Production and Operations Management

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Q1) Explain the basic competitive priorities considered while formulating operations strategy by a firm?

Ans: Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. It is, of course, implemented within the operations function. The operations strategy specifies how the firm will employ its operations capabilities to support the business strategy. Operation advantages depend on its processes and competitive priorities considered while establishing the capabilities. The basic competitive priorities are: * Cost

* Quality
* Time
* Flexibility
Cost: Cost is a primary consideration while marketing a product or service. A firm competing on a price/cost basis is able to provide consumers with an in-demand product at a price that is competitively lower than that offered by firms producing the same or similar good/service. Lower Price and better quality of a product will ensure and higher profitability. To estimate the actual cost of production, the operations manager must address labour, materials, scrap generations, overhead and other initial cost of design and development. QUALITY is defined by the customer. The Operations Manger mainly looks into two aspects namely highly performance design and Consistent quality. High Performance design includes superior features, great durability, and convenience to services where as consistent design measures the frequency with which the product meets its design specifications and performs best. TIME: Faster delivery time, on – time delivery, and speedy development cycle are the time factors that operations strategy looks into. Faster delivery time is the time lapsed between the customer order and the delivery. On time delivery is the frequency with which the product is delivered on time. The development speed is the elapsed time from the idea generation up to the final design and production of products. FLEXIBILITY: Firms may compete on their ability to provide either flexibility of the product or volume. Firms that can easily accept engineering changes (changes in the product) offer a strategic advantage to their customers. The two types of Flexibilities are: * Customization

* Volume Flexibility
While Customization is the ability of the firm to satisfy the specific needs of each of their customers, the volume flexibility is the ability to accelerate or decelerate the rate of production to handle the fluctuations in demand.

Q2: a -List the benefits of forecasting?
Ans: There are three Categories of Benefits of Forecasting
Direct Cost Savings: savings in expenditure other than labour, print, travel costs, telephone etc. that can directly be attributed to the introduction of the Intranet. These can be further calculated in the three steps: a) Number of incidences of expenditure in the time period, b) The Cost of each incidence,

c) The proportion of these that can be eliminated using the intranet Labour Savings: savings in the amount of time required to carry out tasks as a result of introducing the intranet. These can be expressed in minutes per person per day. To calculate the savings, divide the number of minutes saved by the number of minutes in the day and multiply the size of the population and average salary. Productivity Increase: increases in output per person attributable to the introduction of intranet, expressed as a percentage. Because Personal productivity has such a wide range of implications from organization to organization, hence it is probably easier to convert these to simple labour savings. b- Explain the significance of plant location decision?

Ans: A plant location can be changed frequently since a large capital needs to be invested to build the plant and machinery in the selected area. Therefore, before selecting a plant location, a long range of forecasting is to be made to foresee the future needs of the company. Location Decisions are made on basis of parameters which...
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