I.T.
S School of Management
Mohan Nagar, Ghaziabad
PGDM-II Trimester
End Term Examination – January 2021
Subject: Production & Operations Management
Duration: 2:30 Hrs. Max. Marks: 100
Note: Answer all the questions as directed.
SECTION A
Q. No. 1: Attempt any five questions (5x4 Marks=20 Marks)
A) What is the transformation process? Explain the transformation process in a bank.
B) Define Just in time (JIT) system and explain the basic concept of JIT manufacturing.
C) A factory annually uses 24,000 units of a raw material which costs Rs 1.25 per unit. Placing
each order costs Rs 25/-, while carrying cost is 6% per year of the average inventory. Find the
economic order quantity and the total inventory cost.
D) Differentiate between SDE and FSN methods
E) What do you understand by the bullwhip effect?
F) Differentiate between the terms Production and Operations.
SECTION B
Q. No. 2: Attempt any five questions (5x10 Marks=50 Marks)
A) Describe the classification of process in operation management.
B) Explain Aggregate Production plan and Master production schedule by giving suitable example.
C) Explain in detail the Six Sigma technology of Quality Control.
D) Why the ABC Classification of items is done? How is the ABC distribution curve drawn?
E) Describe the different types of facility layouts.
F) Describe SERVQUAL model of measuring service quality by highlighting the different GAPS?
SECTION C
Q. No. 3: Compulsory Cases (30 Marks)
Disney's global portfolio includes Hong Kong Disneyland (opened 2005), Disneyland Paris
(1992), and Tokyo Disneyland (1983). But, it is Disney World (in Florida) and Disneyland (in
California) that drive profits in this USD 32 billion corporation, which is ranked 54th in the
Fortune 500 and 79th in the Financial Times Global 500.
Revenues at Disney are all about people—how many people visit the parks and how they spend
their money while there. When Robert Iger (CEO) receives a daily report from his six theme
parks in Orlando, the report contains only two numbers: the forecast of yesterday's attendance at
the parks (Magic Kingdom, Epcot, Animal Kingdom, MGM Studios, Typhoon Lagoon, and
Blizzard Beach) and the actual attendance. An error close to zero is expected. Iger takes his
forecasts very seriously.
The forecasting team at Disney World provides daily, weekly, monthly, annual, and 5-year
forecasts to the labour management, maintenance, operations, finance, and park scheduling
departments. Forecasters use judgmental models, econometric models, moving-average models,
and regression analysis.
With 20 per cent of Disney World's customers coming from outside the United States, its
economic model includes such variables as gross domestic product, cross-exchange rates, and
arrivals into the US. Disney also uses 35 analysts and 70 field people to survey one million
people each year. The surveys, administered to guests at the parks and its 20 hotels, to
employees, and to travel industry professionals, examine future travel plans and experiences at
the parks. This helps forecast not only attendance but also behaviour at each ride (for example,
how long people will wait, how many times they will ride). Inputs to the monthly forecasting
model include airline specials, speeches by the chair of the Federal Reserve, and Wall Street
trends.
Disney even monitors 3,000 school districts inside and outside the US for holiday or vacation
schedules. With this approach, Disney's 5-year attendance forecast yields just a five per cent
error on average. Its annual forecasts have a zero per cent to three per cent error.
Attendance forecasts for the parks drive a whole slew of management decisions. For example,
capacity on any day can be increased by opening at 8 A.M. instead of the usual 9 A.M., by
opening more shows or rides, by adding more food and beverage carts (nine million hamburgers
and 50 million Cokes are sold per year!), and by bringing in more employees called “cast
members”. Cast members are scheduled in 15-minute intervals throughout the parks for
flexibility. Demand can be managed by limiting the number of guests admitted to the parks, with
the “fast pass” reservation system, and by shifting crowds from rides to more street parades. At
Disney, forecasting is a key driver in the company's success and competitive advantage.
Every day, managers like those at Disney make decisions without knowing what will happen in
the future. They order inventory without knowing what sales will be, purchase new equipment
despite uncertainty about demand for products, and make investments without knowing what
profits will be. Managers are always trying to make better estimates of what will happen in the
future in the face of uncertainty. Making good estimates is the main purpose of forecasting.
Questions:
A. Briefly describe the steps that are used at Disney World to develop a forecasting system.
B. Regardless of the system it uses, what are the issues the Disney World faces?
C. Explain the different methods of demand forecasting.
