PROJECT AND OPERATIONS MANAGEMENT – 2024

SECTION A

1. Five Differences between Project and Operations Management

Aspect Project Management Operations Management

Focuses on managing temporary Manages ongoing, repetitive
Definition
endeavors with specific goals business activities
Duration Temporary with a defined start and end Continuous and ongoing
Unique deliverables, within scope, time, Efficient and effective ongoing
Objectives
and cost processes
Change Strives for stability and
Frequently deals with change
Management consistency
Resource Resources are assigned temporarily for Resources are allocated on a
Allocation specific tasks long-term basis

Project management deals with initiating, planning, executing, and closing projects—unique
activities with defined objectives. For example, constructing a bridge is a project. Operations
management ensures the smooth, efficient functioning of organizational activities, such as
managing a manufacturing process. Both are crucial but differ in focus, duration, and goals.

2. Define Scheduling. Explain the Various Types of Scheduling

Definition: Scheduling is the process of planning and controlling how resources are allocated
over time to perform a sequence of tasks in a project or operation. It ensures timely completion
of tasks within resource constraints.

Types of Scheduling:

1. Forward Scheduling:
o Starts from the current date and schedules tasks forward.
o Used when the completion date is flexible.
o Example: Software development with no fixed deadline.
2. Backward Scheduling:
o Starts from a fixed end date and schedules tasks backward.
o Ensures project completion by a specific deadline.
o Example: Event planning with a fixed launch date.
3. Detailed Scheduling:
o Focuses on day-to-day task execution with exact times.
o Suitable for manufacturing or services with high precision.
4. Priority Scheduling:
 o Tasks are scheduled based on priority levels.
o Useful when resources are limited and not all tasks can be done at once.
5. Critical Path Method (CPM):
o Identifies the longest path of dependent tasks.
o Helps in identifying critical tasks that can’t be delayed.

Effective scheduling ensures optimal use of time and resources, preventing delays and
bottlenecks.

3. Explain the Concept of Project Team Management

Project Team Management refers to the process of assembling, developing, and leading a team
to achieve project objectives. It involves selecting the right people, defining roles, promoting
teamwork, and resolving conflicts.

Key Components:

1. Team Formation:
o Selection based on required skills and experience.
o Defined roles and responsibilities.
2. Team Development:
o Training and team-building activities.
o Stages: Forming, Storming, Norming, Performing, Adjourning.
3. Motivation and Leadership:
o Use of leadership styles (autocratic, democratic, laissez-faire) based on team
dynamics.
o Motivating team through recognition, rewards, and involvement.
4. Communication:
o Ensures transparency and alignment.
o Use of tools like meetings, reports, and collaborative platforms.
5. Conflict Resolution:
o Addressing interpersonal or task-based conflicts early.
o Techniques: mediation, negotiation, and compromise.

An effectively managed project team is crucial for achieving project success, improving
collaboration, and meeting deadlines.

4. What is Risk Management? How is Risk Quantified and Managed in Project

Management?

Risk Management is the process of identifying, assessing, and mitigating potential events or
conditions that may negatively impact a project.
Steps in Risk Management:

1. Risk Identification:
o Determine potential risks using tools like brainstorming, checklists, and SWOT
analysis.
2. Risk Assessment (Quantification):
o Qualitative: Based on likelihood and impact using a risk matrix.
o Quantitative: Uses numerical analysis, e.g., Expected Monetary Value (EMV) =
Probability × Impact.
3. Risk Mitigation Strategies:
o Avoidance: Changing the plan to eliminate the risk.
o Transfer: Shifting the risk to a third party (e.g., insurance).
o Mitigation: Reducing the likelihood or impact of the risk.
o Acceptance: Acknowledging the risk without taking action.
4. Monitoring and Controlling:
o Regularly review risks and update mitigation strategies.

Effective risk management ensures that uncertainties are managed proactively, ensuring project
success.

5. Explain the Functions of Production and Material Management

Production Management deals with the planning, coordination, and control of industrial
processes to ensure that goods are produced efficiently and meet quality standards.

Functions of Production Management:

1. Planning: Determining what to produce, when, and how.

2. Routing: Defining the path a product will follow.
3. Scheduling: Setting timelines for production tasks.
4. Dispatching: Issuing orders for production.
5. Inspection: Quality control at various stages.

Material Management ensures that the right materials are available at the right time, in the right
quantity, and at the right cost.

Functions of Material Management:

1. Procurement: Sourcing and purchasing raw materials.

2. Inventory Control: Managing stock levels to avoid over/under-stocking.
3. Storage: Safe and efficient storage of materials.
4. Material Handling: Movement of materials within the facility.
5. Waste Reduction: Minimizing material wastage.
Together, these functions ensure the smooth operation of production systems, reducing costs and
enhancing productivity.

6. Define Cause and Effect Diagram with Appropriate Example

Definition: The Cause and Effect Diagram, also known as the Ishikawa or Fishbone
Diagram, is a visual tool used to systematically identify and analyze the root causes of a
problem.

Purpose:

 Helps in brainstorming possible causes of a problem.

 Useful in quality control and root cause analysis.

Structure:

 The "head" represents the problem or effect.

 "Bones" represent major categories of causes, such as:
o Man
o Machine
o Method
o Material
o Measurement
o Environment

Example: Problem: Delayed product delivery

Possible Causes:

 Man: Inadequate training

 Machine: Equipment breakdown
 Method: Inefficient logistics
 Material: Supply chain delays
 Measurement: Poor tracking
 Environment: Bad weather

By organizing causes in this manner, teams can systematically investigate and address the root
issues, improving processes and outcomes.

7. How is Inventory Classified? Explain.

Inventory is classified based on various criteria to facilitate effective management and control.

Types of Inventory:

1. Raw Materials:
o Basic inputs used in the production process.
o Example: Steel, plastic.
2. Work-in-Progress (WIP):
o Semi-finished goods still in the production process.
o Example: Partially assembled machinery.
3. Finished Goods:
o Completed products ready for sale.
o Example: Packaged televisions.
4. Maintenance, Repair, and Operations (MRO):
o Items used for maintenance and support.
o Example: Lubricants, cleaning supplies.

Classification Methods:

 ABC Classification:
o Based on value and consumption.
o A: High value, low volume; B: Moderate; C: Low value, high volume.
 VED Classification (Vital, Essential, Desirable):
o Based on criticality to operations.
o Used mostly in public sector and healthcare.
 FSN Classification (Fast, Slow, Non-moving):
o Based on movement or usage rate.
 HML Classification (High, Medium, Low):
o Based on unit price of the inventory items.

Classifying inventory aids in better control, cost reduction, and efficient decision-making in
procurement and storage.

SECTION B

1. State any 5 Differences between Project and Operations Management

Aspect Project Management Operations Management

Temporary and unique; focused on a Ongoing and repetitive; ensures
Nature of Work
specific goal or outcome continuity of business
To complete the project within time, To maintain and improve efficiency
Objective
cost, and scope in daily operations
Continuous without a specific end
Duration Has a defined start and end date
date
Risk Level Higher due to uniqueness and Lower, as processes are
 Aspect Project Management Operations Management
uncertainty standardized and routine
Change Adapts frequently to meet project Changes less often and more
Management demands gradually

Project Management involves planning, execution, and closure of a project—like launching a

new product or building infrastructure. Operations Management, however, deals with regular
activities like production, quality control, and logistics to run a business efficiently. Project
managers deal with scope, deadlines, and deliverables, while operations managers focus on cost-
efficiency, output, and process improvement. Both are crucial but operate in fundamentally
different ways.

2. Define Scheduling. Explain the Various Types of Scheduling

Scheduling in operations and project management is the process of planning tasks or activities
over time to ensure optimal utilization of resources and timely completion of work. It specifies
what needs to be done, when, and by whom.

Types of Scheduling:

1. Forward Scheduling: Plans tasks from the start date toward the project’s end date. Used
when early delivery is preferred. It provides early visibility of completion.
2. Backward Scheduling: Starts from the due date and schedules tasks in reverse to
determine when to begin. Helps meet deadlines with minimal lead time and inventory
holding.
3. Priority Scheduling: Tasks are scheduled based on priority (e.g., urgent vs. non-urgent).
It improves responsiveness to critical jobs.
4. Flexible Scheduling: Allows changes in task sequences, accommodating uncertainties or
resource availability.
5. Batch Scheduling: Groups similar tasks for efficiency, common in manufacturing to
reduce setup times.

Effective scheduling enhances productivity, resource allocation, and customer satisfaction by

meeting timelines and reducing delays.

3. Explain the Concept of Project Team Management

Project Team Management involves selecting, developing, and managing a group of people
working collaboratively toward achieving project goals. It encompasses leadership,
communication, conflict resolution, and motivation to ensure high team performance.

Key Aspects of Project Team Management:

 1. Team Formation: Selecting the right individuals based on required skills, experience,
and availability.
2. Role Assignment: Defining roles and responsibilities clearly to avoid confusion and
overlap.
3. Team Development: Includes training, skill-building, and team-building exercises to
enhance performance and collaboration.
4. Motivation and Leadership: A good project manager leads by example, motivates team
members, and maintains a positive environment.
5. Communication Management: Ensuring clear, timely, and transparent communication
across team members to keep everyone aligned.
6. Conflict Management: Addressing and resolving disputes constructively to maintain
team cohesion.

Project Team Management is essential for aligning individual efforts with project objectives,
increasing efficiency, and ensuring successful project delivery.

4. What is meant by Risk Management? How is Risk Quantified and Managed in Project
Management?

Risk Management in project management refers to identifying, assessing, and controlling risks
that may impact the project’s success. Risks can be threats (delays, cost overruns) or
opportunities (process improvements).

Risk Quantification:

1. Qualitative Analysis: Uses descriptive methods to prioritize risks based on severity and
probability (e.g., High, Medium, Low).
2. Quantitative Analysis: Applies numerical techniques such as:
o Expected Monetary Value (EMV)
o Monte Carlo Simulation
o Decision Tree Analysis

These methods estimate the impact of risks in measurable terms (cost, time).

Risk Management Process:

1. Risk Identification: Brainstorming, checklists, and SWOT analysis to find potential

risks.
2. Risk Assessment: Evaluate the likelihood and impact of each risk.
3. Risk Response Planning:
o Avoid (change plan to eliminate risk)
o Transfer (shift risk to third party like insurance)
o Mitigate (reduce likelihood or impact)
o Accept (acknowledge risk without action)
 4. Monitoring and Control: Continuously track risks and implement mitigation strategies
as needed.

Effective risk management ensures better preparedness and increases the likelihood of project
success.

5. Explain the Functions of Production and Material Management

Production Management is the planning, coordination, and control of industrial processes to

produce goods efficiently. Material Management ensures timely procurement, handling, and
utilization of materials to avoid wastage and delays.

Functions of Production Management:

1. Planning: Forecasting demand and creating production plans.

2. Routing: Deciding the sequence of operations and workflow.
3. Scheduling: Determining when and how production activities occur.
4. Dispatching: Issuing orders and instructions to initiate work.
5. Follow-up: Monitoring and controlling production to ensure goals are met.
6. Quality Control: Ensuring products meet required standards.

Functions of Material Management:

1. Material Planning: Estimating material requirements based on production plans.

2. Purchasing: Procuring materials economically and timely.
3. Inventory Control: Maintaining optimal inventory to balance availability and cost.
4. Receiving and Inspection: Verifying quality and quantity upon delivery.
5. Storage: Organizing and securing materials to prevent damage or loss.
6. Issue and Disposal: Supplying materials as needed and disposing of excess or obsolete
stock.

Together, these functions ensure a smooth production flow, cost efficiency, and customer
satisfaction.

6. Define Cause and Effect Diagram with Appropriate Example

A Cause and Effect Diagram, also known as an Ishikawa or Fishbone Diagram, is a visual
tool used to systematically identify and analyze the root causes of a problem or effect.

Structure:

 The head of the fish shows the main problem (effect).

  The bones branching off represent major categories of causes, commonly:
o Man (people)
o Machine
o Method
o Material
o Measurement
o Environment

Example:

Problem: High Defect Rate in Manufacturing

Categories:

 Man: Inadequate training, fatigue

 Machine: Old equipment, frequent breakdowns
 Material: Low-quality raw materials
 Method: Inconsistent processes
 Measurement: Faulty instruments
 Environment: Poor lighting, dust

By analyzing each category, teams can pinpoint the root causes and take corrective actions.

This diagram is widely used in quality management and continuous improvement processes like
Six Sigma and TQM.

7. How is Inventory Classified? Explain

Inventory is classified based on purpose, function, and type of material to manage stock
efficiently and optimize costs.

Classification:

1. Raw Materials: Basic inputs used to produce goods (e.g., cotton for textiles).
2. Work-in-Progress (WIP): Items in production but not yet completed. Helps track
production flow and efficiency.
3. Finished Goods: Completed products ready for sale. Managed to meet customer demand
without overstocking.
4. Maintenance, Repair, and Operations (MRO): Supplies not part of final products but
necessary for operations (e.g., lubricants, cleaning materials).
5. Transit Inventory: Items in transit between locations. Important for supply chain
coordination.
6. Buffer (Safety) Stock: Extra inventory kept to avoid stockouts due to demand
fluctuation or supply delays.
 7. Cycle Inventory: Regular stock maintained to meet expected demand during the
replenishment cycle.
8. Decoupling Inventory: Used to decouple or separate different stages of production to
ensure smooth flow even if one stage slows down.

Inventory classification enables better control, minimizes holding costs, and ensures materials
are available when needed, thus improving overall operational efficiency.

PROJECT AND OPERATIONS MANAGEMENT – 2023

SECTION A

1. Explain the Concept of Project

A project is a temporary, goal-oriented endeavor undertaken to create a unique product, service,

or result. Projects differ from routine operations in that they have a defined start and end point,
specific objectives, and unique outputs. Each project is constrained by scope, time, cost, and
quality, commonly known as the project management triangle.

Key characteristics of a project include:

 Temporary Nature: Projects have a definite beginning and end.

 Unique Output: Every project produces a unique product, service, or result.
 Progressive Elaboration: The project is gradually developed in steps or increments.
 Defined Resources: Projects have limited budgets, time, human resources, and materials.

Examples include building a bridge, launching a marketing campaign, or implementing a new

information system. The Project Life Cycle typically consists of five phases: Initiation,
Planning, Execution, Monitoring & Control, and Closure.

Effective project management ensures that the project goals are achieved within the constraints.
It involves planning, organizing, motivating, and controlling resources efficiently and
effectively. Ultimately, projects help organizations innovate, improve processes, and gain a
competitive edge.

2. Give a Brief Introduction about Scope Management

Scope Management refers to the processes required to ensure that a project includes all the
necessary tasks and only those tasks required to complete the project successfully. It defines and
controls what is included and excluded from the project.

Scope management includes the following key processes:

 1. Plan Scope Management: Creating a scope management plan that outlines how the
scope will be defined, validated, and controlled.
2. Collect Requirements: Identifying and documenting stakeholders' needs and
expectations.
3. Define Scope: Developing a detailed project scope statement that clearly describes the
project's deliverables.
4. Create WBS (Work Breakdown Structure): Subdividing project deliverables into
smaller, manageable components.
5. Validate Scope: Formalizing acceptance of completed project deliverables.
6. Control Scope: Monitoring the project and managing changes to the scope.

Scope management ensures that the project stays on track and avoids scope creep, which occurs
when additional features or tasks are added without proper control. Proper scope management is
critical for meeting deadlines, staying within budget, and satisfying stakeholders.

3. Define Plant Layout. What are the Objectives of Plant Layout?

Plant layout refers to the physical arrangement of machines, equipment, work areas, and other
facilities within a manufacturing or service plant. It aims to optimize the workflow, minimize
material handling, and ensure efficient utilization of space, labor, and equipment.

There are several types of plant layouts:

 Product Layout: Arranged according to the sequence of operations (e.g., assembly line).
 Process Layout: Similar machines are grouped together (e.g., in a job shop).
 Fixed-Position Layout: The product remains stationary, and workers/equipment move
(e.g., shipbuilding).
 Cellular Layout: Workstations arranged in a cell to produce a family of parts.

Objectives of Plant Layout:

1. Efficient Use of Space: Optimize the use of floor space and reduce waste.
2. Smooth Workflow: Ensure smooth and uninterrupted material and personnel flow.
3. Minimize Handling Costs: Reduce the movement of materials and components.
4. Safety and Comfort: Enhance safety, health, and working conditions for employees.
5. Flexibility: Facilitate easy adjustments for future expansion or changes in processes.
6. Improved Supervision: Enable effective monitoring and control of production activities.
7. Better Quality: Reduce errors and rework through efficient process flow.

A well-designed plant layout enhances productivity, reduces operational costs, and improves
overall organizational performance.
4. What Tasks Must the Project Team Perform Before the Project Progresses?

Before a project progresses to execution, the project team must undertake several critical
preparatory tasks to ensure a strong foundation for success:

1. Define Project Scope and Objectives: Clearly establish what the project aims to
achieve, its deliverables, and boundaries.
2. Develop a Project Plan: This includes scheduling, budgeting, resource allocation, risk
management, and quality planning. It acts as a roadmap for execution.
3. Identify Stakeholders: List all internal and external parties affected by the project.
Understanding their needs and expectations is essential for project success.
4. Assemble the Project Team: Identify and assign roles to individuals based on their
skills, expertise, and availability.
5. Risk Assessment and Mitigation: Analyze potential risks and develop mitigation
strategies to address them proactively.
6. Establish Communication Plan: Define how information will be shared among
stakeholders to ensure transparency and alignment.
7. Resource Planning: Ensure that human, financial, and material resources are available
and scheduled appropriately.
8. Obtain Approvals and Clearances: Secure necessary permissions, legal clearances, and
stakeholder sign-offs to avoid future delays.

These tasks lay the groundwork for effective project execution, help align all stakeholders, and
minimize the risk of project failure or delays.

5. Give a Brief Account of WBS

WBS (Work Breakdown Structure) is a key project management tool that breaks down a
project into smaller, more manageable components. It is a hierarchical decomposition of the
total scope of work to accomplish the project objectives and create the required deliverables.

Purpose of WBS:

 To structure the project into deliverables and work packages.

 To enhance clarity and accountability by assigning tasks to team members.
 To improve planning, scheduling, budgeting, and resource allocation.

Components of WBS:

1. Levels: The top level represents the final deliverable. Lower levels break it down into
sub-deliverables, work packages, and tasks.
2. Work Packages: The smallest units of work that can be scheduled and managed.

Benefits of WBS:
  Facilitates effective project planning and control.
 Provides a clear roadmap for all stakeholders.
 Helps in identifying dependencies and timelines.
 Serves as the basis for cost estimation and resource planning.

For example, in a construction project, the top-level task might be “Build House,” which breaks
down into “Foundation,” “Structure,” “Electrical Work,” and “Finishing,” and each of those
further breaks down into individual tasks.

6. What Factors Affect the Site Location Decision?

Site location decisions are strategic and have long-term implications on a company’s operations,
cost structure, and competitive advantage. The choice of location depends on a range of
economic, geographic, and infrastructural factors.

Key factors include:

1. Proximity to Markets: Being close to customers reduces transportation costs and

enhances responsiveness.
2. Availability of Raw Materials: Reduces inbound logistics costs and ensures continuous
production.
3. Labor Availability and Cost: Access to skilled or unskilled labor at competitive wages
is crucial.
4. Infrastructure Facilities: Availability of power, water, transportation, communication,
and waste disposal.
5. Cost of Land and Utilities: The total cost of setting up and running the facility varies by
location.
6. Legal and Regulatory Environment: Local laws, taxes, and government policies may
influence location decisions.
7. Climate and Environmental Conditions: Certain industries (like pharmaceuticals or
agriculture) may require specific climatic conditions.
8. Community and Quality of Life: Access to education, healthcare, and housing affects
employee satisfaction and retention.
9. Supply Chain Considerations: Ease of integration into existing supply chain networks.
10. Risk Factors: Natural disasters, political instability, or civil unrest can increase
operational risks.

A thorough feasibility study and cost-benefit analysis are usually conducted to make the optimal
site selection decision.

7. Briefly Explain FSN Analysis

FSN Analysis is a method used in inventory management to classify items based on the
frequency of their usage. FSN stands for Fast-moving, Slow-moving, and Non-moving.

Categories:

1. Fast-moving (F): Items that are consumed or issued frequently. These are critical for
day-to-day operations and should be monitored closely to avoid stockouts.
2. Slow-moving (S): Items that are issued less frequently and have moderate turnover.
These require moderate attention.
3. Non-moving (N): Items that haven’t been used for a long period, often over a year. These
are candidates for write-off, disposal, or reduction in future procurement.

Benefits of FSN Analysis:

 Helps in effective inventory control and planning.

 Reduces carrying cost and prevents stock obsolescence.
 Facilitates efficient warehouse management by organizing frequently used items for easy
access.
 Supports better decision-making regarding procurement and storage.

Application: This analysis is particularly useful in large warehouses and manufacturing setups
where thousands of items are managed. Periodic FSN classification helps in maintaining optimal
inventory levels and avoiding overstocking or understocking.

SECTION – B

Q8. Describe any two types of layouts for manufacturing operations.

Manufacturing layouts are the physical arrangements of machines, equipment, work areas, and
resources within a manufacturing plant. The layout significantly impacts productivity, efficiency,
and cost. Two widely used types of layouts in manufacturing operations are:

1. Product Layout (Line Layout):

Definition:
A product layout is an arrangement where equipment and workstations are laid out in a sequence
aligned with the steps in the production process. This layout is ideal for mass production where
the same type of product is made repeatedly.

Characteristics:

 Suitable for standardized products.

 Materials move sequentially from one operation to the next.
 Machines are specialized and arranged in a line.
 High volume, low variety production system.
Advantages:

 High Efficiency: Reduced material handling time and faster throughput.

 Simplified Supervision: The flow of work is continuous, making it easier to supervise.
 Reduced Work-in-Progress: Since work moves in a continuous flow, there’s less
chance of buildup between operations.
 Economies of Scale: Ideal for large-scale production as the cost per unit is minimized.

Disadvantages:

 Inflexibility: Any change in product design requires major layout changes.

 High Capital Investment: Specialized machinery and equipment are expensive.
 Breakdown Impact: A single machine breakdown can halt the entire line.

Example:
Automobile assembly lines where each station adds a component or performs a specific task until
the car is fully assembled.

2. Process Layout (Functional Layout):

Definition:
In this layout, similar machines or processes are grouped together. Products move from one
department to another based on the processing needs. It is best suited for low volume, high
variety production.

Characteristics:

 Designed for flexibility in operations.

 Functional grouping of resources like drilling machines, grinding machines, etc.
 Requires skilled labor and effective scheduling.
 Longer production time compared to product layout.

Advantages:

 Greater Flexibility: Accommodates a variety of products and changes in design.

 Better Equipment Utilization: Equipment is used for multiple products.
 Custom Production: Ideal for customized orders and batch production.

Disadvantages:

 Complex Material Handling: Non-linear movement of materials may require more

handling equipment.
 Longer Lead Time: As products follow different routes, time taken is longer.
  Difficult Scheduling: Managing work-in-progress and allocating machines can be
challenging.

Example:
Job shops such as tool rooms or hospitals where services and production are tailored to specific
customer requirements.

Q9. Discuss the seven underlying principles of Total Quality Management (TQM).

Total Quality Management (TQM) is a structured approach to organizational management that

seeks to improve the quality of products and services through continuous feedback and
improvement. The goal is to achieve long-term success through customer satisfaction.

1. Customer Focus:

TQM begins with understanding and fulfilling customer needs. The success of a business
depends on how effectively it meets customer expectations.

 Organizations must understand both internal and external customers.

 Customer satisfaction becomes the primary goal.
 Feedback mechanisms must be established to understand customer perceptions.

2. Leadership:

Strong leadership is essential in establishing a unified direction and fostering an environment

that supports quality improvement.

 Leaders set the vision, mission, and values.

 Leadership encourages participation, motivation, and effective communication.
 Leaders should act as role models for quality commitment.

3. Involvement of People:

People at all levels are the essence of an organization, and their full involvement enables the
organization's abilities to be used for maximum benefit.

 Employees must be empowered and trained to take responsibility.

 Participation leads to innovation and accountability.
 Teamwork and mutual respect are essential for TQM success.

4. Process Approach:

Managing activities and resources as processes helps achieve more consistent and predictable
results.
  Understanding process interdependencies.
 Process mapping and control are essential tools.
 Continuous improvement of processes leads to better quality.

5. System Approach to Management:

Identifying, understanding, and managing interrelated processes as a system contributes to the

organization’s effectiveness and efficiency.

 Helps in aligning objectives across departments.

 Enhances coordination and efficiency.
 Promotes transparency and accountability.

6. Continuous Improvement:

TQM requires a permanent commitment to continuous improvement of organizational processes.

 Organizations must adapt and evolve.

 Tools like Kaizen, PDCA (Plan-Do-Check-Act), and benchmarking are used.
 Improvement must be embedded in the culture.

7. Factual Approach to Decision Making:

Effective decisions are based on the analysis of data and information.

 Data must be reliable, timely, and accurate.

 Analytical tools like SPC (Statistical Process Control), Pareto analysis, and flowcharts
support better decisions.
 Reduces guesswork and assumptions in decision-making.

Q10. Inventory Problem:

Given:

 Annual Demand (D) = 350,000 units

 Cost per unit (C) = Rs. 14.75
 Ordering Cost (S) = Rs. 53
 Carrying Cost Rate = 25%
 Carrying Cost per unit per year (H) = 0.25 × 14.75 = Rs. 3.6875

i) What is EOQ?

EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS
EOQ=2×350000×533.6875=371000003.6875=10063475.17≈3172.76EOQ = \sqrt{\frac{2 \times
350000 \times 53}{3.6875}} = \sqrt{\frac{37100000}{3.6875}} = \sqrt{10063475.17} \approx
3172.76EOQ=3.68752×350000×53=3.687537100000=10063475.17≈3172.76

So, EOQ = 3,173 units (approx)

ii) Total Stocking Cost (TSC) at EOQ:

TSC = Ordering Cost + Carrying Cost

Ordering Cost = DQ×S\frac{D}{Q} \times SQD×S,
Carrying Cost = Q2×H\frac{Q}{2} \times H2Q×H

For EOQ = 3173:

Ordering Cost = 3500003173×53≈110.3×53=Rs.5,846.32\frac{350000}{3173} \times 53 \

approx 110.3 \times 53 = Rs. 5,846.323173350000×53≈110.3×53=Rs.5,846.32
Carrying Cost = 31732×3.6875=1586.5×3.6875=Rs.5,846.32\frac{3173}{2} \times 3.6875 =
1586.5 \times 3.6875 = Rs. 5,846.3223173×3.6875=1586.5×3.6875=Rs.5,846.32

So, TSC = Rs. 11,692.64

iii) TSC if Order Quantity = 2500 units:

Ordering Cost = 3500002500×53=140×53=Rs.7,420\frac{350000}{2500} \times 53 = 140 \

times 53 = Rs. 7,4202500350000×53=140×53=Rs.7,420
Carrying Cost = 25002×3.6875=1250×3.6875=Rs.4,609.38\frac{2500}{2} \times 3.6875 = 1250
\times 3.6875 = Rs. 4,609.3822500×3.6875=1250×3.6875=Rs.4,609.38

TSC = Rs. 7,420 + Rs. 4,609.38 = Rs. 12,029.38

Increase in TSC = 12,029.38 - 11,692.64 = Rs. 336.74

Q11. Discuss the ten subsystems of project management.

Project Management is a comprehensive discipline involving several key subsystems that work
together to ensure the successful completion of a project. The ten subsystems are:

1. Scope Management:

Defines and controls what is included and excluded in the project.

  Involves scope planning, definition, and change control.
 Helps avoid scope creep and ensures project objectives are met.

2. Time Management:

Involves planning, scheduling, and controlling time spent on project activities.

 Tools like Gantt charts, CPM (Critical Path Method), and PERT are used.
 Ensures timely completion of the project.

3. Cost Management:

Focuses on estimating, budgeting, and controlling project costs.

 Involves cost estimation, cost budgeting, and cost control.

 Helps ensure the project remains within budget.

4. Quality Management:

Ensures the project meets the required standards and customer satisfaction.

 Includes quality planning, quality assurance, and quality control.

 Uses tools like Six Sigma, Quality Audits, and Control Charts.

5. Human Resource Management:

Involves organizing and managing the project team.

 Includes roles assignment, team development, and performance management.

 Crucial for motivation and team cohesion.

6. Communication Management:

Facilitates timely and appropriate generation, collection, and dissemination of project

information.

 Communication planning, information distribution, and stakeholder communication are

key.
 Uses tools like reports, dashboards, and meetings.

7. Risk Management:

Focuses on identifying, analyzing, and responding to project risks.

 Risk identification, assessment, mitigation, and monitoring.

 Enhances preparedness and reduces uncertainty.
8. Procurement Management:

Involves acquiring goods and services from external sources.

 Includes procurement planning, vendor selection, contract management.

 Ensures quality and timely delivery of resources.

9. Integration Management:

Ensures that project processes are properly coordinated.

 Develops project charter, project management plan, and coordinates changes.

 Aligns all elements of the project toward the objective.

10. Stakeholder Management:

Identifies stakeholders and manages their expectations and involvement.

 Ensures that stakeholder interests are addressed.

 Involves engagement planning and communication strategy.

PROJECT AND OPERATIONS MANAGEMENT – 2022

SECTION A

1. Explain Project Portfolio Management and Programme Management

Project Portfolio Management (PPM) and Programme Management are two key concepts in
managing multiple projects effectively within an organization.

Project Portfolio Management (PPM):

PPM is a strategic approach that involves selecting, prioritizing, and managing a collection of
projects or programs aligned with an organization’s objectives. The main goal of PPM is to
maximize the value of the portfolio by selecting the right mix of projects and ensuring resource
optimization.

Key Features:

 Alignment with Strategy: Ensures all projects contribute to business goals.

 Resource Allocation: Optimal distribution of limited resources like time, budget, and
manpower.
 Risk Management: Evaluates the overall risk exposure of the project portfolio.
  Performance Monitoring: Regular assessment of project outcomes and rebalancing of
the portfolio.

Example: A company might have multiple projects like launching a new product, implementing
ERP software, and opening a new branch. PPM helps in deciding which projects to fund based
on strategic importance and resource availability.

Programme Management:

Programme Management is the coordinated management of related projects aimed at achieving a

common objective. A programme is a group of related projects managed in a coordinated way to
obtain benefits not available from managing them individually.

Key Features:

 Focus on Benefits Realization: Aims to deliver outcomes and benefits.

 Coordination: Manages interdependencies between projects.
 Stakeholder Management: Ensures consistent communication across the programme.
 Governance: Provides a structured framework for control and decision-making.

Example: In a city-wide smart transportation initiative, various projects like GPS tracking,
electric bus deployment, and automated ticketing would be managed under a single programme.

Conclusion: While PPM is about selecting and managing the right mix of projects, Programme
Management is about coordinating related projects to achieve strategic benefits.

2. Explain WBS with an Example

Work Breakdown Structure (WBS) is a critical project management tool that breaks down a
project into smaller, more manageable components.

Definition:

WBS is a hierarchical decomposition of the total scope of work to accomplish project objectives
and deliverables. It defines what work needs to be done and helps in planning, scheduling,
budgeting, and resource allocation.

Features of WBS:

 Hierarchical: Work is broken down from broad tasks to detailed sub-tasks.

 Deliverable-Oriented: Focuses on outcomes and results.
 Scope Definition: Clearly defines the scope, helping avoid scope creep.
Levels in WBS:

1. Project Level: The complete project name.

2. Major Deliverables: Key outputs or phases.
3. Sub-deliverables: Specific activities under each major deliverable.
4. Work Packages: Smallest units of work that can be assigned and tracked.

Example:

Consider a project to develop a Mobile Application.

 Level 1: Mobile App Development

o Level 2: Planning
 Define Requirements
 Create Project Plan
o Level 2: Design
 UI/UX Design
 Wireframing
o Level 2: Development
 Front-End Development
 Back-End Development
o Level 2: Testing
 Functional Testing
 User Acceptance Testing
o Level 2: Deployment
 App Store Submission
 Launch

Benefits of WBS:

 Improves clarity and focus

 Facilitates better cost and time estimates
 Enhances communication
 Helps in tracking progress

Conclusion: WBS is essential for structured project planning and helps ensure successful project
delivery by dividing the work into manageable segments.

3. Explain the Stages of Project Life Cycle

The Project Life Cycle refers to the sequence of phases that a project goes through from
initiation to closure. Each phase has specific deliverables and activities.
1. Initiation Phase:

 Objective: Define the project at a broad level.

 Activities: Feasibility study, stakeholder identification, project charter creation.
 Outcome: Approval to move forward with planning.

2. Planning Phase:

 Objective: Establish the total scope, refine objectives, and define the course of action.
 Activities:
o Develop WBS
o Time and cost estimation
o Risk management planning
o Resource planning
 Outcome: A comprehensive Project Management Plan (PMP).

3. Execution Phase:

 Objective: Complete the work defined in the PMP.

 Activities:
o Assign resources
o Develop deliverables
o Monitor performance
o Manage teams and stakeholders
 Outcome: Actual project deliverables.

4. Monitoring and Controlling Phase:

 Objective: Track, review, and regulate project progress and performance.

 Activities:
o Schedule control
o Cost control
o Risk management
o Quality assurance
 Outcome: Performance reports, change requests, corrective actions.

5. Closure Phase:

 Objective: Formally close the project and release resources.

 Activities:
o Final deliverables submission
o Documentation
o Lessons learned
o Client approval and project handover
Conclusion: The project life cycle provides a structured path for managing a project, ensuring
systematic execution and successful delivery of outcomes.

4. Explain Project Risk Management

Project Risk Management is the process of identifying, assessing, and mitigating risks that may
affect a project’s success.

Key Concepts:

 Risk: An uncertain event or condition that, if it occurs, may affect project objectives.
 Risk Management: A proactive approach to reduce the likelihood or impact of negative
events.

Steps in Risk Management:

1. Risk Identification:
o Techniques: Brainstorming, SWOT analysis, checklists.
o Output: Risk Register listing all potential risks.
2. Risk Analysis:
o Qualitative Analysis: Prioritizes risks based on probability and impact.
o Quantitative Analysis: Uses numerical methods (like Monte Carlo simulation).
3. Risk Response Planning:
o Strategies for threats:
 Avoidance
 Mitigation
 Transfer (e.g., insurance)
 Acceptance
o Strategies for opportunities:
 Exploit
 Enhance
 Share
4. Risk Monitoring and Control:
o Track identified risks
o Identify new risks
o Implement risk response plans

Types of Risks:

 Technical Risks: Technology failure or uncertainty.

 Resource Risks: Inadequate resources.
 Schedule Risks: Delays in timelines.
 Cost Risks: Budget overruns.
  External Risks: Regulatory or environmental changes.

Conclusion: Effective risk management helps in proactive decision-making, reduces uncertainty,

and increases the probability of project success.

5. What are Facility Layouts? Discuss the Types of Layouts

Facility Layout refers to the physical arrangement of resources like machines, equipment, and
workstations within a facility to ensure smooth operations and workflow.

Objectives:

 Maximize efficiency
 Reduce movement and material handling
 Enhance safety and employee satisfaction
 Optimize space utilization

Types of Facility Layouts:

1. Product Layout (Line Layout):

o Used for mass production.
o Machines arranged in the sequence of operations.
o Example: Automobile assembly line.

Advantages:

o High efficiency
o Low material handling cost

Disadvantages:

oInflexible
oHigh initial investment
2. Process Layout (Functional Layout):
o Grouping of similar machines or functions.
o Suitable for job shops or batch production.
o Example: Hospital departments like X-ray, labs, etc.

Advantages:

o Flexible for varied tasks

o Efficient use of specialized labor
 Disadvantages:

o Complex material movement

o Longer production time
3. Fixed Position Layout:
o Product remains stationary, resources move.
o Suitable for large, bulky products.
o Example: Shipbuilding, construction sites.

Advantages:

o Minimizes material movement for large products

Disadvantages:

o High logistics cost

o Scheduling is difficult
4. Cellular Layout:
o Groups machines into cells for similar products.
o Combines flexibility of process layout with efficiency of product layout.

Advantages:

o Improved workflow
o Better quality control

Disadvantages:

o Requires detailed analysis for cell formation

Conclusion: Choosing the right layout type is critical to achieving operational efficiency and
depends on the nature of production, volume, and process type.

6. Explain About Six Sigma and Its Application

Six Sigma is a data-driven methodology used to improve business processes by reducing defects
and variability.

Meaning:

Six Sigma aims for near perfection in processes by achieving only 3.4 defects per million
opportunities (DPMO). It uses statistical tools and methods for continuous improvement.
Key Concepts:

 DMAIC Cycle:
o Define: Identify the problem and project goals.
o Measure: Collect data and determine current performance.
o Analyze: Identify root causes of defects.
o Improve: Implement solutions.
o Control: Sustain improvements through controls and monitoring.
 Belt Levels: Like martial arts, Six Sigma practitioners are ranked (Yellow Belt, Green
Belt, Black Belt, etc.)

Tools Used:

 Pareto Charts
 Fishbone Diagrams
 Control Charts
 Process Mapping

Applications:

1. Manufacturing: Reducing defect rates in product lines.

2. Healthcare: Minimizing errors in medical processes.
3. Banking: Streamlining loan approval processes.
4. IT: Improving software development cycles.

Benefits:

 Improved customer satisfaction

 Reduced operational costs
 Enhanced quality and efficiency

Conclusion: Six Sigma is a powerful methodology for quality management and process
improvement, widely used across industries to achieve operational excellence.

7. Write the Meaning of Productivity and Explain the Different Types of Productivity

Productivity is the measure of how efficiently resources are used to produce outputs. It is a key
performance indicator in operations management.

Formula:
Productivity=OutputInput\text{Productivity} = \frac{\text{Output}}{\
text{Input}}Productivity=InputOutput
Importance:

 Measures efficiency
 Enhances profitability
 Supports competitive advantage
 Aids in resource planning

Types of Productivity:

1. Labor Productivity:
o Output per unit of labor (e.g., units per hour)
o

\text{Labor Productivity} = \frac{\text{Total Output}}{\text{Total Labor Hours}} ]

2. Capital Productivity:
o Output per unit of capital used.
o Measures how effectively machinery and assets are utilized.
3. Material Productivity:
o Output per unit of raw material consumed.
o Indicates material efficiency and waste control.
4. Total Factor Productivity (TFP):
o Considers all inputs like labor, materials, capital, and energy.
o

\text{TFP} = \frac{\text{Output}}{\text{Weighted Sum of Inputs}} ]

Factors Affecting Productivity:

 Technology
 Worker skills
 Management practices
 Work environment
 Innovation

Conclusion: Measuring and improving productivity is essential for operational success. By

focusing on different productivity types, organizations can identify inefficiencies and implement
strategies for improvement.

SECTION – B

Q8. Explain about various factors affecting facility location

Facility location is a critical decision in operations and project management as it has long-term
implications on costs, customer satisfaction, and overall operational efficiency. Choosing the
right location involves a complex decision-making process influenced by various factors. These
factors can be broadly classified into the following categories:

1. Proximity to Market

 Locating a facility close to the customer base ensures quick delivery, reduces
transportation costs, and enhances customer satisfaction.
 For example, retail outlets and warehouses are usually located near target markets to meet
demand efficiently.

2. Availability of Raw Materials

 For manufacturing units, proximity to raw material sources is essential to reduce inbound
logistics costs.
 Industries like steel, cement, and sugar prefer to be near their raw material sources to
reduce costs.

3. Transportation and Infrastructure

 Good connectivity by road, rail, air, or sea is essential for both receiving raw materials
and distributing finished goods.
 Efficient transportation networks reduce operational costs and improve supply chain
performance.

4. Cost of Land and Construction

 The initial investment in land and facility construction is a major consideration.

 Organizations weigh urban vs. rural settings in terms of cost, zoning regulations, and
expansion possibilities.

5. Availability of Labor

 Skilled and unskilled labor availability at reasonable wages influences the decision.
 A labor-intensive facility will prefer locations with abundant human resources.

6. Utilities and Government Support

 Continuous supply of power, water, and other utilities is critical for smooth operations.
 Incentives from governments like tax benefits, subsidies, and special economic zones
also attract businesses.

7. Environmental and Legal Regulations

 Compliance with environmental laws and labor laws influences the location choice.
 Pollution control norms, waste disposal regulations, and community impact assessments
play a major role.
8. Proximity to Suppliers

 Being close to suppliers reduces lead time and improves inventory control.
 Just-in-Time (JIT) production systems particularly benefit from supplier proximity.

9. Community and Quality of Life

 Companies consider social infrastructure like schools, hospitals, and housing for
employees.
 A stable, peaceful community with a high standard of living can be a decisive factor.

10. Future Expansion Potential

 Facilities need room to grow with increasing demand.

 Locations that allow easy expansion without major disruptions are preferred.

In conclusion, facility location decisions are strategic and multifaceted. They must align with the
company’s long-term objectives, market dynamics, and operational capabilities. A thorough
analysis using tools like factor rating, cost-profit-volume analysis, and location break-even
analysis can guide businesses to the most appropriate site.

Q10. Tools and Techniques for Quality Improvement

Quality improvement is a key aspect of operations management, focusing on enhancing

product/service quality and customer satisfaction. Various tools and techniques are used for
continuous quality improvement:

1. Check Sheets

 Structured formats for collecting and analyzing data.

 Used for tracking defect types, frequencies, and patterns.

2. Pareto Analysis

 Based on the 80/20 principle: 80% of problems arise from 20% of causes.
 Helps prioritize the most critical issues to focus on.

3. Cause and Effect Diagram (Fishbone/Ishikawa Diagram)

 Identifies root causes of a problem.

 Categorizes causes under people, methods, machines, materials, etc.

4. Control Charts

 Monitor process variation over time.

  Identify whether a process is stable and within control limits.

5. Histogram

 Visual representation of data distribution.

 Useful for understanding variation and spread of quality issues.

6. Scatter Diagrams

 Show relationships between two variables.

 Help determine correlations (e.g., between training hours and defects).

7. Flowcharts

 Graphical representation of a process.

 Identify redundant or non-value-adding steps to streamline processes.

8. Statistical Process Control (SPC)

 Involves statistical techniques to monitor and control processes.

 Used to detect and eliminate assignable causes of variation.

9. Six Sigma

 A data-driven methodology for eliminating defects and improving quality.

 Uses DMAIC (Define, Measure, Analyze, Improve, Control) framework.

10. Total Quality Management (TQM)

 A holistic approach focusing on long-term success through customer satisfaction.

 Involves all employees and continuous improvement.

11. Benchmarking

 Comparing processes and performance metrics to industry bests.

 Identifies gaps and improvement opportunities.

12. Kaizen (Continuous Improvement)

 Emphasizes small, incremental improvements involving everyone in the organization.

 Encourages a culture of quality and accountability.
Conclusion:

These tools and techniques support systematic quality improvement, reduce costs, enhance
efficiency, and increase customer satisfaction. Organizations should adopt a mix based on their
industry, goals, and resources.

Q11. Write Short Notes

a) Materials Management

 It involves planning, organizing, and controlling the flow of materials.

 Includes procurement, inventory control, storage, and transportation.
 Objective is to ensure the right material is available at the right time and cost.

b) Purchase Functions

 Identify requirements, select suppliers, negotiate contracts, place orders, and follow up.
 Ensure timely procurement of quality goods/services at competitive prices.
 Maintain supplier relationships and manage documentation.

c) Vendor Rating

 A process to evaluate supplier performance based on quality, delivery, cost, and service.
 Helps in developing reliable suppliers and reducing procurement risks.
 Tools: weighted point method, cost ratio method, categorical method.

d) EOQ (Economic Order Quantity)

 The optimal order quantity minimizing total inventory costs (ordering + holding costs).
 EOQ Formula:
EOQ=2DSHEOQ = \sqrt{\frac{2DS}{H}}EOQ=H2DS
Where D = demand, S = ordering cost, H = holding cost.
 Reduces stockouts and excessive inventory.

e) Safety Stocks

 Extra inventory kept to avoid stockouts due to demand/supply uncertainties.

 Acts as a buffer during lead time variations or forecast errors.
 Helps maintain service levels and smooth production.

PROJECT AND OPERATIONS MANAGEMENT – 2021

SECTION A

1. State the Difference Between Project and Operation Management

Project Management and Operations Management are both vital for any organization's success
but serve distinct purposes.

 Definition:
o Project Management refers to the temporary endeavor undertaken to create a
unique product, service, or result. It has a defined beginning and end.
o Operations Management focuses on the continuous, repetitive processes and the
efficient production of goods and services.
 Scope:
o Project Management: Involves managing specific, one-time projects that have
clear objectives and deadlines.
o Operations Management: Deals with day-to-day business activities aimed at
maintaining the operational efficiency of an organization.
 Timeframe:
o Project Management: Temporary, limited duration with a distinct start and
finish.
o Operations Management: Ongoing and continuous with no fixed end.
 Objectives:
o Project Management: Focuses on completing a specific project within the
defined scope, quality, and constraints like time and budget.
o Operations Management: Aims to ensure the consistent and efficient production
of goods/services while maintaining quality.
 Nature of Work:
o Project Management: Involves a high degree of variability, change, and unique
challenges.
o Operations Management: Focuses on standardized, repeatable processes to
maintain smooth operations.

In short, Project Management deals with temporary endeavors aimed at producing specific
outcomes, while Operations Management is focused on the ongoing activities of an
organization.

2. What is Scheduling? State the Types of Scheduling

Scheduling is the process of planning and allocating resources (time, people, equipment, etc.) to
tasks or activities within a project. It ensures that the project or operation progresses on time and
meets deadlines.

Types of Scheduling:
  Forward Scheduling: Scheduling starts from the current date and progresses toward the
completion date. It is useful when the project start date is fixed, and we calculate the best
possible project timeline from there.
 Backward Scheduling: In this method, the project timeline is planned backward from a
fixed completion date. This helps to determine the latest possible start date to meet
deadlines.
 Resource Scheduling: Focuses on assigning resources to specific tasks, ensuring that
there are no resource conflicts or shortages. This type is highly used in projects requiring
extensive resource management.
 Priority Scheduling: Involves scheduling tasks based on their importance or urgency. It
ensures that critical tasks are given precedence over less important ones.
 Time-Scaled Scheduling: This type of scheduling considers both the time and the
resource constraints to ensure an optimal allocation for all tasks within the project.

Each of these scheduling types is crucial in ensuring that resources are effectively managed and
that projects are completed on time and within budget.

3. State the Names with Formula of the Types of Variances in the Context of Project
Budgeting, Costing, and Forecasting

Variances in project budgeting, costing, and forecasting are essential for managing project costs
and performance. These variances compare the planned costs with actual costs.

 Cost Variance (CV):

o Formula: CV = EV - AC
o Explanation: The difference between the Earned Value (EV) and the Actual Cost
(AC). A positive CV indicates the project is under budget, and a negative CV
suggests it is over budget.
 Schedule Variance (SV):
o Formula: SV = EV - PV
o Explanation: The difference between the Earned Value (EV) and the Planned
Value (PV). A positive SV indicates the project is ahead of schedule, and a
negative SV indicates it is behind.
 Cost Performance Index (CPI):
o Formula: CPI = EV / AC
o Explanation: A ratio that indicates cost efficiency. A CPI greater than 1 means
the project is under budget, and a CPI less than 1 means the project is over
budget.
 Schedule Performance Index (SPI):
o Formula: SPI = EV / PV
o Explanation: A ratio that indicates schedule efficiency. A SPI greater than 1
means the project is ahead of schedule, and a SPI less than 1 means the project is
behind schedule.
 Estimate at Completion (EAC):
 o Formula: EAC = BAC / CPI
o Explanation: The forecasted total cost of completing the project, based on current
performance.
 Variance at Completion (VAC):
o Formula: VAC = BAC - EAC
o Explanation: The difference between the Budget at Completion (BAC) and the
Estimate at Completion (EAC). A negative VAC indicates the project will exceed
its budget.

These variances help project managers assess project health and take corrective actions when
needed.

4. State the Factors Affecting Facility Locating Decisions

Facility location decisions are critical for any business as they impact operational efficiency,
costs, and customer service. The following factors influence facility location:

 Proximity to Customers: Being close to the target market ensures quick delivery and
reduces transportation costs.
 Availability of Labor: The local labor force must possess the necessary skills and be
available at a reasonable cost.
 Transportation and Infrastructure: The availability and quality of transportation
facilities like roads, ports, and airports are crucial for supply chain efficiency.
 Utility Availability: Access to water, electricity, and other essential utilities is necessary
for smooth operations.
 Government Policies: Tax incentives, regulatory environment, and government support
can play a significant role in location decisions.
 Cost of Land and Real Estate: The cost of acquiring or renting land in a particular
location affects the overall investment.
 Competition and Industry Clusters: Being near competitors or an industry cluster can
foster networking, collaboration, and innovation.
 Environmental Factors: Local climate, environmental regulations, and sustainability
considerations can impact facility location choices.
 Political Stability: Areas with political stability are more favorable for long-term
investment.

Each of these factors must be carefully evaluated to ensure the selected facility location supports
the organization’s operational goals and financial objectives.

5. State the 14 Principles of Deming in the Context of Quality Management

W. Edwards Deming developed 14 key principles for quality management, known as Deming’s
14 Points. These principles aim to guide organizations in achieving continual improvement in
quality.

1. Create Consistency of Purpose: Focus on long-term planning, not short-term goals.

2. Adopt the New Philosophy: Embrace a culture of continuous improvement and reject
the old ways of operating.
3. Cease Dependence on Inspection: Focus on quality improvement rather than relying on
inspection to catch defects.
4. End the Practice of Awarding Business Based on Price: Seek long-term relationships
with suppliers based on quality rather than price.
5. Improve Every Process: Continuously improve the system of production and service,
focusing on improving processes.
6. Institute Training: Provide continuous training to employees to improve their skills and
performance.
7. Institute Leadership: Encourage management to be leaders, not just bosses.
8. Drive Out Fear: Foster a culture where employees feel safe to express their ideas and
concerns.
9. Break Down Barriers: Eliminate silos within the organization to foster collaboration.
10. Eliminate Slogans and Targets: Focus on quality and process rather than setting
arbitrary numerical targets.
11. Remove Barriers to Pride in Workmanship: Encourage employees to take pride in
their work by removing obstacles to excellence.
12. Institute Education and Self-Improvement: Support employee development and
continual learning.
13. Make the Transformation Everybody’s Job: Involve everyone in the organization in
the process of transformation and quality improvement.
14. Take Action to Accomplish the Transformation: Commit to making the necessary
changes to achieve quality improvement.

These principles emphasize systemic thinking, employee involvement, and continuous

improvement, forming the foundation of modern Total Quality Management (TQM).

6. Explain Purchase Functions

The purchase function is a key element of procurement and involves the process of acquiring
goods and services required by an organization. The primary functions of purchasing include:

 Identifying Requirements: Determining the materials, equipment, and services needed

for operations.
 Supplier Selection: Identifying and selecting suppliers based on their reliability, price,
and quality.
 Negotiating Terms and Conditions: Ensuring favorable prices, terms, and delivery
schedules through effective negotiation.
  Order Placement: Creating and issuing purchase orders to suppliers once terms are
finalized.
 Receiving and Inspection: Ensuring the delivered goods meet the quality standards and
specifications before acceptance.
 Inventory Management: Ensuring optimal levels of inventory to avoid overstocking or
stockouts.
 Payment Processing: Ensuring timely and accurate payment to suppliers based on
agreed-upon terms.

The purchase function aims to optimize cost, quality, and timing while ensuring that the
necessary goods and services are available to support the organization’s operations.

7. Briefly Explain the Work Breakdown Structure (WBS)

The Work Breakdown Structure (WBS) is a hierarchical decomposition of a project into

smaller, more manageable components. It helps in organizing project tasks and deliverables.

 Purpose: The WBS provides a framework for project planning, scheduling, and
controlling. It breaks down the project into work packages, which can be easily assigned,
tracked, and monitored.
 Levels: The WBS starts with the overall project at the top level, followed by major
deliverables or phases, and then further broken down into smaller, more specific tasks or
sub-projects.
 Benefits:
o Improves project visibility by detailing all tasks.
o Aids in resource allocation and task management.
o Helps in estimating costs and durations for each component.
 Example: For a construction project, a WBS may include top-level components such as
"Site Preparation," "Building Construction," and "Finishing Work," with each of these
divided further into smaller, actionable items.

The WBS ensures that all aspects of the project are accounted for and provides a clear
framework for project management.

SECTION-B

8. Inventory Management, Levels of Stock, and Analysis Techniques

Inventory Management: Inventory management refers to the process of overseeing the flow of
goods, raw materials, and finished products within an organization. It aims to ensure that a
company has the right amount of stock to meet customer demand while minimizing carrying
costs. It is an essential aspect of supply chain management, involving the control of stock levels,
ordering, storage, and distribution of inventory. The goal of inventory management is to maintain
optimal inventory levels, avoid stockouts, and reduce excess inventory.
Levels of Stock: There are various levels of stock that businesses must monitor and maintain to
ensure efficient inventory management. These levels include:

1. Re-order Level (ROL): This is the inventory level at which a new order should be
placed to replenish stock before it runs out. It is determined by the lead time and the
consumption rate of the item.
o Formula:

ROL=Lead Time Demand=Average Daily Usage×Lead Time in Days\text{ROL}

= \text{Lead Time Demand} = \text{Average Daily Usage} \times \text{Lead
Time in
Days}ROL=Lead Time Demand=Average Daily Usage×Lead Time in Days

2. Minimum Stock Level (MSL): The minimum level of stock that should be maintained
to avoid running out of inventory. This is the safety buffer to account for fluctuations in
demand and supply.
o Formula:

MSL=Reorder Level−Average Consumption during Lead Time\text{MSL} = \

text{Reorder Level} - \text{Average Consumption during Lead
Time}MSL=Reorder Level−Average Consumption during Lead Time

3. Maximum Stock Level (MSL): The highest level of stock that should be kept, which
helps in preventing overstocking and tying up capital in inventory.
o Formula:

MSL=Reorder Level+Economic Order Quantity (EOQ)\text{MSL} = \

text{Reorder Level} + \text{Economic Order Quantity
(EOQ)}MSL=Reorder Level+Economic Order Quantity (EOQ)

4. Economic Order Quantity (EOQ): This is the optimal order quantity that minimizes the
total inventory cost, including ordering and holding costs.
o Formula:

EOQ=2DSH\text{EOQ} = \sqrt{\frac{2DS}{H}}EOQ=H2DS

Where:

 D = Demand rate
 S = Ordering cost per order
 H = Holding cost per unit

VED Analysis: VED (Vital, Essential, and Desirable) analysis is used to categorize inventory
based on its importance for the production process. It helps prioritize inventory management
efforts.
  Vital: Critical to the production process and cannot be substituted.
 Essential: Important but not critical, these items may have substitutes.
 Desirable: Not essential but adds value to the process, often non-critical or optional.

FSN Analysis: FSN (Fast-moving, Slow-moving, and Non-moving) analysis classifies inventory
items based on their movement rate. It helps in optimizing inventory levels and preventing
overstocking of slow or non-moving items.

 Fast-moving: Items that are sold or used frequently and have a high turnover rate.
 Slow-moving: Items that sell less frequently and have a low turnover rate.
 Non-moving: Items that have not been used or sold over a specified period and need to
be cleared.

ABC Analysis: ABC (Activity Based Classification) analysis is a method of classifying

inventory based on its value. It categorizes items into three groups:

 A (High value, low volume): These are the most critical items, though they may not be
sold in large quantities.
 B (Moderate value, moderate volume): Items with a moderate value and a moderate
turnover rate.
 C (Low value, high volume): These items are cheap but sold in large quantities.

9. Quality Control Tools

Quality control tools are techniques used to monitor and control the quality of processes and
products to ensure they meet desired standards. These tools are instrumental in identifying
defects, understanding processes, and improving performance.

1. Flowcharts: A flowchart is a graphical representation of a process that helps in

visualizing the steps involved. It is used to identify bottlenecks, redundancies, and
inefficiencies in a process.
2. Cause-and-Effect Diagram (Fishbone Diagram): This tool is used to identify the root
causes of a problem by categorizing potential causes into several groups (e.g., methods,
materials, machines, people, and environment). It helps in systematically investigating
problems.
3. Pareto Chart: A Pareto chart is a bar graph that displays the frequency or size of
problems in descending order. Based on the Pareto principle (80/20 rule), it highlights the
most important issues that contribute to the majority of problems, aiding in prioritizing
actions.
4. Control Charts: Control charts are used to monitor the consistency of processes over
time. They display data points in time order and help to identify variations or trends that
might indicate problems.
 5. Histograms: A histogram is a graphical representation of the frequency distribution of a
set of data. It helps in understanding the distribution and spread of data, which is essential
for quality control.
6. Scatter Diagrams: A scatter diagram is used to visually investigate the relationship
between two variables. It helps in identifying correlations or patterns that might indicate a
cause-effect relationship.
7. Check Sheets: Check sheets are structured forms used to collect and analyze data. They
help in identifying patterns or trends over time, especially in terms of defect frequency
and type.
8. Histogram: A histogram is a graphical representation of the frequency distribution of
data, useful for identifying the nature of variation in a process.

10. Lean Management and the 7 Wastes

Lean Management: Lean management is a philosophy focused on improving efficiency by

eliminating waste and enhancing value creation. It aims to maximize customer value while
minimizing waste. The key principles of lean management include continuous improvement,
respect for people, and the focus on process optimization. The ultimate goal is to deliver quality
products or services with minimal resources, time, and cost.

Lean management tools include Value Stream Mapping, Kaizen (continuous improvement), 5S
(sort, set in order, shine, standardize, and sustain), and Just-in-Time (JIT).

The 7 Wastes: In lean management, the 7 wastes (often referred to as "Muda") are types of
inefficiency that hinder productivity. They are:

1. Overproduction: Producing more than required, leading to excess inventory.

2. Waiting: Idle time when materials, workers, or equipment are waiting.
3. Transportation: Unnecessary movement of materials or products.
4. Extra Processing: Performing more work than necessary (e.g., unnecessary steps in a
process).
5. Inventory: Storing more inventory than required, leading to excessive holding costs.
6. Motion: Unnecessary movements of workers or machinery that do not add value.
7. Defects: Errors or imperfections that require rework or result in wasted resources.

Eliminating these wastes is critical for improving efficiency and achieving lean operations.

11. Ten Sub-Systems of Project Management

Project management involves coordinating and managing different subsystems to ensure
successful project delivery. The ten sub-systems of project management are:

1. Integration Management: Ensures that all aspects of the project are coordinated,
aligned, and managed effectively, including project planning, execution, and closure.
2. Scope Management: Involves defining and controlling the scope of the project, ensuring
that all necessary work is included and that changes to the scope are managed.
3. Time Management: Focuses on planning and controlling the project schedule, ensuring
that the project is completed within the agreed timeframe.
4. Cost Management: Involves estimating, budgeting, and controlling costs to ensure that
the project is completed within the approved budget.
5. Quality Management: Ensures that the project meets the required quality standards and
satisfies customer expectations.
6. Human Resource Management: Involves organizing, managing, and leading the project
team to ensure that the project is successfully executed.
7. Communication Management: Ensures timely and efficient communication with all
stakeholders, providing necessary information and updates.
8. Risk Management: Involves identifying, analyzing, and responding to risks that may
affect the project, ensuring that risks are minimized.
9. Procurement Management: Focuses on acquiring goods and services required for the
project, including vendor selection and contract management.
10. Stakeholder Management: Involves identifying, managing, and engaging stakeholders,
ensuring their expectations are aligned with project objectives.

These subsystems work together to ensure that a project is planned, executed, and completed
efficiently and successfully.

PROJECT AND OPERATIONS MANAGEMENT – 2020

SECTION A

1. The Five Wastes (7 Wastes in Lean Management)

The five wastes refer to the inefficiencies in the process that do not add value to the customer.
They are part of Lean Management, which focuses on eliminating waste to improve quality,
reduce costs, and increase speed. Traditionally, Lean identifies seven wastes, but the five main
ones are:

1. Overproduction: Producing more than needed, leading to excess inventory and

unnecessary storage costs. Overproduction can be avoided by aligning production with
actual demand, ensuring only what is needed is produced.
2. Waiting: Time spent waiting for resources, materials, or information, which slows down
the production process. Reducing waiting time by ensuring materials and workers are
ready can improve productivity.
3. Transport: Unnecessary movement of materials or products within the factory or
warehouse. Reducing transport waste involves optimizing workflows to minimize
movement distances and improve layout designs.
 4. Excess Processing: Performing more work than is necessary or adding unnecessary steps
to the process. Streamlining the process and focusing on the core value-added activities
ensures efficiency.
5. Defects: Products or services that do not meet the required standards, leading to rework,
scrap, or warranty costs. Preventing defects through quality control mechanisms and
continuous monitoring is essential.

By identifying and reducing these wastes, businesses can improve efficiency, reduce costs, and
enhance customer satisfaction.

2. The 5S of Housekeeping

The 5S methodology is a workplace organization system designed to improve efficiency, safety,

and cleanliness. The five stages of 5S are:

1. Sort (Seiri): The process of sorting through all tools, materials, and equipment and
removing any unnecessary items. This ensures that only essential items remain in the
workspace, helping reduce clutter and increase productivity.
2. Set in Order (Seiton): This step involves organizing and arranging necessary items for
easy access. Items are placed in a way that minimizes wasteful movement and maximizes
efficiency, making it easier for workers to find tools and materials.
3. Shine (Seiso): Cleaning and maintaining the workspace, tools, and equipment. This
includes regular cleaning schedules to ensure the environment remains safe and hygienic,
and that equipment is maintained to avoid breakdowns.
4. Standardize (Seiketsu): Establishing standardized procedures and schedules to maintain
the first three S’s. This helps to ensure that the improvements achieved are sustained and
that the workplace remains organized and clean.
5. Sustain (Shitsuke): The process of instilling discipline and creating a culture where
everyone adheres to the 5S standards. This ensures the longevity of the improvements
and encourages employees to take ownership of their workspace.

By following 5S, organizations can improve efficiency, reduce waste, and create a safer, more
organized workplace.

3. Work Breakdown Structure (WBS)

A Work Breakdown Structure (WBS) is a hierarchical decomposition of a project into smaller,

manageable components or tasks. It breaks down the scope of a project into deliverables and sub-
deliverables, making it easier to plan, manage, and track project progress.

Key Characteristics of WBS:

  Hierarchical Structure: WBS organizes tasks into levels. The first level represents the
overall project, and subsequent levels break it down into smaller, more specific
components.
 Project Scope: The WBS defines and structures the entire scope of the project, ensuring
no key tasks are overlooked.
 Manageable Components: Each WBS component or task is defined in such a way that it
is easy to assign responsibilities, estimate costs, and schedule work.
 Clear Deliverables: Each element in the WBS corresponds to a specific deliverable that
helps in meeting the project’s goals.

Benefits:

 Clarity and Focus: It provides clarity by showing the relationship between various
components, making it easier to focus on individual tasks.
 Task Allocation: It facilitates task delegation, as managers can assign clear deliverables
and responsibilities to team members.
 Cost and Time Estimation: WBS is useful in estimating the cost, time, and resources
required for each component, helping in budgeting and scheduling.
 Risk Management: It allows identification of potential risks at various stages of the
project and helps in managing them effectively.

WBS is a crucial tool for project managers, ensuring that the project is broken down into
manageable tasks, ultimately leading to successful project completion.

4. The 7 Quality Improvement Tools

The 7 Quality Improvement Tools are fundamental techniques used to analyze, improve, and
control the quality of products or services. These tools help identify, measure, and resolve
quality issues in a systematic way.

1. Cause-and-Effect Diagram (Fishbone/Ishikawa Diagram): A graphical tool used to

identify the root causes of a problem. It organizes potential causes into categories like
methods, materials, machinery, and people, helping teams focus on the factors that
contribute to the problem.
2. Flowchart: A visual representation of a process, showing the sequence of steps involved.
Flowcharts help identify bottlenecks, redundancies, and inefficiencies in processes,
facilitating improvements.
3. Check Sheet: A structured form used for collecting and analyzing data in real-time. It
helps in recording the frequency of problems or events and identifying trends, such as
defect types or common errors.
4. Pareto Chart: A bar graph that displays the relative frequency of problems or causes,
with the most significant issues on the left. Based on the Pareto principle (80/20 rule), it
helps prioritize the most impactful issues to address.
 5. Histogram: A graphical representation of the distribution of data. It helps visualize
patterns, trends, or variations in a dataset, allowing teams to identify areas where
improvement is needed.
6. Control Chart: A time-series chart that shows the variation of a process over time. It is
used to monitor the stability of a process, detecting when it goes out of control and
requires corrective action.
7. Scatter Diagram: A plot of two variables to identify the relationship between them. It
helps in determining correlations, such as whether an increase in one variable leads to a
change in another.

These tools are used in tandem to improve quality, identify inefficiencies, and ensure a
systematic approach to problem-solving.

5. Labour Productivity and Multi-Factor Productivity

Labour Productivity measures the output produced by labor over a certain period. It is
calculated as:

Labour Productivity=Total OutputNumber of Labourers\text{Labour Productivity} = \frac{\

text{Total Output}}{\text{Number of
Labourers}}Labour Productivity=Number of LabourersTotal Output

Given:

 Output per day = 1000 chairs

 Number of laborers per day = 4

Labour Productivity=10004=250 chairs per labourer per day\text{Labour Productivity} = \

frac{1000}{4} = 250 \text{ chairs per labourer per day}Labour Productivity=41000
=250 chairs per labourer per day

Multi-Factor Productivity (MFP) considers multiple inputs to determine the overall

productivity of a process. It is calculated as:

MFP=Total OutputTotal Inputs\text{MFP} = \frac{\text{Total Output}}{\text{Total

Inputs}}MFP=Total InputsTotal Output

Given:

 Output per week = 1000×6=60001000 \times 6 = 60001000×6=6000 chairs

 Labor cost per day = 100, so weekly labor cost = 100×6=600100 \times 6 =
600100×6=600
 Overheads = 150×6=900150 \times 6 = 900150×6=900
 Administrative costs = 250×6=1500250 \times 6 = 1500250×6=1500
  Total Inputs = 600+900+1500=3000600 + 900 + 1500 = 3000600+900+1500=3000

MFP=60003000=2 chairs per unit of input\text{MFP} = \frac{6000}{3000} = 2 \text{ chairs per

unit of input}MFP=30006000=2 chairs per unit of input

This means the factory produces 2 chairs for every unit of input cost.

6. Project Life Cycle

The project life cycle is a structured approach to managing a project from initiation to
completion. It consists of several stages:

1. Initiation: This phase defines the project’s purpose, scope, objectives, and feasibility.
The project charter is created, and stakeholders are identified.
2. Planning: Detailed planning is conducted, including creating schedules, allocating
resources, setting budgets, and identifying risks. The project management plan is
developed.
3. Execution: The project plan is put into action. Tasks are performed, resources are
utilized, and the project team works to meet the project’s objectives.
4. Monitoring and Controlling: This phase ensures that the project stays on track.
Performance is measured against the project plan, and corrective actions are taken if
needed.
5. Closing: The project is completed, deliverables are handed over, and the project is
formally closed. Lessons learned are documented, and the project is evaluated.

Each stage of the project life cycle plays a crucial role in ensuring the project is completed
successfully.

7. ISO (International Organization for Standardization)

ISO is an international standard-setting body that develops and publishes standards for various
sectors. ISO standards ensure that products, services, and systems are safe, reliable, and of high
quality.

Key Concepts and Process:

1. ISO Standards: These are documents that outline requirements, guidelines, or

characteristics that organizations must meet to ensure their products or services
consistently meet customer and regulatory requirements. Examples include ISO 9001
(Quality Management Systems) and ISO 14001 (Environmental Management Systems).
2. Certification Process: Organizations can obtain ISO certification by undergoing an audit
process conducted by a certified external body. The process typically includes:
 o Preparation: Understanding the relevant ISO standard and aligning the
organization's processes with its requirements.
o Implementation: Making necessary adjustments in processes, documentation,
and systems to meet ISO standards.
o Audit: An external audit is conducted to assess compliance with the ISO
standard.
o Certification: If the organization meets the requirements, it is granted
certification.

ISO certification demonstrates an organization’s commitment to quality, continuous

improvement, and customer satisfaction. It can enhance credibility and open doors to new
business opportunities.

SECTION-B

8. What is meant by facility layout planning? Discuss the different types of facility layouts.

Facility Layout Planning refers to the process of arranging the physical layout of a facility,
such as a manufacturing plant, warehouse, or office, in an optimal manner. This arrangement
aims to ensure efficient workflow, reduce waste, minimize transportation costs, enhance
productivity, and ensure worker safety. Effective layout planning considers the types of activities
involved, space utilization, material handling requirements, and safety norms. Facility layout
planning is crucial for achieving operational efficiency and cost-effectiveness in an organization.

Types of Facility Layouts:

1. Process Layout (Functional Layout):

o This layout groups similar processes or functions together in separate
departments.
o For example, all machines for metalworking are located in one area, and those for
assembly in another.
o It is commonly used in job shops or environments where customization is
necessary.
o Advantages: Flexibility in product design, better for low-volume or custom
products.
o Disadvantages: High transportation cost due to the layout of resources, complex
material handling.
2. Product Layout (Line Layout):
o In this layout, equipment and workstations are arranged in the order of the
production process.
o It is commonly used in assembly lines where the production of identical items
occurs.
o For example, a car assembly line where each workstation adds a specific part in a
sequential order.
 o Advantages: Reduced material handling time, higher production efficiency, easy
to supervise.
o Disadvantages: Less flexibility, large initial investment in equipment.
3. Fixed-Position Layout:
o Used when the product is large, bulky, or immobile, like ships, aircraft, or
buildings.
o The product stays stationary, and workers, tools, and materials come to the
product.
o Advantages: Ideal for large, complex products, reduces movement of heavy
materials.
o Disadvantages: Difficult to manage space, can lead to inefficient utilization of
resources.
4. Cellular Layout:
o This layout groups machines into cells based on the type of products being
produced.
o It is a hybrid layout combining features of both process and product layouts.
o Advantages: Reduces material handling costs, improves quality control, and
enhances worker morale due to teamwork.
o Disadvantages: Requires significant planning and design effort, can be expensive
to implement.
5. Combination Layout:
o A combination layout incorporates elements of both product and process layouts.
o This is often used in industries where product flows differ based on production
stages.
o Advantages: Flexible, can accommodate various production requirements.
o Disadvantages: Complexity in managing and organizing resources and materials.

Facility layout planning is an ongoing process and needs continuous assessment to ensure
optimal efficiency as production demands and technologies evolve.

9. What is meant by quality? Discuss the contribution of quality gurus.

Quality refers to the degree to which a product or service meets or exceeds customer
expectations. It encompasses features, performance, durability, reliability, and conformance to
specifications. Quality management is a key factor in ensuring customer satisfaction, reducing
costs, and increasing business competitiveness. Quality can be measured in terms of consistency,
precision, and meeting established standards.

Contributions of Quality Gurus:

1. W. Edwards Deming:
o Deming is regarded as the father of quality control and the originator of the
Deming Cycle (Plan-Do-Check-Act or PDCA).
 o He emphasized that quality should be built into the production process rather than
being inspected at the end.
o He introduced the concept of statistical process control (SPC) and advocated for
continuous improvement in management and production processes.
o His 14 Points for Management laid the foundation for Total Quality
Management (TQM).
2. Joseph Juran:
o Juran is known for his Juran Trilogy: quality planning, quality control, and
quality improvement.
o He focused on the importance of management's role in achieving quality and
emphasized that quality should be a part of the corporate culture.
o Juran advocated for a systematic approach to quality, which includes setting
goals, measuring performance, and analyzing results.
3. Philip Crosby:
o Crosby is best known for his concept of "Zero Defects" and his emphasis on
preventing defects rather than detecting them.
o He introduced the Cost of Quality (CoQ) concept, stating that the cost of poor
quality is greater than the cost of implementing quality systems.
o His philosophy emphasized that quality is free and that managers should focus on
doing things right the first time.
4. Kaoru Ishikawa:
o Ishikawa introduced the Fishbone Diagram (also known as the Ishikawa diagram
or cause-and-effect diagram) to identify the root causes of quality problems.
o He also developed the concept of quality circles, encouraging workers to
collaborate in problem-solving and quality improvement efforts.
o Ishikawa emphasized the importance of involving all employees in the pursuit of
quality and continuous improvement.
5. Armand Feigenbaum:
o Feigenbaum is known for his Total Quality Control (TQC) concept, which is
the idea that quality control is a comprehensive, organization-wide effort.
o He proposed that quality is everyone's responsibility and that customer
satisfaction should be the ultimate goal.
o Feigenbaum's approach includes a focus on both product and process quality and
emphasizes continuous improvement.
6. Genichi Taguchi:
o Taguchi is recognized for developing the Taguchi Loss Function, which
quantifies the cost of deviation from quality standards.
o He introduced the concept of design for quality, where quality is built into the
product at the design stage.
o Taguchi’s methods focus on reducing variability in production to prevent defects
from occurring.

These quality gurus collectively contributed to the establishment of quality management

principles and practices that have shaped modern approaches to improving processes, products,
and services. Their contributions emphasize that quality is not a one-time effort but a continuous,
organization-wide commitment.
10. A project has several subsystems. Name each of them and discuss the role each
subsystem plays.

A project is typically composed of several interrelated subsystems, each playing a vital role in
ensuring the success of the project. These subsystems contribute to different aspects of the
project lifecycle, from initiation to completion.

Subsystems of a Project:

1. Project Scope Management:

o The scope management subsystem defines and controls what is included and
excluded from the project. It establishes clear project goals, deliverables, and
deadlines.
o Role: Ensures that the project meets its objectives without scope creep, keeping
the project on track and within the agreed-upon scope.
2. Project Time Management:
o This subsystem focuses on scheduling and controlling the project timeline. It
involves setting milestones, defining tasks, and allocating resources to meet
deadlines.
o Role: Ensures the project is completed on time by identifying potential delays and
taking corrective actions as necessary.
3. Project Cost Management:
o Cost management involves budgeting, estimating costs, and controlling
expenditures throughout the project lifecycle.
o Role: Helps keep the project within its financial constraints, preventing
overspending while ensuring the required quality is maintained.
4. Project Quality Management:
o This subsystem ensures that the project’s deliverables meet the required quality
standards. It involves setting quality criteria, monitoring progress, and controlling
the quality of work.
o Role: Guarantees that the project produces outcomes that satisfy customer needs
and adhere to predefined standards.
5. Project Risk Management:
o Risk management involves identifying, assessing, and mitigating potential risks
that could affect the project’s success.
o Role: Helps minimize the impact of risks and uncertainties, ensuring that potential
issues are addressed proactively.
6. Project Communication Management:
o This subsystem ensures that effective communication occurs among all
stakeholders. It includes developing communication plans, disseminating
information, and managing expectations.
o Role: Facilitates smooth information flow, ensuring stakeholders are kept
informed, aligned, and engaged throughout the project.
7. Project Human Resource Management:
 o Human resource management focuses on organizing, managing, and leading the
project team. It involves recruitment, training, performance evaluations, and
conflict resolution.
o Role: Ensures that the project has the right talent, skills, and team cohesion to
achieve its goals.
8. Project Procurement Management:
o Procurement management involves acquiring the necessary resources, materials,
and services for the project from external suppliers.
o Role: Ensures that the project has all the required external resources and services,
properly managed for cost and quality.
9. Project Stakeholder Management:
o This subsystem focuses on identifying and managing the expectations of all
stakeholders involved in or affected by the project.
o Role: Helps align the project’s objectives with stakeholder needs, ensuring strong
support and reducing resistance.

Each of these subsystems is interconnected, and their effective management ensures that the
project is completed successfully, on time, within budget, and according to the required
standards.

11. What is inventory management? Why is it important? Discuss the various

classifications of inventory management.

Inventory Management refers to the process of ordering, storing, tracking, and controlling
inventory in an efficient and cost-effective manner. It involves maintaining the right balance of
stock to meet customer demand while minimizing costs associated with storing and managing
inventory.

Importance of Inventory Management:

1. Maintains Balance: Helps maintain the optimal stock levels, avoiding stockouts or
overstocking.
2. Cost Control: Proper inventory management minimizes holding costs, ordering costs,
and stockouts, contributing to cost savings.
3. Efficient Operations: Ensures that production processes run smoothly by preventing
material shortages.
4. Customer Satisfaction: Helps fulfill customer orders on time by ensuring product
availability, thereby maintaining customer trust and loyalty.
5. Cash Flow Management: Reduces unnecessary investment in inventory and frees up
working capital.

Classifications of Inventory Management:

1. Raw Materials Inventory:

 o Raw materials are basic materials used in the manufacturing process. They are
essential for producing finished goods.
o Role: Ensures production processes have the necessary materials to operate
without interruptions.
2. Work-in-Progress (WIP) Inventory:
o WIP inventory includes products that are partially completed but are not yet
finished. This inventory exists in manufacturing processes between the raw
material and finished product stages.
o Role: Helps track products at different stages of production, ensuring efficient
transition from one phase to another.
3. Finished Goods Inventory:
o Finished goods are products that are ready for sale or distribution.
o Role: Ensures the business has sufficient stock to meet customer demand and
sales requirements.
4. Maintenance, Repair, and Overhaul (MRO) Inventory:
o MRO inventory includes items required for maintenance, repair, or operations of
machines and equipment, but not part of the final product.
o Role: Ensures that manufacturing or business operations are not disrupted due to
machine breakdowns or repairs.
5. Transit Inventory:
o Transit inventory consists of goods that are in transit between different locations,
like from suppliers to a manufacturing plant.
o Role: Helps in tracking goods being transported, ensuring smooth transitions
between suppliers, warehouses, and production facilities.
6. Anticipation Inventory:
o This type of inventory is built up to meet expected demand due to seasonal
fluctuations or promotions.
o Role: Helps prepare for anticipated future demand, preventing shortages during
peak times.
7. Decoupling Inventory:
o Decoupling inventory is used to separate different production stages. This
inventory exists to ensure that one stage does not halt due to problems in another
stage.
o Role: Acts as a buffer between production stages, allowing smoother operations
despite production variances.

Efficient inventory management practices help businesses minimize costs while maximizing the
availability and quality of their products, ultimately improving customer satisfaction and
operational efficiency.