ETZC412 Compre Regular Answer Keys

Birla Institute of Technology & Science, Pilani
Work-Integrated Learning Programmes Division

B.Tech - ET
Second Semester 2015-16
Comprehensive Examination (Regular)
Course No.
ETZC 412
Course Title:
Production Planning & Control
Nature of Exam:
Open Book
Weightage:
50%
Duration:
3 Hours
Date of Exam:
No. of Pages = 3
No. of Questions = 6
18-Apr-2015
Note:
1. Please follow all the Instructions to Candidates given on the cover page of
the answer book
2. All parts of the questions should be answered. Each answer should start
from a fresh page
3. Write your answers to the topic and preferably in bullet points. Include
sketches appropriately
Q1) You have launched an innovative product and it is currently in the growth
phase of its product life cycle. On a spectrum between Chase and Level strategy,
where will you pitch? What specific strategic options will you consider and why?
[7]
The features of this innovative product on its growth phase of the PDC are:
1. The demand is more market driven assuming that the product has been
designed to meet market expectations and the early signals are addressed
adequately
2. The market mediation is required to match the demand with supply
3. Design / strategy changes are limited
4. There are budgets planned for the capacity related investments
5. The demand has a definite trend and the random variations are minimal
as the period of window is short (compared to the maturity phase)
6. The process and product is vulnerable to bad practices in its urge to grow,
which may impact its maturity phase
Given the above points it is appropriate to fix the strategy towards demandchase for the following reasons:
1. The demand is market driven hence it has to meet the same
2. Lack of product availability can impact the growth and vulnerable to
competitors. See the example of Tata Zest
3. The inventory will not stagnate as the design changes are limited and
flowing to meet the market demand
4. There are no constraints in terms of increasing the capacity hence chase is
possible
5. The demand is growing and it is prudent to exploit the same for quicker
break-even

B.Tech - ET
A level strategy will lengthen the growth phase, which will intensify the
vulnerability of the product and process as well instigate competitors
Q2) Joe Henry machine shop uses 2,500 brackets during the course of a year.
These brackets are purchased from a supplier 90 miles away. The following
information is known about the brackets:
Annual demand
Holding cost per bracket
per year
Order cost
Lead time
Working days per year
2,500
$1.50
$18.7
5
2
days
250
a) What would be the EOQ? 250

[2]
b) What would be average inventory?
125
[1]
c) How many orders would be made each year and what would be the annual
order cost? 10; $187.5
[2]
d) What is the ROP? 20
[2]
Q3) VanOyen Manufacturing has gone out on bid for a regular component.
Expected demand is 700 units per month. The item can be purchased from either
Allen Manufacturing or Baker Manufacturing. Their pricelists are as shown in the
table. Ordering cost is $50, and annual holding cost per unit is $5 and is
independent of purchase price
Allen Manufacturing
Quantity
Unit Price $
1-499
16.00
500-999
15.50
1,000+
15.00
Baker Manufacturing
Quantity
Unit Price $
1-399
16.10
400-799
15.60
800+
15.10
a. What is the economic order quantity?

410
[2]
b. Which supplier should be used?
Baker Manufacturing Co.
[3]
c. What is the optimal order quantity and total annual cost ?
410;
1,33,089
[3]
Q4) The President of Hill Enterprises, projects the firms aggregate demand
requirements over the next 8 months as follows:
Month
Deman
d

B.Tech - ET
Jan
1,400
Feb
1,600
Mar
1,800
Apr
1,800
May
2,200
Jun
2,200
Jul
1,800
Aug
1,800
The opening inventory in Jan is 200 units on hand. Stock-out cost of lost sales
is $100 per unit. Inventory holding cost is $20 per unit per month. No idle
time costs considered
(a) Their Operations Manager is considering a plan (Plan A). The plan is to vary
the workforce level to execute a strategy that produces the quantity
demanded in the prior month. The Dec demand was 1,600 units. The cost of
hiring additional worker is $5,000 per hundred units. The cost of laying-off
workers is $7,500 per hundred units. Evaluate this plan based on cost
1,53,000 [5]
(b) Evaluate Plan B, which envisages producing at a constant rate of 1,400 units
per month, which will meet minimum demands. Then use subcontracting, for
additional units at a premium price of $75 per unit. Evaluate this plan and
compare against Plan A
2,44,000
[5]
(c) Consider Plan C, keeping a stable workforce by maintaining a constant
production rate equal to the average demand of the eight months and allow
varying inventory levels. Evaluate Plan C against Plan A and Plan B
86,000
[5]
Q5) The monthly sales for a given product is:

Month
Actual demand
Mvg Avg
Jan
20
Feb
21
Mar
15
18.67
Apr
14
16.67
May
13
14.00
Jun
16
14.33
Jul
17
15.33
Aug
18
17.00
Sep
20
18.33
Oct
20
19.33
Nov
21
20.33
Dec
23
21.33
Model the forecasting using the following:
Wt. Mvg.
Avg
17.83
15.50
13.67
14.67
16.00
17.33
18.83
19.67
20.50
21.83
Exp smoothing
20.00
20.00
20.30
18.71
17.30
16.01
16.01
16.30
16.81
17.77
18.44
19.21
a) 3-monthly moving average

[1]
b) 3-monthly moving average with 3,2,1 as weightage with the highest for the
most recent past[2]

B.Tech - ET
c) Simple exponential smoothing using = 0.3 (assume Jan forecast as 20)
[2]
d) Suggest the best model based on MAD
Weighted moving average is the
best model as the MAD is the least at 1.12
[2]
Q6) Stanford Rosenberg Computing wants to establish an assembly line for
producing a new product, the Personal Digital Assistant (PDA). The tasks, task
times and immediate predecessors for the tasks are as follows:
Task
Time
Immediate
(Sec)
predecessors
A
12
B
15
A
C
8
A
D
5
B, C
E
20
D
Rosenbergs goal is to produce 180 PDAs per hour
d. What is the cycle time? 20 seconds / unit
[2]
e. What is the theoretical minimum for the number of workstations that
Rosenberg can achieve in this assembly line? 3
[2]
f. Can the theoretical minimum actually be reached when work stations are
assigned Yes, it can be reached as follows
[2]

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Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

Production Planning & Control

Birla Institute of Technology & Science, Pilani

a) What would be the EOQ? 250

a. What is the economic order quantity?

Birla Institute of Technology & Science, Pilani

Q5) The monthly sales for a given product is:

a) 3-monthly moving average

Birla Institute of Technology & Science, Pilani

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