ASSIGNMENTS MBA 2nd SEM Subject Code MB0044 Book ID B1133 PRODUCTION & OPERATIONS MANAGEMENT Set 1 Q.1.

Q.1. Explain in brief the origins of Just in Time. Explain the different types of was tes that can be eliminated using JIT. Ans. Just in time were developed to minimize wastage across the organization. If a fi rm is optimistic about the demand, then that firm increases their planned inventories. On the other hand if the demand is weak when compared to the expectations, then that firms unplanned inventories are high. That means companies dont keep a lot o f excess inventory, and then manufacture a product as an order comes in. It is m anagement philosophy of continuous and forced problem solving. The seven types o f wastes to be eliminated according to JIT are : 1. Over Production Over product ion is to manufacture products before it is actually needed. If the demand for t hat product decreases, the extra parts or products produced may not be useful or needed. Also over production results in high storage costs and is also difficul t to detect defects. So, over productions is considered a waste. 2. Inventory Ex cess procurement or production builds up stock of materials which are not immedi ately use, this locking space and fund carrying heavy cost. 3. Waiting Time Wast e of time happen when goods are not moving or being processed. The operator, the machine or the part will either be not working or be worked upon. The duration is can be said to be unproductive and may create more serious consequences. 4. M ovement Any unnecessary movement is a waste of energy; it causes blockages, disr upting movements and delaying the flow of other items creating delays. 5. Effort The people, who work, do not make a study as to how the products on which they are making

are utilized and do not realize the purpose for which they are made. This lack o f education will lead to waste of resources. Finally, they end up in shortage of resources when needed. 6. Defective products The defective products lead to a t remendous loss to the company. This is because they use up the same equipments, workmen and the time that would be used to make good products. Thus defective pr oducts use up resources and result in losses. 7. Over Processing Some steps like unnecessary processing or production do not add value to the final output. As a result, it is waste of all the inputs that go into the process. Q.2. What is value engineering or value analysis ? Elucidate five companies whic h have incorporate VE with brief explanation. Ans. Value of engineering (VE) or Value Analysis is a methodology by which we try to find substitutes for a produc t or an operation. The concept of value engineering originated during the Second World War. It was developed by the General Electric corporations (GEC). Value E ngineering has gained popularity due to its potential for gaining high Returns o n investment (ROI). This methodology is widely used in business re-engineering, government projects, construction, assembling and machining processes, health ca re and environmental engineering, and many others. Value engineering process cal ls for a deep study of a product and the purpose for which it is used, such as t he raw materials used; the processes of transformation; the equipment needed, an d many others. It is also questions whether what is being used is the most appro priate and economical. This applies to all aspects of the products. 1. General Electrical Corporation (GEC) The concepts of value engineering origin ated in 1947 in General Electricals corporation (GEC) When a substitute for asbe stos for flooring had to be found. Specialized dealers could provide an equally good material at a lesser price. Initially, the practioners were the people in c harge of purchasing who tried to locate substitute material which would be equal ly good, if not better, at a lower price. This is the first and basic approach t o value engineering. The concept percolated to the manufacturing departments, en gineers applied the same principles and found that, they could use alternate mat erials, which were cheaper giving the same

performance. It was also fund that dimensions and tolerance could be altered wit hout affecting the performance of the part or the product. The investigations to ok them on the path of eliminating some operations. The focus was on the value o f each bit materials, each operation. This approach led to the design stage. 2. Ashok Leyland In implementation of VA, Ashok Leyland changed gear material from phosphor bronze to a less expensive cast iron and eliminated frequent field comp laint of gear seizure in trucks. 3. TVS T.V. Sundaram Lyenger (TVS) Limited is o ne of the largest automobile distribution companies in India. During the mid 194 0 to 1960s, TVS based in Madurai was ranked as the best bus transportation syste m in India. It could manage to run the fleets for about 96% of the time. TVS use d the VE approach to restore the mobility of buses that had broken down. They st ocked their garage with some critical assemblies of a bus. Whenever, a part or a n assembly failed of a bus, they replaced it immediately with a new one, thus re storing mobility within a couple of hours. When compared to the traditional meth od, this approach has gained much more benefits to the company, it helped to sav e time, reduce cost, efficient, quicker, and competitive. 4. MODI Xerox Modi Xer ox designed the VE-d low cost copier 1025 ST, which uses a single tray. The adva ntage of new design is that it is easy to operate and the cost is also very low. 5. TITAN Titan watches introduced new designs adopting a strategy of innovation . Q.3. Explain different types of quantitative models. Differentiate between work study and motion study. There are different quantitative models. 1. Linear Programmin g: Linear programming technique is often used for optimizing a given objective l ike; profit or Ans. revenue maximization, or cost outgo minimization. Distribution of the revenues i s the critical issue, when there are limited resources and they have to meet com peting demands. 2. Transportation Model: Transportation model is concerned with goods from manufacturing center or warehouses which have to be supplied to depot s or retails outlets. The demand and supply position of the places

where they are required or produced and the cost of transportation are considere d in the model. We use this model to economize. 3. Assignment Model: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expenses are incurred. Hence, calls for th e use of this model. 4. Inventory Control Model: Inventory control model conside rs the: a. Frequency of placing orders. b. Quantities per order considering the cost of placing an order. c. Number of pieces that are to be kept in reserve. d. Rate of consumption. e. Lead time required for the supplier. f. Cost involved i n storage. We have different models which give solutions to optimization dependi ng upon the probabilities of consumption and supply. 5. Waiting Line Models: Que ues are formed when the rate of services is at a variance with the rate of arriv al. They are formed when the rate of production is less at particular points com pared to the previous one. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques. a. People to be serviced. b. Rate of s ervice c. Type of queue discipline that is intended to be followed. d. Policy of priority e. Tolerable amounts of waiting f. Others. 6. Simulation Models: Simulation models are used when we will not be able to for mulate mathematical model. So, we develop a model which resembles a real life si tuation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions.

7. PERT (Project Evaluation And Review Technique) And CPM (Critical Path Method) Models: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the time required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally import ant to identify the bottlenecks and smoothen resources so that time schedules ar e maintained. Delayed completion may entail penalties. In this model, we adopt s pecial methods to make the system. Difference between Work Study and Motion Study Work study 1. We can say that work study is being conducted when analysis of wor k methods is conducted during the period when a job is done on a machine or equi pment. 2. The study helps in designing the optimum work method and standardizati on of the work method. Motions study 1. Method study is on studying the method currently being used and developing a new method of performing the task in a better way. 2. Operation fl ow charts, motion charts, flow process charts, which are the elements of the tas k are studied to find the purpose of each activity, the sequences in which they are done, and the effect of these on the work. 3. The study enables the methods engineer to search for better methods for highe r utilization of man and machine and accomplishment of higher productivity. 4. T he study gives an opportunity to the workmen to learn the process of study thus making them able to offer suggestions for improved methods. 3. The study may help in changing some of them and even eliminate some of them t o effect improvements. 4. The new method should result in saving of time, reduce d motions and simpler activities.

Q.4. What is rapid prototyping ? Explain the difference between Automated flow line a nd Automated assembly line with examples. Ans. Prototyping is a process by which a new product is developed in small numbers. P rototyping is helpful to: Determine the suitability of the materials Study the v arious methods of manufacture Determine type of machinery required Develop techn iques to overcome problems that may be encountered when full scale manufacturing is undertaken. Prototypes do meet the specification of the components that ente r a product and performance can be measured on those. It helps in confirming the design and any shortcomings can be rectified at low cost. If serious defects or problems arise during manuf acturing, a thorough change in design or even its replacement may be considered. Toa arrive at decisions and to make use of the advantageous stated above, it is important that the prototypes are made within the shortest possible time, Rapid prototyping facilities this. The advanced Rapid Prototype Modeling Processes ar e: 1. Computer Aided Design (CAD) 2. Selective Laser Sintering (SLS) 3. Fused De position Modeling (FDM) 4. Lamination Object Manufacturing (LOM) 5. Electronic B eam Melting (EBM) Different between Automated Flow lines and Assembly Flow line. Automated Flow Lines 1. Several Automated machines are linked by a transfer syst em. 2. Handling machine have main role to move semi finished product to the next stage. 3. Semi-finished products are the main core activities. Assembly Flow Lines 1. All equipments are needed to in automated Assembly line 2 . All equipments make role of making sub-assemblies fitted. 3. Here Sub-assembli es products are the core activities. put together and

4. Here raw materials are achieving to get required shapes and acquire special p roperties. 5. The materials are needed to be moved, held, rotated, fitted and po sitioned for completing different operations. 4. Here intermediated products are achieving to get finished product. 5. Here All parts or sub-assemblies are fitted to enables the product to be in r eadiness to perform the function it was designed to. This process is called asse mbly. 6. Human intervention may be needed to verify that the operations are taking pla ce according to standards. 6. No human intervention is needed, methodologies are framed to achieve the fina l result, basic principle is to fit parts together and ensure linkages so that t he functions are integrated and give out the desired output. Q.5. Explain Break even Analysis and centre of gravity methods. Explain product layou t and process layout with examples. Break Even Analysis Every manufacturing comp any will have three major contributors to cost; 1. Investments made for land, pl ant and machinery resulting in interest and depreciation. 2. Recurring expenses, which are not proportional to the quantity of production. 3. Variable costs, wh ich are directly proportional to the quantity produced. For our calculations, we combine the first two costs together and call them fixed costs. We call Ans. those costs that depend on the quantity of production as variable costs. We comp are the total costs for different locations on estimated amounts per annum and s elect whichever locations costs the least. However we will have to consider the possible variations in production levels during the foreseeable time spans and t ake decision.

COMPANIES MAJOR CONTRIBUTORS TO COST CONTRIBUTING FIXED COSTS VARIABLE COSTS TO THE COST LAND,PLANT AND MACHINERY RECURRING EXPENSES PRODUCTION COST Centre Of Gravity Method. Centre of gravity method is used mainly when; Transpor tation costs, either for distribution of products or collection of materials fro m different suppliers is the main criterion. Production rates are high. The volu me and weights of materials that have to be moved are huge. Time taken either to receive materials from suppliers or delivery to customers is critical. It is be tter to locate the facility at such a place, which caters to the different point s most optimally. The vital factor is the load, that is, number of items, or the weights that need to be moved from the central location to the existing or dema nding point. We use this method when, both distance and load have to be consider ed for optimality in terms of costs. PRODUCT LAYOUT Product layout is also called as production lines or assembly lin es. They are designed and laid out in such a way that only few products are capa ble of being manufactured or assembled. Materials flow through the various facil ities. These use special machines to perform specific operations to produce only one product at one time. So, companies should set different set of machines for different products. Workers perform a narrow range of activities to complete th e operations on the product as it moves in a flow line. The operation times, the sequence of movements and routing procedures are highly standardized to meet pr oduction requirements which are synchronized with many such products

to complete finished goods to meets demands. Using special machines and implemen ting standardization in operations have many advantages which are listed below: The skill required of the workers is low Supervision is minimal Training needs a re small Precautions to be taken are: Constant check on the processes needs to be perform ed so that quality is assured. Corrective measures have to be implemented to avo id rejections, since, the quantities that get manufactured will be continuous. C heck for the behavioral of the worker. As jobs are repetitive, workers tend to b e bored and lose concentration. This may affect productivity and quality. Exampl e: Let us consider an example of a stainless steel manufacturing industry, in wh ich the operations turning, milling and drilling happen in a sequence. Testing i s performed in each process to assure the quality. The items are then sent to th e assembly block. The items that arrive for assembly are either bought out items or made item components from elsewhere in the plant. The final product inspecti ons are made and send to the packing dispatch. TURNING OPERATION PACKING DISPATCH MILLING MACHINES INSPECTION DRILLING MACHINES ASSSEMBLY PROCESS LAYOUT Design of Process Layout: The analysis involved in the design of production lines and assembly lines relates primarily to timing, coordination, a nd balance among individual stages in the process. For process layouts, the rela tive arrangement of departments and machines is the critical factor because of t he large amount of transportation and handling involved. Procedure For Designing Process Layouts: Process layout design determines the best relative locations o f functional work centers. Work centers that interact frequently, with movement of material or people, should be located close together, whereas those that have little interaction can be spatially separated. One approach of designing an eff icient functional layout is described below.

1. List and describe each functional work centre. 2. Obtain a drawing and descri ption of the facility being designed. 3. Identify and estimate the amount of mat erial and personnel flow among work centers. 4. Use structured analytical method s to obtain a good general layout. 5. Evaluate and modify the layout, incorporat ing details such as machine orientation, storage area location, and equipment ac cess. The first step in the layout process is to identify and describe each work centre. The description should include the primary function of the work centre; drilling, new accounts, or cashier; its major components, including equipment a nd number of personnel; and the space required. The description should also incl ude any special access needs (such as access to running water or an elevator) or restrictions (it must be in a clean area or away from heat). For a new facility , the spatial configuration of the work centers and the size and shape of the fa cility are determined simultaneously. Determining the locations of special struc tures and fixtures such as elevators, loading docks, and bathrooms becomes part of the layout process. However, in many cases the facility and its characteristi cs are a given. In these situations, it is necessary to obtain a drawing of the facility being designed, including shape and dimensions, locations of fixed stru ctures, and restrictions on activities, such as weight limits on certain parts o f a floor or foundation. Relationship flow diagram a) To minimize transport times and material-handling costs, we would like to pla ce close together those work centers that have the greatest flow of materials an d people between them.

b) To estimate the flows between work centers, it is helpful to begin by drawing relationship diagram as shown in Fig. c) For manufacturing systems, material fl ows and transporting costs can be estimated reasonably well using historical rou tings for products or through work sampling techniques applied to workers or job s. The flow of people, especially in a service system such as a business office or a university administration building, may be difficult to estimate precisely, although work sampling can be used to obtain rough estimates. The amounts and/o r costs of flows among work centers are usually presented using a flow matrix, a flow-cost matrix, or a proximity chart. Q.6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out the pill ars of total productive maintenance. JURANs Quality Triology Juran uses his famou s universal Breakthrough Sequence to implement quality programmes. The universal break through sequences are ; Ans.

Proof of need: there should be a compelling need to make changes. Project identi fication: here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided.

Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project.

Diagnostic journey: Each team will determine whether the problems result from sy stemic causes or are random or are deliberately caused. Root causes are ascertai ned with utmost certainty.

Remedial Action: This is the stage when changes are introduced. Inspection, test ing, and validation are also included at this point.

Holding on to the gains: the above steps results in beneficiary results. Having records or all actions and consequences will help in further improvements. The a ctions that results in the benefits derived should be the norm for establishing standards.

JURAN has categorised cost of quality in to four categories: 1. Failure CostsInte rnal: These are cost of rejections, repairs in terms of materials, labour, machi ne time and loss of morale. 2. Failure Costs-External: These are cost of replace ment, on-site rework including spare parts and expenses of the personnel, warran ty costs and loss of goodwill. 3. Appraisal Costs: These are cost inspection, in cluding maintenance of records, certification, segregation costs, and others. 4. Prevention costs: Prevention co st is the sequence of three sets of activities, Quality planning, Quality contro l, and Quality improvement, forming the triology to achieve TOTAL QUALITY MANAGE MENT. JURANs argument says that; Quality is the result of good planning consideration t he needs of both internal and external customers and develops processes to meet them. The processes are also planned to meet them. Quality is built into the sys tem of manufacture, inputs and processes that are on stream like raw material, s pare parts, labour, machine maintenance, training, warehousing, inspection proce dures, packaging, and other. All these have to follow standards and control exer cises to make sure that mistake do not occur often and that if mistakes do occur then they are corrected at the source. Quality improvement measures are essenti al to keep the quality culture alive. Newer methods will be found, some operatio ns can be eliminated, improved technology available. In short, as experience is gained things can always be done better. IT is for the management to take the in itiative and encourage the employees to be on lookout for opportunities for impr ovement. CROSBYS Absolutes of Quality Like Deming, Crosby also lays emphasis on t op management commitment and responsibility for designing the system so that def ects are not inevitable. He urged that there be no restriction on spending for a chieving quality. In the long run, maintaining quality is more economical than c ompromising on its achievement. His absolutes can be listed as under: Quality is conformance to requirements, not goodness Prevention, not appraisal, is the path to quality. Quality is measured as the price Paid for non-conformance and as ind ices

Quality originates in all factors. There are no quality problems. It is the peop le designs and processes that create problems. Crosby also has given 14 points s imilar to those of Deming. His approach emphasizes on measurement of quality, increasing awareness, corrective action, error cause rem oval and continuously reinforcing the system, so that advantages derived are not lost over time. He opined that the quality management regimen should improve th at overall health of the organization and prescribed a vaccine. The ingredients are. 1. Integrity: Honesty and commitment help in producing everything right fir st time, every time. 2. Communication: Flow of information between departments, suppliers, customers helps in indentifying opportunities. 3. Systems and operati ons: These should bring in a quality environment so that nobody is comfortable w ith anything less than the best. Total Production Maintenance (TPM) Maintenance is a function in any operations system. Maintenance keeps the equipments in good condition. Generally equipments deteriorate because usage wear to the parts int roducing inaccuracies on the products made on them. When the deterioration produ ces a component which exceeds the permitted deviations rendering them unacceptab le, maintenance is undertaken to bring back the machine to produce acceptable co mponents. Sometimes the failure is sudden and serious and the equipment stops wo rking. Disruption of production and emergency repairs works are costly and sched ules are missed causing delays in supplies and consequent losses. These breakdow ns occur because the equipment was carrying hidden defects which were not appare nt. All theses are attended to by the maintenances department. Historical record s indicate the probability of failures over different periods thus enabling us t o plan to attend to them. With progress in automation, we have costly equipments . We have flow lines and any one machine breaking down causes a series of machin e to be idle. So, we have to move towards zero breakdowns like we want to move t owards zero defects by implementing TQM Tools. TPM puts the responsibility of ma intenance where it belongs to and the operator who uses the equipment. It is a c ompanywide activity which involves all the people. The main thrust is eliminatin g all break downs. The focus is on the operating personnel because they would kn ow about malfunctioning earlier and more than anybody else. They work on the mac hine and are aware of the slightest variations that occur and thus should be abl e to plan to remove the cause before it becomes

serious. So every planned maintenance activity reduces the probability of a brea kdown, Ownership of the operation and machine increases the commitment of the wo rkmen. Autonomy is the starting point for learning and excellence. The worker ca n suggest better ways of improving quality, productivity, and design. This help in continuous improvement, Team work and participation improves the quality cult ure. The principles of 5S- the housekeeping activities which improve efficiency at workplace is considered a measurable standard to aid the implementation at TP M even in the office rooms.

ASSIGNMENTS MBA 2nd SEM Subject Code MB0045 Book ID B1134 FINANCIAL MANAGEMENT Set 1 erforms finance functions simultaneously and continuously in the normal course o f the business. They do not necessarily occur in a sequence. Finance functions call fo r skilful planning, control and execution of a firms activities. Let us note at t he outset hat shareholders are made better off by a financial decision that incr eases the value of their shares, Thus while performing the finance function, the financial manager should strive to maximize the market value of shares. Whateve r decision does a manger takes need to result in wealth maximization of a shareh older. 1. Investment Decision Investment decision or capital budgeting involves the dec ision of allocation of capital or commitment of funds to long-term assets that w ould yield benefits in the future. Two important aspects of the investment decis ion are: a) The evaluation of the prospective profitability of new investments, and b) The measurement of a cut-off rate against that the prospective return of new investments could be compared. Future benefits of investments are difficult to measure and cannot be predicted with certainty. Because of the uncertain futu re, investment decisions involve risk. Investment proposals should, therefore, b e evaluated in terms of both expected return and risk. Besides the decision for investment managers do see where to commit funds when an asset becomes less prod uctive or nonprofitable. There is a broad agreement that the correct cut-off rat e is the required rate of return or the opportunity cost of capital. However, th ere are problems in computing the opportunity cost of capital in practice from t he available data and information. A decision maker should be aware of capital i n practice from the available data and information. A decision maker should be a ware of these problems. 2. Financing Decision Financing decision is the second i mportant function to be performed by the financial manager. Broadly, her or she must decide when, where and how to acquire funds to meet the firms

investment needs. The central issue before him or her is to determine the propor tion of equity and debt. The mix of debt and equity is known as the firms capital structure. The financial manager must strive to obtain the best financing mix o r the optimum capital structure for his or her firm. The firms capital structure is considered to be optimum when the market value of shares is maximized. The us e of debt affects the return and risk of shareholders; it may increase the retur n on equity funds but it always increases risk. A proper balance will have to be struck between return and risk. When the shareholders return is maximized with m inimum risk, the market value per share will be maximized and the firms capital s tructure would be considered optimum. Once the financial manager is able to dete rmine the best combination of debt and equity, he or she must raise the appropri ate amount through the best available sources. In practice, a firm considers man y other factors such as control, flexibility loan convenience, legal aspects etc . in deciding its capital structure. 3. Dividend Decision Dividend decision is the third major financial decision. Th e financial manager must decide whether the firm should distribute all profits, or retain them, or distribute a portion and retain the balance. Like the debt po licy, the dividend policy should be determined in terms of its impact on the sha reholders value. The optimum dividend policy is one that maximizes the market val ue of the firms shares. Thus if shareholders are not indifferent to the firms divi dend policy, the financial manager must determine the optimum dividend payout ra tio. The payout ratio is equal to the percentage of dividends to earnings availa ble to shareholders. The financial manager should also consider the questions of dividend stability, bonus shares and cash dividends in practice. Most profitabl e companies pay cash dividends regularly. Periodically, additional shares, calle d bonus share (or stock dividend), are also issued to the existing shareholders in addition to the cash dividend. 4. Liquidity Decision Current assets management that affects a firms liquidity is yet another important finances function, in addition to the management of longterm assets. Current assets should be managed efficiently for safeguarding the f irm against the dangers of illiquidity and insolvency. Investment in current ass ets affects the firms profitability. Liquidity and risk. A conflict exists betwee n profitability and liquidity while managing current assets. If the firm does no t invest sufficient funds in current assets, it may become illiquid. But it woul d lose profitability, as idle current assets would not earn anything. Thus, a pr oper trade-off must be achieved between profitability and liquidity. In order to ensure that neither insufficient nor unnecessary funds are invested in current assets, the

financial manager should develop sound techniques of managing current assets. He or she should estimate firms needs for current assets and make sure that funds w ould be made available when needed. It would thus be clear that financial decisi ons directly concern the firms decision to acquire or dispose off assets and requ ire commitment or recommitment of funds on a continuous basis. It is in this con text that finance functions are said to influence production, marketing and othe r functions of the firm. This, in consequence, finance functions may affect the size, growth, profitability and risk of the firm, and ultimately, the value of t he firm. To quote Ezra Solomon The function of financial management is to review and control decisions to commit or recommit funds to new or ongoing uses. Thus, in addition to raising funds, financial management is directly concerned with p roduction, marketing and other functions, within an enterprise whenever decision s are about the acquisition or distribution of assets. Various financial functio ns are intimately connected with each other. For instance, decision pertaining t o the proportion in which fixed assets and current assets are mixed determines t he risk complexion of the firm. Costs of various methods of financing are affect ed by this risk. Likewise, dividend decisions influence financing decisions and are themselves influenced by investment decisions. In view of this, finance mana ger is expected to call upon the expertise of other functional managers of the f irm particularly in regard to investment of funds. Decisions pertaining to kinds of fixed assets to be acquired for the firm, level of inventories to be kept in hand, type of customers to be granted credit facilities, terms of credit should be made after consulting production and marketing executives. However, in the m anagement of income finance manager has to act on his own. The determination of dividend policies is almost exclusively a finance function. A finance manager ha s a final say in decisions on dividends than in asset management decisions. Fina ncial management is looked on as cutting across functional even disciplinary bou ndaries. It is in such an environment that finances manager works as a part of t otal management. In principle, a finance manager is held responsible to handle a ll such problem: that involve money matters. But in actual practice, as noted ab ove, he has to call on the expertise of those in other functional areas to disch arge his responsibilities effectively. Q.2. Ans. What are the factors that affect the financial plan of a company? To help your o rganization succeed, you should develop a plan that needs to be followed. This applies to starting the company, developing new product, creating a new departme nt or any undertaking that affects the companys future. There are several factors that affect planning in an

organization. To create an efficient plan, you need to understand the factors in volved in the planning process. Organizational planning is affected by many fact ors. Priorities In most companies, the priority is generating revenue, and this prior ity can sometimes interfere with the planning process of any project. For example, if you are in the process of planning a large expansion project and your largest customer suddenly threat ens to take their business to your competitor, then you might have to shelve the expansion planning until the customer issue is resolved. When you start the pla nning process for any project, you need to assign each of the issues facing the company a priority rating. That priority rating will determine what issues will sidetrack you from the planning of your project, and which issues can wait until the process is complete. Company Resources Having an idea and developing a plan for your company can help your company to grow and succeed, but if the company does not have the resources to make the plan come to gether, it can stall progress. One of the first steps to any planning process sh ould be an evaluation of the resources necessary to complete the project, compar ed to the resources the company has available. Some of the resources to consider are finances, personnel, space requirements, access to materials and vendor rel ationships. Forecasting A company constantly should be forecasting to help prepare for chang es in the marketplace. Forecasting sales revenues, materials costs, personnel costs and overhead costs can help a company plan for upcoming projects. Without accurate forecasting, it can be difficult to tell if the plan has any chance of success, if the company h as the capabilities to pull off the plan and if the plan will help to strengthen the companys standing within the industry. For example, if your forecasting for the cost of goods has changed due to a sudden increase in material costs, then t hat can affect elements of your product roll-out plan, including projected profi t and the long-term commitment you might need to make to a supplier to try to ge t the lowest price possible. Contingency Planning To successfully plan, an organization needs to have a conti ngency plan in place. If the company has decided to pursue a new product line, there needs to be a part of th e plan that addresses the possibility that the product line will fail. The reall ocation of company resources, the acceptable financial losses and the potential public relations problems that a failed product can cause all need to be part of the organizational planning process from the beginning.

Q.3. Show the relationship between required rate of return and coupon rate on the val ue of a bond. Ans. It is important for prospective bond buyers to know how to determine the price o f a bond because it will indicate the yield received should the bond be purchased. In thi s section, we will run through some bond price calculations for various types of bond instruments. Bonds can be priced at a premium, discount, or at par. If the bonds price is higher than its par value, it will sell at a premium because its interest rate is higher than current prevailing rates. If the bonds price is lowe r than its par value, the bond will sell at a discount because its interest rate is lower than current prevailing interest rates. When you calculate the price o f a bond, you are calculating the maximum price you would want to pay for the bo nd, given the bonds coupon rate in comparison to the average rate most investors are currently receiving in the bond market. Required yield or required rate of r eturn is the interest rate that a security needs to offer in order to encourage investors to purchase it. Usually the required yield on a bond is equal to or gr eater than the current prevailing interest rates. Fundamentally, however, the pr ice of a bond is the sum of the present values of all expected coupon payments p lus the present value of the par value at maturity. Calculating bond price is si mple: all we are doing is discounting the known future cash flows. Remember that to calculate present value (PV) which is based on the assumption that each paym ent is re-invested at some interest rate once it is receivedwe have to know the i nterest rate that would earn us a known future value. For bond pricing, this int erest rate is the required yield. Here is the formula for calculating a bonds pri ce, which uses the basic present value (PV) formula: C = coupon payment n = numb er of payments i = interest rate, or required yield M = value at maturity, or pa r value The succession of coupon payments to be received in the future is referr ed to as an ordinary annuity, which is a series of fixed payments at set interva ls over a fixed period of time. (Coupons on a straight bond are paid at ordinary annuity.) The first payment of an ordinary annuity occurs one interval from the time at which the debt security is acquired. The calculation assumes this time is the present. You may have guessed that the bond pricing formula shown above m ay be tedious to calculate, as it requires adding the present value of each futu re coupon payment. Because these payments are

paid at an ordinary annuity, however, we can use the shorter PV-of-ordinary-annu ity formula that is mathematically equivalent to the summation of all the PVs of future cash flows. This PV-of-ordinaryannuity formula replaces the need to add all the present values of the future coupon. The following diagram illustrates h ow present value is calculated for an ordinary annuity: Each full moneybag on th e top right represents the fixed coupon payments (future value) received in peri ods one, two and three. Notice how the present value decreases for those coupon payments that are further into the future the present value of the second coupon payment is worth less than the first coupon and the third coupon is worth the l owest amount today. The farther into the future a payment is to be received, the less it is worth today is the fundamental concept for which the PVof-ordinary-a nnuity formula accounts. It calculates the sum of the present values of all futu re cash flows, but unlike the bond-pricing formula we saw earlier, it doesnt requ ire that we add the value of each coupon payment. By incorporating the annuity m odel into the bond pricing formula, which requires us to also include the presen t value of the par value received at maturity, we arrive at the following formul a: Lets go through a basic example to find the price of a plain vanilla bond. Exa mple 1: Calculate the price of a bond with a par value of $1,000 to be paid in t en years, a coupon rate of 10%, and a required yield of 12%. In our example well assume that coupon payments are made semi-annually to bond holders and that the next coupon payment is expected in six months. Here are the steps we have to tak e to calculate the price: 1. Determine the Number of Coupon Payments: Because tw o coupon payments will be made each year for ten years, we will have a total of 20 coupon payments. 2. Determine the Value of Each Coupon Payment: Because the c oupon payments are semiannual, divide the coupon rate in half. The coupon rate i s the percentage off the bonds par value. As a result, each semi-annual coupon pa yment will be $50 ($1,000 x 0.05). 3. Determine the Semi-Annual Yield: Like the coupon rate, the required yield of 12% must be divided by two because the number of periods used in the calculation has doubled. If we left the required yield a t 12%, our bond price would be very low and inaccurate. Therefore, the required semiannual yield is 6% (0.12/2). 4. Plug the Amounts into the Formula: From the above calculation, we have determined that the bond is selling at a discount; th e bond price is less than its par value because the required yield of the bond i s greater than the coupon rate. The bond must sell at a discount to attract inve stors, who could find higher interest elsewhere in the prevailing rates. In othe r words, because investors can make a larger return in the market, they need an extra incentive to invest in the bonds.

Accounting for Different Payment Frequencies In the example above coupons were p aid semi-annually, so we divided the interest rate and coupon payments in half t o represent the two payments per year. You may be now wondering whether there is a formula that does not require steps two and three outlined above, which are r equired if the coupon payments occur more than once a year. A simple modificatio n of the above formula will allow you to adjust interest rates and coupon paymen ts to calculate a bond price for any payment frequency: Notice that the only mod ification to the original formula is the addition of F, which represents the frequ ency of coupon payments, or the number of times a year the coupon is paid. There fore, for bonds paying annual coupons, F would have a value of one. Should a bon d pay quarterly payments, F would equal four, and if the bond paid semi-annual c oupons, F would be two. Q.4. Ans. Discuss the implication of financial leverage for a firm. The financial leverage implies the employment of source of funds, involving fixed return so as to cause more than a proportionate change in earnings per share (EPS) due to cha nge in operating profits. Like the operating leverage, financial leverage can be positive when operating profits are increasing and can be negative in the situa tion of decrease in such profits. In view of these, financial leverage will affe ct the financial risk of the firm. An important analytical tool for financial le verage is the indifference point at which the EPS/market price is the same for d ifferent financial plans under consideration. The objective of this study was to provide additional evidence on the relationship between financial leverage and the market value of common stock. Numerous empirical studies have been done in t his area, and, concurrently, many theories have been developed to explain the re lationship between financial leverage and the market value of common stock. Beca use of the methodological weaknesses of past studies, however, no conclusions ca n be drawn as to the validity of the theories. Theories on financial leverage ma y be classified into three categories: irrelevance theorem, rising from value in definitely with increase in financial leverage, and optimal financial leverage. Empirical implications of these categories along with the consequences of seriou s confounding effects are analyzed. The implications are then compared with evid ence from actual events involving financial leverage changes, and distinguished from each other as finely as possible, using simple and multiple regression anal yses, normal Z-test, and a simulation technique. The evidence shows that changes in the market value of common stock are positively related to changes in financ ial leverage for some firms and negatively

related for other firms. This evidence is consistent with the existence of an op timal financial leverage for each firm, assuming that financial leverages of fir ms with a positive relationship are below the optimum and those of firms with a negative relationship are above the optimum. The results of the study do not dep end upon the definition of the market portfolio, the definition of the event per iod, or the choice of financial leverage measure. Betas estimated from equally w eighted market portfolios were generally higher than those estimated from value weighted market portfolios during 1981-1982. However, the results of the study w ere the same for both portfolios. Abnormal returns were computed for seven and t wo day event periods, and the results were the same for both periods. Seven diff erent definitions of financial leverage were tested, and the results were the sa me for all measures. Q.5 The cash flows associated with a project are given below: Year Cash flow 0 (100, 000) 1 25000 2 40000 3 50000 4 40000 5 30000 Calculate the a) payback period. b) Benefit cost ratio for 10% cost of capital Ans. a) Payback period: The cash flows and the cumulative cash flows of the proj ects is shown under in table Table Cash flows and cumulative cash flows Year Cas h flows (Rs.) 1 2 3 4 5 25,000 40,000 50,000 40,000 30,000 Project Cumulative Ca sh flows 25,000 65,000 115,000 155,000 185,000 From the cumulative cash flow column the initial cash outlay of Rs. 1,00,000 lie s between 2nd year and 3rd year in respect of project.

Therefore, payback period for project is: = 2 100,000 65,000 65,000

= 2.54 years Hence Pay-back period for project B is 2.54 years. b) Benefit cost ratio for 10% cost of capital Table: Present Value (PV) of Cash inflows Year Cash in flows 1 25,000 2 40,000 3 50,000 4 40,000 5 30,000 PV facto r at 15% 0.909 0.826 0.751 0.683 0.621 PV of Cash inflow Initial Cash out lay NP V PV of Cash in flows 22,725 33,040 37,550 27,320 18,630 139,265 1,00,000 39,265 PV of Cash inflow Benefit cost ratio = -----------------------Initial Cash outlay 1,39,265 = -------------1,00,000 = 1.39 (Ans)

Q6. A companys earnings and dividends are growing at the rate of 18% pa. The growth r ate is expected to continue for 4 years. After 4 years, from year 5 onwards, the growth rate will be 6% forever. If the dividend per share last year was Rs. 2 a nd the investors required rate of return is 10% pa, what is the intrinsic price per share or the worth of one share. Ans. : P = Intrinsic price per share E = Earnings per share = 18%, D = Dividend per sha re = 2 r = Rate of return = 10% P = [2(1.18)/(1.10)1] + [2(1.18)2/(1.10)2] + [2(1.18)3/(1.10)3] + [2(1.18)4/(1.10)4] + [2(1.18)4 (1.06)/(1.10)5] + [2(1.18)4 (1.06)2/(1.10)6] + = 2.15 + 2.30 + 2.47 + 5 + 2.55 + 2.46 Intrinsic price per share = 14.58

ASSIGNMENTS MBA 2nd SEM Subject Code MB0046 Book ID B1135 MARKETING MANAGEMENT Set 1 ts and information types. Ans. A Marketing Information System can be defined as a system in which marketing information is formally gathered, stored, analysed and distributed to managers in accord with their informational needs on a regular b asis. Set of procedures and practices employed in analyzing and assessing marketi ng information, gathered continuously from sources inside and outside of a firm. Timely marketing information provides basis for decisions such as product devel opment or improvement, pricing, packaging, distribution, media selection, and pr omotion. Characteristics of MIS Philip Kotler defines MIS as a system that consists of peo ple, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. Its charac teristics are as follows: 1. It is a planned system developed to facilitate smoo th and continuous flow of information. 2. It provides pertinent information, col lected from sources both internal and external to the company, for use as the ba sis of marketing decision making. 3. It provides right information at the right time to the right person. A well designed MIS serves as a companys nerve centre, continuously monitoring the market environment both inside and outside the organ ization. In the process, it collects lot of data and stores in the form of a dat abase which is maintained in an organized manner. Marketers classify and analyze this data from the database as needed. Benefits of MIS (Marketing Information System) Various benefits of having a MIS and resultant flow of marketing information are given below:

1. It allows marketing managers to carry out their analysis, planning implementa tion and control responsibilities more effectively. 2. It ensures effective tapp ing of marketing opportunities and enables the company to develop effective safe guard against emerging marketing threats. 3. It provides marketing intelligence to the firm and helps in early spotting of changing trends. 4. It helps the firm adapt its products and services to the needs and tastes of the customers. 5. By providing quality marketing information to the decision maker, MIS helps in imp roving the quality of decision making. Types of Marketing Informations A Marketing Information System supplies three ty pes of information. 1. Recurrent Information is the data that MIS supplies perio dically at a weekly, monthly, quarterly, or annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels, payables, and receivables etc. which are made available regularly. Information on customer aw areness of companys brands, advertising campaigns and similar data on close compe titors can also be provided. 2. Monitoring Information is the data obtained from regular scanning of certain sources such as trade journals and other publications. Here relevant data from e xternal environment is captured to monitor changes and trends related to marketi ng situation. Data about competitors can also be part of this category. Some of these data can be purchased at a price from commercial sources such as Market Re search agencies or from Government sources. 3. Problem related or customized information is developed in response to some sp ecific requirement related to a marketing problem or any particular data request ed by a manager. Primary Data or Secondary Data (or both) are collected through survey Research in response to specific need. For example, if the company has de veloped a new product, the marketing manager may want to find out the opinion of the target customers before launching the product in the market. Such data is g enerated by conducting a market research study with adequate sample size, and th e findings obtained are used to help decide whether the product is accepted and can be launched.

Q.2 a. Examine how a firms macro environment operates. b. Mention the key points in P sychoanalytic model of consumer behaviour. Ans. The term micro-environment denotes those elements over which the marketing firm has control or which it can use in order to gain information that will better help it in its marketing operations. In other words, these are elements that can be manipulate d, or used to glean information, in order to provide fuller satisfaction to the companys customers. The objective of marketing philosophy is to make profits thro ugh satisfying customers. This is accomplished through the manipulation of the v ariables over which a company has control in such a way as to optimise this obje ctive. The variables are what Neil Borden has termed the marketing mix which is a combination of all the ingredients in a recipe that is designed to prove most attrac tive to customers. In this case the ingredients are individual elements that mar keting can manipulate into the most appropriate mix. E Jerome McCarthy further d ubbed the variables that the company can control in order to reach its target ma rket the four Ps. Each of these is discussed in detail in later chapters, but a br ief discussion now follows upon each of these elements of the marketing mix toge ther with an explanation of how they fit into the overall notion of marketing. A scan of the external macro-environment in which the firm operates can be expres sed in terms of the following factors: Political Economic Social Technological The acronym PEST (or sometimes rearrange d as STEP) is used to describe a framework for the analysis of these macro environmental factors. A PEST analysis fits into an overall environmental scan as shown in the following diagram: Environmental Scan / \ Internal Analysis External Analysis / \ Macroenvironment Microenvironment P.E.S.T.

Political Factors Political factors include government regulations and legal iss ues and define both formal and informal rules under which the firm must operate. Some examples include: Tax policy Employment laws Environmental regulations Trade restrictions and tari ffs Political stability Economic Factors Economic factors affect the purchasing power of potential custo mers and the firms cost of capital. The following are examples of factors in the macro economy: Economic growth Interest rates Exchange rates Inflation rate Social Factors Social factors include the demographic and cultural aspects of th e external macro environment. These factors affect customer needs and the size o f potential markets. Some social factors include: Health consciousness Population growth rate Age distribution Career attitudes Em phasis on safety Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some t echnological factors include: R&D activity Automation Technology incentives Rate of technological change

External Opportunities and Threats The PEST factors combined with external micro environmental factors can be classified as opportunities and threats in a SWOT analysis. b) The Psychoanalytical Model: The psychoanalytical model draws from Freudian Psych ology. According to this model, the individual consumer has a complex set of dee p-seated motives which drive him towards certain buying decisions. The buyer has a private world with all his hidden fears, suppressed desires and totally subjective longings. H is buying action can be influenced by appealing to these desires and longings. T he psychoanalytical theory is attributed to the work of eminent psychologist Sig mund Freud. Freud introduced personality as a motivating force in human behavior . According to this theory, the mental framework of a human being is composed of three elements, namely, 1. The id or the instinctive, pleasure seeking element. It is the reservoir of the instinctive impulses that a man is born with and who se processes are entirely subconscious. It includes the aggressive, destructive and sexual impulses of man. 2. The superego or the internal filter that presents to the individual the behavioral expectations of society. It develops out of th e id, dominates the ego and represents the inhibitions of instinct which is char acteristic of man. It represents the moral and ethical elements, the conscience. 3. The ego or the control device that maintains a balance between the id and th e superego. It is the most superficial portion of the id. It is modified by the influence of the outside world. Its processes are entirely conscious because it is concerned with the perception of the outside world. The basic theme of the th eory is the belief that a person is unable to satisfy all his needs within the b ounds of society. Consequently, such unsatisfied needs create tension within an individual which have to be repressed. Such repressed tension is always said to exist in the subconscious and continues to influence consumer behavior. 4. The S ociological Model: According to the sociological model, the individual buyer is influenced by society or intimate groups as well as social classes. His buying d ecisions are not totally governed by utility He has a desire to emulate, follow a nd fit in with his immediate environment.

5. The Nicosia Model: In recent years, some efforts have been made by marketing scholars to build buyer behavior models totally from the marketing mans standpoin t. The Nicosia model and the Howard and Sheth model are two important models in this category. Both of them belong to the category called the systems model, whe re the human being is analyzed as a system with stimuli as the input to the syst em and behavior as the output of the system. Francesco Nicosia, an expert in con sumer motivation and behavior put forward his model of buyer behavior in 1966. T he model tries to establish the linkages between a firm and its consumer how the activities of the firm influence the consumer and result in his decision to buy . The messages from the firm first influence the predisposition of the consumer towards the product. Depending on the situation, he develops a certain attitude towards the product. It may lead to a search for the product or an evaluation of the product. If these steps have a positive impact on him, it may result in a d ecision to buy. This is the sum and substance of the activity explanations in the Nicosia Model. The Nicosia Model groups these activities into four basic fields. Field one has two subfields the firms attributes and the consumers attributes. An advertising message from the firm reaches the consumers attributes. Depending on the way the message is received by the consumer, a certain attribute may develo p, and this becomes the input for Field Two. Field Two is the area of search and evaluation of the advertised product and other alternatives. If this process re sults in a motivation to buy, it becomes the input for Field Three. Field Three consists of the act of purchase. And Field Four consists of the use of the purch ased item. Q.3. Ans. Explain the key roles played and various steps involved in organizational buying . Point 1 Introduction. The need for an understanding of the organizational buying process has grown in recent years due to the many competitive challenges presen ted in business-to-business markets. Since 1980 there have been a number of key changes in this area, including the growth of outsourcing, the increasing power enjoyed by purchasing departments and the importance given to developing partner ships with suppliers. Point 2 The organizational buying behaviour process. The o rganizational buying behaviour process is well documented with many models depic ting the various phases, the members involved, and the decisions made in each ph ase. The basic five phase

model can be extended to eight; purchase initiation; evaluations criteria format ion; information search; supplier definition for RFQ; evaluation of quotations; negotiations; suppliers choice; and choice implementation (Matbuy, 1986). Point 3 The buying centre. The buying centre consists of those people in the org anizational who are involved directly or indirectly in the buying process, i.e. the user, buyer influencer, decider and gatekeeper to who the role of initiator ha s also been added. The buyers in the process are subject to a wide variety and c omplexity of buying motives and rules of selection. The Matbuy model encourages marketers to focus their efforts on who is making what decisions based on which criteria. Point 4 Risk and uncertainty The driving forces of organizational buying behavio ur. This is concerned with the role of risk or uncertainty on buying behaviour. The level of risk depends upon the characteristics of the buying situation faced . The supplier can influence the degree of perceived uncertainty by the buyer an d cause certain desired behavioural reactions by the use of information and the implementation of certain actions. The risks perceived by the customer can resul t from a combination of the characteristics of various factors: the transaction involved the relationship with the supplier, and his position vis-a-vis the supp ly market. Point 5 Factors influencing organizational buying behaviour. Three key factors a re shown to influence organizational buying behaviour, these are, types of buyin g situations and situational factors, geographical and cultural factors and time factors. Point 6 Purchasing Strategy. The purchasing function is of great importance beca use its actions will impact directly on the organizations profitability. Purchasi ng strategy aims to evaluate and classify the various items purchased in order t o be able to choose and manage suppliers accordingly. Classification is along tw o dimensions: importance of items purchased and characteristics of the supply ma rket. Actions can be taken to influence the supply market. Based on the type of items purchased and on its position in the buying matrix, a company will develop different relationships with suppliers depending upon the number of suppliers, the suppliers share, characteristics of selected suppliers, and the nature of cus tomer-supplier relationships. The degree of centralization of buying activities and the missions and

status of the buying function can help support purchasing strategy. The company will adapt its procedures to the type of items purchased which in turn will infl uence relationships with suppliers. Point 7 The future. Two activities which will be crucial to the future developme nt of organizational buying behaviour will be information technology and product ion technologies. Point 8 Conclusion. Organizational buying behaviour is a very complex area, howe ver, an understanding of the key factors are fundamental to marketing strategy a nd thus an organizations ability to compete effectively in the market place. Q.4 Explain the different marketing philosophies and its approach. Ans. Marketin g is a societal process by which individuals and groups obtain what they need an d want through creating, offering and freely exchanging products and services of value with others. According to the American Marketing Association, Marketing is the process of planning and executing the conception, pricing, promotion and di stribution of ideas, goods and services to create exchanges that satisfy individ ual and organizational goods There are six competing philosophies under which org anizations conduct marketing activities the production concept, product concept, selling concept, marketing concept, customer concept; and societal concept. 1) T he Production Concept: The production concept is one of the oldest concepts in b usiness. The production concept holds that consumers will prefer products that a re widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs and mass distribu tion. They assume that consumers are primarily interested in products availabili ty and low prices. This philosophy makes sense in developing countries, where co nsumers are more interested in obtaining the product than its features. It is al so used when a company wants to expand the market. 2. The product Concept Product concept holds that consumer will favour these pro ducts that offer the most quality, performance and innovative features. Managers in these organizations focus on

making superior products and improving them over time. They assume that buyers a dmire well-made products and can evaluate quality and performance product orient ed companies often trust that their engineers can design exceptional products. T hey get little or no customer input, and very often they will not even examine c ompetitors products. 3. The Selling Concept: The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization most, therefore, undertakes an aggressive selling and promotion ef fort. This concept assumes that consumers typically show buying inertia or resis tance and must be coaxed into buying. It also assumes that the company has a who le battery of effective selling and promotion tools to stimulate more buying. Th e selling concept is epitomized by the thinking that The purpose of marketing is to sell more stuff to more people for more money in order to make more profit Mo st firms practice the selling concept when they have over capacity. Their aim is to sell what they make rather then make what market wants. 4. The Marketing Concept: The marketing concepts hold that the key to achieving its organizational goals consists of the company being more effective then compe titors in creating, delivering and communicating superior customer value to its chosen target markets. The marketing concept rests on four pillars: target marke t, customer needs, integrated marketing and profitability. There is a contrast b etween selling and marketing concepts: Selling focuses on the needs of the seller ; marketing on the needs of the buyer. Selling is preoccupied with the sellers nee d to convert his product into cash; marketing with the ideas of satisfying the n eeds of the customers by means of the product and the whole cluster of things as sociated with creating, delivering and finally consuming it. 5. The customer Concept: Under customer concept, companies shape separate offers , services and messages to individual customers. These companies collect informa tion on each customers past transactions, demographics, psychographics and media and distribution preferences. They hope to achieve profitable growth through cap turing a larger share of each customers expenditures by building high customer lo yalty and focusing on customer lifetime value. The ability of a company to deal with customers are at a time become practical as a result of advances in factory customization, computers, the internet and database marketing software.

6. The Societal Marketing Concept: The societal marketing concept holds that the organizations goal is to determine the needs, wants and interests of target mark ets and to deliver the desired satisfactions more effectively and efficiently th an competitors in a way that preserves or enhances the consumers and the societys well being. The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often-conflicting criteria of company profits, consumer want satisfa ction and public interest. Companies see cause-related marketing as an opportuni ty to enhance their corporate reputation, raise brand awareness, increase custom er loyalty, build sales and increase press coverage. They believe that consumers will increasingly look for signs of good corporate citizenship that go beyond s upplying rational and emotional benefits. Q.5. What are the various stages involved in decision process when a consumer is buying new product? Also, explain the adoption process. Ans. Stages of the Cons umer Buying Process Six Stages to the Consumer Buying Decision Process (For comp lex decisions). Actual purchasing is only one stage of the process. Not all deci sion processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexitydiscussed next. The 6 stages are: 1. Problem Recognition (awareness of need)difference between the desired sta te and the actual condition. Deficit in assortment of products. HungerFood. Hunge r stimulates your need to eat. Can be stimulated by the marketer through product informationdid not know you were deficient? I.E., see a commercial for a new pai r of shoes, stimulates your recognition that you need a new pair of shoes. 2. In formation search o o Internal search, memory. External search if you need more information. Friends a nd relatives (word of mouth). Marketer dominated sources; comparison shopping; p ublic sources etc. A successful information search leaves a buyer with possible alternatives, the e voked set. Hungry, want to go out and eat, evoked set is :

o o o o Chinese food Indian food Burger king Klondike kates etc 3. Evaluation of Alternativesneed to establish criteria for evaluation features t he buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc. If no t satisfied with your choice then returns to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sou rces may be treated differently. Marketers try to influence by framing alternative s. 4. Purchase decisionChoose buying alternative, includes product, package, stor e, method of purchase etc. 5. PurchaseMay differ from decision, time lapse betwee n 4 & 5, product availability. 6. Post-Purchase Evaluationoutcome: Satisfaction o r Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an ind ian meal, may think that really you wanted a Chinese meal instead. Adoption Process Adoption is an individual s decision to become a regular user of a product. How do potential customers learn about new products, try them, and ado pt or reject them? The consumer adoption process is later followed by the consum er loyalty process, which is the concern of the established producer. Years ago, new product marketers used a mass market approach to launch products. This appr oach had two main drawbacks: It called for heavy marketing expenditures, and it involved many wasted exposures. These drawbacks led to a second approach, heavy user target marketing. This approach makes sense, provided that heavy users are identifiable and are early adopters. However, even within the heavy user group, many heavy users are loyal to existing brands new product marketers now aim at c onsumers who are early adopters. The theory of innovation diffusion and consumer adoption helps marketers identify early adopters. An innovation is any good, se rvice, or idea that is perceived by someone as new. The idea may have a long His tory, but it is an innovation to the person who sees it as new. Innovations take time to spread through the social system. The Innovation diffusion process is d efined as the spread of a new idea from its source of invention or creation to its ultimate users or adopters. The consumer

adoption process is the mental process through which an individual passes from f irst hearing about an innovation to final adoption. Adopters of new products hav e been observed to move through five stages: 1. Awareness : The consumer becomes aware of the innovation but lacks information about it. 2. 3. 4. Interest : The consumer is stimulated to seek information about the innovation. Evaluation: Th e consumer considers whether to try the innovation Trial: The consumer tries the innovation to improve his or her estimate of its value. 5. Adoption : The consumer decides to make full and regular use of the innovatio n. Q.6. Explain briefly the marketing mix elements for an automobile company giving sufficient examples. Ans. Marketing mix is the combination of elements that you will use to market your product. There are four elements: Product, Place, Price and Promotion. They are called the four Ps of the marketing mix. The objectives of this lesson about marketing mix are to give you: The tools you need for esta blishing your detailed marketing plan and forecasting your sales. 1. Challenge 2 . Product 3. Place 4. Price 5. Promotion 6. Sales strategy 7. Do it yourself 8. Coaching 1. CHALLENGE You have gotten a rough idea about the market situation and the possib le positioning of your product. Of course, its far to be sufficient. Now, you must write your de tailed planning. It means that brainstorming is ended and that you have to go to the specifics in examining and checking the entire hypothesis you had made in t he preceding chapters. You will use the marketing mix.

Some people think that the four Ps are old fashionable and propose a new paradig m: The four Cs! Product becomes customer needs; Place becomes convenience, price is replaced by cost to the user, promotion becomes communication. It looks like a joke but the Cs is more customer-oriented. 2. PRODUCT A good product makes its marketing by itself because it gives benefits t o the customer. We can expect that you have right now a clear idea about the benefits your produ ct can offer. Suppose now that the competitors products offer the same benefits, same quality, same price. You have then to differentiate your product with desi gn, features, packaging, services, warranties, return and so on. In general, dif ferentiation is mainly related to: a) The design: it can be a decisive advantage but it changes with fads. For example, a fun board must offer a good and fashio nable design adapted to young people. b) The packaging: It must provide a better appearance and a convenient use. In food business, products often differ only b y packaging. c) The safety: It does not concern fun board but it matters very mu ch for products used by kids. d) The green: A friendly product to environment gets an advantage among some segments. In business to business and for expensive ite ms, the best mean of differentiation are warranties, return policy, maintenance service, time payments and financial and insurance services linked to the produc t. 3. PLACE-DISTRIBUTION A crucial decision in any marketing mix is to correctly ident ify the distribution channels. The question how to reach the customer must always be in your mind. Definition: Th e place is where you can expect to find your customer and consequently, where th e sale is realized. Knowing this place, you have to look for a distribution chan nel in order to reach your customer. In fact, instead of place it would be better to use the word distribution but the MBA lingo uses place to memorize the 4 Ps of th e marketing mix!

4. PRICE Price means the pricing strategy you will use. You have already fixed, as an hypothesis a customer price fitted to your customer profile but you will have now to bargain it with the wholesalers and retailers. Do not be foolish: They know better the m arket than you and you have to listen their advices. 5. PROMOTION Advertising, p ublic relations and so on are included in promotion and consequently in the 4Ps. Sometimes, packaging becomes a fifth P. As promotion is closely linked to the s ales, I will mention here the most common features about the sale strategy. Defi nition: The function of promotion is to affect the customer behavior in order to close a sale. Of course, it must be consistent with the buying process describe d in the consumer analysis.Promotion includes mainly three topics: advertisement , public relations, and sales promotions. a) Advertisement: It takes many forms: TV, radio, internet, newspapers, yellow pages, and so on. You have to take noti ce about three important notions: i) Reach is the percentage of the target marke t which is affected by your advertisement. For example, if you advertise on radio you must know how many people belonging t o your segment can be affected. ii) Frequency is the number of time a person is exposed to your message. It is said that a person must be exposed seven times to the message before to be aware of it. Reach & frequency gives the gross rating point. You have to evaluate it before any advertisement campaign. iii) Message: Sometimes, it is called a creative. Anyway, the message must: get attraction, ca pture interest, create desire and finally require action that is to say close th e sale. b) Public relations: Public relations are more subtle and rely mainly on your own personality. For example, you can deliver public speeches on subjects such as economics, geo-economics, futurology to several organizations (civic gro ups, political groups, fraternal organizations, professional associations) 6. SA LES STRATEGY Sales bring in the money. Salesmen are directly exposed to the pres sure of finding prospects, making deals, beating competition and bringing money.

ASSIGNMENTS MBA 2nd SEM Subject Code MB0047 Book ID B1136 MANAGEMENT INFORMATION SYSTEMS Set 1 Q.1. What is M nsively used in generating statistical report of any organization which can be u sed to study management by behavior. They set objectives to their employees usin g ratio analysis. Management also uses MIS for decision making from the low leve l management to top level management. In order to perform task using Information systems use of technical support is required. So it is the combination of 3 com ponents i.e. organization, technology and management. MIS characteristics It supports transaction handling and record keeping. It is a lso called as integrated database Management System which supports in major func tional areas. It provides operational, tactical, and strategic level managers wi th east access to timely It supports decision making function which is a vital ro le of MIS. It is flexible which is needed to adapt to the changing needs of the organization. It promotes security system by providing only access to authorized users. MIS not only provides statistical and data analysis but also works on th e basis on MBO (management by objectives). MIS is successfully used for measurin g performance and making necessary change in the organizational plans and proced ures. It helps to build relevant and measurable objectives, monitor results, and send alerts. Function of MIS The main functions of MIS are: Data Processing: Gathering, stora ge, transmission, processing and getting output of the data. Making the data int o information is a major task.

Prediction: Prediction is based on the historical data by applying the prior kno wledge methodology by using modern mathematics, statistics or simulation. Prior knowledge varies on the application and with different departments. Planning: Pl anning reports are produced based on the enterprise restriction on the companies and helps in planning each functional department to work reasonably. Control: M IS helps in monitoring the operations and inspects the plans. It consists of dif ferences between operation and plan with respect to data belonging to different functional department. It controls the timely action of the plans and analyzes t he reasons for the differences between the operations and plan. Thereby helps ma nagers to accomplish their decision making task successfully. Assistance: It sto res the related problems and frequently used information to apply them for relat ive economic benefits. Through this it can derive instant answers of the related problem. Disadvantages of MIS The following are some of the disadvantages of MIS: MIS is highly sensitive: MIS is very helpful in maintaining logging information of an a uthorized user. This needs to monitor constantly. Quality of outputs is governed by quality of inputs. MIS budgeting: There is difficulty in maintaining indirec t cost and overheads. Capturing the actual cost needs to have an accrual system having true costs of outputs which is extremely difficult. It has been difficult to establish definite findings. MIS is not flexible to update itself for the ch anges. The changes in the decision of top level management decrease its effectiv eness. Information accountability is based on the qualitative factors and the fa ctors like morality, confidence or attitude will not have any base. Q.2. Ans.: Explain Knowledge based system? Explain DSS and OLAP with example? Knowledge Based System (KBS) : KBS are the systems based on knowledge base. Know ledge base is the database maintained for knowledge management which provides th e means of data collections, organization and retrieval of

knowledge. The knowledge management manages the domain where it creates and enab les organization for adoption of insights and experiences. There are two types o f knowledge bases. a) Machine Readable Knowledge Bases: The knowledge base helps the computer to pr ocess through. It makes the data in the computer readable code which makes the o perator to perform easier. Such informations are used by semantic web. Semantic web is a web that will make a description of the system that a system can unders tand. b) Human Readable Knowledge Bases: They are designed to help people to ret rieve knowledge. The information need to be processed by the reader. The reader can access the information and synthesize their own. Online Analytical Processing (OLAP) OLAP refers to a system in which there are p redefined multiple instances of various modules used in business applications. A ny input to such a system results in verification of the facts with respect to t he available instances. A nearest match is found analytically and the results di splayed form the database. The output is sent only after thorough verification o f the input facts fed to the system. The system goes through a series of multipl e checks of the various parameters used in business decision making. OLAP is als o referred to as a multi dimensional analytical model. Many big companies use OL AP to get good returns in business. The querying process of the OLAP is very str ong. It helps the management take decisions like which month would be appropriat e to launch a product in the market, what should be the production quantity to m aximize the returns, what should be the stocking policy in order to minimize the wastage etc. A model of OLAP may be well represented in the form of a 3D box. T here are six faces of the box. Each adjoining faces with common vertex may be co nsidered to represent the various parameter of the business situation under cons ideration. E.g.: Region, Sales & demand, Product etc. Decision Support Systems (DSS) DSS is an interactive computer based system desig ned to help the decision makers to use all l the resources available and make us e in the decision making. In management many a time problems arise out of situat ions for which simple solution may not be possible. To solve such problems you m ay have to use complex theories. The models that would be required to solve such problems may have to be identified. DSS requires a lot of managerial abilities and managers judgment.

You may gather and present the following information by using decision support a pplication: Accessing all of your current information assets, including legacy a nd relational data sources, cubes, data warehouses, and data marts Comparative s ales figures between one week and the next Projected revenue figures based on ne w product sales assumptions The consequences of different decision alternatives, given past experience in a context that is described. Q.3. What are Value Chain Analysis & describe its significance in MIS? Explain what i s meant by BPR? What is its significance? How Data warehousing & Data Mining is useful in terms of MIS? Ans.: BPR The existing system in the organization is totally reexamined and radi cally modified for incorporating the latest technology. This process of change f or the betterment of the organization is called as Business process re-engineeri ng. This process is mainly used to modernize and make the organizations efficien t. BPR directly affects the performance. It is used to gain an understanding the process of business and to understand the process to make it better and re-desi gning and thereby improving the system. BPR is mainly used for change in the wor k process. Latest software is used and accordingly the business procedures are m odified, so that documents are worked upon more easily and efficiently. This is known as workflow management. Signification of BPR Business process are a group of activities performed by var ious departments, various organizations or between individuals that is mainly us ed for transactions in business. There may be people who do this transaction or tools. We all do them at one point or another either as a supplier or customer. You will really appreciate the need of process improvement or change in the orga nizations conduct with business if you have ever waited in the queue for a longe r time to purchase 1 kilo of rice from a Public Distribution Shop (PDS-ration sh op). The process is called the check-out process. It is called process because u niform standard system has been maintained to undertake such a task. The

system starts with forming a queue, receiving the needed item form the shop, get ting it billed, payment which involves billing, paying amount and receiving the receipt of purchase and the process ends up with the exit from the store. It is the transaction between customer and supplier. Data Warehousing Data Warehouse is defined as collection of database which is re ferred as relational database for the purpose of querying and analysis rather th an just transaction processing. Data warehouse is usually maintained to store he uristic data for future use. Data warehousing is usually used to generate report s. Integration and separation of data are the two basic features need to be kept in mind while creating a data warehousing. The main output from data warehouse systems are; either tabular listings (queries) with minimal formatting or highly formatted "formal" reports on business activities. This becomes a convenient wa y to handle the information being generated by various processes. Data warehouse is an archive of information collected from wide multiple sources, stored under a unified scheme, at a single site. This data is stored for a long time permitt ing the user an access to archived data for years. The data stored and the subse quent report generated out of a querying process enables decision making quickly . This concept is useful for big companies having plenty of data on their busine ss processes. Big companies have bigger problems and complex problems. Decision makers require access to information from all sources. Setting up queries on ind ividual processes may be tedious and inefficient. Data Mining Data mining is primarily used as a part of information system today, by companies with a strong consumer focus - retail, financial, communication, a nd marketing organizations. It enables these companies to determine relationship s among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer de mographics. And, it enables them to determine the impact on sales, customer sati sfaction, and corporate profits. Finally, it enables them to "drill down" into s ummary information to view detail transactional data. With data mining, a retail er could use point-of-sale records of customer purchases to send targeted promot ions based on an individual s purchase history. By mining demographic data from comment or warranty cards, the retailer could develop products and promotions to appeal to specific customer segments.

Q.4. Explain DFD & Data Dictionary? Explain in detail how the information requir ement is determined for an organization? Ans.: Data flow diagrams represent the logical flow of data within the system. DFD do not explain how the processes con vert the input data into output. They do not explain how the processing takes pl ace. DFD uses few symbols like circles and rectangles connected by arrows to rep resent data flows. DFD can easily illustrate relationships among data, flows, ex ternal entities an stores. DFD can also be drawn in increasing levels of detail, starting with a summary high level view and proceeding more detailed lower leve l views. Rounded rectangles represent processes that transform flow of data or w ork to be done. Rectangle represents external agents- the boundary of the system . It is source or destination of data. The open-ended boxes represent data store s, sometimes called files or databases. These data stores correspond to all inst ances of a single entity in a data model. Arrow represents data flows, inputs an d outputs to end from the processes. A number of guideline should be used in DFD Choose meaningful names for the symb ols on the diagram. Number the processes consistently. The numbers do not imply the sequence. Avoid over complex DFD. Make sure the diagrams are balanced Data Dictionary The data dictionary is used to create and store definitions of d ata, location, format for storage and other characteristics. The data dictionary can be used to retrieve the definition of data that has already been used in an application. The data dictionary also stores some of the description of data st ructures, such as entities, attributes and relationships. It can also have softw are to update itself and to produce reports on its contents and to answer some o f the queries.

Q.5. What is ERP? Explain its existence before and its future after? What are th e advantages & Disadvantages of ERP? What is Artificial Intelligence? How is it different from Neural Networks? Ans.: Manufacturing management systems have evol ved in stages over the few decades from a simple means of calculating materials requirements to the automation of an entire enterprise. Around 1980, over-freque nt changes in sales forecasts, entailing continual readjustments in production, as well as the unsuitability of the parameters fixed by the system, led MRP (Mat erial Requirement Planning) to evolve into a new concept : Manufacturing Resourc e Planning (or MRP2) and finally the generic concept Enterprise Resource Plannin g (ERP). Enterprise Resource Planning (ERP) Before and After Before Prior to the concept of ERP systems, departments within an organization ( for example, the human resources (HR)) department, the payroll department, and t he financial department) would have their own computer systems. The HR computer system (often called HRMS or HRIS) would typically contain information on the de partment, reporting structure, and personal details of employees. The payroll de partment would typically calculate and store paycheck information. The financial department would typically store financial transactions for the organization. E ach system would have to rely on a set of common data to communicate with each o ther. For the HRIS to send salary information to the payroll system, an employee number would need to be assigned and remain static between the two systems to a ccurately identify an employee. The financial system was not interested in the e mployee-level data, but only in the payouts made by the payroll systems, such as the tax payments to various authorities, payments for employee benefits to prov iders, and so on. This provided complications. For instance, a person could not be paid in the payroll system without an employee number. After ERP software, among other things, combined the data of formerly separate a pplications. This made the worry of keeping numbers in synchronization across mu ltiple systems disappears. It standardized and reduced the number of software sp ecialties required within larger organizations.

Advantages and Disadvantages Advantages In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk t o each other and do not effectively interface. Tasks that need to interface with one another may involve: A totally integrated system The ability to streamline different processes and workflows The ability to easily share data across variou s departments in an organization Improved efficiency and productivity levels Bet ter tracking and forecasting Lower costs Improved customer service Disadvantages Many problems organizations have with ERP systems are due to inade quate investment in ongoing training for involved personnel, including those imp lementing and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. While advantage s usually outweigh disadvantages for most organizations implementing an ERP syst em, here are some of the most common obstacles experienced: Usually many obstacl es can be prevented if adequate investment is made and adequate training is invo lved, however, success does depend on skills and the experience of the workforce to quickly adapt to the new system. Customization in many situations is limited The need to reengineer business processes ERP systems can be cost prohibitive t o install and run Technical support can be shoddy ERP s may be too rigid for spe cific organizations that are either new or want to move in a new direction in th e near future.

Artificial Intelligence Artificial Intelligence is the science and technology ba sed on various functions to develop a system that can think and work like a huma n being. It can reason, analyze, learn, conclude and solve problems. The systems which use this type of intelligence are known as artificial intelligent systems and their intelligence is referred to as artificial intelligence. It was said t hat the computer dont have common sense. Here in AI, the main idea is to make the computer think like human beings, so that it can be then said that computers al so have common sense. More precisely the aim is to obtain a knowledge based comp uter system that will help managers to take quick decisions in business. Artificial Intelligence and Neural Networks Artificial intelligence is a field o f science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics and engineering. The goal of AI is to deve lop computers that can simulate the ability to think, see, hear, walk, talk and feel. In other words, simulation of computer functions normally associated with human intelligence, such as reasoning, learning and problem solving. AI can be g rouped under three major areas: cognitive science, robotics and natural interfac es. Cognitive science focuses on researching on how the human brain works and ho w humans think and learn. Applications in the cognitive science area of AI inclu de the development of expert systems and other knowledge-based systems that add a knowledge base and some reasoning capability to information systems. Also incl uded are adaptive learning systems that can modify their behavior based on infor mation they acquire as they operate. Chess-playing systems are some examples of such systems. Fussy logic systems can process data that are incomplete or ambigu ous. Thus, they can solve semi-structured problems with incomplete knowledge by developing approximate inferences and answers, as humans do. Neural network soft ware can learn by processing sample problems and their solutions. As neural nets start to recognize patterns, they can begin to program themselves to solve such problems on their own. Neural networks are computing systems modeled after the human brains mesh like network of interconnected processing elements, called neur ons. The human brain is estimated to have over 100 billion neuron brain cells. T he neural networks are lot simpler in architecture. Like the brain, the intercon nected processors in a neural network operate in parallel and interact dynamical ly with each other.

This enables the network to operate and learn from the data it processes, simila r to the human brain. That is, it learns to recognize patterns and relationships in the data. The more data examples it receives as input, the better it can lea rn to duplicate the results of the examples it processes. Thus, the neural netwo rks will change the strengths of the interconnections between the processing ele ments in response to changing patterns in the data it receives and results that occur Q.6. Distinguish between closed decision making system & open decision making sy stem? What is what ifanalysis? Why is more time spend in problem analysis & proble m definition as compared to the time spends on decision analysis? Ans.: If the m anager operates in an environment not known to him, then the decision-making sys tem is termed as an open decision-making system. The conditions of this system i n contrast closed decision-making system are: a) The manager does not know all t he decision alternatives. b) The outcome of the decision is also not known fully . The knowledge of the outcome may be a probabilistic one. c) No method, rule or model is available to study and finalize one decision among the set of decision alternatives. What- if analysis Decisions are made using a model of the problem for developing various solution alternatives and testing them for best choice. The model is built with some variables and relationship between variables consid ered values of variables or relationship in the model may not hold well and ther efore solution needs to be tested for an outcome, if the considered values of va riables or relationship change. This method of analysis is called what if analy sis. Decision Analysis by Analytical Modeling Based on the methods discussed, a decis ion is made but such decision needs to be analysed for conditions and assumption s considered in the decision model. The process is executed through analytical m odelling of problem and solution. The model is analyzed in four ways. What if an alysis Goal Seeking Analysis Sensitivity analysis and Goal Achieving analysis

ASSIGNMENTS MBA 2nd SEM Subject Code MB0048 Book ID B1137 OPERATION RESEARCH Set 1 ing executive decisions. b. Discuss the usefulness of Operation Research in deci sion making process and the role of computers in this field. Ans. a) Churchman, Aackoff and Aruoff defined Operations Research as: the application of scientific methods, techniques and tools to operation of a system with optimum solutions to the problems, where optimum refers to the best possible alternative. The objective of Operations Research is to provide a scientific basis to the decision-makers for solving problems involving interaction of various components of the organisa tion. You can achieve this by employing a team of scientists from different disc iplines, to work together for finding the best possible solution in the interest of the organisation as a whole. The solution thus obtained is known as an optim al decision. You can also define Operations Research as The use of scientific met hods to provide criteria for decisions regarding man, machine, and systems invol ving repetitive operations. OR Operation Techniques is a bunch of mathematical tec hniques. Operation Research is an aid for the executive in making his decisions ba sed on scientific methods analysis. b) Discussion:Any problem, simple or complicated, can use OR techniques to find the best possible solution. This section will explain the scope of OR by seeing its application in various fields of everyday life. i) In Defense Operations: In modern warfare, the defense operations are carried out by three major independe nt components namely Air Force, Army and Navy. The activities in each of these c omponents can be further divided in four sub-components namely: administration, intelligence, operations and training and supply. The applications of modern war fare techniques in each of the

components of military organisations require expertise knowledge in respective f ields. Furthermore, each component works to drive maximum gains from its operati ons and there is always a possibility that the strategy beneficial to one compon ent may be unfeasible for another component. Thus in defense operations, there i s a requirement to co-ordinate the activities of various components, which gives maximum benefit to the organisation as a whole, having maximum use of the indiv idual components. A team of scientists from various disciplines come together to study the strategies of different components. After appropriate analysis of the various courses of actions, the team selects the best course of action, known a s the optimum strategy. ii) In Industry: The system of modern industries is so complex that the optimum point of operation in its various components cannot be intuitively judged by an individual. The business environment is always changing and any decision useful at one time may not be so good some time later. There is always a need to check the validity of decisions continuously against the situations. The industrial re volution with increased division of labour and introduction of management respon sibilities has made each component an independent unit having their own goals. F or example: production department minimises the cost of production but maximise output. Marketing department maximises the output, but minimises cost of unit sa les. Finance department tries to optimise the capital investment and personnel d epartment appoints good people at minimum cost. Thus each department plans its o wn objectives and all these objectives of various department or components come to conflict with one another and may not agree to the overall objectives of the organisation. The application of OR techniques helps in overcoming this difficul ty by integrating the diversified activities of various components to serve the interest of the organisation as a whole efficiently. OR methods in industry can be applied in the fields of production, inventory controls and marketing, purcha sing, transportation and competitive strategies. iii) Planning: In modern times, it has become necessary for every government to have careful planning, for economic development of the country. OR techniques ca n be fruitfully applied to maximise the per capita income, with minimum sacrific e and time. A government can thus use OR for framing future economic and social policies. iv) Agriculture: With increase in population, there is a need to increase agricu lture output. But this cannot be done arbitrarily. There are several restriction s. Hence the need to determine a course of

action serving the best under the given restrictions. You can solve this problem by applying OR techniques. v) In Hospitals: OR methods can solve waiting problems in out-patient department of big hospitals and administrative problems of the hospital organisations. vi) In Transport: You can apply different OR methods to regulate the arrival of trains and processing times minimise the passengers waiting time and reduce cong estion, formulate suitable transportation policy, thereby reducing the costs and time of trans-shipment. vii) Research and Development: You can apply OR methodologies in the field of R& D for several purposes, such as to control and plan product introductions. Q2. Explain how the linear programming technique can be helpful in decision-maki ng in the areas of Marketing and Finance. Ans. Linear programming problems are a special class of mathematical programming problems for which the objective func tion and all constraints are linear. A classic example of the application of lin ear programming is the maximization of profits given various production or cost constraints. Linear programming can be applied to a variety of business problems , such as marketing mix determination, financial decision making, production sch eduling, workforce assignment, and resource blending. Such problems are generall y solved using the simplex method. Media Selection Problem. The local Chamber of Commerce periodically sponsors pub lic service seminars and programs. Promotional plans are under way for this years program. Advertising alternatives include television, radio, and newspaper. Aud ience estimates, costs, and maximum media usage limitations are shown in Exhibit 1. If the promotional budget is limited to $18,200, how many commercial messages should be run on each medium to maximize total audience contact? Linear programming can find the answer.

Q3. a. How do you recognise optimality in the simplex method? b. Write the role of pivot element in simplex table? Ans. Simplex method is used for solving linea r programming problem especially when more than two variables are involved. SIMP LEX METHOD 1. Set up the problem. That is, write the objective function and the constraints. 2. Convert the inequalities into equations. This is done by adding one slack variable for each inequality. 3. Construct the initial simplex tableau . Write the objective function as the bottom row. 4. 5. The most negative entry in the bottom row identifies a column. Calculate the quotients. The smallest quo tient identifies a row. The element in the intersection of the column identified in step 4 and the row identified in this s tep is identified as the pivot element. The quotients are computed by dividing t he far right column by the identified column in step 4. A quotient that is a zer o, or a negative number, or that has a zero in the denominator, is ignored. 6. P erform pivoting to make all other entries in this column zero. This is done the same way as we did with the Gauss-Jordan method. 7. When there are no more negat ive entries in the bottom row, we are finished; otherwise, we start again from s tep 4. 8. Read off your answers. Get the variables using the columns with 1 and 0s. All other variables are zero. The maximum value you are looking for appears in the bottom right hand corner. Example Niki holds two part-time jobs, Job I an d Job II. She never wants to work more than a total of 12 hours a week. She has determined that for every hour she works at Job I, she needs 2 hours of preparat ion time, and for every hour she works at Job II, she needs one hour of preparat ion time, and she cannot spend more than 16 hours for preparation. If she makes $40 an hour at Job I, and $30 an hour at Job II, how many hours should she work per week at each job to maximize her income? Solution: In solving this problem, we will follow the algorithm listed above. 1. Set up the problem. That is, write the objective function and the constraints.

Since the simplex method is used for problems that consist of many variables, it is not practical to use the variables x, y, z etc. We use the symbols x1, x2, x 3, and so on. Let x1 = The number of hours per week Niki will work at Job I. and x2 = The number of hours per week Niki will work at Job II. It is customary to choose the variable that is to be maximized as Z. The problem is formulated the same way as we did in the last chapter. Maximize Subject to: Z = 401 + 302 x1 + x2 12 21 + x2 16 x1 0 x2 0 2. Convert the inequalities into equations. This is done by a dding one slack variable for each inequality. For example to convert the inequal ity x1 + x2 12 into an equation, we add a non-negative variable y1, and we get x 1 + x2 + y1 = 12 Here the variable y1 picks up the slack, and it represents the amount by which x1 + x2 falls short of 12. In this problem, if Niki works fewer that 12 hours, say 10, then y1 is 2. Later when we read off the final solution f rom the simplex table, the values of the slack variables will identify the unuse d amounts. We can even rewrite the objective function Z = 401 + 302 as 401 302 + Z 0. After adding the slack variables, our problem reads Objective function: 401 3 02 + Z = 0 Subject to constraints: x1 + x2 + y1 = 12 21 + x2 + y2 = 16 x1 0 x2 0 3. Construct the initial simplex tableau. Write the objective function as the bottom row. No w that the inequalities are converted into equations, we can represent the probl em into an augmented matrix called the initial simplex tableau as follows. x1 1 2 40 x2 1 1 30 y1 1 0 0 y2 0 1 0 Z 0 0 1 C 12 16 0

Here the vertical line separates the left hand side of the equations from the ri ght side. The horizontal line separates the constraints from the objective funct ion. The right side of the equation is represented by the column C. The reader n eeds to observe that the last four columns of this matrix look like the final ma trix for the solution of a system of equations. If we arbitrarily choose x1 = 0 and x2 = 0, we get Which reads y1 = 12 y2 = 16 Z =0 The solution obtained by arb itrarily assigning values to some variables and then solving for the remaining v ariables is called the basic solution associated with the tableau. So the above solution is the basic solution associated with the initial simplex tableau. We c an label the basic solution variable in the right of the last column as shown in the table below. x1 1 2 40 x2 1 1 30 y1 1 0 0 y2 0 1 0 Z 0 0 1 12 16 0 y1 y2 Z 4. The most negative entry in the bottom row identifies a column. The most negat ive entry in the bottom row is 40, therefore the column 1 is identified. x1 x2 y1 y2 Z 1 2 1 1 1 0 0 0 1 0 0 0 1 12 y1 16 y2 0 Z 40 30

Q4. What is the significance of duality theory of linear programming? Describe t he general rules for writing the dual of a linear programming problem. Ans. Line ar programming (LP) is a mathematical method for determining a way to achieve th e best outcome (such as maximum profit or lowest cost) in a given mathematical m odel for some list of requirements represented as linear relationships. Linear p rogramming is a specific case of mathematical programming. More formally, linear programming is a technique for the optimization of a linear objective function, subject to linear equality and linear inequality constraints. Given a polytope and a realvalued affine function defined on this polytope, a linear programming method will find a point on the polytope where this function has the smallest (o r largest) value if such point exists, by searching through the polytope vertice s. Linear programs are problems that can be expressed in canonical form: where x represents the vector of variables (to be determined), c and b are vectors of ( known) coefficients and A is a (known) matrix of coefficients. The expression to be maximized or minimized is called the objective function (cTx in this case). The equations Ax b are the constraints which specify a convex polytope over whic h the objective function is to be optimized. (In this context, two vectors are c omparable when every entry in one is less-than or equal-to the corresponding ent ry in the other. Otherwise, they are incomparable.) Linear programming can be ap plied to various fields of study. It is used most extensively in business and ec onomics, but can also be utilized for some engineering problems. Industries that use linear programming models include transportation, energy, telecommunication s, and manufacturing. It has proved useful in modeling diverse types of problems in planning, routing, scheduling, assignment, and design. Duality: Every linear programming problem, referred to as a primal problem, can be converted into a d ual problem, which provides an upper bound to the optimal value of the primal pr oblem. In matrix form, we can express the primal problem as: Maximize cTx subjec t to Ax b, x 0 with the corresponding symmetric dual problem, Minimize bTy subjec t to ATy c, y 0. An alternative primal formulation is: Maximize cTx subject to A x b; with the corresponding asymmetric dual problem, Minimize bTy subject to ATy = c, y 0.

There are two ideas fundamental to duality theory. One is the fact that (for the symmetric dual) the dual of a dual linear program is the original primal linear program. Additionally, every feasible solution for a linear program gives a bou nd on the optimal value of the objective function of its dual. The weak duality theorem states that the objective function value of the dual at any feasible sol ution is always greater than or equal to the objective function value of the pri mal at any feasible solution. The strong duality theorem states that if the prim al has an optimal solution, x*, then the dual also has an optimal solution, y*, such that cTx*=bTy*. A linear program can also be unbounded or infeasible. Duali ty theory tells us that if the primal is unbounded then the dual is infeasible b y the weak duality theorem. Likewise, if the dual is unbounded, then the primal must be infeasible. However, it is possible for both the dual and the primal to be infeasible Q.5. Use Two-Phase simplex method to solve: Minimize z x1 nts: x1 - 3 x2 + 4x3 = 5 x1 - 2 x2 3 2x2 - 3 x3 4 x1 0, x 2 0 and x3 is unrestricted. x 2 x 3 Subject to constrai

Ans. :- Minimization Z = x1 + x2 + x3 Subject to constraints x1 - 3 x2 + 4x3 = 5 x1 - 2 x2 3 2x2 - 3 x3 4 x1 0, x 2 0 and x3 is integers. In standard form Minimization z x1 1 2 x 2 S1 0 2 x 2 x 2 S 2 x 2 x3 A2 4 MA1 OS1 MA2 OS 2 x1 3 x 2

4 x 3

Simplex Table C.B -M 0 -M Z j Cj Cj B.V. A1 S1 A2 1 -M 0 M 0 x3 A1 S1 A2 S2 4 1 0 0 0 5 0 0 1 0 0 0 1 0 0 1 -1 4 - 5M 1 -M1 M1 - 2M 0 -2 M M 1 x1 1 1 0 1 x2 -3 -2 2 0

l1 4 1 x2 5/4 -2 2 1 x3 0 0 1 -M A1 - 0 0 0 S1 0 1 0 M A2 1 0 1 0 S2 -1 11/4 0 0 -1 4 A1 S1 x3 Z j Cj A1 S1 x3 Z j Cj 1 x1 - M - 1/4 0 1 1 0 M 1 x2 5/4 -2 2 5M 1 4 1 x3 0 0 1 0 -M A1 - 0 0 0 S1 0 1 0 0 -M A2 1 0 1 - 2M + 1 0 S2 -1 11/4 0 0 -1 4 -M1 L1 = l1, l3 = l1 l2 1 x1 - 1/4 1 1/4 M 3 4 - M A1 0 S1 1 x3 Z j Cj 1 x2 5/4 -2 3/4 1 x3 0 0 1 0 -M A1 - 0 1/4 1 3M 4 0 -M 0 S1 A2 S2 0 1 -1 11/4 1 0 0 0 0 0 0 5/4 0 0 M 5M 4 1 4

3M 4

z1 c1 M 0 0 1 M 5 c5 0 0 0 0 0, z 6 = l3 1 x1 - M - 1/4 0 1 1 0

1, z 2 c6 0

c 2 3M 0 0 M M

2M 1 M 2M z 7 c 7

1 z 3 0 0

c3 M

4 M M ,

M 1 M 3 5M 3 5M 1 0 1 , z 2 c2 0 1 4 4 4 4 4 4 M 1 1 8 8 3 l1 l1 , l 2 l 2 l1 , l3 l 2 * l 3 5 5 3 4 z1 c1 1 x1 1/5 4/5 11/12 Z j Cj + 1/5 1 1 x2 x3 1 0 0 0 0 1 0 0 -M A1 1/5 4/5 9 M 20 1 x2 0 S1 1 x3 0 S1 0 1 1 0 -M A2 4/5 8/5 0 4 M 5 0 S2 4/5 1/5 8/5 22/5 0 5/4 4/5 9/20 All true value of zj cj is positive so z = 9/20 Q.6.

3M z 3

Use Branch and Bound method to solve the following L.P.P: Maximize z = 7x1 + 9x2 Subject to constraints: x1 3 x 2 6 7 x1 x 2 35 0 x1 , x 2 7 x1, x2 0 and a tegers. Ans. Maximize z = 7x1 + 9x2 Subject to constraints (i) x1 3 x 2 6 7 x1 x 2 35 x2 x1 , x 2 0 and all integers 7

z x x 1 *

63 x x 2 2 1 9 , 2 1 7 2 1 4 , 2 3 2

Node (i) x 1

4 x1 5 z * 35 x1 z * 58 x1 x2 3 10 3 x2 z * 4 55 x1 4, x2 3 Optional solution Node (v) 5, x2 4, x1 0 Node (iii) Node (ii) 4, x2 10 x2 3

No solution Node (iv) Mode x1 1 2 3 4 5 9/2 5 Situation x2 7/2 0 Zx 63 35 Additional Types of Solution No integer x1 x1 x1 5 x1 4 . 4 , x2 4 4 , x 2 3

Integer Non-integer. Non-solution Integer (optional) 4 4 10/4 58 3 55

ASSIGNMENTS MBA 2nd SEM Subject Code MB0049 Book ID B1138 PROJECT MANAGEMENT Set 1 s. Projects too have to chore through their life-cycles adhering to a system. Ev ery project irrespective of its size, scope has to adapt a system. A system in t he project management refers to the existence of interrelationship of activities in a project. The absence of a system makes a project die. No matter what proje ct it is that youre preparing for, the project management life cycle can assist y ou in narrowing your focus, keeping your objectives in order and finishing said project on time, on budget and with a minimum of headaches. Every project manage ment life cycle contains five steps: Initiation, Planning, Execution, Monitoring /Control and Closure. No one step is more important than the other and each step plays a crucial role in getting your project off the ground, through the race, down the stretch and across the finish line. Phases of Project management life c ycle 1) Initiation In this first step you provide an over-view of the project in addition to the strategy you plan on using in order to achieve the desired resu lts. During the Initiation phase youll appoint a project manager who in turn will -- based on their experience and skills -- select his team members. And lest yo u think you need to be a Bill Gates or Donald Trump in order to see your project take on a life of its own, fear not: there are some great technological tools av ailable to get you through the Initiation phase of the project management life c ycle. 2) Planning The all-important second step of any successful project manage ment life cycle is planning and should include a detailed breakdown and assignme nt of each task of your project from beginning to end. The Planning Phase will a lso include a risk assessment in addition to defining the criteria needed for th e successful completion of each task. In short, the working process is defined, stake holders are identified and reporting frequency and channels explained. 3 & 4) Execution and Control Steps Three and Four take you into deeper water. When it comes to the project management cycle, execution and control just may be the most important of the five steps in that it ensures project

activities are properly executed and controlled. During the Execution and Contro l phases, the planned solution is implemented to solve the problem specified in the project s requirements. In product and system development, a design resultin g in a specific set of product requirements is created. This convergence is meas ured by prototypes, testing, and reviews. As the Execution and Control phases pr ogress, groups across the organization become more deeply involved in planning f or the final testing, production, and support. 5) Closure By the time you reach Step Five -- Closure -- the project manager should be tweaking the little things to ensure that the project is brought to its proper conclusion. The Closure pha se is typically highlighted by a written formal project review report which cont ains the following elements: a formal acceptance of the final product (by the cl ient), Weighted Critical Measurements (a match between the initial requirements laid out by the client against the final delivered product), lessons learned, pr oject resources, and a formal project closure notification to higher management. The Project Management Cycle saves time and keeps everyone on the team focused. Fortunately, modern technology provides a variety of templates that will take y ou from A-to-Z (or in this case from Start-to-Finish) making the Project Managem ent Cycle user friendly no matter what your level of management experience! Q.23. List and explain the various aspects of programme management. Ans. Project Management Project management is the planning, organizing, directing, and contr olling of company resources. It is clear from this definition that project manag ement is concerned with the dynamic allocation, utilization, and direction of re sources (both human and technical), with time -- in relation to both individual efforts and product delivery schedule -- and with costs, relating to both the ac quisition and consumption of funding. As a corollary, it is safe to say that wit hout the direction project management provides, work would have to proceed via a series of negotiations, and/or it would not align with the goals, value proposi tion, or needs of the enterprise. Within a program, these same responsibilities (i.e., allocation, utilization, and direction) are assigned to people at three l evels in the management hierarchy; the higher the level, the more general the re sponsibilities. For example, at the bottom of the management hierarchy, project managers are

Q.3 Write a short note on the following: a. Project progress control tools and m echanisms b. Process in bringing about a change in project management.

assigned to the various projects within the overall program. Each manager carrie s out the management responsibilities we described above. At the middle of the h ierarchy is the program manager/director, whose major responsibility is to ensur e that the work effort achieves the outcome specified in the business and IT str ategies. This involves setting and reviewing objectives, coordinating activities across projects, and overseeing the integration and reuse of interim work produ cts and results. This person spends more time and effort on integration activiti es, negotiating changes in plans, and communicating than on the other project ma nagement activities we described (e.g., allocating resources, ensuring adherence to schedule, budget, etc.). At the top of the program management hierarchy are the program sponsor(s) and the program steering committee. Their major responsib ility is to own and oversee the implementation of the program s underlying busin ess and IT strategies, and to define the program s connection to the enterprise s overall business plan(s) and direction. Their management activities include pr oviding and interpreting policy, creating an environment that fosters sustainabl e momentum for the program (i.e., removing barriers both inside and outside the enterprise), and periodically reviewing program progress and interim results to ensure alignment with the overall strategic vision. These individuals receive pe riodic summary reports and briefings on funding consumption, resources and their utilization, and delivery of interim work products and results. Typically, they will focus on these reports only if there is significant deviation from the pla n. So, let s return to the questions we posed at the start of this section: What is program management? Is it really management at all? If you think of manageme nt activities strictly as those we defined for project management, then the answ er to the second question is "No," or maybe "Partly." At the project level, mana gers do still perform these activities, but the program manager/director address es a different set of program goals or needs, which requires a different "bag of tricks" as well as a different view of what is happening and what needs to get done. And at the top of the hierarchy, the executive leaders who set goals and o versee the program certainly do not perform the same detailed activities as proj ect managers

Ans. a) Project progress control tools and mechanism Project monitoring and cont rol also provides information to support status reporting, progress measurement, forecasting and updating current cost and schedule information. During this pro cess, it is also important to ensure that implementation of approved changes are monitored when and as they occur. As for tools and techniques used in facilitat ing project monitoring and control, automated project management information sys tems and Earned Value are among the most commonly used. Both are also used to up date information. Earned Value also provides a means for forecasting future perf ormance based upon past performance. Status reports are used for communicating p roject progress and status. Variance Analysis reports are typically used to iden tify variances and the information often used as a basis for determining correct ive actions. The ideal suite of project management tools would provide fully int egrated functionality such that: Tools share the same communication medium to the team (eg Web, Intranet, Exchang e server, EMail, Client/Server)

Information can be automatically transferred to other tools, or, better still, b e held only once (eg team names, task lists, EMail addresses, distribution lists )

Efficiency and effectiveness is supported by automatic messaging and workflow co ntrol - the applications will always prompt those responsible for action. The tools that are used in project planning are 1. Project organization Skills a nd activities Process Initiation Prepare an outline project justification, plan and project budget Selection and briefing of the project team, assigning roles and organization Feasibility study - risk and key success factors Project definition and project plan Communicate t o the team Allocating and monitoring the work and cost Ensuring work and team co hesion Reporting progress Monitoring progress and managing changes Helping the t eam to solve project problems Planning

Execution

Control

Close

Satisfactory delivery Compiling lessons from project experience 2. Project structure Development plan, project tracking and oversight. 3. Project Key personnel Identify those business areas that are within the scope or directly interface with the scope boundary and list them in the Business area column of the project assignment worksheet Identify the key personnel for each area and list them in the Person co lumn of the project assignment worksheet. 4. Project management team It is a sen ior management team, which will be accountable for the project. Identify project sponsor, client representative and technical representative. St age managers- who will plan and manage the project on a day-to-day basis for thi s stage Project coordinators- client coordinator and technical coordinator Clear ly define these coordination, control activities and identify the brief suitable personnel to carry them out 5. Key stakeholders Identify management level perso nnel who are critical to the success of the project. Document the responsibilities of stakeholders 6. Stage teams Identify appropriat e personnel required for the stage, define the team structure and appoint team l eaders. Document the time commitment and responsibilities to be performed by the team members. 7. Key resources Individuals assigned to a key resource role may work towards gathering Business key resources and Technical key resources. They are project coordinators and team invitees. 8. Work Breakdown Structure (WBS) The entire process of a project may be conside red to be made up on number of sub process placed in different stage called the Work Breakdown Structure (WBS). A typical example of a work breakdown structure of a recruitment process is indicated below :

This is the technique to analyze the content of work and cost by breaking it dow n into its component parts.

Project key stages form the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many t asks identified at the start of planning and later this list will have to be val idated.

WBS is produced by Identifying the key elements, breaking each element down into component parts and continuing to breakdown until manageable work packages have been identified. These can then be allocated to the appropriate person. The WBS does not show dependencies other than a grouping under the key stages. It is no t time basedthere is no timescale o the drawing. 9. Task duration Identifying lead and lag times helps in working out task durati on. Lead time: An amount of time, which a successor task can overlap with its pr edecessor task, i.e. the time before the completion of the predecessor at which the successor can start. Lag time: An amount of time, between a predecessor and a successor task, i.e. the time after the completion of the predecessor that the start of the successor is delayed Q.4. Describe in brief the various phases of the quality control process. Ans. The definition of the ISO 8204 for quality: Totality of characteristics of a n entity that bears on its ability to satisfy stated and implied needs. This mean s that the Software product conforms to requirements defined. Description of Phases: Software Quality Management (SQM) describes the processes that ensure that the Software Project would reach its goals i.e. meet the clien ts expectations. Any phase of SDLC has its own independent stages of planning, ex ecution, monitoring, control & reporting. Likewise Software Quality Management h as the following three categories or key phases: 1. 2. 3. Quality Planning Quali ty Assurance Quality Control

1. Quality Planning: Quality Planning is one of the most important parts of Softwar e Quality Management. It is the start activity of SQM. Through proper planning we can ensure that the processes that make a product are audited correctly to meet the overall project objective. The staring of Quality Planning process is followed differently by di fferent Organization. It has been described in different Quality Policy and Docu mentation across various Organizations. Other industry standards related to the Software Project can be referred to Planning phases when needed. These act as St andard inputs for some specific projects. The Planning stage is having following inputs:1. 2. 3. 4. 5. 6. Quality Policy of a Company Organization Standards Ref erencing Industry Standards Regulatory compliances Statement Of Work Project spe cific Requirements Quality planning process can ensure that standards are as per clients expectation s. The outcomes of Quality Planning process are as follows:a) b) Standards defined for the project Quality Plan Various tools and techniques are used to create the quality plan. Few of these t ools and techniques are briefly described in this article. Here are some over vi ews:Benchmark: Deciding on the present product standards by comparing with the perfo rmances of similar products which is already exist in the market. Cost of Quality: The total cost of quality is a summation of prevention, apprais al and failure costs. Design of Experiments: Statistical data can be used to determine the factors inf luencing the Quality of the product.

Other tools: There are various tools used in the Planning process such as Cost B enefit Analysis, Cause and Effect Diagrams, System Flow Charectistics. All of th e above key points aids in the formation of a Quality Management Plan for a part icular project. 2. Quality Assurance: Quality Plan which is created during planning is the input to Quality Assurance Process. The Assurance stage is having the following inputs: 1. 2. Quality Audit s Various Techniques used to evaluate performance of project Quality Assurance Process helps us to ensure that the Project is following the Q uality Management Plan. The tools and techniques which are used in Planning Proc ess such as System Flow Charectistics, Design of Experiments, Cause and Effect D iagrams can be implemented here too, as per requirements. 3. Quality Control: Th e next step to Quality Assurance Process is Quality Control. The Control stage i s having following inputs: 1. Quality Management Plan. 2. Quality Standards for the Project. 3. Actual Observations and Measurements of the work done or work in Progress. The Quality Control Processes use various tools to Observe and Measur e if the work done or not. If the Work done and it is found that the deliverable is not satisfactory then it can be sent back to the development team for fixes. If the work done meets the requirements as defined then it is accepted and rele ased to the clients.

Q.5 Write short note on the following Project Management tools: a. Quality Certifica tion b. Strategic inflection point c. Force field analysis d. Information risk m anagement Ans. Quality Certification Quality certification has become extremely important in competitive markets and especially in gaining foothold in exports. To avail t he certification of ISO-9000, a unit has to undertake significant costs; the sma ll scale industries have been found wanting mainly on account of resource crunch to implement quality systems to obtain this certification. However, as a paradi gm shift, SSI must make Quality a way of life. It has been decided to push the quality upgradation programme in the SSI Sector in a big way. A scheme has been launched to give financial incentive to those SSI units who acquire ISO-9000 ce rtification, by reimbursing 75% of their costs of obtaining certification, subje ct to a maximum of Rs. 0.75 lacs per unit. In order to promote modernisation and technology upgradation in SSI, the units are assisted in improving the quality of their products. A new scheme has been launched to assist SSI units in obtaini ng ISO-9000 or an equivalent international quality standard. Subject to an upper ceiling of Rs. 075 lacs, each unit is given financial assistance equal to 75% o f the costs incurred in acquiring the quality standard. The SSI units are also e ncouraged to participate in quality awareness and learning programmes organised specially for their benefit. Strategic inflection point Point at which a corporation facing a new situation m ust alter the path it is on and adapt, or fall into decline. The term was coined by Hungarian-born US computer entrepreneur Andy Grove, chairman of microprocess or company Intel. Grove believes strategic inflection points occur when a compan y s competitive position goes through a transition. The idea concerns how compan ies recognize and adapt to paradigm changes. At a strategic inflection point the way a business operates, and the concept of it as a business, undergoes a chang e.

Force field analysis Force field analysis is an influential development in the f ield of social science. It provides a framework for looking at the factors (forc es) that influence a situation, originally social situations. It looks at forces that are either driving movement toward a goal (helping forces) or blocking mov ement toward a goal (hindering forces). The principle, developed by Kurt Lewin, is a significant contribution to the fields of social science, psychology, socia l psychology, organizational development, process management, and change managem ent. Lewin, a social psychologist, believed the "field" to be a Gestalt psycholo gical environment existing in an individual s (or in the collective group) mind at a certain point in time that can be mathematically described in a topological constellation of constructs. The "field" is very dynamic, changing with time an d experience. When fully constructed, an individual s "field" (Lewin used the te rm "life space") describes that person s motives, values, needs, moods, goals, a nxieties, and ideals. Lewin believed that changes of an individual s "life space " depend upon that individual s internalization of external stimuli (from the ph ysical and social world) into the "life space." Although Lewin did not use the w ord "experiential," (see experiential learning) he nonetheless believed that int eraction (experience) of the "life space" with "external stimuli" (at what he ca lls the "boundary zone") were important for development (or regression). For Lew in, development (or regression) of an individual occurs when their "life space" has a "boundary zone" experience with external stimuli. Note, it is not merely t he experience that causes change in the "life space," but the acceptance (intern alization) of external stimuli. Lewin took these same principles and applied the m to the analysis of group conflict, learning, adolescence, hatred, morale, Germ an society, etc. This approach allowed him to break down common misconceptions o f these social phenomena, and to determine their basic elemental constructs. He used theory, mathematics, and common sense to define a force field, and hence to determine the causes of human and group behavior. Information risk management Information Risk Management follows information as i t is created, distributed, stored, copied, transformed and interacted with throu ghout its lifecycle. Three Pillars to an Information Risk Strategy 1) Informatio n-centric approach: Begin by understanding what information is critical to key b usiness initiatives, such as growth through acquisitions or expanding partnershi ps. Then diligently

follow the data to gain a more holistic view of all the places where it exists acr oss the organization, where the points of vulnerability are, and what events cou ld put your business at risk. 2) Risk/Reward analysis: Security investments shoul d be prioritized, based on the amount of risk a given activity entails relative to the potential business reward, and in keeping with the organizations appetite for risk. 3) Ensuring repeatability: Once enterprise information has been locate d and a risk assessment performed, the next step is to implement controls includ ing policies, technologies, and tools to mitigate that risk. Here, organizations often turn to frameworks like ISO 27002 and the PCI Data Security Standard. Q.6 List and describe in brief the various types of review used for improving perfor mance of a project. Ans. Performance Measurement Most of us have heard some version of the standard performance measurement cliches: what gets measured gets done, if you dont measure results, you cant tell success from failure and thus you cant claim or reward succ ess or avoid unintentionally rewarding failure, if you cant recognize success, you cant learn from it; if you cant recognize failure, you cant correct it, if you cant easure it, you can neither manage it nor improve it," but what eludes many of us is the easy path to identifying truly strategic measurements without falling ba ck on things that are easier to measure such as input, project or operational pr ocess measurements. Performance Measurement is addressed in detail in Step Five of the Nine Steps to Success methodology. In this step, Performance Measures are developed for each of the Strategic Objectives. Leading and lagging measures are identified, expected targets and thresholds are established, and baseline and b enchmarking data is developed. The focus on Strategic Objectives, which should a rticulate exactly what the organization is trying to accomplish, is the key to i dentifying truly strategic measurements. Strategic performance measures monitor the implementation and effectiveness of an organization s strategies, determine the gap between actual and targeted performance and determine organization effec tiveness and operational efficiency.

Good Performance Measurement Focus employees attention on what matters most to success Allow measurement of accomplishments, not just of the work that is performed Provide a common languag e for communication Are explicitly defined in terms of owner, unit of measure, c ollection frequency, data quality, expected value(targets), and thresholds

Are valid, to ensure measurement of the right things Are verifiable, to ensure d ata collection accuracy Problems in Performance Appraisals: discourages teamwork evaluators are inconsistent or use different criteria and s tandards only valuable for very good or poor employees encourages employees to a chieve short term goals managers has complete power over the employees too subje ctive produces emotional anguish Solutions Make collaboration a criterion on which employees will be evaluated Provide trai ning for managers; have the HR department look for patterns on appraisals that s uggest bias or over or under evaluation

Rate selectively (introduce different or various criteria and disclose better pe rformance and coach for worst performer without disclosing the weakness of the c andidate) or increase in frequency of performance evaluation.

Include long term and short term goals in appraisal process Introduce M.B.O.(Man agement By Objectives) Make criteria specific and test selectively{Evaluate spec ific behaviors or results} Focus on behaviors; do not criticize employees; condu ct appraisal on time.