CMA Inter Suggested Answers | Dec 25 Paper 9 Operations Management and Strategic Management

(i) With reference to the operations of RN Ltd., a manufacturing company, one of the important decisions is “How to reach the products to the Customers”? Which one of the following is related to this?

1. Delivery planning
2. Process Selection & Layout
3. MRP
4. Aggregate Planning

Solution:

View solution in koncept education app - Download App

(ii) The ISO standard associated with “Quality Management and Quality System Elements – Guidelines” is

1. ISO 9001
2. ISO 9002
3. ISO 9003
4. ISO 9004

Solution:

View solution in koncept education app - Download App

(iii) In a particular plant there are 15 workers manufacturing a single product and the output per month consisting of 25 days of that particular product is 450 units. How much is the monthly productivity?

1. 30 units
2. 18 units
3. 15 units
4. 25 units

Solution:

View solution in koncept education app - Download App

(iv) In which phase of the product life cycle the objective is to hold the existing customers and create new customers?

1. Maturity phase
2. Introduction phase
3. Growth phase
4. Decline phase

Solution:

View solution in koncept education app - Download App

(v) Gantt Chart is a principal tool used in –

1. Scheduling
2. Loading
3. Planning
4. Routing

Solution: (A) Scheduling

Choice 'A' is correct as--

Gantt Chart is a principal tool used in:

Scheduling.

A Gantt chart is a visual representation of a project schedule, showing the start and finish dates of various elements of a project. It is widely used for scheduling tasks in project management, helping to track progress and allocate resources efficiently

(vi) Which one of the following processes of Project Quality Management assures the existence and effectiveness of process and procedures tools?

1. Quality definition
2. Quality Assurance
3. Quality Control
4. Quality Improvement

Solution:

View solution in koncept education app - Download App

(vii) The Slack Time of Tail Event of Activity – D of a Project is 1 day. If the total Float and Free Float of the activity D are 8 days and 6 days respectively, the Independent Float of D will be

1. 3 Days
2. 4 Days
3. 5 Days
4. None of the above

Solution:

View solution in koncept education app - Download App

(viii) Which one of the following is not the primary constraint of a project?

1. Time
2. Cost
3. Machine
4. Quality

Solution:

View solution in koncept education app - Download App

(ix) Preventive Maintenance is useful in reducing

1. Inspection Cost
2. Shutdown Cost
3. Cost of premature replacement
4. Set-up Cost of Machine

Solution: (B) Shutdown Cost

Choice 'B' is correct as--

Preventive maintenance is useful in reducing:

Shutdown Cost.

Preventive maintenance helps in identifying and addressing potential issues before they lead to equipment failure, thereby minimizing unplanned downtimes and the associated costs of production halts. This reduces the likelihood of costly shutdowns and ensures smoother, continuous operations.

(x) A workshop of Gear Tech (I) Ltd. has 20 nos. of identical machines. From the failure pattern of the machines, it is calculated that the expected time before failure is 4 months. It costs ₹500 to attend a failure machine and rectify the same. What will be the yearly cost of servicing the broken-down machines?

1. ₹50,000
2. ₹30,000
3. ₹32,000
4. ₹10,000

Solution:

View solution in koncept education app - Download App

(xi) The Strategy which is about how to compete successfully in particular markets is:

1. Corporate Strategy
2. Operational Strategy
3. Business Strategy
4. Functional Strategy

Solution:

View solution in koncept education app - Download App

(xii) Which among the following provide(s) the standards for performance appraisal?

1. Mission
2. Vision
3. Values
4. Objectives

Solution: (D) Objectives

Choice 'D' is correct as--

Objectives act as the clear, measurable benchmarks against which employee performance is evaluated.

They provide specific targets that help assess how well an individual has performed during a given period.

Mission, vision, and values guide overall organisational direction, but they do not offer quantifiable standards for appraisal.

Since performance appraisal requires concrete and assessable criteria, objectives directly serve this purpose.

Therefore, objectives provide the standards for performance appraisal.

(xiii) In the “SMART goal framework” the letter “S” stands for:

1. Specific
2. Strategy
3. Skill
4. Social

Solution:

View solution in koncept education app - Download App

(xiv) Environment is ________

1. complex
2. dynamic
3. multi-faceted
4. All of the above

Solution: (D) All of the above

Choice 'D' is correct as--

The business environment is considered complex because it consists of many interconnected factors.

It is multi-faceted since the same event can affect different organisations in different ways.

It is also dynamic because changes occur continuously due to technology, competition and policies.

All these characteristics together define the nature of the business environment.

Hence, the correct answer is option D.

---

Section B

Question 2 (A):

“Recent trends in Production and Operations Management relate to global competition” – With reference to this Statement, Align seven of the recent trends in Production and Operations Management.

Solution:

Recent trends in production / operations management relate to global competition and the impact it has on manufacturing firms. Some of the recent trends are :

(1) Global Market Place : Globalisation of business has compelled many manufacturing firms to have operations in many countries where they have certain economic advantages. This has resulted in a steep increase in the level of competition among manufacturing firms throughout the world.

(2) Production / Operations Strategy : More and more firms are recognizing the importance of production / operations strategy for the overall success of their business and the necessity for relating it to their overall business strategy.

(3) Total Quality Management (TQM) : TQM approach has been adopted by many firms to achieve customer satisfaction by a never-ending quest for improving the quality of goods and services.

(4) Flexibility : The ability to adapt quickly to changes in volume of demand, in the product mix demanded, and in product design or in delivery schedules, has become a major competitive strategy and a competitive advantage to the firms. This is sometimes called as agile manufacturing.

(5) Time Reduction : Reduction of manufacturing cycle time and speed to market for a new product provide competitive edge to a firm over other firms. When companies can provide products at the same price and quality, quicker delivery (short lead times) provide one firm competitive edge over the other.

(6) Technology : Advances in technology have led to a vast array of new products, new processes and new materials and components. Automation, computerisation, information and communication technologies have revolutionised the way companies operate.

(7) Worker Involvement : The recent trend is to assign responsibility for decision making and problem solving to the lower levels in the organisation. This is known as employee involvement and empowerment.
Examples of worker involvement are quality circles and use of work teams or quality improvement teams.

(8) Re-engineering : This involves drastic measures or break-through improvements to improve the performance of a firm. It involves the concept of clean-slate approach or starting from scratch in redesigning the business processes.

(9) Environmental Issues : Today's production managers are concerned more and more with pollution control and waste disposal which are key issues in protection of environment and social responsibility.

(10) Corporate Downsizing (or Right Sizing) : Downsizing or right sizing has been forced on firms to shed their obesity. This has become necessary due to competition, lowering productivity, need for improved profit and for higher dividend payment to shareholders.

(11) Supply - Chain Management : Management of supply-chain, from suppliers to final customers reduces the cost of transportation, warehousing and distribution throughout the supply chain.

(12) Lean Production : Production systems have become lean production systems which use minimal amounts of resources to produce a high volume of high quality goods with some variety.

Question 2 (B):

“Likewise, the Business Organisations and Human Beings, each product has a life that goes through various phases or cycles” – In this Context, Analyze and Align the Prospective Phases of Product Life Cycle.

Solution:

View solution in koncept education app - Download App

Question 3 (A):

STEEL MAX Ltd. invested in a precision laser cutting machine with a purchase cost of ₹5,00,000 and an installation cost of ₹50,000. The resale value remains fixed at ₹60,000 throughout its life. However, maintenance costs increase with age. The management is analyzing over a 10-year span to determine the most cost-effective replacement year.

(Ignore Cost of Money)

Required :

(i) Analyze Average Annual Cost of replacement of cutting machine for each year.

(ii) Assess and Identify after how many years should Steel Max Ltd., replace the cutting machine on economic considerations.

Solution:

View solution in koncept education app - Download App

Question 3 (B):

FRESHWEAR Clothing Co. shifted its marketing strategy to focus heavily on digital outreach. The management wants to examine how their monthly sales are influenced by the number of social media ad impressions (in Crore). They collected the following data over the last six months:

Required :

(i) Fit a linear regression of Sales (Y) on Ad. Impressions (X)

(ii) If FRESHWEAR plans to run a campaign that reaches 5 Crore (Nos.) impressions, forecast their expected monthly sales using simple linear regression

Solution:

View solution in koncept education app - Download App

Question 4 (A):

AUTO BUILD Ltd. specializes in high-precision car components. The production manager wants to assign four skilled workers – R, A, N and Z – to four complex assembly jobs: GA, BS, EM and EF. Each worker has different time efficiencies for each job (in hours). The goal is to assign one job to each worker to minimize the total time required.

Required :

(i) Analyze and Assign the appropriate job to each worker to minimize the total work hours.

(ii) Assess what is the minimum total time required to finish the jobs.

Solution:

View solution in koncept education app - Download App

Question 4 (B):

Solution:

View solution in koncept education app - Download App

Question 5 (A):

ROTIS Ltd., a manufacturing company produces two types of products: Super and Regular.

Resource requirements for production are given below in the table.

There are 16000 hours of assembly worker hours, 7000 hours of paint time and 3000 hours of inspection time available per week.

Regular customers will demand at least 500 units of the Regular type and 200 units of Super type.

Required :

Develop a mathematical formulation of L.P.P. to determine how many products should be produced to maximize the profit.

(You are not required to solve the LPP.)

Solution:

View solution in koncept education app - Download App

Question 5 (B):

SWIFT TRANS LOGISTICS Ltd. is planning a distribution centre expansion.

The operation manager has split their schedule of implementation into the following 6 activities and have estimated time duration (in weeks) under 3 scenarios as under:

(Time in Weeks)

Required :

(i) Assess the expected duration (in weeks) for each activity.

(ii) Design the PERT Network Diagram and indicate all paths through it.

(iii) Identify the Critical Path and its duration (in weeks).

(iv) Analyze and indicate the variance of each activity.

Solution:

View solution in koncept education app - Download App

Question 6 (A):

“The goal is to achieve quantity and quality of effort between individuals’ and the team” – In this context, analyze and append the details regarding the SMART goal framework to create organizational objectives

Solution:

View solution in koncept education app - Download App

Question 6 (B):

“BLOCKCHAIN is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network” – In this context, Examine and Align the important components of a BlockChain.

Solution:

View solution in koncept education app - Download App

Question 7 (A):

Summarize, in brief, a detailed explanation of the PESTEL Framework

Solution:

View solution in koncept education app - Download App

Question 7 (B):

“The Formal Strategic Planning process has five main steps” – In accordance to this statement, Examine and Align the respective steps of Strategic Planning process.

Solution:

Question 8 (A):

What do you infer from Project-based Structures? Align the advantages and disadvantages of project based structures.

Solution:

A project-based structure is one where teams are created, undertake the work and are then dissolved. This can be particularly appropriate for organisations that deliver large and expensive goods or services (civil engineering, information systems, films) or those delivering time-limited events (conferences, sporting events or consulting engagements). The organisation structure is a constantly changing collection of project teams created, steered and glued together loosely by a small corporate group. Many organisations use such teams in a more ad hoc way to complement the ‘main’ structure. For example, taskforces are set up to make progress on new elements of strategy or to provide momentum where the regular structure of the organisation is    not effective. 

Advantages of Project-based structures

• The project-based structure can be highly flexible, with projects being set up and dissolved as required.
• Accountability and control are good because project teams should have clear tasks to achieve within a defined life.
• Projects can be effective at knowledge exchange as project team members will typically be drawn from different departments within the firm.
• Projects can also draw members internationally and, because project life spans are typically short, project teams may be more willing to work temporarily around the world.

Disadvantages of Project-based structures

• Without strong programme management providing overarching strategic control, organisations are prone to proliferate projects in an ill-coordinated fashion.
• The constant breaking up of project teams can also hinder the accumulation of knowledge over time or within specialisms.

Overall, project-based structures have been growing in importance because of their inherent flexibility. Such flexibility can be vital in a fast-moving world where individual knowledge and competences need to be redeployed and integrated quickly and in novel ways.
Structural choice depends on the strategic challenges the organisation faces. In reality, few organisations adopt a structure that is just like one of the pure structural types discussed above. Structures often blend different types and have to be tailor-made to the particular mix of challenges facing the organisation. Michael Goold and Andrew Campbell provide nine design tests against which to check specific tailor-made structural solutions. The first four tests stress fit with the key objectives and constraints of the organisation:

• The Market-Advantage Test. This test of fit with market strategy is fundamental, following Alfred Chandler’s classic principle that ‘structure follows strategy’. For example, if coordination between two steps in a production process is important to market advantage, then they should probably be placed in the same structural unit.
• The Parenting Advantage Test. The structural design should fit the ‘parenting’ role of the corporate centre. For example, if the corporate centre aims to add value as a synergy manager, then it should design a structure that places important integrative specialisms, such as marketing or research, at the centre.
• The People Test. The structural design must fit the people available. It is dangerous to switch completely from a functional structure to a multidivisional structure if, as is likely, the organisation lacks managers with competence in running decentralised business units.
• The Feasibility Test. This is a catch-all category, indicating that the structure must fit legal, stakeholder, trade  union or similar constraints. For example, after scandals involving biased research, investment banks are now required by financial regulators to separate their research and analysis departments from their deal-making departments. Goold and Campbell then propose five tests based on good general design principles, as follows: 
• The Specialised Cultures Test. This test reflects the value of bringing together specialists so that they can develop their expertise in close collaboration with each other. A structure fails if it breaks up important specialist cultures.
• The Difficult Links Test. This test asks whether a proposed structure will set up links between parts of the organisations that are important but bound to be strained. For example, extreme decentralisation to profit- accountable business units is likely to strain relationships with a central research and development department. Unless compensating mechanisms are put in place, this kind of structure is likely to fail. 
• The Redundant Hierarchy Test. Any structural design should be checked in case it has too many layers of management, causing undue blockages and expense. Delayering in response to redundant hierarchies has been  an important structural trend in recent years.
• The Accountability Test. This test stresses the importance of clear lines of accountability, ensuring the control and commitment of managers throughout the structure. Because of their dual lines of reporting, matrix  structures are often accused of lacking clear accountability. 
• The Flexibility Test. In a fast-moving world, an important test is the extent to which a design will allow for change in the future. For instance, divisional domains should be specified broadly enough to allow divisional managers to follow new opportunities as they emerge. 
• Goold and Campbell’s nine tests provide a rigorous screen for effective structures. But even if the structural design passes these tests, the structure still needs to be matched to the other strands of the organisation’s configuration, its processes and relationships. Each strand will have to reinforce the others.

Question 8 (B):

(i) Critically Assess important reasons that lead an organization to undertake Business Process Re-engineering.

(ii) Discuss four concerns while implementing the Business Process Re-engineering program. 

Solution:

View solution in koncept education app - Download App