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Fall 2015

MBA Semester 2
MB0044: Production and Operation Management
Q1. Write short notes on:
Outsourcing strategies for capital productivity
Implementation of operations
Basic competitive priorities
Market survey method of forecasting

Outsourcing strategies for capital productivity:

When capacity requirements are determined, it is easy to figure out whether some goods or
services can be outsourced. Outsourcing can reduce the capital and manpower
requirements. Also, the available capacities can be used to augment the core competencies
thus reducing the cost of the product or service to the customer. Further, outsourcing also
helps in improved product design and even enables better networking and collaborations.
However, lack of expertise, quality considerations, nature of demand, and cost factors may
restrict outsourcing.
Implementation of operations:
Implementation is the process of executing the planned operations. When planning and
controlling functions are put together, we call it as Implementation of Operations. The
planning is the process of estimating, routing, and scheduling. The controlling functions are
conducted while the manufacturing is going on, like dispatching and expediting.
Basic competitive priorities:


1. Cost
Cost is one of the primary considerations while marketing a product or a service. Being a low
cost producer, the product accepted by the customer offers sustainability and can
outperform competitors.
2. Quality
Quality is defined by the customer. The operations manager looks into two important aspects
namely high performance design and consisitent quality.
3. Time

Faster delivery time, on-time delivery, and speedy development cycle are the time factors
that operations strategy looks into. Faster delivery time is the time lapsed between the
customer order and the delivery.
4. Flexibility
Flexibility is the ability to provide a wide variety of products, and it measures how fast the
manufacturer can convert its process line used for one product to produce another product
after making the required changes.
Market survey method of forecasting:
Conducting surveys among the prospective buyers or users is a very old method of
forecasting. Here, a questionnaire is prepared and circulated among the people and their
responses are obtained. The responses are collated and analysed to reveal possible clues
towards acceptance or otherwise about a new product or service. Based on the overall
decision, the forecasting is done. This method is typically done for new products or at new
places where a product is to be launched. In this method, the number of respondents and
how responses are gathered like through oral interviews, personal talks, internet based,
postal ballots, etc, have to be established before survey. The common limitations are the
sample size and the way of drawing the sample like random, convenient, or judgmental.
Sample bias is not completely ruled out.

Q2. Gujarats emergence as an auto hub is a positive for the economy Saturday, 17
September 2011 - 8:00am IST | Place: Mumbai | Agency: DNA
This question is answered in the full assignments since this is a case study.

Q3. Write short notes on:

5Ss system of waste elimination
Scheduling in services
Vendor managed inventory
Subcontracting capacity (production) option
5Ss system of waste elimination:

Sort/segregate Keep what is needed and remove everything else from the work
area; when in doubt, throw it out. Identify non-value items and remove them.

Simplify/straighten Arrange and use analysis tools to improve the work flow and
reduce wasted motion. Consider long-run and short-run ergonomic issues.

Shine/sweep Clean daily; eliminate all forms of dirt, contamination, and clutter
from the work area.

Standardise Remove variations from the process by developing standard

operating procedures and checklists; develop good standards. Standardise
equipment and tooling so that cross-training time and cost are reduced.

Sustain/self-discipline Review periodically to recognise the efforts and motivate

the workforce to sustain progress. Use visuals wherever possible for easy
communication and implementation.

Scheduling in services:
There are distinctive difference between the scheduling followed for manufacturing and
services. All these differences have a direct impact on scheduling. These differences are:

Service operations cannot create inventories to provide buffer for demand


Demand in service operations cannot be predicted accurately

Demand for service are initiated mostly as unplanned event and hence, there
may be certain distortions in scheduling

Providing the required manpower and skills for the sudden demand in scheduling
a service activity is challenging and sometimes becomes crucial

Vendor managed inventory:

The very purpose of JIT is to reduce inventory at all places in the supply chain. Inventory is
considered a waste because inventory is created by using materials, machines, and efforts
of persons. All of these are resources which have already been used up and that portion of it
which is not consumed and sent up the value chain causes a drag in the system. However,
inventories are inevitable because uncertainties exist at every stage, making it necessary to
provide a buffer so that demands do not go unfilled. The challenge is to keep it to the
Subcontracting capacity (production) option:
A firm can acquire temporary capacity by subcontracting work during peak demand periods.
Subcontracting, however, has several pitfalls. First, it may be expensive; second, it risks
opening the clients door to a competitor. Third, it is often hard to find the perfect subcontract
supplier, one who always delivers the quality product on time. However, of late outsourcing
has become a complete business policy and cost of operations may be cited as the main

Q4. Describe the post implementation review of a project. Explain the tools that may
be considered for post implementation review.

Q5. Explain the steps to set data in logical order so that the business process may be

Q6. Describe the dimensions of quality.

Remaining answers are available in the full assignments.

For full assignments contact us:

Global Education
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