Production Planning & Control Book

SEM -VII Production Planning & Control
P a g e | 1
Learn With GeekAlign
GeekAlign Notes
Production Planning & Control | Semester 7
By - Amit Mahto

P a g e | 2
Important Questions with Answers (Module Wise)
JOIN OUR TELEGRAM CHANNEL FOR MORE UPDATES
https://t.me/joinchat/AAAAAFkF7iEpknCDZcNmHA
Follows us on
Instagram : https://instagram.com/learnwithgeekalign?igshid=1abqnl020kq04
YouTube : https://www.youtube.com/channel/UCDoWuDKv6rVMZazIko9WARA
Website : https://learn.geekalign.com/mcq/
MODULE NO 1
[5/10 marks questions]
Q1. Discuss The Pre-requisites Of PPC?
Answer : The pre-requisites of PPC are as follows :
a. Data Pertaining to Design
The design of the product is most important which is supplied by the customer.
Based on the design provided, the entire shop floor plan is decided. This gives
the core idea of extracting the type of materials required, machine utilization,
numbers of workers required etc.
b. Data pertaining to Equipment’s
The equipment’s required for manufacturing the products mainly follow a
sequence of operations to be performed on the same. The sequence of
PRODUCTION PLANNING & CONTROL

P a g e | 3
operations is mainly decided from the design given by the customers. These
also include the tooling and accessories necessary for holding the job in the
machine. The feed of tool and depth of cut. The size of machine depends upon
dimension of workpiece to be machined.
c. Data pertaining to raw materials
The raw material requirements for products depends mainly upon the customer
requirements and demands, the type of material to be used, specifications like
composition chemical involvement , type of process etc.
d. Data pertaining to tooling
Type of tooling depends upon composition of work pieces. It also incorporates
the method of machining to be carried out that will give standardized sizes of
tools and cutting accessories required for production.
e. Data pertaining to performance standard
In an industrial engg process, taken as a whole, there are some standard
methods or procedures to be followed while planning a process. The production
planning techniques are mainly based on the type of end or final products to be
made. This is decided by the type of drawing or part diagrams sent by the
customers.
f. Data pertaining to Labour
Management of labour on shop floor along with the assignment of Jobs and
productivity output. Labour required in Industrial engg is mainly categorized into
a. Labour at management level
b. Labour at staff level
c. Labour at shop floor level
g. Data pertaining to operating systems
The operating systems considered in an industry mainly and wholly depend
upon type of products to be manufactured. The final end products decide the
type of operating system applicable. It is usually called as the plant layout
planning. The layout of the plant forms a major part of operating system.
Q2 - Explain Need Of PPC with other Department?
Answer : The depts. and their areas of cooperation are as follows:
a. Sales dept.:
• Sales dept. must consult PPC dept. regarding quotation price & delivery
date

P a g e | 4
• Information regarding new customer order must be immediately passed
to PPC dept. for further action.
• PPC should provide status of production to sales dept...
• PPC should report sales dept. when delivery promises cannot be met
within schedule so that customer can be informed about the delay.
• Buyer’s feedback about quality must be passed on PPC immediately so
that corrective action can be taken if required.
b. Quality dept.
• When few pieces are produced to check setup of machineries, inspection
dept. should return these pieces immediately after inspection to keep
setup time minimum.
• Inspection dept. should provide immediate feedback on rejection quantity
and quantities of items that are reworkable.
• Quality control dept. must give feedback about quality of incoming
materials immediately.
• Errors in dimensions observed by shop inspection must be communicated
to PPC immediately.
c. Purchase dept.:
• PPC dept. must inform purchase dept. about requirement of materials in
terms of quantity, quality & time well in advance.
• Changes in schedule, specifications etc. must be informed to purchase
dept. immediately
• Purchase section must inform PPC dept. on progress of orders and delays
if any so that alternative action can be taken.
d. Design dept.:
• Changes in design should be informed to PPC dept. immediately.
• Process capability must be considered by design dept. while designing
specifications and tolerances
• On request of PPC, design tolerance should be relaxed by design dept.
for those operations which are difficult to done.
e. Store dept.:
• Store should ensure regular flow of materials & tools. It should inform level
of stock to PPC dept. so that purchasing can be done well in time.
• To keep records of inventory level is the responsibility of store dept.
f. Maintenance dept.:
• Attending maintenance of vital machineries on top priority
• Providing information on maintenance, lubrication and overhauling etc.
g. Personnel dept.:
• PPC should inform personnel dept. about requirements of labours and
their training.

P a g e | 5
• Personnel dept. should provide information about labour absenteeism,
holidays, hiring and dismissals etc.
h. Tool room:
• Tool room assist PPC dept. by making tools and gauges available in the
right quantity.
i. Manufacturing shop:
• Preparing detailed work order for each worker.
• Consulting and accepting suggestion of planning staff related to overtime,
job splitting, subcontracting, and changes in job priority to complete
delayed jobs in schedule.
• Consulting with regards to sanction of leaves to workers when workload
is high and doing substitute arrangement while sanctioning leave.
• Making suggestions regarding changes in machines and manufacturing
processes so that efficiency can be improved.
• Motivating workers for better performance.
• Improving morale of workers.
• Preparation of daily production report.
Q3 - Function of PPC
Answer : Function of PPC are as follows:
a. Materials function:
• Raw materials, finished parts and bought out components should be made
available in required quantity and at the required time.
• The function includes the specification of materials such as quality and
quantity, delivery dates, variety reduction, procurement and make or buy
decisions.
b. Machines and Equipment’s:
• Analysis of available production facilities, equipment downtime,
maintenance policy etc.
• Thus the duties include the analysis of facilities and making their
availability with minimum down time because of breakdowns.
c. Methods
• This function is concerned with the analysis of alternatives and selection
of the best method and also determination of sequence of operations.
d. Process Planning (Routing):
• Fixation of path of travel giving due consideration to layout
• Breaking down of operations to define each operation in detail
• Deciding the setup time and process time for each operation
e. Estimating:

P a g e | 6
• Once the overall method & sequence of operations are fixed & process
sheet for each operation is available, then the operation times are
estimated.
• The standard time for the operation is established using work
measurement techniques
f. Loading & Scheduling:
• Loading the machines as per their capability and capacity
• Determining the start and completion times for each operation
g. Dispatching:
• This is an execution phase of planning. It is the process of setting
production activities in motion through release of orders and instructions.
• To assign definite work to definite machines, work centres and men
• To issue required materials from store.
• To issue jigs, fixtures and make them available at correct point of use.
h. Expediting/follow-up/ progressing
• This is the control tool that keeps a close observation on the progress of
the work.
• It is a logical step after dispatching.
Q4 - Illustrate different manufacturing method give characteristic with one
example each
a. Job production
• More than one or few products are produced to customer's requirement
within the given date and within the price fixed prior to the contract
• Materials are purchased on receipt of customer’s order.
Standard tools are stocked and special tools are either made in house or
purchased from outside
• Schedule is prepared to mark the beginning and finish of each activity
• Example-a commercial printing shop, Designer dresses
b. Batch production
• A limited number of products are produced at regular intervals and
stocked in warehouses as finished goods awaiting sales.
• Detailed route sheets (process sheets) are prepared
• Loading and scheduling are to be worked out with greater details
• Typical examples are pharmaceuticals, paints, chemicals, medium and
heavy engineering industry engaged in the manufacture of electric
motors, switch gears, heavy motor vehicles & I. C. engines
c. Mass and Flow Production

P a g e | 7
• In mass production a large number of identical articles are
production but inspite of advanced mechanization and tooling the
equipment need not be specially designed for this type of article
only. Both plant and equipment are flexible enough to produce
other products involving same production processes.
• In flow production the plant it s equipment and layout are primarily
designed to manufacturing the product in question. Flexibility
in selection of products for manufacturing is confined to
minor modifications in layout or design of models.
• Typical examples of mass production units are continuous
manufacturing industries such as plastic goods, hardware,
manufacturing and assembly shops of automobiles, refrigerators,
radios, television sets & domestic appliances etc.
d. Continuous or Process Production:
• A single product is manufactured & stocked in the warehouses
awaiting sales.
• The flexibility of such plant is almost zero.
• Typical examples are sugar, steel, cement, paper, coke, textile &
refineries.
Q5 - What do you understand by Degree of Centralization?
• For any organisation to run efficiently, all the process activities for a part
or a product must have a centralised operating system.
• Degree of Centralization: It is the rate at which the production of the
company is carried out due to the planning activities that are finally
controlled in order to fulfil its objectives is known as degree of
centralisation.
• The degree of centralisation mainly depends upon the PPC activities
carried out centrally to attend the goals of the organisation
• Centralised planning is more effective in case of multi-product, multi-plant
organisations and it takes away the burden of planning from line function
to allow them to concentrate on manufacturing instead of planning.
Q6 - What are principle function of dispatching?
Dispatching is the routine of setting productive activities in motion through the
release of orders and necessary instructions according to pre-planned times
and sequence of operations embodied in route sheets and loading schedules.
FUNCTIONS:

P a g e | 8
• It is the process of setting production activities in motion through release
of orders and instructions
• To issue jigs, fixtures and make them available at correct point of use
• The issue of time tickets, instruction cards and other required items to the
workers who are to perform the various activities.
• Clean up on jobs, collection of time tickets, blueprints and instruction
cards and their return to appropriate section of production control deptt.
• To ensure that the work is forwarded to next deptt. or storeroom etc.
• To record the beginning and completion times of jobs on time tickets for
calculation of time interval. To forward time ticket to accounts deptt for
preparing wages.
• To record and report idle time of men and machines and request for
corrective action required.
Q7 - Status of PPC department
• PPC can be defined as, “the direction and coordination of firms resources
towards attaining the prefixed goals”.
• It helps to achieve uninterrupted flow of materials through production line
by making available the materials at right time and in required quantity.
• PPC serves as a useful tool to co-ordinate the activities of production
system by proper planning and control.
• The status of PPC dept. in the organisation depends upon many factors
such as degree of centralisation desirable, composition of internal
structure of PPC, manufacturing system and management policies.
➢ In case of highly repetitive type of production with higher degree of
automation the planning work is carried out by line staff. There may
not be a formal planning dept.
➢ For the product type of layout where the sequence of operations are
prefixed, then PPC may be the part of manufacturing dept. itself
➢ An independent PPC dept. is to be set-up if each product requires
varying capacity, product variety & different sequence of operations
with a functional layout. A separate dept. with a PPC head reporting
directly to the work manager.

P a g e | 9
MODULE NO 2
[5 marks questions]
Q1 - What is forecasting & their role in PPC
• Forecasting is defined as the estimation of future sales or demands for a
product. It is not only the guess work but it is based on past data and human
judgement.
• Forecasting as defined by American Marketing Association, “An estimate of
sales in physical units, for a specified future period, under proposed marketing
plan & under the assumed set of economic & other forces outside the
organisation for which the forecast is made”.
Role in PPC
• It is essential for planning, scheduling and controlling the system to
facilitate effective and efficient output of goods and services.
• The main purpose of forecasting, is to estimate the occurrence, timing or
magnitude of future events.
• Appropriate production scheduling.
• Reducing the cost of purchasing raw materials.
• Determining appropriate price policy
• Setting sales targets and establishing controls
• Evolving a suitable advertising and promotional campaign.
• Forecasting short term financial requirements.
• Avoid the overproduction and underproduction.
Q2 - Forecasting Method

P a g e | 10
In general, forecasting methods are classified as:
1. Judgemental techniques: It relies on the art of human judgement. These are
commonly used techniques in business and industries. This is a subjective method
where in there is a heavy reliance on the past experience of the person and skill.
2. Time series methods: It uses statistics for analysing the past data. It identifies
the historical pattern of demand for the product or project. The method of making
inference about future on the basis of what has happened in the past hence it is
called as time series analysis.
3. Casual methods (Econometric forecasting): In this method, the analyst tries
to establish cause and effect relationship between sales and some other parameter
that are related to sales e.g. the demand for cement depends upon the projected
growth of construction industry.
[10 marks questions]
Q1 - What is aggregate planning? Explain different strategies of aggregate
planning?
• It is a marketing activity that does an overall plan for the production process
in advance of 6 to 18 months.
• It gives an idea to the management as to what quantity of materials and
other resources are to be procured and when, so that the total cost of
operations of the organization is kept to the minimum over that period.
• The quantity of outsourcing, subcontracting of items, overtime of labour,
numbers to be hired and fired in each period and the amount of inventory to
be held in stock for each period is decided in aggregate planning.
Aggregate planning strategies:
❖ Strategy 1: Vary the workforce according to requirement
• From historical data, management can calculate productivity per
employee and determine number of employees required to meet month’s
output requirement.
• When monthly production demand declines, employees can be laid off
and when monthly production demand increases extra employees are
hired to meet demand.

P a g e | 11
Disadvantages
1. This method is accompanied with hiring and laying off cost.
Required skilled workers may not be immediately available whenever
necessary.
2. This method lowers morale of workers because of no job guarantee.
3. More time is required to hire and train the workers.
4. This method is not suitable for those companies which are bounded by
fix wages, guarantee of job with trade union.
5. It creates negative image of firm in the society.
❖ Strategy 2: Maintain constant workforce and vary utilisation of workforce
• In this method company employs constant workforce.
• During peak period, workers are asked to work for overtime and during
slack period workers work for lesser time.
• Thus, workforce is over utilised during peak period and underutilized
during lean period.
Advantages:
It avoid hiring and laying off costs associated with strategy 1
Disadvantages:
• Overtime costs are normally 1.5 times of normal wages.
• There are legal limits on overtime.
• When employees work a lot of overtime, they tend to become inefficient
and job related accidents increases.
• If idle time increases during slack period it affects morale of employees.
❖ Strategy 3: Vary the size of inventory in response to varying demand
• In this method, finished products are stored in inventory for stock.
• It employs fixed number of employees, so that very little or no overtime or
idle time is incurred.
• Producing at a constant rate, output exceeds actual demand during the
lean period and such products are stored for stock.
• During peak period, when demand increases than actual production
previous stock of finished products are used to fulfil the current demand.
Advantages:
• Stable employment
• No or little overtime and idle time, so no hiring and layoff costs.
Disadvantages
• Higher inventory cost.
• More storage space is required.
• Risk of damage, obsolescence, theft etc.

P a g e | 12
• Greater clerical efforts and costs.
Q2 - An investigation into the demand for water pumps manufactured by Joy
Engineering Pvt. Ltd. resulted into the following historical data,
Year 2012 2013 2014 2015 2016 2017
Sales (in
hundred )
28 33 37 48 54 68
Project the trend of sales for next 3 years
Solution :
Using Least Square Method
Year Sales (Y) Deviation (X) X2
XY
2012 28 -2.5 6.25 -70
2013 33 -1.5 2.25 -49.5
2014 37 -0.5 0.25 -18.5
2015 48 0.5 0.25 24
2016 54 1.5 2.25 81
2017 68 2.5 6.25 170
n =6 ∑ 𝑌 = 268 ∑ 𝑋 = 0 ∑ 𝑋2
= 17.5 ∑ 𝑋𝑌 = 137
∑ 𝑋 = 0
a =
∑ 𝑌
𝑛
=
268
6
= 44.66
b =
∑ 𝑋𝑌
∑ 𝑋2
=
137
17.5
= 7.828
The equation of best line fit is y = a + bx = 44.66 + 7.828x
Forecast for next 3years
Y2018 = 44.66 + 7.828 × 3.5 = 72.058 (in hundred)
Y2019 = 44.66 + 7.828 × 4.5 = 79.886 ( in hundred)
Y2020 = 44.66 + 7.828 × 5.5 = 87.714 (in hundred)

P a g e | 13
Q3 - For the given demand pattern estimate the sales forecast for the year 2018 using
exponential smoothing forecaster. Take 𝜶 = 𝟎. 𝟓 and the forecast for the year 2013 as 180
units.
Year 2013 2014 2015 2016 2017
Demand 200 188 179 190 208
Solution:
Given : 𝜶 = 𝟎. 𝟓 𝒂𝒏𝒅 𝒇𝒐𝒓𝒆𝒄𝒂𝒔𝒕 𝒐𝒇 𝒚𝒆𝒂𝒓 𝟐𝟎𝟏𝟖 = 𝟏𝟖𝟎𝒖𝒏𝒊𝒕𝒔
CASE - I : Using Exponential Smoothing Method
Ft = 𝜶 × 𝑫𝒕−𝟏 + (𝟏 − 𝜶)𝑭𝒕 − 𝟏
Year Demand Forecast for 𝜶 = 𝟎. 𝟓 𝐹𝑡
2013 200 180(given) -
2014 188 (0.2× 200) + (1 − 0.5) × 180 190
2015 17 (0.2× 188) + (1 − 0.5) × 190 189
2016 190 (0.2× 179) + (1 − 0.5) × 189 184
2017 208 (0.2× 190) + (1 − 0.5) × 184 187
2018 (0.2× 208) + (1 − 0.5) × 187 197.5
Forecasted demand for Year 2018 is = 198units

P a g e | 14
MODULE NO 3
[5 marks questions]
Q1 - Mention the reasons for storing the inventory
• To stabilize the production:
➢ The demand for an item fluctuates because of seasonality & other factors.
➢ The inventory should be made available to the production as per the
demand, failing which results in stock out and the production stoppage
takes place.
• To take advantage of price discounts:
➢ Usually, the manufacturer offers the discount for bulk buying and to gain
this price advantage the materials are brought in bulk even though it is not
required immediately.
➢ Thus, inventory is maintained to gain economy in purchasing
• To meet the demand during the replenishment period:
➢ The lead time for procurement of materials depends upon many factors
like location of the source, demand-supply conditions etc.
• To prevent loss of orders or sales:
➢ In this competitive scenario, one has to meet the delivery schedule at
100% service level.
➢ It means, manufacturers cannot afford to miss the delivery schedule which
may result in loss of sales.
➢ To avoid this, the organisation have to maintain the inventory in sufficient
quantities.
• To keep pace with changing market conditions:
➢ Sometimes the organisation have to stock materials due to other reasons
like suppliers minimum quantity conditions, seasonal availability of
materials or sudden increase in prices.

P a g e | 15
Q2 - Economic order quantity(EOQ)
• Economic order quantity (EOQ) is the ideal order quantity a company should
purchase to minimize inventory costs such as holding costs, shortage costs,
and order costs.
• The following formula is used to determine the economic order quantity (EOQ):
Where,
D = Demand per year
Co = Cost per order
Ch. = Cost of holding per unit of inventory
Q3 - Define : lead time, safety stock, reorder point & max inventory
Lead time:-
The length of time between placing an order and receipt of items is called lead
time.
Safety stock:-
It is also called buffer stock or minimum stock. It is the stock or inventory needed
to account for delays in material supply and to account for sudden increase in
demand due to rush orders.
Reorder point:-
It is the point at which the replenishment action is initiated. When the stock level
reaches recorder level (ROL). the order is placed for the item.
Max inventory:-

P a g e | 16
Max inventory is the stock level which based on a calculation of the cost of
storage, standard order quantities, and the risk of inventory becoming
obsolete or spoiling with the passage of time
Q4 - ABC Analysis
• The inventory of an industrial organization generally consists of thousands of
items with varying prices, usage rate & lead time. In is not possible to pay equal
attention to all the items.
• ABC analysis is an inventory categorization method which consists of dividing
items into three categories (A, B, C): A being the most valuable items & C being
the least valuable items.
A-class items:
• These hardly constitutes 10-20% of the total inventory items & accounts for 70-
80% of total money spent on inventories.
• These items require rigid & tight inventory control
• It requires more secured storage areas and better sales forecasts
• Re-orders should be frequent, with weekly or even daily basis; avoiding stock-
outs.
B-class items
• These are interclass items, with a 15-25% of annual consumption value (cost),
typically accounts for 30% of total inventory items.
• These items require moderate control, medium safety stock, monthly control
report

P a g e | 17
C-class items:
• Items with 5% of the annual consumption value typically accounts for 50% of
total inventory items.
• These items being less expensive does not require strict control.
• These are ordered in bulk quantities.
• Large safety stock & quarterly control reports.
➢ 10Marks question
Q1 - Annual requirement of an item is 2400 units. Each item costs the company Rs
6/units. The manufacturer discount of 5% if 500 or more quantities are purchased. The
ordering cost is 32/order and inventory cost is 16% whether it is advisable to accept the
discount ? Comment.
Solution : D = requirements = 2400units
CO = Ordering cost = Rs 32/order
CP= Cost per unit = Rs 6/unit
Discount on inventory carrying cost = 16% = 0.16
CC = CP I
EOQ = √
2𝐷𝐶 𝑂
𝐶 𝐶
= √
2𝐷𝐶 𝑂
𝐶 𝐶×𝐼
= √
2×2400×32
6×0.16
= 400𝑢𝑛𝑖𝑡𝑠
a) Annual total inventory cost at Q = 400units
CC = CP I = 6× 0.16 = 0.96
TC = (CP × 𝐷) +
𝐷𝐶 𝑂
𝑄
+
𝑄
2
× 𝐶 𝐶 = 14784𝑢𝑛𝑖𝑡𝑠
b) Annual total cost of present dat (i.e Q= 2400units)
TC = (CP × 𝐷) +
𝐷𝐶 𝑂
𝑄
+
𝑄
2
× 𝐶 𝐶 = 15584𝑢𝑛𝑖𝑡𝑠
on order of 500, 5% discover is offered
Discount price = 5% on RS 6 = rs 5.70
New CP cost per unit is Rs 5.70
CC = CP I = 5.70× 0.16 = 0.912
Total annual cost at order quanity 500
TC = (CP × 𝐷) +
𝐷𝐶 𝑂
𝑄
+
𝑄
2
× 𝐶 𝐶 = 14061.6𝑢𝑛𝑖𝑡𝑠
From cost consideration = 15584 - 14061.6 = 1522.4units
It is justified that distributor should accept the discount worth of = 1522.4 x 5.70 = Rs
8677.68

P a g e | 18
Q2 -- Universal tooling has a requirements for 1,50,000 metal bushing per annum. The
company orders the metal bushing in lots of 40,000units from a supplier. The ordering cost
is rs 40 and the carrying charges are expressed 20% of the unit cost. The bush cost Rs 1.5
each. The company wants to know what percentage of their order quantity differs from
economic order quantity and how the cost varies for the two. Find the optimal order
quantity.
Solution : D = requirements = 1,50,000units
CO = Ordering cost = Rs 40/-
Cost of bush = Rs 1.5/units
Inventory carry cost percentage = 20% = 0.20
CC = 1.5 x 0.2 = 0.3
Optimum number of units/order = √
2𝐷𝐶 𝑂
𝐶 𝐶
= √
2×150000×40
0.3
= 6325𝑢𝑛𝑖𝑡𝑠
Annual order given is 40,000units
%of ordering quantity =
40000−6325
40000
= 0.84187 = 84.18%
Q3 - The demand for an item is Rs 18,000 per year. Production rate is 3000 units/month.
The carrying cost is Rs 0.15/unit/month and the setup cost is Rs 500 per setup. The
shortage cost is Rs 20.00 per year. Find the following parameter
i. Economic batch quantity
ii. Cycle time
Solution : Annual demand D = Rs 18,000per year
Carrying cost = CC = Rs 0.15/ units month
Set up cost = Co = Rs 500/ setup
Shortage cost = CS = Rs 20,000 per unit year
EOQ = √
2𝐷𝐶 𝑂
𝐶 𝐶
= √
2×18000×500
0.15
= 10954 𝑢𝑛𝑖𝑡𝑠/𝑜𝑟𝑑𝑒𝑟
Number of order per year = D/EOQ = 18000/10954 = 2 orders
Time between order = 1/number of order per year = ½ =0.5year

P a g e | 19
Q4 - A company currently purchases one of its items for Rs.2 per unit without quantity
discount. The ordering cost is Rs.20 per order and the carrying cost is 20% of its purchase
price per unit per year. The annual demand is 2500 units. A new vendor offers quantity
discounts for the same item as per the following quantity discount scheme. Find the best
order quantity.
Quantity Discount per unit
0 ≤ 𝑸 𝟏 < 𝟏𝟓𝟎𝟎 No discount
1500 ≤ 𝑸 𝟐 < 𝟐𝟓𝟎𝟎 3 % per unit price
2500 < 𝑸 𝟏 5 % per unit price
Solution : Ordering cost (S) = Rs 20
Annual demand (D) = 2500units
Price (P) = Rs 2
Carrying cost (CC ) = 20% × 𝑝𝑟𝑖𝑐𝑒
EOQ at P = 1.9
EOQ = √
2𝐷𝑆
𝐶 𝐶
= √
2×20×2500
20
100
×𝑃
= 513 𝑢𝑛𝑖𝑡𝑠[𝑛𝑜𝑡 𝑓𝑒𝑎𝑠𝑖𝑏𝑙𝑒]
EOQ at P = 1.94
EOQ = √
2𝐷𝑆
𝐶 𝐶
= √
2×20×2500
20
100
×1.94
= 507 𝑢𝑛𝑖𝑡𝑠[𝑛𝑜𝑡 𝑓𝑒𝑎𝑠𝑖𝑏𝑙𝑒]
EOQ at P = 1.94
EOQ = √
2𝐷𝑆
𝐶 𝐶
= √
2×20×2500
20
100
×2
= 500 𝑢𝑛𝑖𝑡𝑠[𝑓𝑒𝑎𝑠𝑖𝑏𝑙𝑒]
TC at 500 units = P×D +
𝐷
𝑄
× 𝑆 +
𝑄
𝑃
× 𝐶 𝐶
= 2×2500 +
2500
500
× 20 +
500
2
× 0.40
= 5200Rs
TC at 2500 units = P×D +
𝐷
𝑄
× 𝑆 +
𝑄
𝑃
× 𝐶 𝐶
= 2×2500 +
2500
2500
× 20 +
2500
2
× 0.40
= 5245Rs
BOQ = 500units with TC = 5200
NO. Of order = D/Q = 2500/500 = 5
Cycle time =Q/D = 500/2500 = 0.2years = 73days

P a g e | 20
MODULE NO 4
[5 MARKS QUESTIONS]
Q1 - What do you understand by process planning?
• Planning processes can result in increased output, higher precision, and
faster turnaround for vital business tasks.
• A process is described as a set of steps that result in a specific outcome.
It converts input into output.
• Process planning is also called manufacturing planning, material
processing, process engineering, and machine routing.
• It is the act of preparing detailed work instructions to produce a part. It is
a complete description of specific stages in the production process.
• Process planning determines how the product will be produced or service
will be provided.
• Process planning converts design information into the process steps and
instructions to powerfully and effectively manufacture products.
• As the design process is supported by many computer-aided tools,
computer-aided process planning (CAPP) has evolved to make simpler
and improve process planning and realize more effectual use of
manufacturing resources.
Q2 - Discuss importance of process planning
• Process planning is also called manufacturing planning, material
processing, process engineering, and machine routing.
• It is the act of preparing detailed work instructions to produce a part. It is
a complete description of specific stages in the production process.
• Process planning determines how the product will be produced or service
will be provided.
• Process planning converts design information into the process steps and
instructions to powerfully and effectively manufacture products.
• As the design process is supported by many computer-aided tools,
computer-aided process planning (CAPP) has evolved to make simpler
and improve process planning and realize more effectual use of
manufacturing resources

P a g e | 21
Q3 - Short notes on CAPP
• CAPP is the use of computer technology in process planning. It is a link
between CAD and CAM.
• CAPP aids in creation of process plans for manufacturing and increases
its flexibility
• Computer support or computerized process planning systems can help to
reduce the process planning time and increase plan’s consistency and
efficiency
❖ The uses of computers in process plan have following advantages over
manual experience-based process planning :
➢ Produce accurate and consistent process plans.
➢ Reduction of cost and lead times of process plan.
➢ Skill requirement of process planer are reduced to develop feasible process
plan.
Increased productivity of process planar.
Q4 - Types of CAPP
I. Retrieval type CAPP method.
• In the retrieval type of CAPP system the various parts to be
manufactured are classified, given codes and grouped within certain
families.
• Within each part family standard process plan is established, which is
stored in the computer.
• This process plan is also used for the new parts that come under the
same family.
• The system developed is such that it is easier to retrieve the process
plans for the new work parts.
• The whole process plan documents the operations as well as the
sequence of operations on different machines.
• The retrieval CAPP system offers lots of flexibility as one can do lots of
editing and changes as per the requirements.
II. Generative type CAPP method.
• In the generative process planning systems new plan is made
automatically from scratch for each part using the computers, without
involving human assistance.

P a g e | 22
• The computer program uses a set of algorithms that enables it to take a
number of technical and logical decisions to attain the optimum final
manufacturing process plan.
• One has to give certain inputs to the systems like detailed description of
the part to be manufactured.
• This CAPP system synthesizes the design of the optimum process
sequence based on the analysis of the part geometry, material and other
relevant parameters.

P a g e | 23
MODULE NO 5
[5 MARKS QUESTIONS]
Q1 - Short notes on : Scheduling
• Scheduling is the process of arranging, controlling and optimizing work &
workloads in a production process.
• Scheduling is used to allocate resources to the plant & machinery, plan
human resources, production processes and purchase of materials.
• It is an important tool for manufacturing where it can have a major impact on
the productivity of a process.
• In manufacturing the purpose of scheduling is to minimise the production
time and cost by telling a production facility when to make, with which staff
and on which equipment or machine.
• Production scheduling aims to maximize the efficiency of the operation and
reduces cost.
• Scheduling is used to establish start and finish times of all jobs at each work
centre.
Objectives of Scheduling
➢ Making efficient use of labour & equipment.
➢ Increasing the profit.
➢ Increasing the output.
➢ Improving the delivery performance or service level i.e. meeting the
delivery dates.
➢ Minimising the inventory.
➢ Reducing the manufacturing time.
➢ Minimising the production cost.
Q2 - Factor influencing scheduling
The factors that affects scheduling are grouped into two categories internal
factors and external factors
❖ Internal factors
• Finished goods inventories: Scheduling depends on how much stock of
finished goods is kept by the company. Most companies keep one month
supply of each product as stock.

P a g e | 24
• Process intervals: It is the time required to produce a product. Different
products have different process intervals e.g. the process interval of a car
is more than that of bike.
• Type of machines available: If the company has old & outdated
machines the schedule must keep provisions for the breakdown of
machines while for modern & computerized machines scheduling is very
easy.
• Availability of personnel: If the company has untrained and
inexperienced employees then they will take more time to produce a
product so the schedule must keep provisions for this. A faster schedule
will be required for trained and experienced employees.
• Availability of materials: If a regular supply of material is available then
the company can do normal scheduling however if it is irregular the
schedule must be made flexible i.e. when the supply is good then
schedule will be fast and vice versa
• Manufacturing facilities: Scheduling depends on manufacturing
facilities available in the company this includes space for new machines
& employees, availability and supply of electricity and water which may be
required for production if all the required infrastructure is available then
the production schedule can be fast and vice versa
• Economic production run: It means the optimum lot size i.e. how many
items must be produced in one lot in order to minimise the cost of
production. If the company produces more or less than the optimum lot
size, then the cost of production will increase.
❖ External factors
• Consumer demand: It can be found out by sales forecast so the production
schedule is prepared according to it, however it has to be adjusted when the
actual demand is different from the sales forecast.
• Consumer delivery dates: The production schedule must be made in such
a way that it will guarantee timely delivery to the consumers in case of
seasonal goods. Production must be spread out throughout the year so
there will not be too much pressure in demand season.
• Dealers and retailers inventories: The production manager must find out
how much stock is held by dealers and retailers. He must know why they are
keeping this stock? Are they keeping this stock to meet current demand if
yes then normal scheduling can be done however if they are keeping the
stock in anticipation of future demand the scheduling will have to be slowed
down.

P a g e | 25
Q3 - Difference between CPM & PERT
Sr. no Critical path method (CPM) Program Evaluation & Review
Technique (PERT)
1 It uses activity oriented network
which consist of a number of well
organised jobs, task or activities.
Each activities is represented by
arrow and the activities are joined
by the event.
It uses event oriented network in
which successive events are
joined by the arrows.
2 It is generally used for simple
repetitive type of project e.g.
construction of similar type of
buildings , roads , bridges etc.
It is generally used for non-
repetitive type of projects such as
launching of satellite, sending
space craft to mars, research and
development of a war weapons.
3 It is a planning device It is a controlling device
4 It is used when activity times are
deterministic
It is used when activity times are
probabilities
5 It has one time estimate It has three time estimates
optimistic, pessimistic & most
likely
Q4 - Short note on Dispatching
• Dispatching is the routine of setting productive activities in motion through the
release of orders and necessary instructions according to pre-planned times
and sequence of operations embodied in route sheets and loading schedules.
• It is the process of setting production activities in motion through release of
orders and instructions
• To issue jigs, fixtures and make them available at correct point of use
• The issue of time tickets, instruction cards and other required items to the
workers who are to perform the various activities.
• Clean up on jobs, collection of time tickets, blueprints and instruction cards and
their return to appropriate section of production control dept.
• To ensure that the work is forwarded to next dept. or storeroom etc.

P a g e | 26
• To record the beginning and completion times of jobs on time tickets for
calculation of time interval.
• To forward time ticket to accounts deptt for preparing wages.
• To record and report idle time of men and machines and request for corrective
action required.
Q5 - Assumption made in Job sequencing
• Only one machine of each type is available
• An operation must be completed before its succeeding operation can start
• A job is processed as soon as possible but only in the order specified
• No machine can process more than one job at a time
• Processing times are independent of order of performing the operation
• Each job once started on one machine is continued till completion on it
• Time involved in moving a job from one machine to another is negligible.
Q6 - Explain optimistic time, most likely time & pessimistic time
• Optimistic time (to): It is the shortest possible time if everything goes perfectly
without any complications. It is an estimate of minimum possible time to
complete the activity under ideal condition.
• Most likely time (tm): It is the best estimate of the activity time. This lies
between the optimistic and pessimistic time. The time an activity will take if
executed under normal conditions. It is the modal value.
• Pessimistic time (tp): It is the maximum possible time the activity will take if
everything goes wrong. However the major reasons such as earthquakes,
floods, storms and labour problems are not taken into account while estimating
this time.
Q7 - Explain Gantt chart
• It is popular, traditional technique, also known as a bar chart -developed by
Henry Gantt (1914).
• A visual display of project schedule showing activity start and finish times
and where extra time is available
• Suitable for projects with few activities and precedence relationships.
• Visual scheduling tool, graphical representation of information, show
dependencies between tasks, personnel, and other resources, track
progress towards completion

P a g e | 27
Building a Gantt chart
List all tasks or activities from the project along the vertical axis
List time frame along the horizontal axis.
Example:-Sequence of Activities Of The Project - House Building
Gantt chart for House Building Project
❖ Benefits of Gantt charts
➢ Easy to create
➢ Identify the schedule baseline
➢ Allow for updating and control
➢ Identify resource needs

P a g e | 28
Q8 - Forward and Backward scheduling
❖ Forward scheduling
• It is commonly used in job shops where customers places their orders on
“needed as soon as possible” basis.
• It determines start and finish times of next priority job by assigning it the
earliest available time slot and from that time, determines when the job
will be finished in that work centre.
• Since the job and its component starts as early as possible, they will be
completed before their due date.
• This method generates in-process inventory that are needed at
subsequent work centres and higher inventory cost.
• It is simple to use and it gets jobs done in shorter lead times compared to
backward scheduling.
❖ Backward scheduling
• It is often used in assembly type industries and commit in advance to
specific delivery dates.
• It determines the start and finish times for waiting jobs by assigning them
to the latest available time slot that will enable each job to be completed
just when it is due but done before.
• By assigning jobs as late as possible, backward scheduling minimises
inventories since a job is not completed until it must go directly to the next
work centre on its routing.

P a g e | 29
➢ 10 marks question
Q1 - A small project has the following data
Activity 1-2 1-3 1-4 2-5 3-5 4-6 5-6
Optimistic
time
1 1 2 1 2 2 3
Most likely
time
1 4 2 1 5 5 6
Pessimistic
time
7 7 8 1 14 8 15
i. Draw network with critical path identification.
ii. calculate project duration, slack and floats
iii. what is the probability that the project will be completed 4 weeks later than expected
and 2 weeks earlier than expected?
Solution :
Activity 𝑻 𝒐 𝑻 𝒎 𝑻 𝒑 𝑻 𝒆 𝝆
=
𝑻 𝒑 − 𝑻 𝒐
𝟔
v =
(
𝑻 𝒑−𝑻 𝒐
𝟔
) 𝟐
1-2 1 1 7 2 1 1
1-3 1 4 7 4 1 1
1-4 2 2 8 3 1 1
2-5 1 1 1 1 0 0
3-5 2 5 14 6 2 4
4-6 2 5 8 5 1 1
5-6 3 6 15 7 2 4

P a g e | 30
1.
2. Length of path 1-2-5-6 = 2+1+7 = 10
Length of path 1-3-5-6 = 4+6+7 = 17
Length of path 1-4-6 = 3+5 = 8
So, Critical path is 1-3-5-6
The expected project length = 17weeks
Variance : Vcp = V1 - 3 + V3 - 5 + V5 + 6
= 1+4+4
=9
6 = 3 weeks
3. Probability that project will be completed no more than 4 weeks later than
expected times
Expected time = 17weeks
Scheduled time = 17+4=21weeks
Z = 21-17/3 = 1.33
p = 0.9082 =90.82%
4. Probability that project will be completed at least 2weeks earlier than expected
time
Expected time = 17weeks
Scheduled time = 17-2=15weeks
Z = 15-17/3 = -0.666
p = 0.2899 =28.99%

P a g e | 31
Q2 - A project consist of following six activities
Activity Normal time
N(t)
Crash time
(ct)
Normal cost Crash cost
1-2 3 2 1600 1800
1-3 7 5 1400 2000
2-3 5 3 2500 3000
3-4 4 3 500 800
3-5 2 1 4200 4400
4-5 8 6 1600 2600
i. draw the network for the activities stated above
ii. identify the critical path
iii. what is total project duration and associated cost
iv. if the duration of project to be reduce by 1 week which activity or duration to be
reduced ? what will be the total project cost ?
Solution :
Activity 𝑵 𝑻 𝑪 𝑻 𝑵 𝑪 𝑪 𝑪 ∆𝑪 = (𝑪 𝑪 − 𝑵 𝑪) ∆𝑪
= (𝑵 𝑻 − 𝑪 𝑻)
∆𝑪
∆𝑻
1-2 3 2 1600 1800 200 1 200
1-3 7 5 1400 2000 600 2 300
2-3 5 3 2500 3000 500 2 250
3-4 4 3 500 800 300 1 300
3-5 2 1 4200 4400 200 1 200
4-5 8 6 1600 2600 1000 2 500
Total 11800 14600
Total associated cost of project is 11800 which is total normal cost
It the duration of the project is to be reduced by 1 week then the activity which has
less cost slope should be cracked.
In table,there are two activities which are having less cost slope i.e. 200
Choose the activity which is a part of critical path only
Therefore, seleceting activity of 1-2 from table to be crashed

P a g e | 32
crashing activity 1-2 by 2 days at cost of 1800
New critical path is 1-3-4-5
Total project cost = 11800 + (2 x 200) = 12200
Q3 - Put the problem in n jobs and 2 machines
(A)Seven jobs each of which has to through the machines M1 & M2 in the order M2M1,
have the following processing times in hours
Job A B C D E F G
Machine
M1
3 12 15 6 10 11 9
Machine
M2
8 10 10 6 12 1 3
(B) Determine the optimal sequence that will minimize the total elapsed time. Also find
the idle time of each machine.
(C ) If the order is reversed to M1M2, what difference will it make to the calculated result
and idle times
Solution :
We have optimal sequence like this
OR
A E C B D G F
A D E C B G F

P a g e | 33
Calculation for elapsed time is:
Jobs Machine 1 Machine 2
Time
in
Processing
time
Time
out
Time
in
Processing
time
Time
out
Idle
time
A 0 3 3 3 8 11 3
D 3 6 9 11 6 17 0
E 9 10 19 19 12 31 2
C 19 15 34 34 10 44 3
B 34 12 46 46 10 56 2
G 46 9 55 56 3 59 0
F 55 11 66 66 1 67 7
Minimum elapsed time = 67hours
Idle time for machine M1 is = 67-66 = 1hours
Idle time for Machine M2 is = 3+2+3+2+7 = 17hours

P a g e | 34
MODULE NO 6
[5-10 MARKS QUESTION]
Q1 - Explain MRP - I /Objectives / components
• Material requirements planning (MRP) is a system for calculating the materials
and components needed to manufacture a product. It consists of three primary
steps: taking inventory of the materials and components on hand, identifying
which additional ones are needed and then scheduling their production or
purchase
• MRP, which is done primarily through specialized software, helps ensure that
the right inventory is available for the production process exactly when it is
needed and at the lowest possible cost.
• As such, MRP improves the efficiency, flexibility and profitability of
manufacturing operations.
• It can make factory workers more productive, improve product quality and
minimize material and labour costs.
• MRP also helps manufacturers respond more quickly to increased demand for
their products and avoid production delays and inventory stockouts that can
result in lost customers, which in turn contributes to revenue growth and
stability.
Components of MRP

P a g e | 35
Q2 - Short note on MRP –II
• Manufacturing Resource Planning (MRP II) is an integrated information
system used by businesses. Manufacturing Resource Planning (MRP II)
evolved from early Materials Requirement Planning (MRP) systems by
including the integration of additional data, such as employee and
financial needs.
• The system is designed to centralize, integrate, and process information
for effective decision making in scheduling, design engineering, inventory
management, and cost control in manufacturing.
• MRP II is a computer-based system that can create detailed production
schedules using real-time data to coordinate the arrival of component
materials with machine and labour availability
• MRP II includes,
➢ master production scheduling
➢ bill of materials
➢ inventory tracking
➢ machine capacity scheduling
➢ demand forecasting
➢ quality assurance
➢ general accounting
• MRP II is an extension of the original materials requirements planning
(MRP I) system. Materials requirements planning (MRP) is one of the first
software-based integrated information systems designed to
improve productivity for businesses.
Q3 - Short note on ERP

P a g e | 36
• ERP is a package software solution that addresses the enterprise needs
of an organization by tightly integrating the various functions of an
organization using a process view of the organization
• ERP software is ready-made generic software; it is not custom-made for
a specific firm.
• ERP software understands the needs of any organization within a specific
industry segment.
• Many of the processes implemented in an ERP software are core
processes such as order processing, order fulfilment, shipping, invoicing,
production planning, BOM (Bill of Material), purchase order, general
ledger, etc., that are common to all industry segments
• After ERP introduction the line managers would no longer have to chase
information, check compliance to rules or conformance to budget. What is
striking is that a well-implemented ERP can guarantee these benefits
even if the organization is a multi-plant, multi- location global operation
spanning the continents.
➢ 10 Marks question
Q1 - It refers to the basic calculation used to determine component requirement from ‘n’
item requirement. The technique determines what components are needed? How many are
needed? When they are needed? & when they should be ordered? So that they are likely to
be available as needed The information system for planning and controlling the production
operation and purchasing
Order
quantity =70
Lead time = 4
weeks
Safety stock
= 40
Weeks
1 2 3 4 5 6 7 8 9 10 11 12
Project
Requirement
20 20 25 20 20 25 20 20 30 25 25 25
Schedule
receipts
70
On
hand at
the end
of
period
65
Planned
order release

P a g e | 37
Solution :
Order
quantity =70
Lead time = 4
weeks
Safety stock
= 40
Weeks
1 2 3 4 5 6 7 8 9 10 11 12
Project
Requirement
20 20 25 20 20 25 20 20 30 25 25 25
Schedule
receipts
70
On
hand at
the end
of
period
65
95 70 50 100 75 55 105 75 50 95 70
45 25 30 35 25
Planned
order release
70 70 70

Production Planning & Control Book

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie Production Planning & Control Book

Ähnlich wie Production Planning & Control Book (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Production Planning & Control Book