Detailed Solutions : A-16/C-17/T20
INDUSTRIALMANAGEMENT : DECEMBER 2003
Q1 (a) C –Span of Management refers to the number of subordinates
working under a manager
(b) C - In PERT the expected time estimate is calculated on the basis of
Beta distribution of time estimates
(c) D - Dual factor theory has been proposed by Herzberg.
(d) A - Trade Unions Act 1926 provides that any seven workers may form an union.
(e) D - Sales Promotion is resorted to increase the sale volume.
(f) B – Measuring the input of the employee is not a purpose of
Performance appraisal in modern management
(g) D - The important feature of collective bargaining is give and take
(h) A – X control chart is used with go and not go inspection.
PART I
Q2(a) Steps in Management Planning Process: Planning can be defined as
deciding in advance what is to be done in future. Some of the basic steps involved in planning are:
· Setting objectives-this is the most crucial step in the planning process.
· Establishment of planning premises-it is an identification of the assumptions as to future conditions.
· Development of alternative courses of action – there must be a search by the management for the various alternatives.
· Critical evaluation of the alternative courses of action-going into the plus and minus points of each alternative and find out the net worth of each alternative
· Selection of the best alternative –this decision is based on experience and experimentation
· Formulation of derivative plans – these plans are derived from the major plans.
· Implementation of the plan – this is the most significant step and the plan would have to be communicated to those who are supposed to initiate action.
· Follow – up Action – this implies watching the consequences which arise from the implementation of the plan
· Restarting the planning cycle – new plan must be undertaken to take the place of the accomplished plan as planning is a continuous process.
Q2(b) Critical Path:Calculation of Earliest and Latest Values of the events of the
given network is as below :-
|
Event |
EOT |
LOT |
|
1 |
0 |
0 |
|
2 |
6 |
6 |
|
3 |
5 |
6 |
|
4 |
9 |
9 |
|
5 |
16 |
16 |
The critical path is 1à 2 à 4 à 5
Q3(a) Principles of Organization: Organization is a mechanism or structure that enables living things to work effectively together. It is defined as the process of grouping the work to be performed, defining and delegating responsibility and authority, establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. Organizing being a universal problem of all business concerns, many principles have been designed as guidelines for successful organizational relationships. A few common principles are:
(i) Consideration of objectives – Since the objectives have an important bearing on the organization structure, only those objectives should be taken up and accomplished for which there is real need in the organization.
(ii) Relationship of the basic components of the organization – Objectives as decided in step I above determine the work to be performed and the type of work dictates the selection of personnel and physical facilities.
(iii) Responsibility and Authority – Responsibility means accountability. It is the obligation of the subordinates to the boss to do a work given to them. Authority means right to command and power to act. Since the top man in the organization cannot do each and everything himself alone, a definite chain of responsibility and authority is provided from the top executive to each employee through several layers or levels between them.
(iv) Span of control – Span of control means the number subordinates that report to an executive or the number of subordinates that an executive can supervise directly. Depending on the conditions of the business enterprise, the span of control can vary from 2 to 20.
(v) Dividing and grouping work – Divisionalisation provides a broader perspective, a greater sense of responsibility on the part of the personnel and more clear-cut control over profits. Grouping or departmentation is the process of grouping of activities for specialization. This also helps in coordination which means weaving together the segments of an organization into a coherent whole in such a way that all parts operate at the most optimum level and produce maximum profits.
(vi) Effective Delegation – Effective delegation is said to exist when an executive instead of doing all the thinking for the unit himself, passes down to his subordinates any task on which they can take decisions themselves and perform it effectively and efficiently.
(vii)Communication – Communication serves as a linking process by which parts of an organization are tied together. Good communication is essential and it has to be a two- way communication.
(viii)Line and Staff functions – All activities of an organization can be classified into Primary and Supporting activities. Primary or Line activities are those that contribute directly and visibly to the objectives of an organization. Supporting activities or Staff functions are those that aid the line or are auxiliary to the line functions.
(ix) Balance, Stability and Flexibility – All units of an organization must be balanced to achieve the goals of the organization more effectively. Organizational stability refers to the capacity to withstand the losses of the key personnel if they leave the organization. Organizational flexibility specifies the capacity to adjust work assignments, personnel and facilities to temporary changes which take place in the volume of work.
Q3 (b) Line and Staff Organisation: As the industry grew in size and complexity, the line executives could not perform properly all other functions such as R&D, planning, distribution, legal, public relations etc,. This necessitated the employing of special executives to assist line executives and they were known as Staff since they were recruited to perform staff or specialist functions. The line executives retain supervisory authority and control over the work of their subordinates whereas the staff executives relieve the line executives of certain specialized work and advise them on matters referred to them. The following figure shows the line and staff organization:-
Q4(a) Managerial Motivation: Managerial motivation is the means or nducements, which inspire or impel a person to intensify his willingness to use his capabilities and potentialities for achieving goals of the organization which he works. Motivation is the psychological force. What morale does to a work- group, motivation does to an individual. Motivation moves an individual to action. Motivation of workers is very important.
Factors affecting motivation:
· Achievement-Personal satisfaction in job completion and problem solving
· Advancement-Promotion to the higher job/level
· Growth-Learning new skills, which will offer greater possibility for advancement.
· Recognition – Acknowledgement of a job done well
· Responsibility & Authority – This should be in relation to one’s job
· Work itself – Actual job content and it’s positive or negative effect on the worker
· Company Policy and Administration – Feelings about the adequacy/inadequacy of company organization and management policies and procedures
· Job Security – Tenure, company stability or instability
· Interpersonal Relations – Relations with superiors, sub-ordinates and peers
· Salary – Pay and fringe benefits
· Status – Size of office, private secretary, etc.
· Supervision – Competency or technical ability of supervision
· Working Conditions – Physical Environment
· Personal Life – Personal factors that affect the job
Q4 (b) Leadership: Leadership is the knack of getting other people to follow you and do willingly the things that you want them to do. It is the ability to persuade others to seek desired objectives enthusiastically. It is the human factor that binds a group together and motivates it towards goals.
“Leadership is the ability of a manager to induce subordinates to work with confidence and zeal.”-Koontz & O’Donnell.
“A leader is one who guides and directs other people and gives their efforts the direction and purpose” – Louise.A.Allen
In the management literature, every manager is a leader. Leadership is a process of interpersonal influence. It is a mix of inspiration, motivation and communication. It aims at the pursuit of common goals. It is a continuous managerial exercise. It rests on power rather than on the formal authority of the manager. A leader as a manager plays several roles. He stimulates followers towards performance by inspiring them through his charisma and outstanding personal traits. He helps the enterprise in the most efficient and effective attainment of common objectives. A leader is a co-ordinator, expert, philosopher, strategy - designer, examplar, integrator and representative of his group.
The three relatively distinct leadership styles are:-
a) Authoritarian - leader makes all decisions unilaterally and demands obedience of all subordinates.
b) Democratic - leader discusses and consults his subordinates.
c) Free Rain or Laissez-Faire – leader exercises minimum controls and gives complete freedom to subordinates to decide and act.
Q5(a) Performance Appraisal: Performance appraisal, is a systematic and impartial assessment of an employee’s performance on the job, with a view to discovering how well or how worse is the job being performed by him or her; and also unearthing his or her potential for further development.
Dale Yoder defines performance appraisal as “all formal procedures used in working organizations to evaluate personalities and contributions and potentials of group members.”
Importance of performance appraisal
o It is helpful in operational decisions of personal management relating to pay increases, promotions, lay-offs and transfers etc.
o It provides clues to management for effecting improvements in selection procedures and placement of employees.
o On the basis of performance appraisal, the top management can advise/direct the personnel department to design and implement suitable training programmes.
o It guides and stimulates employee development
o It encourages healthy competition among employees.
o It seeks to discover the potential for growth in employees and thus helps management to prepare promising employees to take up challenging jobs in future.
o It attracts good personnel to the organization
o During the process of performance appraisal, the management gets an idea of the difficulties faced by the employees while working on the jobs. Management can take accordingly take appropriate steps to redress their grievance.
o It highlights a need for more competent supervisors, to undertake the task of judging the employees in an objective and intelligent manner.
o Performance appraisal seeks to evaluate employees’ performance in a systematic manner.
Performance Appraisal & Individual’s Career Progression
Performance appraisal helps in unearthing the individual’s potential for
further development and growth in the organisation. It helps the employee in
taking up challenging jobs as they come. It helps him in knowing how he is
performing on his jobs. It guides and stimulates employee development. It
helps him in getting promoted to higher levels in the organization. It provides a
feedback to employee for self – control and self – development. Performance
appraisal helps him in knowing the type of training programmes to be attended
for better job performance and career development.
Q5(b) Methods of Training of Supervisors: Foremen or supervisors are above the workers or operative level employees in the organizational pyramid. A supervisor is the key man who interprets management instructions and directives to the workers and at the same time is responsible for production. He stands between the management and the rank and file level employees.
A supervisor generally has to take care of the following:-
o Selecting and training of workers
o Work production
o Control of quality, quantity and cost
o Discipline, motivation and morale of workers
o Accident prevention
o Maintaining machinery and supplies
o Work method improvement
o Handling labour grievances
o Record keeping
Therefore, training of supervisors should be planned by keeping the
above-mentioned points in mind. Following are the methods of training for
supervisors:-
(i) Induction – It implies introducing or orienting a new employee to the organization. The induction and orientation training aims to get over the settling in period as quickly as possible and with the minimum of emotional upsets being experienced by the new employee.
(ii) Lecture Method – Classroom training depends entirely on lectures as the medium of instruction. Lectures can be delivered to as many supervisors as can be accommodated in the room. Lecture is delivered by experts from within or outside the industry. Lecture is a very good medium of training where no reliable books or any other material is available.
(iii) Written Material – This method is used to give to the trainees
the important information in permanent form for immediate or future use,
e.g., Standard practice instructions on how to perform various jobs.
(iv) Conference – A conference brings together many people who tend to train themselves and learn together. A conference helps pooling ideas and experiences of different persons and puts them open for discussions to arrive at a feasible solution for the problem at hand. A conference can uproot ideas, change attitudes and develop analytical and questioning ability. The conference should guide, be active, lead, interpret, stimulate and draw out the ideas and opinions of the group engaged in the discussion.
(v) Training within the industry – This is basically a supervisory training programme. One of the parts of the programme is the job instruction-training programme, which is concerned, with how much to teach. These courses can be held on the concern’s premises with little disturbances or disruption of work. This programme imparts training in Job instruction, Job relation, Job safety and Job methods.
Q6 (i) Levels of Management: Industrial management has got the following activity levels:
1) Top Management: It includes Board of Directors, Managing Directors,
Chief Executive, General Managers, Owners and Share holders.
Top management functions are:-
a) Setting basic goals and objectives
b) Expanding or contracting activities
c) Establishing policies
d) Monitoring performance
e) Designing/redesigning organization system
f) Shouldering financial responsibilities etc.
2) Upper middle management : It includes Sales executive
(Manager), Production executive, Finance executive, Accounts
executive and R and D executive
Upper Middle Management functions are:-
a) Establishment of the organization
b) Selection of staff for lower levels of management
c) Installing different departments
d) Designing operating policies and routines
e) Assigning duties to their subordinates, etc.
3) Middle Management : It includes Superintendents, Branch managers and General managers
Middle management Functions are:
a) To cooperate to run organization smoothly
b) To understand the interlocking of departments in major
policies
c) To achieve coordination between different parts of the
organization
d) To conduct training for employee development
e) To build an efficient company team spirit
4) Lower Management: It includes Foremen, Supervision or charge-hands, Office superintendent and Inspectors etc.
Lower management Functions are:
a) Direct supervision of workers and their work
b) Developing and improving work methods and operation
c) Inspection
d) Imparting instructions to workers
e) To give finishing touch to the plans and policies of top Mgt
f) To act as links between Top Mgt and operating force (workers)
g) To communicate the feeling of workers to top management.
Q6(ii) System concept of Organisation:
a) System is a group of independent but inter dependent elements ( called sub-systems) which act and interact together with a purpose of achieving certain common objectives/goals. An organisation can be called as a system which in turn consists of many sub-systems and sub-sub systems, and so on.
b) Systems concept gives to the industry and to other large business organizations, a systematic approach to get the task accomplished more efficiently, effectively and economically.
c) Systems approach is an organized approach for complex (Military and Industrial) equipment design and the same can be completed in a much shorter duration with comparatively less efforts.
d) Systems concept furnishes a frame of references which tells how to manage the jobs or how to analyse complex phenomena under different environments.
e) Systems approach is more common in the field of physical sciences and engineering because it is comparatively easier to build a model of such systems. However, the systems approach can also be used to solve problems related to business or human values (like fire protection, housing etc.)
Q6(iii) Understanding of Human Behavior:Understanding human behaviour is important for any one dealing with human resources. It has also been the subject of large number of researches. Research in human behaviour in industry aims at discovering:-
a) Causes of behaviour, or
b) The factors which are correlated with behaviour even though they are not causative.
Individuals differ from one another in dozen ways. Differences are present as regards physical appearance, abilities, education, aptitude etc. Individuals differ and therefore, in industry, they are paid at different rates. One learns with little effort and practice, whereas, another is not able to pick up so fast. The differences in individuals reflect in their performance and behaviour at work.
Individual differences in behaviour, identified and measured, helps much in right selection, placement and imparting proper training to the individuals. Action on a peculiar behaviour of an individual to a particular situation is seldom spontaneous; it does have a cause behind.
For any given aspect of individual behaviour, there may be many contributing factors. The individuals differ from each other in certain aspects which are termed as individual variables. These individual variables play a major role and influence the performance ( behaviour) of an employee at work. These are the physical characteristics, intellectual factors, interest & motivation, temperament, character of an individual, aptitude, personality aspects, education, experience, age and sex. Besides these individual variables there are some situational variables, like physical environment, work space/layout, Design and condition of work, equipment, methods of work, character of the organisation, kinds of training & supervision, types of incentives and social environment which also influences the performance (behaviour) of an employee on a given job.
Q6(iv) Job Evaluation:
Definition: Job evaluation is a systematic process of evaluating different jobs of an organization. Depending upon the characteristics and requirements of a job, job evaluation determines its relative worth and attaches a value to it. These relative values of jobs assist in deciding wage rates and salaries for different jobs.
Objectives of Job Evaluation:
a) decides the relative values of different jobs in an organization.
b) helps to formulate an appropriate and uniform wage structure.
c) clarifies the responsibility and authority connected with each job.
d) provides a basis for recruitment, selection, training, promotion and
transfer of the employees.
e) improves employer-employees relationships.
f) adds to job satisfaction.
g) minimizes labour turnover, and
h) describes and evaluates new jobs.
Procedure of Job Evaluation:
a) Identify the job to be evaluated.
b) Describe and analyse the requirements of the job. Write-down the
skill statement and the responsibilities involved
c) Compare the job with the pre-identified key jobs and decide its level or
value (with respect to key jobs)
d) Use the above information to arrive at a suitable wage structure for the job.
Method of job Evaluation. Following are the methods in which job evaluation is done:-
a) Ranking method.
b) Classification method.
c) Factor comparison method.
d) Point method.
PART – II
Q 7(a) Factories Act 1948:
Objectives and Applicability: The Factories Act regulates the conditions of work (health, safety, etc) in factories. It safeguards the interests of the workers and it is for the welfare of the factory workers. The act received the assent of Governor General of India on September 23, 1948 and came into force on April 1, 1949. This act was further amended many times. The act is applicable to any factory in which ten or more than ten workers are working. The act has a provision in respect of
a) Employee health and safety,
b) Hours of work,
c) Sanitary conditions and wholesome work environments,
d) Employee welfare,
e) Leave with wages, etc.
Important Terms of the Act:
(a) Factory: A place wherein ten or more persons are working and in which a
manufacturing process is going on using electricity, steam, oil, etc.
(b) Manufacturing Process: A process for
- making, altering, repairing, finishing, packing, washing, cleaning, or otherwise treating a substance for its use, sale, transport, disposal, etc.
- pumping oil, water, sewage, or
- generating, transforming, or transmitting power, or
- composing types for printing, printing for letterpress, lithography, photogravure or other similar process or book-binding;
- constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels.
(c) Worker: Worker means a person employed directly or through any agency, whether for wages or not, in any manufacturing process or in cleaning any part of the machinery or premises used for manufacturing process or in any other kind of work incidental to or connected with, the manufacturing process or the subject of manufacturing process.
(d) Adult: A person who has completed eighteenth year of age.
(e) Child: A person who has not completed his fifteenth year of age.
(f) Power: Electrical energy or any other form of energy which is mechanically transmitted and is not generated by human or animal agency.
(g) Machinery: It includes
- prime movers, engine, motor, etc
- transmission machinery, shaft, wheel, drum, pulley, belt, etc.
- and all other appliances whereby power is generated, transformed and transmitted.
(h) Occupier of Factory: A person who has ultimate control over the affairs of the factory and where the said affairs are entrusted to a managing agent, such agent will be considered as the occupier of the factory.
Q7(b) Workmen Compensation Act 1923: The important terms in the Workmen Compensation Act 1923 are as below:
a) Dependents. Dependent means
- a widow, a minor son, unmarried daughter or a widowed mother, and
- if wholly or in part dependent on the earnings of the worker at the time of his or her death’
i) a widower, a minor brother and unmarried sister
ii) a widowed daughter–in– law and
iii) a minor child of predeceased daughter, etc.
b) Minor: A person below 18 years of age.
c) Partial Disablement: means disablement of temporary nature and which reduces the earning capacity of a workman.
d) Total Disablement : implies such disablement which (temporarily or permanently) incapacitates a workman for all work and he cannot earn at all (for a period or for ever).
e) Workman: means a person (other than one whose employment is of casual nature and who is employed otherwise than for the purpose of the employer’s trade or business) who is
(i) a railway servant and not permanently employed in any administrative capacity.
(ii) getting wages not exceeding :-
Rs. 500 as per Act of 1923
Rs. 1000 as per Act modified in 1976.
Q8(a) Quality, Quality Control and Total Quality Management
Quality: Quality is defined as fitness of purpose. Quality is a relative term and is generally explained with reference to the end use of the product. For example, a gear used in sugar-cane extracting machine though not of the same material and without possessing good finish, tolerance and accuracy as that of a gear used in the head stock of a sophisticated lathe, may be considered of good quality if it works satisfactorily in the juice extracting machine. Thus, a component is said to be of good quality if it works well in the equipment for which it is meant.
Quality Control: Control is a system for measuring and checking (inspecting) a phenomenon. It suggests when to inspect, how often to inspect and how much to inspect. In addition, it incorporates a feedback mechanism which explores the causes of poor quality and takes corrective action. A quality control system performs inspection, testing and analysis to conclude whether the quality of each product is as per laid down quality standards or not. It is called statistical quality control when statistical techniques are employed to control quality or to solve quality control problems.
Total Quality Management TQM (Total Quality Management) is a system approach to quality in all spheres of the organisation. TQM means meeting the requirement of internal/external customers consistently by continuous improvement in the quality of work of all employees. Total in QM stands for an overall integrated approach to all aspects of quality, all domains of system including organisation, people, resources, time, hardware/software and even management committees. TQM is a management approach of organisation, centered on quality, based on participation of all its members and aiming at long term success through customer delight and benefits to the members of the organisation and society. TQM sustains on four pillars viz systems, top Management commitment, Team work and Statistical Process control (SPC) Tools. The principal objectives of TQM are :-
(i) Customer Focus viz Customer Delight.
(ii) Continuous improvement as a culture of the organisation which must be the way of life.
(iii) Focussed, continuous and relentless cost reduction.
(v) Focussed, continuous and relentless quality improvement.
(vi) To create an organisation whereby everyone is working towards making their organisation the best in its business and to capitalize on the sense of achievement and working in a world-class organisation.
Q8(b) Control Charts: Control Charts are based on statistical sampling theory, according to which an adequate sized sample drawn, at random from a lot, represents the lot. All processes whether semi-automatic or automatic are susceptible to variations which in turn, result in changes in dimensions of the products. These variations occur either due to chance causes or due to certain factors to which we can assign the causes for such variations. Variation in the diameter of spindles being manufactured on lathe may be either due to tool wear, non-homogeneity of bar stock, changes in machine setting, etc. The purpose of control chart is to detect these changes in dimensions and indicate if the component parts being manufactured are within the specified tolerance or not.
Control chart is a (day-to-day) graphical presentation of the collected information. The information pertains to the measured or otherwise judged quality characteristics of the items or the samples. A control chart detects variations in the processing and warns if there is any departure from the specified tolerance limits. A control chart is primarily a diagnostic technique.
Q9(a) Productivity
a) Productivity implies more number of goods (output) from the same amount resources (input)
(b) Management can play an important role in promotion of productivity. The following are the scope for management in this regard:-
(i) Material
- Change of design of component
- Use of correct process
- Suitable material handling equipment
- Storage facilities and proper packaging
- Use of computers and other sophisticated eqpt
(ii) Labour
- Improvement in work methods, through work study techniques
- Giving motivation apart from pay
- Provide good, safe working conditions
- Recognising HR as vital part of the enterprise
- Education and training of employees
- Maintenance of good relations with labour unions
(iii) Plant, Eqpt & Machinery
- Provisioning improved tools, attachments and devices
- Ensuring proper maintenance
(iv) Land & Building
- Suitable lay out to accommodate more machinery
- Proper orientation, construction and inside condition of the building.
Q9(b) Work Study as a Management Tool: Work study investigates the work done in an organization and it aims at finding the best and most efficient way of using available resources; Work study is a generic term for those techniques particularly ‘method study’ and ‘work measurement’. As a management tool, work study is used for examination of human work in all its contents. This, in turn, leads systematically to the investigation of all factors which effect the efficiency of the situation being reviewed, in order to seek improvements. The objectives of work study for any management are:-
a) improved working processes and standard procedures.
b) Better layout
c) Better productivity
d) Effective utilisation of men, materials and machinery
e) Reduced hazards
f) Helps to decide the time to do a job, manpower required for the job and materials required
g) Helps budgeting and costing
h) provides a fair and sound basis for incentives
i) Helps production planning and maintenance.
As a management tool, work study finds application in all types of industries and organisations providing goods and services and is used in all types of activities in these institutions.
Q10(a)Preparation and Analylsis of Balance Steet: Balance Sheet is one of the important financial statements of a company giving its financial status at any given time. It is prepared at least annually but may be done so more often and on specific occasions when the need exists in connection with making decisions concerning large project investments, dividend distribution, etc.
Balance Sheet is a statement of Assets, Liabilities and the Company’s Capital ( or net worth) at a specified date. It shows the summary of the sources of the enterprise resources and the investment of these resources in various forms of assets.
Along with the Profit & Loss account, the Balance Sheet is analyzed using certain financial ratios which help to reveal the financial and non-financial health of the enterprise.
In general, there are four categories of ratios each attempting to measure the firm’s financial position and performance. These are:-
a) Liquidity Ratios –which reflect the firm’s ability to meet scheduled
short term obligations
b) Activity Ratios – which tell how the firm is managing various classes
of assets.
c) Leverage Ratios –Show how much debt the firm has used to finance
its investments.
d) Profitability Ratios – designed to reflect the profitability of the firm.
Q10(b) Product Development: Product Development is an activity which involves
design/redesign and fabrication of new or modified product and then testing
it to find its usefulness.
The various steps involved in developing a product are:-
a)Get New Ideas by initiating, adaptation, by invention, from dealers/customers,
from public at large.
b)Separate the good and feasible ideas from amongst many, if need be,
by a committee consisting of managers of important Depts connected
with product development.
c) Evaluate ideas technically with regard to method of manufacture,
labour and eqpt requirements, cost, performance characteristics, etc
d)Evaluate ideas from markets point of view viz their acceptability by
the customers. First evaluation can be done through cursory survey
by salesmen, followed by a proper market survey.
e)Based on information collected on market and technical aspects, it
may be decided finally as to whether to go ahead for production or
to forget the idea.
f) If it is decided to take up the idea and production started, then the
following are done viz designing the product, ordering of eqpt,
procurement of material, selection and training of workers,
establishing control system etc.
g) While production is on, preparations are done to introduce the
product into market and to impress the market with the developed
product viz market, advertisement policies, packaging, channels of
distribution, price/discount, guarantee, after sales service, etc
Short Notes
Q11(i) Inventory Control- its scope and importance: Inventory control is the
scientific method of finding out how much stock be maintained in order to
meet the production demands and be able to provide right type of material at
right time in the right quantities and at competitive prices.
Inventory control is concerned with achieving an optimum balance between two objectives which are:-
a) to minimise investment in inventory since it means money kept in store room.
b) to maximize the service levels to the firm’s customers and its own departments.
A good inventory control will aim to :-
a) Procure material of good quality in time
b) not to face shortage of material
c) Avoid delay in production schedules
d) Achieve production targets
e) Obtain delivery dates accurately
f) help industry to build up its reputation and maintain better
customer relations.
Q 11(ii)Line Balancing :Line balancing means balancing the line between the
product lines or assembly lines. It aims at grouping facilities and workers in
an efficient pattern in order to obtain optimum or most promising balance of
the capability and flow of the production or assembly processes. Tasks are
grouped so that their total time is preferably equal to or a little lesser than
the time available to each work station – thus reducing the idle time.
Each work station should have the same operating time and the various operations should be sequenced properly. There should be perfect balance between the output rates of the parts and the sub assemblies. However, it is not always possible that the parts reach in a steady stream immediately before sub-assembly. This may be because of the limitation as regards materials, men and equipments or it may be economical to manufacture and supply parts in batches. The flow control section has to cope with such situations and thus, carry big inventories and arrange facilities for storage.
Line balancing problems can be solved through heuristics approaches, linear programming, dynamic programming and using computer method.
Q 11(iii) Marketing and Selling: The marketing concept is a management orientation
that holds that the key task of the organization is to determine the needs, wants and values of a target market and to adopt the organization to deliver the desired satisfaction more effectively and efficiently than its competitors.
The selling Concept is a management orientation which assumes that consumers will normally not buy enough of the Company’s products unless they are approached with a substantial selling and promotional effort.
Selling focuses on the needs of the seller, whereas marketing focuses on the needs of the buyers. Selling is preoccupied with the seller’s need to convert his goods into cash, whereas marketing lays emphasis on satisfying the needs of the customers by means of the product he wants. Marketing tries to know and understand the customer, as well as, the product or service that fits him and sells itself. Actually Marketing is another name for selling with the inference that it is a long-haired method. Marketing is a more expensive way of selling.
Q 11(iv) Breakeven Analysis: Break even analysis implies that at some point in the
operations, total revenue equals total cost. Break-even analysis is concerned with finding the point at which revenues and costs agree exactly – hence the term ‘ Break-even Point’. The following figure portrays the Break Even Chart:-
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Break-even point is the volume of output at which neither a profit is made nor a loss is incurred. The break even analysis can be carried out algebraically or graphically.
Breakeven Analysis helps solving the following types of problems:-
a) What volume of sales will be necessary to cover
- a reasonable return of capital employed
- preference and ordinary dividends, and
- reserves
b) To computing costs and revenues for all possible volumes of output to fix budgeted sales.
c) To find the price of an article to give the desired profit.
d) To determine the variable cost per unit
e) To compare a number of business enterprises by arranging their earnings in order of magnitude.
The Breakeven point (BEP) can be calculated by using the following relation:-
F
BEP = ------------
1 – V/P
Where F is fixed Cost
V is Variable cost per unit or total variable cost
and P is the selling price of each unit.