MBA 2 SEM OM notes CV

MBA II OPERATIONS MANAGEMENT UNIT I
Nature and scope of operations management
Operation management, as the name suggests, is managing the operations and functionality of the business.
It involves the tasks and skills required to plan, organise and direct the activities in order to achieve the
task of the day. Usually, operation management is more identified with the manufacturing process. However,
if one observes, the necessary process of operation management is required in every industry. Operation
management is one of the essential in every business, especially in the business of manufacturing. Hence,
completing a course in the operation management would always help the people who want to be a subject
matter expert in the field of operation management. The nature and scope of operation management are stated
below.
Operation Management is very critical in achieving the objective of the business.
Every business is incepted with a specific objective in mind, and the business does its best to achieve it. If
the resources within the company are not appropriately allocated to achieve these objectives, then this would
affect the net profits of the company. Hence, to achieve the objective of the company in a structured and
disciplined way operation management comes into the picture. Operation manager ensures that there is better
coordination between the various departments of the business in order to achieve the objective of thebusiness.
Operation Management helps in utilising the resources at the optimum level.
One of the jobs of the operation manager is the optimum utilisation of the resources. The operation manager
is responsible for strategising the resource allocation in the business and for making sure that the resources
are being used as per the decided strategies. This will help in getting a direction towards the achievement of
the objective of the goals of the company. The operation manager always checks that the resources in the
business are used to the optimum, and none of the resources is wasted while doing the job.
Operation Management aids in enhancing the productivity of the employees
With the increasing focus of the business to be customer-centric, it is imperative that the assignment or the
project took for the client is given to them on time as any delay would affect the image of the company.
Hence, here the skill of operation management comes into the picture; the operation managers deploy various
techniques like improving the internal systems or monitoring the internal procedures. Therefore, one can say
that operation management is the enforcement of the required practices for the business in the best possible
way.
Operation Management is vital for all types of business organisation
The operating process of all the industries is the same. Hence the operation management is an essential
department in all types of business, manufacturing and services industries alike. Operation management is
considered a problem-solving department. With the help of the operation management organisation is able
to achieve the objective with the maximum use of the resources available with the business
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Functions of operation management
In the past, manufacturing companies had a challenging time improving the efficiency of their production
facilities. As the companies grew, this task became even more challenging due to a lack of visibility within
their production operations and a lack of collaboration throughout the departments.
As the challenges grew, some people found that focusing on the ‘operations’ component of the business
organization made a real impact on the productivity of the manufacturing facility. After this, operations
management became a viable solution to help manufacturing facilities increase their efficiency and profits.
What is Operations Management?
In a manufacturing organization, the ‘operations’ component is responsible for the transformation of raw
materials into finished goods. Operations management can then be defined by the management of all
processes related to the production of items.
Within the process, operations management makes use of various tools and strategies to increase production
output and ensure that customer orders are completed on time.
The field of operations management is vast and complex, but it has some key functions that are important
to understand for anyone wanting to implement such strategies into their manufacturing facility.
Key Functions within Operations Management
Some of the key functions of operations management include:
● Finance - In any manufacturing organization, finance plays a crucial role in ensuring that financialresources
are properly allocated and utilized to their full extent. Finance in operations management helps create a
budget that will allow the organization to meet its production goals and can help evaluate various investment
opportunities to make the best decision. Proper utilization and allocation of finances will allow for a product
to be created for the lowest cost that will also satisfy overall consumer needs.
● Strategy - Strategic management is the planning, monitoring, analysis, and assessment of tall aspects of an
organization on a continuing basis. Attention to these elements ensures that a strategy is developed and
then implemented in the manufacturing facility. The benefits of strategic management will help
manufacturing organizations make better decisions regarding production planning and scheduling, keep
customers happy and allow the facility to meet its overall goals. Many business strategies include supply
chain configuration, sales, capacity to hold money, and optimal utilization of human resources.
● Operation - This function of operations management is concerned with planning, organizing, directing, and
overall control of all activities within the organization. This is the primary function of operations
management and will effectively aid in converting raw materials and human efforts into a durable good and
service that consumers will be able to utilize. Operations within production must be scheduled in a way
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that minimizes the amount of setup required and maximizes the utilization of resource capacity. If this is
achieved, the production facility will be able to increase its production output.
● Product Design - With new technology becoming available, the selling of a product becomes much more
simple. One of the main duties of operations management is to ensure that a product is designed properly
and caters to market trends and satisfies the needs of consumers. In addition, introducing new product designs
can be challenging due to the existing product mix and available resources. Those are important factors to
consider when looking to introduce new items.
● Forecasting - Demand forecasting is the process of predicting what the demand for certain products will
be in the future. It identifies what both current and future customers will want to buy and tells manufacturing
facilities what they should actually produce. Ideally, manufacturing companies want to be able to accurately
predict customer demands so that they can produce the right amount of products. Producing too few items
leads to stock shortages and can negatively impact customer relationships. On the other hand, having too
much inventory is costly and can lead to having excess stock if the items become obsolete. Finding the right
balance is one of the functions of operations management.
● Quality Control - In addition to the product design function, operations managers should strive to produce
the best quality product possible. Modern-day consumers are concerned about quality instead of quantity,
which is why it is so crucial to develop a durable and top-notch quality product. This is especially important
when evaluating the existing processes as improving production processes should not be at the expense of
quality. Operations managers should ensure that quality control processes are defined and implemented to
catch any defective items.
Managing operations can be a complicated process that requires in-depth knowledge of the related field.
Fortunately, operations management uses similar management tools and techniques, no matter the industry.
Additionally, an Advanced Planning and Scheduling (APS) software such as Planet together APS can also
help reduce the complexity that comes with operations management.
Factors affecting productivity

Productivity is affected by various factors. These Factor Affecting Productivity in Operation Management
can be divided into.
1. External factor
2. Internal factor
1. External factors
External factor are those factors, which are beyond the control of management or individual enterprises.
They affect organizations productivity level but organization cannot control them. These external factors are
also called macro-productivity factors. They can be listed as follows:
● Structural adjustment
● Natural resources
● Government and infrastructure
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Structural adjustment: Changes in social, economic, political, demographic structure of nation directly
influence national and industrial productivity. However the change in national and industrial productivity
later has long term affects on the socio, economical, political and demographic structure of nation.
Natural resources: Natural resources like manpower, land energy, raw material are important for improving
productivity at international, national, industry and firm level. In order to improve productivity all these
sources should be utilized efficiently and effectively with proper policy and strategy.
What is Standardization?
Standardization is the process of creating protocols to guide the creation of a good or service based on the
consensus of all the relevant parties in the industry. The standards ensure that goods or services produced
in a specific industry come with consistent quality and are equivalent to other comparable products or
services in the same industry.
Standardization also helps in ensuring the safety, interoperability, and compatibility of goods produced.
Some of the parties involved in the standardization processes include users, interest groups, governments,
Corporation. A corporation is a legal entity created by individuals, stockholders, or shareholders, with the
purpose of operating for profit. Corporations are allowed to enter, and standards organizations.
Standardized services enable network operators to efficiently deliver services with an expectation of cross-
compatibility among equipment. Vendors manufacture their products with features that guarantee support
for reliable and timely delivery of data and services.
Advantages of standardization
● Rationalize different varieties of products.
● Decrease the volume of products in the store and also the manufacturer cost.
● Improve the management and design.
● Speed up the management of orders.
● Facilitate the exportation and marketing of products.
Simplify purchasing management.
Customized services
Customized service is any service that's tailored to the needs of individual customers. The math is simple –
if the service better fits their needs, you'll be more successful in service, sales and retention.
Product customization is the process of delivering tailor-made products to customers based on their needs
and expectations. This strategy is one of the most effective ways to promote customer experience and
satisfaction
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MBA II OPERATIONS MANAGEMENT UNIT II
Facility planning
Facilities planning is the development of a forward-thinking strategy for the management of a single facility or
an organization's complete portfolio of space that supports operations.
What are the steps of facility planning?
● 4 Steps of Facility Planning

●
● Understanding.
● Analyzing.
● Planning.
● Acting.
● Facility managers are responsible for keeping facilities humming along smoothly. It’s a job that requires day-to-
day oversight and the ability to adapt to changing facility needs. But more than that, FMs need the foresight to
engage in facility planning.
● What is the meaning of facility planning? It’s more than just keeping up with the demands of the workplace.
Facility planning is about staying ahead of them. With a forward-looking mindset, facility managers can maximize
space, improve the workplace experience, and keep costs low. It all starts by observing current trends and
pinpointing the pivotal workplace needs.
● The best way to explain the need of facility planning within operations management is to look at it through the
lens of fostering efficiency. How can it create efficiency in the context of employees and their work? In budgeting
and cost planning? In space utilization and usage? At its core, facility planning is the tool that unlocks efficient
operations management.
● The goal: Creating efficiency
● Understanding the importance of facility planning means looking at efficiency. How effectively are you using the
space available to you? Are you supporting employee productivity? Where does waste exist within your
workplace and what can you do to minimize it?
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● The goal of facility planning is to not only recognize opportunities for efficiency, but to anticipate them as well.
Alleviating inefficiencies within the workplace has rippling effects across the entire business. For example:
● Recognizing workspace is insufficient prevents overcrowding and the dip in productivity that comes with it. It
can also serve as the foundation for a cost-saving hot desk or remote work arrangement.
● Reviewing vendor contracts helps FMs move to an integrated facilities management approach,
consolidating costs and streamlining the property management aspect of facilities oversight.
● Reviewing occupancy data from an office gives facility managers the data they need to anticipate space
requirements for a growing workforce. This supports better planning for expansion costs and logistics.
● In these scenarios and others like them, the emphasis is on facilities planning. The need of facility planning
is evident any time there are recognized efficiencies or areas of opportunity. Facility managers observe,
understand, and act on key areas to chart future improvements. The goal is to optimize the different facets of
business by making improvements to the one thing touching them all: facilities. Efficiency in planning and
execution is critical.
● Facility planning objectives
● Looking ahead at facility needs is important, but not without context. Before addressing anything, FMs need core
facility planning objectives at the forefront of their observations and decision-making. What are your facility
goals?
● Keeping costs as low as possible?
● Using the workplace to attract talent?
● Imbuing a sense of culture and belonging?
● Maximizing productivity?
● Planning for growth?
● Improved space utilization?
● The objectives are likely a combination of all these and more. Order them by importance and assess the impact
they’ll have. Then, start looking at what you can do to shift the momentum in the right direction.
● Don’t forget to set benchmarks. Objective improvements are only actualized when you can measure change.
Create systems for collecting and measuring data to dictate future facility changes. Whether it’s through the IoT,
employee feedback, or financial reporting, tracking the effects of change helps refine future facilities planning.
Just make sure benchmarks align with objectives.
● Aspects of facility planning
● Facility planning is as broad in scope as the job duties of facilities managers. As a result, FMs need to
align objectives and trends with the different segments of facilities themselves. These include:
● People
● Technologies
● Building and landscape
● Processes and practices
● Each part of the business contributes to planning. For example, if your goal is to improve space
utilization and plan for the future, you’ll need to observe how it fits into the various aspects of facilities planning.
How does space utilization impact people, technology, the building, and your processes? Every facilities
planning initiative should be stacked against individual pieces and then considered as part of the whole.
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● Looking ahead at how facilities impact operations give businesses an edge for improvement. When you
understand how facilities impact your business’ core pillars, it’s possible to work backward, making
improvements that facilitate best results.
● The importance of facility planning in operations management
● What is facility planning in operations management? It’s the act of improving facilities to foster continued success
in the business. Your facilities touch every part of the business. Planning ahead to means looking thoroughly at
facilities and how to improve them. The need of facility planning in operations management is invaluable a core
driver of betterment across the workplace and across the organization.
● Facility planning is like any other mode of planning. You plan for financials and hiring, product development and
marketing why not facilities, too? Facilities are the second-largest cost behind employees. It makes sense to
continuously plan for facility evolution. Whether change is a result of demand or careful observation, thorough
facilities planning ensures it comes to fruition.
.
● How can the center of gravity model be used in a service facility location?
● The center of gravity method is used for locating single facilities that considers existing facilities, the distances
between them, and the volumes of goods to be shipped between them.
How do you apply the simple grid or center of gravity approach to facility location?
Using the Method:
1. Locate the delivery locations on a map and look up the expected shipping volume to each location. ...
2. Using a grid assign an X and Y coordinate to each location.
3. Calculate the sums for. ...
4. The X value for the Center Point = Sum(X value * Shipments) / Sum of Shipments.
Taking the sum of the average value of the weight/volume times the distance times the volume segment divided
by the weight will produce the center of gravity.
Facility location is the process of determining a geographic site for a firm's operations. Managers of both
service and manufacturing organizations must weigh many factors when assessing the desirability of a particular
site, including proximity to customers and suppliers, labor costs, and transportation costs
.
Facility Location is the right location for the manufacturing facility, it will have sufficient access to the
customers, workers, transportation, etc.
Simple Median Model

The model considers the volume offloads transported on rectangular paths. All movements are made in east-west
or North-south directions; diagonal moves are not considered. The simple median model provides an optimal
solution.
BROWN AND GIBSON MODEL
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The Brown–Gibson model is one of the many techniques for multi-attribute decision making. The method was
developed in 1972 by P. Brown and D. Gibson. This is one of the few models which integrates both
objective and subjective factors in decision making.
The Brown–Gibson model can be mathematically represented as follows:
{\displaystyle M_{i}=C_{i}\cdot {\big [}D\cdot O_{i}+(1-D)S_{i}{\big ]}}
where
Mi = measure for an alternative i
Ci = critical factor measure, which could be either 0 or 1 for an alternative i
O = objective factor measure, which could be between 0 and 1; however, the sum of all objective factor
measures for different alternatives should add back to 1
S = subjective factor measure, which could be between 0 and 1; however, the sum of all subjective factor
measures for different alternatives should add back to 1
D = objective factor decision weight; should be between 0 and 1
One would select the alternative whose measure is the highest.
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MBA II OPERATIONS MANAGEMENT UNIT III
In manufacturing engineering, a product layout refers to a production system where the work
stations and equipment are located along the line of production, as with assembly lines. Usually,
work units are moved along line (not necessarily a geometric line, but a set of interconnected work
stations) by a conveyor.
ProductLayout
This is the typical assembly line approach. For example, in the manufacturing process of a car, the
car body goes from one stage of production to the next. Employees at each stage work on the car
and then pass it on to the next stage.
1. WHAT IS PRODUCT LAYOUT

If we look at the product layout meaning, it explains about various missions which work before and
which work after to produce the whole product as an output. It is like the end product of the previous
machine will become the source product of the next machine.
Define product layout,
The product layout can be defined as an arrangement or a mechanism of various machines run to
produce the final product in a prescribed order.
In general, we can find these product layouts in the manufacturing units. Usually, the product
layouts are either linear or u-shaped in design. In the product layouts, the linear arrangements are
again divided into two types. One is paced lines and the other one is non-paced lines.
2. CHARACTERISTICS OF PRODUCT LAYOUT

The features of the product layout are quite qualitative and impressive to produce various products.
Some of the characteristics are explained by Harald T Amrine. So let’s have a glance at them.
● It involves huge equipment to produce the product.

● The machines available in the product layout are semi-skilled because each machine can perform
only a certain part of the whole production.
● Sophisticated machines are used here.
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● The linear arrangement of product layout may be either paced or non-paced.

● It requires huge amounts of investments to purchase machines.
● The product layouts are required more physical work than that of the technical skill.
3. TYPES
In the field of the manufacturing industry, we have different kinds of layouts. Each has its positives
and negatives. The available types of layouts are,
Process layout:- These layouts involve various processes and machines but they may not be
continuous. It also has the flexibility to place the machines at various locations and each machine
produces different products.
Product layout:- Product layout is another type of layout that has a structured arrangement of various
machines that work for a single kind of product.
Cellular layout:- These layouts are also known as group layouts. the machines work with the
similarities, will make into a group or a single set of departments and placed at one location. It is
nothing but a cellular layout.
Fixed-position layout:- These layouts are fixed in one place. They cannot be moved further. These
are usually occupied by very huge industries and machinery. Battleships, hospitals, etc come under
this category.
Combination Layout:- it is also known as a hybrid layout. Because it is a combination of three
layouts namely process, product, fixed position layouts. Certain industries and diversified
companies may opt for these kinds of layouts. Because they involve the manufacturing process of
raw materials and producing various kinds of products etc.
4. PRODUCT LAYOUT AND PROCESS LAYOUT
Even though both the product layout and process layout how their significance and several
similarities, few differences are also available between them. These differences need to know while
choosing which layout is perfectly apt for a particular industry.
Product layout has a structured arrangement of various machines that concentrate on producing
a single kind of final product. Here the output of One machine at one step will become the input for
the other machine. Whereas the process layout has various missions but each mission can produce
different products and there is no restriction that it should be continuous.
The product layout requires huge investment and a wide space to arrange the equipment. On the
other hand, process layout doesn’t require much investment and one can choose multiple locations
to place different machines.
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The product layout is perfectly suitable for large scale industries and the continuous process. In
contrast, process layout is suitable for small scale industries.
The product layout has less flexibility and paperwork. It doesn’t require much skill also. But,
the process layout is more flexible and requires clean employees to monitor specific machines.
Diagram
The diagram of the product layout is shown below. As it is known that the product layouts may be
either linear or u shaped. It depends on the arrangement of machines and their sequential order.
5. ADVANTAGES AND DISADVANTAGES OF PRODUCT LAYOUT

The product layouts are widely used in manufacturing units. They often work for producing
qualitative products by following step by step procedures. Among all other layouts, product layout
is one of the best suitable options for large-scale industries.
The advantages of product layout are
● product layout is preferably used for several continuous processes industries because of automated
work.
● The product layout also requires less manpower when compared to other industries.
● It involves the optimization of land resources and financial resources.
● Very less scope for manual mistakes with the product layout.
● It doesn’t require much scheduling and manpower.
● Most of the work has been done by automated machines and no need to move them from a place
to another.
Along with the benefits, a few limitations are also owned by the product layout. So,
The disadvantages of product layout are,
● The product layout cannot assure the maximum utilization of all machines.
● The product layout requires huge amounts of investment and large space to place the equipment.
● Frequent disturbances like repairs, power fluctuations, etc will be faced by the product layout.
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● The product layout requires human resources for the supervision process. And they need to pay
high amounts for them.
● It is not easy to expand the product layout which becomes a risk factor for the growth of an
organization.
6. EXAMPLES
The product layout examples are majorly manufacturing units and continuous processes. Certain
industries like sugar, paper, cement are the best examples. Also, automobile industries, electronic
appliances like printers, refrigerators were using these product layouts for manufacturing. Our daily
needs like food, paper, etc manufactured which is the help of product layout. The product layouts
are preferably used for large scale industries having continuous processes.
CONCLUSION
Thus the product layout definition explains that a product layout is a systematic approach of
arranging different machines in a sequential order to provide products. From the product layout
diagram and product layout design, it is clear that it is either line or U shaped structure. So before
choosing a layout for initiating an industry, it is very important to learn and get the awareness of
each layout and the differences between those layouts to get productive results.
Load distance cost matrix
The load-distance method is a mathematical model used to evaluate locations based on proximity
factors. The objective is to select a location that minimizes the total weighted loads moving into and
out of the facility. The distance between two points is expressed by assigning the points to grid
coordinates on a map.
To calculate a load-distance for any potential location, we use either of the distance measures and
simply multiply the loads flowing to and from the facility by the distances travelled
What is material handling in operation management?

Material handling is the movement, protection, storage and control of materials and products
throughout manufacturing, warehousing, distribution, consumption and disposal.
.
What are the 3 principle of material handling?
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Standardization Principle: It encourages standardization of handling methods and equipment.

Ergonomic Principle: It recognizes human capabilities and limitation by design effective handling
equipment. Energy Principle: It considers consumption of energy during material handling.
Material handling
Introduction
Raw materials form a critical part of manufacturing as well as service organization. In any
organization, a considerable amount of material handling is done in one form or the other. This
movement is either done manually or through an automated process. Throughout material, handling
processes significant safety and health; challenges are presented to workers as well as management.
Therefore, manual material handing is of prime concern for health and safety professional, and they
must determine practical ways of reducing health risk to the workers.
Material Handling
Manual material handling ranges from movement of raw material, work in progress, finished goods,
rejected, scraps, packing material, etc. These materials are of different shape and sizes as well as
weight. Material handling is a systematic and scientific method of moving, packing and storing of
material in appropriate and suitable location. The main objectives of material handling are as
follows:
▪ It should be able determine appropriate distance to be covered.

▪ Facilitate the reduction in material damage as to improve quality.
▪ Reducing overall manufacturing time by designing efficient material movement
▪ Improve material flow control
▪ Creation and encouragement of safe and hazard-free work condition
▪ Improve productivity and efficiency
▪ Better utilization of time and equipment
It is critical for manufacturing organization to identify importance of material handling principle

as the critical step in promoting the job improvement process. Manual material handling
significantly increases health hazard for the workers in from lower back injuries.
In the current competitive and globalized environment, it is important to control cost and reduce
time in material handling. An efficient material handling process promotes:
▪ Design of proper facility layout

▪ Promotes development of method which improves and simplifies the work process
▪ It improves overall production activity.
▪ Efficient material handling reduces total cost of production.
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Principles of Material Handling
Material handling principles are as follows:
▪ Orientation Principle: It encourages study of all available system relationships before

moving towards preliminary planning. The study includes looking at existing methods,
problems, etc.
▪ Planning Principle: It establishes a plan which includes basic requirements, desirable
alternates and planning for contingency.
▪ Systems Principle: It integrates handling and storage activities, which is cost effective into
integrated system design.
▪ Unit Load Principle: Handle product in a unit load as large as possible
▪ Space Utilization Principle: Encourage effective utilization of all the space available
▪ Standardization Principle: It encourages standardization of handling methods and
equipment.
▪ Ergonomic Principle: It recognizes human capabilities and limitation by design effective
handling equipment.
▪ Energy Principle: It considers consumption of energy during material handling.
▪ Ecology Principle: It encourages minimum impact upon the environment during material
handling.
▪ Mechanization Principle: It encourages mechanization of handling process wherever
possible as to encourage efficiency.
▪ Flexibility Principle: Encourages of methods and equipment which are possible to utilize in
all types of condition.
▪ Simplification Principle: Encourage simplification of methods and process by removing
unnecessary movements
▪ Gravity Principle: Encourages usage of gravity principle in movement of goods.
▪ Safety Principle: Encourages provision for safe handling equipment according to safety
rules and regulation
▪ Computerization Principle: Encourages of computerization of material handling and
storage systems
▪ System Flow Principle: Encourages integration of data flow with physical material flow
▪ Layout Principle: Encourages preparation of operational sequence of all systems available
▪ Cost Principle: Encourages cost benefit analysis of all solutions available
▪ Maintenance Principle: Encourages preparation of plan for preventive maintenance and
scheduled repairs
▪ Obsolescence Principle: Encourage preparation of equipment policy as to enjoy appropriate
economic advantage.
Material handling operations are designed based upon principles as discussed above. Material
handling equipment consists of cranes, conveyors and industrial trucks.
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MBA II OPERATIONS MANAGEMENT UNIT IV
Resourses requirement planning
Objectives
To create a profile of a work center's load that the system uses to validate a forecast
To determine available capacity
To determine long-range requirements for a work center
To review the actual and planned load on work centers, either together (as a dispatch group) or
individually
To understand the different ways you can view actual and planned load information
To set up Resource Requirements Planning (RRP)
You generate a resource requirements plan after you generate your long-term forecast, but before you
run the Master Scheduling program. Resource Requirements Planning uses data from a forecast of future
sales to estimate the time and resources that are required to make a product.
RRP can help you resolve long-range planning issues, such as:
Expanding existing facilities
Acquiring new facilities
Staffing loads
Determining capital expenditures for equipment
RRP enables you to support your company's strategic business plan with a realistic tactical plan that:
Is shorter in range than the strategic plan and has a planning horizon of 12 months to 3 years
Allows planning at the product family level and is in greater detail than the strategic plan
Validates the monetary amounts allotted to the business plan as closely as possible
Work study
Meaning of Work Study:
According to ILO — International Labour Organisation — work study is “a term used to embrace the
techniques of method study and work measurement which are employed to ensure the best possible
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use of human and material resources in carrying out a specified activity.” In other words, “work study
is a tool or technique of management involving the analytical study of a job or operation.” Work study
helps to increase productivity.
Objectives of Work Study:
(i) Work study brings higher productivity;
(ii) Work study improves existing method of work for which cost becomes lower;
(iii) It eliminates wasteful elements;
(iv) It sets standard of performance;
(v) It helps to use plant and human more effectively;
(vi) It improves by saving in time and loss of material also.
Steps Involved in Work Study:
(i) It selects the jobs which are to be studied;
(ii) It examines critically the recorded facts which are already done
(iii) It records from direct observations all the matters which are happened;
(iv) It defines new method;
(v) It also installs the new method;
(vi) It also maintains the new standard;
(vii) It develops most economic and appropriate methods;
(viii) It measures the work content in the method, that is selected and compute a standard time.
Types of Work Study:
1. Method Study:
According to ILO, method study is “the systematic recording, analysis and critical examination of
existing and proposed ways of doing work and the development and application of easier and more
effective method”. In short, it is a systematic procedure to analyse the work to eliminate unnecessary
operations
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The objectives of method study are:
(i) It improves the proper utilisation of manpower, machine and materials;
(ii) It also improves the factory layout, work place, etc.;
(iii) It also improves the process and procedure;
(iv) It develops better physical working environment;
(v) It reduces undesirable fatigue.
The steps of method study are:
(i) At first select the proper work which are to be studied;
(ii) Record all the facts of existing method;
(iii) Examine the facts very critically;
(iv) Develop the most practical, economic, and effective method;
(v) Install the method and the same should be maintained.
2. Time And Motion Study:
According to ILO, Time Study means “a technique for determining as accurately as possible from a
limited number of observations the time necessary to carry out a given activity at a different standard of
performance”. In other words, “time study is the art of observing and recording time required to do each
detailed element of an individual operation.” Practically, it studies the time taken on each element of a
job.
Motion study, on the other hand, is the study of the body motion used in performing an operation, with
the thought of improving the operation by eliminating unnecessary motion and simplifying necessary
motion and thus establishing the most favourable motion sequence for maximum efficiency.
So, in short, ‘Time Study’ means the determination of standard time that is taken by a worker of average
ability under normal working conditions for performing a job. But ‘Motion Study’ determines the correct
method of doing a job to avoid wasteful movements, for which the workers are unnecessarily tired.
Steps:
1. Time and Motion studies eliminate wasteful movements;
2. They examine the proposed method critically and determine the most effective one;
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3. They determine for each element having a stop-watch;
4. They record all the parts of a job which are done by the existing method;
5. They install the method as standard one;
6. They critically observe the workers who are engaged with the work;
7. They assess the proper speed of the operator who is working.
Capacity planning
It’s hard to plan how much capacity you’re going to have or need for a certain task, project, moment, or
scenario in most areas of life. Many people adjust as they go, making room where they can.
While this is a somewhat unfortunate truth of life, it doesn’t have to be one in business. Though there’s
no way to know for sure how much product to order in six months or how many workers you’ll need
in a year, there is something that can get you as close to these answers as you can possibly be: capacity
planning.
What is Capacity Planning?
Capacity planning refers to the process of deciphering how much resource you’re going to need to meet
demand. This “demand” can be for any unit of time: the coming week, next season, or even in a year’s
time.
Some things that fall under capacity planning are:
Employing staff to meet coming demand
Having enough resources
Securing everything needed to complete the work ahead
In short, capacity planning is all about preparing yourself and your business for the future, whatever that
looks like for you. With it, you’ll know how to scale, create better design, and even identify bottlenecks
in the supply chain before they happen.
Types of Capacity Planning
Capacity planning itself can be split into three types: workforce, product, and tool. Together they
ensure that you have the right amount of three main resources for the short- and long-term.
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Workforce Capacity Planning
This capacity planning strategy ensures that you have the workforce needed to meet demand. It’s all
about having the right number of workers and hours available to not just complete jobs but complete
them well. Should you need to hire more workers (or possibly downsize) you’ll know how far in advance
you need to start making changes to accommodate the length of the recruiting and onboarding process.
Product Capacity Planning
This capacity strategy ensures that your business is equipped with the right number of products or
resources needed to fulfill deliverables. For example, a pet store needs things like food, pet toys, and
equipment like carriers, leashes, and cages. These are all things which are required to fulfill demand.
Tool Capacity Planning
Finally, this type of capacity planning strategy ensures that your business is equipped with thenecessary
tools. Such tools may include machinery, vehicles, assembly line parts, and anything else needed to
create and deliver your product or service in a timely manner.
When Is Capacity Planning Required?
Capacity planning is useful and required any time you’re trying to ensure that your supply meets
demand. This means whether it's a week, month, quarter, year, or more, capacity planning is always a
good idea and rule of thumb to stick to.
For many businesses, leaders and managers have a lot to handle. Among some of their responsibilities
are:
Keeping track of autonomous teams
Being aware of changing priorities
Preparing for unpredictable tasks
Matrix structures
Handling remote workers
The space between actual work and planned work (i.e., the reality of the situation)
With so many moving parts, it doesn’t make sense to go forward without a plan. Having a capacity
planning strategy is a great way to get ahead of the challenges that are sure to arise.
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Capacity planning is a great way to invest your time because it helps you address possible future issues,
take advantage of the benefits that come with planning, improve team performance, andstreamline your
business tasks for increased efficiency.
What Is Inventory Management?
Inventory management helps companies identify which and how much stock to order at what time. It
tracks inventory from purchase to the sale of goods. The practice identifies and responds to trends to
ensure there’s always enough stock to fulfill customer orders and proper warning of a shortage.
Once sold, inventory becomes revenue. Before it sells, inventory (although reported as an asset on the
balance sheet) ties up cash. Therefore, too much stock costs money and reduces cash flow.
One measurement of good inventory management is inventory turnover. An accounting measurement,

inventory turnover reflects how often stock is sold in a period. A business does not want more stock
than sales. Poor inventory turnover can lead to deadstock, or unsold stock.
Why Is Inventory Management Important?
Inventory management is vital to a company’s health because it helps make sure there is rarely too much
or too little stock on hand, limiting the risk of stockouts and inaccurate records.
Public companies must track inventory as a requirement for compliance with Securities and Exchange
Commission (SEC) rules and the Sarbanes-Oxley (SOX) Act. Companies must document their
management processes to prove compliance.
Benefits of Inventory Management
The two main benefits of inventory management are that it ensures you’re able to fulfill incoming or
open orders and raises profits. Inventory management also :Saves Money:
Understanding stock trends means you see how much of and where you have something in stock so
you’re better able to use the stock you have. This also allows you to keep less stock at each location
(store, warehouse), as you’re able to pull from anywhere to fulfill orders — all of this decreases costs
tied up in inventory and decreases the amount of stock that goes unsold before it’s obsolete.
ImprovesCashFlow:
With proper inventory management, you spend money on inventory that sells, so cash is always moving
through the business.
SatisfiesCustomers:
One element of developing loyal customers is ensuring they receive the items they want without waiting.
Inventory Management Challenges
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The primary challenges of inventory management are having too much inventory and not being able to
sell it, not having enough inventory to fulfill orders, and not understanding what items you have in
inventory and where they’re located. Other obstacles include:
GettingAccurateStockDetails:
If you don’t have accurate stock details,there’s no way to know when to refill stock or which stock
moves well.
PoorProcesses:
Outdated or manual processes can make work error-prone and slow down operations.
ChangingCustomerDemand:
Customer tastes and needs change constantly. If your system can’t track trends, how will you know
when their preferences change and why?
UsingWarehouseSpaceWell:
Staff wastes time if like products are hard to locate. Mastering inventory management can help
eliminate this challenge.
What Is Inventory?
Inventory is the raw materials, components and finished goods a company sells or uses in production.
Accounting considers inventory an asset. Accountants use the information about stock levels to record
the correct valuations on the balance sheet.
Inventory vs. Stock
Inventory is often called stock in retail businesses: Managers frequently use the term “stock on hand” to
refer to products like apparel and housewares. Across industries, “inventory” more broadly refers to
stored sales goods and raw materials and parts used in production.
Some people also say that the word “stock” is used more commonly in the U.K. to refer to inventory.
While there is a difference between the two, the terms inventory and stock are often interchangeable.
What Are the Different Types of Inventory?
There are 12 different types of inventory: raw materials, work-in-progress (WIP), finished goods,
decoupling inventory, safety stock, packing materials, cycle inventory, service inventory, transit,
theoretical, excess and maintenance, repair and operations (MRO). Some people do not recognize MRO
as a type of inventory.
Inventory Management Process
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If you produce on demand, the inventory management process starts when a company receives a
customer order and continues until the order ships. Otherwise, the process begins when you forecast
your demand and then place POs for the required raw materials or components. Other parts of the process
include analyzing sales trends and organizing the storage of products in warehouses.
How Inventory Management Works
The goal of inventory management is to understand stock levels and stock’s location in warehouses.
Inventory management software tracks the flow of products from supplier through the production
process to the customer. In the warehouse, inventory management tracks stock receipt, picking, packing
and shipping.
Inventory Management Techniques and Terms
Some inventory management techniques use formulas and analysis to plan stock. Others rely on
procedures. All methods aim to improve accuracy. The techniques a company uses depend on its needs
and stock.
Find out which technique works best for your business by reading the guide to inventory management
techniques. Here’s a summary of them:
ABCAnalysis:
This method works by identifying the most and least popular types of stock.
BatchTracking:
This method groups similar items to track expiration dates and trace defective items.
BulkShipments:
This method considers unpacked materials that suppliers load directly into ships or trucks. It involves
buying, storing and shipping inventory in bulk.
Consignment:
When practicing consignment inventory management, your business won’t pay its supplier until a
given product is sold. That supplier also retains ownership of the inventory until your company sells it.
Cross-Docking:
Using this method, you’ll unload items directly from a supplier truck to the delivery truck.
Warehousing is essentially eliminated.
DemandForecasting:
This form of predictive analytics helps predict customer demand.
Dropshipping:
In the practice of dropshipping, the supplier ships items directly from its warehouse to the customer.
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EconomicOrderQuantity(EOQ):
This formula shows exactly how much inventory a company should order to reduce holding and other
costs.
FIFOandLIFO:
First in, first out (FIFO) means you move the oldest stock first. Last in, first out (LIFO) considers that
prices always rise, so the most recently-purchased inventory is the most expensive and thus sold first.
Just-In-TimeInventory(JIT):
Companies use this method in an effort to maintain the lowest stock levels possible before a refill.
LeanManufacturing:
This methodology focuses on removing waste or any item that does not provide value to the customer
from the manufacturing system.
MaterialsRequirementsPlanning(MRP):
This system handles planning, scheduling and inventory control for manufacturing.
MinimumOrderQuantity:
A company that relies on minimum order quantity will order minimum amounts of inventory from
wholesalers in each order to keep costs low.
ReorderPointFormula:
Businesses use this formula to find the minimum amount of stock they should have before reordering,
then manage their inventory accordingly.
PerpetualInventoryManagement:
This technique entails recording stock sales and usage in real-time.
SafetyStock:
An inventory management ethos that prioritizes safety stock will ensure there’s always extra stock set
aside in case the company can’t replenish those items.
SixSigma:
This is a data-based method for removing waste from businesses as it relates to inventory.
LeanSixSigma:
This method combines lean management and Six Sigma practices to remove waste and raise
efficiency.
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Page 10
MBA II OPERATIONS MANAGEMENT UNIT V
Production planning is required for scheduling, dispatch, inspection, quality management, inventory
management, supply management and equipment management.
Here's a simple production planning and control example: A factory produces handbags. The
management plans the production of a number of bags based on demand forecasts for each design
seasonally. Using the right material and resources, such as leather for each item, the bags are made in
the factory
Aggregate planning is a method for developing an overall manufacturing plan that ensures uninterrupted
production at a facility. Aggregate production planning typically is applied to a 3- to 18-month period.
Introduction
An organization can finalize its business plans on the recommendation of demand forecast. Once
business plans are ready, an organization can do backward working from the final sales unit to raw
materials required. Thus annual and quarterly plans are broken down into labor, raw material, working
capital, etc. requirements over a medium-range period (6 months to 18 months). This process of working
out production requirements for a medium range is called aggregate planning.
Factors Affecting Aggregate Planning
Aggregate planning is an operational activity critical to the organization as it looks to balance long-term
strategic planning with short term production success. Following factors are critical before an aggregate
planning process can actually start;
▪ A complete information is required about available production facility and raw materials.
▪ A solid demand forecast covering the medium-range period
▪ Financial planning surrounding the production cost which includes raw material, labor,
inventory planning, etc.
▪ Organization policy around labour management, quality management, etc.
For aggregate planning to be a success, following inputs are required;
▪ An aggregate demand forecast for the relevant period

▪ Evaluation of all the available means to manage capacity planning like sub-contracting,
outsourcing, etc.
▪ Existing operational status of workforce (number, skill set, etc.), inventory level and
production efficiency
Aggregate planning will ensure that organization can plan for workforce level, inventory level and
production rate in line with its strategic goal and objective.
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Aggregate planning as an Operational Tool
Aggregate planning helps achieve balance between operation goal, financial goal and overall strategic
objective of the organization. It serves as a platform to manage capacity and demand planning.
In a scenario where demand is not matching the capacity, an organization can try to balance both by
pricing, promotion, order management and new demand creation.
In scenario where capacity is not matching demand, an organization can try to balance the both by
various alternatives such as.
▪ Laying off/hiring excess/inadequate excess/inadequate excess/inadequate workforce until

demand decrease/increase.
▪ Including overtime as part of scheduling there by creating additional capacity.
▪ Hiring a temporary workforce for a fix period or outsourcing activity to a sub-contrator.
Importance of Aggregate Planning
Aggregate planning plays an important part in achieving long-term objectives of the organization.
Aggregate planning helps in:
▪ Achieving financial goals by reducing overall variable cost and improving the bottom line
▪ Maximum utilization of the available production facility
▪ Provide customer delight by matching demand and reducing wait time for customers
▪ Reduce investment in inventory stocking
▪ Able to meet scheduling goals there by creating a happy and satisfied work force
Aggregate Planning Strategies
There are three types of aggregate planning strategies available for organization to choose from. They
are as follows.
1. Level Strategy
As the name suggests, level strategy looks to maintain a steady production rate and workforce
level. In this strategy, organization requires a robust forecast demand as to increase or decrease
production in anticipation of lower or higher customer demand. Advantage of level strategy is
steady workforce. Disadvantage of level strategy is high inventory and increase back logs.
2. Chase Strategy
As the name suggests, chase strategy looks to dynamically match demand with production.
Advantage of chase strategy is lower inventory levels and back logs. Disadvantage is lower
productivity, quality and depressed work force.
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3. Hybrid Strategy
As the name suggests, hybrid strategy looks to balance between level strategy and chase
strategy.
Material requirements planning (MRP) is a system for calculating the materials and components needed
to manufacture a product. It consists of three primary steps: taking inventory of the materials and
components on hand, identifying which additional ones are needed and then scheduling their production
or purchase.
Why is MRP important?

MRP, which is done primarily through specialized software, helps ensure that the right inventory is
available for the production process exactly when it is needed and at the lowest possible cost. As such,
MRP improves the efficiency, flexibility and profitability of manufacturing operations. It can make
factory workers more productive, improve product quality and minimize material and labor costs.
MRP also helps manufacturers respond more quickly to increased demand for their products and avoid
production delays and inventory stockouts that can result in lost customers, which in turn contributes
to revenue growth and stability.
MRP is widely used by manufacturers and has undeniably been one of the key enablers in the growth
and wide availability of affordable consumer goods and, consequently, has raised the standard of living
in most countries. Without a way to automate the complex calculations and data management of MRP
processes, it is unlikely that individual manufacturers could have scaled up operations as rapidly as they
have in the half century since MRP software arrived
How does MRP work?

MRP uses information from the bill of materials (BOM), inventory data and the master production
schedule to calculate the required materials and when they will be needed during the manufacturing
process.
The BOM is a hierarchical list of all the materials, subassemblies and other components needed to make
a product, along with their quantities, each usually shown in a parent-child relationship. The finished
good is the parent at the top of the hierarchy.
The inventory items in the BOM are classified as either independent demand or dependent demand.
An independent demand item is the finished good at the top of the hierarchy. Manufacturers determine
its amount by considering confirmed orders and examining market conditions, past sales and other
indicators to create a forecast, then decide how many to make to meet the expected demand.
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Dependent demand items, in contrast, are the raw materials and components needed to make the finished
product. For each of these items, demand depends on how many are needed to make the next-highest
component in the BOM hierarchy.
MRP is the system most companies use to track and manage all of these dependencies and to calculate
the number of items needed by the dates specified in the master production schedule. To put it another
way, MRP is an inventory management and control system for ordering and tracking the items needed
to make a product.
Lead time -- the period from when an order is placed and the item delivered -- is another key concept
in MRP. There are many types of lead times. Two of the most common are material lead time (the time
it takes to order materials and receive them) and factory or production lead time (how long it takes to
make and ship the product after all materials are in). Customer lead time denotes the time between the
customer order and final delivery. The MRP system calculates many of these lead times, but some are
chosen by the operations managers and entered manually.
MRP in manufacturing
MRP is essential to the efficiency, effectiveness and ultimately the profitability of a manufacturing
operation. Without the right raw materials and components on hand, manufacturers can't hope to keep
up with the demand for products at the optimal cost and quality. They will also be less able to respond
to fluctuations in demand by adjusting production.
MRP can also make the later stages of production, such as assembly and packaging, proceed more
smoothly and predictably by removing most of the uncertainty over inventory and minimizing the time
needed to manage it.
MRP is useful in both discrete manufacturing, in which the final products are distinct items that can be
counted -- such as bolts, subassemblies or automobiles -- and process manufacturing, which results in
bulk products, including chemicals, soft drinks and detergent, that can't be separately counted or broken
down into their constituent parts.
Benefits of MRP
The primary objective of MRP is to make sure that materials and components are available when needed
in the production process and that manufacturing takes place on schedule. Additional benefits of MRP
are:
● reduced customer lead times to improve customer satisfaction;

● reduced inventory costs;
● effective inventory management and optimization -- by acquiring or manufacturing the optimal
amount and type of inventory, companies can minimize the risk of stock-outs, and their negative
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impact on customer satisfaction, sales and revenue, without spending more than necessary on
inventory;
● improved manufacturing efficiency by using accurate production planning and scheduling to
optimize the use of labor and equipment;
● improved labour productivity; and
● more competitive product pricing.
Disadvantages of MRP
MRP has drawbacks, including:
● Increased inventory costs: While MRP is designed to ensure adequate inventory levels at the
required times, companies can be tempted to hold more inventory than is necessary, thereby driving
up inventory costs. An MRP system anticipates shortages sooner, which can lead to overestimating
inventory lot sizes and lead times, especially in the early days of deployment before users gain the
experience to know the actual amounts needed.
● Lack of flexibility: MRP is also somewhat rigid and simplistic in how it accounts for lead times or
details that affect the master production schedule, such as the efficiency of factory workers or issues
that can delay delivery of materials.
● Data integrity requirements: MRP is highly dependent on having accurate information about key
inputs, especially demand, inventory and production. If one or two inputs are inaccurate, errors can
be magnified at later stages. Data integrity and data management are thus essential to effective use
of MRP systems.
To address these shortcomings of MRP, many manufacturers use advanced planning and scheduling
(APS) software, which uses sophisticated math and logic to provide more accurate and realisticestimates
of lead times. Unlike most MRP systems, APS software accounts for production capacity, which can
have a significant impact on availability of materials.
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MBA II OPERATIONS MANAGEMENT UNIT VI
Production Activity Control

Introduction
∙ Production activity control (PAC) is responsible for executing the master production schedule and the material
requirements plan. At the same time, it must make good use of labour and machines, minimize work-in-process
inventory, and maintain customer service.
∙ The material requirements plan authorizes PAC: to release work orders to the shop for manufacturing, to take
control of work orders and make sure they are completed on time, to be responsible for the immediate detailed
planning of the flow of orders through manufacturing, and to manage day-to-day activity and provide
the necessary support. The activities of the PAC system can be classified into planning, implementation, and
control functions.
∙ The flow of work through each work center must be planned. PAC must ensure that the required resources are
available to manufacture the components as needed and develop a load profile for each work center to ensure
the timely completion of orders by the scheduled date.
∙ Next we implement the plan. PAC will gather the information needed by the shop floor to make the product
and release orders to the shop floor as authorized by the material requirements plan
(dispatching).
∙ Monitor the process and determine the necessary corrective action. PAC will rank the shop orders in
desired priority sequence by work center and establish a dispatch list, track actual performance to plan and
take corrective action by replanning, rescheduling, or adjusting capacity to meet delivery.
Assembly line balancing

Assembly line balancing (ALB) problems mainly deal with proper allocation of tasks to the workstations in
a balanced manner without violating the precedence relationship and optimizing a given objective
function. This problem mainly occurs in a continuous production line and is classified as one of the hard
optimization problems. Since the installation of assembly line is a long-term decision and highly cost
intensive, there is a proper need of designing the assembly line and balancing the workload at the
workstations. Over the years, human workforce has been replaced by robots for performing assembly
tasks in the industries. Different types of robots with different capacity and specialization are
available; there is high requirement of selecting the best-fit robot to perform the tasks in the assembly
line. Hence, this leads to the development of robotic assembly line balancing (RALB) problems. In this
chapter, detailed implementation procedure for using metaheuristics to solve RALB problems with an
objective of minimizing the cycle time is presented. Two configurations of robotic assembly line (straight
and U-shaped) are discussed in detail. Particle swarm optimization (PSO) is
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used to solve the problem, experimental results obtained by using PSO algorithm are presented, and
detailed discussion of the findings is reported.
The primary factors to be considered for the ALB are the following:
.
Restricted operation sequence, which has to be performed in a specified sequence. However,
in some cases, like fixing two independent items to the main component but having different
time standards, this factor becomes flexible.
The rate of production demand.
The feasibility of splitting a base operation into rational and transferable elements. For example,
drilling cannot be divided, but fixing different-sized screws can be divided..
Total work content is the sum of work elements.
Workstation process time is time taken for an individual workstation, after individual tasks
have been combined into stations.
The sum of task times equals the sum of workstation times.
Cycle time is the time between parts coming off the line.
Ideally, the production rate may need to be adjusted for efficiency and downtime.
Established by the bottleneck station, that is the station with the largest time.
Balance delay is a measure of line inefficiency due to imbalances in station times.
Bottleneck operation takes the longest time among all the members in the line.
What is Batch Processing?

Batch processing is a method of scheduling groups of jobs (batches) to be processed at the
same time with human intervention. Traditionally, batch workloads have been processed during
batch windows, which are periods of time when overall CPU usage is low (typically overnight).
The reason for this is two-fold:
Batch workloads can require high CPUs, occupying resources that are needed for other
operational processes during the business day
Batch workloads are typically used to process transactions and to produce reports, for example,
gathering all sales records that were created over the course of the business day
Today, batch processing is done through job schedulers, batch processing systems, workload
automation solutions, and applications native to operating systems. The batch processing tool
receives the input data, accounts for system requirements, and coordinates scheduling for
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high-volume processing. Batch processing differs from stream processing in that batch
processing requires non-continuous information.
Examples of Batch Processing
Batch processing use cases can be found in banks, hospitals, accounting, and any other environment
where a large set of data needs to be processed. For example, report generations run after the close
of business, when all credit card transactions have been finalized. Utility companies collect data on
customer usage and run batch processes to determine billing.
In another use case, a financial data management company runs overnight batch processes that
provide financial reports directly to the banks and financial institutions they serve.
Advantages and Disadvantages of Batch Processing
Batch processing is useful because it provides a method of processing large amounts of data without
occupying key computing resources. If a healthcare provider needs to update billing records, it might
be best to run an overnight batch, when demands on resources will be low.
Similarly, batch processing helps reduce downtime by executing jobs when computing resources are
available.
Batch processing tools, however, are often limited in scope and capability. Custom scripts are often
required to integrate the batch system with new sources of data, which can pose cybersecurity concerns
where sensitive data is included. Traditional batch systems can also be ill-equipped to handle
processes that require real-time data, for example stream processing or transaction processing.
Johnson rule
When many jobs are waiting before an operational facility, we must have some rule to decide the priority
while sequencing. We will understand these rules through an example.
Example: There are 5 jobs in waiting for getting processed on a machine.
JOB
(In sequence of arrival) PROCESSING TIME DUE DATE
J1 4 6
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J2 5 7
J3 3 8
J4 7 10
J5 2 3
▪ FIRST COME FIRST SERVE RULE (FCFS):

Arrange the jobs in the order of their arrival.
PROCESSING LATENESS OF
JOB ARRIVAL TIME DUE DATE FLOW TIME JOBS
(i) (pi) (di) (Fi) (Fi – di)
J1 4 6 0+4=4 4 – 6 = -2 = 0
J2 5 7 4+5=9 9–7=2
J3 3 8 9 + 3 = 12 12 – 8 = 4
J4 7 10 12 + 7 = 19 19 – 10 = 9
J5 2 3 19 + 2 = 21 21 – 3 = 18
▪ Total Flow Time = 4 + 9 + 12 + 19 + 21 = 65 days

▪ Mean Flow Time = Total Flow Time/ Number of Jobs = 65/5 = 13 days
▪ Total Lateness of job = 0 + 2 + 4 + 9 + 18 = 35 days
▪ Average Lateness = Total Lateness/ Number of Jobs = 33/5 = 6.6 days
▪ SHORTEST PROCESSING TIME (SPT):
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Arrange the jobs in order of their processing time in increasing order.
(i) (pi) (di) (Fi) (Fi – di)
J5 2 3 0+2=2 2 – 3 = -1 = 0
J3 3 8 2+3=5 5 -8 = -3 = 0
J1 4 6 5 + 4 =9 9–6=3
J2 5 7 9 + 5 = 14 14 – 7 = 7
J4 7 10 14 + 7 = 21 21 – 10 = 11

▪ Mean Flow Time = Total Flow Time/ Number of Jobs = 51/5 = 10.2 days
▪ Total Lateness of job = 3 + 7 + 11 = 21 days
▪ EARLIEST DUE DATE (EDD):

Arrange the jobs in order of their due date in increasing order.
(i) (pi) (di) (Fi) (Fi – di)
J5 2 3 0+2=2 2 – 3 = -1 = 0
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J1 4 6 2+4=6 6–6=0
J2 5 7 6 + 5 = 11 11 – 7 = 4
J3 3 8 11 +3 = 14 14 – 8 = 6
J4 7 10 14 + 7 = 21 21 – 10 = 11

▪ LAST COME FIRST SERVE (LCFS):

Arrange the jobs in the reverse order of their arrival.
(i) (pi) (di) (Fi) (Fi – di)
J5 2 3 0+2=2 3–3=0
J4 7 10 2+7=9 9 – 10 = -1 = 0
J3 3 8 9 + 3 = 12 12 – 8 = 4
J2 5 7 12 + 5 = 17 17 – 7 = 10
J1 4 6 17 + 4 = 21 21 – 6 = 15
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▪ SLACK TIME REMAINING (STR):

SLACK TIME = DUE DATE – PROCESSING TIME
Arrange the jobs in order their slack time in increasing order.
(i) (pi) (di) (Fi) (Fi – di)
J5 2 3 0+2=2 2 – 3 = -1 = 0
J1 4 6 2+4=6 6–6=0
J2 5 7 6 + 5 = 11 11 – 7 = 4
J4 7 10 11 + 7 = 18 18 – 10 = 8
J3 2 8 18 + 2 = 20 20 – 8 = 12

PROBLEM: We have n jobs that are to be produced on 2 parallel machines. The processing time of
all jobs is known. The problem is to sequence the jobs on both the machines so that the total elapsed
time is minimized.
STEP 1: Select the minimum processing time among all the available values of processing times. In
case two operations contain least processing time, break the tie arbitrability and select them.
STEP2: Look at the following five situations and take the decision accordingly.
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S.
No. SITUATION DECISION
Minimum processing time is on Place Pth job at the beginning of

1 1st machine M1 for the Pth job. sequence.
Minimum processing time is on

2 2nd machine M2 for the Qth job. Place Qth job at the end of the sequence.
Processing time of two jobs, one on M1 Place Pth job at the beginning of the
and other on M2 is equal and both are sequence and Qth job at the end of the
3 minimum. sequence.
Sequence any of the two jobs in tie as first

and place at the beginning of sequence.
Two jobs are having least processing time Second job of the ties is to be placed next.
4 on machine 1 (M1).
Sequence any of the two jobs in tie as last

and place it at the end of sequence.
Two jobs are having least processing time Second job of the tie is to be placed before
5 on machine 2 (M2). the first one.
STEP 3: Remove the jobs already sequenced in Step 2 and process with the remaining jobs. Repeat
Step 1 and Step 2 till all jobs are sequenced.
Example: Processing time of 6 jobs on two machines are given below. Use Johnson’s rule to
schedule these job.
JOB J1 J2 J3 J4 J5 J6
M1 4 6 7 8 9 1
M2 5 8 1 3 6 10
Sol:
M1 M2
JOBS TIME IN TIME OUT TIME IN TIME OUT
J6 0 1 1 11
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J1 1 5 11 16
J2 5 11 16 24
J5 11 20 24 30
J4 20 28 30 33
J3 28 35 35 36
▪ Idle time for M1 = Total elapsed time – Total busy time for M1 = 36 – 35 = 1 minute
▪ Idle time for M2 = 36 – (5 + 8 + 1 + 3 + 6 +10) = 36 – 33 = 3 minutes.
PROCESS n JOBS ON 3 MACHINES:

For a special n jobs and 3 machines problem, Johnson provided an extension of Johnson algorithm.
For this let, tij be the processing time of job i on machine j. Here i = 1,2,3,——n and j = 1,2,3.
At least one of the following conditions must be satisfied before we can use this algorithm.
i) Minimum (ti1) ≥ Maximum (ti2)

(ii) Minimum (ti3) ≥ Maximum (ti2)
STEP 1: Take two hypothetical machine R and S. The processing time on R and S is calculated as
follows:
tiR = ti1 + ti2
tiS = ti2 + ti3
STEP 2: Use Johnson algorithm to schedule jobs on machine R and S with tiR and tiS.
EXAMPLE: 6 jobs are to be processed on 3 machines. The processing time is as follows. Find the
optimal schedule so that the total elapsed time is minimized.
M1 10 3 5 4 2 1
M2 2 4 6 3 1 2
M3 8 6 7 9 7 7
Sol: Check for necessary condition
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Minimum(ti1) = 1
Maximum(ti2) = 6
Minimum(ti3) = 6
Since Minimum (ti1) ≥ Maximum (ti2) and Minimum (ti3) ≥ Maximum (ti2) are satisfied, the Johnson’s
algorithm may be used.
tiR = ti1 + ti2 12 7 11 7 3 3
tiS = ti2 + ti3 10 10 11 12 8 9
Using Johnson’s algorithm the optimum sequence for two machines R and S and six job is:
J5 J6 J2 J4 J3 J1
M1 M2 M3
JOB
S TIME IN TIME OUT TIME IN TIME OUT TIME IN TIME OUT
J5 0 2 2 3 3 10
J6 2 3 3 5 10 17
J2 3 6 6 10 17 23
J4 6 10 10 13 23 32
J3 10 15 15 21 32 39
J1 15 25 25 27 39 47
CALCULATION OF IDLE TIME:

▪ Idle time for M1 = 47 – 25 = 22 minutes
▪ Idle time for M2 = (2-0) + (6-5) + (15-13) + (25-21) + (47-27)
= 2 + 1 + 2 + 4 + 20 = 29 minutes
▪ Idle time for M3 = (3 – 0) = 3 minutes
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MBA II OPERATIONS MANAGEMENT UNIT VII
Quality concept
Enterprises usually adopt some quality practices to control the product quality during the manufacturing
process in order to assure the delivery of qualitative good products to customers. The quality practices
or quality management systems adopted by industries will further evolve due to the changes of quality
concepts as time goes by. This chapter discusses the change of quality concepts and the related revolution
of quality management systems in the past century. The quality concepts were gradually changed from
the achievement of quality standards, satisfaction of customer needs, and expectations to customer
delight. Since merely satisfying customers is not enough to ensure customer loyalty, the enterprises
gradually focus on customers’ emotional responses and their delight in order to pursue their loyalty. The
emotion of “delight” is composed of “joy” and “surprise,” which can be achieved as the customers’
latent requirements are satisfied. Thus, the concept of “customer delight” and the means to provide the
innovative quality so as to meet the unsatisfied customers’ latent needs are elaborated on. Finally, a
framework of innovation creation is developed that is based on the mining of customer's latent
requirements. This outline will manifest the essential elements of the related operation steps
It is widely recognized that consumers only buy the goods with good quality, desired functions, and
accepted price [1]. Therefore, industries always adopt several management practices, or even develop
some management systems to design and produce the products so as to meet customers’ needs and
expectations showcasing good quality and lower costs. But the management practices or systems
adopted by the industries are always changed due to the changes of the quality concepts as time goes
by. This occurs as several quality gurus give the pragmatic definitions of “quality” over different time
periods, thus causing industries to implement different practices or systems to control overall product
quality [2].
In the first three decades of the last century, quality was defined as “conforming to the standards and
specifications of a product” [3]. Thus, the commonly adopted quality practices by industries were the
standardization of quality, inspection, and rework. Deming emphasized that “quality is to fulfill the
requirements of customers and satisfy them” [4]. Hence, the meaning of quality was gradually changed
to a “customer‐focused” perspective. Enterprises, therefore, committed themselves to satisfy customers’
needs and expectations. Their aim was to pursue customer's satisfaction and loyalty [5, 6]. Companies
also developed a number of methods to find out customers’ needs and expectations. To thisend, in‐depth
interviews with customers were performed, customer surveys conducted, and market research was done.
But, when Apple announced several innovative products, and their sales were increasing, it became
apparent that only satisfying customers’ requirements are not enough [7]. As a matter thereof the
identification and fulfillment of customers’ unsatisfied latent needs was gauged in conjunction with their
emotional responses [8].
Entering the new century, several studies have suggested that merely satisfying customers is not enough
to ensure their loyalty [9–11]. The industries need to focus on the customer's emotional responses and
provide the products with attractive quality in order to pursue customers’ delight [11]. It is worth
mentioning at this point that Apple is regarded as a future trend setter, as it successfully
Page 1
created several innovative products such as iPod, iPhone, and iPad, triggering increased sales. A strong
customer service department equally assisted in causing customers’ delight experiences [12].
In view of the above, quality concepts have changed. Terms such as “customer delight” are deemed as
forming the crucial elements of quality concepts, which are coined as “attractive quality” and
“innovative quality” [13]. The conceptualization of delight is that the emotion of “delight” is composed
of “joy” and “surprise,” which can be achieved as the customers’ latent requirements are satisfied. The
provision of innovative quality products is the strategic tool to meet the unsatisfied customers’ latent
needs and their curiosity. These changes of quality concepts will lead the enterprises to reengineer their
existing quality system, in order to develop the innovative quality attributes of products and services
alike so as to retain and attract customers. This scenario causes the quality professionals and researchers
to further develop and expand the new quality system beyond TQM. Based on performed research it is
the author's view that research should focus on developing an effective new quality system.
During the past century, several quality gurus had led the changes of quality concepts. This chapter
will discuss the changes of quality concepts during different time periods over the past century. To this
end, it will also state the reflected revolutions of quality management systems with respect to the
changing quality concepts. These are arranged in Sections 2 and 3, respectively. The development of
“total quality management” (TQM) philosophy in the 1980s was an important landmark, which caused
the change of new quality concepts and the reengineering of the quality management system, as
introduced in Section 4. Based on the performance evaluation of the TQM implementation of TQM, it
is worth noting at this point that the “business excellence model” had been proposed during the 1990s.
This is elaborated in Section 5. This chapter also introduces the development of an integral model of a
business excellence system beyond TQM, based on the realization of TQM.
What are Quality Control Charts?
Quality control charts depict measures of quality for processes or for products. They show thedeviation,
if any, from the set, ideal standards or specifications for a product or a process.
The Importance of Quality Control

Quality control is an extremely important activity for any business that is engaged in manufacturing
products. If a company’s products are produced with uneven quality, it can negatively impact the
company’s sales.
For example, consider a company that makes and sells bottled beverages. Now think about what might
happen if a production machine that affixes the caps to the bottles gets a little bit out of whack, so that
it begins affixing approximately one-third of the bottle caps in such a way that it becomes nearly
impossible, or at least extremely difficult, for consumers to remove the cap from the bottle. It doesn’t
take too many instances of an occurrence such as that before the company begins to lose a lot of
customers.
Page 2
Therefore, companies set rigorous specification standards for both manufacturing processes and for the
finished products that they produce. They then set in place quality control procedures. One of the
procedures is commonly to take random samples and create quality control charts that reveal how much
deviation exists from the specification standards for a product.
If significant deviations from specifications are revealed, the company can take whatever action is
needed to correct any problems – such as recalibrating a machine that affixes caps to bottles – and restore
the desired level of uniform quality.
Understanding Quality Control Charts

Quality control charts can be created and used to examine either a single variable or multiple variables
related to the desired quality of a product or process. For example, a toy manufacturing company may
wish to use quality control charts to monitor (1) the smoothness of the edges of the toy and (2) the fit
of the toy’s packaging.
A quality control examination will use random samples of the population to be examined, comparing
actual specifications found in the collected samples to the stated, ideal specifications. Typically, a
quality control chart will show a center line that represents the ideal specification for whatever quality
variable is being studied. The chart will also usually include upper and lower quality control lines that
represent acceptable, relatively insignificant levels of deviation from the desired specification. Plotted
on the chart will be the results of random samples drawn for the quality control study.
As long as the samples show deviations that are only within the range bordered by the upper and lower
quality control lines, then that indicates good quality control, that products are being produced with the
desired level of uniform quality. It is referred to as being “in control.”
However, if the results show many samples with plot points above or below the upper or lower quality
control lines, respectively, it indicates significant variation in product or process quality that needs to be
addressed. Wide variations from specifications indicate being “out of control.”
Quality Control Charts
Quality control charts represent a great tool for engineers to monitor if a process is under statistical
control. They help visualize variation, find and correct problems when they occur, predict expected
ranges of outcomes and analyze patterns of process variation from special or common causes. Quality
control charts are often used in Lean Six Sigma projects and DMAIC projects under the control phase
and are considered as one of the seven basic quality tools for process improvement.
x-bar chart
The x-bar and s-chart are quality control charts used to monitor the mean and variation of a process
based on samples taken in a given time. The control limits on both chats are used to monitor the mean
and variation of the process going forward. If a point is out of the control limits, it indicates that the
Page 3
mean or variation of the process is out-of-control; assignable causes may be suspected at this point. On
the x-bar chart, the y-axis shows the grand mean and the control limits while the x-axis shows the sample
group
Range “R” control chart.

This type of chart demonstrates the variability within a process. It is suited to processes where the sample
sizes are relatively small, for example <10. Sets of sample data are recorded from a process for the
particular quality characteristic being monitored. For each set of date the difference between the smallest
and largest readings are recorded. This is the range “R” of the set of data. The ranges are now recorded
onto a control chart. The center line is the averages of all the ranges.
What is a P-Chart?
A p-chart (sometimes called a p-control chart) is used in statistical quality control to graph
proportions of defective items. The chart is based on the binomial distribution; each item onthe
chart has only two possibilities: pass or fail. An “item” could be anything you’re interested in charting,
including: gadgets from a production line, wait times, or delivery times.
Groups of different sizes are charted together. Proportions make more sense than individual counts,
which would give too much weight to larger samples. The proportions are shown on the y-axis. The x-
axis shows the size of the sample, which is usually around 20-40 groups. Fewer than 20 groups will not
show an accurate picture of the process.
Uses
P-charts are used to:
● Detect sudden changes in systems, which can be attributed to a cause.

● Assess the need for stratification into subgroups, like location, employee, or time of day.
● Show whether the system is stable (i.e. in control).
● Compare systems before and after a major change. For example, call center times before and after
employee training.
Page 4
Acceptance sampling
Contributions ofAcceptance sampling is an important field of statistical quality control
Dodge and Romigthat was popularized by Dodge and Romig and originally applied by the to
acceptanceU.S. military to the testing of bullets during World War II. If every bullet
sampling was tested in advance, no bullets would be left to ship. If, on the other
hand, none were tested, malfunctions might occur in the field of battle,
with potentially disastrous results.
Definintion of LotDodge reasoned that a sample should be picked at random from the lot,
Acceptance and on the basis of information that was yielded by the sample, a
Sampling decision should be made regarding the disposition of the lot. In general,
the decision is either to accept or reject the lot. This process is called
Lot Acceptance Sampling or just Acceptance Sampling.
"Attributes" (i.e.,Acceptance sampling is "the middle of the road" approach between no

defect counting)inspection and 100% inspection. There are two major classifications of
will be assumed acceptance plans: by attributes ("go, no-go") and by variables. The
attribute case is the most common for acceptance sampling, and will be
assumed for the rest of this section.
Page 5
Important point A point to remember is that the main purpose of acceptance sampling isto
decide whether or not the lot is likely to be acceptable, not to estimate
the quality of the lot.
Scenarios leadingAcceptance sampling is employed when one or several of the following

to acceptancehold:
sampling
● Testing is destructive
● The cost of 100% inspection is very high
● 100% inspection takes too long
Acceptance It was pointed out by Harold Dodge in 1969 that Acceptance Quality
Quality ControlControl is not the same as Acceptance Sampling. The latter depends on
and Acceptancespecific sampling plans, which when implemented indicate the
Sampling conditions for acceptance or rejection of the immediate lot that is being
inspected. The former may be implemented in the form of an
Acceptance Control Chart. The control limits for the Acceptance Control
Chart are computed using the specification limits and the standard
deviation of what is being monitored
Page 6

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MBA II OPERATIONS MANAGEMENT UNIT I

Nature and scope of operations management

Operation Management is very critical in achieving the objective of the business.

Operation Management helps in utilising the resources at the optimum level.

Operation Management aids in enhancing the productivity of the employees

Operation Management is vital for all types of business organisation

Functions of operation management

What is Operations Management?

Key Functions within Operations Management

Some of the key functions of operations management include:

Factors affecting productivity

What are the steps of facility planning?

● 4 Steps of Facility Planning

Simple Median Model

BROWN AND GIBSON MODEL

1. WHAT IS PRODUCT LAYOUT

Define product layout,

2. CHARACTERISTICS OF PRODUCT LAYOUT

● It involves huge equipment to produce the product.

● The linear arrangement of product layout may be either paced or non-paced.

5. ADVANTAGES AND DISADVANTAGES OF PRODUCT LAYOUT

The advantages of product layout are

The disadvantages of product layout are,

Load distance cost matrix

What is material handling in operation management?

What are the 3 principle of material handling?

Standardization Principle: It encourages standardization of handling methods and equipment.

▪ It should be able determine appropriate distance to be covered.

It is critical for manufacturing organization to identify importance of material handling principle

▪ Design of proper facility layout

Principles of Material Handling

Material handling principles are as follows:

▪ Orientation Principle: It encourages study of all available system relationships before

Resourses requirement planning

To determine available capacity

To determine long-range requirements for a work center

To set up Resource Requirements Planning (RRP)

Expanding existing facilities

Acquiring new facilities

Determining capital expenditures for equipment

Meaning of Work Study:

Objectives of Work Study:

(i) Work study brings higher productivity;

(iii) It eliminates wasteful elements;

(iv) It sets standard of performance;

(v) It helps to use plant and human more effectively;

(vi) It improves by saving in time and loss of material also.

Steps Involved in Work Study:

(i) It selects the jobs which are to be studied;

(iv) It defines new method;

(v) It also installs the new method;

(vi) It also maintains the new standard;

(vii) It develops most economic and appropriate methods;

Types of Work Study:

The objectives of method study are:

(i) It improves the proper utilisation of manpower, machine and materials;

(ii) It also improves the factory layout, work place, etc.;

(iii) It also improves the process and procedure;

(iv) It develops better physical working environment;

(v) It reduces undesirable fatigue.