CWA ICWA Final Stage III : Operations and Project Management and Control - June 2009

CWA ICWA - Final Stage III • Operations and Project Management and Control • June 2009

This Paper has 55 answerable questions with 0 answered.

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. 6, 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

The figures in the margin on the right side indicate full marks.

Answer Question No. 1 & Question No. 6, 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

(a)

Match each item in the left hand Column A with an appropriate item in the right hand Column B.

Column A		Column B
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J)	Broaching Phosphating SIMO Chart Kanban Phonotics Tail Stock Motor Brushes Robotics Soldering Minimum level of production	(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x)	Break–Even Analysis Metal joining Flow Control System Job holding device Powder Metallurgy Micromotion Study Surace treatment Metal Cutting Transmission of digital information Automation

½x10=5

(0)

(b)

Expand the following acronyms:

1x5

(i)

CRM

(0)

(ii)

DS/RO

(0)

(iii)

TOT

(0)

(iv)

PPM

(0)

(v)

CADD

(0)

(c)

State whether the following statements are True/False

½x10=5

(i)

Increased production always leads to increased productivity.

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(ii)

Jigs are job holding devices.

(0)

(iii)

Sampling Inspection is adopted in case of destructive tests.

(0)

(iv)

Cast iron cannot be forged.

(0)

(v)

Job analysis succeeds job evaluation.

(0)

(vi)

MRP is a marketing technique.

(0)

(vii)

Teeth of a Gear Wheel cannot be formed on a Milling M/c.

(0)

(viii)

FMS is a hybrid between intermittent and continuous flow.

(0)

(ix)

Kaizen is an essential part of TQM.

(0)

(x)

VED analysis is employed for Spare–parts Inventory.

(0)

(d)

Define the following terms in not more than one/two sentences:

1x5

(i)

Efficiency

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(ii)

Effectiveness

(0)

(iii)

Economy

(0)

(iv)

Scheduling

(0)

(v)

Installed Capacity

(0)

(a)

Why is "Logical Planning" incorporated along with "Facilities Planning"?

(0)

(b)

A company is engaged in drilling and tapping of spark plugs for supply to an automobile company. The operations are performed on a CNC 3–Axis drilling and tapping center.
The CNC Cycle time is as follows:

Drilling time
Total tapping time
ATC tool changing time

: 45 seconds
: 1 minute 30 seconds
: 25 seconds

For feeding the spark plugs, the company designed a special fixture holding 10 plugs at a time and set up time by the operator for the 10 plugs is 1 minute 20 seconds.

The machine cycle time shown above includes the movement time of each spark plug also. The company has decided to augment capacity due to an additional order from an automobile co., to the extent of 1.10 lakhs spark plugs per year. Assuming that manpower is no constraint, How many additional drilling tapping centers the company should procure under the Augmentation Plan?

Average rejections % is 2% of the produced spark plugs in drilling–tapping centers. Assume 300 working days/year of 8 hrs. per day. Please note that 20% time, the drilling and tapping centers are not available due to preventive maintenance and the utilization is 70% of the available time due to power and service line shut downs.

(0)

(a)

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?

(0)

(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 toolings are required and using the details given below:

		Cost Wheel	Gun 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	25kg. Rs.20 Rs.4 20 kg. 6 hrs. –	3kg. Rs.60 Rs.40 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 ½hrs., costs Rs.10/hour and consumes hardware worth Rs.5/–.

(0)

(a)

Under what circumstances an Industry can show financial loss despite high productivity?

(0)

(b)

A heavy structural engineering company is manufacturing 4 products viz., A, B, C and D. There are 800 direct workers averaging 250 days per annum. The working hours in the company is 8 hrs. and as a policy, there is no O.T.

The company runs an Incentive Scheme based on "Value Added" calculated by reducing the material cost from the Sales revenue. According to the scheme 1% of the "Value Added" is to be distributed amongst the workers proportional to their basic wages.
An analysis of the past record reveals the following:

Item	Sales Revenue/ Unit (Rs. in lakhs)	Material Cost/ Unit (Rs. in Lakhs)	Man Hours per Unit
A	12	6	1200
B	4	2	600
C	20	11	1600
D	8	5	800

Management wants to know the amount of average incentive per direct labour per month individually for each of the item and expect you to comment on the same from operation control point of view.

(0)

Write short notes on any three out of the following:

5x3

(a)

Six Sigma Quality Program.

(0)

(b)

Job Enrichment.

(0)

(c)

Process Planning.

(0)

(d)

Route Card.

(0)

(e)

Standardization.

(0)

SECTION II

SECTION II

(a)

Expand the following acronyms:

1x5

(i)

(0)

(ii)

BOLT

(0)

(iii)

COD

(0)

(iv)

(0)

(v)

BCWS

(0)

(b)

Match the following:

Column I		Column II
(A) (B) (C) (D) (E)	Supplier’s Credit Early Start Schedule Risk Analysis Demand Forecasting Success Planned	(i) (ii) (iii) (iv) (v)	PERT Network Consumption level Method Project Management Software Raw Material Stores Project viability

1x5

(0)

(c)

Mention whether the following statements are "True" or "False":

1x5

(i)

Brown Field Project means revamping or renovating a running plant.

(0)

(ii)

Employer provides the design in an EPC Contract.

(0)

(iii)

Independent Float of an Activity is the difference between the Total Float of the Activity and its Head Slack.

(0)

(iv)

In a Matrix Organization, authority is shared between the Project Manager and the Functional Managers.

(0)

(v)

Pre–operative expenses are those which are incurred till the date of commencement of the project.

(0)

(d)

Distinguish between:

2+2+1

(i)

CAT & RAT Schedules

(0)

(ii)

Sensitivity Analysis & Risk Analysis

(0)

(iii)

BOO & BOT Projects

(0)

You answer should be in one or two sentences only.

A Project has nine activities with their durations as given below:

SI.No.	Activity	Estimated Duration in days
SI.No.	Activity	Optimistic	Most likely	Pessimistic
(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 16days?

The cumulative values 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’	0.00	0.10	0.20	0.30	0.40	0.50	0.60	0.70	0.80	0.90	1.00	1.10
G(z)	0.50	0.54	0.58	0.62	0.65	0.69	0.73	0.76	0.79	0.81	0.84	0.86

3+4+4+4

(0)

(a)

Five projects, M, N, O, P and Q are available to a company for consideration. The investment required for each project and the cash flows it yields are tabulated below. Projects N and Q are mutually exclusive. Taking the cost of capital @ 10%, which combination of projects should be taken up for a total capital outlay not exceeding Rs.3 lakhs on the basis of NPV and BCR (Benefit–Cost–Ratio)?

(0)

(b)

The occurrence of rain in a city on a day is dependent upon whether or not it rained on the previous day If it rained on the previous day, the rain distribution is given by:

Event	Probability
No rain	0.50
1 cm rain	0.25
2 cm rain	0.15
3 cm rain	0.05
4 cm rain	0.03
5 cm rain	0.02

If it did not rain on the previous day, the rain distribution is given by:

Event	Probability
No rain	0.75
1 cm rain	0.15
2 cm rain	0.06
3 cm rain	0.04

Simulate the city’s weather for 10 days and determine by simulation the total days without rains as well as the total rainfall during the period.
Use the following random numbers only for simulation:
67, 63, 39, 55, 29, 78, 70, 06, 78, 76.
Assume that for the first day of the simulation, it had not rained the day before.

(0)

Superior Engineering proposes a Project with the following data:

(i)	Total Quality: 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 Rate: Term Loan 12% p.a. and Working Capital Advance 15% p.a.
(iv)	Term Loan is repayable in 5 equal installments, commencing from 3rd year of operations. (Assume that installment 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 the 3rd year onwards.
(vii)	Expected revenue from the project will be Rs.500 lakhs p.a. on 100% capacity utilization 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.

(0)

10.

Write short notes on any three out of the following:

5x3

(a)

Taxonomy of Projects;

(0)

(b)

Zero Date of a Project;

(0)

(c)

Key man Insurance;

(0)

(d)

Retention Money;

(0)

(e)

Resource Optimization.

(0)

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