CWA/ICWA Final :: Operations and Project Management & Control : June 2006

F-13(OPM)
Revised Syllabus

Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks
Answer Question No. 1 & Question No. 7, which are compulsory and any two other
questions from Section I and any two other from Section II.
Please answer all the bits of a question at one place.
Section I
Marks
1. (a) Choose the correct answer from the alternatives given and indicate your answer as (a) or (b) or (c) or (d);
(i)Relaxation Allowances are considered in:
(a)Time Study(b)Method Study(c)Ergonomic Study(d)Feasibility Study.
(ii)ABC Analysis is normally used in:
(a)Statistical Quality Control(b)Production Planning & Control
(c)Value analysis(d)Inventory Control.
(iii)Continuous Improvement Programme in Japan is known as:
(a)Jishu Kanri(b)Kaizen(c)Kanban(d)5 S.
(iv)Cost Reduction can be achieved through:
(a)Work Sampling(b)Value Analysis
(c)Quality Assurance(d)Supply Chain Management.
(v)

Linear Programming is a technique used for determining:

(a)Production Programme(b)Plant Layout
(c)Product Mix(d)Manufacturing Sequence.
 1x5
(b) Match each item in the left hand column with an appropriate item in the right hand column:
(A)Productivity(i)Means for customers delight
(B)Life Time Value(ii)Maintenance System
(C)Economic Utility(iii)Open Health System
(D)Failure Analysis(iv)Selection of Equipment
(E)Steel Plant(v)Work Study
 1x5
(c) Fill in the blanks with appropriate words:
(i)Installed capacity should be based on number of ________
(ii)Surface treating process can be either ________ or chemical;
(iii)Metal powders are obtained by ________ of metals to powder;
(iv)Organic coatings are commonly used to improve resistance to ________
(v)Standard time is always more than ________ time.
 1x5
(d) Define the following terms under (i), (ii) & (iii) in just a sentence/two:
(i)
(ii)
(iii)		Efficiency;
effectiveness;
Economy;
(iv)Just name three "New Technologies" available for Intermittent Production Processes.
(v)Just name three "New Technologies" available for continuous Flow Production Process.
 1x5
Please turn over

( 2 )

F-13(OPM)
Revised syllabus		 Marks
2. (a) What are the advantages of "Diversification"? 5
(b) Should the following industries "Simplify" or "Diversify" and why?
 (i) Automobile;
(ii) Cosmetic.		 5x2
3. (a) Draw a comparison between "Type Grouping" and "Sequence Grouping" of machines in a factory. 6
(b) A warehouse handles 60,00,000 cases each of inbound and outbound shipments per year, operating two shifts a day, five days a week. (Each shift is of 8 hours durations). 70% of inbound shipments and 90% of outbound shipments are by trucks. 9
the truck loading rate is 175 outbound cases per worker-hour while the unloading rate is 200 inbound cases per worker-hour.
A truck carries 500 cases for both inbound and outbound shipments.
A 25% safety factor is desired since flow of the trucks throughout the month is not uniform.
The trucks stand at the entry to the warehouse while being loaded or unloaded. The warehouse manager wants to design a new warehouse with sufficient number of truck entries to the warehouse to handle the operations mentioned above.
Please calculate the number of truck-entries the warehouse should have, from the data given above, assuming that the width of the entry permits only one truck entries to the warehouse to handle the operations
Please calculate the number of truck-entries the warehouse should have, from the data given above, assuming that the width of the entry permits only one truck to be loaded or unloaded at a time.
4. (a) A Media company proposes to build a new office in one of the three locations.
Using the data below, determine the best location. Please assume the following values:
Excellent = 10, V. Good = 8, Good = 6, Fair = 4 and Poor = 2.		 9
 Rating FactorLocation
1		Location
2		Location
3		Weight
(A)
(B)
(C)
(D)
(E)
(F)
(G)		 Living Standard
Labour Relations
Govt. aid
Schooling System
Distance to Customers
Distance to Suppliers
Revenue Contribution		 Excellent
Good
V. Good
Fair
V. Good
Poor
V. Good		 Good
Fair
Good
Excellent
Poor
Good
Excellent		 Fair
Excellent
Poor
Good
Excellent
V. Good
Good		 30
10
5
15
10
10
20
(b) A crane wheel assembly is made of cast steel wheel and two gun metal bushes. Find the cost of the assembly assuming no special tooling are required and using the details given below: 6
  Cast WheelGun Metal Bush
(i)
(ii)
(iii)
(iv)
(v)

 Weight of each raw casting
Material Cost/Kg.
Sale Price of Scrap/Kg.
Finished weight/unit after machining
Machine hours required per unit:
(a) Boring M/c
(b)Lathe		 25 Kg.
20 Rs.
4 Rs.
20 Kg.

6 hrs.
—		 3 Kg.
60 Rs.
40 Rs.
2 kg.

—
1.5 hrs.
Machine Hour Rates are Rs. 40/hour for Boring.
Machine Hour Rates are Rs. 20/hour for Turning.
Assembly takes ½ hr. costs Rs. 10/hour and consumes hardware worth Rs. 5/-.
Please turn over

( 3 )

F-13(OPM)
Revised syllabus
Marks
5. (a) "Giving instructions is an Art". Justify the statement by discussing the characteristics of good instructions. 8
(b) A company has sales of Rs. 100 lakhs of which 70% represents variable costs. Fixed costs are Rs. 20 lakhs. If sales are now increased by 10%, what will be the improvement in profit?
On the other hand, if due to improved productivity, variable costs are decreased by 10%, what will be the profit?
Compare the present profit with those under the cases as cited above.
What is your recommendation?		 7
6. Write short notes on any three out of the following:
(i)Six Sigma Quality Programme.(ii)Job Enrichment.(iii)Process Planning.(iv)Route Card.
(v)Standardisation.
 5x3
Section II
7. (a) Expand the following acronyms:
(i)LD(ii)BOLT(iii)COD(iv)PG(v)BCWS.
 1x5
(b) Match the following
(A)Supplier's Credit(i)PERT Network
(B)Early Start Schedule(ii)Consumption level Method
(C)Risk Analysis(iii)Project Management Software
(D)Demand Forecasting(iv)Raw Material Stores
(E)Success Planned(v)Project viability
 1x5
(c) Mention whether the following statements are "True" or "False":
(i)Brown Field Project means revamping or renovating a running plant.
(ii)Employer provides the design in an EPC Contract.
(iii)Independent Float of an Activity is the difference between the Total Float of the Activity and its Head Slack.
(iv)In a Matrix Organisation, authority is shared between the Project Manager and the Functional Managers.
(v)Pre-operative expenses are those which are incurred till the date of commencement of the Project.
 1x5
(d) Distinguish between: 2+2+1
(i)CAT & RAT Schedules(ii)Sensitivity Analysis & Risk Analysis(iii)BOO & BOT Projects
8. A Project has nine activities with their durations as given below: 15
SI. No.ActivityEstimated Duration in Days
  OptimisticMost LikelyPressimistic
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)		 1—2
1—3
1—4
2—5
3—7
4—6
5—7
7—8
6—8		 3
2
2
6
3
3
5
1
4		 6
5
5
12
6
9
11
4
19		 15
8
14
30
15
27
17
7
28
(a) What is the probability that the project will be completed in 41 days?
(b) What is the expected duration of the project, if it has to be completed with a probability of 80%?
(c) What is the expected duration of completing the activity 6—8 with a probability of 65%?
(d) What is the probability of completing the activity 2—5 in 16 days?
Please turn over

( 4 )

F-13(OPM)
Revised syllabus		 Marks
The cumulative value of probability, G(z) (areas of the cumulative standard normal distribution—cumulated from the negative tail) at some values of 'z' in the normal probability distribution table are given below:
'z':
G(z):		 0.00
0.50		 0.10
0.54		 0.20
0.58		 0.30
0.62		 0.40
0.65		 0.50
0.69		 0.60
0.73		 0.70
0.76		 0.80
0.79		 0.90
0.81		 1.00
0.84		 0.10
0.86
9. (a) Enumerate the factors that can lead to wrong results while conducting a market survey using a Questionnaire. 6
(b) A carpet stores has kept the following record of sales of carpets vis-a-vis the housing permits that the municipality of the town gave in each of the past nine years: 9
YearNo. of Housing PermitsCarpet Sales (Sq. Yds.)
1997
1998
1999
2000
2001
2002
2003
2004
2005		 18
15
12
10
20
28
35
30
20		 13,000
12,000
11,000
10,000
14,000
16,000
19,000
17,000
13,000
The Store Manager feels that the sales of carpets have a linear relationship with the number of housing permits issued by the municipality. Forecast the carpet sales in the Year 2006, if the number of housing permits is estimated to be 25 in 2006.
10. Superior Engineering proposes a Project with the following data: 15
(i) Total Outlay: Rs. 450 Lakhs (Rs. 250 Lakhs of Fixed Assets and Rs. 200 Lakhs of Current Assets).
(ii) Scheme of Financing: Rs. 100 Lakhs, Equity, Rs. 200 Lakhs Term Loan, Rs. 100 Lakhs Working Capital Advance and Rs. 50 Lakhs Trade Creditors.
(iii) Interest rates: Term Loan—12% p.a. and Working Capital Advance: 15% p.a.
(iv) Term Loan is repayable in 5 equal instalments, commencing from 3rd year of operations. (Assume that instalment for each year is paid on the last day of the year).
(v) Depreciation: 30% on Written Down Value.
(vi) Production is expected to reach 60% of capacity in the 1st year of operations, 70% in the 2nd year and 80% from 3rd year onwards.
(vii) Expected revenue from the project will be Rs. 500 Lakhs p.a. on 100% capacity utilisation and corresponding Direct Costs are Rs. 200 Lakhs. Fixed Costs are Rs. 100 Lakhs p.a. Working Capital advance of Rs. 100 Lakhs is on 80% capacity and proportionately reduced in the first two years.
(viii) Tax Rate applicable is 50%.
Assuming that each year's production is sold away in the same year, draw the projected Profit & Loss Account for each year of operation and the operational cash flow. Also calculate the Debt Service Coverage Ratio.
11. (a) Draw a schematic diagram showing various activities involved in the feasibility study of a project. 7
(b) A new project is being set up by ABC Ltd. The company plans to achieve 80% capacity in the third year of operation, when the expected sales will be 64,000 units and the selling price Rs. 15/- per unit. The corresponding variable costs and fixed costs are estimated at Rs. 5,76,000 and Rs. 3,00,000 respectively. Calculate the following from the given data: 8
(i)P/V Ratio;
(ii)Break-Even Point in terms of Sales Volume, % Capacity & Sales Revenue; and
(iii)Margin of Safety.
12. Write short notes on any three out of the following:
(i)Taxonomy of Projects;
(ii)Zero Date of a Project;
(iii)Keyman Insurance;
(iv)Retention Money;
(v)Resource Optimisation.
 5x3

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