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UNIVERSITY OF COLOMBO, SRI LANKA

FACULTY OF MANAGEMENT AND FINANCE

Postgraduate & Mid-career Development Unit

Master of Business Administration in Finance/Master of Business Administration in

Marketing/Master of Business Administration in HRM (Semester II First-half) Examination

August, 2008

MBA 538 Operations Management

Three (03) Hours

Answer Any Five(05) Questions

Total Number of Questions Six (06)

Question 1

i. Explain the relationship between the operations function and other functions of a businessorganization such as finance, accounting and marketing by providing suitable examples.

(10 Marks)

ii. Today it is difficult to find pure service organizations or pure manufacturing organizations.Do you agree with this statement? Justify your answer.

(10 Marks)

Question 2

i. Work study is one of the best tools available for an operations manager to increase theproductivity. Explain this statement.

(10 Marks)

ii. Identify and elaborate three practical actions which can be taken by an organization toincrease the productivity of the organization. You should clearly demonstrate how the

proposed actions increase the productivity.

(10 Marks)

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Question 3

i. The dimensions of quality which are considered by operations managers of manufacturingorganizations and service organizations are not the same. Elaborate this statement by

providing suitable examples.

(10 Marks)

ii. Total Quality Management (TQM) is a broader concept than quality control. Explain.(10 Marks)Question 4

i. A large garment factory needs 150,000 button packets per annum. The supplier provides abutton packet at a price of Rs. 24. Presently, this company orders in lots of 50,000. It costs

Rs. 400 to place an order and it is estimated that the stock holding cost is 20% of the unit

cost. If they order the Economic Order Quantity (EOQ) what will be their annual saving?

(EOQ formula isH

o

C

DCQ

2*= .

*Q is the EOQ when D is the annual demand, C0 is the

ordering cost per order and CH is the holding cost.)(10 Marks)

ii. Explain the importance of product life cycle to an operations manager.(10 Marks)

Question 5

i. A large Indian pharmaceutical manufacturing company has approached a Sri Lankanconglomerate to start a state of the art pharmaceutical manufacturing plant in Sri Lanka.They want to export most of their production to Europe and the USA. Due to the nature of

some of the drugs they would produce in the new factory, it is very important to send these

drugs to the destination within two days of manufacture. The Indian partner wants to have a

research and development department too within the factory. Therefore, it is expected that

at least 30 50 scientists and managers from India and UK would arrive in Sri Lanka to

work in the factory. However, they want to recruit Sri Lankan doctors and scientists as

well. Most of the raw materials will be imported from India in the bulk form. The Indian

company has entrusted the task of finding a place to start this factory to the Sri Lankan

company. What are the important factors to be considered in locating this factory?

(10 Marks)

ii. The CEO of your company has recently heard that there is a technique called Just-In-Timemanufacturing to increase the productivity. As the CEO knows that you are following an

MBA programme, he wants you to make a presentation to the senior managers. How do

you explain the JIT concept to the senior management?

(10 Marks)

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Question 6

i. A bank has bought a three-storey building to locate a new branch. What should be theobjectives of the new branch layout?

(8 Marks)

ii. TitToys has decided to manufacture a new toy car, the production of which is broken intosix steps. The demand for the car is 4,800 units per 40-hour work week.

Task Performance Time

(Sec)

Predecessor

A

B

C

D

E

F

20

30

15

15

10

30

None

A

A

A

B,C

D,E

a. Draw the precedence diagram of this operation.b. Calculate the cycle time.c. Assign tasks into workstations.d. What is the overall efficiency of the assembly line?

(12 Marks)

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