INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Post Graduate Diploma in Materials Management
PAPER 18 C
OPERATIONS STRATEGY.
DATE: 18.06.2016 Max. Marks: 100
TIME: 2.00 p.m to 5.00 p.m. Duration: 03 Hrs.
Instructions:
1. The question paper is in two parts.
2. Part A is compulsory. Each question carries one mark Total 32marks
3. In part B answer 3 questions out of 6. Each question carries 15 marks. Total 48 marks
4. Part C is a case study which is compulsory Total20 marks

PART A 32 marks
Compulsory -Each question carries 1 mark
Q.1. Choose the correct answer from multiple choices. 8 marks
A process that operates continuously to produce very high volume of standard product
is referred as
Process production Mass production
Batch production Project production
ii) Computer directing manufacturing process is the heart of
Flexible manufacturing system Computer aided engineering
Computer aided design Computer aided manufacturing
iii) All are generic competitive strategies except
Cost leadership Extensive advertising
Differentiation Focus strategy
iv) Which of the following is not a dimension of service quality?
Empathy Responsiveness
Reliability Durability
Four of marketing are Product, Price, Place and
Population Promotion
Position Packaging
vi) Which of the following is not a process related option to be decided up on?
Make or Buy Flexibility
June 2016
Level of mechanization Product choice
vii) Scanning technology is associated with which of the following
Bar code Satellite systems
EDI Expert systems
viii) BPO stands for
Basic product optimization Business process optimization
Business process outsourcing Best promotional offer
Q. 2. Fill in the blanks. (Do not reproduce the statement) 8 marks
Labour is the largest cost in service operations and key driver of customer
satisfaction.
ii) A retailer is an independent seller who purchases the rights to a distribution or sales
territory of a single product/service.
iii) Operational strategy focuses on resources, processes, and people.
iv) Movement of goods from supplier to producer is known as distribution.
Two objectives of distribution are to reduce cycle time and increase customer
satisfaction.
vi) Facility design process progresses from sub-micro level to global level in distinct
sequential steps.
vii) Standardization kills uniqueness.
viii) Packaging provides a marketing advantage at the point of sale.
Q.3. Expand the following 8 marks
MPI
ii) VAR
iii) CRM
iv) ATO
GIS
vi) SRM
vii) FMCG
viii) SEO
Q.4. Match A and B 8 marks
A B
TPS house Mission statement
ii) Customer Real time data
iii) Generalship Path for goods movement
iv) Corporate strategy Toyota production system
Value Growth
vi) Customer loyalty Strategy
vii) Trade channel Relative measure
viii) RFID Final destination
PART B Marks 48
(Attempt any 3 Questions, each question carry 16 marks
Q.5. Explain six drivers of service quality and cost.
Explain product development process.
Q.6. Briefly describe E commerce.
Explain indirect distribution system.
Q.7. Write short notes on any four
Factor rating analysis
Operational excellence
Product Innovation
Product process matrix
Strategic surveillance
Q.8. Distinguish between
Internal supply chain and external supply chain
After sales service and customer relationship
Customization and standardization
Process analysis and operational analysis
Q.9. Discuss the gap model for service quality.
What are the steps involved in designing an effective supply chain relationship.
PART C Case Study
Compulsory Marks 20
Q. 10. Jack Haley, a senior buyer for the Dynamite Truck Company, was confronted with an
interesting predicament and possibly a trip overseas. Rising gasoline costs and
increased competition had caused the management at the Dynamite Truck to develop a
new truck powered by an air-cooled diesel engine. From bumper to tailgate, the new
vehicle was designed as a full performance diesel truck. It was heavy-duty throughout:
frame, suspension, brakes, axles and steering. It was built to endure. Under normal
operating conditions, the new truck, using an efficient air-cooled diesel engine, was
designed to yield 18 to 20 miles per gallon. The warranty was for 100,000 miles or two
full years, whichever came first.
Jack had been actively involved in the development of the new truck. He provided the
Dynamite engineers with information on the availability and cost implications of various
materials, components, and subassemblies under consideration. From a technical, cost,
availability, and service point of view, the diesel engine was the most crucial item to be
purchased for the new truck.
Jack obtained technical data on four air-cooled diesel engines that appeared to satisfy
Dynamite's requirements. Two of the manufacturers of these engines were located in
Europe, one in Japan, and one in the United States. Discussions with the program
manager indicated that from a technical point of view, each of the diesel engines was
acceptable. Accordingly, all four manufacturers were invited to submit bids. The request
for bids stipulated an estimated requirement of 10,000 engines per year for each of the
next three years.
All four firms, submitted bids by the established date. Dutzel Diesel of Gailsdorf,
Germany, was the lowest bidder with an FOB destination price of $14,263 for the first
year, and a standard price escalation clause for the second and third years. The second
lowest bidder was a US firm, the Great American Diesel Company. Its price bid for the
first year was $16,287 per engine. The price for the second and third years contained the
same economic escalation clause as Dutzel's bid.
Jack sat contemplating a course of action. He wondered if the $2,024 per unit differential
required to buy the US engines could be justified. He also wondered about the necessity
of a trip to Gailsdorf to perform a survey on Dutzel prior to awarding the contract.
Questions:
Is a strategic issue involved in the sourcing of the engines? Analyze.
What type of supplier relationship would you recommend for the engine supplier?
Why?
Is Jack's supplier visit justified?