MBHRAK11118263

1.1 PRINCIPLES OF MANAGEMENT

1) Discuss between delegation and decentralization. Cite some of the important obstacles to effective delegation? 2) Construct a diagram depicting the formal organization of an enterprise with which you are familiar. How does this organization chart help or hinder the establishment of an environment for performance?

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1) Discuss between delegation and decentralization. Cite some of the important obstacles to effective delegation? Ans. DELEGATION : Delegation is the process by which authority passes from one organization level to another. Delegation is the only solution to cope with increasing work load of managers as the organization grows. Because of the constraints of time and ability, a manger cannot perform all his duties by himself. Thus, he delegates some of his tasks to his subordinates. The entrustment of duties or assignment of responsibilities has the following process:a) Granting of authority:- When subordinates are authorized with some tasks or responsibilities, authority is required by them to make use of the resources of organizations in the execution of the task. Thus, the superior parts of his duties to authorize to his subordinate to perform. Responsibility and authority both go together. The party of authority and responsibility emphasizes the need for a proper balance between two. b) Creation of accountability:- Delegation just not with granting of authority. The superior has to create an obligation on the part of the subordinate to perform. That is the subordinate is accountable to his superior for the tasks delegated. The subordinate submits the performance reports or status report from time to time.

DECENTRALIZATION: Decentralization is more wider in scope reflecting

managements philosophy regarding which the decision is taken at the top as well as down the line in the organization. Ernest Dale, a well known management writer, describes decentralization as follows:The greater the number of decisions made lower the management hierarchy. The more important the decisions made lower down the management hierarchy. The more functions affected by decisions made at the lower levels. Thus companies which permit only operational designs to be made at plant levels are less decentralized than those which permit financial and personnel decisions at the plant levels. The less checkings required on the decision. Decentralisation is greatest when no check at all must be made, less when superiors have to be informed decision after it has been made, still less if superiors have to be consulted before decision is made. The fewer people to be consulted, and the lower they are on the management hierarchy, the greater the degree of decentralization. Total decentralization as its undesirable, the question before us is whether an organization should be decentralized or not. If yes, then

MBHRAK11118263 to what extent. Thus, the decentralization will vary with time and circumstances. For e.g. production and sales department have to remain centralized. Thus in delegation when authorised is transformed from one to one basis from the superior to subordinate, decentralization of authority is broader in scope and involves the transfer of authority in organizational content from top to the lower rungs of management in the hierarchy. OBSTACLES TO THE EFFECTIVE DELEGATION Delegation requires effective communication while the subordinates accepting delegation must understand exactly what the superior wants, the superiors must have leadership qualities and should motivate and influence. To make delegation effective the willingness of both parties are crucial. Superiors Resistance to Delegation:I can do it better myself fallacy:- Here the manager spends his time on the things what his subordinates can perform and also the superior dont give chance to his subordinates to develop their skill. Lack of ability to direct:- Unable to understand the longer prospective some managers neglect to distribute work among subordinates which reflects their lack of confidence in their supervisory abilities Lack of Confidence in subordinates:- Lack of trust and confidence on subordinates abilities and skills make the superior reluctant to delegate. As a result subordinate lose confidence and frequently seek the guidance of the boss. Aversion to risk:- Fear in the superior that the subordinate might outsmart them and later may become a potential threat to his position. Absence of selective controls:- The superior must ensure proper controls in the form of feedback performance failure to which may cause severe damage. Subordinates Resistance to delegation:The attitude and skills of subordinates play a significant role. The subordinates finds it easier to ask the boss what to do rather than taking the initiative. The subordinates fear criticism for mistakes. As greater responsibilities increased the chances of making an error, they for the sake of security avoid additional responsibilities. The subordinate lacks the information and resources needed to do the job successfully. Some managers with a view to let down their subordinates may deliberately make the decision unclear. Thus, the subordinate lands up in confusion. The subordinate thinks he is overburdened, and shows less interest in accepting new responsibilities. The subordinate lacks confidence which shows that he is feared up in landing in some failure or trouble in future.

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MBHRAK11118263 The subordinate is not offered any incentives in terms of pay rises, etc.

2) Construct a diagram depicting the formal organization of an enterprise with which you are familiar. How does this organization chart help or hinder the establishment of an environment for performance? Ans. Organising is the process of dividing work among individuals and groups and coordinating their activities to accomplish goals, thus ending up in creating a structure which constantly keeps on modifying. A look at the organization chart of a company provides us an understanding as to the pattern used to divide the organization into manageable units and the corresponding authority responsibility relationships among people working in various departments. An organisation chart is a pictorial representation of all positions in an organization and their formal relationships to one another. It illustrates overall shape and levels of management in a comprehensible manner of an organization. The organization chart on the next page gives the functional basis of a Power and desalination plant where the highlighted (yellow) one shows the Executive Managing Directors Office in the city and the remaining shows the employee employed at the site. From the chart it is clear depicted that the plant General Manager is the head of the team followed by Deputy Plant General Manager. The Technical, Shared Facility, Business Mangers when they directly report to Plant General Manager, the Production and Engineering Manager. Also, the HR and Finance Manager directly reports to Business Manager. Thus, we can conclude that the three principles of organizing are: Chain Of Command:Chain of Command defines degrees of authority as well as the routes through which the information flows within an organization. For e.g. in the given chart the Plant General Manager is the sole authorize person for the entire plant. Any decision or message to be conveyed to Deputy Plant General Manager, Engineering Manager, Head of Stores & Procurement. Again from the Engineering Manager it flows down to the Technician through the leads & the seniors. Unity of Command:The chart gives us an idea that who should report to whom and who should issue orders to whom. For e.g. the fire fighters will report to their lead fire fighter who in turn will report to shared facility Manager. It is the Production Manager who will

MBHRAK11118263 issue orders to Control Room Engineers who in turn passes his orders to the field operators. Span of Control:Chain of command and unity of command relate the vertical structure the span of control relates to the horizontal structure. Span of control refers to the number of subordinates that reports to the managers. If an organization has wide spans, the structure will be flat with fewer levels of management. If it has narrow span, the structure is tall with many management levels. The chart which is drawn here is narrow level as we can find that its only four managers who report directly to Plant General Manager. Again four of them directly reporting to DPGM and two of them to the Business Manager. Thus we can say that an organization chart shows:The hierarchical structure from PGM to DPGM to Production Manager to Shift Engineer to Control Room Engineer to Field Operator. The number of management levels. Here at an average 6 levels are there in each department. Degrees of authority and status of level. Division of activities department wise e.g. by product, y function, etc. Work being done. Interaction of people horizontally or vertically. Relation between superiors and subordinates. Span of control. Career progression routes to higher levels. Formal channels of communication. But an organization chart does not show:The ongoing dynamics of work place behaviour. The interaction of people I the informal organization. Personal preferences and coalitions. Informal communication channel. Interference by outsiders.

Problems with levels: Communication The information loses its clarity and takes a lot of time to reach the bottom level from the top level management. Omissions and misinterpretation occurs and the information passes through too many levels. Managerial Control The distance between the top and bottom levels of an organization also affects control. The best of the plans loses clarity when subdivided and elaborated at lower levels. Consequently, at the implementation stage of the plans, control becomes difficult.

MBHRAK11118263 Cost Too many levels involve lot of expenditure. But in many organization substantial expenditure has been saved by increasing the span. Factors influencing span of control:Managers Personality:- Managers wanting strong need of power to be shared prefer a wider span whereas those who finds it difficult to oversee the activities of too many people narrow span. Managers Capability:An experienced, well trained and knowledgeable manager will have a good control over wider span. Subordinates Capability:- Experienced and well trained subordinates will resolve difficulties themselves there by maintaining a less contact. Fatigue Tolerance:- The greater the physical or mental demands of a job, the narrower the span of control. Activity Level:- More active the pace and pattern of a managers work, the narrower the appropriate span of control. Nonsupervisory Activities:- If the managers spend more time on non supervisory activities like long range planning and outside assignments, he tends t have less time to supervise. This obviously limits the span. Similarity of Activities Supervised:- If unique and non routine problems are more frequent, the span is limited. Complexity of Work:- Less supervision is needed if the job is a simple one rather than a complex one. Availability of Sophisticated Facilities:- Availability of more advanced facilities will help the manager in managing a wider span. Location:- If the subordinates are physically dispersed, a manager will need to spend more time in travelling and communicating. To conclude with the span of control widening spans and reducing levels may be suitable in some situations whereas the opposite may be true in other. Thus to conclude with, organization chart of a company explains chain of command, span of control and unity to command. Span of control is one of the most important as it tells us about the levels. The flat and the narrow structure has their own merits and demerits. Thus the classical thinkers say that span is influenced by the factors like capabilities of superiors, subordinates, nature of tsk etc.

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1.2 HUMAN RESOURCE MANAGEMENT

1) Accurate appraisal of performance is very difficult. Do you agree with this? Explain? What are the pitfalls in effective appraisal system and how can these be overcome? 2) Selection tests reveal more but that is suggestive. They conceal less but that is vital. Elucidate this statement. How does this statement hold true?

MBHRAK11118263 1) Accurate appraisal of performance is very difficult. Do you agree with this? Explain? What are the pitfalls in effective appraisal system and how can these be overcome? Ans. Performance appraisal is a method of evaluating the behaviour of employees in the workplace including quantitative and qualitative aspects of job performance, where, by performance we mean degree of accomplishment of the tasks that make up an individuals job. Before passing on to the topic let us understand the features; need and importance and the objectives of performance appraisal. Features:a) Its a systematic description of an employee job relevant strengths and weakness. b) The basic purpose is to find out how well the employee is performing his job and establish a plan of improvement. c) Its arranged periodically according to a definite plan. d) It is a continuous process. NEED AND IMPORTANCE Performance appraisal is needed in order to:provide information about the performance ranks basing on which decisions regarding salary fixation, confirmation, promotion, transfer and demotion are taken. provide feedback about the level of achievement and behaviour of the subordinate. provide information which helps to counsel the subordinate. provide information to diagnose deficiency in employee regarding skill, knowledge, determine training, development needs to precrible means for employee growth. to prevent grievances ad indiscipline. OBJECTIVES Aims of performance appraisal are:To create and maintain a satisfactory level of performance. To contribute to the employee growth and development through training programs. To help superiors to have a proper understanding about their employee. To guide job changes with the help of continuous ranking. To facilitate fair and equitable compensation based on performance. To facilitate validating of selection tests, interview techniques through comparing their scores with performance appraisal ranks.

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MBHRAK11118263 7) To provide information for making decisions regarding lay off, retrenchment etc. 8) To ensure organizational effectiveness through correcting employees for standard and improved performance and suggesting the change in employee behaviour. Thus, we come to know that there are different factors which influence performance appraisal. In short, they give rise to different problems. The problems are:Rating Biases:- As performance appraisal is a subjective measure it has the possibility for bias. The rater biases include:Halo effect It is the tendency of the raters to depend excessively on the rating of one trait consideration in rating all other trait considerations. Error of central tendency Some raters follow plays safe policy in rating by rating all the employees around the middle point of the rating scale. They avoid rating the people at both the extremes. They do because they are answerable to the management or lack of knowledge about the job and person he is rating or at least interest in his job. The leniency or strictness The leniency bias crops up when some raters have a tendency to be liberal (or strict) in assigning higher (or lower) rates consistently. Such ratings damages a lot to the management as well as employees. Personal Prejudice If the rater dislikes an employee or any group he may rate them low, which may distort the rating purpose and affect employees career. The recency effect Otherwise known as recent behaviour bias. Here the raters generally remember the recent actions of the employee at the time of rating. Failure of the superior in conducting performance appraisal and post performance appraisal interviews. Most part of the appraisal is based on subjective. Less reliability and validity of techniques. Negative ratings affect interpersonal relations and industrial relations. Influence of external environmental factors and uncontrollable internal factors. Feedback and post appraisal interview may have a setback on production. Some ratings are based on pure guess work for e.g. potential appraisal. Management emphasis on punishment rather than development. Absence of inter rater reliability. Relationship between appraisal rates and performance after promotions are not significant. Some superiors complete appraisal reports within few minutes.

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MBHRAK11118263 Thus, by looking at the problems we can easily conclude that accurate appraisal of performance is very difficult I do agree with this statement. The performance appraisal is affected by different factors. They are:As performance appraisal is a method of evaluating the employees behaviour where the behaviour word itself an abstract one which is immeasurable, performance appraisal becomes difficult. Scope of job if we categorize into two fixed scope and variable scope, in the fixed scope of job appraisal is easy but when the same scope of job is categorized as variable one performance appraisal becomes difficult as it keeps on changing according to the time. The appraisal technique should measure performance and provide information I job related activities/areas. If we take an example of an industry where nuts and bolts are produced and an employee is been asked to man faction 100 nuts a day and if he achieves it we can say its done easily. But for a power industry its quiet difficult to judge as the output is not a concrete one. As we all know now that performance appraisal is a continuous process where the data should be recorded continuously which for a manger is difficult as it consumes a lot of time. For this to become effective at least the manager should spend one day per employee. If the company is a multinational one where multicultural people are employed salary fixation becomes a problem. It should provide consistent, reliable and valid information, data which can be used to defend the organization even in legal challenge otherwise this will be a failure. Thus, we observed the pitfalls for an appraisal the following points should be taken care of :Reliability and Validity This system should provide consistent, reliable and valid information which can be used to defend the organization even in legal challenges. It must also satisfy the conditions of validity by measuring what they are supposed to measure. Job Relatedness The appraisal technique should measure the performance and provide information in job related activities. Standardization Appraisal forms, procedures, administration of techniques, ratings etc. should be standardized as it affects all employees in the group. Practical Viability The techniques should be practically viable to administer, ratings etc. possible to implement and economical regarding cost aspect. Legal sanction It should have compliance with the legal provisions concerned of the country.

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MBHRAK11118263 f) Training appraisers The rater should be provided training viz. some insights and ideas on rating, documenting appraisals and conducting appraisal interviews. Familiarity with rating errors can improve rater. g) Open communication The technique should permit both parties to learn about the gaps and prepare themselves for future. Good performance appraisal provides the feedback. h) Employees access to results Employees should receive adequate feedback so that they can detect any errors. If they disagree then they can challenge through formal channels. i) Due process The employees who disagree must have the means for pursuing their grievances and having them redressed objectively. Performance appraisal should be used primarily to develop as valuable resources. Only then it will be effective. Also, I feel if the nine step process are carried out properly and systematically performance appraisal can be made effective. They are:Performance standards should be established based in job description. Informing all employees including appraisers. Follow the instructions provided for appraisal, measurement of employee performance by the rater through observation, interview etc. Finding out the influence of various internal and external factors on actual performance. Comparing the actual performance with that of other appraises and previous performance of the employees and others. Communicating with the appraise. Suggesting necessary changes in standards. Follow up performance appraisal report, where guiding, counseling, coaching etc. are arranged. If the actual performance is very poor then steps can be taken for demotion. Thus, the difficulty level could be minimized if we strictly follow the factors specified earlier and the nine stages mentioned just above.

MBHRAK11118263 2) Selection tests reveal more but that is suggestive. They conceal less but that is vital. Elucidate this statement. How does this statement hold true? Ans. Selection tests reveal more but that is suggestive. They conceal less but that is vital. The statement is cent percent true. The main aim of the test (written or oral) is to solicit further information to assess the candidates suitability to the job. The written test measure The capacity to learn a given job if adequate training is given. The value of specific achievements when an organization wishes to employ experienced candidates. The ability to solve critical problem (real life situation) on the job. To find out the interest in job. To discover clues to an individuals value system his emotional reaction and maturity and characteristic mood. The oral test rather say intervies elicits information for the suitability of the post by measuring skills, knowledge, etc. orally. The interviewer collects the basic information about the job and organization which can be an informal test. Interaction between the candidate and the line executive on various areas of job knowledge, skill, talent, etc. Let us discuss about selection test (written & oral) in detail so as tto justify the above topic. Definition of Selection The selection procedure is the system of functions and devices adopted in a given company to ascertain whether the candidates specifications and requirements. There are prescribed steps in selection to make it effective. They are:1) Job analysis. 2) Recruitment. 3) Application form. 4) Written examination. 5) Preliminary interview. 6) Group discussion. 7) Tests. 8) Final interview. 9) Medical examination. 10) Reference checks. 11) Managers decision. 12) Employment. Clearly step 4 and 7 indicates tests are expose more which make someone to think, it hides less but is very important. After analyzing the job, recruiting and

MBHRAK11118263 going through application form the selection tests are carried. As discussed early selection tests can be categorized into two written test and oral test. WRITTEN TEST After the tests are screened on the basis of application blanks, their ability in arithmetic, altitude towards job, aptitude, reasoning, knowledge in discipline, general knowledge and English language. PSCHOLOGICAL TESTS The objective of tests is to solicit further information to assess the employee suitability to the job. The tests are Aptitude test It measures an individuals capacity to learn a given job when adequate training is given. Aptitude test is divided as general and mental ability. a) Intelligence tests: It measures capacity for comprehension, reasoning, word fluency, numbers, memory , space, etc. It also includes sample learning. b) Mechanical tests: It measures capacity of spatial visualization, speed, mechanical knowledge etc. c) Psychomotor test: It measures abilities like manual, motor ability. d) Clerical test: It measures capacity in office work. Achievement tests It is conducted when applicant claim to know something as these tests are concerned with what one has accomplished, mostly done when an organization needs an experienced person. It includes job knowledge tst and work sample test. Job knowledge tests the knowledge if a particular job. Work sample test is conducted by giving a sample work and candidate is asked do it. Situational tests It evaluates a candidate in a similar real life situation. Its categorized into two one group discussions and in basket test. Group discussion test through discussions in group is tested to solve a problem under which candidates are observed in the areas of imitating, leading, proposing valuable ide, etc. In basket test is conducted by asking the candidate to take decisions based on various items based on in basket information regarding requirements in memoranda. Interest tests This test is to find out a candidates interest in the job as three is a high correlation between the interest of a candidate in a job and job success. Personality tests This test is to discover clues to an individuals value system, his emotional reactions and maturity, etc. It is categorized into like objective test and projective test. objective tests are mostly used for personality tests as they are suitable to a group and can be scored objectively. In projective test candidates are asked to project their own interpretation of certain standard stimulus situations basing on ambiguous picture, figures, etc.

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MBHRAK11118263 ORAL TEST (OR INTERVIEW) Different types of oral tests are adopted to solicit different kinds of information and to measure the candidates skills, knowledge etc. at different places. Its divided into three categories: Preliminary test Here exchange of information takes place between the candidate and manager about job and organization, like job nature, salary, etc. Again two subcategories are there Informal interview Its conducted at any place buy any person to secure basic and non job related information. Unstructured interview The candidate is given freedom to tell about himself. Core interview Interaction is between candidate and expert on carious areas of job knowledge, skill, etc. Here too different form are there background information interview, job and probing interview, stress interview, formal and structured one, group panel and finally depth one.

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1.3 PROODUCTION AND MATERIALS MANAGEMENT

1) Just in time concept reduced the importance of Inventory techniques Discuss this statement by considering examples from industries of various categories? 2) What type of maintenance is more effective? Make a comparative analysis of various types and conclude. Do you feel that type of maintenance differ from industry to industry? Why?

MBHRAK11118263 1) Just in time concept reduced the importance of Inventory techniques Discuss this statement by considering examples from industries of various categories? Ans. Just in time (JIT) is an inventory strategy implemented to improve the return on investment of business by reducing in process inventory and its associated carrying costs. In order to achieve JIT the process must have signals of what is going on elsewhere in the process. This means that the process is often driven by a series of signals, which can be Kanban(ticket), that tell production processes when to make the next part. Kanban are usually tickets but can be simple visual signals, such as the presence or absence of a part on a shelf. When implemented correctly, JIT can lead to dramatic improvements in manufacturing organizations return on investment quality and efficiency. Quick communication of the consumption of old stock which triggers new stock to be ordered is key to JIT and inventory reduction. This saves warehouse space and costs. However since stocks levels are determined by historical demand any sudden demand rises above the historical average demand, the firm will deplete inventory faster than usual and cause customer service issues. HISTORY The technique was first used by the Ford Motor Company as described explicitly by Henry Fords My life and work; we have found in buying materials that it is not worthwhile to buy for other than immediate needs. We buy only enough fit into the plan of production, taking into consideration the state of transportation at the time. If transportation were perfect and even flow of materials could be assured, it would not be necessary to carry any stock what so ever. The carloads of raw materials would arrive on schedule an in planned order and amounts and go from the railways car into production. that would save a great deal of money, for it would give a very rapid turnover and thus decrease the amount of money of money ties up in the materials. With bad transportation different disciplines including statics, industrial engineering, production management and behavioural science. In the JIT inventory philosophy there are views with respect to how inventory is looked upon, what it says about the management within the company and the main principle behind JIT. Inventory is seen as incurring costs or waste, instead of adding value, contrary to traditional accounting. Under this way of working , businesses are encouraged to eliminate inventory that doesnt compensate for manufacturing issues and then to constantly improve processes so that less inventory can be kept. Secondly, allowing any stock habituates the management to stock keeping and it can then be a kit like narcotic. Management are then tempted to keep stock there to hide problems within the production systems. These problems include backups at work centres, machine reliability, process validity, lack of flexibility of employees

MBHRAK11118263 and equipment and inadequate capacity among other things. One has to carry larger stocks. this statement also describes the concept of dock to factory floor in which incoming materials are not even stored or warehouse before going into production. This technique was subsequently adopted and published by Toyota Motor corporation of Japan as part of its Toyota Production System. It is hard for corporations to warehouse finished products and parts, due to the limited amount of land available for them. Before 1950s this was thought to ne a disadvantage because it forced the production lot size below economic lot size. The undesirable result was poor return on investment to factory.

PHILOSOPHY The philosophy of JIT is simple inventory is defined to be waste. JIT inventory systems expose the hidden causes of inventory keeping and are therefore not s dimple solution a company can adopt; there is a whole new way of working the company must follow in order to manage its consequences. The ideas in this way of working come from many. It means giving up old concept of managing and adopting JIT way of thinking. There are 10 principles for improvement: 1. 2. 3. 4. Abolish old tradition concepts. Assume that new method will work. No excuses are accepted. It is not seeking for perfection, absolutely zero-defect process, few defects is acceptable. 5. Correct mistakes immediately. 6. Do not spend money on improvement. 7. Use your brain to solve problem. 8. Repeat to ask yourself 5 times before any decision. 9. Gather information from several people, more is better! 10. Remember that improvement has no limits. The idea of giving up old concept was especially for the large lot production, The lot production was felt that "having fewer changeover was better", but it was no longer true. Whereas JIT is a one-piece flow manufacturing. To compare the two, Hirano had this idea: Lot production: "Unneeded goods...In unneeded quantities...At unneeded times..." (20) JIT: "Needed goods...In needed quantities...At needed times..." (21) The main point here is to have an awareness of the need of throwing out old system and adopting a new one.

MBHRAK11118263 The author continued by comparing lot production with flow manufacturing, here is a short summary of comparison. Lot Production 1. Floor layout is job-shop type Flow Manufacturing 1. Floor layout is U-shaped cell

2. Grouping machines of same type 2. Different types of machines are type together together put together into one cell 3. Large lot product 4. Machines used are large 3. One-single piece at a time 4. Machines used are small

5. Inventory is easy to accumulate 5. Less or even no inventory between processes between processes accumulated 6. Single-process handling 7. Workers are sitting while working 8. Workers are single-skilled 6. Multi-process handling 7. Workers are standing while working 8. Workers are multi-skilled

9. Inspection at the final stage 9. Inspection at the end of each process process

Some points that should be aware: Clearly assign jobs to machines and workers. Make a good use of U-shaped cell manufacturing. Multi-skilled workers Operation should be able to perform multi-machine handling and multi process. Multi-machine handling - a worker should handle several machines at once, this is also called "horizontal handling". Multi-process handling - a worker should handle several different processes at once, this is also called "vertical handling" and this is the basis for JIT production. Uses casters extensively As author written, "Floor bolts are our enemies! Machines must be movable." The above 5 steps are the basis for introducing JIT. Only after these are completed can JIT be implemented. Synchronization and balance of information and work flow While synchronization matching output with customer demand is important in manufacturing to help minimize inventory levels, it is more important for services. Output from the service firm must match customer demand as, frequently, the

MBHRAK11118263 customer is directly involved in the process, waiting for the results, and may have other alternatives available. For many companies, this emphasis on timing may be the competitive weapon for keeping and increasing their presence in their chosen market (Stalk, 1988). JIT also emphasizes balance at every process stage to avoid excess inventory and resource use. Service operations often cannot inventory the output of their processes making balance even more vital. Further, as in manufacturing, resources required to produce the service can be costly. For example, airlines must balance the size of the aeroplane with passenger demand. An unfilled seat is a lost seat: it cannot be saved for later use, yet the cost of providing the service is virtually the same whether the seat is filled or not. Feather and Cross (1988) reported the implementation of a product versus process orientation for processing paperwork associated with managing contracts. To improve the work flow, JIT and optimized production technology techniques were applied to this non-manufacturing environment. One-at-a-time processing of contracts was implemented. Bottleneck operations were studied, work flow balanced with regard to bottlenecks and unnecessary buffers eliminated. The results of this implementation included not only a 60 per cent reduction in throughput time (the time between entry of a contract into the system and its exit), but also an 80 per cent reduction in the number of backlogged contracts. Semantodontics, a direct marketing company selling nationwide by catalogue to dentists, also found JIT an appropriate approach for reducing the time to process paperwork (Conant, 1988) and, hence, the time required for a dentist to receive an order. The idea of making lot sizes as small as possible was implemented by decreasing the batch size in which telephone orders were aggregated. As a result, telephone orders were moved to the second stage of the process three times daily rather than once a day, as was the previous norm. Setup time for entering new customer records was reduced by moving the process to the original telephone operation where the data were first gathered. The decrease in order batch size had a behavioural impact on employees as well. From the sense of satisfaction gained on completion of multiple small batches, employees tended to work faster and more efficiently. One JIT technique which has been investigated for use in service companies is kanban-controlled movement. Kanban in manufacturing is a simple method of notifying preceding work centres that material is required downstream. Buffers of material between workstations are eliminated. Schonberger (1993) describes the benefits of using kanban for document processing. Atlantic Envelope Company uses kanban trays at its Atlanta facility to move documents within the order entry department. Order entry time fell to under a day from a previous uncertain number of days.

MBHRAK11118263 2) What type of maintenance is more effective? Make a comparative analysis of various types and conclude. Do you feel that type of maintenance differ from industry to industry? Why? Ans. What is maintenance and why is it performed? Past and current maintenance practices in both the private and government sectors would imply that maintenance is the actions associated with equipment repair after it is broken. The dictionary defines maintenance as follows: the work of keeping something in proper condition; upkeep. This would imply that maintenance should be actions taken to prevent a device or component from failing or to repair normal equipment degradation experienced with the operation of the device to keep it in proper working order. Unfortunately, data obtained in many studies over the past decade indicates that most private and government facilities do not expend the necessary resources to maintain equipment in proper working order. Rather, they wait for equipment failure to occur and then take whatever actions are necessary to repair or replace the equipment. Nothing lasts forever and all equipment has associated with it some predefined life expectancy or operational life. For example, equipment may be designed to operate at full design load for 5,000 hours and may be designed to go through 15,000 start and stop cycles. The need for maintenance is predicated on actual or impending failure ideally, maintenance is performed to keep equipment and systems running efficiently for at least design life of the component(s). As such, the practical operation of a component is time-based function. If one were to graph the failure rate a component population versus time, it is likely the graph would take the bathtub shape shown in Figure 5.1.1. In the figure the Y axis represents the failure rate and the X axis is time. From its shape, the curve can be divided into three distinct: infant mortality, useful life, and wear-out periods. The initial infant mortality period of bathtub curve is characterized by high failure rate followed by a period of decreasing failure. Many of the failures associated with this region are linked to poor design, poor installation, or misapplication. The infant mortality period is followed by a nearly constant failure rate period known as useful life. There are many theories on why components fail in this region, most acknowledge that poor O&M often plays significant role. It is also generally agreed that exceptional maintenance practices encompassing preventive and predictive elements can extend this period. The wear-out period is characterized by a rapid increasing failure rate with time. In most cases this period encompasses the normal distribution of design life failures. The design life of most equipment requires periodic maintenance. Belts need adjustment, alignment needs to be maintained, proper lubrication on rotating equipment is required, and so on. In some cases, certain components need replacement, (e.g., a wheel bearing on a motor vehicle) to ensure the main piece of equipment (in this case a car) last for its design life. Anytime we fail to perform maintenance activities intended by the equipments designer, we shorten the operating life of the equipment. But what options do we have? Over the last 30 years, different approaches to how maintenance can be performed to ensure equipment reaches or exceeds its design life have been developed in the United

MBHRAK11118263 States. In addition to waiting for a piece of equipment to fail (reactive maintenance), we can utilize preventive maintenance, predictive maintenance, or reliability centered maintenance. Reactive Maintenance Reactive maintenance is basically the run it till it breaks maintenance mode. No actions or efforts are taken to maintain the equipment as the designer originally intended to ensure design life is reached. Studies as recent as the winter of 2000 indicate this is still the predominant mode of maintenance in the United States. The referenced study breaks down the average maintenance program as follows: >55% Reactive 31% Preventive 12% Predictive 2% Other. Advantages Low cost. Less staff. Disadvantages Increased cost due to unplanned downtime of equipment. Increased labor cost, especially if overtime is needed. Cost involved with repair or replacement of equipment. Possible secondary equipment or process damage from equipment failure. Inefficient use of staff resources. Note that more than 55% of maintenance resources and activities of an average facility are still reactive. Advantages to reactive maintenance can be viewed as a double-edged sword. If we are dealing with new equipment, we can expect minimal incidents of failure. If our maintenance program is purely reactive, we will not expend manpower dollars or incur capital cost until something breaks. Since we do not see any associated maintenance cost, we could view this period as saving money. The downside is reality. In reality, during the time we believe we are saving maintenance and capital cost, we are really spending more dollars than we would have under a different maintenance approach. We are spending more dollars associated with capital cost because, while waiting for the equipment to break, we are shortening the life of the equipment resulting in more frequent replacement. We may incur cost upon failure of the primary device associated with its failure causing the failure of a secondary device. This is an increased cost we would not have experienced if our maintenance program was more proactive. Our labor cost associated with repair will probably be higher than normal because the failure will most likely require more extensive repairs than would have been required if the piece of equipment had not been run to failure. Chances are the piece of equipment will fail during off hours or close to the end of the normal workday. If it is a critical piece of equipment that needs to be back

MBHRAK11118263 on-line quickly, we will have to pay maintenance overtime cost. Since we expect to run equipment to failure, we will require a large material inventory of repair parts. This is a cost we could minimize under a different maintenance strategy. Preventive Maintenance Preventive maintenance can be defined as follows: Actions performed on a timeor machine-run-based schedule that detect, preclude, or mitigate degradation of a component or system with the aim of sustaining or extending its useful life through controlling degradation to an acceptable level. The U.S. Navy pioneered preventive maintenance as a means to increase the reliability of their vessels. By simply expending the necessary resources to conduct maintenance activities intended by the equipment designer, equipment life is extended and its reliability is increased. In addition to an increase in reliability, dollars are saved over that of a program just using reactive maintenance. Studies indicate that this savings can amount to as much as 12% Advantages Cost effective in many capital-intensive processes. Flexibility allows for the adjustment of maintenance periodicity. Increased component life cycle. Energy savings. Reduced equipment or process failure. Estimated 12% to 18% cost savings over reactive maintenance program. Disadvantages Catastrophic failures still likely to occur. Labor intensive. Includes performance of unneeded maintenance. Potential for incidental damage to components in conducting unneeded maintenance. 18% on the average. Depending on the facilities current maintenance practices, present equipment reliability, and facility downtime, there is little doubt that many facilities purely reliant on reactive maintenance could save much more than 18% by instituting a proper preventive maintenance program. While preventive maintenance is not the optimum maintenance program, it does have several advantages over that of a purely reactive program. By performing the preventive maintenance as the equipment designer envisioned, we will extend the life of the equipment closer to design. This translates into dollar savings. Preventive maintenance (lubrication, filter change, etc.) will generally run the equipment more efficiently resulting in dollar savings. While we will not prevent equipment catastrophic failures, we will decrease the number of failures. Minimizing failures translate into maintenance and capital cost savings. Predictive Maintenance Predictive maintenance can be defined as follows: Measurements that detect the onset of system degradation (lower functional state), thereby allowing causal stressors to be eliminated or controlled prior to any significant deterioration in the component physical state. Results indicate current and future functional capability.

MBHRAK11118263 Basically, predictive maintenance differs from preventive maintenance by basing maintenance need on the actual condition of the machine rather than on some preset schedule. You will recall that preventive maintenance is time-based. Activities such as changing lubricant are based on time, like calendar time or equipment run time. For example, most people change the oil in their vehicles every 3,000 to 5,000 miles travelled. This is effectively basing the oil change needs on equipment Advantages Increased component operational life/availability. Allows for pre emptive corrective actions. Decrease in equipment or process downtime. Decrease in costs for parts and labor. Better product quality. Improved worker and environmental safety. Improved worker morale. Energy savings. Estimated 8% to 12% cost savings over preventive maintenance program. Disadvantages Increased investment in diagnostic equipment. Increased investment in staff training. Savings potential not readily seen by management. run time. No concern is given to the actual condition and performance capability of the oil. It is changed because it is time. This methodology would be analogous to a preventive maintenance task. If, on the other hand, the operator of the car discounted the vehicle run time and had the oil analyzed at some periodicity to determine its actual condition and lubrication properties, he/she may be able to extend the oil change until the vehicle had traveled 10,000 miles. This is the fundamental difference between predictive maintenance and preventive maintenance, whereby predictive maintenance is used to define needed maintenance task based on quantified material/equipment condition. The advantages of predictive maintenance are many. A well-orchestrated predictive maintenance program will all but eliminate catastrophic equipment failures. We will be able to schedule maintenance activities to minimize or delete overtime cost. We will be able to minimize inventory and order parts, as required, well ahead of time to support the downstream maintenance needs. We can optimize the operation of the equipment, saving energy cost and increasing plant reliability. Past studies have estimated that a properly functioning predictive maintenance program can provide a savings of 8% to 12% over a program utilizing preventive maintenance alone. Depending on a facilitys reliance on reactive maintenance and material condition, it could easily recognize savings opportunities exceeding 30% to 40%. In fact,

MBHRAK11118263 independent surveys indicate the following industrial average savings resultant from initiation of a functional predictive maintenance program: Return on investment: 10 times Reduction in maintenance costs: 25% to 30% Elimination of breakdowns: 70% to 75% Reduction in downtime: 35% to 45% Increase in production: 20% to 25%.

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1.4 MARKETING MANAGEMENT

1) Give examples of how Procter and Gamble, general Motors and Indian Oil Corporation have exercised social responsibility? 2) Do you think that female and male roles in purchasing decisions have changed over the years? Justify your answer with examples based on masculine and feminine products?

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1.6 BUSINESS MATHEMATICS AND STATISTICS

1. a) What is a matrix? Explain the addition and multiplication of matrices giving an example for each?

b)

Find the inverse of the following matrix 2 A = 1 3 4 5 4 6 8 6

2.

a)

Using Cramers method solve the following set of simultaneous equations: 3x + 2y + z = 15 2x + 3y + 4z = 20 4x + y + 2z = 14

b)

In a sample survey it is found that 53% of the respondents prefer brand A of tea, 61% brand B, 60% brand C, 24% prefer A & B 35% prefer B & C, 27% A and C and 5% liked none of these brands. How many prefer all the three brands?

MBHRAK11118263 1. a) What is a matrix? Explain the addition and multiplication of matrices giving an example for each?

b)

Find the inverse of the following matrix: 2 A = 1 3 4 5 4 6 8 6

Ans. Matrix means rectangular arrangement of numbers. It is used in many fields of pure mathematics and applied mathematics such as algebra, differential equation, astronomy etc. It has proved its usefulness in quantitative analysis of managerial decisions in disciplines of finance, marketing, production, personnel and economics. Definition of Matrix: Numbers arranged in rows and columns of the rectangular array and enclosed by square brackets [ ] is called matrix. The numbers are called as elements. A matrix with m rows and n columns are

A=

a11 a12 a1n a21 a22 a2n . . . am1 am2.. amn

where a1n refers to an element in the first row and nth column. a mn means an element in mth row and nth column. Matrix are usually denoted by capital letter A.B etc. A matrix is said to be order m by n (m x n) if it has m rows and n columns. In a matrix each element has its assigned position in row and column.

MBHRAK11118263 Two matrices are equal if the corresponding elements are same. x If A = u v y and B= c d a b

then x = a, y = b, u = c and v = d. A matrix with one row is called a row matrix. A = x a column is called column matrix B = b c y z and with one

A matrix is called as zero matrix or null matrix if all the elements are equal to zero. A = 0 0 0 0 0 0 0 0 0

A matrix with order m x m is called a square matrix 2 A = 3 5 3 6 7 4 8 9

The matrix A is a square matrix with order 3 x 3. A diagonal matrix is a matrix with the diagonal elements equal to zero and non diagonal elements are non zero elements. 0 A = 3 5 3 0 7 4 8 0

MBHRAK11118263 A matrix with all diagonal elements equal is called a scalar matrix. 2 A = 0 0 0 2 0 0 0 2

ALGEBRA OF MATRIX : a) Addition Addition of two or more matrices is possible if they are of same order. The sum obtained is again a matrix of same order. 1 A = 4 7 2 5 8 3 6 9 and B = 1 2 3 1 2 3 1 2 3

2 A+B = 6 10

3 7 11

4 8 12

where matrix A and B are of order 3 and the sum is also of order 3. Properties of Matrix Addition: Matrix addition is Commutative A + B = B + A 2 If A = 4 5 2 So A + B = 4 5 3 + 8 9 6 7 = 12 14 3 and B= 8 9 8 10 6 7

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6 So B + A = 8

7 + 9 8

2 4 10 14

3 = 5

8 12

10 14

A+B=B+A= 12

Matrix addition is associative ( A + B ) + C = A + (B + C).

6 A = 8

7 B 9 =

2 4

3 C 5 =

8 12

10 14

(A+B)+C