UNIVBRSITY OF COLOMBO, SRI LANKA

Facultyof Management& Finance

Postgraduate& Mid-career DevelopmentUnit
Il-first half) Examination- September,2010
Masterof BusinessAdministration(Semester

MBA 538-OperationsManagement
Three (03) Hours
AnswerAny FIVE Questions
Noteson both sidesof A'4 paperareallowed.
Use a separateanswerbook for eachpart
This paperconsistsof Seven(07) Questionsin Five (05) printed pages

PART - I
Q1.
i. Whatar
ii. Whal
clas

- andsimilaritiesbetweenproductsandservices?
(04 Marks)
product
is
it
different
from the
design?How
- .rcsignapproachin
,--rrtlol designapproach?
(05 Marks)

andgive an exampleproductfor each.

iii. Differentiatethe following productstrategies
(a) make-to-stock
(b) make-to-order
Explainhow you would chooseamongthesestrategies.
Discussthe suitabilityof massproductionandjob shopin eachstrategy.
(07 Marks)
iv. How shoulda firm changeits processat differentstagesof the productlife cycle?
(04 Marks)
(Total20 marks)

Q2.
i.

ll.

il1.

What is meantby the capacityof a facility?In what ways can the capacityof a facility
planningrequiredfor a facility?
Why is capacityrequirements
be measured?
(05 Marks)
:j
Elaboratethis statement.
Strategiccapacityplanningis a key for competitiveness?
(04 Marks)
two locations:Campahaand Negambofor its audio
Amila Electronicsis considering
equipmentfactory. At Gampaha,the fixed cost of the factory is estimatedat Rs I
At
million and the variablecost is Rs 1,200per audio equipmentmanufactured.
the
variable
1.2
and
at
Rs
million
is
estimated
Negombo,the fixed cost of the factory
The sellingpriceof the equipment
costisRs 1,100per audioequipmentmanufactured.
place
Decidewhich
of manufacture.
the
of
will be Rs 3,000 per unit irrespective
analysis.
locationis bestfor the factoryunderdifferentdemandlevelsusingbreak-even
(l I Marks)
(Total20 marks)

Q3.
that havepredominantlyproduct,process,
i.
Give at leasttwo examplesof organizations
andfixed-positionlayouts.
(06 Marks)
ll,

Whatis a cellularlayout?How is it differentfrom a processlayout?

(04 Marks)

ul.

Given below are tasksinvolvedand their time requirementsin producinga consumer

product.
Task
A

B
C

D
E
F
G
H
I
J
Total

Tasktime (Seconds)

Precedinstask

20
40
l3
l0

None

8
l5

60
75

60
55
356

Line processingis adoptedin production.

A
B

B
B
C,D,E
A
G
H
F,'

(a) Ifthe projectedrateofproductionis 40 unitsperhour,whatwouldbethecycletime

per unit?
(03 Marks)
(b) Determinethe most efficient productionline to meet the productionrequirements
given in (a) aboveshowingthe allocationof tasksamongworkstations.
(07 Marks)
(Total20 marks)
Q4.
i.
planning,anddiscussthe relevantcostcomponent
What arethe objectivesof aggregate
involvedwith them.
(08 Marks)
ii.

Followingfigures(Rs.'000)showsthe salesduringthe pastsix monthsof the XYZ

company.

January
February
March
April
May
June

(Rs.'000)
215
223
232
234
240
247

(a) Using exponentialsmoothingmethod,forecastthe salesfor April throughJuly for

the company.(Assumethat forecastfor March is 200 unitsanda= 0.2).

(08 Marks)
(b) What is the main weaknessof using exponentialsmoothingmethod with data
patternedlike above?Suggestan improvedtime-seriesmethod to forecastthe
sales.(You are not expectedto re-computeforecastusingthe suggested
method).
(04 marks)
(Total20 Marks)

Qs.
i. What is the differencebetweensporadicproblemsandchronicproblemsin the contextof
qualitymanagement?
(06 Marks)
ii. "lf your employeesare askedto increasethe quality of output,the quantityof outputwill
be suffered."Discussthis statement.
(06 Marks)
iii. Leanmanufacturing
focuseson eliminationof waste.Explainfour leantoolswhich are
usedto eliminatewaste.
(08 Marks)
(Total20 marks)

PART.II

Q6.
i.

One of the inputsfor MRP is MasterProductionSchedule(MPS) and MPS is derived

from AggregatePlanning(AP). Explainwith an examplehow you can convertan AP
outputto a MPS.
(04 Marks)

ii.

Developan MRP outputfor productQ with the productstructuresgiven below:

There is an order for 200 units.of productQ in period 7. The lead time of each
componentandmaterialsin the structurehasbeengiven in the figure.
The on-handquantitiesand safetystocksmaintainedfor the itemsare given in the table
below:
Items

On-handQuantity

20

30

SafetyStock

Thereare no openordersfor any items.The lot sizeor orderquantityfor itemsQ andC

whilethe lot sizefor D is 200 unitsandE is 500units.
arethe sameas net requirements,
What shouldbe the size of the ordersfor each item and when shouldthe ordersbe
released?
(16 Marks)
(Total20 marks)

Q7.
i.

Comparea traditionalorganizationwith a supplychain practicingorganizationin the

context of inventory management,inventoryflows, cost, information,and risk and
planning.
(04 Marks)

ii.

Discussstepsinvolved in implementingsupplychain practicesin a manufacturing

orsanization.
(04 Marks)
Don CarolisPLC operates52 weeksper year,and the cost of goodssold last year was
The firm has eight inventoryitems: four raw materials,two work-in$6,500,000.
processitems,and two finishedgoods.The table below showslast year'sinventory
recordsof theseitems,alongwith theirunit costvalues.

Inventory
Category

Average
Part
Opening
Closing
Unit Cost ($)
Number Inventory for Inventory for
the Period
the Period
22,000
2.00
18,000
Raw materials RM-I
4.000
3.00
RM-2
6,000
3.500
5.00
RM-3
2.500
l,000
10.00
1.000
RM-4
4,000
r8.00
Work-inWIP-I
8.000

process

wlP-2

Finished
goods

FG-I
FG-2

5,000
1.500
700

I 1,000
500
300

21.00
33.00
42.00

(a) Whatwasthe averageaggregateinventoryvalue?

(05 Marks)
(b) How many.weeksof supplythe firm hadlastyear?
(04 Marks)
(c) Whatwasthe inventorvturnoverlastvear?
(03 Marks)
(Total20 marks)

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