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Spring 2014
BBA SEMESTER V

BBA501: PRODUCTION & OPERATIONS MANAGEMENT

Q1. List and explain the functions of operations management.

The functions of operations management
Planning
Organizing
Controlling


Planning
There are certain functions that the production or operations management should perform.
Operations management begins with the discussions for conceiving the design and
specifications for the product.
Operations management is involved throughout in the development and production cycles
to a stage where products are ready to be dispatched to the marketing and sales department
to provide them to final consumers.

Product design and development: This deals with the issues of converting market
feedback on the requirements pertaining to the type of product to be produced into
specifications and drawings that help in production.

Production process selection: This helps in evaluating different process options possible
to produce the type of product in terms of volume and variety and other factors to select the
best-suited process.

Planning facility location: This deals with evaluation of different possible locations for
production and selecting the most suitable one that meets the organizational objectives of
production in the required quantities at the minimal costs.

Organizing
Work study: Also known as time and motion study, it aims at improving the cycle time
required for producing a product.

Materials management: This aims at establishing sources for the required materials in
terms of input materials or consumables at the right time so that no delays in production
occur.

Purchasing management: This is responsible for making the input material available in
time, at the right price and in the right quantity and quality.



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Controlling
Stores management: This refers to managing the stores for input materials, consumables
and finished stocks while avoiding overstocking of materials. Stores are also accountable for
recording the stock and consumption of these materials.

Value analysis: The process of obtaining the best possible combination between cost and
required functional specifications of a product by assigning a value to every operation of the
production process and identifying the function of the product. This helps in enhancing the
value of the product.

Quality control: This is responsible for monitoring the quality requirements of the product so
that no defective parts are passed on to the consumers. For this, systems associated with
the processes are assessed by the management of an organization in order to improve them
so that no defective parts are produced.



Q2 What are the objectives of forecasting?

The objectives of sales forecasting can be of two types:
1. Short-run objectives
2. Long-run objectives

1. Short-run objectives: The sales forecasting for a year or lesser period is known as short-
run forecasting. The short-run objectives of sales forecasting are as follows:

Formulation of suitable production policy: It is necessary so that problems of under-
production or over-production do not arise and future production of goods is available
according to the demand forecast.

Regular supply of raw materials: The second objective of forecasting is to make
provisions for the regular supply of raw materials for production on the basis of estimated
sales during a short period.

Best utilization of machines: Sales forecasting is to utilize the available machines to
their maximum capacity, both in case of increasing production and in case of decrease in
demand, the machine should not remain idle.

Determination of appropriate price policy: Sales forecast has an important bearing on
the organizations price policies so that in a period of depression.

Regular availability of labour: This is to arrange trained personnel and non-technical
workers so that the organization does not experience any shortage of personnel during

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the peak period and at the same time they should not remain idle due to lack of
production work.
Forecasting of short-term financial requirements: Sales forecasts enable the
arrangement of funds according to the needs of the enterprise on reasonable terms well
in advance. It will minimise the cost of finance.

Setting the sales target and establishing controls and incentives: Sales forecasts
help in setting the sales target for different market segments. The personnel engaged in
the work are controlled with the implementation of necessary incentives.

2. Long-run objectives
Forecasting of sales of more than a year is called long-run forecasting. The objectives of
long-run forecasting are:

Estimating long-term financial requirements: Long-term financial requirements can
be predicted on the basis of long-term sales forecasting. Cash inflow can be very well
estimated by determining cash and credit sales ratio.

Planning of plant capacity: The long-run objective of sales forecasting is to plan plant
capacity in accordance with the demand or sales forecasts.

Manpower planning: Another long-run objective of sales forecasting is planning for the
permanent workforce on the basis of sales prediction so that the best labour force may
be available to run the production smoothly.

Budgetary control over expenditures: In forecasting the sales, all the activities are to
be forecasted and for this purpose, various budgets are to be prepared for the income
and expenditure of the organization.

Long-run production planning: With the help of long-run sales forecasting, long-run
production policy can be planned. In the long run, the product should meet the demands
and other conditions.

Dividend and reserve policies: Long-run sales forecasting can also forecast the profits
of the firm on the basis of gross profit ratio on sale.


Q3. Explain any 10 main functions of Production Planning and Control (PPC).



Q4. Describe the major steps that constitute the purchasing procedure.




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Q5 Write short notes on:
PERT
CPM



Q6. Elucidate the planned preventive maintenance system.




Remaining answers are available in the full assignments.


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