CWA ICWA Final Stage III : Operations and Project Management and Control - December 2007

CWA ICWA - Final Stage III • Operations and Project Management and Control • December 2007

This Paper has 50 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. 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

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

(a)

Expand the following acronyms:

1x5=5

(i)

BOM

(0)

(ii)

OCC

(0)

(iii)

VED

(0)

(iv)

TOT

(0)

(v)

O & M.

(0)

(b)

Match each item in the left hand column with an appropriate item in the right hand column:

(i)
(ii)
(iii)
(iv)
(v)

Activity Sampling
Ergonomics
Fettling
Smithy
Mass Production

(1)
(2)
(3)
(4)
(5)

Forgings
Time Study
Assembly Line
Human Factor Engineering
Shot Blasting

1x5=5

(0)

(c)

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

1x5=5

(i)

Teeth of a Gear Wheel cannot be manufactured on a Milling Machine.

(0)

(ii)

Factor Comparison is a method of Job Evaluation.

(0)

(iii)

Industrial Engineering is a Line Function.

(0)

(iv)

Merit Rating is concerned with rating the "operative" while Job Evaluation is concerned with rating the "job".

(0)

(v)

Group Layout is ideal for Mass Production.

(0)

(d)

Fill up the blanks in the following sentences with appropriate words:

1x5=5

(i)

Method Study should _______ Work Measurement.

(0)

(ii)

Benefit Cost Ratio is the ratio of Present Value of Benefits to the Present Value of _______

(0)

(iii)

A _______ Machine is used to produce a flat surface on a large foundation block.

(0)

(iv)

_______ Conveyors are used for loading cement into bags in a Cement Plant.

(0)

(v)

A project implemented in the precincts of a working plant is known as _______ Project.

(0)

The existing layout of a Finished Goods Stores in a manufacturing organization is as follows:

	2	3	4	5	6
1	7	8	9	10	11
↓	12	13	14	15	16
			↓	(aisles omitted for simplicity)
Receiving/Despatch Area			Packing Area

The other areas (2 to 8 and 10 to 16) are storage areas for different products.

aterial flows between Area 9 and the other 15 sections/areas. Loads are moved to Area 1 only from Area 9. All other loads flow from remaining areas/sections into Area 9. For simplicity, we consider only loads moved to Packing Area 9 from all areas, except the Receiving/Despatch Area 1. The location of Receiving/Despatch Area 1 is fixed and cannot be relocated. All other areas can be considered for relocation.

Average annual loads from each area/section to Area 9 are as follows:

Area
2
3
4

Load
500
100
350

Area
5
6
7

Load
150
150
150

Area
8
10
11

Load
350
250
100

Area
12
13
14

Load
150
250
100

Area
15
16

Load
250
500

From Area 9 to Area 1, average annual loads are 2800. Using the Distance Matrix, arrive at an improved layout.

(0)

Vision Graphics provides copy services for law firms in Mumbai suburbs. Five customers submitted their orders at the beginning of the week. Specific scheduling data are as follows:

Job (In order of arrival)	Processing Time (Days)	Due Date (Days Hence)
A B C D E	3 4 2 6 1	5 6 7 9 2

All orders require the use of the only colour copy machine available. Vision Graphics would like to use the following Priority Rules and decide the best rule for the Job Sequencing, using the evaluation criterion of minimum flow time:

(i)	FCFS (First Come First Served)

(ii)	SOT (Shortest Operation Time)

(iii)

D Date (Due Date)

(iv)	STR (Slack Time Remaining)

(v)	LCFS (Last Come First Served)

Compute the Mean Flow Time and Average Lateness using the Five Priority Rules and determine the best Priority Rule to sequence the jobs.

3x5=15

(0)

(a)

What is Work Sampling? What is its scope and applicability?

2+3

(0)

(b)

A brass washer manufacturing unit produces one type of Washer A–using one Lathe and one radian drilling machine. Both the machine tools work one shift of 8 hours per day and 25 days in a month. Preventive Maintenance time for both the machine tools is 1 hour each every day and the machine tools run 80% of available time due to service line and system constraints. The machining time per washer is 0.40 minutes and 0.30 minutes for lathe and radial drilling respectively. The selling price varies with volume as follows:

Volume in unit per month		Selling price per unit (Rs.)
(i) (ii) (iii) (iv)	upto 10,000 10,000 to 16,000 16,001 to 18,000 Above 18,000	9.00 8.50 8.00 7.50

Fixed cost is Rs. 80,000/- per month upto 12,000 units and Rs. 86,000/- per month beyond 12,000 units and Rs. 90,000/- per month beyond 16,000. Variable cost per unit is Rs. 1.50.

Find out the production volume at which profit is maximum and calculate the same.

(0)

(a)

What is SWOT Analysis? Illustrate.

2+1

(0)

(b)

Manufacture of Gunmetal bush requires operations on Lathe, Milling and Drilling machine tools. The standard times, operator efficiencies and machine availabilities of each of the machine tools are as follows:

Machine tools	Operator Efficiency	Std. Man–hrs/bush	M/c tool availability
Lathe Milling Drilling	75% 80% 80%	0.15 0.20 0.10	95% 75% 75%

(i)	If the Factory operates one shift of 8 hours for 6 days in a week, how many each of Lathe, Milling and Drilling m/cs will be required to produce 2000 bushes/weeks? 3x3

(ii)	What will be the spare capacity available on each of the machine tools? 3x1

(0)

Write short notes on any three of the following:

5x3

(a)

Case hardening

(0)

(b)

Technology Life Cycle

(0)

(c)

Maintaining Discipline

(0)

(d)

Progressing

(0)

(e)

Labour Turn–over

(0)

(f)

Supply Chain Management.

(0)

Section II

Section II

(a)

Expand the following acronyms:

1x5

(i)

EPC

(0)

(ii)

LOB

(0)

(iii)

MRTB

(0)

(iv)

ARR

(0)

(v)

DSCR.

(0)

(b)

Match the following

Column I		Column II
(A) (B) (C) (D) (E)	Trend Projection Method Histogram Power Soaps & Detergents PERT Network	(1) (2) (3) (4) (5)	Fulkerson’s rule Consumer Industry Demand Forecasting Utility Vertical Bar Chart

1x5

(0)

(c)

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

1x5

(i)

Consortium Lending involves joint financing by more than one bank/financial institution to the same project, generally against a common security.

(0)

(ii)

Efficiency and Effectiveness mean the same.

(0)

(iii)

Dummy activities in a PERT network do not require time or any other resources.

(0)

(iv)

Pay Back Period is the period during which the total return on investment equals the original investment without discounting.

(0)

(v)

In a 2–bid tender, the price bid is opened first.

(0)

(d)

Fill up the blanks in the following sentences with appropriate words:

1x5

(i)

The Earliest Occurrence Time and the Latest Occurrence Time of an Event on the Critical Path are the _______

(0)

(ii)

Zero Date of Project means the effective _______ date of the Project.

(0)

(iii)

Productivity is measured by the ratio Output to _______.

(0)

(iv)

Cost Slope of an activity is the ratio of cost increase per unit of _______ duration.

(0)

(v)

BPO stands for Business Process _______.

(0)

Data relevant to a particular project are given below:

Activity	Duration (days)	Manpower required (Number)
1 – 2 1 – 3 1 – 5 2 – 5 3 – 4 3 – 5 4 – 5	1 2 2 2 3 1 Nil	10 2 8 4 5 6 Nil

(a)	Draw the network and show the critical path.

(b)	Show the manpower profiles based on the Early Start as well as Late Start schedules on a squared network.

(c)	What will be the optimal schedule if not more than 12 people are available on any day of the project? (Show on a squared network).

3+8+4

(0)

(a)

Describe the Little–Mirrless approach to Social Cost Benefit Analysis (SCBA) of a project and the Indian modification of the same.

(0)

(b)

A ferry service operated privately is presently being used to cross a river. The ferry operator charges Rs. 3 per person and his cost per person is Rs. 2. Throughout the year, 50,000 persons use the ferry service. The government is considering construction of a bridge over the river. It is estimated that about 250,000 persons would use the bridge after construction, which is expected to cost Rs. 30 lakhs. Its annual maintenance would cost Rs. 10,000. It has an infinitely long life. Once the bridge is constructed, the ferry operator is expected to close down and sell the ferry boats for Rs. 1 lakh.

Define the social costs and benefits of constructing the bridge, assuming that the Monetary figures given in the problem represent social values and the shadow price of investment is 1. Ignore redistribution effects.

(0)

10.

An entrepreneur wishes to set up an engineering consultancy and training services company in India which a capital of Rs. 10 lakhs. He enters into a joint venture with an overseas company with the terms & conditions that

(a)	His firm can provide consultancy and training services in India for which the overseas firm would provide technical help; and
(b)	That 40% of the consultancy fee earned in India each month will be paid to the overseas collaborator. In the subsequent month.

the entrepreneur secured a bank loan of Rs. 50 lakhs in January 2007 and agrees to repay Rs. 10 lakhs every quarter to the bank. The bank assured the firm to provide additional funds in cash of a shortfall, if the loan repayment is made regularly.
The expenditure of the entrepreneur against fixed assets is as follows for the year 2007:

• • • • • •	Buildings Interiors Office Equipment Computer Systems Furniture & Fixtures Motor Vehicles	: : : : : :	Rs. 8 lakhs in January & Rs. 12 lakhs in February Rs. 4 lakhs in January Rs. 4 lakhs in January Rs. 10 lakhs in February Rs. 2 lakhs each in January & February and Rs. 4 lakhs in March Rs. 2 lakhs in January & February and Rs. 8 lakhs in May.
The monthly running expenditure is as follows:
• • • •	Salaries & Wages Advertisement Provision for Taxation Depreciation	: : : :	Rs. 10 lakhs in January, 6 lakhs in February, 8 lakhs each in March & May, 2 lakhs in April and 4 lakhs in June. Rs. 12 lakhs in two equal installments in January & April Rs. 12 lakhs payable in equal installments in March & June Rs. 2 lakhs per month

The entrepreneur has an opening cash balance of Rs. 10 lakhs and would like to maintain a minimum cash balance of Rs. 10 lakhs. Draw the Capital Budget, Trading (Profit) forecast and projected cash flows for a period of six months from January, 2007 if the firm estimates the earnings (Rs. in lakhs) as follows:

	January	February	March	April	May	June
(i) Consultancy (ii) Training	10 10	20 10	20 20	10 16	40 16	20 20

(0)

11.

(a)

Elaborate the role played by a Cost Accountant in the implementation of project.

(0)

(b)

The projected cash flows and the expected net abandonment values for a project are given below:

Year	Cash inflows (Rs.)	Abandonment Value (Rs.)
0 1 2 3 4	(—) 1,00,000 35,000 30,000 25,000 20,000	Nil 65,000 45,000 20,000 Nil

Should the Project be abandoned and if so, when?
Cost of Capital may be taken as 10%.
Present Value (PV) factor @ 10% is `1.000, 0.909, 0.826, 0.751 and 0.683 for 0, 1, 2, 3 & 4 years respectively.

(0)

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