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IGNOU MS-05 Free Solved Assignment 2012


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Course Code : MS - 05 Course Title : Management of Machines & Materials Assignment Code : MS-05/SEM - 1/2012 Coverage : All Blocks Note : Answer all the questions and submit this assignment on or before April 30, 2012, to the coordinator of your study center. Q1. Define Operations Management and describe four activities performed by Operations Managers. Solution: Operations management is a multi-disciplinary field that focuses on managing all aspects of an organization's operations. "The typical organization consists of the integration of many different functions, " wrote Howard J. Weiss and Mark E. Gershon in Production and Operations Management. "The two most obvious functions are to provide the product or service and to sell the product or service. Operations management focuses on the function of providing the product or service. It is concerned with the planning and controlling of all activities necessary for the provision of the firm's product or service." Aspects of operations management, then, include products or services to emphasize; facility size and location with respect to customers and suppliers; marketing strategies to attract clients/custmers; techniques and equipment to use to make the goods or to provide the services; work force management and training; and measurements of quality assurance. Operations managers apply ideas and technologies to increase productivity and reduce costs, improve flexibility to meet rapidly changing customer needs, enhance product quality, and improve customer service. Key Issues in Operations :As an organization develops plans and strategies to deal with the opportunities and challenges that arise in its particular operating environment, it should design a system that is capable of producing quality services and goods in demanded quantities in acceptable time frames. Activities:Operations Management has become a necessary subject in business management studies as this provides essential tools for the smooth, efficient and effective business operations which in turn leads to higher productivity and profits. Irrespective of the size of the enterprise operations management techniques are widely practiced with varying degrees of perfection in manufacturing industries,projects and construction,service organizations like hospitals,medicare, travel & tourism, education, banking etc. The operation managers help to achieve the organizations overall goals within the framework of the corporate strategy. The operations management system consists of five basic elements: input transformation subsystem output control subsystem feedback. Let us take two examples of an oil refinery in the manufacturing sector and a truck transport delivery service in the service sector to illustrate these elements. In an oil refinery the inputs are crude oil, labour and processing plants and the output is petroleum products like gasoline, diesel etc.The transformation process consists of heating, mixing and distillation; feedback is production rates,expenses; and the control elements are plant managers, accountants, supervisors etc. In the example of a truck transport delivery service the inputs are trucks and facilities and output is delivered goods.The transformation is the picking up & transportation of goods.The feedback mis cost per mile,truck utilization rates etc and the control is the terminal manager, supervisor etc

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Typical concepts used to measure the success of the operation manager include productivity, efficiency and effectiveness. Operations management involves the management of human,technology and system resources.The operations management functions,like in other management disciplines, include planning,directing,organizing,staffing,motivating and controlling to achieve the set organizational goals. In addition to the above management functions operation managers perform many other activities as given below. Facility location and lay out design-The facility location activity involves the decision of the location for the facility,manufacturing unit or service outfit,geographically.The layout design determines how the internal facilities (departments,equipments,service stations,workstations etc ) will be arranged. Job design and work measurement-The job design activity involves the structuring of work tasks assigned to an employee and the study of the tasks that make up the job.The work measurement activity involves the timing of the tasks that comprise a job.The job design and work measurement activities are carried out to optimize output.Design of the production processes, type of process design,and investment and economic analysis also studied to achieve maximum productivity Demand forecasting-Organizations need to forecast the demand for their products and services so that all relevant plans can be developed for the future.Operation managers need to estimate future demand as accurately as possible as this will influence not only the requirement of manpower resources but also the utilization of working capital.Various types of quantitative and non-quantitative forecasting techniques are used in operation management. Planning and controlling operations-Planning is the most important function performed by an operations manager.Planning may be long range(strategic),short range(operational) or medium range(tactical). An operational management plan follows as a sequel to the overall corporate planning and includes marketing,financial,personnel/MIS, other plans at the functional level and departmental plans for the purchasing,inventory,assembly,finishing etc.Aggregate plans define how the resources can be best employed to meet market demand for the given products Materials management-The materials management activity involves the grouping of management functions supporting materials flow.Materials management includes activities starting from purchase and internal control of production materials,the planning and control of unfinished products in process at various stages of production and the warehousing,shipping and distribution of the finished product Inventory control and management-The inventory management activity is concerned with the planning and control of inventories of raw materials,consumables,work in progress materials,other economic resourses and finished goods. Purchase management-This function is a subsystem of the materials management and is of special importance in a typical manufacturing firm where 50-60%of the total costs is made up of purchases.Purchase management functions include vendor development,selection of suppliers,contract negotiation,value analysis,make or buy decisions and maintaining the high ethics Total Quality Management-This is a management concept that focuses the collective efforts of all managers and employees on satisfying customer expectations by continually improving operation management processes and products. Supply chain management-Supply chain can be described as the network covering the various stages in the provision of products or services to the customers.Supply chain management integrates procurement,operations and logistics to provide value added products or services.Effective management of the supply chain enables organisations to meet customer requirements in time with improved facility utilisation,optimimal inventory etc. Project Management-A thorough knowledge of project management procedures,tools and techniques is essential for the operations manager as almost all organizations embark upon projects of one kind or another almost all the time.Also some project oriented organizations take years to deliver their products.Project management uses basic tools like PERT/CPM and their advanced versions for planning ,scheduling and expediting. Maintenance management-The objective of maintenance management is to ensure that the systems are working at their optimum efficiency and is essential to the organization for productivity,increase operational life of equipments and kep safe working conditions.Maintenance management uses modern preventive and predictive maintenance tools and monitoring techniques

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======================================================================== ========== Q2. Explain Product Design and development. How does it influence the process design? Solution: Key Issues in Operations As an organization develops plans and strategies to deal with the opportunities and challenges that arise in its particular operating environment, it should design a system that is capable of producing quality services and goods in demanded quantities in acceptable time frames. DESIGNING THE SYSTEM. Designing the system begins with product development. Product development involves determining the characteristics and features of the good (or service if engaged in a service-oriented industry) to be sold. It should begin with an assessment of customer needs and eventually grow into a detailed product design. The facilities and equipment that will produce the product, as well as the information systems needed to monitor and control performance, are part of this system design process. In fact, manufacturing process decisions are integral to a system's ultimate success or failure. "Of all the structural decisions that the operations manager faces, the one with the greatest impact on the manufacturing operation's success is the process/technology choice, " said Thomas S. Bateman and Carl P. Zeithaml in Management: Function and Strategy. "This decision addresses the question 'How will the product be made?' " Product development should be a crossfunctional decisionmaking process that relies on teamwork and communication to install the marketing, financial, and operating plans needed to successfully launch a product. Product design is a critical task because it determines the characteristics and features of the product, as well as how the product functions. Product design determines a product's cost and quality, as well as its features and performance. These are important factors on which customers make purchasing decisions. In recent years, new design models such as Design for Manufacturing and Assembly (DFMA) have been implemented to improve product quality and lower costs. DFMA focuses on operating issues during product design. This can be critical even though design costs are a small part of the total cost of a product, because, procedures that waste raw materials or duplicate effort can have a substantial negative impact on a business's operating profitability. Another innovation similar to DFMA in its emphasis on design is Quality Functional Deployment (QFD). QFD is a set of planning and communication routines that are used to improve product design by focusing design efforts on customer needs. Process design describes how the product will be made. The process design decision has two major components: a technical (or engineering) component and a scale economy (or business) component. The technical component includes selecting equipment and selecting a sequence for various phases of operational production. The scale economy or business component involves applying the proper amount of mechanization (tools and equipment) to make the organization's work force more productive. This includes determining: 1) If the demand for a product is large enough to justify mass production; 2) If there is sufficient variety in customer demand so that flexible production systems are required; and 3) If demand for a product is so small or seasonal that it cannot support a dedicated production facility. Facility design involves determining the capacity, location, and layout for the production acility. Capacity is a measure of an organization's ability to provide the demanded services or goods in the quantity requested by the customer in a timely manner. Capacity planning involves estimating demand, determining the capacity of facilities, and deciding how to change the organization's capacity to respond to demand. Facility location is the placement of a facility with respect to its customers and suppliers. Facility location is a strategic decision because it is a long-term commitment of resources that cannot easily or inexpensively be changed. When evaluating a location, management should consider customer convenience, initial investment necessary to secure land and facilities, government incentives, and operating transportation costs. In addition, qualitative factors such as quality of life for employees, transportation infrastructure, and labor environment should also be taken under consideration. Facility layout is the arrangement of the work space within a facility. It considers which departments or work areas should be adjacent to one another so that the flow of product, information, and people can move quickly and efficiently through the production system.

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PLANNING THE SYSTEM. Planning the system describes how management expects to utilize the existing resource base created as a result of the production system design. One of the outcomes of this planning process may be to change the system design to cope with environmental changes. For example, management may decide to increase or decrease capacity to cope with changing demand, orrearrange layout to enhance efficiency. Decisions made by production planners depend on the time horizon. Long-range decisions could include the number of facilities required to meet customer needs or studying how technological change might affect the methods used to produce services and goods. The time horizon for long-term planning varies with the industry and is dependent on both complexity and size of proposed changes. Typically, however, long-term planning may involve determining work force size, developing training programs, working with suppliers to improve product quality and improve delivery systems, and determining the amount of material to order on an aggregate basis. Short-term scheduling, on the other hand, is concerned with production planning for specific job orders (who will do the work, what equipment will be used, which materials will be consumed, when the work will begin and end, and what mode of transportation will be used to deliver the product when the order is completed). MANAGING THE SYSTEM. Managing the system involves working with people to encourage participation and improve organizational performance. Participative management and teamwork are an essential part of successful operations, as are leadership, training, and culture. In addition, material management and quality are two key areas of concern. Material management includes decisions regarding the procurement, control, handling, storage, and distribution of materials. Material management is becoming more important because, in many organizations, the costs of purchased materials comprise more than 50 percent of the total production cost. Questions regarding quantities and timing of material orders need to be addressed here as well when companies weigh the qualities of various suppliers. Building Success With Operations To understand operations and how they contribute to the success of an organization, it is important to understand the strategic nature of operations, the value-added nature of operations, the impact technology can have on performance, and the globally competitive marketplace. Efficient organization operations are a vital tool in achieving competitive advantage in the daily contest for customers/clients. What factors influence buying decisions for these entities? For most services and goods, price, quality, product performance and features, product variety, and availability of the product are critical. All these factors are substantially influenced by actions taken in operations. For example, when productivity increases, product costs decline and product price can be reduced. Similarly, as better production methods are developed, quality and variety may increase. By linking operations and operating strategies with the overall strategy of the organization (including engineering, financial, marketing, and information system strategy) synergy can result. Operations become a positive factor when facilities, equipment, and employee training are viewed as a means to achieve organizational objectives, rather than as narrowly focused departmental objectives. In recognition of this evolving viewpoint, the criteria for judging operations is changing from cost control (a narrowly defined operating objective) to global performance measurements in such areas as product performance and variety, product quality, delivery time, customer service, and operational flexibility.In today's business environment, a key component of operational flexibility in many industries is technological knowledge. Advances in technology make it possible to build better products using fewer resources. As technology fundamentally changes a product, its performance and quality often increases dramatically, making it a more highly valued commodity in the marketplace. But the growth in high-tech business applications has created new competitiors as well, making it important for businesses to try to register advantages in any and all areas of operations management. Over time, operations management has grown in scope and increased in importance. Today, it has elements that are strategic, it relies on behavioral and engineering concepts, and it utilizes management science/operations research tools and techniques for systematic decisionmaking and problem-solving. As operations management continues to develop, it will increasingly interact with other functional areas within the organization to develop integrated answers to complex interdisciplinary problems. Indeed, such interaction is widely regarded as essential to longterm business success for small business establishments and multinational corporations alike. ======================================================================== ==========

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Q3. What are the objectives of maintenance management? Discuss atleast five important indices for measuring the performance of maintenance department. Solution: The term maintenance means to keep the equipment in operational condition or repair it to its operational mode. Main objective of the maintenance is to have increased availability of production systems, with increased safety and optimized cost. Maintenance management involves managing the functions of maintenance. Maintaining equipment in the field has been a challenging task since the beginning of industrial revolution. Since then, a significant of progress has been made to maintain equipment effectively in the field. As the engineering equipment becomes sophisticated and expensive to produce and maintain, maintenance management has to face even more challenging situations to maintain effectively such equipments in industrial environment. This brief lecture on maintenance management includes maintenance strategies, functions of maintenance department, maintenance organization and elements of maintenance management. MAINTENANCE STRATEGIES OR OPTIONS A maintenance strategy or option means a scheme for maintenance, i.e. an elaborate and systematic plan of maintenance action. Following are the maintenance strategies [1] that are commonly applied in the plants.

Breakdown Maintenance or Operate to Failure or Unplanned Maintenance Preventive or Scheduled Maintenance Predictive or Condition Based Maintenance Opportunity Maintenance Design out Maintenance The equipment under breakdown maintenance is allowed to run until it breaks down and then repairing it and putting back to operation. This strategy is suitable for equipments that are not critical and have spare capacity or redundancy available. In preventive or scheduled Maintenance, maintenance actions such as inspection, lubrication, cleaning, adjustment and replacement are undertaken at fixed intervals of numbers of hours or Kilometers. An effective PM program does help in avoidance of accidents. Condition monitoring (CM) detects and diagnoses faults and it helps in planned maintenance based on equipment condition. This condition based maintenance strategy or predictive maintenance is preferred for critical systems and for such systems breakdown maintenance is to be avoided. A number of CM techniques such as vibration, temperature, oil analysis, etc. have been developed, which guide the users in planned maintenance [2]. In opportunity maintenance, timing of maintenance is determined by the procedure adopted for some other item in the same unit or plant. In design out maintenance, the aim is to minimize the effect of failures and in fact eliminates the cause of maintenance. Although it is an engineering design problem, yet it is often a responsibility of maintenance department. This is opted for items of high maintenance cost that are due to poor maintenance, poor design or poor design outside design specifications. It may be mentioned that a best maintenance strategy for each item should be selected by considering its maintenance characteristics, cost and safety. In addition to the above, new strategies concepts such as Proactive Maintenance, Reliability Centred Maintenance (RCM), Total Productive Maintenance (TPM), etc. have recently been evolved to look it from different perspectives and this has helped in developing effective maintenance. In proactive maintenance, the aim is identify what can go wrong, i.e. by monitoring of parameters that can cause failures. In RCM, the type of maintenance is chosen with reliability of the system in consideration, i.e. system functions, failures relating to those functions and effects of the dominant functional system failures. This strategy in the beginning was applied to critical systems such as aircrafts, nuclear and space applications. At present, this is being extended to critical systems in the plant. TPM, a Japanese concept, involves total participation of all concerned. The aim is to have overall effectiveness of the equipment with participation of all concerned using productive maintenance system.

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FUNTIONS OF A MAINTENANCE DEPARTMENT Following are the major functions of a maintenance department [3-4]: Maintenance of installed equipment and facilities Installations of new equipment and facilities PM tasks Inspection and lubrication of existing equipment CM tasks monitoring of faults and failures using appropriate techniques Modifications of already installed equipment and facilities Management of inventory Supervision of manpower Keeping records MAINTENANCE ORGANIZATION It concerns in achieving an optimum balance between plant availability and maintenance resource utilization. The two organization structures that are common are: Centralized and Decentralized. A decentralized structure would probably experience a lower utilization than centralized one but would be able to respond quickly to breakdowns and would achieve higher plant availability. In practice, one may have a mix of these two. A maintenance organization can be considered as being made up three necessary and interdependent components. Resources: men, spares and tools Administration: a hierarchy of authority and responsibility for deciding what, when and how work should be carried out. Work Planning and Control System: a mechanism for planning and scheduling the work and feeding back the information that is needed for correctly directing the maintenance effort towards defined objective. It may be mentioned that maintenance / production system is a continuously evolving organism in which the maintenance organization will need continuous modifications in response to changing requirements. Moreover, it is required to match the resources to workload. Maintenance activities be it preventive or condition monitoring, involve use of resources- men and materials including documents. This requires coordination amongst the involved personnel so that these are timely undertaken. Work planning and control system under maintenance management in the plant ensures this and provides planning and control of activities associated with maintenance. This means application of general management principles of planning, organizing, directing and controlling to the maintenance functions, e.g. to the establishment of procedures for development of maintenance strategy and to models for describing the flow of work through maintenance work planning department. Control system controls the maintenance cost and plant condition. ELEMENTS OF EFFECTIVE MAINTENANCE MANAGEMENT An effective maintenance system includes the following elements : Maintenance Policy Control of materials Preventive Maintenance Condition Monitoring Work Order Job planning Priority and backlog control Data recording system Performance measurement measures or indices

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Maintenance performance for a plant or an organization can be assessed through analysis of Reliability, Availability and Maintainability (RAM) plant data. Relevant parameters, measures or indices for specific plants can be identified [5]. The performance over a period of time will show if it is improving, going down or being sustained. This will also help in knowing how well the objectives are being met. In addition, it will guide the areas which are strong and which need to be strengthened. Use of computers and dedicated software will certainly help in implementing this and the maintenance management system in general. CONCLUSION The above lecture has briefly focused on the various aspects of maintenance management. Maintenance is expected to play even much bigger role in years to follow, as industries worldwide are going through an increasing and stiff competition and increased automation of plants. The down time cost for such systems is expected to be very high. To meet these challenges, maintenance has to use latest technology and management skills in all spheres of activities to perform its effective role in profitability of the company. Performance measurement for maintenance department:Performance measurement is the heart and soul of the performance-based management process. Flowing from the organizational mission and the strategic planning process, it provides the data that will be collected,analyzed, reported, and, ultimately, used to make sound business decisions. It directs the business function by justifying budgetary expenditures, documenting progress towards established objectives, identifying areas of both strength and weakness, providing an on-going assessment of the current ?organizational climate, and driving business improvement. In a nutshell, performance measurement supports organizational existence.Performance measurement systems succeed when the organizations strategy and performance measures are in alignment and when senior managers convey the organizations mission, vision, values and strategic direction to employees and external stakeholders. The performance measures give life to the mission, vision, and strategy by providing a focus that lets each employee know how they contribute to the success of the company and its stakeholders measurable expectations. Integration places performance measures where they are the most effective: integrated with the strategic,business activity. It makes it possible for the measures to be effective agents for change. If the measures quantify results of the activity, one only need compare the measured data with the desired goals to know if actions are needed. In other words, the measures should carry the message.While the flow of information in Volume 2 is designed for those who are ?first-timers to performance measurement, this volume will prove very useful to those who are experienced and knowledgeable about the subject. Novices will be provided with the information necessary to establish an integrated performance measurement system. ?Old timers will get a ?refresher course on performance measurement and may gain insight into new areas and new experiences about which they had not considered Useful Key Performance Indicators for Maintenance: A useful Maintenance Key Performance Indicator (KPI) drives reliability growth while guiding your choices for improving maintenance effectiveness and efficiency. A useful maintenance KPI lets you identify the issues causing your maintenance effects and helps you select the right strategy to either support or correct the actions producing the results. It is important that when you select a range of maintenance KPI you pick those that let you improve both equipment reliability and maintenance performance and not simply tell you that you have problems in your business. You measure a thing to learn something about it. To know how heavy an item is you weight it. To know its size and shape you measure its dimensions. From its volume and weight you can calculate its density. Measurements help you better understand a thing, how it works and how you have to work with it. Measuring maintenance is no different in intent. Useful maintenance measures are of two typesthose that improve Maintenance effect on business performance and those that drive good reliability-building behaviours.

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The key performance indicators (KPIs) that you use ought to help you to understand what Maintenance is doing, what it is achieving for the business and what more it can do to improve operational performance. Maintenance performance can be improved by making it more effective and more efficient. Effective maintenance is doing the right maintenance: that which brings higher equipment reliability and lower operational risks. Efficient maintenance is doing maintenance right so that reliability and risk reduction are achieved with the least resources and time. Maintenance Supports Business Strategy The work done by Maintenance needs to support the business aims and operating strategy. The ideal way to show that is to have maintenance performance clearly linked to the reasons your company is in business. In Figure 1, the pyramid of objectives, and Figure 2, the objectives cascade, you can see how KPIs are matched to business objectives and how maintenance and reliability activities cascade from the hierarchy of business purpose and aims1. Developing useful maintenance KPIs starts by creating KPI pathways from top to bottom of the organisation so you connect activities across the operation together with a corporate purpose. Note that you build the KPI pathways top-down, but the corporate goals are achieved bottom-up. Operational success actually starts on the shopfloor by doing those causes that bring success. Once you have a clear link between business goals and the maintenance activities needed to achieve them everyone can see the benefits that maintenance brings to the business. With interlinked, cascading objectives connecting the business together from top to bottom you can use KPIs to measure and check if they are being achieved

PURPOSE

EFFECT

CAUSE

BEHAVIOUR

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Examples of Maintenance KPIs A warning often heard about KPIs is to select those with outcomes that can be controlled by the group or persons responsible for meeting them. If you are trying to produce results that you cannot. greatly influence there will be much frustration and running-in-circles. You need measures that are relevant to what Maintenance does each day and which Maintenance can mostly control.Its interesting to see what experienced and successful operators have done when it comes to measuring maintenance performance. Figure 3 lists the KPIs used by DuPont Chemicals to monitor their operating process plants; along with the target benchmarks those plants are required to meet.

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As an example of not having control over the outcome of a performance measure we can consider the reliability indicator measure of Mean Time Between Failure from Figure 3. MTBF is affected by original equipment manufacturing quality, by capital project design selection, by the quality and accuracy of initial installation, by the severity of operating duty, by the quality of operator practices, by the maintenance activities performed or not performed when due, by the quality of parts storage and by maintenance workmanship. A KPI that shows MTBF is not greatly under Maintenance control because of the extent of life cycle influences that Maintenance has no way of affecting. For a company to greatly improve the MTBF of its equipment the whole life-cycle needs to be addressed and not only its maintenance performance. If Maintenance is charged with improving MTBF you would have to develop a company-wide training scheme to teach people at each phase of the life cycle what to do to improve reliability, and follow that with a business-wide project to change business processes to those that produce higher reliability. (That is what DuPont did.) Many companies only measure maintenance performance with historic indicators. A maintenance performance KPI that appears in a monthly report delivered mid-month is already six weeks out of date for the first week. Historic information is interesting, but as shown in Figure 4, feedback control means a lot of time passes before effects are observed and you can act in response. Useful and relevant maintenance performance indicators are those that drive the actions and behaviours needed to meet the goals you set at the lowest level in Figure 2, the Objectives Cascade. If we can do the cause of high reliability well it automatically follows that we will get a good operating effect that feeds into the corporate goals. Maintenance work orders spent on improving equipment Maintenance time and effort spent removing breakdown causes Maintenance time and effort spent improving maintenance procedures Maintenance time and effort spent improving maintainer skills/knowledge Maintenance time and effort spent reducing operating problems Time spent removing wasted effort and cost from maintenance processes Efforts spent improving stores management processes and stored parts reliability Maintenance work orders spent improving safety

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======================================================================== ======= Q4. State the principle of central limit theorem. Discuss the process of developing X and R charts for quality control. Solution: Principle of CLT:Central limit theorem Main article: Central limit theorem The theorem states that under certain (fairly common) conditions, the sum of a large number of random variables will have an approximately normal distribution. For example if (x1, , xn) is a sequence of iid random variables, each having mean and variance 2, then the central limit theorem states that

The theorem will hold even if the summands xi are not iid, although some constraints on the degree of dependence and the growth rate of moments still have to be imposed. The importance of the central limit theorem cannot be overemphasized. A great number of test statistics, scores, and estimators encountered in practice contain sums of certain random variables in them, even more estimators can be represented as sums of random variables through the use of influence functions all of these quantities are governed by the central limit theorem and will have asymptotically normal distribution as a result.

As the number of discrete events increases, the function begins to resemble a normal distribution Another practical consequence of the central limit theorem is that certain other distributions can be approximated by the normal distribution, for example: The binomial distribution B(n,p) is approximately normal N(np,np(1 p)) for large n and for p not too close to zero or one. The Poisson() distribution is approximately normal N(,) for large values of . The chi-squared distribution 2(k) is approximately normal N(k,2k) for large ks. The Student's t-distribution t() is approximately normal N(0,1) when is large. Whether these approximations are sufficiently accurate depends on the purpose for which they are needed, and the rate of convergence to the normal distribution. It is typically the case that such approximations are less accurate in the tails of the distribution. A general upper bound for the approximation error in the central limit theorem is given by the Berry Esseen theorem, improvements of the approximation are given by the Edgeworth expansions. Charts development process :In statistical quality control, the and R chart is a type of control chart used to monitor a variable's data when samples are collected at regular intervals from a business or industrial process.[1] The chart is advantageous in the following situations:[2]

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The sample size is relatively small (say, n 10 and s charts are typically used for larger sample sizes) The sample size is constant Humans must perform the calculations for the chart The "chart" actually consists of a pair of charts: One to monitor the process standard deviation (as approximated by the sample moving range) and another to monitor the process mean, as is done with the and s and individuals control charts. The and R chart plots the mean value for the quality characteristic across all units in the sample, , plus the range of the quality characteristic across all units in the sample as follows: R = xmax - xmin. The normal distribution is the basis for the charts and requires the following assumptions: The quality characteristic to be monitored is adequately modeled by a normally-distributed random variable The parameters and for the random variable are the same for each unit and each unit is independent of its predecessors or successors The inspection procedure is same for each sample and is carried out consistently from sample to sample The control limits for this chart type are: (lower) and (upper) for monitoring the process variability for monitoring the process mean where and are the estimates of the long-term process mean and range established during control-chart setup and A2, D3, and D4 are sample size-specific antibiasing constants. The anti-biasing constants are typically found in the appendices of textbooks on statistical process control. As with the and s and individuals control charts, the chart is only valid if the within-sample variability is constant,Thus, the R chart is examined before the chart; if the R chart indicates the sample variability is in statistical control, then the chart is examined to determine if the sample mean is also in statistical control. If on the other hand, the sample variability is not in statistical control, then the entire process is judged to be not in statistical control regardless of what the chart indicates. DETAIL:The Control Chart Defined Thus far in our training, we have learned that Histograms and Check sheets consolidate the data collected, to show the overall picture, while the Pareto diagram is used to indicate problem areas. However, for production purposes, we want to know more about the nature of changes that take place over a specified period of time, or as they occur in "real time". Control charts are generally used in a production or manufacturing environment and are used to control, monitor and IMPROVE a process. Common causes are always present and generally attributed to machines, material and time vs. temperature. This normally takes a minor adjustme ent to the process to make the correction and return the process to a normal output. HOWEVER, when making a change to the process, it should always be a MINOR change. If a plot is observed that shows a slight deviation trend upward or downward, the "tweaking" adjustment should be a slight change, and then another observation should be made. Too often people will over-correct by making too big of an adjustment which then causes the process to dramatically shift in the other direction. For that reason, all changes to the process should be SLIGHT and GRADUAL! A control chart is a graph or chart with limit lines, called control lines. There are basically three kinds of control lines: the upper control limit (UCL), the central line (actual nominal size of product), the lower control limit (LCL). The purpose of drawing a control chart is to detect any changes in the process that would be evident by any abnormal points listed on the graph from the data collected. If these points are plotted in

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"real time", the operator will immediately see that the point is exceeding one of the contol limits, or is heading in that direction, and can make an immediate adjustment. The operator should also record on the chart the cause of the drift, and what was done to correct the problem bringing the process back into a "state of control". The method in which data is collected to be charted is as follows: A sampling plan is devised to measure parts and then to chart that measurement at a specified interval. The time interval and method of collection will vary. For our example, we will say that we collect data five times a day at specified time intervals. In making the control chart, the daily data is averaged out in order to obtain an average value for that day. Each of these values then becomes a point on the control chart that then represents the characteristics of that given day. To explain further, the five measurements made in one day constitute one sub group, or one plot point. In some manufacturing firms, measurements are taken every 15 minutes, and the four plots (a subgroup) are totaled and then an average value is calculated. This value then equals one plot for the hour, and that plot is placed on the chart; thus, one plot point on the chart every hour of the working day. It is when these plot points should fall outside the UCL or LCL, that some form of change must occur on the assembly or manufacturing line. Further, the cause needs to be investigated and have proper action taken to prevent it from happening againcalled preventative action, and continuous improvement in the Quality world. The use of control charts is called "process control." In reality, however, a trend will develop that indicates the process is leading away from the center line, and corrective action is usually taken prior to a point exceeding one of the control limits. There are two main types of Control Charts. Certain data are based upon measurements, such as the measurement of unit parts. These are known as "indiscrete values" or "continuous data". Other types of data are based on counting, such as the number of defective articles or the number of defects. These are known as "discrete values" or "enumerated data".

The Xbar & R Control Chart An Xbar & R Control Chart is one that shows both the mean value ( X ), and the range ( R ). The Xbar portion of the chart mainly shows any changes in the mean value of the process, while the R portion shows any changes in the dispersion of the process. This chart is particularly useful in that it shows changes in mean value and dispersion of the process at the same time, making it a very effective method for checking abnormalities within the process; and if charted while in progress, also points out a problem in the production flow in real time mode.

Steps In Making the Xbar and R Chart STEP #1 - Collect the data. It is best to have at least 100 samples. STEP #2 - Divide the data into sub groups, it is recommended the subgroups be of 4 or 5 data points each. The number of samples is represented by the letter " n " and the number of subgroups is represented by the letter " k ". The data should be divided into subgroups in keeping with the following conditions: The data obtained should be from the same grouping of products produced. A sub group should not include data from a different lot or different process. STEP #3 - Record the data on a data sheet. Design the sheet so that it is easy to compute the values of X bar and R for each sub group (see the page in the class example). STEP #4 - Find the mean value (Xbar). Use the following formula for each subgroup:

STEP #5 - Find the range, R. Use the following formula for each subgroup. R = X (largest value) - X (smallest value) Example 14.0 - 12.1 = 1.9

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It is now time for you to practice some of your learning. I have completed many of the Xbar and R values for you, however, you really should perform a few calculations to gain the experience. Using the attached Exercise Sheet, calculate the remaining Xbar and R values. STEP #6 - Find the overall mean, or X double bar . Total the mean values of Xbar, for each subgroup and divide by the number of subgroups (k).

STEP #7 - Compute the average value of the range (R). Total R for all the groups and divide by the number of subgroups (k).

CLASS EXERCISE PART 2: On the same Work Sheet that you just computed the X double bar figures, now compute the R bar explained above. STEP #8 - Compute the Control Limit Lines. Use the following formulas for Xbar and R Control Charts. The coefficients for calculating the control lines are A2, D4, and D3 are located on the bottom of the Work Sheet you are presently using, and presented here:

Xbar Control Chart: Central Line (CL) = X double bar figure you calculated. Upper Control Limit (UCL) = X double bar + A2 * R bar. Lower Control Limit (LCL) = X double bar - A2 * R bar. R Control Chart: Central Line (CL) = R bar figure you calculated. Upper Control Limit (UCL) = D4 * R bar. Lower Control Limit (LCL) = D3 * R bar. For our Class Exercise, the details are as follows: X Control Chart CL = X double bar = 12.94 UCL = 12.94 + .577 * 1.35 = 13.719 Note that we are using 5 subgroups, so on the chart n = 5, and under the A2 column, 5 = 0.577. 1.35 is the figure you calculated for R bar. LCL = 12.94 - .577 * 1.35 = 12.161 R Control Chart CL = R bar = 1.35 UCL = 2.115 * 1.35 = 2.86 Note that we are using 5 subgroups, so on the chart n = 5, and under the D4 column, 5 = 2.115.

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LCL = Since our subgroups equal 5, if you look under the D3 column, there is no calculation coefficient to apply, thus there is no LCL. STEP #9 - Construct the Control Chart. Using graph paper or Control Chart paper, set the index so that the upper and lower control limits will be separated by 20 to 30 mm (units). Draw in the Control lines CL, UCL and LCL, and label them with their appropriate numerical values. It is recommended that you use a blue or black line for the CL, and a red line for the UCL and LCL. The central line is a solid line. The Upper and Lower control limits are usually drawn as broken lines. STEP #10 - Plot the Xbar and R values as computed for each subgroup. For the Xbar values, use a dot (.), and for the R values, use an (x). Circle any points that lie outside the control limit lines so that you can distinguish them from the others. The plotted points should be about 2 to 5 mm apart. Below is what our Xbar chart looks like when plotted.

Below is what our Rbar chart looks like when plotted.

STEP #11 - Write in the necessary information. On the top center of the control charts write the Xbar and R chart, and the R Chart so that you (and others) will know which chart is which. On the upper left hand corner of the Xbar control chart, write the n value to indicate the subgroup size; in this case n = 5. ANALYSIS OF THE CONTROL CHART Now that we know how to make a control chart, it is even more important to understand how to interpret them and realize when there is a problem. All processes have some kind of variation, and this process variation can be partitioned into two main components. First, there is natural process variation, frequently called "common cause" or system variation. These are common variations caused by machines, material and the natural flow of the process. Secondly is special cause variation, generally caused by some problem or extraordinary occurrence in the system. It is our job to work at trying to eliminate or minimize both of these types of variation. Below is an example of a few different process variations, and how to recognize a potential problem.

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In the above chart, there are three divided sections. The first section is termed "out of statistical control" for several reasons. Notice the inconsistent plot points, and that one point is outside of the control limits. This means that a source of special cause variation is present, it needs to be analyzed and resolved. Having a point outside the control limits is usually the most easily detectable condition. There is almost always an associated cause that can be easily traced to some malfunction in the process. In the second section, even though the process is now in control, it is not really a smooth flowing process. All the points lie within the control limits, and thus exhibits only common cause variations. In the third section, you will notice that the trending is more predictable and smoother flowing. It is in this section that there is evidence of process improvement and the variation has been reduced. Therefore, to summarize, eliminating special cause variation keeps the process in control; process improvement reduces the process variation, and moves the control limits in toward the centerline of the process. At the beginning of this process run, it was in need of adjustment as the product output was sporadic. An adjustment was made, and while the plotted points were now within the boundaries, it is still not centered around the process specification. Finally, the process was tweaked a little more and in the third section, the process seems to center around the CL. There are a few more terms listed below that you need to become familiar with when analyzing a Xbar Chart and the process: RUN - When several plotted points line up consecutively on one side of a Central Line (CL), whether it is located above or below the CL, it is called a "run". If there are 7 points in a row on one side of the CL, there is an abnormality in the process and it requires an adjustment. TREND - If there is a continued rise or fall in a series of points (like an upward or downward slant), it is considered a "trend" and usually indicates a process is drifting out of control. This usually requires a machine adjustment. PERIODICITY - If the plotted points show the same pattern of change over equal intervals, it is called "periodicity". It looks much like a uniform roller coaster of the same size ups and downs around the centerline. This process should be watched closely as something is causing a defined uniform drift to both sides of the centerline. HUGGING - When the points on the control chart seem to stick close to the center line or to a control limit line, it is called "hugging of the control line". This usually indicates that a different type of data, or data from different factors (or lines) have been mixed into the sub groupings. To determine if you are experiencing "hugging" of the control line, perform the following exercise. Draw a line equal distance between the centerline and the upper control limit. Then draw another line equal distance

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between the center line and the lower control limit. If the points remain inside of these new lines, there is an abnormality, and the process needs closer analysis. ======================================================================== ========== Q5. What are the common objectives of the purchasing functions? Also discuss the methods of vendor evaluation. Solution: Common objectives:THE OBJECTIVES OF PURCHASING OR SUPPLY MANAGEMENT CAN BE VIEWED FROM THREE LEVELS FIRST FROM A VERY GENERAL MANAGERIAL LEVEL WHICH IS WHERE TOP MANAGEMENT SEES PURCHASING FROM SECONDLY FROM A MORE SPECIFIC FUNCTIONAL OR OPERATIONAL LEVEL AND LASTLY FROM A DETAILED LEVEL AT WHICH PRECISE STRATEGIC BUYING PLANS ARE MADE FROM A TOP MANAGERIAL PERSPECTIVE THE OBJECTIVES ARE AS FOLLOWS FIRST TO BUY THE RIGHT QUALITY AND FROM THE RIGHT SUPPLIER IN THE RIGHT QUANTITY AT THE RIGHT TIME AND OF COURSE AT THE RIGHT PRICE THESE ARE KNOWN AS THE FIVE RIGHTS OF PURCHASING AND SHOULD BE THE GENERAL OBJECTIVES OF ALL PURCHASING PERSONNEL NOW FROM A FUNCTIONAL OR OPERATIONAL LEVEL THE OBJECTIVES BECOME A LITTLE DIFFERENT THEY ARE MORE SPECIFIC IN THAT THEY WANT TO SUPPORT COMPANY OPERATIONS WITH AN UNINTERRUPTED FLOW OF MATERIALS AND SERVICES TO BUY COMPETITIVELY OF COURSE, WHICH IS THE COST FACTOR AND TO BUY WISELY WHICH MEANS VALUE + QUALITY + SERVICE + PRICE AND ALSO TO KEEP INVENTORY INVESTMENT AND INVENTORY LOSSES TO A MINIMUM THIS IS IMPORTANT BECAUSE THE AVERAGE FOR MOST FIRMS FOR INVENTORY COSTS ARE 25-35% OF THE VALUE OF THE INVENTORY THEREFORE, KEEP IT TO A MINIMUM

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ONE SOLUTION TO THIS IS TO UTILIZE A J.I.T. INVENTORY SYSTEM BY THE WAY, WE WILL TALK ABOUT INVENTORIES AND THEIR IMPORTANCE LATER IN THE COURSE ANOTHER OBJECTIVE FOR THE OPERATIONAL AND FUNCTIONAL LEVEL IS TO DEVELOP EFFECTIVE AND RELIABLE SOURCES OF SUPPLY IN OTHER WORDS, FIND SUPPLIER WHO ARE WILLING TO WORK WITH THE BUYERS IT IS ALSO IMPORTANT TO FIND SUPPLIERS WHO WILL HELP YOUR FIRM IN A PINCH SOMEWHAT AKIN TO THIS LAST OBJECTIVE IS TO DEVELOP GOOD RELATIONSHIPS WITH THE SUPPLIER COMMUNITY AND ESPECIALLY GOOD CONTINUING RELATIONSHIPS WITH ACTIVE SUPPLIERS YOU MIGHT HAVE NO IDEA WHO IMPORTANT THIS IS MORE THAN ONCE AN ONGOING RELATIONSHIP WITH A TRUSTED SUPPLIER HELPED ME OUT OF A JAM WHEN I NEEDED SOMETHING QUICKLY YOU WILL ALSO WANT TO ACHIEVE MAXIMUM INTEGRATION WITH OTHER DEPARTMENTS WITHIN YOUR FIRM FOR EXAMPLE, COORDINATE WITH ENGINEERING WHEN DEVELOPING SPECIFICATIONS OR ADVISE THE SALES AND MARKETING DEPARTMENTS OF THE FUTURE COST OF SUPPLIES IN ORDER TO ASSIST THEM IN THEIR FORECASTING AND OF COURSE IT GOES WITHOUT SAYING THAT ANOTHER OBJECTIVE NEEDS TO BE TO HANDLE THE PURCHASING AND SUPPLY MANAGEMENT FUNCTION PROACTIVELY IN A PROFESSIONAL AND COST-EFFECTIVE MANNER AND OF COURSE IN AN ETHICAL MANNER AS YOU WILL NOTICE, WE WILL KEEP TALKING ABOUT ETHICS THROUGHOUT THE COURSE LETS SHIFT NOW FROM PURCHASING OBJECTIVES TO PURCHASING POLICIES SO WHAT IS A POLICY? FROM OUR PERSPECTIVE, IT IS A STATEMENT IN VERY GENERAL TERMS THAT DESCRIBES A COURSE OF ACTION IN YOUR PURSUIT OF GOOD PURCHASING PRACTICES WHATEVER PURCHASING POLICY OR POLICIES YOU DEVELOP, THEY SHOULD ALWAYS SERVE AS GENERAL GUIDELINES FOR HOW YOU GO ABOUT PURCHASING AND FOR THAT MATTER, TO EVEN ASSIST OTHER PEOPLE WITHIN YOUR OWN FIRM NOT IN THE PURCHASING DEPARTMENT, BUT WHO COME IN CONTACT WITH YOU FROM TIME TO TIME FOR EXAMPLE, A POLICY TO GUIDE THOSE IN THE PREPARATION OF REQUISITIONS

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HERE AT THE UNIVERSITY I HAVE DEVELOPED A PURCHASING HANDBOOK THAT CONTAINS ALL MY PURCHASING POLICIES ONE THING TO ALWAYS KEEP IN MIND IS THAT THE ENTIRE PURCHASING PROCESS IS ALWAYS DRIVEN BY POLICES MOST POLICIES THAT PERTAIN OR DEFINE PURCHASING RESPONSIBILITY IS USUALLY BROKEN DOWN INTO TWO BROAD CATEGORIES CENTRALIZATION OF PURCHASING AUTHORITY AND DECENTRALIZATION OF PURCHASING AUTHORITY WELL TAKE A LOOK AT CENTRALIZATION FIRST KEEP IN MIND THAT CENTRALIZATION REFERS TO AUTHORITY FOR PURCHASING NOT THE LOCATION OF BUYERS THIS IS A VERY COMMON PURCHASING ORGANIZATION FOR MANY FIRMS UNDER THE CENTRALIZED PURCHASING CONCEPT, THE ENTIRE PURCHASING FUNCTION USUALLY FALLS UNDER THE RESPONSIBILITY OF ONE INDIVIDUAL HE OR SHE MIGHT BE CALLED THE PURCHASING DIRECTOR OR MANAGER OR THE CHIEF PROCUREMENT OFFICER OR MATERIALS MANAGEMENT DIRECTOR, OR SOMETHING LIKE THAT HE OR SHE IN TURN IS USUALLY DIRECTLY ACCOUNTABLE TO TOP MANAGEMENT CENTRALIZATION ALLOWS THE FIRM TO OBTAIN OPTIMUM OPERATING EFFICIENCY AND OF COURSE, MAXIMUM PROFITABILITY FOR THE COMPANY OTHER ADVANTAGES WOULD BE THE OPPORTUNITY TO TAKE ADVANTAGE OF VOLUME DISCOUNTS LESS PURCHASE ORDERS ARE ALSO ISSUED GENERALLY THERE WILL BE LOWER TRANSPORTATION COSTS AND IT PROVIDES THE OPPORTUNITY TO SPECIALIZE PERSONNEL IN THE PURCHASING FUNCTION OTHER DEPARTMENTS WOULD ALSO NOT NEED TO DEVOTE TIME TO THE PURCHASING FUNCTION BUT ON THE FLIP SIDE, THE OTHER CONCEPT IS A DECENTRALIZED PURCHASING OPERATION HERE, OTHER AREAS OF THE FIRM, SUCH AS PRODUCTION, MARKETING, ENGINEERING DEVELOPMENT, ETC. MAKE THEIR OWN PURCHASING DECISIONS THEY SELECT THEIR OWN SOURCES OF SUPPLY AND EVEN NEGOTIATE DIRECTLY WITH SUPPLIERS BUT THIS POLICY ALSO COMES WITH SOME NOTABLE PROBLEMS FIRST OF ALL AND THE MOST OBVIOUS IS THE DUPLICATION OF PERSONNEL

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YOU WOULD HAVE TO HAVE PURCHASING PERSONNEL IN EVERY DEPARTMENT DOING PURCHASING IT ALSO DRIVES UP COMPANY COSTS BECAUSE EACH DEPARTMENT WOULD LIKELY MAINTAIN THEIR OWN INVENTORY RATHER THAN ONE CENTRALIZED INVENTORY DECENTRALIZATION ALSO SOMETIMES LEADS TO HAPHAZARD PURCHASING ESPECIALLY IF THE DEPARTMENT DOES NOT HAVE TRAINED PURCHASING PERSONNEL ALSO ANY DISCOUNTS REALIZED THROUGH VOLUME PURCHASING WOULD LIKELY BE LOST IF THE PROCESS IS DECENTRALIZED AND OF COURSE, THERE WOULD EVEN BE EXTRA TRANSPORTATION COSTS TO CONTEND WITH ESPECIALLY SINCE MORE ORDERS ARE BEING PROCESSED AND WILL ULTIMATELY BE DELIVERED BUT TO BE FAIR, THERE ARE SOME INSTANCES WHEN A DECENTRALIZED PURCHASING POLICY IS DESIRABLE FOR EXAMPLE WHEN A FIRM DEALS IN A SINGLE RAW MATERIAL AND THIS ITEM IS OFTEN UNSTABLE IN PRICE OR HAS WILDLY FLUCTUATING PRICES THEREFORE IT IS OFTEN WISER TO HAVE THESE ITEMS PURCHASED BY SPECIALIZED COMMODITY BUYERS WHO CAN STAY ON TOP OF THE RAW MATERIAL MARKET AND ITS CHANGES GENERALLY, PURCHASING PERSONNEL WOULD NEVER HAVE THE TIME TO FOCUS ONLY ON ONE COMMODITY DECENTRALIZED PURCHASING MAY ALSO BE DESIRABLE IF ITEMS ARE PURCHASED AT AUCTIONS AGAIN, THIS IS AN AREA WHERE PURCHASING PERSONNEL USUALLY DO NOT HAVE EXPERTISE OR IF THE GRADE OF AN ITEM IS CRITICAL, SUCH AS LUMBER, CERTAIN TEXTILES, LEATHER, ETC., AGAIN, EXPERTS ARE USUALLY NEEDED TO EVALUATE THEIR PROPERTIES BEFORE BEING PURCHASED AND RESEARCH FIRMS OFTEN HAVE THEIR PURCHASING FUNCTION DECENTRALIZED THIS IS USUALLY BECAUSE THE ITEMS THEY NORMALLY PURCHASE ARE FAR TOO TECHNICAL FOR MOST PURCHASING PERSONNEL TO BE FAMILIAR WITH AND OF COURSE MULTI-SITE FIRMS IN THIS CASE, ESPECIALLY IF THEY ARE STRUNG ACROSS THE COUNTRY OR AROUND THE WORLD IT MAY NOT BE COST EFFECTIVE TO CENTRALIZE THE PURCHASING FUNCTION

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ESPECIALLY SINCE YOU WOULD HAVE TO MAKE SO MANY DIFFERENT LOCATION SHIPMENTS AND THERE WOULD BE A TIME ISSUE AS WELL SENDING ALL ORDERS TO A CENTRALIZED LOCATION SOMEWHERE IN THE COUNTRY TO BE PROCESSED WOULD ONLY SLOW DOWN THE TIME IT TAKES TO GET THE ITEMS AND FINALLY ANOTHER REASON FOR DECENTRALIZATION MIGHT BE THE USE OF PETTY CASH OR CREDIT CARDS THIS IS THE ONLY PURCHASING FUNCTION HERE AT THE COLLEGE THAT I HAVE DECENTRALIZED AND EVEN THEN, THEY MUST PROVIDE THE SUPPORTING PAPERWORK FOR THEIR PURCHASE TO THE PURCHASING DEPARTMENT WITHIN 24 HOURS WHERE THE FILES ARE MAINTAINED ONE OF THE MOST IMPORTANT RESPONSIBILITIES OF THE PURCHASING DEPARTMENT IS TO LOCATE AND/OR DEVELOP SUPPLIERS THAT ARE COMPETENT AND QUALIFIED TO FILL ORDERS STAYING ABREAST OF THE LARGE NUMBER OF BUYERS IN THE MARKETPLACE IN ANY GIVEN COMMODITY IS A DIFFICULT AND TIME CONSUMING JOB SO IMAGINE HAVING A PURCHASING DEPARTMENT THAT BUYS A VARIETY OF COMMODITIES FOR EXAMPLE, EVEN HERE AT THE COLLEGE WE BUY OFFICE SUPPLIES, GASOLINE, FURNITURE, CLEANING SUPPLIES, LAB SUPPLIES, TESTING EQUIPMENT, ETC. YOU NAME IT AS SUCH, IN ORDER TO STAY ON TOP OF THE VARIOUS SELLERS, MANY FIRMS HAVE A POLICY THAT REQUIRES BUYERS TO SPEND A CERTAIN AMOUNT OF THEIR TIME SEARCHING FOR, AND IDENTIFYING AND INVESTIGATING POTENTIAL SUPPLIERS IN THE MARKET IN ORDER TO GET THE BEST PRICING AND SERVICE THIS ALSO INCLUDES BUYERS IN THE PURCHASING DEPARTMENT MEETING WITH VENDORS WHO COLD-CALL ON THEIR ORGANIZATION HOW YOU HANDLE THAT SHOULD DEPEND ON HOW MANY CALLS YOU GET FROM SUPPLIERS IF YOU DO NOT GET TOO MANY, THEN YOU MIGHT NOT WANT TO INSIST ON THEM MAKING APPOINTMENTS BUT IF THE NUMBER IS OVERWHELMING THEN YOU CAN MAKE APPOINTMENTS MANDATORY WHICH THEN ALLOWS YOU TO SEE ONLY THOSE YOU ARE INCLINED TO WANT TO MEET WITH ANOTHER AREA OF PURCHASING OFTEN REQUIRING SOME TYPE OF POLICY TO GUIDE THEM IS THE REVIEW OF MATERIAL SPECIFICATIONS AND REQUESTS THE PURCHASING DEPARTMENTS RESPONSIBILITY AND AUTHORITY TO REVIEW MATERIAL SPECIFICATIONS IS A POLICY OF THE UTMOST IMPORTANCE

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THERE CERTAINLY IS NOTHING WRONG WITH HAVING NON-PURCHASING PERSONNEL DEVELOP SPECIFICATIONS AFTER ALL, THEY ARE PROBABLY THE EXPERT ON THAT ITEM ANYWAY HOWEVER, THE PURCHASING DEPARTMENT MUST BE THE AREA TO FINALIZE REVIEW AS TO PROPER FORMAT BEFORE ALLOWING IT TO GO TO THE BIDDERS OR VENDORS THIS NOT ONLY KEEPS THE PROCESS UNIFORM AND SOMETIMES THE ONLY WAY TO REMAIN ETHICAL, IT ALSO WILL LIKELY SAVE THE FIRM MONEY, SINCE PURCHASING USUALLY KNOWS WHAT TO PUT INTO SPECIFICATIONS TO GET THE MOST FOR THE BUCK LETS LOOK AT SOME OF THE POLICIES AFFECTING EXTERNAL RELATIONSHIPS OUTSIDE THE FIRM THE PURCHASING DEPARTMENT IS USUALLY ONE OF ONLY TWO DEPARTMENTS ROUTINELY DEALING WITH OUTSIDE ENTITIES THE OTHER AS YOU WOULD EXPECT IS THE SALES DEPARTMENT ALSO IF YOUR FIRM HAS ONE, A CUSTOMER SERVICE DEPARTMENT ALSO MEETS WITHOUT OUTSIDE INDIVIDUALS GENERALLY HOWEVER, THEREFORE, SALES AND PURCHASING HAVE A MAJOR RESPONSIBILITY TO PROJECT THE PROPER IMAGE OF THE FIRM AND AS I MENTIONED EARLIER, EACH PURCHASING DEPARTMENT WILL HAVE TO DECIDE ON HOW THEY WANT TO HANDLE THE VARIOUS SELLERS WHO COME CALLING ON THEM BUT NO MATTER WHAT, PURCHASING PERSONNEL NEED TO TREAT ALL SALES REPS. FAIRLY AND COURTEOUSLY REMEMBER, THEY HAVE A JOB TO DO JUST LIKE US AND AS LONG AS THEY ARE ETHICAL THEN THEY DESERVE TO BE TREATED AS SUCH IT IS ALSO IMPORTANT TO COMMUNICATE CAREFULLY AND COMPLETELY TO VENDORS AND SUPPLIERS WHATEVER YOU ARE DEALING WITH MAKE SURE THERE IS NO ROOM FOR MISUNDERSTANDING MISTAKES COST THE FIRM MONEY AND THE PURCHASING DEPARTMENT LOST TIME WHEN IN A BIDDING SITUATION, CAREFULLY AND CORRECTLY HANDLE ALL COMPETITIVE BIDS HONESTLY AND ETHICALLY NOTHING WILL DESTROY A FIRMS CREDIBILITY FASTER THAN ILLEGAL OR UNETHICAL PERFORMANCE DURING A COMPETITIVE BID SITUATION YOU SHOULD ALSO NOT BE AFRAID TO INVITE SUPPLIERS TO YOUR FIRM, ESPECIALLY IF THEY ARE REPETITIVE SELLERS WHO PROVIDE A GOOD PRODUCT AT A FAIR PRICE AND ONCE AGAIN, REMAIN ETHICAL THIS IS SO IMPORTANT THAT I WILL GO OVER IT AGAIN LATER IN THE SEMESTER FOR AN ENTIRE LESSON

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AND FINALLY REGARDING OBJECTIVES AND POLICIES, THE PURCHASING MANAGER SHOULD DEVELOP A PURCHASING DEPARTMENT POLICY MANUAL THAT DETAILS HOW EVERY ASPECT OF THE PURCHASING FUNCTION WITHIN THE FIRM WILL BE HANDLED THIS SHOULD INCLUDE EVERYTHING FROM REQUISITIONS, TO WRITING SPECIFICATIONS, TO ORDERING, TO RECEIVING, TO INVENTORY AFTER ALL, YOU CERTAINLY WOULD NOT WANT SOMEONE FROM YOUR FIRM, BUT OUTSIDE OF PURCHASING TO GIVE YOU A REQUISITION WRITTEN ON A PIECE OF SCRATCH PAPER INSTEAD OF SUBMITTING A PROPER REQUISITION IF THIS DOES NOT SOUND IMPORTANT TO YOU, LET ME ASK YOU A COUPLE OF QUESTIONS WHAT FUNDS ARE YOU TO CHARGE THE ITEMS ASKED FOR ON THE SCRATCH PAPER? WHAT ARE SOME SUGGESTED SOURCES OF SUPPLY? WHEN DO THEY NEED THE ITEMS? WHO SIGNED AUTHORIZING THE EXPENDITURE OF FUNDS TO PURCHASE THESE ITEMS? NOW PERHAPS YOU SEE THE IMPORTANCE OF HAVING A PROPER REQUISITION FILLED OUT AND APPROVED A REQUISITION SHOULD HAVE SPACE FOR EVERYONE OF THESE QUESTIONS TO BE ANSWERED SO IN CONCLUSION, BE FAIR AND ETHICAL TO ALL VENDORS DEVELOP WRITTEN DEPARTMENTAL POLICIES AND REMEMBER ABOVE ALL THE FIVE RIGHTS OF PURCHASING PURCHASE THE RIGHT QUALITY FROM THE RIGHT SUPPLIER IN THE RIGHT QUANTITY AT THE RIGHT TIME AT THE RIGHT PRICE The Objectives of Purchasing. (Cost Accounting) Progressive organisations recognize purchasing as an important function and establish a separate purchase department to look after this function. Objectives of purchasing should be clearly laid down by the organisation for the justification of the functioning of the purchase department. It should be seen that objective of purchasing should match with the overall objectives of the organisation. The objectives of purchasing can be outlined as follows: Maintaining continuity of supply: The purchasing function must ensure the continuous availability of material, supplies and equipments to maintain production schedule or to avoid disruption in production. The purchasing function also requires investments in reserve inventories. The efficiency of purchasing function lies in proper balancing of these factors which require experience, judgment of future activities and trends and various other activities on the part of purchasing authority.

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Maintenance standards quality: The purchasing function must ensure that the material purchased must be of required quality in order to produce the goods according to specifications and to maintain quality standards. Avoidance of duplication, waste and obsolescence 7:The purchasing authority must have the accurate knowledge of the items in hand and the requirements of materials for a particular period in order to have proper decision in view of long range and short range plans. This is necessary to avoid duplication, waste and obsolescence with respect to various items purchased. Maintenance of company's competitive position: The purchasing authority must constantly examine his specifications for the purchase of right material. This is necessary to make sure that his company's quality standards are neither higher nor lower than those of close competitors and to maintain his company's position in the industry. Maintenance of company's good image: The purchasing agent must create a good image in the minds of suppliers. This will help him in purchasing operation and to discover new ideas and materials besides lowering its cost or improving products. Developing alternative sources of supply: Alternative sources of supply should be exposed for increasing the bargaining power of the buyer and minimizing the cost of purchases. Purchases can be made from alternative sources if a particular supplier fails to supply the required items.

-------------------------------vender evaluation -----------------------------------------:- As a consumer, when you want to purchase an item, whether it is a new car or a flat screen television, you will most likely do some research on the prices of your local stores or from vendors on the internet. When you have narrowed your search you then look at other criteria that may be important to you, like warranty or availability. Lastly you will look at other less tangible criteria such as your previous experiences with the vendor and how their customer service was. This behavior is exactly the same for companies when they want to evaluate the vendors in their supply chain. Unless your company only uses one vendor for each item they purchase, there will enviably be occasion when a decision has to be made as to which vendor gets your business. There are a number of different scenarios when this will occur, for example when the item is purchased for the first time and when an item is no longer single sourced. Methods :* Developing the vendors to reduce cost, improve performance and affect growth by diversification and expansion. Actions required by Industry in this regard are 1) Allocating specified areas for vendors. 2) Identifying technocrats from amongst company employers, Qualified personnel willing to take risk. 3) Assisting the entrepreneurs in preparation of project report, negotiating with financial institution and other government agencies. 4) Assisting in the purchase and commissioning of capital equipment. 5) Providing complete know-how, drawings, gauges, fixtures and supplying or locating of source for raw material. 6) Providing specialized facility for material analysis, inspection, total maintenance etc. at reasonable cost. 7) Arranging quick payment, sorting out financial difficulties. 8) Monitoring vendors on performance. OBJECTIVES : Objectives of vendor rating are To motivate suppliers to improve performance. To apportion orders to deserving vendors for overall cost reduction. To select vendors for further development. To reduce the cost of inspection of incoming lots by modifying sampling

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plans. METHODS OF VENDOR EVALUATION : Methods of vendor rating are i Point method. i Cost Ratio method. Aspects covered and weight-age given for vendor rating are 1) Quality of suppliers weight-age 40 or 35% 2) Dependability on delivery or meeting of schedules 20% 3) Price 20 or 30% 4) Relationship in terms of giving suggestion, replenishment of rejections, helpfulness, financial aspects etc. 20 or 15% QUALITY RATING CAN BE ARRIVED AT BASED ON BEND IN FORMULA : LR= [ 70 + -------- - 70) N ] X Weight-age factor N where LR = lot rating given by LR = 70-10 (p-p1) P1 (100-p1) -----------------------N p = percent defective in the sample quantity inspected. p1 = A.Q.L. percent n = sample size N = number of lots submitted in a given period. Alternatively a simplified method can be adopted where quality rating is further split up as Total no. of defectives found (a) Percent rejection = ------------------------------------------------------Total no.. of items inspected AQL for the item X 25 and points given = -------------------------------------------------------% rejection (b) consistency in quality and No. of lots accepted based on sampling plan = 10 X ----------------------------------------------------------------No. of lots received (c) reliability based on opinions of people concerned judged on following scale. Good = 5, Satisfactory = 3, Poor = 1, Un-satisfactory = 0 For semi-finished items reliability can be combined with consistency and two aspects i.e. Quality and Consistency can be given weight-age of 30 and 10. Timeliness of Delivery or ability to meet schedule,

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No. of times the suppliers Supplied in time ---------------------------------------- x Weightage factor Actual number of suppliers Delivered within 2 days of the delivery date should be treated as timely supplies. Lowest price among the suppliers ------------------------------------------ x Weightage factor Price for that items as ordered Replacement of rejection = 7 Fulfilness in emergency = 7 Response to queries = 3 Financial aspects = 3 Factors may judged on following scale for a & b a) Satisfactory 4, Poor 2, Unsatisfactory 0, b) Good 3, Satisfactory 2, Poor 1, Unsatisfactory 0 We can also calculate Suggestion made by vendor --------------------------------------- X Weightage Factor Number of suggestions received Vendor rating is the total of the points for all the factors together and they can be grouped as - Excellent keep it - Satisfactory - Poor - to be discontinued Vendors can be arranged decending order, the no.1 rank getting all the preference for future orders etc. The performance is affected by (a) the relationship governed by status i.e. size of the vendor vendor - vendor equal status vendor - big manufacturer vendor - is small manufacturer (b) technically in capable due to personnel inspection method or due to inefficient methods or equipments. (c ) lack of communication in terms of interpretations, use of gauge, etc. Example of Vendor Rating is given below: VENDOR RATING EXAMPLE Vendor Total % Qlty. Avg. Low- Price % on Deli- Service % Ser- Total Con- acce- Rating price est/ Rat- sche- very No.of of vice comsignpted (%x35) /unit act. ing dule rat- sug- tot. rat- posit ment ual %x30 ing ges- ing ratreod price %x20 tion %x15 ing

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A 100 90 31.5 40 40/40 30 80 16 1 20 5 80.5 =1 B 60 80 28.0 50 40/50 24 90 18 1 20 3 73 =0.80 C 50 70 24.5 60 40/60 20.1 100 20 3 60 9 63.6 Cost l Ratio Method : In this method identifiable purchasing and receiving costs are totaled I and related to the value of the lot received. Higher the ratio, lower is the rating. The items generally considered are (a) Visit to the vendors plant (b) Sample approval (c ) Incoming inspection (d) Reworking cost (e) Value of rejected parts (f) Follow up cost, etc. Examples of vendor rating is given below: COST RATIO METHOD OF VENDOR RATING 1. Visit of vendors plant - Rs. 100.00 2. Sample approval - Rs. 200.00 3. Incoming inspection - Rs. 75.00 4. Manufacturing losses - --5. Reworking cost - Rs. 175.00 6. Value of rejected parts - Rs. 325.00 7. Miscellaneous cost - Rs. 25.00 8. Follow up costs - Rs. 100.00 Total Cost - Rs. 1,000.00 Total cost of purchase - Rs.1,00,000.00 Quality cost ratio - 1% Other Methods of Supplier Evaluation : A. Supplier Quality Audit in this system a team from Vendor visits the Vendor and allocates points against a number of queries in a questionnaire. Actual working of the quality department is audited by examining records, analysis of the system and talking to people on the spot. If carried out periodically will show up the changing conditions. B. Supplier Quality Assurance Certificate Vendors may be asked to send the inspection report of the samples taken from the lot being shipped. Acceptance can be based on these reports or on a reduced sampling basis. C. Supplier Source Inspection - Vendors may be asked to keep the lot ready and vendors inspectors can go to vendors premises to check the items. Inspectors may be stationed during the processing of the batch also. D. Acceptance can be based on the inspection reports by independent bodies, authorized to certify.

======================================================================== ========== Q6. Write Short Notes on the following: Work Sampling Ans :-

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Work Sampling is the statistical technique for determining the proportion of time spent by workers in various defined categories of activity (e.g. setting up a machine, assembling two parts, idleetc.). It is as important as all other statistical techniques because it permits quick analysis, recognition, and enhancement of job responsibilities, tasks, performance competencies, and organizational work flows. Other names used for it are 'activity sampling', 'occurrence sampling', and 'ratio delay study'. In a work sampling study, a large number of observations are made of the workers over an extended period of time. For statistical accuracy, the observations must be taken at random times during the period of study, and the period must be representative of the types of activities performed by the subjects. One important usage of the work sampling technique is the determination of the standard time for a manual manufacturing task. Similar techniques for calculating the standard time aretime study, standard data, and predetermined motion time systems. Characteristics of work sampling study The study of work sampling has some general characteristics related to the work condition. One of them is the sufficient time available to perform the study. A work sampling study usually requires a substantial period of time to complete. There must be enough time available (several weeks or more) to conduct the study. Another characteristic is multiple workers. Work sampling is commonly used to study the activities of multiple workers rather than one worker. The third characteristic is long cycle time. The job covered in the study has relatively a long cycle time. The last condition is the nonrepetitive work cycles. The work is not highly repetitive. The jobs consist of various tasks rather than a single repetitive task. However, it must be possible to classify the work activities into a distinct number of categories. Steps in conducting a work sampling study There are several recommended steps when starting to prepare a work sampling study[1]: Define the manufacturing tasks for which the standard time is to be determined. Define the task elements. These are the defined broken-down steps of the task that will be observed during the study. Since a worker is going to be observed, additional categories will likely be included as well, such as "idle", "waiting for work", and "absent". Design the study. This includes designing the forms that will be used to record the observations, determining how many observations will be required, deciding on the number of days or shifts to be included in the study, scheduling the observations, and finally determining the number of observers needed. Identify the observers who will do the sampling. Start the study. All those who are affected by the study should be informed about it. Make random visits to the plant and collect the observations. After completing the study, analyze and present the results. This is done by preparing a report that summarizes and analyzes all data and making recommendations when required. Determining the Number of Observations Needed In Work Sampling After the work elements are defined, the number of observations for the desired accuracy at the desired confidence level must be determined. The formula used in this method is:

P = standard error of proportion p = percentage of idle time q = percentage of working time n = number of observations Additional applications of work sampling Work sampling was initially developed for determining time allocation among workers' tasks in manufacturing environments.However, the technique has also been applied more broadly to examine work in a number of different environments, such as healthcareand construction. More recently, in the academic fields of organizational psychology and organizational behaviour, the basic technique has

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been developed into a detailed job analysis method for examining a range of different research questions. ======================================================================== ========== Acceptance Sampling Ans:Acceptance sampling uses statistical sampling to determine whether to accept or reject a production lot of material. It has been a common quality control technique used in industry and particularly the military for contracts and procurement. It is usually done as products leave the factory, or in some cases even within the factory. Most often a producer supplies a consumer a number of items and decision to accept or reject the lot is made by determining the number of defective items in a sample from the lot. The lot is accepted if the number of defects falls below where the acceptance number or otherwise the lot is rejected. A wide variety of acceptance sampling plans are available. Acceptance sampling procedures became common during WWII. Sampling plans, such as MIL-STD105, were developed by Harold F. Dodge and others and became frequently used asstandards. More recently, quality assurance broadened the scope beyond final inspection to include all aspects of manufacturing. Broader quality management systems include methodologies such as statistical process control, HACCP, six sigma, and ISO 9000. Some use of acceptance sampling still remains Rationale Sampling provides one rational means of verification that a production lot conforms with the requirements of technical specifications. 100% inspection does not guarantee 100% compliance and is too time consuming and costly. Rather than evaluating all items, a specified sample is taken, inspected or tested, and a decision is made about accepting or rejecting the entire production lot. Plans have known risks: an acceptable quality limit (AQL) and a rejectable quality level (LTDP) are part of the operating characteristic curve of the sampling plan. These are primarily statistical risks and do not necessarily imply that defective product is intentionally being made or accepted. Plans can have a known average outgoing quality limit (AOQL). ]Acceptance sampling for attributes A single sampling plan for attributes is a statistical method by which the lot is accepted or rejected on the basis of one sample. Suppose that we have a lot of size M; a random sample of size N < M is selected from the lot; and an acceptance number B is determined. If it is found the number of nonconforming is less than or equal to B, the lot is accepted; and if the number of nonconforming is greater than B, the lot is not accepted. The design of a single sampling plan requires the selection of the sample size N and the acceptance number B. MIL-STD-105 was a United States defense standard that provided procedures and tables for sampling by attributes (pass or fail characteristic). MIL-STD-105E was cancelled in 1995 but is available in related documents such as ANSI/ASQ Z1.4, "Sampling Procedures and Tables for Inspection by Attributes". Several levels of inspection are provided and can be indexed to several AQLs. The sample size is specified and the basis for acceptance or rejection (number of defects) is provided. Variables plans When a measured characteristic produces a number, other sampling plans such as those based on MIL-STD-414 are often used. Compared with attribute sampling plans, these often use a smaller sample size for the same indexed AQL. ======================================================================== ========

Materials Requirement Planning

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Ans:Materials Requirements Planning (MRP) MRP is a planning tool geared specifically to assembly operations. The aim is to allow each manufacturing unit to tell its supplier what parts it requires and when it requires them. The supplier may be the upstream process within the plant or an outside supplier. Together with MRP II it is probably the most widely used planning and scheduling tool in the world. MRP was created to tackle the problem of 'dependent demand'; determining how many of a particular component is required knowing the number of finished products. Advances in computer hardware made the calculation possible. Master Production Schedule The process starts at the top level with a Master Production Schedule (MPS). This is an amalgam of known demand, forecasts and product to be made for finished stock. The phasing of the demand may reflect the availability of the plant to respond. The remainder of the schedule is derived from the MPS. Two key considerations in setting up the MPS are the size of `time buckets' and the `planning horizons'. A `time bucket' is the unit of time on which the schedule is constructed and is typically daily or weekly. The `planning horizon' is how far to plan forward, and is determined by how far ahead demand is known and by the lead times through the operation. There are three distinct steps in preparing an MRP schedule: exploding netting offsetting. Exploding Explosion uses the Bill of Materials (BOM). This lists how many, of what components, are needed for each item (part, sub assembly, final assembly, finished product) of manufacture. Thus a car requires five wheels including the spare. BOM's are characterised by the number of levels involved, following the structure of assemblies and sub assemblies. The first level is represented by the MPS and is 'exploded' down to final assembly. Thus a given number of finished products is exploded to see how many items are required at the final assembly stage. Netting The next step is 'netting', in which any stock on hand is subtracted from the gross requirement determined through explosion, giving the quantity of each item needed to manufacture the required finished products. Offsetting The final step is 'offsetting'. This determines when manufacturing should start so that the finished items are available when required. To do so a 'lead time' has to be assumed for the operation. This is the anticipated time for manufacturing. The whole process is repeated for the next level in the BOM and so on until the bottom is reached. These will give the requirements and timings to outside suppliers. There are three major assumptions made when constructing an MRP schedule: The first, and possibly the most important, is that there is sufficient capacity available. For this reason MRP is sometimes called infinite capacity scheduling. The second is that the lead times are known, or can be estimated, in advance. The third is that the date the order is required can be used as the starting date from which to develop the schedule. ======================================================================== ========== Value Engineering and Analysis:Ans:Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet

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of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements. In the United States, value engineering is specifically spelled out in Public Law 104-106, which states Each executive agency shall establish and maintain cost-effective value engineering procedures and processes." Value engineering is sometimes taught within the project management or industrial engineering body of knowledge as a technique in which the value of a systems outputs is optimizedby crafting a mix of performance (function) and costs. In most cases this practice identifies and removes unnecessary expenditures, thereby increasing the value for the manufacturer and/or their customers. VE follows a structured thought process that is based exclusively on "function", i.e. what something "does" not what it is. For example a screw driver that is being used to stir a can of paint has a "function" of mixing the contents of a paint can and not the original connotation of securing a screw into a screw-hole. In value engineering "functions" are always described in a two word abridgment consisting of an active verb and measurable noun (what is being done - the verb - and what it is being done to - the noun) and to do so in the most non-prescriptive way possible. In the screw driver and can of paint example, the most basic function would be "blend liquid" which is less prescriptive than "stir paint" which can be seen to limit the action (by stirring) and to limit the application (only considers paint.) This is the basis of what value engineering refers to as "function analysis". Value engineering uses rational logic (a unique "how" - "why" questioning technique) and the analysis of function to identify relationships that increase value. It is considered a quantitative method similar to the scientific method, which focuses on hypothesis-conclusion approaches to test relationships, and operations research, which uses model building to identify predictive relationships. Value engineering is also referred to as "value management" or "value methodology" (VM), and "value analysis" (VA).VE is above all a structured problem solving process based on function analysis understanding something with such clarity that it can be described in two words, the active verb and measurable noun abridgement. For example, the function of a pencil is to "make marks". This then facilitates considering what else can make marks. From a spray can, lipstick, a diamond on glass to a stick in the sand, one can then clearly decide upon which alternative solution is most appropriate. Origins Value engineering began at General Electric Co. during World War II. Because of the war, there were shortages of skilled labour, raw materials, and component parts. Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. They noticed that these substitutions often reduced costs, improved product, or both. What started out as an accident of necessity was turned into a systematic process. They called their technique value analysis. The Job Plan Value engineering is often done by systematically following a multi-stage job plan. Larry Miles' original system was a six-step procedure which he called the "value analysis job plan." Others have varied the job plan to fit their constraints. Depending on the application, there may be four, five, six, or more stages. One modern version has the following eight steps: Preparation Information Analysis Creation Evaluation Development Presentation Follow-up Four basic steps in the job plan are: Information gathering - This asks what the requirements are for the object. Function analysis, an important technique in value engineering, is usually done in this initial stage. It tries to determine what functions or performance characteristics are important. It asks questions like; What does the object do? What must it do? What should it do? What could it do? What must it not do? Alternative generation (creation) - In this stage value engineers ask; What are the various alternative ways of meeting requirements? What else will perform the desired function? Evaluation - In this stage all the alternatives are assessed by evaluating how well they meet the required functions and how great will the cost savings be.

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Presentation - In the final stage, the best alternative will be chosen and presented to the client for final decision. How it works VE follows a structured thought process to evaluate options as follows. Gather information 1.What is being done now? Who is doing it? What could it do? What must it not do? Measure 2.How will the alternatives be measured? What are the alternate ways of meeting requirements? What else can perform the desired function? Analyze 3.What must be done? What does it cost? Generate 4.What else will do the job? Evaluate 5.Which Ideas are the best? 6. Develop and expand ideas What are the impacts? What is the cost? What is the performance? 7.Present ideas Sell alternatives ======================================================================== ========== Assembly Line Ans:In mass production, products are usually produced on an assembly line. Many believe that theassembly line was the most significant technological development of the 20th century. Nearly everything that we have we would not have in the quantities we have it, and at the prices we have it, without the assembly line. The assembly line moves the world. It is a driving force behind every industrialized nation on earth. An assembly line can be explained as workers and machines organized into a continuous flow of raw materials that are made into products in an unimaginable scale. Through the use of mass production methods and the assembly line, more goods can be produced in a given period of time, usually at a lower cost. assembly line, manufacturing technique in which a product is carried by some form of mechanized conveyor among stations at which the various operations necessary to its assembly are performed. It is used to assemble quickly large numbers of a uniform product. Henry Ford is often credited with establishing the first assembly line for his Model T. So long as an assembly line's output is high, the cost per unit is relatively low. It is somewhat inflexible, however, as it must be designed and installed for a particular product. Also, the operations on the product usually must be performed in a sequence that is strictly ordered. A malfunction or shortage of parts that shuts down a single assembly station necessitates shutdown of the entire line. Traditional assembly lines had come under criticism from those concerned with their effects on workers, but industrial robots now perform many of the repetitive tasks. Recent variations on the assembly-line process, such as teams of workers responsible for multiple steps, have increased productivity and employee interest.

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Assembly lines are designed for a sequential organization of workers, tools or machines, and parts. The motion of workers is minimized to the extent possible. All parts or assemblies are handled either by conveyors or motorized vehicles such as fork lifts, or gravity, with no manual trucking. Heavy lifting is done by machines such as overhead cranes or fork lifts. Each worker typically performs one simple operation. According to Henry Ford: The principles of assembly are these: (1) Place the tools and the men in the sequence of the operation so that each component part shall travel the least possible distance while in the process of finishing. (2) Use work slides or some other form of carrier so that when a workman completes his operation, he drops the part always in the same place--which place must always be the most convenient place to his hand--and if possible have gravity carry the part to the next workman for his operation. (3) Use sliding assembling lines by which the parts to be assembled are delivered at convenient distances. in his autobiography Henry Ford (1922) mentions several benefits of the assembly line including: Workers do no heavy lifting No stooping or bending over No special training required There are jobs that almost anyone can do Provided employment to immigrants The gains in productivity allowed Ford to increase worker pay from $2.50 per day to $5.00 per day and to reduce the hourly work week while continuously lowering the Model T price. These goals appear altruistic; however, it has been argued that they were implemented by Ford in order to reduce high employee turnover. ======================================================================== ======================================================================== ======================================================================== ==============================

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