Centre For Continuing Education Executive MBA Oil & Gas Mana

Centre For Continuing Educationexecutive Mba Oil Gas Managementba

Centre For Continuing Educationexecutive Mba Oil Gas Managementba

CENTRE FOR CONTINUING EDUCATION EXECUTIVE MBA (OIL & GAS MANAGEMENT) BATCH: _______________________ SEMESTER: _______________________ NAME: _______________________ SAP NO/REGN NO: _______________________ ASSIGNMENT – 1 FOR Operations and Materials Management MBCQ -722 UNIVERSITY OF PETROLEUM & ENERGY STUDIES Last Date of Submission:-15th April 2012 Sectionâ€A (Short Answer Questions) Marks: 4à—5=. For the following organizations, explain how their operations functions can support business strategy, implement business strategy and drive business strategy: †a fastâ€food restaurant †a filmâ€processing service †an oil refinery. 2. Why is operations management relevant to managers in other organization functions? 3. Using an example of your own choice, describe how the cost of the operation might be affected by changing the levels of performance of quality, speed, dependability and flexibility. 4. Draw the hierarchy of operations for a small manufacturing company. Sectionâ€B (Long Answer Questions) Marks: 3à—10=.

A company which specializes in fabricating large lathes inspects every lathe before it is shipped to the customer’s site. Given below are the defects found on a sample of 10 lathes. Sample No. No. Defects Find whether the processes are under the control for 99 percent defects.

Justify your answer 2. A firm is planning to set up a production line to assemble 300 units per hour, and 50 minutes per hour are productive. The time to perform each task and the tasks that must precede each task are: ======================================================================= Task That Time to Tasks That Time to Immediately Perform Task Immediately Perform Task Task Precedes (Minutes) Task Precede (Minutes) â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€â€ A â€â€ .69 F B 1.10 B A .55 G C,D,E .75 C B .21 H G,F .43 D B .59 I H .29 E B .70 ======================================================================= a.

Draw a diagram of precedence relationships. b. Compute the cycle time per unit in minutes. c. Compute the minimum number of work stations required to produce 300 units per hour and find the efficiency of the balance line 3. What is statistical process control (SPC)? Explain why x and R charts are used together? Sectionâ€C (Caselets/Situational Questions) Marks: 2à—25=. Inventory management in some operations is more than just a part of their responsibility; it is their very reason for being in business. Flame Electrical, South Africa’s largest independent supplier and distributor of lamps, is such a business. It stocks over 2900 different types of lamp, which are sourced from 14 countries and distributed to customers throughout the country. ‘In effect our customers are using us to manage their stocks of lighting sources for them,’ says Jeff Schaffer, the Managing Director of Flame Electrical. ‘They could, if they wanted to, hold their own stock but might not want to devote the time, space, money or effort to doing so.

Using us they get the widest range of products to choose from, and an accurate, fast and dependable service.’ Central to the company’s ability to provide the service its customers expect is its computerized stock management system. The system holds information on all of Flame’s customers, the type of lamps they may order, the quality and brand of lamps they prefer, the price to be charged and the location of each item in the warehouse. When a customer phones in to order, the computer system immediately accesses all this information, which is confirmed to the customer. This leaves only the quantity of each lamp required by the customer to be keyed in. The system then generates an instruction to the warehouse to pick up and dispatch the order.

This instruction includes the shelf location of each item. The system even calculates the location of each item in the warehouse which will minimize the movement of stock for warehouse staff. Orders for the replenishment of stocks in the warehouse are triggered by a reâ€order point system. The reâ€order point is set for each stocked item depending on the likely demand for the product during the order lead time (forecast from the equivalent period’s orders the previous year), the order lead time for the item (which varies from 24 hours to four months) and the variability of the lead time (from previous experience). The size of the replenishment order depends on the lamp being ordered.

Flame prefers most orders to be for a whole number of container loads (the shipping costs for partâ€container loads being more expensive). However, lower order quantities of small or expensive lamps may be used. The order quantity for each lamp is based on its demand, its value and the cost of transportation from the suppliers. However, all this can be overridden in an emergency. If a customer, such as a hospital, urgently needs a particular lamp which is not in stock, the company will even use a fast courier to fly the item in from overseas – all for the sake of maintaining its reputation for high service levels. ‘We have to get the balance right,’ says Jeff Schaffer. ‘Excellent service is the foundation of our success.

But we could not survive if we did not control stocks tightly. After all we are carrying the cost of every lamp in our warehouse until the customer eventually pays for it. If stock levels were too high we just could not operate profitably. It is for that reason that we go as far as to pay incentives to the relevant staff based on how well they keep our working capital and stocks under control.’ Questions a) Define what you think the five performance objectives (quality, speed, dependability, flexibility and cost) mean for an operation such as Flame Electrical. b) What are the most important of these performance objectives for Flame Electrical? c) What seems to influence the stock replenishment policy of Flame Electrical? d) How does this differ from conventional economic order quantity theory?

2. The development of the 1.6 Zeta engine by Ford was one of its most important design projects for years. Like any engine design, it was a huge and complex task. Indeed, each part of the engine needed to go through all the stages of the ‘concept through to market’ design activity. Take, for example, the air intake manifold.

This plays a particularly important part in the engine because it recirculates exhaust gases from the engine, reburning some of them and therefore reducing the overall emission levels from the engine. In the Zeta engine, the manifold (unusually) is made not from metal but from a glassâ€reinforced nylon resin. The advantages of using this material include its strength, impact resistance, heat resistance and ease of processing. However, there were many design problems to sort out, including noise and vibration, the dimensional stability of the product and the ability of the material to stand up to the very high temperatures involved. The design of the engine manifold took almost three years and was organized using all the interactive design principles.

First of all, the various stages in the design were compressed and run in parallel (what Ford calls ‘concurrent engineering’). Secondly, the various fundamental design problems were sorted out right at the beginning of the process. Third, a design team was put together involving not only various personnel from the Ford Motor Company but also the more significant suppliers. Those involved included design representatives from the Du Pont chemical company who were supplying the material, Dunlop who were to perform the moulding operation, and several specialist suppliers including Dowty who were designing the seals, Elring who were involved in gasket design, Elm Steel who were involved with supplying tubing, and so on.

Design technology also played a large part in the development of this product. For example, Du Pont used CAD techniques to study the effects of engine vibration on the manifold. By simulating engine conditions, the various stress levels in the manifold could be estimated. This allowed the team to explore different design solutions without having to devote time and cost to manufacturing too many alternative prototypes – particularly important because the design of the manifold had to fit in with the overall design of the engine itself. Prototype manifolds were needed to supply the main engine design team who wanted to start engine testing several months before the end of the manifold design process.

By involving its suppliers, by using them to resolve the considerable technical problems early on in the project, and by solving the technical problems in an interactive and simultaneous manner, the team managed to get a highly complex and very novel product designed to fit into the overall engine project more quickly, more cheaply and more dependably than it could otherwise have done. Questions: a) In developing this product, Ford put together a team of suppliers. Do you think it would do the same for every single supplier of every part in every product? If not, how should it choose which suppliers, which parts and which products to subject to this sort of treatment? b) Should Ford have included its suppliers’ suppliers as well? Sectionâ€D (Short Answer Questions) Marks: 4à—5=. Explain the relationship between material requirements planning and scheduling decisions. From where in the MRP system does the information for making shopâ€floor scheduling decisions come? 2. Name and describe seven costs that are increased by holding inventories. 3. Compare and contrast the philosophy of traditional and JIT manufacturing. What are their objectives? How do they achieve them? 4.

Define and describe: a. CAD b. CAM c. CAD/CAM d. CIM e.

ERP. Sectionâ€D (Long Answer Questions) Marks: 3à—10=. A company produces a mix of high technology products for use in automobiles. The annual sales data are as follows: Product Type Number of Units Unit Price (Rs) 1 1,000 2........,000 0....,000 5.,850 2.....85 For inventory control reasons, the company wants to classify these items into three groups on the basis of annual sales value of each item. Suggest an inventory control technique and classify the above items with a precise graph? 2. A firm needs to develop a sales forecast for next year. It believes that its annual sales are related to the sales of its industry. It has prepared these historical data: Industry Sales Firm's Annual Sales (Millions of Dollars) (Number of Boats) ,, If the industry estimates next year's sales at $820 million, use simple linear regression to forecast annual demand for the firm's boats for next year. 3.

The Biâ€State Trucking Company, a local deliverer of freight in Durham, North Carolina, has been experiencing customer complaints about late deliveries. Biâ€State's management strives for an average delivery of local freight in 24 hours. Weekly samples of 20 customers are taken and exhibit an average range of 3.5 hours. Biâ€State's management thinks this is about right. a. Compute 3σ control limits for x b.

Plot these sample means on a 3σ control chart for x : 23.4, 24.5, 23.9, 25.6, 26.5, 23.8, 23.7, 24.1, 25.1, 24.9 c. Is management's target of an average 24â€hour delivery being met? Sectionâ€D (Caselets/Situational Questions) Marks: 2à—25=. Bill Blane has just received a big promotion to works manager and director of Gas Generator Corporation’s largest plant, located in Carbondale, Illinois. The plant’s products are gas generators that serve as power sources for the guidance systems for the most advanced U.S. missiles.

After the euphoria of moving his family from California to the new location, meeting his new staff, and settling into his new office had passed, he got the bad news—one lot of the plant’s products had just been rejected by its best customer. He noticed that the plant’s staff members were not too concerned because, according to them, “it has happened before.†Mr. Blane called a meeting of all the technical staff as soon as the test data from the customer had been received. He asked the following questions: (1) What was the nature of the test failure? (2) What caused the substandard products to be produced? (3) What should we have done differently in our production processes to have avoided the problem? (4) What is the impact of this failure on our operations?

The staff summarized the nature of the failure this way: The products performed well under all conditions except the deepâ€freeze firing, and then the generators produced volumes of gas that were only slightly below standard. As for the other questions, the answers were the same: “We don’t know!†Mr. Blane dispersed the group with instructions to develop the answers to his questions. He then called the home office to inform his boss, Don Billigan, that a potentially large problem loomed on the horizon and that he would keep him informed of the progress of the investigation. The next morning the staff met again to discuss the problem.

The news was much worse than Mr. Blane had thought. The entire finishedâ€goods inventory and the inâ€process inventory back to the mixing stage of production were similarly substandard. Because it would take at least three months to introduce new materials at the mixing stage and process them through final assembly and delivery, the plant faced the prospect of three months of filling the pipeline without any revenue. The staff members were stumped, however, about the exact cause of the failure.

Mr. Blane called Mr. Billigan and told him the bad news: “We won’t have any finished products to ship for at least 90 days, we will have a net loss of about $500,000 before taxes during this period, we will be in default of our delivery contracts, and we don’t know for sure what caused the problem or what needs to be done to correct it, but we are continuing the investigation.†Mr. Blane started with the mixing operation and worked forward through the production process to determine if the workers were following the Manual of Standard Operating Procedures. Two observers were assigned to every major operation in the process to verify that the procedures were being followed.

It took only a week to determine that the workers were not following the procedures at the mixing operation. It took another week to verify that when the procedures were religiously followed, the inâ€process materials met the quality control performance specifications. Questions: 1. What are the underlying causes of the quality control problem at the Gas Generator plant? 2.

Discuss any deficiencies in the quality control program that are apparent from the case. 3. Why didn’t the acceptance tests indicate the problem before the customer discovered it? Is such an occurrence possible? How would such a problem arise?

4. Discuss the appropriateness of the methods that Mr. Blane used to investigate the problem. How might he have acted to achieve better results? 5.

Describe how a quality control program should operate so that such problems are avoided. 6. What changes should Mr. Blane make at the Gas Generator plant? 2.

Phelps Petroleum Refining Corporation converts crude oil to refined petroleum products. The key process in its refinery is the cracking unit. This process heats the crude, drives off the refined products at different temperatures, and collects and cools the refined products. The present cracking unit is about 20 years old, is relatively inefficient, and costs much to maintain each year. Two competing proposals are being considered for its replacement.

The first proposal is for a lowâ€cost economy cracking unit. This unit will produce refined products at 94 percent yield; in other words, 94 percent of the crude actually ends up in refined products and 6 percent is lost. The unit has semiautomatic controls and requires some degree of worker monitoring. The unit must be shut down, flushed out, and its controls calibrated before it can be changed to crudes with vastly different characteristics; thus the amount of refined products that can be produced each year is reduced. The type of construction used in the unit will require a moderate amount of annual maintenance.

The second proposal is for a highâ€cost quality cracking unit with 98 percent yield. The unit has fully automatic controls and requires only a small amount of worker monitoring. Because of its control system and type of holding vessels, the unit can easily be shifted to crudes with other characteristics. The construction used in manufacturing the unit minimizes the amount of annual maintenance. These estimates have been developed for the two units: Economy Quality Cracking Cracking Unit Unit Annual volume (millions of gallons) First year 50 60 Second year 60 70 Later years 70 80 Annual fixed costs $140,000 $1,650,000 Average variable cost per gallon $.372 $.360 Questions: 1.

If the sales price of the refined products averages $.425 per gallon at the cracking unit, which process would be preferred in each year? 2. At what annual volume of refined products would Phelps be indifferent between the two processes if the only consideration were economic analysis? 3. What other considerations would affect this decision?