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Production and Operation Management PDF

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Lectures notes

Production and Operation

Prepared by

Dr. Sarojrani Pattnaik
Dr. Swagatika Mishra
Assistant Professor

Department of Mechanical Engineering



2.Production System Models of production system, Product Vs. Services,
Process-focused & product focused systems, product strategies, product
life cycle, production function.

3.Forecasting : Methodsmoving average, exponential smoothing,
Regression analysis, coefficient of co-relation, Delphi, Market survey.

4.Facilities Planning : Site location, facilities layout and various types,
planning using CRAFT work place design, working conditionsnoise
illumination etc.

5.Motion studyprinciples of motioneconomy, Time study-standard time.

6.Production Planning & Control : Aggregate planning. Sequencing, Line
balancing, Flow control,Dispatching,expediting, Gantt chart, line of
balance, learing curve.

7.Project ManagementNetwork scheduling, PERT. Critical path, Most
likely time estimate , Resource leveling.

8.38.Modern Trends in Manufacturing :Basic concepts of CAD,CAM,FMS, CIM,

ISO 9000, Quality circle, Kaizen, Kanbans, Poke Yoke' supply chain

Text Books

1.Production Systems : Planning, Analysis & Control : ByRiggs, J.L.(4th
Edn.) John Wiley & Sons

2.Modern Production/Operation management : ByBuffa, E.S. & Sarin,
=,.K.(8`" Edn.) John Wiley & Sons.

3.Production & Operations Management : By Panneer saivem, R.(2'1Edn.)

4.Production & Operations Managem ent : By Chary, S.N.(TMH)

LESSON PLAN FORProduction and Operation Management

SUBJECT CODE: 8thSemester

Topics to be coveredRemark
Lecture 1
Productivity: Importance, productivity ratio, productivity
measurement, productivity index

Lecture 2
Production System, Models of production system

Lecture 3
Product Vs. Services, Process-focused & product-focused systems
Lecture 4
Product strategies, product life cycle, production function
Lecture 5
Forecasting: Methods
Lecture 6
Moving average,Exponential smoothing
Lecture 7
Regression analysis, coefficient of co-relation
Lecture 8
Delphi, Market survey
Lecture 9
Facilities planning: Site location, facilities layout
Lecture 10
Types of facility layout,Planning using CRAFT work place design
Lecture 11
Working conditionsnoise illumination etc.
Lecture 12
Problemson single facility location usingmedian method
Lecture 13
Problemson single facility location using minimax method and
gravity method

Lecture 14

Lecture 15
Motion study, Principles of motion-economy, method study
Lecture 16

Lecture 17
Rules concerning tools and equipments design, time conservation
Lecture 18
Time study and work measurement techniques
Lecture 19Performance rating anddifferent types of allowances
Lecture 20
Production planning and control-Aggregate planning
Lecture 21
Sequencing and line balancing
Lecture 22
Flow control
Lecture 23
Dispatching, centralized and decentralized dispatching
Lecture 24
Expeditingand Gantt chart
Lecture 25
Line of balance and learning curve
Lecture 26
Project management, network scheduling
Lecture 27
PERT with problems
Lecture 28
Lecture 29
Critical path method with problems
Lecture 30
Lecture 31
Resource levelling
Lecture 32
Basicconcepts of CAD, CAM, FMS
Lecture 33
CIM, JIT, ISO 9000
Lecture 34
Quality circle, Kaizen, Kanbans
Lecture 35
Poke Yoke, Supply chain management
Lecture 36
Revision of problems
Lecture 37
Revision of problems
Lecture 38
Revision of problems
Lecture 39
Revision of problems
Lecture 40
Revision of problems


Production/Operation management is the process which combines and transforms various
resources used in the production/operation subsystem of the organization into value added
products/services in a controlled manner as per the policies of the organization.


(In controlled manner as

per the policies of the organization)

Production/Operation function:

The set of interrelated management activities which are involved in manufacturing certain
products is called production management and for service management, then corresponding set
of management activities is called as operation management.

Examples: (Products/goods)

Boiler with a specific capacity,

Constructing flats,

Car, bus, radio, television.

Examples: (Services)

Medical facilities,

Travel booking services.

In the process of managing various subsystems of the organization executives at
different levels of the organization need to track several management decisions.
The management decisions are Strategic, tactical and operational.

Defining goalsPlant locationeffective and

Making policiesnew product establishmentefficient utilization

Monitoring of budgetsof resources

Resources used in
production/ operation

Value added products/services

Range of inputs
Required output (product/service)
(Having the requisite quality level)

Strategic (Top level)
Tactical (Middle level)Operational (Bottom level)
Corrections from feedback information:

Tight quality check on the incoming raw-material.

Adjustment of machine settings.

Change of tools.

Proper allocation of operations to machines with matching skills.

Change in the production plans.

1.2 Productivity:

Productivity is a relationship between the output (product/service) and input (resources
consumed in providing them) of a business system.The ratio of aggregate output to the
aggregate input is called productivity.

Productivity = output/Input

For survival of any organization, this productivity ratio must be at least 1.If it is more
than 1, the organization is in a comfortable position. The ratio of output produced to the
input resources utilized in the production.

1.3 Importance:

Benefits derived from higher productivity are as follows:

It helps to cut down cost per unit and thereby improve the profits.

Gains from productivity can be transferred to the consumers in form of lower priced
Products or better quality products.

These gains can also be shared with workers or employees by paying them at higher rate.

A more productive entrepreneur can have better chances to exploit expert opportunities.

It would generate more employment opportunity.

Overall productivity reflects the efficiency of production system.

More output is produced with same or less input.

The same output is produced with lesser input.

More output is produced with more input.

The proportional increase in output being more than the proportional increase in input.

1.4 Productivity Measurement:

Productivity may be measured either on aggregate basis or on individual basis, which are called
total and partial measure.

Total productivity Index/measure = Total output/ Total input

=Total production of goods and services


Partial productivity indices, depending upon factors used, it measures the efficiency of individual

factor of production.
Labour productivity Index/Measure = Output in unit

Man hours worked

Management productivity Index/Measure =Output

Total cost of management

Machine productivity Index/Measure=Total output

Machine hours worked

Land productivity Index/Measure=Total output

Area of Land used

Partial Measure = OutputorOutputorOutputorOutput




The input and output data for an industry given in the table. Find out various productivity
measures like total, multifactor and partial measure.

Output and Input production data in dollar ($)


1.Finished units10,000

2.Work in progress2,500



5.Other income--------






5.Other Expenses1,500


Total measure =Total Output= 13,500= 0.89

Total Input15,193

Multi factor measure = Total Output=13,500 = 4.28


Multi factor measure =Finished units=10,000 = 3.17


Partial Measure1=Total Output=13,500= 25


Partial Measure2=Finished units= 10,000 = 18.52

Note:For multifactor and partial measures it is not necessary to use total output as numerator.
Often, it is describe to create measures that represent productivity as it relates to some particular
output of interest.

Other fields for the measurement of partial measures of productivity are:

BusinessProductivity Measure

RestaurantCustomers (Meals) per labour hour

Retail StoreSales per square foot

Utility plantKilowatts per ton of coal

Paper millTons of paper per cord of wood


A furniture manufacturing company has provided the following data. Compare the labour,
raw materials and supplies and total productivity of 1996 and 1997.

Output: Sales value of production in dollar ($)

22,000 (in 1996) and 35,000 (in 1997)


Inputs: Labour10,00015,000

Raw materials and Supplies8,00012,500

Capital equipment depreciation7001,200




a.Partial productivities


Raw materials and Supplies2.752.80

b.Total Productivity1.051.04

1.5 Productivity measurement approaches at the enterprises level:

As stated above total productivity is expressed as the ratio of aggregate output to the aggregate
input. That the total overall performance is captured in this ratio, becomes apparent, if we
examine the relationship between this ratio and the age-old performance measure of profit.

If the outputs and input for the period for which productivity is measured, are expressed in
rupees, then under such restrictive assumptions one can write:

Aggregate output =Gross Sales=G (Say)

Aggregate input=Cost=C (Say)
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