Operations Management-1


SKU: AMSEQ-198 Category:

Assignment A


1. Why are plant location decisions important? Name and discuss the factors which need to be considered to arrive at the ideal location of a plant?


2. “Effective planning and control guarantees better utilization of machines and labour.” Discuss.


3. What do you mean by plant layout? What are various tools and techniques for layout analysis?


Assignment B


1. What are various aspects which a manager should consider before making a decision to make or buy the product?


2. “Two basic aspects of the function of plant of plant maintenance are: preventive maintenance and corrective maintenance.” What are they? How do they differ from each other? What activities are considered under each of them?


3. Explain the concept of Total Quality Management.




The Blue Powder Company produces powder for shotgun shells in its only plant, which is in Cleveland, Ohio. The plant was originally built in 1861, but with the growing en­vironmental pressures from being located in a large city, the company is considering three new location alternatives for its central offices and manufacturing plant: Las Vegas, Santa Fe, and Yuma. The production processes at Blue Powder require about 300 production workers and 200 engineering and management personnel, large amounts of water and other utilities, large expanses of land, large volumes of materials to be shipped in and out of the plant, and fire and explosion-tolerant areas.

The three locations under consideration have been analyzed by the company’s staff, and these operating costs have been developed for each location:




Las Vegas Santa Fe Yuma
Annual fixed cost 3000000 2700000 2200000
Variable cost/ pound 0.0500 0.0700 0.1100


These costs reflect all relocation costs, production costs, overhead costs, transportation costs, and so on. The company has produced 100 million pounds of powder this year, and sales are expected to increase by about 10 million pounds per year. The company does not think that sales volume or sales price will be affected by the location of the plant.



1. What major factors should be considered in choosing one of the three location al­ternatives?


2. How would you weight the factors that you developed in No.1 for Blue Powder’s plant? Which ones are more important and which ones should not be weighted heavily? Discuss and defend your answer.


3. Analyze the factors listed in No.1, and recommend a course of action for Blue Powder.



Assignment C

1. Jobbing production is characterized by short run production runs.


(b) No


2. One of the following is a site factor for plant location:

(a) Nearness to transport facilities

(b) Entertainment facilities

(c) Suitability of land

(d) Climate conditions



3. One of the following is a major reason for change in layout:

(a) Improve customer relation

(b) Increases company image

(c) Improve quality

(d) Introduction of new product



4. Work in progress in jobbing production is low as few pieces are produced at a time.

(a) Yes

(b) No


5. Plant and machinery in jobbing as well as batch production is arranged to give product type of layout.

(a) Yes

(b) No


6. Need for location decision occurs when:

(a) Space at existing units is inadequate for expansion

(b) A new manufacturing unit is being set up

(c) Growth of business necessitates expansion

(d) All of above


7. Following are the objectives of good layout:

(a) Economy in material handling

(b) Efficient utilization of available space

(c) Minimize production holding

(d) All of above


8. One of the critical factors for location of plant is climate conditions

(a) Yes

(b) No



9. The structure of the transportation cost depends on characteristics of the commodity and mode of payment.

(a) Yes

(b) No


10. Time required to design the product in jobbing production at times exceeds its manufacturing time.

(a) Yes

(b) No


11. Mass and flow production is characterized by the manufacture of a large number of pieces of standard products.

(a) Yes

(b) No


12. Materials handling in batch production as compared to jobbing production is large.

(a) Yes

(b) No


13. Product design is of ________types.

(a) One

(b) Two

(c) Three

(d) Four


14. The types of policies relating to finished goods inventory includes:

(a) Product to stock policy

(b) Produce to order policy

(c) Both a and b

(d) None of above



15. Special purpose machines are employed and the plant assembly stages are laid out on the basis of product layout in mass and flow production.

(a) Yes

(b) No


16. Components of Production Management include

a) Capacity Planning

b) Job Design

c) Production Planning

d) All of the above


17. Any premise in which persons are employed for purpose of making any product/s is called ______________________.

a) Factory

b) Warehouse

c) Education institution

d) Bank


18. Taxes / duties levied is one of the important determinant for location decision as taxes/duties substantially influence_____________________________.

(a)Product cost

(b)Product sales

©Product innovation

(d) Product marketing



19. Process production is characterized by the manufacture of a single product.

(a) Yes

(b) No


20. Which of the following factors play important role while selecting or rejecting a particular site from legislation and taxation point of view?

(a)Labour laws

(b)Building codes

©Policies regarding issue of license

(d)All of above


21. Process layout is also called:

(a) Functional layout

(b) Job shop layout

© Both of above


22. Various types of layout are:

(a) Process layout

(b) Product layout

(c)Grouping technology layout

(d) All of above


23. Network planning techniques like PERT/ CPM have been found suitable in ___________________

(a) Jobbing production

(b) Batch production

(c) Project scheduling

(d) None of above


24. ______________________ is characterized by manufacture of one or few pieces of a product at a time under a separate contract.

(a) Project production

(b)Batch production

(c) Mass production

(d) Jobbing production


25. Material movement in a process production unit is usually done by conveyors and automatic machine transfer.

(a) Yes

(b) No


26. Functions of PPC includes:

(a) Regular functions

(b) Optional functions

(c) Both a and b

(d) None of above



27. ________________ concerns preparation of pre production cost estimates.

(a) Regular functions

(b) Optional functions

(c) Both a and b


28. Options for situations in which demand needs to be increased in order to match capacity include:

(a) Pricing

(b) Promotion

(c) Back ordering

(d) All of above


29. Materials include:

(a) Current machine

(b) Product design changes

(c) New products

(d) Storage capacity


30. CIF includes:

(a) Cost

(b) Insurance

(c) Freight

(d) All of above


31. _______________ is given for prompt and full payment.

(a) Quantity discount

(b) Seasonal discount

(c) Cash discount

(d) Trade discount




32. The main task of the _______________ department is to acquire the required materials in the right quantity, of the right quality, from the right source, at the right time and at the least possible cost.

(a) Marketing

(b) Sales

(c) Purchase

(d) Production


33. The inventory control function is represented in three departments:

(a)Raw materials inventory department

(b)Production department and

(c)Finished goods inventory department.

(d) All of the above


34. _____________ are influenced by the products that an organization plans to manufacture and the markets it intends to cater to.

(a) Technology

(b) Capacity decisions

(c) Innovation

(d) Integration


35. Work in progress in a continuous production unit is almost zero.

(a) Yes

(b) No


36. It is the system ­of tools and techniques by which products are made to comply with specifications at minimum cost to the firm.

(a) Total quality management

(b) Control charts

(c) Quality control

(d) Quality specifications


37. ___________________ refers to verification that every quality characteristic or product to meet a pre-determined performance standard at each stage in the manufacturing cycle.

(a) Preventive function

(b) Assurance function

(c) Corrective function

(d) Maintenance function


38. One of key decision area is the type of ______________(a wholly-owned joint venture, or alliance) to be used to set up operations at a new location.

(a) Entry method

(b) Exit method

(c) Sustainable method

(d) Declining stage




39. Initial planning in jobbing production is more important than in flow production.

(a) Yes

(b) No


40. The manufacturing cycle time in batch production is comparatively smaller than jobbing production but is longer than in mass and flow production.

(a) Yes

(b) No