MB 722 – PRODUCTION AND OPERATIONS MANAGEMENT
Assignment – 1st April 2022 10:00 Hrs to 10th April 2022 23:59 Hrs
Total Marks – 15
Disclaimer: The following assignment is purely hypothetical and for educational purposes alone. Names of
companies and/or products are for illustrative purposes only. No data is in any way relevant to any actual
company/ product}
B-Biscuit, a manufacturer of biscuits, is in the process of planning its production for the next week. Accordingly,
the number of packets for its popular Rs.20/ packet “GD-Cookies” biscuits demanded over the past four weeks is
given in Table-1 below.
Table-1: Demand data for B-Biscuit’s GD-Cookies
Demand 4 Demand 3 Demand 2 Demand in the
Day
weeks ago weeks ago weeks ago last week
Monday 2400 2300 2400 2200
Tuesday 2200 2200 2100 2000
Wednesday 2500 2300 2400 2300
Thursday 1500 1800 1900 1800
Friday 1550 2000 1800 1900
Saturday & Sunday 3000 3300 3250 3500
Given that you are appointed as the new planning head, you are faced with the following questions.
1. Regression is used for forecasting demand for each day of the week (model is fitted for each day of the
week). Then, for the planning week if a 1 standard error confidence interval is used, what is the minimum
expected number of packets for GD-Cookies demanded on [0.25 Marks * 6 = 1.5 Marks]
{Note: Roundup all your answers to the nearest whole number. E.g.: 23.3 is rounded up to 24}
A. Monday
B. Tuesday
C. Wednesday
D. Thursday
E. Friday
F. Saturday & Sunday
2. For the forecasts obtained in Question-1, what is the Standard Error for each day? [0.25 Mark*6 = 1.5
Marks]
{Note: Roundup all your answers to the nearest whole number. E.g.: 23.3 is rounded up to 24}
A. Monday
B. Tuesday
C. Wednesday
D. Thursday
E. Friday
F. Saturday & Sunday
3. For Question-1, which of the following plots represents the time series that will be used?
{Note: Plots will be available in Moodle} [ 1 Mark]
4. For Question-1, after computing the forecasts for each day of the week, a box plot (data + forecast) is
plotted. Then which bar in the given graph, corresponds to which day of the week? {Note-1: Graph will
be available in Moodle}
MB 722 – PRODUCTION AND OPERATIONS MANAGEMENT
Assignment – 1st April 2022 10:00 Hrs to 10th April 2022 23:59 Hrs
Total Marks – 15
{Note-2: Graph developed with criteria “Exclusive median”} [1 Mark]
5. Convert the data to the weekly demand of GD-Cookies. Now, an exponential smoothing model with a
goal to reduce the MAD is explored for the converted data. Then
A. What is the best possible alpha? [1 Mark]
{Note: Do not round-up this answer. Round it off to 4 decimal places}
{Hint: use optimization to find the best alpha that minimizes the MAD}
B. What is the best possible MAD? [0.5 Mark]
{Note: Do not round-up this answer. Round it off to 2 decimal places}
C. What is the forecast for the coming week at the best possible alpha? [0.5 Mark]
{Note: Roundup all your answers to the nearest whole number. E.g.: 23.3 is rounded up to 24}
6. Currently, B-Biscuit can produce a maximum of 13,000 GD-Cookie packets a week at a capital cost of
Rs.1 Lakh per week and additionally incurring Rs.5 per packet manufactured. An opportunity is given to
expanding the facility for the planning week by incurring a capital cost of Rs. 15 for every 2 units addition
in capacity. Now answer the following questions (using the computations from Question-2)
A. What will be the total profit for the company when it operates at the old capacity? [0.5 Marks]
{Note: Do not round-up this answer. Round it off to 2 decimal places}
B. If the capacity is decided to be increased, how much will the capacity increase be? [0.5 Marks]
{Note: Do not round-up this answer. Round it off to 2 decimal places}
C. By how many packets will the point of indifference change, when the company operates at the
new capacity as compared to operating in the old capacity? [0.5 Marks] {Note-1: Give +ve value
for an increase and -ve value for a decrease}
{Note-2: Do not round-up this answer. Round it off to 2 decimal places}
7. Having increased the capacity, now B-Biscuit faces a facility layout problem.
A. What type of production layout will suit GD-Cookies? [0.25 Marks]
B. What type of production system will be ideal for GD-Cookies? [0.25 Marks]
8. B-Biscuit is also looking for locations to build and expand (if needed) its production process. As a first
move, the location analysis is completed and four locations are identified. The locations are evaluated on
6 factors rated on a scale of 1 to 100 as specified in Table-2 below. Table-2 also specifies the ratings (1
to 100) for the different locations against each factor. Given this information, [0.25*4 = 1 Marks]
{Note: Do not round-up the answers. Round it off to 2 decimal places}
Factor Rating for each location against each factor
Factor
Rating Loaction-1 Loaction-2 Loaction-3 Loaction-4
Infrastructure availability 90 20 40 32 55
Size of the market 60 30 30 40 80
Local sentiments 50 30 30 50 23
Tax and other benefits 30 20 20 10 20
Labour availability 30 70 70 45 50
Closeness to ports 65 40 40 90 60
Table-2: Factors Considered, Along with The Factor and Location Ratings, By B-Biscuits
A. What is the composite score for Location-1? [0.25 Mark]
B. What is the composite score for Location-2? [0.25 Mark]
C. What is the composite score for Location-3? [0.25 Mark]
D. What is the composite score for Location-4? [0.25 Mark]
9. Submission time [5 Marks]. Will be computed as given in the instructions document.
ALL THE BEST
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