MBA 1ST Year Material and Inventory Management Long Question Answers

MBA 1ST Year Material and Inventory Management Long Question Answers: – In this Post you will find MBA 1 year related to important questions related to the answer such as the Operation Concept Answer and many other important questions. Short Questions are answered in section C

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MBA 1ST Year Material and Inventory Management Long Question Answers
MBA 1ST Year Material and Inventory Management Long Question Answers

Section C

LONG ANSWER QUESTIONS

Q.1. Explain the meaning, objectives and process of production planning. What are the steps of production planning process?

Ans. Meaning of Production Planning: Production planning means to fix the production goals and to estimate the resources which are required to achieve these goals. It prepares a detailed plan for achieving the production goals economically and efficiently in time. It forecasts each step in the production process. It forecasts the problems, which may arise in the production process. It tries to remove these problems and also remove the causes of wastage.

Production planning provides answers for two major questions, viz.

1. What work should be done?

2. How much time will be taken to perform the work?

So, production planning decides the ways and means of production. It shows the direction. It is based on sales forecasting. It is a pre-requisite of production control. ‘Production planning is concerned with the determination, acquisition and arrangement of all facilities necessary for future operations

Objectives of Production Planning

1. Effective Utilization of Resources: Production planning results in effective utilisation of resources, plant capacity and equipments. This results in low-cost and high returns for the organisation.

2. Steady flow of Production: Production planning ensures a regular and steady flow of production. Here, all the machines are put to maximum use. This results in a regular production, which helps to give a routine supply to customers.

3. Estimate the Resources: Production planning helps to estimate the resources like men, materials, etc. The estimate is made based on sales forecast. So production is planned to meet sales requirements.

4. Ensures Optimum Inventory: Production planning ensures optimum inventory. It prevents over-stocking and under-stocking. Necessary stocks are maintained. Stock of raw material is maintained at a proper level in order to meet the production demands. Stock of finished goods is also maintained to meet regular demands from customers.

5. Coordinates Activities of Departments: Production planning helps to coordinate the activities of different departments. For example, the marketing department coordinates with production department to sell the goods. This results in profit to the organization.

6. Minimise Wastage of Raw Materials: Production planning minimises wastage of raw materiale It ensures proper inventory of raw materials and materials handling. This helps to minimise the wastage of raw material. It also ensures production of quality goods. This results in a minimum rejects So, proper production planning and control results in minimum wastage.

7. Improves the Labour Productivity: Production planning improves the labour productivity Here, there is maximum utilisation of manpower. Training is provided to the workers. The profits are shared with the workers in the form of increased wages and other incentives. Workers are motivated to perform their best. This results in improved labour efficiency.

8. Helps to Capture the Market: Production planning helps to give delivery of goods to customers in time. This is because of regular flow of quality production. So the company can face competition effectively and it can capture the market

9.Provides a Better Work Environment: Production planning provides a better work environment to the workers. Workers get improved working conditions, proper working hours, leave and holidays, increased wages and other incentives. This is because the company is working very efficiently.

10. Facilitates Quality Improvement: Production planning facilitates quality improvement because the production is checked regularly. Quality consciousness is developed among the employees through training, suggestion schemes, quality circles, etc.

11. Results in Consumer Satisfaction: Production planning helps to give a regular supply of goods and services to the consumers at par prices. It results in consumer satisfaction

12. Reduces the Production Costs: Production planning makes optimum utilisation of resources and it minimises wastage. It also maintains optimum size of inventories. All this reduces the production costs.

OWL

Process of Production Planning

Process of production planning is as follows:

1. Planning: Production planning may be defined as the technique of foreseeing every step in a long series of separate operations, each step to be taken at the right time and in the right place and each operation to be performed in maximum efficiency. It helps entrepreneur to work out the quantity of material, manpower, machine and money Routing SX requirements for producing predetermined level of output in a given period of time.

2. Routing: Under this, the operations, their path and sequence engineering function and it are established. To perform these operations, the proper class of is useful to prepare machine machines and personnel required are also worked out. The main aim of routing is to determine the best and cheapest sequence of operations and to ensure that this sequence is strictly followed. In small enterprises, this job is usually done by entrepreneur himself in a rather ad hoc manner. Routing procedure involves following different activities:

(a) An analysis of the article to determine what to make and what to buy?

(b) To determine the quality and type of material.

(c) Determining the manufacturing operations and their sequence.

(d) A determination of lot sizes.

(e) Determination of scrap factors.

(f) An analysis of cost of the article.

(g) Organisation of production control forms.

3. Scheduling: It means working out of time that should be required to perform each operation, and also the time necessary to perform the entire series as routed, making allowances for all factor concerned. It mainly concerns with time element and priorities of a job. The pattern of scheduling differs from one job to another which is explained as follows:

(a) Production Schedule: The main aim is to schedule that amount of work which can easily be handled by plant and equipment without interference. It is not independent decision as it takes into account following factors:

(1) Physical plant facilities of the type required to process the material being scheduled.

(2) Personnel who possess the desired skills and experience to operate the equipment and perform the type of work involved.

(3) Necessary materials and purchased parts.

(b) Master Schedule: Scheduling usually starts with preparation of master schedule which is weekly or monthly breakdown of the production requirement of each product for a definite time period, by having this as a running record of total production requirements. The entrepreneur is in better position to shift the production from one product to another as per the changed production requirements. This forms a base for all subsequent scheduling activities. A master schedule is followed by operator schedule which fixes total time required to do a piece of work with a given machine or which shows the time required to do each detailed operation of a given job with a given machir process.

(c) Manufacturing Schedule: It is prepared on the basis of type of manufacturing process involved. It is very useful where single or few products are manufactured repeatedly at regular intervals. Thus it would show the required quality of each product and sequence in which the same is to be operated.

(d) Scheduling of Job Order Manufacturing: Scheduling acquires greater importance in job order manufacturing. This will enable the speedy execution of job at each centre point. As far as small scale industry is concerned, scheduling is of utmost importance as it brings out efficiency in the operations and reduces cost price. The small entrepreneur should maintain four types of schedules to have a close scrutiny of all stages namely an enquiry schedule, a production schedule, a shop schedule and an arrears schedule out of above four, a shop schedule is the most important most suited to the needs of small scale industry as it enables a foreman to see at a glance.

(i) The total load on any section.

(ii) The operational sequence.

(iii) The stage, which any job has reached.

4. Loading: The next step is the execution of the schedule plan as per the route chalked out. It includes the assignment of the work to the operators at their machines or work places. So loading determines who will do the work as routing determines where and scheduling determines when it shall be done. Gantt charts are most commonly used in small industries in order to determine the existing load and also to foresee how fast a job can be done.

MBA 1ST Year Material and Inventory Management Long Question Answers

Q.2. What is production planning and explain the main factors determining production planning process?

Ans. Production Planning: According to British Standard Booklet, ‘Production planning is the process by which a manufacturing plan is determined, information is issued for its execution and data is collected and recorded which will enable the plant to be controlled through all stages’.

According to Chase and Aquilano, ‘Production planning is concerned with developing specific course of action for production system’.

Factors Determining Production Planning: The end-product of the production planning efforts is the formulation of production plans. The production plans are formulated in the light of the specified future period. The plans are to be implemented in the light of the estimated costs and agreed policies. The factors determining production planning process are as under:

1. Controlling Production: Once the production plan is made and set to operations, it is likely that the actual stocks of the finished goods inventory will fall below or exceed the planned balances due to the discrepancies in the estimated and actual sales. The marginal imbalance in the estimated and actual sales is solved by providing for certain safety level of inventory. The size of the safety stock depends on the promptness of production adjustment. The adjustments in the plan are made as follows:

(a) Where only a short span of the planned cycle is over, the revisions of the original foreca should be made by adjusting the accepted sales changes to the cumulative forecast for the remainder of the planned cycle.

(b) Where the planned cycle is on the verge of completion, the forecast may be extended to cover the next planning cycle.

2. Setting of Production Rate: The production requirements are broken into periods and the schedule of production is prepared. The production at any point of time is the result of the prescribed rated capacity. In the light of the desired production, the production rate should be planned on the basis of the existing production capacity, overtime working, extra shift working or new additions to the existing production capacity. The production rate is set with the help of graphic technique.

3. Specification of Production Requirement: Though demand forecasts provide the basis for production planning, it is not everything in production planning. The forecast demands are adjusted as under while planning the actual production:

(a) On the basis of available production capacity, the forecast demand is put on the calendar schedule.

(b) Reasonable allowances are made for possible errors in the forecast.

(C) The deficiency of surplus of the existing production capacity ascertained in terms of machine capacity and labour force. On the basis of the temporary or permanent fluctuations in the demand, the adjustment in the machine capacity and labour force are planned well in advance.

(d) A schedule of material requirement is prepared. While deciding the quantity of material, due considerations are given to the seasonal advantage, cost of excess inventories carrying, cost of stockouts, etc.

4. Demand Forecasts: The production planning function is geared to the estimated demand for the product. The demand forecasting represents an anticipated level of demand and it also reflects on the pattern of the demand. If seasonal or other kind of symmetry can be predicted, production can be planned to take advantage of the predicted pattern of the demand.

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