Industrial Management [HU 802] EI Organizer 2012

INDUSTRIAL MANAGEMENT

Basic Concepts of Management 2

Organizational Structure 4

Organisational Behaviour 8

Communication 9

Human Resource Management 11

Concepts of Production Management 16

Product Development 19

Material Management 20

Quality Management 28

Financial Management 35

Marketing Management 38

Work Study 45

Plant Maintenance and Material Handling **

Miscellaneous **

POPULAR PUBLICATIONS

BASIC CONCEPTS OF MANAGEMENT

Multiple Choice Type Questions

1. Who is the father of Scientific Management? [WBUT 2009]a) Frank Gilberth b) F. W. Taylorc) Mark Parker Follet d) Max Weber

Answer: (b)

2. ‘Hierarchy Theory of Motivation’ was professed by [WBUT 2010]a) F.W. Taylor b) Abraham Maslowc) Henry Fayol d) Elton Mayo

Answer: (b)

3. X & Y theory was created by [WBUT 2010]a) McGregor b) A. Maslow c) P. F. Drucker d) F. W. Taylor

Answer: (a)

4. Henry Fayol concentrated on [WBUT 2010]a) Productivity b) Top level c) Middle d) Upper level

Answer: (a)

5. Luther Gulick states seven functions of management under the catch word a) PODSCORB b) PDOSCORB [WBUT 2010]c) DOPSCORB d) PSCORBOD

Answer: (a)

6. Which function of the management is the basic of all other functions? a) controlling b) staffing c) planning d) directing [WBUT 2010]

Answer: (c)

7. The Wage Boards appointed by the Government and usually consist of number of persons [WBUT 2010]

a) 5 b) 7 c) 10 d) 12Answer: (c)

8. Decision making helps in [WBUT 2010]a) improving efficiency b) increasing profits c) achieving organizational goal d) implementing a policy

Answer: (c)

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9. Planning is [WBUT 2010]a) looking ahead b) looking back c) guiding people d) delegation of authority

Answer: (a) 10. Who is the father of Human Relation approach? [WBUT 2011]

a) Elton Mayo b) Henri Fayolc) F.W. Taylor d) Mary Parker Foilet

Answer: (a)

11. Management is a art of [WBUT 2011]a) profit making b) misleading customerc) getting thing done by others d) satisfying the competitors

Answer: (c)

12. Management is [WBUT 2011]a) an art b) a sciencec) both (a) & (b) d) none of these

Answer: (c)

Short Answer Type Questions

1. Highlight the basic elements of Scientific Management. [WBUT 2009]Answer: Following are the basic elements of scientific management:1. Selection of personnel2. Placement of personnel3. Training of personnel4. Job analysis includes the followings:

i) Time studyii) Motion studyiii) Fatigue study

5. Incentive system6. Appointment of function foreman7. Good relation between worker and manager

All the above are human aspect element. Non human aspect elements are as follows:1. Separation of planning from doing2. Standardization3. Economy

2. What do you mean by Management? Write down the main functions of management? [WBUT 2011]Answer: 1st part:Management is a functional concept and can be defined as “It is an effort for getting things done in order to achieve the predetermined goals of the concern through co-

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ordination of human and other elements. But, as its scope is so wide it is not easy task to define management. It is correct perspective. The difficulty is mainly due to the fact that the word management is highly concerned with the people. The behaviors and attitude of the people are highly unpredictable and defy all calculations. Besides, management is a growing science and its generalization is thus in the process of development. For this it is very difficult to confirm its subject matter within a tight compartment of a short definition. Thus various Authors, Writers and Economists define management in different ways but main idea of these definitions is more or less similar though differ in their wordings. Economists define management as a factor of production, Sociologists consider management as a group of persons and as per specialists management is a system of authority.

2nd part:Management is a functional concept and can be defined as “It is an effort for getting things done in order to achieve the predetermined goals of the concern through co-ordination of human and other elements. The major role and functions of management are as follows: a) Planning: The first function of management is planning. The planning works out in

broad outlines the things that need to be done and the methods of doing them in an orderly manner.

b) Organizing: Once the plan is formulated then there is the need for organizing. This is nothing but a structure created to give successful form of all the combined efforts.

c) Staffing: In organizing, the manager seeks to establish position and decide the duties and responsibilities that belong to each one. But in case of staffing, the manager finds the right man for each job, brings and trains the whole staff for this purpose and maintains congenial atmosphere for work.

d) Commanding: Planning and organizing are not sufficient to move the staff into action. For this command is necessary. Command is the starting signal or order to enable the staff member to move into operational activities.

e) Directing: Direction is associated with command. Directions include guidance and supervision of work of the subordinate. Direction is a continuous process and involves making decision giving necessary instruction for work performance.

f) Motivating: Motivation is psychological acts that help the workers to do more work. It is psychological aspect since it is linked to mental state. Motivation is the actuating force, which inspires a worker to put his best in the accomplishment of the task.

g) Controlling: The work of planning, organization, command, direction and motivation if carried into effect smoothly and properly, leaves nothing to be desired for the accomplishment of the objectives.

h) Coordinating: In a large organization, the number of workers and volume of work is large. The jobs of different workers need to be harmonized. This task is performed with the help of Coordination.

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Long Answer Type Questions

1. a) Briefly describe the contribution made by “HENRY FAYOL” in the field of modern management.b) Briefly describe the two sets of assumption about human behaviour as per DOUGLAS McGREGOR. [WBUT 2011]Answer:a) Henry Fayol:Henri Fayol, a french industrialist, is regarded as “Father of modern management”. His management thought can be classified under three broad categories:

a) Functions of management,b) Principles of management,c) Activities, which managers should perform

Functions of Management:Management is a process, which concerns itself with efficient use of resources (men, material, machinery and capital) in most economic way for achieving the desired result. It includes five primary functions i.e. a) Planning, b) Organisation, c) Staffing, d) directing, e) controlling and integrating functions is called “Co-ordinating”.

Principles of Management: Fayol distinguished fourteen principles of management which have been widely used and accepted and form core of most management teachings and practices. These principles are: i) Division of labour: The more people specialize, the more efficiently they can perform their duties.ii) Authority and responsibility: Responsibility refers to all the duties or activities that must be done to complete a job. For good results, these responsibilities must be delegated to the lowest possible level of employees having the ability to perform. Responsibility without authority is meaningless. Employees must have sufficient authority to carry out their assigned responsibilities. Authority is the individuals right to take decisions and take actions required to complete one’s assigned responsibility.iii) Discipline: Members in an organization need to respect the rules and agreements that govern the organization. To Fayol, discipline will result from good leadership at all levels of the organization, fair arrangement, and judiciously enforced penalties for infractions. iv) Unity in command:

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Each employee must receive instructions about a particular operation from only one person. Fayol believed that when an employee reported to more than one superior, conflicts in instructions and confusion of authority would result.

v) Unity of direction: Those operations within its organization that have the same objective should be directed by only one manager using one plan. For example, the personnel department in a company should not have two directors, each with a different hiring policy. vi) Subordination of individual interest to the common good: In any undertaking the interests of employees should not take precedence over the interests of the organization as a whole. vii) Remuneration: Compensation for work done should be fair to both employees and employer.viii) Centralization:Decreasing the role of subordinates in decision making is centralization. Increasing their role is decentralization. Fayol believed that managers should retain that responsibility but also need to give their subordinates enough authority to do their jobs properly. The problem is to find the best amount of centralization in each case. ix) The hierarchy: The line of authority in an organization – often represented today by the neat boxes and lines of the organization chart – grows in order to rank from top management to the lowest level of the enterprise. x) Order: Materials and people should be in the right place at the right time. People in particular should be in jobs or positions most suited for them. xi) Equity: Managers should be both friendly and fair to their subordinates. xii) Stability of staff: A high employee’s turn over rate is not good for efficient functioning of an organization. xiii) Initiative: Subordinates should be given the freedom to conceive and carry out their plans, even; though some mistakes may result. xiv) Esprit de corps: Promoting team spirit will give the organization a sense of unity. To Fayol, even small factors could help to develop this sprit. He suggested, for example, the use of verbal communication instead of formal communication whenever possible.

b) Following are the two sets of assumptions about human behaviour as per DOUGLAS McGREGOR.Daouglas McGregor proposed two distinct views of human beings: one basically negative, labelled Theory X, and the other basically positive, labelled Theory Y. After viewing the way in which managers dealt with employees, McGregor concluded that a manager’s view of the nature of human beings is based on certain grouping of

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assumptions and that he or she tends to mould his or her behaviour towards employees according to these assumptions.

Under Theory X, the four assumptions held by managers are:1. Employees inherently dislike work and, whenever possible, will attempt to avoid

it.2. Since employees dislike work, they must be coerced, controlled, or threatened

with punishment to achieve goals.3. Employees will avoid responsibilities and seek formal direction whenever

possible.4. Most workers place security above all other factors associated with work and will

display little ambition.In contrast to these negative views about the nature of human beings, McGregor listed the four positive assumptions that he called Theory Y:1. Employees can view work as being as natural as rest or play.2. People will exercise self-direction and self-control if they are committed to the

objectives.3. The average person can learn to accept, even seek responsibility.4. The ability to make innovative decisions is widely dispersed throughout the

population and is not necessarily the monopoly of those in management positions.

SignificanceTheory X assumes that lower-order needs dominate individuals. Theory Y assumes that higher-order needs dominate individuals. McGregor himself held to the belief that Theory Y assumptions were more valid over Theory X. Therefore, he proposed such ideas as participative decision making, responsibility and challenging jobs, and good group relations as approaches that would maximize an employee’s job motivation.

1. Write short note on Time study and Motion study. [WBUT 2009]Answer: Taylor, along with Gilbreth, tried to determine the best way to perform each and every job. Time study is defined as “the art of recording, analyzing and synthesizing the time elements of any operation. Time study involves the determination of the time required for each element of worker’s job, by observing his movements. Time study is conducted after motion study. Motion study involves study of movements which are involved in doing a job, in parts, and thereby eliminating wasteful movements and retaining only necessary movements.

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ORGANIZATIONAL STRUCTURE


1. State how authority and responsibility are interrelated. [WBUT 2009, 2011]Answer:Delegation of AuthorityThe process by which authority passes from one managerial level to another is known as delegation. As organisations grow in size and complexity, no one person can perform all the tasks or exercise all the authority that is needed to accomplish goals.Delegation of authority is not the same as division of work. As Henry Fayol says, "Division of work permits reduction in the number of objects to which attention and effort must be directed and has been recognised as the best means of making use of individuals and of groups of people".Delegation of authority denotes the superior vesting decision-making power in his subordinate. No one can delegate an authority which he himself does not have.Delegation is one of the most important skills a manager must possess. The overworked managers are often those who do not know how to delegate. For they lack the skill to get results through others. An individual can perform limited work in a day, all by himself. But through delegation—through dividing his load and sharing his responsibilities with others—he can accomplish much more. No manager and no organisation can run smoothly and effectively without delegation.

Elements of DelegationThe number of delegation marks the effectiveness of the manager and influences the relationship between the superior and the subordinate.Delegation is the process where a manager divides the work assigned to him so as to get help from others in accomplishing the same. It involves the following four steps that arc indivisible: the determination of results expected the assignment of tasks the delegation of authority for accomplishing these tasks the exaction of responsibility for their accomplishmentLooked at differently, these four steps have three elements: responsibility, authority and accountability. Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance. Let us briefly consider these three elements.

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Responsibility Responsibility refers to the activities which must be performed to carry out the task assigned. Responsibility can be delegated.

Authority Authority refers to the powers and rights entrusted to enable performance of the task assigned or delegated. Certain authority is imperative to shoulder a given responsibility. In organisations people derive authority mainly from two sources: position and personal. Position authority is related to powers of decision-making, reward and punishment. Personal authority refers to the expert knowledge and certain qualities which are part of the personality of an individual manager. Position authority can be delegated, but not personal authority. Authority could be formal or informal. Here we refer to formal authority that is clear, structured and communicated to all.

AccountabilityAccountability is the obligation to carry out responsibility and exercise authority as per established standards or norms. It is an obligation to account for, and report upon, the discharge of responsibility or use of authority. Accountability can not be delegated. The person who delegates continues to be responsible to his superior for what he had delegated as well.Since accountability cannot be delegated, the accountability of superiors for the acts of their subordinates is absolute. By the same token, we see that the delegate is accountable to the delegator to the extent he is delegated responsibility and authority For example, if the line managers are not given the responsibility to train the operators, they cannot be held accountable for the operators’ proficiency.While accountability always moves upward, responsibility and authority move downward in a hierarchy. A person can be accountable only to one superior for delegated responsibility and authority. Accountability is easy to establish if the standards and measures of performance are predetermined.

2. State the concept of ‘Delegation of Authority’. [WBUT 2010]Answer: The process by which authority passes from one managerial level to another is known as delegation. As organisations grow in size and complexity, no one person can perform all the tasks or exercise all the authority that is needed to accomplish goals.Delegation of authority is not the same as division of work. As Henry Fayol says, "Division of work permits reduction in the number of objects to which attention and effort must be directed and has been recognised as the best means of making use of individuals and of groups of people".Delegation of authority denotes the superior vesting decision-making power in his subordinate. No one can delegate an authority which he himself does not have.

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Delegation is one of the most important skills a manager must possess. The overworked managers are often those who do not know how to delegate. For they lack the skill to get results through others. An individual can perform limited work in a day, all by himself. But through delegation—through dividing his load and sharing his responsibilities with others—he can accomplish much more. No manager and no organisation can run smoothly and effectively without delegation.


1. Mention the basic steps in the formation of an organization. [WBUT 2009]Answer: In order to form a company, the promoters are needed. According to Companies Act, 1956 at lease two persons required for private limited company and seven persons required for public limited company. For formation of a company, the following step should be considered.

Preliminary Planning: In the first stage, the promoter with the expert knowledge discovers an idea of a new project and prepares a draft planning about the proposed business.

Preliminary Investigation: The promoter is to require preparing a draft account as regards estimated income and expenditure of the proposed business. If the proposal is profitable, the promoter will proceed for the next step i.e., searches for capital, labour, raw materials, etc. If required, promoter can take advice from different experts. He will then prepare a draft plan on the basis of information received form enquiry in respect of different matters. This draft plan on the basis of information received form enquiry in respect of different matters. This draft plan shall mention the amount of Authorised Capital, Working Capital and Capital Budgeting Decision.

Assembling Promoters: After preparation of planning the promoters assemble to make discussion and contact. A board of promoters is constituted with adequate number of entrepreneurs who desirous of making capital investment and participating actively in promotion. This entrepreneur would sign on the documents needed for incorporation.

Procurement of Industrial License: As per provisions of the Industrial Development and Regulation Act, 1951, Industrial license must be obtained from the Govt. Department.

Preparation of Different Documents: In accordance with the provisions of the companies Act, 1956, every company has to submit different documents along with the requisite fees for registration.The documents are as follow:i) Memorandum of associationii) Article of Association.iii) Concept from the Directors to act as a director.

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iv) Letter of concept from Directors as regards qualifying shares.v) Address of the registered office, etc.

Obtaining Certificate of Incorporation: After submitting the necessary documents along with prescribed fees to the Registrar of Companies, the Registrar will look over the documents thoroughly. If he satisfied, he would incorporate the name of the company and issue a certificate to it. This certificate is known as certificate of incorporation.Preparation of Prospectus: After incorporation, a document is circulated for inviting the public to subscribe for capital and loan. It is known as prospectus. It is not obligatory to circulate the prospectus. If the prospectus is not circulated then a statement in lieu of prospectus to be submitted to the Registrar containing in writing the different matter with conditions relating to the issue of shares to the public.Allotment of SharesConcerned with the allotment of shares on the basis of prospectus issued, people apply for share. Allotment of shares is made to them who have submitted the application.

Certificate of Commencement of Business: Within a month after the allotment of shares, the secretary or director so authorised would apply on behalf of the company, to the registrar to the effect that minimum subscription has been collected and other necessary conditions have been complied. Then the Registrar will issue a certificate of commencement of business.

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ORGANISATIONAL BEHAVIOUR


1. Briefly discuss the theory of motivation of Maslow. [WBUT 2010]Answer: The Maslow’s need Hierarchy theory views and individual’s motivation as a predetermined orders of needs which he strives to satisfy. The theory makes the following assumptions – a) People have an unending stream of needs. As soon as one need is satisfied, another need spring up in its place.b) Only unsatisfied needs motivate man’s behavior.c) People’s need have a definite order of priority i.e., needs can be arranged in the ascending order of their importance called need hierarchy.d) Physiological, safety and social needs are lowest order needs and esteem needs and self actuation needs are termed as higher order needs.

The above needs can be shown through following chart.

Generally it has been observed that a worker is motivated when his/her lower level needs satisfied.

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Higher Order needs

Lower Level needs


COMMUNICATION


1. When authority flows from the top executive to the lower level of employees it is known as [WBUT 2009]

a) Functional Organisationb) Staff Organisationc) Formal Organisationd) Line organization

Answer: (c)

2. When communication flows from lower level to upper level, it is known as [WBUT 2009]

a) Downward communication b) Upward communicationc) Formal communicationd) Oral communication

Answer: (b)


1. How do you overcome the barriers in communication? [WBUT 2010]Answer: Methods of Overcoming Barrier1. Clear organization policy: It is quite essential that the organizational policy be made clear so that flow of communication can takes place smoothly .The policy should be clear and unambiguous so as to unable the organization to easily promote the flow of communication.

2. Specification of the subject matter: The policy should clearly specify the subject matter to be communicated. Of course, this does not require the contents of the communication to be prescribed in a completely exclusive manner.

3. Ignoring proper channel in case of necessity: In general, communication through proper channel is essential for orderly and smooth flow of information. But it should not always be made operative. The system of communication through proper channel serve the purpose adequately as regards conveyance of routine type of information. But this principle may be overlooked as and when situation demands.

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4. Sharing responsibility of communication: It is desirable that every person in the organization shares the responsibility of good communication. The person at the top level have a special responsibility in this regard. When the top-level management assumes such special responsibility, the communication system can be successfully achieved.

5. Facility for promotion of communication: Organization should provide adequate facilities for promotion of communication. It will not be sufficient to provide adequate facilities, but at the same time due care should be given towards their proper and effective use.

6. Development of inter-personal relationship:Communication is regarded as an interpersonal process. So, it requires to develop inter-personal relationship based on mutual trust, respect and confidence which are essential for its promotion. The organization climate should, therefore, be radically modified to make it more intimate and personal. An educative programme should be arranged where manager should be instructed to identify the need and significance of communication, need for developing close personal contacts.

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HUMAN RESOURCE MANAGEMENT


1. For registration of trade union the minimum number of members required isa) 7 b) 14 c) 21 d) 28 [WBUT 2009]

Answer: (a)

2. Trade Union Act was passed in the year [WBUT 2009]a) 1965 b) 1926 c) 1950 d) 1980

Answer: (b)


1. How does Personal Management differ from Human Resource Management? Answer: [WBUT 2009]

Personnel management Human resource management1. The personnel management emphasize on clearly defined rules, procedures, agreement and contracts. The personnel Manager is governed by the rules and procedure. Work force is controlled through collective bargaining.

Human Resource management emphasize open ended contracts linked to exigencies of business. Management assumes special responsibility to motivate people in the organization and to constantly inspire performance based on commonality of goals.

2. The main aim of Personnel Management is to create a good relationship between employer and employee and manager in personnel department conducting routine based management.

Human Resource Management arouse conscience of employees and ensures their maximum contribution.

3. Personnel management focuses to individual development and capacity.

Human Resource management develops and increase efficiency of human resource.

4. Generally Personnel Management is applicable in business organisation hence its scope is limited.

Human Resource Management is not only applicable in business organisation but also in Govt. and different social sectors. Hence, its scope is unlimited.

5. Personnel Management is old and hence it is regarded as traditional concept.

Human Resource Management is new concept.

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6. Personnel Management is related to the behaviour and conduct of all employees of an organisation.

Human Resource Management considers the utilization of the whole human resource as the main force.

7. Personnel Management is a branch science.

Human Resource Management is social science.

2. State the benefits of performance Appraisal. [WBUT 2010]Answer: Performance appraisal may be defined as “a process and a system for knowing as to how efficiently and effectively the assigned work is carried out by employees and identifying suitability of employees for other jobs, particularly of higher responsibility in an organization”.

Uses / Purposes of Performance Appraisals1) Performance Appraisal is a useful tool for both employee and employer. Employees

should know how efficiently they have done their duties and what improvement is required for their performance. On the other hand, employer can assess areas of strength and weakness of their employees.

2) Most of the business unit decide their action regarding increment, promotion and reward of their employees on the basis of performance appraisal.

3) Performance appraisal identifies the strength and weakness of the employees. Weak Performance may be improved through proper training.

4) Performance appraisal helps the management to determine the deficiencies, if any, in respect of their recruitment and selection process.

5) It helps the management to confirm an employee at the end of the probation period.6) It acts as a tool for development of manpower in an organization.7) It leads an improvement in managerial leadership by means of periodic and effective

appraisal.8) It guides the manager for assessing future assignment.Periodic appraisal of performance of subordinates may help the departmental managers to be alert on their duties of supervision and control.


1. a) Define the concept of industrial relation. [WBUT 2010]b) State the factors affecting industrial relations.c) What are the causes of industrial dispute? State the steps that have been taken by the Government to prevent industrial disputes.Answer: a) Industrial relations, also called “Labour-management relations” or “Employer-employee relations”, represent the relationships that exist in an industrial organization between the employer and employees as between employees and employees. Poor industrial relations cause industrial disputes, which reduces productivity of the concern. The employee also suffer by way of loss of wages and salaries. Society also suffers due

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to higher prices and shortage of goods and services. A healthy industrial relations depends on Employer, Employee, Government, trade union and society.

b) Factors Affecting Industrial Relations1. Enlightened Management: Enlightened management who recognize

rights of workers and utilizes every opportunity to appreciate the sincere efforts of the employees.

2. Strong and Responsible Trade Unions: Strong and responsible trade unions who promote welfare of workers without harming interests of management. A responsible union is one, which exhorts workers to produce more, persuades management to give higher wages.

3. Economic Satisfactions of Workers: Only satisfied workers will think through their hearts instead through their mind.

4. Social and Psychological Needs Satisfaction: As man is a social animal, satisfaction of social and psychological needs encourage them for participation in management, suggestion schemes, grievance committee, etc. help to build good industrial relationships.

5. On-The-Job Conditions: Good lighting, safety conditions, provision of drinking water, management efforts to reduce noise/vibrations, shorter hours of work, flexible timings etc. gives the feeling to employees that management thinks for them which helps to improve industrial relations.

6. Off-The-Job Conditions: Off the job conditions in the form of conditions at home have influenced the industrial relations.

7. Literacy of Workers: Educated workers have greater sense of responsibility and are not misled by outside trade union leaders.

c) Causes of Industrial Disputes

1) Economic Causes:Industrial disputes relate to economic causes includes –a) Demand for higher wages.b) Demand for higher dearness allowance.c) Demand for share in the profits of the Company.d) Demand for better working conditions.e) Rationalization and automation in Industryf) Demand for facilities such as medical, education, housing etc.

2) Managerial Causes: It includes the followings –

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a) Attitude of employers’ towards labour in respect of (i) not to recognize the trade unions (ii) recognize the rival union (iii) not to follow the labour policy.

b) Defection recruitment policy includes –i) Hire and Fire Policy, (ii) Recruitment of Casuals, (iii) Wrong transfer and promotion policies (iv) not making worker permanent for long. c) Delays in labour agreement.d) Incorrect interpretation of terms of agreement.e) Inefficient leadership.f) Layoff and retrenchment.

3) Other Causes: It includes -i) Irresponsible trade union.ii) Political affiliation.

Steps Taken by Government to Prevent Industrial DisputesThe Government of India has taken following measures to prevent industrial disputes:a) Wages Boards have been set up by the Government of India for various

industries such as jute, cotton, textile, sugar, cement iron & steel etc., whose main function is to fix wages in the respective industries.

b) The payment of Bonus Act 1965, which was introduced in the year 1965 provides for payment of minimum bonus at 8.33% of annual income for employees drawing monthly salary of Rs. 15000 or less.

c) The Industrial Employment (standing Order) Act, 1946 requires each employer to make their standing orders covering conditions of employment and get them certified from the certifying officer and make them known to all workers.

d) Works committee, under the Industrial Dispute Act, 1947, every industrial unit employing 100 (one hundred) or more workers is required to set up a work committee consisting of representatives of employer and employees, to maintain a good relation between employer and employee.

e) Joint Management Councils were suggested by the Government in its industrial resolution 1956 to initiate the process of labour participation in management but unfortunately the measure has not found much roots.

f) National Arbitration Promotion Board set up in 1967, comprising representatives of employers’ and employees’ organizations, public undertakings and central and state government to promote voluntary arbitration to settle industrial disputes. Industrial disputes referred to voluntary arbitration if conciliation efforts fail.

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Procedure for Settlement of Industrial Disputes

2. a) Write down the different types of Production system. [WBUT 2011]b) How does production planning differ from production control?c) State the functions of the production planning. Answer:a) Following are the types of production system1. Mass production or flow line production system: These systems have simplest flow characteristic constituting straight line flow. Facilities are arranged according to the sequence of operations where the output of one stage becomes input to the next stage.

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Employees Employer

Refer to Works Committee

Other cases

Mutually Settled Not Settled

Conciliation Officer Conciliation Board

Settlement Reached Voluntary Arbitration

Settled Not Settled

Not Refer to Govt.

Settle

Both the parties free to strike or lockout

Industrial Dispute

Refer to Govt.

Not Settled

Industrial Tribunal

Labour Court


2. Batch production system: If a variety of products are made with relatively small volume of production it may not be possible to layout a separate line for each product. In such cases, batch production concept is adopted. When product is made in a certain quantity it is called as “Batch quantity”. After a while it is discontinued and another product is scheduled in a certain batch quantity. The various products compete for the share of machine. The machines are for general purposes. Material flow in such systems is more complex than in mass production systems.

3. Job production system: A job production does not have its own standard products but accept whatever customer order comes in. Thus it is essentially a group of facilities and processes that meets a wide variety of customer orders in varying batch sizes.4. Project production system: This type of production system generally adopted when there is a huge volume of one work, i.e., a ship production, a construction of a multistoried building or construction of a bridge etc. etc. Generally this system have definite beginning and definite end.

b) Planning and control are the two important components of the management process. Planning involves the consideration of all input variables to achieve defined output goals. Control involves the corrective actions taken when the actual output varies from the desired one by bringing the actual output in line with the planned input. Production planning, in particular, would therefore consist mainly of the evaluation and determination of production-inputs such as labour (manpower), machinery and equipment, materials, and utilities to achieve the desired goals. The definition of the goals is also, of course, a part of the production planning process.

We may break down the planning process into various stages as follows i) Defining objectives and setting priority to attain theseii) (a) Studying the environment external to the system being planned. (b) Studying the internal environment of the system being planned.iii) Determining realizable targets (quantified as far as possible).iv) Gearing the inputs to achieve these targets.

Production Control is the updating and revising procedure where, according to the requirements, the labour assignments, the machine assignments, the job priorities, the line speeds, the production routes, etc. may be revised. It is basically a correcting mechanism, which goes on throughout the implementation process of the already drawn up production plan and schedule.

In order to continuously monitor the progress of implementation, many control techniques such as Gantt Charts, Line of Balance, PERT/CPM, etc. may be used. Essentially these are bar charts, with the latter two showing some sequence relationship.Extraordinary revision of schedules would need an extra person to look after the changes and monitor and communicate decisions and information faster on the production line. Such a person, who is not uncommon in industries, is called an “expediter”.

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In order to control the production schedule as efficiently as possible, a procedure called Short Interval Scheduling is used in many western countries. This is nothing but scheduling production to a micro level, thereby exercising tight control over the minute deviations from the already drawn-up production schedule.

c) Function of production planning

2. Write short note on Collective Bargaining. [WBUT 2009]Answer:Good industrial relations are essential to achieve healthy productivity in the Organization. To achieve good industrial relation, it is essential that industrial disputes should be resolved quickly and amicably. One of the excellent methods of resolving industrial disputes is collective bargaining.Collective bargaining is a process in which representatives of employer and employees meet, discuss and attempt to negotiate an agreement that specifies the nature of future relationship between the employer and the employee.

Objective/Importance of Collective Bargaining1) It provides an effective democratic method for settlement of industrial disputes.2) It results in better understanding between employer and employees.3) It facilitates smooth implementation of the decision. 4) Collective bargaining slowly and steadily builds up atmosphere of faith and trust

between workers and employer.5) Elimination of industrial disputes leads to greater job satisfaction, higher productivity

and more wages.

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Engineering and maintenance

planningManpower planning

Marketing planning

Financial and investment planning

Production planning

Quality planning

Distributions planning

Materials and procurement planning


CONCEPTS OF PRODUCTION MANAGEMENT


1. The production which has definite beginning and definite end is known asa) Project Production b) Job Productionc) Batch Production d) Mass Production

Answer: (a) [WBUT 2009, 2011]

2. Productivity is the a) Output-Input Ratio b) Input-Output Ratioc) Both of these d) None of these [WBUT 2009]

Answer: (a)


1. Write short notes on the following:a) General OC curve on acceptance sampling C-7 [WBUT 2010]b) Mass production and flow production [WBUT 2010]Answer:a) The Operating Characteristic CurveIt is useful to have a simple picture that allows us to compare sampling plans as to how they will react to different lots with unknown, varying fraction defective. Such a comparison is provided by the operating characteristic curve (OCC) which displays the probability of accepting a lot with any fraction defective.

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1.0097%

84%

0.50

14%

1%0.0

0% 2% 5% 10% 15%

n = 35, c = 1

n = 150, c = 6

Incoming Fraction Detective (t)

Fig: II Operating Characteristics Curve

Pro

babi

lity

of A

ccep

ting

the

Sam

ple

(Pa)


Above figure II shows OCC for two single sampling plans. A and B with n = 35, c = 1 and n = 150, c = 6, respectively. For example, suppose that a lot with f = 10 per cent defectives is considered to be a bad lot and a lot with f = 2 per cent defectives is considered to be a good lot. From above figure, it is clear that sampling plan. A would stand a 14 per cent chance of accepting a bad lot. The same unfortunate error can occur with the sampling; plan B, with larger sample size also, but the probability of error is much smaller. In fact it is only 1 per cent. The sampling plan B is also better at not rejecting good lots (f = 2 per cent). Sampling plan A has 16 per cent chance of rejecting a good lot whereas sampling plan B has only 3 per cent chance of rejecting a good lot.It is not surprising that a larger sample does a better job of discriminating between good and bad lots. It has more information. However, the price for increased accuracy is higher inspection costs. The design of a sampling plan has to optimally trade off cost with discrimination.

The values of the ordinates of the Operating Characteristic Curve are determined from the Poisson Distribution.

Design of Single Sampling PlanYou have to design a sampling plan (n, c) that has an OCC that meets certain pre-specified requirements. Generally the design is based on the following criteria that are related to the probability of making either of the following errors; accepting a bad lot () and rejecting a good lot (). The criteria are established subjectively and ultimately should reflect the cost of accepting a bad lot or rejecting a good lot. Needless to say before and values can be specified, one has to decide what is a good lot and what is bad lot. Invariably this is done by specifying the lower/upper limits of fraction defective(f), as illustrated below:

AQL(Acceptable Quality Level) the fraction defective (f) that the user considers acceptable. Thus if a batch were known to have a fraction defective equal to AQL, it should not be rejected.

LTPD (Lot Tolerance Per cent Defective) the fraction defective that defines a bad lot or one that should be rejected of course, AQL must be less than LTPD

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Producers Risk () the largest allowable probability of rejecting a good lot (due to statistical error). Note that a good lot has fraction defective less than or equal to AQL (generally 5 per cent).

Consumers Risk () the largest allowable probability of accepting a bad lot (due to statistical error). Note that a bad lot as fraction defective greater than or equal to LTPD (generally 10 per cent).

b) Mass production and flow production:These systems have simplest flow characteristics constituting straight-line flow. Facilities are arranged according to sequence of operations where the output of one stage becomes input to the next stage. The whole system is cascaded.

Major production management problems in mass production system are – balancing of production/assembly lines, machine maintenance and raw materials supply. In a production line consisting of the series of production centres, if workload is unbalanced, then the most bottle-necked production stage will govern the whole output rate. This will result in increased throughput time and poor capacity utilization thus contributing to low productivity. Hence a production or assembly line should be designed such that its workload is as evenly balanced as possible. Maintenance becomes important because if any production stage is under breakdown it will block the whole line unless quickly restored back into operational effectiveness. Raw material to first stage is important to avoid shortage and subsequent starvation of the whole line.

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PRODUCT DEVELOPMENT


1. What is the concept that holds that consumer will prefer products that are widely available and inexpensive called? [WBUT 2010]

a) Production concept b) Product conceptc) Marketing concept d) Selling concept

Answer: (c)

2. If input increase while output remain constant, what will happen to productivity?a) It will increase b) It will decrease [WBUT 2010]c) It will remain same d) None of these

Answer: (b)

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MATERIAL MANAGEMENT


1. EOQ means [WBUT 2009]a) Excess Order Quantity b) Economic Order Quantityc) Exempted Order Quantity d) none of these

Answer: (b)

2. Mechanization of material handling increases [WBUT 2011]a) output cost b) handling costc) efficiency and economy in handling d) none of these

Answer: (c)


1. a) Define EOQ? State the importance of EOQ in inventory control.Answer: [WBUT 2009]1st part:Economic Order Quantity:The economic order quantity (EOW) refers to that order quantity within the range of possible order quantities, which minimizes total cost per annum. Total cost consists of two parts –

(1) Ordering Cost(2) Carrying Cost

Ordering Cost:Ordering Cost means total expenses incurred for placing order and includes the expenses incurred for following activities –

(a) Preparation of Purchase Order,(b) Cost of receiving Goods,(c) Documentation(d) Processing Cost,(e) Transport Cost(f) Intermittent Costs of Chasing Orders, rejection of faulty goods(g) Additional Costs of frequent or small quantity orders.

Carrying Cost:IMEI-26


Carrying Cost includes the followings. (1) Storage Cost (Rent, Lighting, Heating, refrigeration, air conditioning etc.)(2) Stores staffing, equipment maintenance and running costs(3) Material handling Cost(4) Stock Audit, Stock taking or perpetual inventory cost(5) Obsolescence and Security Costs(6) Costs of money tied up in inventory(7) Pilferage and damage cost

Ordering cost is independent of the quantity of orders, while carrying cost increases with the increase in the quantity ordered. Thus, ordering cost decreases as the size of the purchase increases (because in that case the number of purchase decreases), but the carrying cost increases with the increase in the size of purchase. It is, therefore, necessary to find a balance between ordering costs and carrying costs in order to find the most favorable quantity.

Graphical Representation of EOQ:

EOQ Determination:

2ABEOQ

CS

EOQ :- Economic order quantityA :- Annual ConsumptionB :- Buying Cost per orderC :- Cost per UnitS :- Carrying Cost

2nd part:Following are the importance in case of Economic Order Quantity:1. To stabilized production 2. To take advantage of price discount3. To meet the demand during the replenishment period4. To prevent loss of orders5. Minimized blockage of capital in inventory

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COST

EOQCOST

EOQ (Units) ORDER QUANTITYO

ORDERING COST

TOTAL COST

CARRYING COST


b) A particular item has demand of 15,000 units per year. The cost of one procurement is Rs. 200 and the holding cost per unit is Rs. 1.50 per year. Determinei) the Economic Order Quantityii) the number of orders during the orderiii) the gap between two ordersiv) the total cost per year if the cost of one unit is Rs. 75. [WBUT 2009]Answer: Annual Demand (D) = 15,000 unitsCost of Procurement (Co) = Rs. 200/Holding cost (Cn) = Rs. 1.50 per years.

i)

02 2 15000 200EOQ 2000

1.50Q n

DC

C

ii) N*( optimal no. of orders placed per annum)=15,000

7.52000

D

Q

No. of orders placed must be a whole number, so it should be 8.

iii) Optimal time interval between two orders (t*)

= No of months in a year

N

12

1.5 months8

Two consecutive orders has been placed between 1.5 months or 45 days interval.

iv) Minimum total yearly inventory cost = 02 nDC C

Total Cost = Cost of Purchasing + 02 nDC C

= 02p nD C DC C p

D = Annual Demand

C = Cost of unit

= 15,000 75 2 15000 200 1.50 = 11,25,000 + 3000 = Rs. 11,28,000/- only

2. a) Discuss briefly the concept of ABC analysis in material Management. C-13 [WBUT 2010]

Answer: ‘ABC’ Analysis is a basic tool, which helps the management to place their efforts where the results would be useful to the greatest possible extent. The first important step in inventory management is to have a selective approach to fix-up inventory levels, order

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quantities, and the extent to which the control can be exercised. The selective approach mainly depends on the annual consumption of various items. For example, the items like nuts and bolts (though being equally important) cost less than the items like engines. But we cannot safely stock the items like engines because of their heavy cost, while the items like nut-bolts can be easily stocked. Thus, less control is required for stocking the items like nut-bolts etc. But, more emphasis should be given to control the stocking of big items like engines. The investment of such items is substantial, and record keeping is expensive. ABC (Always Better Control) analysis is a very effective tool for such selective control. This technique involves the classification of inventory items into three categories A, B and C in descending order of annual consumption and annual monetary value of each item. Based on ABC analysis, an average pattern of percentages of items and percentages of their annual consumption value may be planned as below:

Category Percentage of items (%) Percentage of Annual Usage (%)A 10 80B 20 15C 0 5

In practice it is experienced that bulks of items in an inventory have low usage value. Annual usage value = (annual requirement) per unit cost.

Thus for better and more economic control of items in inventory, the items should be classified according to their significance or priority for recording. So for effective inventory control a decision has to be made that – which items are little things and which need more careful control. The items of an inventory can be classified according to the following characteristics. (i) Items, which are functionally critical to the operations, no matter how

little they cost. (ii) Items those are important because their usage value is very high.(iii) Items having average usage value.(iv) Items, which have, low usage value. The ‘ABC’ analysis is based on Pareto’s Law that – a few high usage value items constitute a major part of the capital invested in inventories, where as bulk of items in inventory having low usage value constitute insignificant part of the capital. This concept is based upon selective control. If there are large numbers of items to be analyzed, then sampling technique may be used for ABC analysis. In ABC analysis, the items are classified in three main categories based on their respective usage value:

(i) Category ‘A’ items. More costly and valuable items are classified as ‘A’. Such items have large investment but not much a number, e.g., say 10% of items account for 75% of total capital invested in inventory. So, more careful and closer control is needed for such items.

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The items of this category should be ordered frequently but in small number. A periodic review policy should be followed to minimize the shortage percentage of such items and top inventory staff should control these items. These items have high carrying cost and frequent orders of smaller size for these items can result in enormous savings.

(ii) Category ‘B’ items. The items having average consumption value are classified as ‘B’. Nearly 15% of the items in an inventory account for 15% for the total investment. These items have less importance than ‘A’ class items, but are much costly to pay more attention on their use. These items cannot be overlooked and required lesser degree of control than those in category ‘A’. Statistical sampling is generally useful to control them.

(iii) Category ‘C’ items. The items having low consumption value are put in category ‘C’. Nearly 75% of inventory items account only for 10% of the total invested capital. Such items can be stoked at an operative place where people can help themselves with any requisition formality. These items can be charged to an over head account. In fact, loose control of ‘C’ items increase their investment cost and expenditure on shelf-wear, obsolescence and wasteful use, but this will not be so much offset for the saving in recording costs.

b) ABC Co. wants to buy a product. The price discount is as follows: [WBUT 2010]Quantity Unit Price (Rs.)Less then 500 12500 but less then 1600 11.801600 but less then 4000 11.60

Annual demand for the material is 8000 kg, ordering cost per order is Rs. 12 and stock holding cost is 20% of the cost of material per annum. You are required to compute the best ordering quantity and total annual inventory capital.Answer: Annual Demand (D) = 8000 kg; Ordering cost per order (Co) = Rs. 12/-Inventory carrying cost (I) = 0.20, Unit price (Cp)EOQ at these three prices are given below:

Price (Rs.) Range of price quantity (Q)

EOQ Quantity to be purchased

Rs. 12 283

IMEI-30


Rs. 11.80 500

Rs. 11.60 1600

Case I Cost of unit = Rs. 12/-, Order Quantity (Q) = 283

Total cost of Inventory = (Annual cost of material) + (Annual Order Cost)+ (Annual Inventory carrying cost)

/-

Case II Cost of unit = Rs. 11.80/- Order Quantity (Q) = 800

Total cost of Inventory

= Rs. 94,400/- + Rs. 192/- + Rs. 590/- = Rs. 95, 182/-

Case III Cost of unit = Rs. 11.60/- Order Quantity (Q) = 1600

Total cost of Inventory

= Rs. 91,200 + Rs. 60/- + Rs. 1856/-= Rs. 93,116/-

Considering the above three cases, strategically we can say that the Case III situation is the best alternative, as this strategy can save (Rs. 96,678.82 – Rs. 93,116) = Rs. 3568.82 over Case I and it can save (Rs. 95,182 – Rs. 93,111)= Rs. 2,066/- over Case I.Best ordering Quantity = 1600 kg per order; total annual inventory capital, Rs. 93,116/-

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3. a) A company uses 2000 units per annum of special studs in the manufacture of its products. The studs are procured from a local manufacturer at a basic price of Rs. 10 each. The procurement cost per order is Rs. 20 and inventory carrying cost is 20%. The suppliers following discount on the basic price for order quantities of

Order Quantity Discount400 – 799 2%800 – 1599 4%1600 and above 6%

What quantity should be ordered to optimize cost? [WBUT 2011]Answer: Annual Demand (D) = 2000 unitsUnit price (Cp) = Rs. 10/-Procurement cost (C0) = Rs. 20/-Inventory carrying Cost (I) = 0.20

Economic Order Quantity

Quoted prices for quantities are shown below:Price Value Range of purchase

quantityQuantity to be purchased

Cp(I) Rs. 10×0.98=9.8 400 Q < 799 400Cp(II) Rs. 10×0.96=9.6 800 Q < 1599 800Cp(III) Rs. 10×0.94=9.4 1600 Q 1600

Case I:Considering Economic Order Quantity (Q*) = 200 units.Annual Total Cost (arc)

= [Purchase cost] + [Ordering cost] + [Inventory cost]

Case II:Considering Order Quantity (when discount rate 2%)

= 400 units; unit cost = Rs. 9.8/-

Arc

Case III:Considering Order Quantity (when discount rate 4%) = 800 units; Unit cost = Rs. 9.6/-

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Arc

Case IV:Considering Order Quantity (when discount rate 6%) = 1600 units; Unit cost = Rs. 9.4/-

Arc

Based on above four Annual total cost calculation, we can conclude that the company should place the order 800 at a time that will optimize the cost at the maximum level. b) What are the two costs associated with inventory management? [WBUT 2011]Answer: Following are the cost associated with inventory.1. Purchased cost (cost of the goods purchase)2. Capital cost (money invested in purchase)3. Ordering cost (expenses incurred for placing order)

4. Write short note on a) VED Analysis [WBUT 2010, 2011]b) FSN analysis [WBUT 2010]Answer: a) VED Analysis VED analysis represents classification of items bases on their criticality. The analysis classifies the items into three groups called vital, essential and desirable.“Vital” Category encompasses those items for want of which production would come to halt. “Essential” group includes items whose stock outs-cost is very high. And “Desirable “group comprises of items which do not cause any immediate loss of production or their stock-out cost is nominal. VED (Vital – Essential – Desirable) analysis is carried out to identify critical items. An item which usage wise belongs to C – category may be critical from production point of view if its stock-out can cause heavy production loss.An item may be vital for a number of reasons, namely If the non-availability of the item can cause serious production losses. Lead time for procurement is very large It is non-standard item and is procured to buyer’s design. The sources of supply is only one and is located far off from the buyer’s plant.Steps involved in making VED analysis are as under:

IMEI-33


(i) Identify the factors to be considered for VED analysis. The commonly considered factors are: effect on production (i.e. stock out cost in the event of its non – availability), lead time, nature of the item and sources of supply.

(ii) Assign points / weightages to the factors according to their importance to the company. Typical examples of the weightages to the above four factors may be 30, 30, 20 and 20 points.

(iii) Divide each factor into three degrees and allocate points to each degree. Usually, the first degree is assigned points equal to the weightages of its factor; second degree is allocated points equal to twice the weightage of the factor and third degree is assigned points equal to thrice the weight age of the factor.

(iv) Prepare categorization plan (Table A) which provides the basis of classification of items into vital essential and desirable categories.

(v) Evaluate items one by one against each factor and assign points to the item depending upon the extent of presence of the factor in the item.

(vi) Place the items into V, E and D categories depending upon the points scored by them (Table B) and basis of classification set under step (iv).

Table A: Typical VED analysis categorization plan.Factor First Degree Second

DegreeThird degree

1 Stock out costIn the event of non availability (30)

Above Rs. X (30)

Between Rs. x to y (60)

Above Rs. y (90)

2 Lead time forProcurement (30)

1-4 Weeks (30) 4-8 weeks (60) Over 8 weeks (90)

3 Nature of the item(20)

Produced to CommercialStandard, or off the shelfavailability (20)

Produced toSuppliers’ design (40)

Produced to buyer’s design or proprietary items (60)

4 Sources of supply (20)

Local (20) Outstation (40)

Imported, Quota items i.e. controlled supply (60)

Table B: Typical categorization planPoints Classification

100-160161-230231-300

DesirableEssential

VitalVED analysis is best suited for spares inventory. In fact, it in advantageous to use more than one method e.g. ABC and VED analysis together would be helpful for inventory control of spares.

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b) FSN AnalysisFSN analysis is based on the consumption figures of the items. The items under this analysis are classified into three groups: F (fast moving), S (low moving) and N (non moving)To conduct the analysis, the last date of receipt or the last date of issue whichever is later is taken into account and the period, usually in terms of number of months that has elapsed since the last movement is recorded.

Such an analysis helps to identify:i) active items which require to be reviewed regularly.ii) surplus items whose stocks are higher than their rate of consumption; andiii) non moving items which are not being consumed. The last two categories are

reviewed further to decide on disposal action to deplete their stocks and thereby release company’s productive capital.

Further detailed analysis is made of the third category in regards to third year wise stocks and items can be sub-classified as non-moving for 2 years, non-moving for 3 years, non-moving for 5 years and so on.

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QUALITY MANAGEMENT


1. Which of the following is a principle of Total Quality Management? [WBUT 2009]a) Customer satisfaction b) Continuous improvementc) Both (a) & (b) d) None of these

Answer: (c)


1. a) State the meaning and objectives of control charts. [WBUT 2009]Answer: A fundamental aim of process control is to evolve system of differentiating between the variations due to chance causes and those due to assignable causes so that the latter can be identified and removed thereby improving the quality of the product. The basics tool used for this purpose is called control chart. A control chart is a visual display of the inspection results of the samples of a product. It incorporates carefully derived statistical limits, which help to discriminate between random variability and assignable variability.A control chart consists of three lines a central line, upper control limit and lower control. To construct the chart, time variable is taken along the abscissa (x-axis) and the quality characteristic of the product is taken along the ordinate (y-axis). The control parameters-central line, upper control limit and lower control limit-are drawn by horizontal lines. The central line denotes the mean value of the quality characteristic. The upper control limit is located at 3 standard deviation above the central line and the lower control limit is located at 3 standard deviations below the central line.

Samples of fixed size are taken at specified intervals of time. Each sample is inspected for the given quality characteristic. The values of the samples are plotted on the graph according to the time variable. The trend of the points in the chart is studied to know the state of the process. So long the sample points lie within the control limits, the process is said to be under control. The variations that are observed are due to chance causes and are not serious. The falling of the points outside the control limits indicates the deterioration in quality and hence the presence of assignable cause. Such causes are identified and corrected.

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Sometimes the sample points within control limits exhibit certain patterns-a continuous upward or downward trend, cyclical pattern, hugging pattern etc. Even though the points are within limits, it indicates the presence of assignable causes and hence the need to take a corrective action.

b) From the following information draw a P-Chart. Size of five samples is 100.Sample Number: 1 2 3 4 5

No. of Defectives: 4 0 5 2 3

[WBUT 2009]Answer:

Sample No. Sample Size No of Defectives Fraction Defectives1 100 4 0.042 100 0 03 100 5 0.054 100 2 0.025 100 3 0.03

0.14

Average Fraction Defectives =

i) Central line

ii) Upper control line

=

= 0.028+3×0.0165 = 0.028+0.0495 =0.078

iii) Lower Control line

=

= 0.028-0.0495IMEI-37


= – 0.0215=0

(Since the negative control is always as zero).

2. a) Define TQM. [WBUT 2010]b) Write down the essential elements of TQM.c) Explain the benefits of TQM. Answer: a) TQM is to improve efficiency and effectiveness of the organization that enables defect prevention leading to maximization of customer satisfaction by developing right attitude and control. TQM is an organizational activity and it must reach every employee of the organization. TQM is a way to improve quality of products and services continuously and it therefore includes every level and every activity of the organization. Since TQM stands for Total Quality management, it includes –1) all area and function i.e. marketing, production, sales, Engineering, planning, administration, accounts or anyother.

2) All activities namely order booking, costing, designing, B.O.M. preparation, planning, indenting, sourcing, ordering, storing, issuing, handling, assembly, testing, inspection, packing, dispatching, invoicing, transporting etc.

3) All employees, be they owners, directors, manager, supervisors, workers, vendors, sub-contractors, service providers of customers.

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Fra

ctio

n D

efec

tive

0 1 2 3 4 5LCL

CL

UCL

Sample no.

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10


4) Always (i.e. at all times) that is month after month, every day of the month, every hour of the day and every minute of the hour.5) All places, be it factory, office, branch or anyother premises of the firm.

b) Following are the essential elements of TQM.1. Quality Inspection: Salvaging, sorting. Investigating, corrective actions, identifying sources of non-conformance and dealing with them.2. Quality Planning: Developing quality manuals, producing process performance data, planning for quality.3. Quality Management: Statistical process control, third party approval, quality system audit, use of quality costs, involvement of functions in direct to production process.4. Total Quality Management (TQM): Continuous improvement system perspective involves all operations and at all levels (company wise), undertakes performance measurement; focus on leadership, teamwork and participation of every one, employee empowerment.

c) Benefits of TQM TQM can result in the following improvements: 1) Greater customer satisfaction.2) Lower cost of manufacturing.3) Lower inventory investment.4) Reduction in product development time.5) Shorter throughput time.6) Lesser cost of procurement.7) Lower cost of inspection.

3. a) State the advantages of SQC over mass inspection. [WBUT 2010]Answer: Statistical Quality Control underlines a basic philosophy that “prevention is better than cure” and a “stitch in time saves nine”. SQC prevents the occurrence of defectives by exercising control over the process rather than inspecting goods for conformance after they have been produced. The most common device used for this purpose is Shewhart control chart introduced in the year 1931. A control chart is a visual display of statistically significant changes that may occur in a process. The chart evaluates whether the process is in the state of statistical control or not. If it is the fluctuations are due to random variability and if it is not, they are due to assignable variability.

b) The following are the quantity of a finished product from 5 samples of a shampoo manufacturing company. The specification limit for a bottle is 60 ± 1 ml. Construct and R chart and examine whether the process is under control or not. [WBUT 2010]

For this sample size

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Sample No QuantityX1 X2 X3 X4

1 60.6 62 60.4 612 61 59.5 59.8 60.53 60.3 59 59.5 604 60.3 60.5 61 59.45 61.2 64 62 60

Answer: Step I Average of each sample

The Range (R) is obtained as the difference between the highest and lowest measurement of a sample.

Sample No. Arithmetic Mean Range

1 61 1.6

2 60.2 1.5

3 59.7 1.3

4 60.3 1.6

5 61.8 4

Step II Calculate Grand average and the mean average

Grand average is the average of the averages

average of sample ranges

Step III Setup control chart for the average .

Central line

Upper Control Limit

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Lower Control Limit

Since all the points are within the control limit, so the process is under control.

Step IV Setup a Range ChartR chart

Central line

Upper control limit

Lower control limit

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59

59.5

60

60.5

61

61.5

62

1 2 3 4 5

UCLx

CLx

LCLx

Mea

sure

men

t

Sample No.

Mea

sure

men

t

1

2

3

4

4.55

1 2 3 4 5

Sample No.

RUCL

RLCL

RCL


The values of R for the test data have been plotted into the chart. Since all the points are within the control limits, hence variability is within the limits.

4. From the following data observed during inspection of dimensions of an item.Determine: [WBUT 2011]a) Mean/average dimensionb) Upper control limitc) Lower control limitd) Plot the dimensions to see whether the process is under control or not:

Data: 1.65, 1.70, 2.00, 1.65, 2.50, 2.25, 1.70, 1.60, 1.50 2.00, 1.70, 2.25, 2.50, 1.50, 2.25, 1.60, 1.65, 1.60

Answer:

a) Central line

= 1.86

b) Upper Control limit

c) Lower Control limit

[Negative value cannot be considered, it should be taken as zero]

d)

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

1.0

2.0

3.0

4.0

5.0

6.0

Sample No.

CUCL

CCL

CLCL

Num

ber

of d

efec

ts


The inspected data is plotted in the graph that indicates that all the measured data are within the specified limit, so we conclude that the process is under control.

4. Write short notes on the following: a) Quality circle [WBUT 2009]b) Random and assignable causes [WBUT 2010]c) Statistical Quality control [WBUT 2010]Answer: a) Quality circle:Quality circle is basically a small group of employees who volunteer to meet regularly to undertake work of related project such as quality, productivity, safety, efficiency, cost, working conditions etc. and develop recommendations to improve effectiveness in the selected functional area.The size of the quality circle is very important. Too big size (too many members) may not provide enough time to each member to effectively participate and two small sizes (few members) may make a circle dormant. An idle size of the circle is seven to ten members but in any case it should not exceed fifteen members.More than one circle may be form if too many employees in a particular work area are willing to participate in the quality circle activities. If there are twenty five clerks in the organization doing identical jobs, 2 – 3 circles may be formed.

b) Random and assignable causes:One of the powerful statistical techniques of quality control is Acceptance Sampling. This technique is generally used in those situations where items are inspected in batches, generally known as lots. For example, you may receive a shipment of 10,000 electric bulbs and you may have to decide whether to accept the shipment or return it back to the supplier. The acceptability will depend on the acceptable quality of the lot. Suppose you decide to accept if the average fraction defective is less than 5 per cent. Then to ascertain the actual quality you may decide to inspect each and every bulb. Such a strategy of 100 per cent inspection, however, may often be expensive and impractical. In such cases a more intelligent way is to use the concept of Sampling Inspection.

The idea of sampling inspection is to inspect only a small portion of the lot and infer the quality of the lot, based on the quality of the sample. Acceptance is based on the inference made from the sample and hence the technique is known as Acceptance

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Sampling. Typically a lot is specified by its size (N) and the fraction (f) of defectives that are expected to be present (at the most) in the lot. The principles of statistics are used in the inference process.

Interestingly the concept of acceptance sampling is no different from the strategy adopted by a typical housewife who decided whether or not a pot-full of rice is cooked by inspecting just a spoonful of grains.Two things must be kept in mind. In order that sampling inspection might work, the sample must be representative of the lot. Typically this is ensured by choosing the sample at random so that every portion of the lot has equal representation in the sample. Such a sampling is known as Random Sampling. Secondly, a sample is only representative and not identical (in characteristic) with the lot. In the inference process, therefore a few good lots will be rejected and a few bad lots will be accepted. We can control such sampling errors, but they cannot be eliminated. In fact in the design of sampling plans we will ensure that the errors are kept below certain acceptable levels.

c) Statistical Quality control:Statistical Quality Control underlines a basic philosophy that prevention is better than cure and a stitch in time saves nine. SQC prevents the occurrence of defectives by exercising control over the process rather than inspecting goods for conformance after they have been produced. The most common device used for this purpose is Shewhart Control Chart introduce in the year 1931. A control chart is a visual display of statistically significant changes that may occur in a process. The chart evaluates whether the process is in the state of statistical control or not. If it is, the fluctuations are due to random variability and if it is not they are due to assignable variability.

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FINANCIAL MANAGEMENT


1. Margin of Safety is the [WBUT 2009]a) Excess Actual Sales over Break-even Salesb) Excess Break-even Sales over Actual Salesc) Excess Actual Sales over Targeted salesd) None of these

Answer: (a)

2. Contribution is the difference between [WBUT 2009, 2011]a) Sales and Fixed costb) Sales and Variables costc) Sales and Cost of goods soldd) None of these

Answer: (b)

3. Financial management deals with [WBUT 2009]a) satisfying the needs of customer b) training and development of employees c) procurement and utilization of found d) designing user-friendly products

Answer: (c)

4. Positive working capital is the excess of [WBUT 2011]a) current liability over current assetsb) current assets over current liabilitiesc) current assets over fixed assetsd) none of these

Answer: (b)


1. What is the margin of safety? How can it be improved? [WBUT 2011]Answer:

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Margin of SafetyThe excess of actual sales over break-even sales is known as margin of safety. It represent the amount by which sales revenue call fall before a loss is incurred. At BEP there is no profit no loss, sales beyond BEP represents margin of safety because any sales above the BEP will give some profit.

Margin of Safety = Total sales – BEP Sales.

M.S. Ratio = .

100M S

S

Margin of Safety = P

P/P Ratio

Margin of safety can be improved by taking the following steps a) By increasing level of production,b) By increasing selling price,c) By reducing Fixed/Variable cost.d) By increasing contribution by charting the sales mix or by dropping un-profitable

products.

2. State the concept of Break-Even Analysis. Give example. [WBUT 2011]Answer:Break-Even Analysis indicates the estimated profit or loss at various levels of output. The break-even point as indicated in the following graph is that point at which total cost line and total sales lines intersect each other.ExampleDetermine graphically (a) Break even point (b) Profit if the output is 25,000 units.

Out Put(units)

VariableCost Per Unit Rs.

TotalVariable Cost Rs.

FixedCost Rs

Total Cost Rs.

Selling Price Per Unit Rs.

Total Sales Rs.

0 5,00010,00015,00020,00025,00030,000

5 5 5 5 5 5 5

0 25,000 50,000 75,0001,00,0001,25,0001,50,000

75,00075,00075,00075,00075,00075,00075,000

75,0001,00,0001,25,0001,50,0001,75,0002,00,0002,25,000

10 10 10 10 10 10 10

0 50,0001,00,0001,50,0002,00,0002,50,0003,00,000

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250

300

200

150

100

75 50

0 5000 10000 15000 20000 25000 30000

Output (Units)

FIXED COST LINE Fixed Express

Variable Express

Profit Area

X

Y

Loss AreaTOTAL COST LINE

Break-even point

Angle of incidence Profit

Margin of safest

CO

ST

/ R

EV

EN

UE


Assumption of Break Even Analysis1. All cost can be segregated between fixed and variable.2. Variable cost per unit remains fix throughout the year.3. Fixed cost remains fix throughout the year.4. Selling price per unit remain unchanged all level of activity.5. There is no opening or closing stock.6. There will be no change in operating efficiency.7. The volume of output or production is the only factors, which influence

the cost.


1. a) What is Cost Volume Profit Analysis? [WBUT 2009]Answer: Cost volume profit analysis is a technique for studying the relationship between COST, Volume and Profit. Profit of an undertaking depend upon a large number of factors. But the most important of these factors are the COST of manufacturer, volume of sales and selling prices of the product. The CVP relationship is an important tools used for profit planning of a business.Cost volume profit analysis can be used to answer the following quarries –1) How much sales should be made to avoid losses?2) How much should be the sales to earn desired profit?3) What will be the effect of change in prices, costs and volume on profits?4) Which product or product mix is most profitable?5) Which product should manufacture or buy?

b) State the assumption of Break-even Analysis. [WBUT 2009]Answer: Assumption of Break Even Analysis8. All cost can be segregated between fixed and variable.9. Variable cost per unit remains fix throughout the year.10. Fixed cost remains fix throughout the year.11. Selling price per unit remain unchanged all level of activity.12. There is no opening or closing stock.13. There will be no change in operating efficiency.The volume of output or production is the only factors, which influence the cost.

c) From the following information calculate:

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i) Profit Volume Ratio.ii) Break even point sales.iii) Sales-required to earn profit of Rs. 75,000.iv) Profit when sales are Rs. 5,00,000.

Year Sales Profit

2007 Rs. 1,50,000 Rs. 30,000

2008 Rs. 2,00,000 Rs. 50,000

Fixed cost, variable cost and selling price during the years 2007 and 2008 remain constant. [WBUT 2009]Answer:

i) P/V- Ratio = Increase in Profit

×100Increase in sales

= 20,000

10050,000

= 40%

ii) B.E.P Sales:Contribution 2007 = 1,50,000 × 40% = 60,000Fixed Cost = 60,000 – 30,000 = 30,000

B.E.P Sales = F

P/V Ratio

= 30,000

40% = 75,000

iii) Sales required to earn a Profit Rs. 75,000/

Required Sales = F+P

P/V Ratio

= 30,000 75,000

40%

= 1,05,000

40% = 2,62,500/

iv) Profit When Sales Rs. 5,00,000/P = S×P/V Ratio-F = 5,00,000 × 40% – F = 2,00,000 – 30,000

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= 1,70,000

MARKETING MANAGEMENT


1. Which one is not the element of marketing mix? [WBUT 2009]a) Product b) Price c) Place d) Packing

Answer: (d)


1. How do you discuss BCG Matrix? [WBUT 2009]Answer: Large companies normally manage quite different Business, each requiring its own strategy. General Electric classified its business into 49 strategic business units (SBUS). An SBU has three characteristics 1. It is a single business or collection of related businesses that can be planned

separately from the rest of the company.2. It has own set of competitors.3. It has a manager who is responsible for strategic planning and profit performance

and who controls most of the factors affecting profit.

The purpose of identifying the Company’s strategic business unit is to develop separate strategies and assign appropriate funding. One of the best known business portfolio evaluation models is the “Boston Consulting Group Model”.

The Boston Consulting Group ApproachThe Boston Consulting Group (BCG), a leading management consulting firm, developed and popularized the “growth phase matrix”.(Fig. below). The eight circles represent the current sizes and positions of eight business units in a hypothetical company. The dollar-volume size of each business is proportional to the circle’s area.The location of each business unit indicates its market growth rate and relative market share.

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The market growth rate on the vertical axis indicates the annual growth of the market in which the business operates. In figure, it ranges from 0 percent to 20 percent. A market growth rate above 10 percent is considered high.

Relative market share, which is measured on the horizontal axis, refers to the SBU’s market share relative to that of its largest competitor in the segment. It serves as a Measure of the company’s strength in the relative market segment.The growth share matrix is divided into four cells, each indicating a different type of business:

1. Question Mark Question marks are businesses that operate in high growth markets but have low relative market shares. Most businesses start off as question marks as the company tries to enter a high growth market in which there is already a market leader. A question mark requires a lot of cash because the company has to spend money on plant, equipment and personnel, to keep up; with the fast growing market, because it wants to overtake the leader. The term question mark is appropriate because the company has to think hard about whether to keep pouring money into this business.

2. StarsIf the question mark business is successful, it becomes a star. A star is the market leader in a high-growth market. A company must spend substantial funds to keep; up with the high market growth and fight off competitors’ attack. In Fig. 1, the company has two stars. The company would be justifiably concerned if it had no stars.

3. Cash Cows

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Stars Question Marks

Cash Cow Dogs

3 1

2

4

5

7

8

6

10%

20%

10x 1x 0.1x

Relative Market Share

Mar

ket G

row

th R

ate


When a market’s annual growth rate falls to less than 10 per cent, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company. The company does not have to finance capacity expansion because the growth rate has slowed down. Because the business is the market leader, it enjoys economies of scale and higher profit margin. The company in Fig. 3, has only one cash cow and is therefore highly vulnerable. If this cash cow starts losing relative market share, the company will have to pump money back into it to maintain market leadership.

4. DogsDogs are businesses that have weak market shares in low growth markets. They typically generate low profits or losses. The company in fig. 1 holds two dogs, and this may be two too many. The company should consider whether it is holding on to these business for good reasons (such as an expected turnaround in the market growth rate or a new chance at market leadership) or for sentimental reasons.

The company’s next task is to determine what objective, strategy and budget to assign to each SBU. Four strategies can be pursued

1. Build Here the objective is to increase market share, even forgoing short-term earnings to achieve this objective if necessary. Building is appropriate for question marks whose market shares must grow if they are to become stars.

2. HoldHere the objective is to preserve market share. The strategy is appropriate for strong cash cows if they are to continue yielding a large positive cash flow.

3. Harvest Here the objective is to increase short-term cash flow regardless of long-term effect. Harvesting involves a decision to withdraw from a business by; implementing a program of continuous cost retrenchment. This strategy is appropriate for weak cash cows whose future is dim and from which more cash flow is needed.

4. Divest Here the objective is to sell or liquidate the business because resources can be better used elsewhere. This strategy is appropriate for dogs and question marks that are acting as a drag on the company’s profit.

2. Mention the basic element of marketing mix. [WBUT 2010]Answer: Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.

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The marketing tools can be broadly classified into four groups which is known as 4 P’s of marketing. i.e., product, price, place and promotion.

Product includes the following:i) Product varietyii) Product qualityiii) Product designiv) Product featurev) Product brand namevi) Product packingvii) Product sizesviii) Product servicesix) Product warrantiesx) Product return

Price includes:i) List priceii) Discountiii) Allowancesiv) Payment termsv) Credit termsvi) Others

Promotions includes:i) Sales promotionii) Advertisingiii) Public relationiv) Direct marketing

Place includes:i) Channelsii) Coverageiii) Locationiv) Inventoryv) Transportation

3. Write short notes on:a) SWOT Analysis [WBUT 2009]b) BCG matrix [WBUT 2010, 2011]Answer:a) SWOT Analysis:The overall evaluation of a company’s strengths, weakness, opportunities and threats is called SWOT analysis.

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External Environment Analysis (Opportunity and Threat analysis)In general, a business unit has to monitor key macro environment for us (demographic, economic, technological, political – legal and social cultural) and significant micro environment actors (customers, competitors, distributors, suppliers) that affect its ability to earn profits. The business unit should set up a marketing intelligence system to track trends and important developments. For each trend or development, management needs to identify the associated opportunities and threats.

A marketing opportunity is an area of buyer need in which a company can perform profitably. Opportunities can be classified according to their attractiveness and their success probability. The company’s success probability depends on whether its business strengths not only match the key success requirements for operating in the target market but also exceed those of its competitors. Mere competence does not constitute a competitive advantage. The best performing company will be the one that can generate the greatest customary value and sustain it over time.

An environmental threat is a challenge posed by an unfavorable trend, or development that lead, in the absence of defensive marketing action, to deterioration in sales or profit. Threats should be classified according to seriousness and probability of occurrence.One management has identified the major threats and opportunities facing a specific business unit, it can characterize that business’s overall attractiveness. Four outcomes are possible. An ideal business is high major opportunities and low in major threats. A speculative business is high in both major opportunities and threats A mature business is low in major opportunities and low in threats. A troubled business is low in opportunities and high in threats.

Internal Environment Analysis (strengths/Weaknesses analysis)It is one thing to discern attractive opportunities and another to have the competencies to succeed in these opportunities. Each business needs to evaluate its internal strengths and weaknesses periodically. It can do so by using a form like the one shown in the marketing menu “checklist for performing strengths / weaknesses analysis”. Management or an outside consultant – review marketing, financial, manufacturing and organizational competencies and rates each factor as a major strength, minor strength neutral factor, minor weakness or major weakness.

Clearly, the business does not have to correct all its weaknesses, nor should it go about all its strengths. The big question is whether the business should limited itself to those opportunities where it possesses the required strengths or should consider better opportunities where it might have to acquire or develop certain strengths.

George stalk, a leading BCG consultant, suggests that winning companies are those that have achieved superior in – company capabilities, not just core competences. Every company must manage some basic processes, such as new – product development, sales

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generation and other fulfillment. Each process creates value and requires interdepartmental team work. Although each department may possess specific core competences, the challenge is to develop superior competitive capability in managing the company’s key processes. George Stalk calls this capabilities based competition.

b) BCG matrix:Large companies normally manage quite different Business, each requiring its own strategy. General Electric classified its business into 49 strategic business units (SBUS). An SBU has three characteristics.1) It is a single business or collection of related businesses that can be planned

separately from the rest of the company.2) It has own set of competitors.3) It has a manager who is responsible for strategic planning and profit performance and

who controls most of the factors affecting profit.The purpose of identifying the Company’s Strategic business unit is to develop separate strategies and assign appropriate funding. One of the best known business portfolio evaluation models is the “Boston Consulting Group Model”.

The Boston Consulting Group ApproachThe Boston Consulting Group (BCG), leading management consulting firm, developed and popularized the “growth phase matrix” figure below. The eight business units in a hypothetical company.

Mar

ket G

row

th R

ate

20%Stars Question

Mark

10%Cash Cow Dogs

10x 1x 0.1x Relative Market Share

The dollar-volume size of each business is proportional to the circle’s area. The location of each business unit indicates its market growth rate and relative market share.

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5

43

2

1

6

7

8


The market growth rate on the growth of the market in which the business operates. In the above figure it ranges from 0 percent to 20 percent. A market growth rate above 10 percent is considered high.

Relative market share, which is measured on the horizontal axis, refers to the SBU’s market share relative to that of its largest competitor in the segment. It serves as a Measure of the company’s strength in the relative market segment.The growth share matrix is divided into four cells, each indicating a different type of business:

1. Question MarkQuestion marks are businesses the operate in high growth markets but have low relative market shares. Most businesses start off as question marks as the company tries to enter a high growth market in which there is already a market leader. A question mark requires a lot of cash because the company has to spend money on plant, equipment and personnel, to keep up; with the fast growing market, because it wants to overtake the leader. The term question mark is appropriate because the company has to think hard about whether to keep pouring money into this business.

2. StarsIf the question mark business is successful, it becomes a star. A star is the market leader in a high-growth market. A Company must spend substantial funds to keep; with the high market growth and fight off competitors attack. In Fig. 1, the company has two stars. The company would be justifiably concerned if it had no stars.

3. Cash Cows When a market’s annual growth rate falls to less than 10 percent, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company. The Company does not have to finance capacity expansion because the growth rate has slowed down. Because the business is the market leader, it enjoys economies of scale and higher profit margin. The company in the above figure has only one cash cow and is therefore highly vulnerable. If this cash cow starts losing relative market share, the company will have to pump money back into it to maintain market leadership.

4. Dogs Dogs are business that has weak market shares in low growth markets. They typically generate low profits or losses. The company in fig. 1 holds two dogs, and this may be too many. The company should consider whether it is holding on to these business for good reasons (such as an expected turnaround in the market growth rate or a new chance at market leadership) or for sentimental reasons.The company’s next task is to determine what objective, strategy and budget to assign to each SBU for strategies to be pursued.

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WORK STUDY


1. Job satisfaction refers to [WBUT 2009]a) attitude of an employee towards his workb) work culturec) relationship between superiors and subordinatesd) appraisal of the performance of employees

Answer: (a)


1. a) What is Job evaluation? [WBUT 2009]b) State the importance of it.c) Discuss the advantages and limitations of Job evaluation.Answer: a) Job evaluation is the rating of jobs in an organization. This is the process of establishing the value of jobs. It attempts to compare the relative intrinsic value of jobs within an organization.According to International Labour office “Job evaluation is an attempt to determine and compare the demands which the normal performance of a particular job makes on normal workers, without taking into account the individual abilities or performance of the workers concerned.”

b) The importance of job evaluation are as follows – a) Provide a standard procedures for determining the relative worth of each job in a

plant.b) Determine equitable wage differentials between different jobs in the organization.c) Eliminate wage inequalities.d) Ensure that like wages are paid to all qualified employees for like work.e) Form a basis for fixing incentives and different bonus plans.f) Serve as a useful reference for setting individual grievances regarding wage rate.

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g) Provide information for work organization, employees’ selection, placement, training and numerous other similar problems.

h) Provide benchmark for career planning for the employees in the organization.

c) Advantages: 1. Job evaluation being a logical process and technique help in developing a equitable

and consistent wage and salary structure based on the relative worth of jobs in an organization.

2. By eliminating wage differentials within the organization, job evaluation helps in minimizing conflict between labour unions and management and, in turn, helps in promoting harmonious relations between them.

3. Job evaluation simplifies wage administration by establishing uniformity in wage rates.

4. It provides a logical basis for wage negotiations and collective bargaining.5. In the case of new jobs, job evaluation facilities spotting them into the existing wage

and salary structure.6. In the modern times of mechanization, performance depends much on the machines

than on the worker himself/herself. In such cases, job evaluation provides the realistic basis for determination of wages.

7. The information generated by job evaluation may also be used for improvement of selection, transfer and promotion procedures on the basis of comparative job requirements.

8. Job evaluation rates the job, not the workers. Organizations have large number of jobs with specializations. It is job evaluation here again which helps in rating all these hobs and determining the wages and salary and also removing ambiguity in them.

Limitations:1. In spite of many advantages, job evaluation suffers form the following

drawbacks/limitations:2. Job evaluation is susceptible because of human error and subjective judgment. While

there is no standard list of factors to be considered for job evaluation, there are some factors that cannot be measured accurately.

3. There is a variation between wages fixed through job evaluation and market forces. Say Kerr and Fisher9, the jobs which tend to rate high as compared with the market are those of junior, nurse and typist, while craft rates are relatively low. Weaker groups are better served by an evaluation plan than by the market, the former places the emphasis not on force but on equity”.

4. When job evaluation is applied for the first time in an organization, it creates doubts in the minds of workers whose jobs are evaluated and trade unions that it may do away with collective bargaining for fixing wage rates.

5. Job evaluation methods being lacking in scientific basis are often looked upon as suspicious about the efficacy of methods of job evaluation.

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6. Job evaluation is a time-consuming process requiring specialized technical personnel to undertake it and, thus, is likely to be costly also.

7. Job evaluation is not found suitable for establishing the relative worth of the managerial jobs which are skill-oriented. But, these skills cannot be measured in quantitative terms.

8. Given the changes in job contents and work conditions, frequent evaluation of jobs is essential. This is not always so easy and simple.

9. Job evaluation leads to frequent and substantial changes in wage and salary structures. This, in turn, creates financial burden on organization.

2. a) What do you mean by Forecasting? [WBUT 2009]Answer: Forecasting is an act of predicting the future on the basis of past and present information. It is a projection of future on the basis of present trend. The success of a business unit is fully depend on accurate forecasting. According to ‘HENRI FAYOL’. “Forecasting is an import function of business Administration”. According his opinion, entire planning in business is made up of a series of separate plans called forecasting.According to “NETER AND WASSERMAN” – “Business forecasting refer to the statistical analysis of the past and current movement in the movements” “C.E.SULTON” – has defined business forecasting “as a calculation of probable events against the future”.Hence, forecasting is a technique to determine economic, social and financial forces effecting the business.

b) State the main objectives and functions of Forecasting. [WBUT 2009]Answer:Functions of Forecasting are as follows:1. Promotion of a new business: Forecasting is very much essential in case of setting

up a new business. To launch a new business involves risk and uncertainties and entire success of a new business depends upon the soundness of forecasting. Hence, a successful promoters, after ascertaining business opportunities, can assemble various factors i.e. men, machine, materials and money, etc. Proper forecasting helps to minimize the possibilities of uncertainties.

2. Formulation of plan: Forecasting is a tool for formulation of effective plan. Planning decides the future course of action which takes place in certain conditions. Planning under all circumstances involves a good deal of forecasting. Forecasting provides the knowledge about the knowledge of future conditions which is the key factor of planning.

3. Managerial decisions: The extent of correctness of managerial decisions is fully dependant on accurate forecasting. Administration is essentially a decision making process. Authority has responsibility for making decisions and for ascertaining that the decisions made are properly carried out.

4. Continuous flow of work: Forecasting ensures smooth and continuous working, specially in case of newly established company. With the help of proper forecasting, a newly established company can estimate its future earnings or profits.

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5. Success in business: Success of a business, special in case of a newly established business, fully dependant on accurate forecasting by the various departments. Managers can save their business and face the unfortunate happenings if they know in advance what is going to happen.

6. Estimation of financial requirements: Forecasting plays a vital role for estimation of financial requirement. Finance is the life blood of business enterprise. A business cannot survive long without adequate capital i.e. Fixed and Working Capital. But adequacy of capital both fixed and working, entirely depends on sound financial forecasting. How much capital is required for investment in fixed assets, for expansion, for introduction of a new product, for investment in current assets fully depends on effective financial forecasting.

7. Increase the co-operation and co-ordination: Forecasting is not achieved with one man. It requires proper co-ordination of the views and opinions of all the departmental heads of the organization. All the units of an organization are involved in the process of forecasting. Hence, process of forecasting increases team sprit as well as co-ordination of all levels.

c) Mention the limitation of it. [WBUT 2009]Answer:1. Based on future assumption: Forecasting is the future assumption on the basis of

present and past activities. The assumption may not hold good as future is uncertain. There are practically various factors which go into determining the occurrence of an event. The behavior of all those factors may not be similar. A change in a particular factor may be so unpredictable and important that it may affect the total business situations.

2. Time and cost involvement: Time and cost factor is also an important factor of forecasting. For forecasting of any event, certain information and data are required. The collection of date and information and conversion qualitative data into quantitative ones involves lot of time and money. Managers, therefore, have to trade off between cost involved in forecasting and benefit obtained for this reason, small concerns do not go for formal forecasting.

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PLANT MAINTENANCE AND MATERIAL HANDLING


1. A device to move materials along a definite path and used for moving bulk materials over long distance is known as [WBUT 2011]

a) Fork lift truck b) Elevatorc) Hoists d) Conveyor

Answer: (d)


1. Explain briefly relative merits and demerits of breakdown maintenance, preventive maintenance and TPM. [WBUT 2011]Answer:Merits of Breakdown maintenance1) The important thing in breakdown maintenance is after attending and repairing the

equipment, the maintenance engineer attended to the machine only when another failure occurs.

2) This type of maintenance can be well justified in small factories, where scheduling techniques are a final burden and occasional demand exceeds normal operating capacity.

3) It is affordable, practicable and economical for critical items whose downtime and repair cost are less.

Demerits of Breakdown Maintenance:1) It is not economical for non critical items whose downtime and repair cost is high.2) It is complexity in administrative work and record keeping involve in breakdown

maintenance is less that in preventive maintenance.

Merit of Preventive maintenance: 1) The State of the equipment can reveal what changes need to be brought about in the

equipment.2) Every equipment has a breakdown curve; working lower on the curve adds

predictability and reliability.

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3) It damage is known and recognized at an earlier stage one gets more time to plan and secure parts.

4) Early prediction shifts maintenance work load form emergency fire-fighting to an orderly, scheduled system.

5) Decreased user problems translate into increased satisfaction.

Demerits of Preventive Maintenance1) It is very costly. Hence one should be careful weather to go in for preventive

maintenance or not by considering the cost of using preventive maintenance and the cost of not using it.

2) Application of Preventive Maintenance to all the items in the plant/industries may be uneconomical.

Merits of Total Productive Maintenance:1) Maximum overall equipment effectiveness2) Establish a share system of preventive maintenance for the equipments, complete life.

Demerit of Total Productive Maintenance:1) Process defects due to scraps & quality defects to be repaired. Quality problems are

not tolerated. Deep analysis is undertaken until these lose approach Zero.2) Reduced filled from start-up to suitable productions. The production process is traced

and watched for start-up problems. Stable production should follows start-up very closely.

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MISCELLANEOUS

1. Write down the terms CPM and PERT. [WBUT 2011]Answer:CPM [Critical Path Method]:In 1957, DuPont developed a project management method designed to address the challenge of shutting down chemical plants for maintenance and then restarting the plants once the maintenance had been completed. Given the complexity of the process, they developed the Critical Path Method (CPM) for managing such projects.CPM provides the following benefits: Provides a graphical view of the project. Predicts the time required to complete the project. Shows which activities are critical to maintaining the schedule and which are not.CPM models the activities and events of a project as a network. Activities are depicted as nodes on the network and events that signify the beginning or ending of activities are depicted as arcs or lines between the nodes.

Steps in CPM Project Planning1. Specify the individual activities.2. Determine the sequence of those activities.3. Draw a network diagram.4. Estimate the completion time for each activity.5. Identify the critical path (longest path through the network)6. Update the CPM diagram as the project progresses.

PERTThe Program Evaluation and Review Technique (PERT) is a network model that allows for randomness in activity completion times. PERT was developed in the late 1950's for the U.S. Navy's Polaris project having thousands of contractors. It has the potential to reduce both the time and cost required to complete a project.In a project, an activity is a task that must be performed and an event is a milestone marking the completion of one or more activities. Before an activity can begin, all of its predecessor activities must be completed. Project network models represent activities and milestones by arcs and nodes. PERT originally was an activity on arc network, in which the activities are represented on the lines and milestones on the nodes. Over time, some people began to use PERT as an activity on node network. For this discussion, we will use the original form of activity on arc.

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2. Write Short Notes on Gant Chart [WBUT 2011]What is a Gantt chart?Answer: A Gantt chart, similar to a bar chart, lists tasks down the left side and elapsed time is marked off across the top. This graphical depiction of the schedule will track the planning and coordination of work that must be completed to produce the defined product. Major task groupings are entered as general areas of work (summary tasks), and then broken down into bodies of work that can be completed independently. Project detail can be added to the smallest increment of definable tasks. As work is completed, the project manager receives updates from each person or resource working, and the plan is updated frequently and then progress is measured against the plan. The Gantt chart reflects the entire schedule of work which might include duration, recourses milestones, etc. A Gantt chart can also provide performance and efficiency information that directly impacts reward systems of monetary compensation and promotion.

Gantt chart informationThe Gantt chart is versatile and timeless for use in every kind of project from building a house to constructing the tallest building and overhauling a computer system. The time required to build detail into the original plan and keep the plan updated throughout the project will provide all the information necessary keep the project on track.

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