Production and Operation
Management
Session No : 02
Prof. Suraj Marathe
Department of Mechanical Engineering
Don Bosco College of Engineering.
17/7/2017
Contents :
Session No.
1-2 Introduction to Operation Management
(11/7/2017) (Manufacturing and Service Sector)
Classification of Operation
Operation Management and Decision Making.
Responsibility of Operation Manager
3-4 New Product Development
Selection and Design of Product/Service.
Introduction to Operations Research.
5-6 Introduction to Linear Programming.
Formulation of Transportation model Problem
Initial basic solution for Transportation Model
7-8 Class Test to evaluate knowledge of Operation
Management and Application Transportation
Model.
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Business Operations Overlap
Operations
Marketing
Finance
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Operations Interfaces
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Historical Evolution of Operations
Management
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Management Technology
Technology: The application of scientific
discoveries to the development and
improvement of goods and services
Product and service technology
Process technology
Information technology
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Decision Making
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Decision Making
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Decision Making
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Models
A model is an abstraction of reality.
– Physical
– Schematic
– Mathematical
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Models Are Beneficial
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Limitations of Models
Quantitative information may be
emphasized over qualitative
Models may be incorrectly applied and
results misinterpreted
Nonqualified users may not comprehend
the rules on how to use the model
Use of models does not guarantee good
decisions
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Quantitative Approaches
• Linear programming
• Queuing Techniques
• Inventory models
• Project models
• Statistical models
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Trends in Business
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Product and Service Design
Product and service design – or redesign – should be
closely tied to an organization’s strategy
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Product or Service Design
Activities
1. Translate customer wants and needs
into product and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications
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Reasons for Product or
Service Design
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Objectives of Product and Service
Design
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Designers Adhere to
Guidelines
Produce designs that are consistent with
the goals of the company
Give customers the value they expect
Make health and safety a primary
concern
Consider potential harm to the
environment
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Other Issues in Product and
Service Design
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Life Cycles of Products or
Services
Saturation
Maturity
Demand
Decline
Growth
Introduction
Time
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Standardization
Standardization
Extent to which there is an absence of
variety in a product, service or process
Standardized products are immediately
available to customers
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Product Design
Product Life Cycles
Robust Design
Concurrent Engineering
Computer-Aided Design
Modular Design
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Phases in Product Development
Process
1. Idea generation
2. Feasibility analysis
3. Product specifications
4. Process specifications
5. Prototype development
6. Design review
7. Market test
8. Product introduction
9. Follow-up evaluation
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Service Design
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Service Design
Service design involves
The physical resources needed
The goods that are purchased or consumed
by the customer
Explicit services
Implicit services
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Guidelines for Successful
Service Design
1. Define the service package
2. Focus on customer’s perspective
3. Consider image of the service package
4. Recognize that designer’s perspective is different
from the customer’s perspective
5. Make sure that managers are involved
6. Define quality for tangible and intangibles
7. Make sure that recruitment, training and rewards are
consistent with service expectations
8. Establish procedures to handle exceptions
9. Establish systems to monitor service
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Introduction to Operations
Research (OR)
OR is a scientific approach to problem
solving for executive management.
H.M Wagnar
OR is a problem Solving and Decision
making science.
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Characteristics of OR
System orientation
Use of interdisciplinary
Application of scientific method
Improvement in the quality of
decisions
Use of computer
Quantitative solutions
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Necessity of OR in Industry
Complexity
Scattered responsibility and authority
Uncertainty
Knowledge
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Scope of OR in Management :
Allocation and Distribution.
> Men, Machines, Materials, Time and money
> Warehouses, Distribution Centre's, Retail depots.
Production and Facility Planning
> Selection, Locations and Design of production plants.
> Project Scheduling and allocation of resources
> Scheduling and Sequencing
Procurement
> What, How and When
> Replacement policies
> Transportation Planning
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Marketing
> Product selection
> Demand forecasts
Finance
> Capital requirement
> Profit plan
> Replacement polices
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Personnel
> Selection
> Recruitment policies
> Wages/Salary
Research and Development
> Area of Research
> Selections of projects
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Linear Programming (LP)
LP deals with the optimization
(max/min) of a function of variable
known as objective function,
Subjected to a set of linear equation
and/or inequalities known as
constraints.
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LP- Management Applications
Media selection Problems
Investment Problems
Profit planning problems
Transportation Problems
Assignment Problems
Man-power scheduling Problems
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LP
LP is an optimization problem
Maximize or minimize a linear
function of decision variables
The values of the decision variable
are selected in such a way that they
satisfy a set of constraint.
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Decision Variable
In a LP model, the decision variable
means the variable whose quantitative
values are required to be found, so as
to minimize or maximize the objective
function.
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Constraint
The restriction which are expressed in
the form of an equation or
inequality(<= or >).
Feasible Solution.
Optimum Solution.
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Steps in LP
1) Identify the problem.
2) Specify the objective and decision
criteria for choosing the solution
3) Develop the Alternatives
4) Select the best (Optimal Solution)
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The objective function and constraint
are linear.
eg.
Z= 5x1+3x2
ST 5x1+3x2>125
15x1-3x2=106
x1<165
x1,x2>0
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Formulation of LPP
A firm produces two products A and B which gives
a profit margin of Rs.4 and Rs 3 respt. Each of the
two products require different amounts of labour
and raw material. Each item of A and B requires 2
hrs and 1 hrs of labour respt. further Raw
material requirement for each item of type A and
B are 1kg and 2 kg respt. Availability of labour
and raw material are 72kg and 48 kg respt.
Formulate the LP model for maximizing the profit.
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Solution :
Decision Variable :
Let
x be the no of item of product A to be
produced.
y be the no of item of product B to be
produced.
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Objective function :
Max Z= 4x + 3y
ST,
2x + y <= 72 ……….Labour
x +2y <= 48 ………..Raw material
where, x>=0 ,y >=0
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Problem No.2
A company is manufacturing two different types of
product A and B. Each product has to be
processed in 3 different department- Casting,
Machining and finally inspection. The capacity of 3
department is limited to 35 hrs,32hrs and 24 hrs
per week respt. Product A requires 7 hrs in
casting dept. 8 hrs in machining shop and 4 hrs in
inspection whereas product B requires 5 hrs, 4 hrs
and 6 hrs in respt shops. The profit contributed
for a unit product of product A and B is Rs. 30 and
Rs.40 respt.
Formulate the problem.
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Solution
Decision Variable :
Let
x be the no of item of product A to
be produced
y be the no of item of product B to be
produced.
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Objective Function :
Maximize Z= 30x + 40y
ST,
7x + 5y <= 35 …….casting
8x + 4y <= 32 …….Machining
4x + 6y <= 24 …….Inspection
Where,
x>=0, y>=0
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Transportation Model
Decision based on movement costs of
raw materials or finished goods
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THANK YOU
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