Q.6 Explain Jurans Quality Trilogy and Crosbys absolutes of quality.

List out the pillars of total productive maintenance. Ans. JURANS QUALITY TRIOLOGY

Juran uses his famous universal Breakthrough Sequence to implement quality programmes. The universal break through sequences are ;

7 Proof of need: changes.

there should be a compelling need to make

8 Project identification: here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided. 9 Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project. 10 Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. 11 Remedial Action: This is the stage when changes are introduced. Inspection, testing, and validation are also included at this point. 12 Holding on to the gains: the above steps results in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that results in the benefits derived should be the norm for establishing standards.

JURAN HAS CATEGORISED COST OF QUALITY IN TO FOUR CATEGORIES: 13 Failure costs internal: These are cost of rejections, repairs in

terms of materials, labour, machine time and loss of morale. 14 Failure costs-External: These are cost of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill. 15 Appraisal costs: These are cost inspection, including maintenance of records, certification, segregation costs, and others. 16 Prevention costs: Prevention cost is the sequence of three sets of activities, Quality planning, Quality control, and Quality improvement, forming the triology to achieve TOTAL QUALITY MANAGEMENT. JURANS ARGUMENT SAYS THAT; 17 Quality is the result of good planning consideration the needs of both internal and external customers and develops processes to meet them. The processes are also planned to meet them. 18 Quality is built into the system of manufacture, inputs and processes that are on stream like raw material, spare parts, labour, machine maintenance, training, warehousing, inspection procedures, packaging, and other. All these have to follow standards and control exercises to make sure that mistake do not occur often and that if mistakes do occur then they are corrected at the source. 19 Quality improvement measures are essential to keep the quality culture alive. Newer methods will be found, some operations can be eliminated, improved technology available. In short, as experience is gained things can always be done better. IT is for the management to take the initiative an encourage the employees to be on lookout for opportunities for improvement.

CROSBYS ABSOLUTES OF QUALITY Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more

economical than compromising on its achievement. His absolutes can be listed as under: 20 Quality is conformance to requirements, not goodness 21 Prevention, not appraisal, is the path to quality. 22 Quality is measured as the price Paid for non-conformance and as indices 23 Quality originates in all factors. There are no quality problems. It is the people designs and processes that create problems. Crosby also has given 14 points similar to those of Deming. His approach emphasizes on measurement of quality, increasing awareness, corrective action, error cause removal and continuously reinforcing the system, so that advantages derived are not lost over time. He opined that the quality management regimen should improve that overall health of the organization and prescribed a vaccine. The ingredients are. 24 Integrity: Honesty and commitment help in producing everything right first time, every time. 25 Communication: Flow of information between departments, suppliers, customers helps in indentifying opportunities. 26 Systems and operations: These should bring in a quality environment so that nobody is comfortable with anything less than the best.

TOTAL PRODUCTION MAINTENANCE (TPM)

Maintenance is a function in any operations system. Maintenance keeps the equipments in good condition. Generally equipments deteriorate because usage wear to the parts introducing inaccuracies on the products made on them. When the deterioration produces components which exceeds the permitted deviations rendering them unacceptable, maintenance is undertaken to bring back the machine to produce acceptable components. Sometimes the failure is sudden and serious and the equipment stops working. Disruption of production and emergency repairs works are costly and schedules are missed

causing delays in supplies and consequent losses. These breakdowns occur because the equipment was carrying hidden defects which were not apparent. All theses are attended to by the maintenances department. Historical records indicate the probability of failures over different periods thus enabling us to plan to attend to them. With progress in automation, we have costly equipments. We have flow lines and any one machine breaking down causes a series of machine to be idle. So, we have to move towards zero breakdowns like we want to move towards zero defects by implementing TQM Tools. TPM puts the responsibility of maintenance where it belongs to and the operator who uses the equipment. It is a companywide activity which involves all the people. The main thrust is eliminating all break downs. The focus is on the operating personnel because they would know about malfunctioning earlier and more than anybody else. They work on the machine and are aware of the slightest variations that occur and thus should be able to plan to remove the cause before it becomes serious. So every planned maintenance activity reduces the probability of a breakdown, Ownership of the operation and machine increases the commitment of the workmen. Autonomy is the starting point for learning and excellence. The worker can suggest better ways of improving quality, productivity, and design. This help in continuous improvement, Team work and participation improves the quality culture. The principles of 5S- the housekeeping activities which improve efficiency at workplace is considered a measurable standard to aid the implementation at TPM even in the office rooms.

(Book ID: B1133)

Set- 2 (60 Marks)

Q1. EXPLAIN LOGICAL PROCESS MODELLING AND PHYSICAL PROCESS MODELLING. WHAT ARE THE INGREDIENTS OF BUSINESS PROCESS? ANS. LOGICAL PROCESS MODELLING Logical process modeling is the representation of putting together all the activities of business process in details and making a representation of them. The initial data collected need to be arrange in a logical manner so that, links are made between nodes for making for the workflow smooth. The steps to be followed to make the work smoother are given below: 27Capture relevant data in detail to be acted upon. 28Establish controls and limit access to the data during processes execution 29Determine which task in the process is to be done and also the subsequent task in that process. 30Make sure that all the relevant data is available for all the tasks. 31Make the relevant and appropriate data available for that task. 32Establish a mechanism to indicate acceptance of the results after every task or process. This is to have an assurance that flow is going ahead with accomplishments in the desired path.

Some of these activities may occur in a sequential order whereas, some of them run parallel. There may even be circular paths, like re-work loops. Complexities arise when the processes activities are not connected together. Logical processes model consists of only the business activities and shows the connectivity among them. The process model is a representation of the business activities different from the technology dependent ones. Thus, we have a model that is singularly structured only for business activities. Computer programmes are also present in the total system. This allows the business oriented executives to be in control of the inputs, processes and outputs. The logical process model improves, control on the access to data. It also indentifies, who is in possession of data at different nodes in the dataflow network that has been structured. A few of the logical modeling formats are given below. 33Process Descriptions with task sequences and data addresses. 34Flow chart with various activities and relationships 35Flow diagrams 36Function hierarchies 37Function dependency diagram Every business activity, when considered as a logical process model, can be represented by a diagram, it can be decomposed and meaningful names can be given to the details. Verb and noun form combinations can be used to describe at each level. Nouns give the name of the activity uniquely and are used for the entire model meaning the same activity.

PHYSICAL PROCESS MODELLING

Physical process modeling is concerned with the actual design of data base meeting the requirement of the business. Physical modeling deals with the conversion of the logical model into a relation model. Object gets defined at the schema level. The objects here are tables created on the basis of entities and attributes. A database is defined for the business. All the information is put together to make the database software specific. This means that the objects during physical modeling vary on the database software being used. The outcomes are server model diagrams showing tables and relationships with a database. BELOW ARE THE INGREDIENTS OF BUSINESS PROCESS. The ingredients that might be used in a business process can be briefly outlined as shown below. 38The data which accomplishes the desired business objective. 39Acquisition, storage, distribution, and control of data which undertakes the process across tasks. 40Persons, teams, and organizational units which helps to perform and achieve the tasks. 41Decision which enhances the value of data during the process.

Q.2

EXPLAIN

PROJECT

MANAGEMENT

KNOWLEDGE

AREAS.WITH AN EXAMPLE BREAKDOWN STRUCTURE.

EXPLAIN

WORK

Ans. The knowledge areas of project management are the following:

42Project integration management, cost management, communications management. 43Project scope management, quality management, risk management. 44Project time management, procurement management. human management,

45For a project to be successful, it is necessary to understand its relationship with other management disciplines. Other management supporting disciplines are business legal issues, strategic planning, logistics, human resource management, and domain knowledge.

WORK BREAK DOWN STRUCTURE.

The entire process of a project may be considered to be made up on number of sub process placed in different stage called the work breakdown structure (WBS).

WBS is the technique to analysis the content of work and cost by breaking it down into its component parts. Projects key stages from the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many task identified at the start of planning and later this list will have to be validated. WBS is produced by indentifying the key elements, breaking each elements down into component parts and continuing to breakdown until manageable work packages have indentified. These can then be allocated to the appropriate person. The WBS does not shown dependencies other than a grouping under the key stages. It is not time based- there is no timescale on the drawing. Chart showing the example of work break down structure. A Work Breakdown Structure is a results-oriented family tree that captures all the work of a project in an organized way. It is often portrayed graphically as a hierarchical tree, however, it can also be a tabular list of "element" categories and tasks or the indented task list that appears in your Gantt chart schedule. As a very simple example, Figure 1 shows a WBS for a hypothetical banquet. EXAMPLE 1.

EXAMPLE -2

Q.3 TAKE AND EXAMPLE OF ANY PRODUCT OR PROJECT AND EXPLAIN PROJECT MANAGEMENT LIFE CYCLE. ANS. A life cycle of a project consists of the following steps. 46 Understanding the scope of the project. 47 Establishing objectives of the projects 48 Formulating and planning various activities. 49 Executing the project 50 Monitoring and controlling the project resources. 51 Closing and post completion analysis PHASES OF PROJECT MANAGEMENT LIFE CYLCE. Project management life cycle has six phases: 52 Analysis and evaluation phase. 53 Marketing phase 54 Design phase 55 Execution phase 56 Control-inspecting, testing, and delivery phase 57 Closure and post completion analysis phase.

58 ANALYSIS AND EVALUATION PHASE: Analysis and evaluation phase is the initial phase of any project. In this phase, information is collected from the customer pertaining to the project. From the collected information, the requirements of the project are analyzed. According to the customer requirement, the entire project is planned in a strategic manner. The project manager conducts the analysis of the problem and submits a detailed report to the top management.

59 MARKETING PHASE: A project proposal is prepared by a group of people including the project manager. This proposal has to contain the strategic adopted to market the product to the customer. 60 DESIGN PHASE: Design phase involves the study of inputs and outputs of the various project stages. a. Inputs received consist of project feasibility study, preliminary project evaluation details, project proposal, and customer interviews. b. Outputs produced consist of system design specifications, functional specifications of the project, design specifications of the project and project plan. 61 EXECUTION PHASE In execution phase, the project manager and the term members work on the project objectives as per the plan. At every stage during the execution, reports are prepared. 62 Control- inspecting testing and delivery phase: During this phase, the project teams works under the guidance of the project manager. The project manager has to ensure that the team working under him is implementing the project designs accurately. The project has to be tracked or monitored through its cost, manpower, and schedule. The project manager has to ensure ways of managing the customer and marketing the future work, as well as ways to perform quality control work 63 Closure and post completion analysis phase: Upon satisfactory completion and delivery of the intended product or service the staff performance has to be evaluated. The project manager has to document the lessons from the project. Reports on project feedback are to be prepared and analyzed. A project execution report is to be prepared.

Let us have a quick recap of what is involved in the above phases c. Analysis and evaluation phase: The preparation stage involves the preparation and approval of project outline,

project plan, and project budget. d. Assigning task to the team members: The next stage involves selecting and briefing the project team about the proposals, followed by discussions on the roles and responsibilities of the project member and the organization. e. Feasibility study: The feasibility or research stage establishes whether the project is feasible or not and establishes the risk factors likely to be faced during the course of the project execution and the related key factors to overcome the problem f. Execution phase: A detailed definition and plan for the project and its execution is prepared by the team and coordinated by the project manager. g. Implementation stage: The implementation stage involves the execution of the project as per the plan, this also involves careful monitoring of the project progress and managing the changes, if any, within the scope of the project framework. 64 Closure and post completion analysis phase: The final stage involves satisfactory delivery of the product/service to the customers. Upon completion, a project review is to be conducted by the project manager along with team member, sponsors, and customer. A project review process involves discussions about the progress, performance, hurdles that were overcome and problems faced , so that, such instances could be avoided in future projects.

Example No.1

Example No.2

Example No.3

Q.4 EXPLAIN PMIS. WHAT IS DIFFERENCE BETWEEN KEY SUCCESS FACTOR (KSF) AND KNOWLEDGE (K) FACTOR ? EXPLAIN WITH EXAMPLES. ANS. PMIS (PROJECT MANAGEMENT INFORMATION SYSTEM) An information system is mainly aimed at providing the

management at different levels with information related to the system of the organization. It helps in maintaining discipline in the system. An information system dealing with project management tasks is the project management information system. It helps in decision making in arriving at optimum allocation of resources. The information system is based on a database of the organization. A project management information system also hold schedule, scope changes, risk assessment and actual results. The information is communicated to managers at different levels of the organization depending upon the need. Let us find how a project management information system is used by different stakeholders.

WHO NEEDS INFORMATION AND WHY?

Upper managers To know information on all project regarding progress, problem, resource usage, costs and project goals. This information helps them take decisions on the projects. They should review the projects at each milestone and arrive at appropriate decision. To see each project schedule, priority and use of resources to determine the most efficient use across the organization.

Project manager and department managers

Project team members

To see schedule, task lists and specification so that they know what needs to be done next.

The fours majors aspects of a PMIS are: 65 Providing information to the major stakeholder. 66 Assisting the team members, stakeholders, managers with necessary information and summary of the information shared to the higher level managers. 67 Assisting the manager in doing what if analysis about project staffing, proposed staffing changes and total allocation of resources. 68 Helping organizational learning by helping the members of the organizations lean about project management. Usually, the team members, and not the systems administrators of the company, develop a good PMIS. Organisations tend to allocate such responsibility by rotation among members with a well designed and structured data entry and analytical format.

DIFFERENT BETWEEN KEY SUCCESS FACTORS (KSF) AND KNOWLEDGE (K) FACTOR

Key success factors (KSF)

Knowledge (k) factor

The KSF should be evolved based on a Knowledge is the most powerful mover of basic consensus document (BCD) the wheels of progress KSF will also provide an input to Knowledge (k) factor is an index of the effective exit strategy (EES) extent to which one can manager today with yesterdays knowledge content and

also the extent to which todays knowledge will be used tomorrow. Broad level of KSF should be available at the conceptual stage and should be firmed up and detailed out during the planning stage. The easiest way would be for the team to evaluate each step for chances of success on a scale of ten. K factor would render the development process more productive. The k factor of course, undergoes correction through obsolescence, since changes are now phenomenal.

KSF should be available to the Leaders should recognize the knowledge management, duly approved by the potential of the younger managers. project manager before execution and Seniority is no more an automate scale control stages. for knowledge. It is equally important for younger member not suppress their knowledge potential from its application. KSF rides normal consideration of time Here time and cost does not matter, and cost- at the levels encompassing knowledge is to be updated time to time client expectation and management to get better results. perception-time and cost come into play as subservient to these major goal. In order to provide complete stability to fulfillment of goals, a project manager needs to constantly evaluate the key success factor from time to time. As age and experience advance wisdom gains, but knowledge should always be updated and utilized. It is the task of every team members to maximize the k factor in all directions.

Example of Key success factor

According to TeachMeFinance.com, a turnkey project is "a project in which a builder/developer contracts to construct a completed facility that includes all items necessary for use and occupancy." Unfortunately, many turnkey businesses never capture the interest of the buyers. Whether you're building in brick and mortar or building in computer code, there are several factors critical to the success of your turnkey project.

Know the Business

Several businesses can be set up as turnkey businesses, from food service to copy management to telemarketing and sales. Whichever you decide, it is important to have an intimate knowledge of the business you are building. One key factor in a successful turnkey business is being able to anticipate the needs and desires of the potential owners before they are brought on board. A salesman, for example, looking to purchase a turnkey sales business will need an office as a base of operations; but since so much of the sales process is done through phones, computers and other electronic devices, the turnkey developer may want to include additional power outlets in the construction of the building, or desks with onboard power strips and surge protectors. These small additions can make a turnkey project a success.

Know the Area

Internet businesses often have nationwide access to clientele, but brick-and-mortar turnkey operations sometimes run into trouble in areas poorly suited to the service they offer. For example, an outdoor food service stand opening in Wilkes-Barre, Pennsylvania, will not do as much business (at least during the winter months) as one opening in an Orlando, Florida, theme park. Knowing the area where you are constructing your turnkey business includes knowing the weather conditions, the dominant demographic, the current popularity and number of businesses like the one you are creating and the average income of the public. Planning a turnkey business that uses these factors to its advantage will make the business more readily sellable.

Make Connections
Turnkey businesses are designed to be ready to operate as soon as the buyer takes ownership. Still, once they are sold, many businesses of this type run into problems when it comes to resupplying, logistics and advertising. Because of this, many buyers are wary of turnkey operations. One way to quell any "down the road" fears is to have this part of the infrastructure accounted for. Make contact with businesses which help advertise businesses, ship products, supply copy paper and any other stock the owner might require. Obtain discounts from as many as possible

Example of Knowledge (k) factor ABSTRACT Most organisations are aware that in todays highly competitive environment managing effectively their knowledge is the only way to achieve a sustainable competitive advantage. One of the primary areas to which knowledge management can be applied is the field of project management. An increasing number of business sectors are adopting a project

approach to carry out a range of essential activities where valuable knowledge is gained. Knowledge from projects is an important resource for further projects, because projects solve innovative and interdisciplinary tasks. However, the majority of organisations do not manage the information gained through past projects. Failure to transfer knowledge from past to future projects leads to wasted activity and unnecessary expenses by reinventing the wheel. Therefore, knowledge management is a critical success factor for many projects. The purpose of this Management Report is to approach knowledge management from the perspective of project management. The main objective is to define how knowledge management can be enhanced within a project by analysing suitable tools and relevant theories. The research is based on the high-speed train project XY of the company XXX. This project is an important milestone for XXX to improve its market position in Spain. The knowledge gained through the XY project will be the key factor for the success of the further high-speed train projects. The main finding of the case study highlights that there is a lack of formal knowledge management activities at the project. The project team focuses mainly on personal interaction for transferring knowledge and information technology is not used to its full potential. A hybrid approach to knowledge management for project environments is suggested, taking into account technical as well as human-specific aspects. The main recommendation is to determine a knowledge management strategy, which preferably focuses on transferring tacit knowledge and gives information technology a support function. Other areas of improvement are creating an open and constructive project culture, including knowledge initiatives in reward systems and fostering documented project review sessions. Finally, general conclusions are provided to answer the main research question of this management report. Q.5 EXPLAIN THE SEVEN PRINCIPAL OF SUPPLY CHAIN MANAGEMENT.TAKE AND EXAMPLE OF ANY PRODUCT IN THE MARKET AND EXPAIN THE SECENRIO OF BULLEHIP EFFECT. Ans: Seven principles of SCM are: 69 Group customer by needs: Effective SCM groups customers by distinct service needs, regardless of industry and then tailors services to those particular segments. 70 Customize the logistics networks: In designing their logistic network, companies need to focus on the service requirement and profit potential of the customer segments identified. 71 Listen to signals of market demand and plan accordingly: sales and operations planners must monitor the entire supply chain to detect early warning signals of changing customers demand and needs. This demand driven approach leads to more

consistent forecast and optimal resource allocation. 72 Differentiate the product closer to the customer: companies today no longer can afford to stockpile inventory to compensate for possible forecasting errors. Instead, they need to postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively to changes in customer needs. 73 Strategically manage the sources of supply: By working closely with their key suppliers to reduce the overall costs of owning materials and services, SCM maximizes profit margins both for themselves and their suppliers. 74 Develop a supply chain wide technology strategy: As one of the cornerstones of successful SCM, information technology must be able to support multiple levels of decisions making. It also should afford a clear view and ability to measure the flow of products, services and information. 75 Adopt channel spanning performance measures: Excellent supply chain performance measurement systems do more than just monitor internal functions. They apply performance criteria to every link in the supply chain-criteria that both service and financial metrics.

BULLWHIP EFFECT IN SCM An organization will always have up and downs. It is necessary that the managers of the organization keep track of the market conditions and analyze the changes. They must take decisions on the resources and make necessary changes within the organization to meet the market demands. Failing to do so may results in wild swings in the orders. This may adversely affect the functioning of the organization resulting in lack of coordination and trust among supply chain members. The changes may affect the information and may led to demand amplification in the supply chain. The Bullwhip effect is the uncertainty caused from distorted information flowing up and down the supply chain. This has its affect on almost all the industries, poses a risk to firms that experience large variations in demand, and

also those firm which are dependent on suppliers, distributors and retailers. A bullwhip effect may arise because of: 76 Increase in the lead time of the project due to increase in variability of demand 77 Increase in the stocks to accommodate the increase demand arising out of complicated demand models and forecasting techniques. 78 Reduced service levels in the organization. 79 Inefficient allocation of resources. 80 Increased transportation cost. How to prevent it ? Bullwhip effect may be avoided by one or more of the following measures: 81 Avoid multiple demand forecasting. 82 Breaking the single order into number of batches of orders. 83 Stabilize the prices, avoid the risk involved in overstocking by maintaining a proper stock 84 Reduce the variability and uncertainty in point of sale (POS) and sharing information 85 Reduce the lead time in the stages of the project 86 Always keep analyzing the past figures and track current and future levels of requirement. 87 Enhance the operational efficiency and outsourcing logistics to a capable and efficient agency

Example of one product the effect Bullwhip theory.

The Beer Game

The beer game was developed at MIT by the Systems Dynamic Group in the 1960s. The game

involves a simple production/distribution system for a single brand of beer. There are three players in the game including a retailer, a wholesaler, and a marketing director at the brewery. Each player's goal is to maximize profit. A truck driver delivers beer once each week to the retailer. Then the retailer places an order with the trucker who returns the order to the wholesaler. There's a four week lag between ordering and receiving the beer. The retailer and wholesaler do not communicate directly. The retailer sells hundreds of products and the wholesaler distributes many products to a large number of customers. The following represents the results of a typical beer game:3.1 The Retailer Week 1: Lover's Beer is not very popular but the retailer sells four cases per week on average. Because the lead time is four weeks, the retailer attempts to keep twelve cases in the store by ordering four cases each Monday when the trucker makes a delivery. Week 2: The retailer's sales of Lover's beer doubles to eight cases, so on Monday, he orders 8 cases. Week 3: The retailer sells 8 cases. The trucker delivers four cases. To be safe, the retailer decides to order 12 cases of Lover's beer. Week 4: The retailer learns from some of his younger customers that a music video appearing on

TV shows a group singing "I'll take on last sip of Lover's beer and run into the sun." The retailer assumes that this explains the increased demand for the product. The trucker delivers 5 cases. The retailer is nearly sold out, so he orders 16 cases. Week 5: The retailer sells the last case, but receives 7 cases. All 7 cases are sold by the end of the week. So again on Monday the retailer orders 16 cases. Week 6: Customers are looking for Lover's beer. Some put their names on a list to be called when the beer comes in. The trucker delivers only 6 cases and all are sold by the weekend. The retailer orders another 16 cases. Week 7: The trucker delivers 7 cases. The retailer is frustrated, but orders another 16 cases. Week 8: The trucker delivers 5 cases and tells the retailer the beer is backlogged. The retailer is really getting irritated with the wholesaler, but orders 24 cases. 3.2 The Wholesaler The wholesaler distributes many brands of beer to a large number of retailers, but he is the only distributor of Lover's beer. The wholesaler orders 4 truckloads from the brewery truck driver each week and receives the beer after a 4 week lag. The wholesaler's policy is to keep 12 truckloads in inventory on a continuous basis. Week 6: By week 6 the wholesaler is out of Lover's beer and responds by ordering 30 truckloads from the brewery.

Week 8: By the 8th week most stores are ordering 3 or 4 times more Lovers' beer than their regular amounts. _________________________________________________________________________ _____ _________________________________________________________________________ _______ Week 9: The wholesaler orders more Lover's beer, but gets only 6 truckloads. Week 10: Only 8 truckloads are delivered, so the wholesaler orders 40. Week 11: Only 12 truckloads are received, and there are 77 truckloads in backlog, so the wholesaler orders 40 more truckloads. Week 12: The wholesaler orders 60 more truckloads of Lover's beer. It appears that the beer is becoming more popular from week to week. Week 13: There is still a huge backlog. Weeks 14-15: The wholesaler receives larger shipments from the brewery, but orders from retailers begin to drop off. Week 16: The trucker delivers 55 truckloads from the brewery, but the wholesaler gets zero orders from retailers. So he stops ordering from the brewery. Week 17: The wholesaler receives another 60 truckloads. Retailers order zero. The wholesaler orders zero. The brewery keeps sending beer. 3.3 The Brewery

The brewery is small but has a reputation for producing high quality beer. Lover's beer is only one of several products produced at the brewery. Week 6: New orders come in for 40 gross. It takes two weeks to brew the beer. Week 14: Orders continue to come in and the brewery has not been able to catch up on the backlogged orders. The marketing manager begins to wonder how much bonus he will get for increasing sales so dramatically. Week 16: The brewery catches up on the backlog, but orders begin to drop off. Week 18: By week 18 there are no new orders for Lover's beer. Week 19: The brewery has 100 gross of Lover's beer in stock, but no orders. So the brewery stops producing Lover's beer. Weeks 20-23. No orders. At this point all the players blame each other for the excess inventory. Conversations with wholesale and retailer reveal an inventory of 93 cases at the retailer and 220 truckloads at the wholesaler. The marketing manager figures it will take the wholesaler a year to sell the Lover's beer he has in stock. The retailers must be the problem. The retailer explains that demand increased from 4 cases per week to 8 cases. The wholesaler and marketing manager think demand mushroomed after that, and then fell off, but the retailer explains that didn't happen.

Demand stayed at 8 cases per week. Since he didn't get the beer he ordered, he kept ordering more in an attempt to keep up with the demand. The marketing manager plans his resignation. 3.4 Lessons from the Beer Game 1. The structure of a system influences behavior. Systems cause their own problems, not external forces or individual errors. 2. Human systems include the way in which people make decisions. _________________________________________________________________________ _____ _________________________________________________________________________ _______ 3. People tend to focus on their own decisions and ignore how these decisions affect others. 3.5 Lessons Related to the Learning Disabilities 1. People do not understand how their actions affect others. 2. So they tend to blame each other for problems. 3. Becoming proactive causes more problems. 4. The problems build gradually, so people don't realize there is a problem until its too late. 5. People don't learn from their experience because the effects of their actions occur somewhere else in the system.

Stock variability amplification in a supply chain due to Bullwhip Effect

Q.6 TIME TAKEN BY THREE MACHINES ON FIVE JOBS IN A FACTORY IS TABULATED BELOW IN TABLE BELOW. FIND OUT THE OPTIMAL SEQUENCE TO BE FOLLOWED TO MINIMIZE THE IDLE TIME TAKEN BY THE JOBS ON THE MACHINES.

ANS. Consider M1 and M3

Job

Machin Machin e 1 e 3 (M1) (M3) 6 4 5 3 4 7 3 7 6 4

A B C D E

JOB = D E C A B