G. L.

BAJAJ INSTITUTE OF TECHNOLOGY AND MANAGEMENT, GREATER

NOIDA

ASSIGNMENT

OF

“OPERATION MANAGEMENT FOR BUSINESS ANALYTICS”

TOWARDS THE PARTIAL FULLFILLMENT FOR THE AWARD OF DEGREE OF

MASTERS OF BUSINESS ADMINISTRATION (MBA)

(DR. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW, UTTAR

PRADESH)

By

PRATIBHA KUMARI
(2401921570092)

Under the Supervision of

Mr. RAHUL DOBRIYAL

Assistant Professor, Department of Management Studies, ITM-Greater Noida

2025-26
SECTION 1: Operations Basics (K2 Understanding)

1. Define “Process Design” and explain its importance in improving

operational efficiency.
Process Design refers to planning, structuring, and organizing all the activities, resources,
workflows, and procedures required to produce a product or deliver a service.

It involves:

 Identifying each step of the process

 Determining the required materials, technology, and manpower

 Setting the workflow

 Standardizing procedures

Importance of Process Design in Improving Operational Efficiency

Process Design directly impacts the overall efficiency of an organization. Here’s why it is important

1. Eliminates Waste & Reduces Cost

A good process reduces unnecessary steps, delays, duplications, and errors → cost savings + faster
output.

2. Improves Productivity

Clear workflow and defined roles help employees perform tasks faster and more efficiently.

3. Enhances Quality

Standardized procedures lead to consistent and high-quality products/services.

4. Better Resource Utilization

Manpower, machines, materials, and time are used in the best possible way, reducing idle time.

5. Faster Delivery & Shorter Cycle Time

Efficient workflows reduce the total time taken from start to finish, improving customer
satisfaction.

6. Increases Flexibility

Well-designed processes can adapt to changes such as demand fluctuations, new technologies, or
market condition

2. Compare manufacturing operations and service operations based on at

least five parameters.
 Parameter Manufacturing Service Operations
Operations
1. Nature of Produces tangible Provides intangible
Output products that can be seen, services that cannot be
touched, and stored. stored or physically
possessed.

2. Production & Production and Production and

Consumption consumption happen consumption occur
separately (goods simultaneously (service
produced first, consumed produced at the time of
later). delivery).

3. Customer Very low customer High customer

Involvement involvement in actual involvement; customer
production. participates in the service
process.

4. Quality Quality is easier to Quality is harder to

Measurement measure using physical measure because it is
standards (size, weight, subjective and depends
color, durability). on customer experience.

5. Inventory Products can be stored as Services cannot be stored,

inventory for future use. so unused service
capacity is lost.

6. Labor vs. More machine-intensive; More labor-intensive;

Machine automation is common. human interaction is
Intensity (extra) essential.

7. Customization Often less customized; High customization

(extra) products are standardized. possible according to
customer needs.

8. Location Location of factory is not Location must be close to

Dependency necessarily close to customers since services
(extra) customers. require direct interaction.

3. Describe any real-life example of a transformation process using the

input–process–output model.

Real-Life Example: A Bakery Making Bread (Input–Process–Output Model)

Inputs-

The bakery needs several inputs to make bread:

 Raw materials: flour, water, yeast, sugar, salt, butter
 Human resources: bakers, helpers
  Machines/equipment: oven, mixer, weighing scale
 Information: recipe, baking instructions
 Energy: electricity, gas

Process (Transformation Activities)-

The inputs go through different steps to transform them into finished bread:
 Measuring and mixing ingredients
 Kneading the dough
 Fermenting and proofing
 Shaping the dough into loaves
 Baking in the oven
 Cooling and packaging
All these activities convert raw materials into a ready-to-eat product.

Outputs-

After the transformation, the bakery produces:

 Final product: fresh loaves of bread
 By-products: aroma, heat, leftover crumbs
 Services: customer satisfaction, timely delivery

SECTION 2: Forecasting & Analytics (K3–K4)

4. A store’s sales for the last four months were 240, 260, 280, and 300 units.

Use a 2-month moving average to forecast month 5.

To forecast Month 5 using a 2-month moving average:

Given Sales

 Month 1 = 240

 Month 2 = 260

 Month 3 = 280

 Month 4 = 300

2-Month Moving Average Formula

Forecast for Month 5=Month 4+Month 32\text{Forecast for Month 5} = \frac{\text{Month 4} +

\text{Month 3}}{2}Forecast for Month 5=2Month 4+Month 3

Calculation

=300+2802= \frac{300 + 280}{2}=2300+280 =5802= \frac{580}{2}=2580 =290= 290=290

Forecast for Month 5 = 290 units

 4. Explain the meaning of "forecast bias" and how it affects operational decisions.

Forecast Bias refers to the consistent tendency of a forecasting method to overestimate or

underestimate actual demand.
 If forecasts are consistently higher than actual demand → Positive Bias (Over-forecasting)
 If forecasts are consistently lower than actual demand → Negative Bias (Under-forecasting)
It shows whether the forecasting process is systematically skewed in one direction, rather than
producing balanced and accurate predictions.

How Forecast Bias Affects Operational Decisions

1. Inventory Problems
o Over-forecasting leads to excess inventory, higher storage costs, wastage, and tied-up
capital.
o Under-forecasting leads to stockouts, missed sales, and dissatisfied customers.
2. Capacity Planning Issues
o Over-forecasting may cause the company to allocate more machines, labor, and space
than necessary.
o Under-forecasting may result in insufficient resources to meet actual demand.
3. Poor Financial Performance
o Over-forecasting increases operational costs, while under-forecasting reduces revenue.
o Both reduce profitability.
4. Scheduling Inefficiencies
o Biased forecasts distort production schedules, causing overtime, idle time, or last-
minute adjustments.
5. Supply Chain Disruptions
o Suppliers may be asked to deliver too much or too little, affecting their planning and
relationships.
6. Decision-Making Errors
o Managers may make wrong decisions regarding procurement, hiring, budgeting, or
expansion because they are relying on biased data.

6. A manager has two strategies for promotion with uncertain outcomes.

Create a simple payoff table (your own numbers) and explain how maximax and maximin
decisions differ.
Payoff Table (Example)

A manager must choose one of two promotion strategies: Strategy A or Strategy B.

There are three possible outcomes: High Demand, Medium Demand, Low Demand.
 Strategy High Demand Medium Demand Low Demand

A 80 50 20

B 60 55 40

(Numbers represent profits or payoff in thousands of rupees, for example.)

1. Maximax Decision Rule (Optimistic Approach)

Maximax = Choose the option with the maximum of the maximum payoffs.

 For Strategy A → max payoff = 80

 For Strategy B → max payoff = 60

Maximax chooses Strategy A because 80 is the highest possible payoff.

This rule is used by risk-loving or optimistic managers who focus on the best possible outcome.

2. Maximin Decision Rule (Pessimistic Approach)

Maximin = Choose the option with the maximum of the minimum payoffs.

 For Strategy A → minimum payoff = 20

 For Strategy B → minimum payoff = 40

Maximin chooses Strategy B because 40 (its worst-case scenario) is better than 20.

This rule is used by risk-averse or pessimistic managers who focus on the safest, least-bad outcome.

SECTION 3: Inventory & Supply Chain (K4–K5)

7. Explain the concept of “Reorder Point (ROP)” and list any two factors that
influence ROP.

Reorder Point (ROP) – Concept

The Reorder Point (ROP) is the inventory level at which a new order must be placed to
replenish stock before it runs out.
It ensures that materials or products are available continuously without interruption.
In simple terms:
ROP tells you the stock quantity at which you should reorder so that you do not face a
stockout during the supplier’s lead time.
Formula (basic):
ROP=Demand during Lead Time\text{ROP} = \text{Demand during Lead
Time}ROP=Demand during Lead Time

Two Factors that Influence ROP

1. Lead Time
  The time taken by the supplier to deliver the order.
 Longer lead time → higher ROP (you must reorder earlier).
2. Demand Rate
 The average usage or sales rate of the item.
 Higher demand → higher ROP because stock gets consumed faster.

8. A warehouse faces annual demand of 4800 units and places orders 6 times a year.

Calculate average cycle inventory and annual ordering cost (assume ₹200 per order).

Given:
 Annual Demand (D) = 4800 units

 Number of orders per year = 6

 Ordering cost per order (S) = ₹200

Step 1: Calculate Order Quantity

Q=DNumber of orders=48006=800 unitsQ = \frac{D}{\text{Number of orders}} = \frac{4800}{6} =

800 \text{ units}Q=Number of ordersD=64800=800 units

1. Average Cycle Inventory

Average cycle inventory = Q2\frac{Q}{2}2Q

=8002=400 units= \frac{800}{2} = 400 \text{ units}=2800=400 units

Average Cycle Inventory = 400 units

2. Annual Ordering Cost

Annual ordering cost = Number of orders × Cost per order

=6×200=₹1200= 6 \times 200 = ₹1200=6×200=₹1200

Annual Ordering Cost = ₹1200

If you want, I can also calculate EOQ, holding cost, or total inventory cost.

You said:

. A warehouse faces annual demand of 4800 units and places orders 6 times a year

ChatGPT said:

Here is the complete solution in a clean, exam-friendly format:

Given

 Annual Demand (D) = 4800 units

 Number of Orders per Year = 6

 Ordering Cost per Order (S) = ₹200

1. Order Quantity

Q=DNumber of Orders=48006=800 unitsQ = \frac{D}{\text{Number of Orders}} = \frac{4800}{6} =

800 \text{ units}Q=Number of OrdersD=64800=800 units

2. Average Cycle Inventory

Average cycle inventory = Q2\frac{Q}{2}2Q

=8002=400 units= \frac{800}{2} = 400 \text{ units}=2800=400 units

✅ Average Cycle Inventory = 400 units

3. Annual Ordering Cost

Annual ordering cost = Number of Orders × Cost per Order

=6×200=₹1200= 6 \times 200 = ₹1200=6×200=₹1200

✅ Annual Ordering Cost = ₹1200

8. Explain the role of safety stock in maintaining service level during demand fluctuations.

Role of Safety Stock

Safety Stock is the extra inventory kept above the expected demand to protect against
uncertainties in demand or supply. It acts as a buffer to ensure that operations continue smoothly
even when actual demand is higher than forecasted or supply is delayed.

Key Roles of Safety Stock

1. Prevents Stockouts
o When demand unexpectedly rises or deliveries are late, safety stock ensures there is
enough inventory to meet customer needs.
2. Maintains Service Level
o By having safety stock, a company can meet customer demand on time, improving
reliability and customer satisfaction.
3. Handles Demand Fluctuations
o In situations where demand is unpredictable, safety stock helps the company absorb
variability without interrupting production or sales.
4. Supports Continuous Operations
o Reduces the risk of halting production due to lack of materials or missing sales
opportunities due to stockouts.
 5. Reduces Emergency Costs
o Helps avoid rush orders, overtime, or expedited shipping costs caused by unexpected
demand spikes.

10. Prepare a VED or FSN classification using any five items of your choice.

VED Classification (Vital, Essential, Desirable)

Item VED Reason

Category

ECG Machine V (Vital) Critical for patient diagnosis, cannot function without it

Surgical Gloves E (Essential) Necessary for routine operations but alternatives exist

Stethoscope D (Desirable) Useful for examination, but not critical for immediate patient
care

Oxygen V (Vital) Life-saving equipment, cannot be substituted

Cylinder

Hospital Beds E (Essential) Required for patient care, but stock can be planned

2. FSN Classification (Fast, Slow, Non-moving)

Item FSN Category Reason

Paracetamol Tablets F (Fast) High consumption, used daily

Sutures F (Fast) Used frequently in surgeries

ECG Machine S (Slow) Used less frequently, high-value equipment

MRI Film N (Non-moving) Rarely used, long shelf-life

Stethoscope S (Slow) Low consumption, durable

SECTION 4: Lean, Quality & Six Sigma (K3–K5)

11. Explain “Kaizen” and describe one practical example of continuous improvement in
a workplace or college setting.
Kaizen is a Japanese term that means “continuous improvement.”
It refers to the philosophy of making small, incremental changes in processes, systems, or work
methods on a regular basis to improve efficiency, quality, and productivity.

Key points about Kaizen:

 Focuses on gradual, continuous improvement rather than one-time major changes.

 Encourages employee participation and teamwork.

  Aims to reduce waste, errors, and inefficiencies while improving processes.

Practical Example of Kaizen

Scenario: A college library wants to improve the efficiency of book issuing and returning.

Current problem: Students often wait in long queues, causing delays.

Kaizen Implementation:

1. Observe & Identify: Note peak hours and bottlenecks at the counter.

2. Small Improvements:

o Introduce self-checkout kiosks for issuing/returning books.

o Place clear signage and instructions for quick usage.

o Assign staff to assist students during peak hours.

3. Result:

o Reduced waiting time from 15 minutes to 5 minutes.

o Improved student satisfaction.

o Staff can focus on other tasks.

12. Identify any service (canteen, bank, hospital) and list five wastes (Muda) present in
its operations.

Service Chosen: Bank

Five Wastes (Muda) in Bank Operations

1. Waiting

o Customers waiting in long queues due to slow service or limited staff at counters.

2. Overprocessing

o Performing unnecessary paperwork or multiple approvals for simple transactions.

3. Transportation / Movement

o Excess movement of documents or cash between departments instead of centralized

processing.

4. Defects / Errors

o Mistakes in account entries, incorrect statements, or wrong transactions requiring

corrections.

5. Inventory / Excess Resources

 o Maintaining excessive stationery, forms, or idle cash in multiple branches that remain
unused.

13. Draw a simple Cause–Effect diagram for the problem of “Frequent delays in office
document approvals”.
Problem: Frequent Delays in Office Document Approvals

Major Causes (Categories)

1. People – Lack of training, insufficient staff, unclear responsibilities

2. Process – Complex approval steps, multiple levels of authorization, missing deadlines

3. Technology – Slow software, system downtime, lack of automation

4. Policy/Rules – Strict or unclear policies, excessive formalities

5. Communication – Poor coordination between departments, delayed responses

Simple Cause–Effect Diagram

Frequent Delays in Office Document Approvals

-----------------------------------------------------------------

| | | | |

People Process Technology Policy/Rules Communication

| | | | |

- Lack of - Complex - Slow - Excessive - Poor coordination

training approval software formalities - Delayed responses

- Insufficient steps - Downtime - Unclear rules - Miscommunication

staff - Multiple - No auto

- Unclear authorization notifications

roles - Missing

deadlines

SECTION 5: Project Management (K6 Creating)

14. Consider four activities in a project with your own time estimates.
Arrange them in a small CPM network and identify which activity looks most critical.
Activities (example for a short magazine design project):

• A — Briefing & scope (2 days) — Start activity.

• B — Content creation (5 days) — Depends on A.

• C — Design & layout (4 days) — Depends on A.

• D — Final review & publish (2 days) — Depends on B and C.

Network & durations:

A→ B→ D

A→ C→ D

Paths and durations:

• Path 1: A → B → D = 2 + 5 + 2 = 9 days

• Path 2: A → C → D = 2 + 4 + 2 = 8 days

Critical path: Path with longest total duration = A → B → D (9 days).

Most critical activity(s): B (Content creation) is on the critical path and has the largest single duration
on that path, so delaying B will directly extend project duration.

(If you want, I can compute ES, EF, LS, LF for each activity and show slack — but above identifies the
critical path.)

15. Prepare a basic Gantt chart for planning a 5-day workshop with tasks such as
planning, material preparation, communication, execution, and reporting.

Basic Gantt Chart for a 5-Day Workshop

Task Day 1 Day 2 Day 3 Day 4 Day 5

Planning ███

Material Preparation ███

Communication ███

Execution ███ ███

Reporting ███

Explanation:

 Planning is done on Day 1.

 Material preparation and communication happen on Day 2.

 Execution takes 2 days (Day 3–4).

  Reporting is done on Day 5.

16. Explain the terms earliest start time and latest finish time with an example in project
scheduling.

Definitions
 Earliest Start Time (EST): The earliest time an activity can start based on the completion of
preceding activities.

 Latest Finish Time (LFT): The latest time an activity can finish without delaying the project
completion.

Example

Consider a mini project with two activities:

Activity Duration Predecessor

A 2 days –
B 3 days A
1. Earliest Start Time (EST):

o Activity A: EST = Day 0 (can start immediately)

o Activity B: EST = Day 2 (can start only after A finishes)

2. Earliest Finish Time (EFT):

o Activity A: EFT = EST + Duration = 0 + 2 = Day 2

o Activity B: EFT = 2 + 3 = Day 5

3. Latest Finish Time (LFT):

o If project deadline = Day 5, LFT for B = Day 5 (must finish by then)

o LFT for A = LFT of B – Duration of B = 5 – 3 = Day 2

SECTION 6: Industry 4.0 & IoT (K6 Creating)

17. Suggest one IoT-based method to reduce spoilage or wastage in cold

storage operations.
Method: Deploy a network of IoT temperature & humidity sensors with cloud telemetry, combined
with automated alerts and actuators.

How it works (steps):

1. Place sensors throughout the cold room (multiple zones, racks) to measure
temperature/humidity every few minutes.
2. Data streams to cloud/edge analytics that monitor trends and detect deviations from setpoints
or early warning signs (e.g., gradual warming).

3. If anomaly detected (sensor drift, door left open, compressor inefficiency), system triggers
alerts (SMS/APP) and can automatically adjust HVAC setpoints or activate backup cooling or close
dampers.

4. Use historical data + machine learning to predict equipment failures or peak load periods and
schedule preventive maintenance or load balancing.

Benefits: reduces spoilage by rapid detection and response, maintains consistent conditions, and
enables proactive maintenance (reducing extended downtimes that cause mass spoilage).

18. Explain how automation can help reduce human errors in warehouse order
picking.
Automation reduces mistakes by removing manual steps and enforcing error-proofing:

• Pick-to-light / Put-to-light systems: show exact bin and quantity — reduces selection errors.

• Barcode scanning / RFID: requires scanner confirmation of SKU and quantity before packing
— prevents wrong items.

• Voice picking: gives step instructions and requires verbal confirmations, keeping hands free
and reducing lookups.

• Automated Guided Vehicles (AGVs) / Autonomous Mobile Robots (AMRs): move goods
reliably to pack stations, reducing human handling errors.

• Warehouse Management Systems (WMS): enforce pick sequences, lot/FIFO rules, and
display real-time inventory to avoid mistaken picks.

• Poka-yoke (error proofing): mechanical guides, keyed slots, or fixtures that only allow the
correct part to fit.

Result: fewer mispicks, improved accuracy, faster throughput, fewer returns, and better traceability.

19. Describe any two Industry 4.0 technologies and how they support real-time
decision-making.
A. Digital Twin

• What: Virtual replica of physical assets/processes (equipment, factory floor) that mirrors real-
time state using sensor data.

• Real-time support: By simulating “what-if” scenarios (e.g., change production rate or respond
to a machine fault), digital twins enable immediate evaluation of impacts and prescribe corrective
actions without interrupting operations.

B. Edge Computing
• What: Processing data near the source (on-site devices or gateways) rather than sending all
data to the cloud.

• Real-time support: Enables low-latency analytics and control (e.g., immediate shutoff if
temperature rises) and reduces reliance on network round trips. Edge can run anomaly detection and
trigger local actuations for fast decisions.

(Other technologies: IoT sensors, AI/ML, 5G, blockchain for traceability — all contribute to faster,
data-driven decisions.)

SECTION 7: Case-Based Application (Moderate Level)

20. Case: A small restaurant receives inconsistent daily supplies of vegetables

and faces both excess stock and shortages.

Questions:
a) Identify the operational problem using supply chain concepts.
This is a supply variability & mismatch problem (supply uncertainty + poor coordination). Symptoms:
high demand/supply variability, lack of supplier reliability, inadequate lead-time visibility, and poor
ordering policy — leading to stockouts sometimes and excess perishable inventory other times. It may
also indicate the bullwhip effect (small variations in downstream demand amplified upstream) and
insufficient information sharing between restaurant and suppliers.

b) Suggest one forecasting method they can use.

Simple exponential smoothing (SES) is practical for short-term perishable items: it gives more weight
to recent observations and adapts quickly to level changes. If there’s a small trend, Holt’s linear
method (double exponential smoothing) can be used. For daily demand with weekday patterns, use 2-
week moving average by weekday (e.g., average of last 2 Mondays to forecast next Monday) for
simplicity.

c) Recommend two improvements to stabilize stock availability.

[Link] supplier coordination / contracts:

Enter short-term supply agreements with local suppliers that commit daily delivery
windows and minimum quality/quantity guarantees. Use multiple small suppliers (diversify)
to reduce single-point failure. Consider vendor-managed inventory (VMI) for key perishables
where the supplier monitors sales and replenishes.

[Link] demand smoothing + safety strategies:

Adopt par level and reorder point policies with small, frequent orders matched to lead
time; maintain safety stock calibrated for short lead times and demand variability (but keep
minimal due to perishability). Use daily sales data to update forecasts (SES), and standardize
portion sizes to reduce waste. Additionally, use a small buffer like “2–3-day par” for staples
and flexible menu substitution for ingredients with supply issues.
Optional: improve visibility with simple digital tools (shared daily order sheet via WhatsApp
or Google Sheet) so suppliers see real demand patterns.