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MB0044_MBA_Sem2_Fall/August 2012
Master of Business Administration - MBA Semester 2
MB0044 – Productions & Operations Management- 4 Credits
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions.

Q.1 What do you understand by Vendor-Managed Inventory (VMI)? Answer : Vendor-managed inventory (VMI) is a family of business models in which the buyer of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store). A third-party logistics provider can also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps.

As a symbiotic relationship, VMI makes it less likely that a business will unintentionally become out of stock of a good and reduces inventory in the supply chain. Furthermore, vendor (supplier) representatives in a store benefit the vendor by ensuring the product is properly displayed and store staff are familiar with the features of the product line, all the while helping to clean and organize their product lines for the store. One of the keys to making VMI work is shared risk. In some cases, if the inventory does not sell, the vendor (supplier) will repurchase the product from the buyer (retailer). In other cases, the product may be in the possession of the retailer but is not owned by the retailer until the sale takes place, meaning that the retailer simply houses (and assists with the sale of) the product in exchange for a predetermined commission or profit (sometimes referred to as consignment stock). A special form of this commission business is scan-based trading whereas VMI is usually applied but not mandatory to be used.

This is one of the successful business models used by Wal-Mart and many other big box retailers. Oil companies often use technology to manage the gasoline inventories at the service stations that they supply (see Petrolsoft Corporation). Home Depot uses the technique with larger suppliers of manufactured goods (i.e. Moen, Delta, RIDGID, Paulin). VMI helps foster a closer understanding between the supplier and manufacturer by using Electronic Data Interchange formats, EDI software and statistical methodologies to forecast and maintain correct inventory in the supply chain.

Vendors benefit from more control of displays and more customer contact for their employees; retailers benefit from reduced risk, better store staff knowledge (which builds brand loyalty for both the vendor and the retailer), and reduced display maintenance outlays.

Consumers benefit from knowledgeable store staff who are in frequent and familiar contact with manufacturer (vendor) representatives when parts or service are required. Store staff have good knowledge of most product lines offered by the entire range of vendors. They can help the consumer choose from competing products for items most suited to them and offer service support being offered by the store.

Q.2 Explain briefly the four classification of scheduling strategies & its approaches.

Q.3 Define production management. What are the various functions involved in production management?

Q.4 Explain the various phases in project management life cycle.

Q.5 Explain the ingredients of a business process. Explain Physical Modelling.

Q.6 Define the term quality. Explain the concept of quality at source.

MB0044_MBA_Sem2_Fall/August 2012
Master of Business Administration - MBA Semester 2
MB0044 – Productions & Operations Management - 4 Credits
Assignment Set- 2 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions. Q.1 What is value engineering? Explain the steps involved in Value analysis. Answer : Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as...
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