 3 years moving average Period 4 = (200+225+235)/3 = 220 Period 5 = (225+235+240)/3 = 233.33 Period 6 = (235+240+255)/3 = 243.33 Period 7 = (240+255+260)/3 = 251.66 Period 8 = (255+260+265)/3 = 260 Period 9 = (260+265+275)/3 = 266.66 Period 10 = (265+275+270)/3 = 270

Forecast using 5 years moving average Period 6 = (200+225+235+240+255)/5 = 231 Period 7 = (225+235+240+255+260)/5 = 243

Period 8 = (235+240+255+260+265)/5 = 251 Period 9 = (240+255+260+265+275)/5 = 259 Period 10 = (255+260+265+275+270)/5 = 265

(i)

Exponential smoothing for α = 0.3 and 0.7.

Period

Actual Demand

Forecast using α = 0.3

Forecast using α = 0.7

1

200

--

--

2

225

200

200

3

235

211

225

4

240

220

236

5

255

231

250

6

260

240

257

7

265

8

275

9

270

10

271

α = 0.3 Period 3 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 200 +0.3[235-200] Ft = 210.5 = 211 unit

α = 0.7 Period 3 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 200 +0.7 [235-200] Ft = 224.5 = 225 unit

Period 4 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 211 +0.3[240-211] Ft = 219.7 = 220 unit

Period 4 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 225 +0.7 [240-225] Ft =235.5 = 236 unit

Period 5 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 231 +0.3[260-231] Ft =239.7 = 240 unit

Period 5 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 250 +0.7 [260-250] Ft =257 unit

Period 6 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 220 +0.3[255-220] Ft = 230.5= 231 unit

Period 6 Ft = Ft-1 +  [(At-1)- (Ft-1)] Ft = 236 +0.7 [255-236] Ft =249.3 = 250 unit

Likewise leftover values are calculated Q5 a) For the given data, compute 3 month moving average Month Jan Feb Mar Apr May June July Aug Sep Oct Orders 120 90 100 175 110 50 75 130 110 90 Compute the 3 month weighted moving average with a weight of 52% for the October data, a weight of 23% for the September data, and a weight of 18% for the August data. Solution:WMA = 130 (0.18)+110 (0.23)+ 90 (0.52)/(0.18+0.23+0.52) WMA =

(23.4+25.3+46.8)/0.93

WMA = 102.688 = 103 Q5 b) One of the two wheeler manufacturing company experienced irregular but usually increasing demand for three products. The demand was found to be 520 bikes for June and 540 bikes for July. They use a forecasting method which takes average of past year to forecast future demand. Using the simple average method demand forecast for June is found as 420 bikes (Use a smoothing coefficient 0.7 to weight the recent demand most heavily) and find the demand forecast for August. Solution:-

Period

Actual Demand

Forecast

June

520

420

July

540

504

For July Ft = Ft-1 +  [(At-1)- (Ft-1)] = 420+ 0.7(540-420) = 504 Q6a) Explain the importance of forecasting in an industry. 1. Promotion of new business: Forecasting is of utmost importance in setting up a new business. It is not an easy task to start a new business as it is full of uncertainties and risks. With the help of forecasting the promoter can find out whether he can succeed in the new business; whether he can face the existing competition; what is the possibility of creating demand for the proposed product etc. After discovering the business opportunity, he will see the possibilities of assembling men, money, materials etc. The success of a business unit depends upon as to how sound is the forecasting? Proper forecasting will help to minimise the role of luck or chance in determining business success or failure. A successful promoter is also the prophet of economic conditions. 2. Estimation of financial requirements: The importance of forecasting can’t be ignored in estimating the financial requirements of a concern. Efficient utilisation of capital is a delicate issue before the management. No business can survive without adequate capital. But adequacy of either fixed or working capital depends entirely on sound financial forecasting. Financial estimates can be calculated in the light of probable sales and cost thereof. How much capital is needed for expansion, development etc., will depend upon accurate forecasting? 3. Smooth and continuous working of a concern: ‘Forecasting of earnings’ ensures smooth and continuous working of an enterprise, particularly to newly established ones. By forecasting, these concerns can estimate their expected profits or losses. The object of a forecast is to reduce in black and white the details of working of a concern. 4. Correctness of management decisions: The correctness of management decisions to a great extent depends upon accurate forecasting. As Meivin, T. Copeland says, “Administration is essentially a decision making process and authority has responsibility for making decisions and for ascertaining that the decisions made are carried out. In business, whether the enterprise is large or small, changes in conditions occur; shifts in personnel take place, unforeseen contingencies arise. Moreover, just to get the wheels started and to keep them turning, decisions must be made.”

This shows that the decision making process continues throughout the life of the concern. Forecasting plays an important role in various fields of the concern. As in the case of production planning, management has to decide what to produce and with what resources. Thus forecasting is considered as the indispensable component of business, because it helps management to take correct decisions. 5. Success in business: The accurate forecasting of sales helps to procure necessary raw materials on the basis of which many business activities are undertaken. The accurate sales forecasting becomes the basis for several other budgets. In the absence of accurate sales forecasting, it is difficult to decide as to how much production should be done. Thus, to a great extent, the budgets of other departments depend upon the compilations based on the sales forecasts and the accuracy of these budgets also depends upon correctness of sales forecasting. Thus, the success of a business unit depends on the accurate forecasting by the various departments. 6. Plan Formulation: The importance of correct forecasting is apparent from the Key role it plays in planning. It should not go unaccounted that forecasting is an essential element in planning since planning premises include some forecasts. There are forecast data of a factual nature having enormous implication on sound premises. Undoubtedly, forecasting is a prelude to planning and indeed it is the foundation on which planning takes place. Infact, planning under all circumstances and in all occasions involve a good deal of forecasting, i.e. appraising the future in the light of existing conditions and environment. Forecasting and planning are closely related. Adequate planning, no matter whether it is overall or sectoral, short-term or long term, largely depends on forecasting. 7. Co-Operation and co-ordination: Forecasting is not one man’s job. It needs proper co-ordination of all departmental heads in a company. Thus, by bringing participation of all concerned in the process of forecasting, team spirit and coordination is automatically encouraged. According to Henry Fayol, “The act of forecasting is of great benefit to all who take part in the process, and is...