Production Planning and Inventory Control MCQ Quiz in मल्याळम - Objective Question with Answer for Production Planning and Inventory Control - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക

Explanation:

Breakeven analysis is used to find the minimum level of production required. It evaluates both fixed and variable costs.

A breakeven analysis is used to determine how much sales volume your business needs to start making a profit, based on your fixed costs, variable costs, and selling price.

Break-even analysis consists of:

1. Fixed cost (F)
2. Variable cost (V)
3. Sales revenue (S)

From the diagram, the slope of the sales line at BEP will be given by, 

At BEP, Total cost = Fixed cost + Variable cost

Explanation:

Economic Order Quantity (EOQ): 

• A decision about how much to order has great significance in inventory management.
• The quantity to be purchased should neither be small nor big because the costs of buying and carrying materials are very high.
• Economic order quantity is the size of the lot to be purchased which is economically viable.
• This is the number of materials that can be purchased at minimum costs.
• Generally, economic order quantity is the point at which inventory carrying costs are equal to order costs.
• First, EOQ policy is not optimal in MRP system because the assumptions of constant demand are not met.
• As compared with a lot-for-lot policy, the setup costs for an EOQ policy will generally be lower and holding costs will be higher.
• Second, in an EOQ policy, extra inventory is unnecessarily carried to the end of the planning horizon.

At EOQ:

Ordering cost = Holding cost

D = Annual or yearly demand for inventory (unit/year)

Q = Quantity to be ordered at each order point (unit/order)

Co = Cost of placing one order [Rs/order]

Ch = Cost of holding one unit in inventory for one complete year [Rs/unit/year]

Explanation:

In inventory management system there are two ways to review the inventory, they are

Fixed order system:

• In this system the reorder level of the inventory is fixed as soon as the inventory reaches the reorder level a prescribed quantity is ordered in this system the size of order is fixed while the time of order is variable. It is also called reorder level system or two-bin system or Q-system.

Periodic review system/periodic inventory system:

• In this system the period of time after which inventory is reviewed is fixed, after that particular period new order is placed at that point. In this system the time of order is fixed but the size of order is variable. It is also called fixed period system or P-system.

Explanation:

Product Layout:

It is also known as line layout. In implies that various operations on raw material are performed in a sequence and the machines are placed along the product flow line i.e. machines are arranged in the sequence in which the raw material will be operated upon.

This type of layout is preferred for continuous production i.e. involving a continuous flow of in-process material towards the finished product stage.

Advantages:

• Smooth and logical flow lines
• Small in process inventories
• Total production time/unit short
• Reduced material handling
• Little operator skill, training simple
• Simple production planning & control
• Less space for work in transit and temporary

Process Layout:

It is also known as functional layout and is characterised by keeping similar machines or similar operations at one location (place).

In other works, all lathes will be at one place, all milling machines at another and so on, that is machines have been arranged according to their functions. 

Concept:

Normal time =  × observed time

Standard time = normal time ×

Calculation:

Normal time = 0.75 × (110/100)

∴ Normal time = 0.825 min

Standard time = 0.825 × (1 + 0.2)

= 0.99 minutes

Explanation:

• The inventory comprises of large number of items. All items are not of equal importance.
• The firm, therefore, should pay more attention and care to those whose items whose usage value is high and less values to those whose usage value is low.

There are different types of selective inventory control:

Concept:

Optimum number of quantities (Q*) can be calculated by:

where, D = Demand rate for a particular item, C₀ = Ordering cost per order, C_h = Holding cost per item per year       

Calculation:

Given:

D = 12000 units/year, C₀ = Rs.100/order C_c = 0.80 per item per month = 0.80 × 12 = 9.6 Rs. per item per year

No shortages are allowed and replacement is instantaneous

Explanation:

Organisation structure

The organisation structure is a skeleton or a framework that divides the total activities into related groups develops superior and subordinate relationship among the persons by prescribing the authorities.

Types of organisation structure

Line, Military or Scalar organisation

• In this type of organisation, the line of authority flows directly from top to bottom and the line of responsibility from bottom to top.
• The business activities are divided into three groups i.e. finance or accounts, production and sales.
• Each department head has complete control over his section and he is fully authorised to select his labour, staff, purchases of raw material and to set the standards of output etc.
• The responsibility of each head is clearly defined.
• Each department works as a self-supporting unit.

Functional organisation

• Functional organisation divides managerial activities so that each head from the works manager down has few functions to perform as possible and is able to become a specialist in these.
• Authority from top to down is delegated according to function.
• In this type of organisation specialists like production engineer, maintenance engineer, purchase officer etc. are employed.
• Each specialist is authorised to give orders to workers, but only in regard to his field of specialisation.

Line and staff organisation

• In this type of organisation, the line heads are assisted by specialist staff.
• If the firm is of large size, managers cannot give careful attention to every aspect of management.
• Hence staff is deputed to do the work of investigation, research, recording and advising to managers.
• Thus the staff brings specialization by assisting the line officers.
• The line maintains discipline and stability, staff provides experts with information and helps to improve overall efficiency.
• Thus the staff are thinkers while the line is doers.

Given:

d = 30 units/day, P = 60 units/day, C₀ = Rs. 150, C_h = Rs. 0.2

Now,

∴ Minimum Inventory Cost = Rs. 30 per day

Mistake Points 

This is not the answer, as it is asked in the question, to find the minimum cost per run and not the minimum inventory cost.

Now,

Economic order quantity is:

Now,

Therefore,

Minimum cost per run = T × minimum cost

Minimum cost per run = 10 × 30

∴ Minimum cost per run = Rs. 300

Expediting is a process to get back on the plan in case a significant deviation from the plan has occurred during the executing stage.

A production planning and control system has many functions to perform, some before the arrival of raw materials and tools, and others while the raw material undergoes processing.

There are four steps in the process of production planning and control:

Routing: Routing can be defined as the process of deciding the path (route) of work and the sequence of operations.

Scheduling: Scheduling function determines when an operation is to be performed, or when work is to be completed.

Dispatching: It is the action, doing or implementation stage. It comes after routing and scheduling. Dispatching means starting the process of production. It provides the necessary authority to start the work.

Expedition or follow-up: It is designed to keep track of the work effort. The aim is to ensure that what is intended and planned is being implemented. It maintains proper records of work, delays and bottleneck. Such records can be used in future to control production.

Forecasting is the technique that predicts the trend in future data with the help of the trend in historical data.