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problem 1)a) prepare down the functions of Production and Operation Management?

b) describe the uses of Forecasting?

c) Sales of domestic water pumps manufactured by ABC Ltd, are given below. Develop equation for the line of best fit and give the forecast for the next 3 years.

Year       1998       1999        2000          2001          2002        2003      2004       2005       2006       2007
Sales       30           33           37             39                42           46          48          50           55           58

problem 2)a) Quarterly sales data for the past 2 years is shown below. Find out the seasonal factors and do regression analysis to forecast demand for the next 4 quarter

Period              1        2         3          4          5            6        7          8
Demand         300    540      885      580        416       760     1191     760

b)  Following are the cost and sales data of a manufacturer selling 3 products X, Y, and Z.

Product                       Selling Price/unit           Variable cost/unit    % of Rupee sales Volume
X                                               4                                       3                                       20
Y                                               5                                       4                                       40
Z                                                8                                      6                                       40

Annual capacity of the manufacturer is Rs.1500000 of total sales value. Annual fixed cost is Rs. 230000.

a) Find out BEP in terms of rupee sales volume and the contribution from the respective products that is available for recovering the fixed cost.

b) Profit/loss at 80% and 40% of the capacity abd the contribution available from the 3 products.

problem 3)a) Which are the factors affecting system capacity? Describe

b) A media centre should find out how many digital processes are needed to maintain the output of 200 good prints per hour. The set up and exposure can theoretically be done in 2 minutes per print, but operators are on the average only 90% efficient and in addition 5 % of the prints must be scrapped and redone. Also the processors can be utilized only 70 % of the time.

i) what is the required system capacity in prints per hour?

ii) What average output per hour can be expected from processor, taking its use factor and efficiency into account?

iii) How many processors are required?

c) A business man should decide whether to build the small capacity plant or a large capacity plant at a new location. Demand at the location can be either low or high with probabilities estimated at 0.4 and 0.6 respectively. If small capacity plant built and demand proves to be high businessman may select either to expand or not to expand with payoffs of 540000 and 446000 respectively. In case small capacity plant is built and the demand is low there is low, there is no reason to expand and payoff is Rs 400000

If large capacity plant is built and the demand is low choice is to do noting with pay off of Rs.80000 or to stimulate demand through intensive advertising. Response to advertising may either modest or sizeable with their probabilities estimated to be 0.3 and 0.7 respectively. If it is modest the payoff is estimated to be only Rs.40000 and the payoff grows to Rs.440000 if the response is sizable. Finally if a large capacity plant is built and demand turns out to be high the payoff is Rs.1600000. Draw the decision tree and find out whether the businessman must build a small capacity plant or a large capacity plant?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M96466

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