MBA Second Semester Assignments Document
229
NAME GALI NEHRU SUBJECT PRODUCTION AND OPERATIONS MANAGEMENT ROLL NUMBER 530910855 ASSIGNMENT MBA 2 SEM MH0032 SET 1 STUDY CENTRE 2542 DATE OF SUBMISSION
Transcript of MBA Second Semester Assignments Document
NAME
GALI NEHRU
SUBJECT
PRODUCTION AND OPERATIONS MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0032SET 1
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Explain the various automated systems for transfer of materials in the production plant? Illustrate your answer by considering an example of an automobile showroom.
Basically, automation system comes to reduce labor power and time in the production. Here we can see the evolution systems with some examples. The goods requited by society were produces in small quantities by craftsman who would know the need of the community and produced them by their own hands with simple tools. The apprentices or by another craftsman, who would make them to meet the requests made.The parts and components used to make these machines had to be replaced when they wore making parts so that interchangeability was achieved made setting up standards and specifications important for meeting
The craftsmen gave way to engineers, workers, superiors and inspectors. Division of labor became necessary to achieve efficiencies and the jabs that became specialized. Competition has necessitated improved quality, reduced sates and better services to the customer.
Automation systems cost huge sums of money and therefore a deep analysis of the various factors has to be done. For services, automation usually means labor saving devices in education, long distance learning technology helps in supplementing class room instruction. The facilitating goods that are used are web site and videos.
Automation in the banking sector has resulted in ATMs which same the banks a huge amount customer satisfaction. Automation is ideas when the service provided or the product manufactured is highly standardized.
Some extent of automation can be designed even with customization i. e. product or service a meant to produce or deliver low volume specific to a requirement. The advantages of automation is it has low variability and will be more consistent on a repetitive basis
The machines have sensing and control devices that enable them to operate automobile. The simplest of them called machine attachments replace human effort. They guide, locate, move and achieve revise position by means of came, optical sensing. Load sensing mechanisms and activate the controls to remove human intention.
Robots are higher in the order of automation as they perform a variety of tasks. They are designed to move movements according to programmers written into the computer that inside them.
With the help of automation, inspection of component can be done 100% ensures highest quality identification and movement of materials are helped by bar codes which are read and fed into the system far monitoring quantity, location, movement etc. They help the automated systems to start information and provide information for effecting any changes necessary. To make effective use of automated machines, we need to have the movement of materials from and to different time as stores, automated, Automated storage and Retrieval systems- ASRS- receive orders for materials from anywhere in the production area, collect materials in the works times. Computers and information systems are used for placing orders for matters, give commands adjust inventory records which show the location and quantity of materials needed.
Automated guided vehicle systems- AGVS – are pallet trucks and unit load carriers follow embedded guide wires or paint strips to destinations as programmed.
In an automobile showroom we can see all the work automatically with latest machine.
2. State the important considerations for locating an automobile plant? Collect information on layout planning of an automobile plant from various sources and furnish the same.
To locate an automobile company or plant many thing should be consider. For an automobile plant automated flaw lines, automated assembly lines, flexible manufacturing systems, global transition rapid prototyping. Building manufacturing flexibility things are necessity.
About the automated flow lines we can say it is a machine which is linked by a transfer system which moves the parts by using handling machines which are also automated, we have an automated flow line.
Human intervention ma is needed to verify that the operations are taking place according to standards. When these can be achieved with the help of automation and the processes are conducted with self regulation, we will have automated flow lines established.
In fixed automation or hard automation, where one component is manufactured using services operations and machines it is possible to achieve this condition. We assume that product life cycles are sufficiently stable to interest heavily on the automate flow lines to achieve reduces cast per unit.
Product layouts ate designed so that the assembly tasks are performed in the sequence they are designed at each station continuously. The finished item came out at the end of the line.
In automated assembly lines the moving pallets move the materials from station to station and moving arms pick up parts, place them at specified
place and system them by perusing, riveting, & crewing or even welding. Sensors will keep track of their activities and move the assembles to the next stage.
The machines are arranged in a sequence to perform operations according to the technical requirements.
The tools are loaded, movements are effected, speeds controlled automatically without the need for worker’s involvement.
The flexibility leads to better utilization of the equipments. It reduces the numbers of systems and rids in reduction of investment as well as a space needed to install them. One of the major cancers of modern manufacturing systems is to be able to respond to market demands which have uncertainties.
Prototyping is a process by which a new product is developed in small number so as to determine the suitability of the materials, study the various methods of manufactured, type of machinery required and develop techniques to overcome problems that may be encountered when full scale manufacture is undertaken.
Prototypes do meet the specification of the component that enters a product and performance can be measured on these.
It helps in con be reforming the design and any shortcomings can be rectified at low cost.
Flexibility has three dimensions in the manufacturing field. They are variety, volume and time. Their demands will have to be satisfied. In that sense they become constraints which restrict the maximization of
productivity. Every business will have to meet the market demands of its various products in variety volumes of different time.
Flexibility is also needed to be able to develop new products or make improvements in the products fast enough to cater to shifting marker needs.
Manufacturing systems have flexibility built into them to enable organization meet global demand. You have understood how the latest trends in manufacturing when implemented help firms to stay a head in business.
3. Who are the players in a project management? What are the various roles and responsibilities of the players in a project management?
At first we will discuss about project management then we will discuss about players in project management. Project management is the practice of controlling the use of resources, such as cost, time manpower, hardware and software involved in a project. That starts with a problem statement and end with delivery of a complete product.
Here we will see the participants of project management:
In the project management players individual and organizations both are involved-
That is actively involved in the project whose interests may be affected by the outcome of the project.
Exert influence over the project and its results players or also called “stake holders’’ of the project.Project manager - the individual responsible for managing the project.
Customer - the individual or organization that will use the product- the end result of the project.
Performing organization - the enterprise whose employees are mast directly involved in doing the work of the project.
Sponsors - the individual or group within or external to the performing organization that funds the project.
Now, we will define the role and responsibilities of project management. Here are some roles and responsibilities:
There are number of projects which an organization works on. It is not possible for one individual to manage all the projects.
There is a team of managers who manage the projects.
There may be different teams working on different projects.
An experienced project manager and this team may manage more than one project at a time.
The project team is responsible for ensuring that the project upon completion shall deliver the gain in the business for which it is intended for.
The project team has to properly co-ordinate with each other working on different aspects of the project.
The team members are responsible for the completion of the project as per the plans of the project.
Characteristics of project mindset: - some of the characteristics of project mindset are the following –
Time - it is possible to improve the pace of the project by reducing the time frame of the process. The mindset is normally to work in a comfort made by stretching the time limits.
Responsiveness – it refers to quickness of response of an individual. The vibrancy and livens of an individual or an organization are
proportional to its capability of evolving process and structure for superior responsiveness time constant.
Information sharing – information is owner information is the matter key to today’s business. Information sharing is the characteristic of the project mindset today.
Process – project mindset lays emphasis on flexible process. The major difference in a process and a system is in its capabilities of providing flexibility to different situational encounters. Flexible process possesses greater capabilities of adaptability.
Structured planning – structure planning based a project management life cycle enables one to easily and conveniently work according to the plan.
4. What are the various steps in project monitoring and controlling a project?
Any project aimed at delivering a product or service has to go through phases in a planned manner in order to meet the requirements. It’s only by careful monitoring of the project progress. It required establishing control factors to keep the project on the track of progress. The results of any stage in a project, depends on the inputs to that stage. It is therefore necessary to control all the inputs and the corresponding outputs from a stage. A project management may use certain standard trolls to keep the project on track.
The project manager and the team members should be fully aware of the techniques and methods to rectify the factors influencing delay of the project and its product. The methodology of PERT (programmer Evolution Review Technique) and CPM (critical path method) may be used to analyze the project. In the PERT method one can find out the variance and use the variance to analyze the various probabilistic estimates pertaining to the project. Using the CPM one can estimate the start time and the finish time for every event of the project in its WBS (work Breakdown Structure).
The analysis charts can be used to monitor, control, track and execute a project. The various steps involved in monitoring and controlling a project from start to end are as follows-
a. Preliminary work- the team members understand the project plans, project stage schedule, progress controls, tracking the schedules. Summary of the members have to understand the tolerances in any change and maintain a change control log. They must realize the need and importance of quality for which they have to follow strictly quality agendas. They must understand the stage status reposes, stage and reports, stage end approval reports.
b. Project progress- The members must keep a track of the project progress and communication the same to other related members of the
project. They must monitor and control project progress, through the use of regular check points, quality charts. Statistical tables, control the quality factors which are likely to deviate from expected values as any deviation may result in change to the stage schedule.
c. Stage control- The manager must establish a project check paint cycle. For this suitable stage version control procedure may be followed.
d. Resources- Plan the resources required for various stage of the project. Brief both the project team and the key resources about the objectives of every stage, planned activities, products, organization. Metrics and project controls.
e. Quality control- This is very important in any project: Quality control is possible if the project member’s follow-Schedule quality review, Agenda for quality review, conduct quality review and follow up.
f. Progress control- It is the main part at assessment- Progress control assesses- monitor performance, update schedule, update casts, Re-plan stage schedule, conduct team status review etc.Along with we create status report, create flash reports, project status
reports etc.
g. Approvals - lastly, project sage reviews and the decisions taken and actions planned need to be approved by the top management. The goals of such review are to improve quality by finding defects and to improve productivity by finding defects in a cost effective manner. The group review progress includes several stage like planning, preparation and overview, a group review meeting and rework recommendation and follow-up.
5. Explain the necessity and objectives of SCM?
SCM is the abbreviation of supply chain Management. It is considered by many express worldwide as the ultimate solution towards efficient enterprise management.
The necessity and objectives of SCM-
SCM is required by and enterprise as a tow to enhance management effectiveness with a following organizational objective:
Reduction of inventory
Enactment in functional effectiveness of existing systems like ERP, Accounting. Software and Documentation like financial reports statements ISO 9000 Documents etc.
Enhancement of participation level and empowerment level
Effective integration of multiple systems like ERP, communication systems, documentation system and secure, Design R&D systems etc.
Better utilization of resources- men, material, equipment and money.
Optimization of money flow cycle within the organization as well as to
and from external agencies.
Enhancement of value of products, operations and services and consequently, enhancements of profitability.
Enhancement of satisfaction level of customer and clients, supporting institutions, statutory control agencies, supporting institutions, statutory control agencies, suppliers and vendors, employees and executives.
Enhancement of flexibility in the organization to help in easy implementation of schemes involving modernization, expansion and divestment, mergers and acquisitions.
Enhancement of coverage and accuracy of management information systems.
With the objectives of SCM, its implementation is required. Implementation is in the form of various functional blocks of an organization interpenetrated through which a smooth flow of the product development is possible.
A relatively new SCM option involves web based software with a browser interface. Several electronic markets place for buying and selling goods and materials.
6. What are the steps involves in SCM implementation?
There are many steps which involved in SCM implementation are- Business Process, sales and marketing. Logistics, costing, demand planning, trade- off analysis, environmental requirement, process stability, integrated supply, supplier management, product design, suppliers, customers, material specifications, etc.
Some important aspect of SCM:
The level of competition existing in the market and the impact of competitive forces on the product development.
Designing and working on a strategic logic for better growth through value invention.
Working out new value curve in the product development along with necessary break point.
Using it to analyses markets and the economies in product design. Tine, customer, quality of product and the concept of survival of fittest.
Steps of SCM implementation:
Group customer by need:
Effective SCM groups, customer by distinct service needs those particular segments.
Customize the logistics networks:
In designing their logistics network, companies need to focus on the service requirement and profit potential of the customer segments identified.
Listen to signals of market demand and plan accordingly
Sales and operations planners must monitor the entire supply chain to detect early warning signals of changing customer demand and needs.
Differentiate the product closer to the customer
Companies today no longer can afford to stock pile inventory to compensate for possible forecasting errors; instead, they need to postpone product differentiation in the manufacturing. Processes closer to actual customer demand.
Strategically manage the source of supply
By working closely with their key suppliers to reduce the overall casts of owning materials and services; SCM maximizes profit margins both for themselves, and their supplies.
Develop a supply chain wide technology strategy
As one of the cornerstones of successful SCM information technology must be able to support multiple levels of decision making.
Adopt channel spanning performance measures
Excellent supply performance measurement systems do more than just monitor internal functions. They apply performance criteria that embrace both service and financial metrics, including each account’s true profitability.
NAME
GALI NEHRU
SUBJECT
PRODUCTION AND OPERATIONS MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0032SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Explain how material flow information helps in work centre
decision. Consider the example of a shopping centre to
illustrate your answer.
Answer: The decision which involves during uses of material flow information has below-
A work center is a production facility comprising of one or more machines and one or more workmen considered as a single unit for purposes of estimation of capacity. This unit may have a single operation or a number of them conducted on the input items. In the pipeline of production, each work center’s contribution is vital as materials are scheduled, routed and loads to be sent to it.
In most organization, they are even considered as cash centers. Location
trust means relative position of different centers so as to minimize the
movement of materials, meet technological sequences, to reduce
congestion, maximize throughput, improve part tracking ability and avoid
repetitive movements. In addition another consideration is to provide for
expansion of production.
Each work center receives information along with material that enter it
the material also leaves the word center with information. The route sheet
contains information about the material, process, quantities, and
inspection procedures. Etc. the drawings or instructions tell the condition
of the malarial of entry and the required condition at exit.
In this sense every operation consists of material transformation occurring
on the basis of information. Activities conducted are on the basis of
information that flows with material. Different locations have to
accommodate the constraints of the basis of darning maximums benefit of
the information that is available. Basically, each location is determined on
the basis of from and to: where does it receive material goes. Some
centers have to close as a matter of necessity, some need not to be and
some need to be as for away as possible.
This aspect has been given a rating scale in terms of alphabets as under:
Absolutely necessary to be close
Essential to be close
Ordinary closeness
Ordinary closeness
Unimportant that they are close or not
Not desirable that the centers are close
It can be seen that this is only a guide for Indian location as the work
centers as there will many competing factors that have to be
accommodated.
2. What are the reasons for failure of a project? Give suitable
examples.
Answer: Before knowing the reasons of failure we have to know about
project.
Project is a set of activities which are networked in order and aimed
towards achieving goal of a project.
Now, the reasons are project failure:
Incidence of Project failure
Projects being initiated of random at all levels
Project objective not in line with business objective
Project management not observed
Project manager with no prior experience in the related project
Non- dedicated team
Lack of complete support from clients
Factors contributing to project success not emphasized:
Project objective in alignment with business objective
Working within the framework of project management methodology
Effective scoping planning, estimation, execution, controls and reviews,
project bottlenecks
Communication and managing expectations effectively with clients, team
merits and stake holders
Prior expectance of PM in a similar project
Overview of information and communication Technologies (ICT)
project:
Involve information and communication technologies such as the word
wide web, e-mail, fiber-optics satellites
Enable societies to produce, access, adapt and apply information in
greater amount, more rapidly and at reduce casts
Offer enormous opportunities for enhancing business and economic
viability
Common problems encountered during projects
No prioritization of project activity from an organizational position
One or more of the stages in the project mishandled
Less qualified non-dedicated manpower
Absence of smooth flow of communication between the involved parties
These basic reasons lead a project to failures. In the project failures
business management and project management is directly involved. From
the management point of view it is basic things to care above topics to
success of a project. Project is the core business of a company.
3. Explain the various phases in project management life cycle?
Answer: This is the initial phase of any project. In this phase information
is collected from the customer pertaining to the project and the
requirements are analyzed. The entire project has to be planned and it
should be done in a strategic manner. The project manager conducts the
analysis of the problem and submits a detailed report to the top project
justification, details on what the problem is a method of solving the
problem, list of the objectives to be achieved, project budget and the
success rate of completing the project. The report must also contain
information and the project feasibility, and the risks involved in the
project.
Project management life cycle is the integrated part of management. It is
attach with project responsibility or failure of a project.
The important tasks of this phase are as follows:
Specification Requirements Analysis (SRA): It has to be conducted to
determine the essential requirements of a project in order to achieve the
target.
Feasibility study: To analyze whether the project is technically,
economically and practically feasible to be undertaken.
Trade off analysis: To understand and examine the various alternatives
which could be considered.
Estimation: To estimate the project cost, effort requires for the project and
functionality of various process in the project.
System design: Choose a general design that can fusil the requirements.
Project evolution: Evaluate the project in terms of expected profit, cost
and risks involved marketing phase.
A project proposal is prepared by a group of people including the project
manager. This proposal has to contain the strategies adopted to market
the product to the customers.
Design phase: This phase involves the study of inputs and outputs of the
various project stages.
Execution phase: In this phase the project manager and the teams
members work on the project objectives as per the plan. At every stage
during the execution reports are prepared.
Control – Inspecting, Testing and Delivery phase during this phase. The
project team works under the guidance of the project manager. The
project manager has to ensure that the team working under his,
implements the project designs accurately, the project manager has to
ensure ways of managing the customer, perform quality control work.
Closure and post completion analysis phase upon satisfactory completion
and delivery of the intended product or service the staff performance has
to be evaluated. Document the lessons from the project. Prepare the
reports on project feedback analysis followed by the project execution
report.
The phase which involve in the above are:
The preparation stage involves the preparation and approval of project
outline, project plan and project budget.
The next stage involves selecting and briefing the project team about the
proposals followed by discussions on the roles and responsibility of the
project member and the organization.
The project management life cycle:
A Life cycle of a project consists of the following:
Understanding the scope of the project
Establishing objectives of the project
Formulating and planning various activities
Project execution and
Monitor and control the project resources.
4. What are the seven principles of SCM?
Answer: Seven principles of SCM are:
Group customer by needs- Effective SCM groups, customer by distinct
service needs, regardless of industry and then tailors services to this
particular segment.
Customize the logistic network- In designing their logistics network;
companies need to focus on the service requirement and profit of the
customer segments identified.
Listen to signals of market demand and plan accordingly- Sales and
operations planners must monitor the entire supply chain to detect early
warning signals of changing customer demand and needs. This demand
driven approach leads to more consistent forecast and optimal resource
allocation.
Differentiate the product closer to the customer- companies today no
longer can afford to stock pile inventory to compensate for possible
forecasting errors. Instead, they need to postpone product differentiation
in the manufacturing process closer to actual consumer demand. This
strategy allows the supply chain to respond quickly and cost effectively to
change in customer needs.
Strategically manage the sources of supply- by working closely with their
key suppliers to reduce the overall costs of owning materials and services;
SCM maximizes profit margins both for themselves and their suppliers.
Develop a supply chain wide technology strategy- as one of the
cornerstones of successful SCM information technology must be able to
support multiple levels of decision making. It also should afford a clear
view and ability to measure the flow of products, services and information.
Adopt channel spanning chain performance measures- Excellent supply
chain performance measurement system do more than just monitor
internal functions. They apply performance criteria to every link in the
supply chain-criteria that embrace both service and financial metrics.
5. Explain what is meant by bullwhip effect and how it could be
prevented?
An unmanaged supply chain is not inherently stable. Demand variability
increases as one moves up the supply chain away from the retail
customer, and small changes in consumer demand can result in large
variations in orders placed upstream. Eventually, the network can oscillate
in very large swings as each organization in the supply chain seeks to
solve the problem from its own perspective. This phenomenon is known as
the bullwhip effect and has been observed across most industries,
resulting in increased cost and poorer service.
Causes of the Bullwhip Effect
Sources of variability can be demand variability, quality problems, strikes,
plant fires, etc. Variability coupled with time delays in the transmission of
information up the supply chain and time delays in manufacturing and
shipping goods down the supply chain create the bullwhip effect. The
following all can contribute to the bullwhip effect:
Overreaction to backlogs
Neglecting to order in an attempt to reduce inventory
No communication up and down the supply chain
No coordination up and down the supply chain
Delay times for information and material flow
Order batching - larger orders result in more variance. Order
batching occurs in an effort to reduce ordering costs, to take
advantage of transportation economics such as full truck load
economies, and to benefit from sales incentives. Promotions often
result in forward buying to benefit more from the lower prices.
Shortage gaming: customers order more than they need during a
period of short supply, hoping that the partial shipments they
receive will be sufficient.
Demand forecast inaccuracies: everybody in the chain adds a
certain percentage to the demand estimates. The result is no
visibility of true customer demand.
Free return policies
Countermeasures to the Bullwhip Effect
While the bullwhip effect is a common problem, many leading companies
have been able to apply countermeasures to overcome it. Here are some
of these solutions:
Countermeasures to order batching - High order cost is
countered with Electronic Data Interchange (EDI) and computer
aided ordering (CAO). Full truck load economics are countered with
third-party logistics and assorted truckloads. Random or correlated
ordering is countered with regular delivery appointments. More
frequent ordering results in smaller orders and smaller variance.
However, when an entity orders more often, it will not see a
reduction in its own demand variance - the reduction is seen by the
upstream entities. Also, when an entity orders more frequently, its
required safety stock may increase or decrease; see the standard
loss function in the Inventory Management section.
Countermeasures to shortage gaming - Proportional rationing
schemes are countered by allocating units based on past sales.
Ignorance of supply chain conditions can be addressed by sharing
capacity and supply information. Unrestricted ordering capability
can be addressed by reducing the order size flexibility and
implementing capacity reservations. For example, one can reserve a
fixed quantity for a given year and specify the quantity of each
order shortly before it is needed, as long as the sum of the order
quantities equals to the reserved quantity.
Countermeasures to fluctuating prices - High-low pricing can be
replaced with every day low prices (EDLP). Special purchase
contracts can be implemented in order to specify ordering at regular
intervals to better synchronize delivery and purchase.
Countermeasures to demand forecast inaccuracies - Lack of
demand visibility can be addressed by providing access to point of
sale (POS) data. Single control of replenishment or Vendor Managed
Inventory (VMI) can overcome exaggerated demand forecasts. Long
lead times should be reduced where economically advantageous.
Free return policies are not addressed easily. Often, such policies
simply must be prohibited or limited.
6. What do you understand by Line Balancing? What is the
importance of order picking in material handling? Give suitable
examples.
Answer - Production lines have a number of work centers in a particular
sequence so that the material that gets proceed has to move further
without encountering any bottlenecks. The quantities produced the rate of
production at each center, the number of operations and the total
production required are factors taken into account.
The purpose of taking place between work centers and minimum
inventory gets created. We use the principles of JIT and lean
Manufacturing to achieve these. Linear programming, Dynamic
programming and other mathematical models are used to study these
problems.
In order picking important pants are:
Order picking is a process by which items of products for supply is to be
made haves to be retrieved from specific storage location. It is found to
take 60% of labour activities in the warehouse. Since it is critical to the
business to meet customer’s demand expeditiously and accurately, lot of
attention is being given to this aspect of operations. In the manufacturing
arena, we desire to move towards small lot sizes and cycle time
reductions.
Efficient order picking is necessary for being competitive. In the supply
chain Storage, retrieval and delivery do not add value to the product, but
are necessary.
Material Handling:
The purpose is to take the job through the technological steps in which
the processing needs to be done for the transformation that is to be
effected on the material that is getting processed. The major concerns are
about the quantities that need to be processed and the time that the
different operations required. In case the product has to enter assembly,
along with other parts that are being manufactured parallel, will all the
required parts arrive at that point at the same time. Some components
may be outsourced. To handle different parts, we have material handling
equipments such as cranes lifting forks, trucks etc.
The problem for the manager is the limited supply of these equipments
and the need to optimize utilization of the equipment and see that the
manufacturing line has smooth flow. Our concern is to reduced inventory,
minimums movement and timely availability.
NAME
GALI NEHRU
SUBJECT
FINANCIAL MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0033SET 1
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Explicit cost and implicit cost are the two dimensions of cost. What role does cost play in financial decisions.
Ans.
The cost of debt has two parts – explicit cost and implicit cost. Explicit
cost is the given rate of interest. The firm is assumed to borrow
irrespective of the degree of leverage. This can mean that the increasing
proportion of debt does not affect the financial risk of lenders and they do
not charge higher interest. Implicit cost is increase in Ke attributable to
Kd. Thus the advantage of use of debt is completely neutralized by the
implicit cost resulting in Ke and Kd being the same.
Graphically this is represented as:
Percentage cost
2. Assume you are newly appointed as Finance Executive in a Manufacturing firm. What guidelines you need to follow in financial planning?
Ans.
Guidelines for financial planning that I would follow:
1. Never ignore the coordinal principle that fixed asset requirements b
e met from thelong term sources.
2. Make maximum use of spontaneous source of finance to
achieve highest productivity of resources.
3. Maintain the operating capital intact by providing adequately
out of the current periods earnings. Due attention to be given to
physical capital maintenance or operating capability.
4. Never ignore the need for financial capital maintenance in units of
constant purchasing power.
5. Employ current cost principle wherever required.
6. Give due weightage to cost and risk in using debt and equity.
7. Keeping the need for finance for expansion of business,
formulate plough back policy of earnings.
8. Exercise thorough control over overheads.
9. Seasonal peak requirements to be met from short term borrowings
from banks.
3. Due to over capitalization the company may collapse which would certainly affect its employees, society, consumers and its shareholders. What remedies you would suggest? Give suitable example.
Ans. I would suggest following Remedies for Overcapitalization
1. Reduction of debt burden.
2. Negotiation with term lending institutions for reduction in interest obligation.
3. Redemption of preference shares through a scheme of capital reduction.
4. Reducing the face value and paidup value of equity shares.
5. Initiating merger with well managed profit making companies interested in taking over ailing company.
A company is said to be overcapitalized, when its total capital (both equity and debt) true value of its assets. It is wrong to identify overcapitalization with excess of capital because most of the overcapitalized firms suffer from the problems of liquidity. The correct indicator of overcapitalization is the earnings capacity of the firm. If the earnings of the firm are less then that of the market expectation, it will not be in a position to pay dividends to its shareholders as per their expectations. It is a sign of overcapitalization. It is also possible that a company has more funds than its requirements based on current operation levels, and yet have low earnings.
4a. Mr. Avinash aged 40 years, needs 50000 after 5 years. If the interest rate is 10% how much should he save now to get Rs.50000 at the end of 5 years
Ans.
FVn=PV (1+i/m)m*n
Where
i = annual nominal interest rate (as a decimal)=0.1
m = number of times the interest is compounded per year=1
n = number of years = 5
FVn = amount after time t ie 5 yrs = 50,000
PV = principal amount (initial investment=Present Value) =?
50,000 = PV (1+ 0.1/1)1*5
= PV (1.1)5
= PV * 1.61051
PV = 50,000/1.61051
PV = Rs. 31,046.07
The ampount to be saved now is Rs. 31,046.07
4b. A Senior citizen intents to deposit Rs.1000 annually in ICICI bank for 3 years. The prevailing interest rate is 10%. What is the maturity value of the deposit?
Ans.
Amount at the end of 3 years with 10% rate of interest = Deposit * FVIFA(10%, 3y)
Where, FVIFA = Future Value of Interest Factor for Annuity
From Compound Value of Annuity table we have
For 10% and 3 years we get 3.310
= 1,000 * 3.310
= Rs. 3,310
5. Explain various types of bonds.
Ans. Types of Bonds
Bonds are of three types: (a) Irredeemable Bonds (also called perpetual bonds) (b) Redeemable
Bonds (i.e., Bonds with finite maturity period) and (c) Zero Coupon Bonds.
1) Irredeemable Bonds or Perpetual Bonds
Bonds which will never mature are known as irredeemable or perpetual bonds. Indian Companies Acts restricts the issue of such bonds and therefore these are very rarely issued by corporates these days. In case of these bonds the terminal value or maturity value does not exist because they are not redeemable. The face value is known; the interest received on such bonds is constant and received at regular intervals and hence the interest receipts resemble a perpetuity. The present value (the intrinsic value) is calculated as:
V0=I/id
If a company offers to pay Rs. 70 as interest on a bond of Rs. 1000 par value, and the current yield is 8%, the value of the bond is 70/0.08 which is equal to Rs. 875
2) Redeemable Bonds :
There are two types viz.,bonds with annual interest payments and bonds with semiannual
Interest payments.
Bonds with annual interest payments;
Basic Bond Valuation Model:
The holder of a bond receives a fixed annual interest for a specified number of years and a fixed
principal repayment at the time of maturity. The intrinsic value or the present value of bond can be expressed as:
V0 or P0=Σ n
t=1 I/(I+kd) n +F/(I+kd) n
Which can also be stated as folloows
V0=I*PVIFA(kd, n) + F*PVIF(kd, n)
Where V0= Intrinsic value of the bond
P0= Present Value of the bond
I= Annual Interest payable on the bond
F= Principal amount (par value) repayable at the maturity time
n= Maturity period of the bond
Kd= Required rate of return
Bond Values with Semi-Annual Interest payment:
In reality, it is quite common to pay interest on bonds semiannually. the value of bonds with semiannual interest is much more than the ones with
annual interest payments. Hence, the bond valuation equation can be modified as:
V0 or P0=Σ n
t=1 I/2/(I+id/2) n +F/(I+id/2) 2n
Where V0=Intrinsic value of the bond
P0=Present Value of the bond
I/2=Semiannual
Interest payable on the bond
F=Principal amount (par value) repayable at the maturity time
2n=Maturity period of the bond expressed in half yearly periods
kd/2=Required rate of return semiannually.
Zero Coupon Bonds
In India Zero coupon bonds are alternatively known as Deep Discount Bonds. For close to a
decade, these bonds became very popular in India because of issuance of such bonds at regular intervals by IDBI and ICICI. Zero coupon bonds have no coupon rate, i.e. there is no interest to be paid out. Instead, these bonds are issued at a discount to their face value, and the face value is the amount payable to the holder of the instrument on maturity. The difference between the discounted issue price and face value is effective interest earned by the investor. They are called deep discount bonds because these bonds are long term bonds whose maturity
some time extends up to 25 to 30 years.
6. Sushma Industries wishes to issue bonds with Rs.100 as par value, 5 years to maturity, coupon rate 11% and YTM of 11%.
a. What is the value of the bond? b. If the YTM is 10% what would be the value of the bond?c. If the YTM is 13% what is the value of the bond
Ans.
Note: In the above problem YTM is misprint. It should be Kd.F = Rs. 100n = 5 years Coupon rate = 11%I = F * Coupon rate = 100 * 11% = Rs. 11V0 = Value of Bond = ?
(a) If kd is 11%,
V0=I*PVIFA(kd, n) + F*PVIF(kd, n)
=11*PVIFA(11%, 5) + 100*PVIF(11%, 5)
=11*3.6959 + 100*0.593
=40.6549+59.3
=Rs. 99.95
(b) If kd is 10%,
V0=I*PVIFA(kd, n) + F*PVIF(kd, n)
=11*PVIFA(10%, 5) + 100*PVIF(10%, 5)
=11*3.7908 + 100*0.621
=41.6988+62.1
=Rs. 103.79
(c) If kd is 13%,
V0=I*PVIFA(Kd, n) + F*PVIF(kd, n)
=11*PVIFA(13%, 5) + 100*PVIF(13%, 5)
=11*3.5172 + 100*0.543
=40.6549+54.3
=Rs. 94.95
NAME
GALI NEHRU
SUBJECT
FINANCIAL MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0033SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Is Equity Capital Free of cost? Substantiate your statement.
Ans. No. Equity Capital is not free of cost. Some people are of the opinion that equity capital is free of cost for the reason that a company is not legally bound to pay dividends and also the rate of equity dividend is not fixed like preference dividends. This is not a correct view as equity shareholders buy shares with the expectation of dividends and capital appreciation. Dividends enhance the market value of shares and therefore equity capital is not free of cost.
Equity shareholders do not have a fixed rate of return on their investment. There is no legal requirement (unlike in the case of loans or debentures where the rates are governed by the deed) to pay regular dividends to them. Measuring the rate of return to equity holders is a difficult and complex exercise. There are many approaches for estimating return - the dividend forecast approach, capital asset pricing approach, realized yield approach, etc. According to dividend forecast approach, the intrinsic value of an equity share is the sum of present values of dividends associated with it.
2 (a) What is the rate of return for a company if the β is 1.25, risk free rate of return is 8% and the market rate of return is 14%. Use CAPM model.
Ans.
Ke = Rf + β (Rm—Rf) = 0.08 + 1.25(0.14 - 0.08) = 0.08 + 0.075= 0.155 or 15.5%
(b) Sundaram Transports has the following capital structure.
Equity capital Rs.10 par value 250 lakhs
12% preference share capital Rs.100 each 100 lakhs
Retained earnings 150 lakhs
12% Debentures (Rs.100 each) 350 lakhs
14% Term loan from SBI 150 lakhs
Total 1000 lakhs
The market price per equity is Rs 54. The company is expected to declare a dividend per share of Rs.2 per share and there will be a growth of 10% in the dividends for the next 5 years. The preference shares are redeemable at a premium of Rs.5 per share after 8 years. The current market price of preference share is Rs.92. Debenture redemption will take place after 7 years at a discount of 2% and the current market price is Rs.91 per debenture. The corporate tax rate is 40%. Calculate WACC. (7 Marks)
Ans.
Ke is the cost of external equity, D1 is the dividend expected at the end of year 1 = 2P0 is the current market price per share = Rs. 92g is the constant growth rate of dividends = 10%f is the floatation costs as % of current market price.
Step I is to determine the cost of each component.
Cost of external equity: Ke =( D1/P0) + g = (2/54) + 0.1 = 0.137 or 13.7%
Cost of preference capital:
Kp = D + (F—P)/n / (F+P)/2
D is the preference dividend per share payable=11
F is the redemption price=105
P is the net proceeds per share = 92
n is the maturity period =8
Kp = D + (F—P)/n / (F+P)/2
= 11 + (105—92)/8] / (105+92)/2 =12.625/98.5 = 0.1281 or 12.81%
Cost of Retained Earnings:Kr=Ke which is 13.7%
Cost of debentures:Kd = [I(1—T) + (F—P)/n] / F+P)/2
Where Kd is post tax cost of debenture capital, I is the annual interest payment per unit of debenture, T is the corporate tax rate = 40%F is the redemption price per debenture = Rs. 98 P is the net amount realized per debenture = Rs. 91 n is maturity period = 7 years
Kd = [I(1—T) + (F—P)/n] / F+P)/2 = [12(1—0.4) + (98—91)/7] / (98+91)/2 = [7.2 + 1] / 94.5 = 0.0867 or 8.67%
Cost of Term Loans:Kt = I(1—T) =0.14(1—0.4) = 0.084 or 8.4%
Step II is to calculate the weights of each source.
We = 250/1000 = 0.25 Wp = 100/1000 = 0.1 Wr = 150/1000 = 0.15Wd = 350/1000 = 0.35 Wt = 150/1000 = 0.15
Step III Multiply the costs of various sources of finance with corresponding weights and WACC calculated by adding all these components.
Weighted Average of Cost of Capital:WACC = WeKe + WpKp +WrKr + WdKd + WtKt
= (0.25*0.137) + (0.1*0.1281) + (0.15*0.137) + (0.35*0.0867) + (0.15*0.084) = 0.03425+ 0.01281+ 0.02055+ 0.030345+ 0.0126= 0.043 + 0.023 + 0.022 + 0.0384 + 0.004 = 0.1105 or 11.05%
3. The effective cost of debt is less than the actual interest payment made by the firm. Do you agree with this statement? If yes/no substantiate your views.
Ans. Yes. The debentures carry a fixed rate of interest. Interest qualifies for tax deduction in determining tax liability. Therefore the effective cost of debt is less than the actual interest payment made by the firm.
The Net Cash Outflows in terms of Amount of Periodic interest Payment and Repayment of Principal in Installments or in lump-sum on Maturity.
The Interest Payment made by the firm on Debt Issues qualifies for tax deduction in determining the net taxable income. Therefore, the effective cash outflow is less than the actual payment of Interest made by the firm to the debt holders by the amount of tax shield on Interest Payment. The debt can either be Perpetual/Irredeemable or Redeemable.
4. Why capital budgeting decision very crucial for finance managers?
Ans. There are many reasons that make the Capital budgeting decisions the most crucial for finance Managers:
1. These decisions involve large outlay of funds now in anticipation of cash flows in future. For example, investment in plant and machinery. The economic life of such assets has long periods. The projections of cash flows anticipated involve forecasts of many financial variables. The most crucial variable is the sales forecast.
a. For example, Metal Box spent large sums of money on expansion of its production facilities based on its own sales forecast. During this period, huge investments in R & D in packaging industry brought about new packaging medium totally replacing metal as an important component of packing boxes. At the end of the expansion Metal Box Ltd found itself that the market for its metal boxes had declined drastically. The end result is that Metal Box became a sick company from the position it enjoyed earlier prior to the execution of expansion
as a blue chip. Employees lost their jobs. It affected the standard of lining and cash flow position of its employees. This highlights the element of risk involved in these type of decisions.
b. Equally we have empirical evidence of companies which took decisions on expansion through the addition of new products and adoption of the latest technology creating wealth for shareholders. The best example is the Reliance group.
c. Any serious error in forecasting Sales and hence the amount of capital expenditure can significantly affect the firm. An upward bias may lead to a situation of the firm creating idle capacity, laying the path for the cancer of sickness.
d. Any downward bias in forecasting may lead the firm to a situation of losing its market to its competitors. Both are risky fraught with grave consequences.
2. A long term investment of funds some times may change the risk profile of the firm. A FMCG company with its core competencies in the business decided to enter into a new business of power generation. This decision will totally alter the risk profile of the business of the company. Investor’s perception of risk of the new business to be taken up by the company will change his required rate of return to invest in the company. In this connection it is to be noted that the power pricing is a politically sensitive area affecting the profitability of the organization. Therefore, Capital budgeting decisions change the risk dimensions of the company and hence the required rate of return that the investors want.
3. Most of the Capital budgeting decisions involve huge outlay. The funds requirements during the phase of execution must be synchronized with the flow of funds. Failure to achieve the required coordination between the inflow and outflow may cause time over run and cost over run. These two problems of time over run and cost over run have to be prevented from occurring in the beginning of execution of the project. Quite a lot empirical examples are there in public sector in India in support of this argument that cost over run and time over run can make a company’s operations unproductive. But the major challenge that the management of a firm faces in managing the uncertain future cash inflows and out flows associated with the plan and execution of Capital budgeting decisions.
4. Capital budgeting decisions involve assessment of market for company’s products and services, deciding on the scale of operations, selection of relevant technology and finally procurement of costly equipment. If a firm were to realize after committing itself considerable sums of money in the process of implementing the Capital budgeting decisions taken that the decision to diversify or expand would become a wealth destroyer to the company, then the firm would have experienced a situation of inability to sell the equipments bought. Loss incurred by the firm on account of this would be heavy if the firm were to scrap the equipments bought specifically for implementing the decision taken. Sometimes these equipments will be specialized costly equipments. Therefore, Capital budgeting decisions are irreversible.
5. The most difficult aspect of Capital budgeting decisions is the influence of time. A firm incurs Capital expenditure to build up capacity in anticipation of the expected boom in the demand for its products. The timing of the Capital expenditure decision must match with the expected boom in demand for company’s products. If it plans in advance it may effectively manage the timing and the quality of asset acquisition. But many firms suffer from its inability to forecast the future operations and formulate strategic decision to acquire the required assets in advance at the competitive rates.
6. All Capital budgeting decisions have three strategic elements. These three elements are cost, quality and timing. Decisions must be taken at the right time which would enable the firm to procure the assets at the least cost for producing the products of required quality for customer. Any lapse on the part of the firm in understanding the effect of these elements on implementation of Capital expenditure decision taken will strategically affect the firm’s profitability.
7. Liberalization and globalization gave birth to economic institutions like World Trade organization. General Electrical can expand its market into India snatching the share already enjoyed by firms like Bajaj Electricals or Kirloskar Electric Company. Ability of G E to sell its products in India at a rate less than the rate at which Indian Companies sell cannot be ignored. Therefore, the growth and survival of any firm in today’s business environment demands a firm to be proactive. Proactive firms cannot avoid the risk of taking challenging Capital budgeting decisions for growth. Therefore, Capital budgeting decisions for growth have become an essential characteristics of successful firms today.
8. The social, political, economic and technological forces generate high level of uncertainty in future cash flows streams associated with Capital
budgeting decisions. These factors make these decisions highly complex.
9. Capital expenditure decisions are very expensive. To implement these decisions firm’s will have to tap the Capital market for funds. The composition of debt and equity must be optimal keeping in view the expectation of investors and risk profile of the selected project.
5. A road project require an initial investment of Rs.10,00,000. It is expected to generate the following cash flow in the form of toll tax recovery. Year Cash Inflows
1 4,50,0002 4,25,0003 3,00,0004 3,50,000
What is the IRR of the project?
Ans.
To calculate Internal Rate of Return (IRR):
Step I: Compute the average of annual cash inflows
Year Cash Inflow in Rs.
1 4,50,000
2 4,25,000
3 3,00,000
4 3,50,000
Total 15,25,000
Average = 15,00,000 / 4 = Rs. 3,81,250
Step II: Divide the initial investment by the average of annual cash inflows:
=10,00,000 / 3,81,250
=2.622
Step III: From the PVIFA table for 4 years, the annuity factor very near to 2.622 is 20%. Therefore
the first initial rate is 20%
Year Cash flows PV factor at 20%PV of Cash
1 4,50,000 0.833 3,74,850
2 4,25,000 0.694 2,94,950
3 3,00,000 0.579 1,73,700
4 3,50,000 0.482 1,68,700
Total 10,12,200
Since the initial investment of Rs.10,00,000 is less than the computed value at 20% of
Rs. 10,12,200 then next trial rate is 22%.
Year Cash flows PV factor at 22% PV of Cash
1 4,50,000 0.82 3,69,000
2 4,25,000 0.672 2,85,600
3 3,00,000 0.551 1,65,300
4 3,50,000 0.451 1,57,850
Total 9,77,750
Since initial investment of Rs.10,00,000 lies between 9,77,750 (22%) and 10,12,200 (20%), the IRR by interpolation is,
IRR = 20 + ((10,12,200-10,00,000) / (10,12,200-9,77,750))*2
= 20 + 0.3541 *2
= 20.70%
6. What is sensitivity analysis? Mention the steps involved in it.
Ans. Sensitivity Analysis:
There are many variables like sales, cost of sales, investments, tax rates etc which affect the NPV and IRR of a project. Analysing the change in the project’s NPV or IRR on account of a given change in one of the variables is called Sensitivity Analysis. It is a technique that shows the change in NPV given a change in one of the variables that determine cash flows of a project. It measures the sensitivity of NPV of a project in respect to a change in one of the input variables of NPV.
The reliability of the NPV depends on the reliability of cash flows. If fore casts go wrong on account of changes in assumed economic environments, reliability of NPV & IRR is lost. Therefore, forecasts are made under different economic conditions viz pessimistic, expected and optimistic. NPV is arrived at for all the three assumptions.
Steps involved in Sensitivity analysis:
1. Identification of variables that influence the NPV & IRR of the project.
2. Examining and defining the mathematical relationship between the variables.
3. Analysis of the effect of the change in each of the variables on the NPV of the project.
NAME
GALI NEHRU
SUBJECT
MARKETING MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0034SET 1
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Explain BCG Matrix?
This model is used to identify company’s SBU’s position in the market. This model identifies the SBU’s strengths weaknesses, opportunities and threats on the basis of market growth rate and relative market share. This model is also known as growth share matrix.
The origin of the Boston Matrix lies with the Boston Consulting Group in the early 1970s. It was devised as a clear and simple method for helping corporations decide which parts of their business they should allocate their available cash to. Today, this is as important as ever because of the limited availability of credit.
However, the Boston Matrix is also a good tool for thinking about where to apply other finite resources: people, time and equipment.
Market share is the percentage of the total market that is being serviced by your company, measured either in revenue terms or unit volume terms. The higher your market share, the higher proportion of the market you control.
The Boston Matrix assumes that if you enjoy a high market share you will normally be making money (this assumption is based on the idea that you will have been in the market long enough to have learned how to be profitable, and will be enjoying scale economies that give you an advantage).
The question it asks is, "Should you be investing your resources into that product line just because it is making you money?" The answer is, "not necessarily."
This is where market growth comes into play. Market growth is used as a measure of a market's attractiveness. Markets experiencing high growth are ones where the total market is expanding, which should provide the opportunity for businesses to make more money, even if their market share remains stable.
By contrast, competition in low growth markets is often bitter, and while you might have high market share now, what will the situation look like in a few months or a few years? This makes low growth markets less attractive
Axis components:
a. Market Growth rate: the rate at which market is growing.b. Relative Market Share: market share of the SBU dived by the
market share of the largest competitor.
Model Components:
These groups are explained below:
Dogs:
Low Market Share / Low Market Growth.
In these areas, SBU’s market presence is weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale economies of the larger players, so it's going to be difficult to make a profit.
Cash Cows:
High Market Share / Low Market Growth
Here, SBU’s are well-established, so it's easy to get attention and exploit new opportunities. However it's only worth expending a certain amount of effort, because the market isn't growing and your opportunities are limited.here we can say cash cow can be milked.
Stars:
High Market Share / High Market Growth
Here SBU’s are well-established, and growth is exciting! These are fantastic opportunities, and you should work hard to realize them.
Question Marks (Problem Child):
Low Market Share / High Market Growth
These are the opportunities no one knows what to do with. They aren't generating much revenue right now because you don't have a large market share. But, they are in high growth markets so the potential to make money is there. Here there are two choices, either to invest heavily to bring it to star position or divest or liquidate from that position.
Question Marks might become Stars and eventual Cash Cows, but they could just as easily absorb effort with little return. These opportunities need serious thought as to whether increased investment is warranted.
Key Points
The Boston Matrix is an effective tool for quickly assessing the options open to you, both on a corporate and personal basis.
With its easily understood classification into "Dogs", "Cash Cows", "Question Marks" and "Stars", it helps you quickly and simply screen the opportunities open to you, and helps you think about how you can make the most of them.
Limitations:
As any other marketing theories in the field, the BCG matrix model is not perfect either. There are according problems of this theory.
Some limitations concerning the particular use of BCG include:
1. Only two dimensions – market share and product or service growth rate, are employed. These are the first limitations.
2. How to define market and how to get data about market share are also problems.
3. High market shares don’t always necessarily lead to profit at all times. It is not the only success factor.
4. Low share or niche businesses can be profitable too, which means in the real world some Dogs can be more profitable than cash Cows.
5. The model cannot reflect the growth rates of the general market and market growth is not the only indicator for market attractiveness.
6. The model also neglects the effects of synergy between different business units.
2.Describe the marketing mix for Pepsi.
Marketing Mix:
The product, its price, promotion and distribution / position blended together to get favourable response from the customer.
PepsiCo is one of the world’s largest food and beverage companies with annual turnover of $44 billion [2008]. The company employs approximately 185000 people worldwide, and its products are sold in approximately 200countries through 4 Ps of marketing mix which are following.
1. Product2. Promotion3. Place4. Price
1. Pepsi Products:
Quality:
Pepsi follows on Quality standard across the globe.
Pepsi has a long standing commitment to protecting the consumers whose trust and confidence in its products is the backbone of its success. In order to ensure that consumers stay informed about the global quality of all Pepsi products sold in world, Pepsi products carry a quality assurance seal on them.
“One Quality Worldwide” assurance seal appears on the entire range of Pepsi’s beverages.
The composition of the soft drink is as follows:
Water (86-90%), Sugar (10-13%), CO2 (0.3 -0.7%) and Concentrate (0.2-0.4%).
- Water used in Pepsi Co soft drinks must be as safe as possible for human consumption. At every plant , Pepsi require incoming water to be purified even further, using a variety of processes. At minimum, every plant in world employs a dual back to back carbon filter.
- Sugar must meet the standards of quality of Pepsi, which are uniform for all plants across world. All Pepsi sugar manufacturers should undergo the same supplier qualification process. All plants in
the world further purify sugar with hot activated carbon anf fine filtration.
- The Co2 in each bottle of Pepsi surpasses the recognised standards for medical use. Each supplier undergo rigorous qualification process, which includes the complete audit of refineries and testing from international laboratories. Each batch carries certificate of analysis and compliance.
- Concentrates which makes up less than 1 % of Pepsi finished beverages, also are diligently controlled. All ingredients including flavours, emulsifiers, preservatives, colours, sweeteners are of food grade and approved by global standards like JECFA/CODEX etc.
To conclude, Pepsi products comply with most stringent international regulations.
Design:
Pepsi logo evolution:
2. Pepsi promotion :
Promotion is a key element of marketing program and is concerned with effectively and efficiently communicating the decisions of marketing strategy, to favourably influence the target customers’ perceptions to facilitate exchange between the marketer and the consumer that may satisfy the objective of both.
A company’s promotional efforts are the only controllable means to create awareness among publics about itself, the products and services it offers, their features and influence their attitudes favourably.
Advertising:
It is any paid form of non personal mass communication through various media to present and promote product, services and ideas by an identified sponsor.
PepsiCo has advertised its products through many different channels and media. Through TV we have seen different advertisements of its products such as Pepsi or Dew. PepsiCo always advertises its products targeting those favourable television programs like sports, series etc.
Through News papers PepsiCo has advertised wide range of products and also through posters a message has been sent to a lot of people about the products which it offers.
3. Pepsi Place :
Decisions with respect to distribution channel focus on marketing the product available in adequate quantities at places where consumers are normally expected to shop for them to satisfy their needs. Depending on the nature of the product, marketing management decides to put into place an exclusive, intensive or selective network distribution, while selecting appropriate dealers or wholesalers.
- Direct distribution:o Delivery of post mix cylinders and handling of key accounts; the
key accounts are different wholesalers, restaurants and hotels like pizza hut, etc. These are known as national key accounts and are very important in terms of competition.
o Export parties.- Indirect Distribution:o Through base market distributorso Through outstation distributors.
Before delivering the product, some certain guiding principles are followed for the assessment of distributors’ capability
- Applicants must have 20to 25 vehicles- Applicants must have 20000 cases of empty bottles- Applicants must deposit 1000000 as a security.
This is usually done through taking over key revenue areas. If the distributor des not achieve sales target, the distribution is taken back and addition of new distributor is done.
4. Pepsi Price :
Pricing decisions are almost always made in consultation with marketing management. Price is the only marketing mix that can be altered quickly. Price variables such as dealers price, retail price, discounts, allowances, credit terms etc., influence the development of marketing strategy, as price is a major factor that influences the assessment of the value obtained by customers.
Supplier Manufacturer Distributor Retailer Customer
Customers directly relate price to quality, particularly in case of profucts that are ego intensive of technology based. Pepsi being a company which emphasizes product quality, it tends to sell it sproducts with price range from moderately low to high prices depending on the use and target customers.
Sample price list
Pegular Pepsi (150ml) ->Rs .8/-
Pepsi (250ml) ->Rs.15/-
Pepsi can (300ml) ->Rs.25/-
Pepsi (1.5L) -> Rs.50/-
3.Choose any well-known company and study the micro environment and macro environment for the same.
Company : PepsiCo
Micro Environment
Supplier :
Marketing Intermediaries:
The***** was set up in **** and is the selling agent for Pepsi in south India, it is based in the *****. It manages the supply of several wholesalers, retailers, restaurants, hotels and other such food outlets.In order to acieve the projected sales targets effectively, the organisation ensures a comprehensive strategic alignment with the overall Pepsi’s business strategy.
Customers:
Pepsi cutomers are mostly of youg generation between age 14 and 30 years.
Competitors:
Coca-Cola is the main competitor in India.
Publics:
There are lots of public are included such as channels, investment houses, radio stations, news papers community groups, general public etc. And also internal public include workers, board of directors, managers and so on.
Macro Environment:
Demographic forces:
Age:
The age of potential customers is around 14 to 30years.
Income:
As far as income levels are concerned, Pepsi targets mainly middle class to the upper class.
Economic Forces:
When the economy of the consumer becomes low and expenses become high, consumers move towards another product which is of lower cost than the PepsiCo product.
Natural forces:
Due to any earthquake, or disaster shortage of product will be there by marketers or suppliers, so this affects the product and market.
Technology Forces:
There is huge investment from the government to develop the infrastructure opportunities and the creation of the new product such as new advanced formulas, changes in technology of production this affects the product.
Political and legal:
India is politically stable and hence economy is stable and as a result it attracts investments from other countries. This increases other beverages companies to enter Indian market and this in turn affects the Pepsi products.
Cultural forces:
Majority of Indians are non vegetarians and they expect the beverages they consume must be free from all insects. Hence even if a small insect is found in an Pepsi product in any part of India by a customer, this affects the business of Pepsi in whole country.
4.Write a short note on consumer buying behaviour
Consumers are individuals, households, or businesses who use the products. Here we will consider only individuals and households. Consumer characteristics vary from country to county. Therefore it is a challenging task for marketer to understand the need, buying behaviour of consumer before developing the product and marketing program.
Characteristics affecting the consumer behaviour:
Marketer need to understand the impact of the following factors on his/ her organisation.
a. Cultural factors:- Culture is the combination of costoms, beliefs and values of
consumers in a particular nation. Majority of Indians are vegetarians and a company which sells non-vegetarian items should analyse these values of the consumer. For example, KFC which sells chicken dishes all over the world added vegetarian burgers in their menu to serve vegetarian consumers.
- Subcultures are part of culture comprising, geographic regions, religions, nationalities and racial groups. The value system of these groups differs from others. For example, Hindus in north India prefer to spend their time with family during the navaratri festival. During this time to attract consumers, restaurants started offering the authentic navarathri dishes.
- Social Class are permanent groups in the society whose members have common linkings. According to Mckinsey consumer report, Indian consumers can be classified into 5 different categories.
o Deprived: Deprived are the people who earn less than Rs.90000 annually. This group is also known as below poverty line. People in this category will do less of semiskilled work.
o Aspires: As pires belongs to the families who earn between Rs.90000 to Rs. 200000. This group consists of shop keepers, industrial workers, and small land holding firms. Half of their earned money goes for basic amenities and food.
o Seekers: Seekers earn between Rs200000 and Rs. 500000. This class varies largely. This group contains fresh workers, middle level employees, government employees and business people.
o Strivers: Strivers earn between Rs500000 and Rs1000000. They are considered very successful. The group contains business people, large farmers, senior government officials and professionals. They are leading the consumption lead India growth.
o Global Indians: They are earning more than Rs.1000000. this group is comprised of senior officials, professionals, and top business executives. India is witnessing growth in this class.
b. Social factors:Human beings are social animals. They live and interact with other people. Therefore there is a chance of influence by others on their opinions. Marketers identify such influential persons or groups of consumer. Generally such groups are classified into two major groups namely reference groups and family.
Reference Groups are used in order to evaluate and determine the nature of given individual or other group’s characteristics and social attributes. Reference groups are those that people refer to when evaluating their own qualities, circumstances, attitudes, values and behaviours.
Family: Indian culture gives utmost importance to the family. People discuss with their family before purchasing the valuable items. Therefore many companies use either whole family or kids in their promotional programs.
For example Godrej introduced memory backup auto washing machine. They have shown family enjoying without any problems of washing clothes.
c. Personal Factors:Individual factors like age, occupation, lifestyle and personality influence the consumer decision making. Personality is the image of personal traits. Traits includes self confidence, dominance, autonomy, defensiveness, adaptability and aggressiveness. Many companies use this concepts in their marketing communications. Bajaj pulsar used muscularity to highlight its image(definitely male).
d. Psychological factors:
Motivation: (Need Hierarchy theory)One of the most mentioned theory of motivation is the Hierarchy of needs put forth by psychologist Abraham Maslow. He saw human
needs in the form of a hierarchy, ascending from the lowest to the highest. As per him the needs are:i. Physiological:
These are important needs for sustaining the human life. Food, water, warmth, shelter, sleep, medicine and education are the basic physiological needs. Until these needs are satisfied no other motivating factor will work.
ii. Security or safety:These are the needs to be free of physical danger and of the fear of losing job, property, food, shelter. It laso includes protection against emotional harm.
iii. Social needs:People will try to satisfy their needs for affection, acceptance and friendship.
iv. Esteem needs:Once the people are satisfied with social needs, they would like to have esteem needs like power, prestige, status, self-confidence, self respect, achievements recognition and attention.
v. Needs for self actualisation:Highest need in this hierarchy of needs. It is the drive to become what one is capable of becoming. It includes growth, achieving one’s potential and self fulfilment.
Marketers interested in finding what state of need of hierarchy the consumer is in and what type of product to be developed to suit his or her need.
Perception:
It is the process of acquiring, interpreting, selecting and organising sensory information.
Marketers research their consumer profile and communicates the product or service messages to them either through radio, demo or television.
Types of consumer buying behaviour:
High involvement Low involvement
Significant difference between brands
Complex buying behaviour
Variety seeking buying behaviour
Few differences between brands
Dissonance reducing buying behaviour
Habitual buying behaviour
Complex Buying Behaviour:
Consumers who are representing this behaviour are highly involved in the purchase if the product or service. The process become complex as different between brands is very high. For example, customer who wants to purchase refrigerator would like to know the meaning of defrosting, door lock, digital temperature control etc. The price of the product is usually high.
Comparison of 3 brands and significant difference between them:
LG GR T 282
Akai D186
Electrolux Kelvinator 386
Defrost system √ √ √
Door lock √ √ √
Adjustablee shelves √ √ √
Moisture and humidity control
√ X √
Deodorising ability √ √ √
Water dispenser X X √
√ √ √
From the above table it is clear that marketer should first develop the belief about the brand, provide the information and differentiate company brand from others.
Dissonance reducing buying behaviour:
The behaviour exhibited by the customer when product purchases require high involvement but not only have few differences existed. For example, customers who want to purchase CTV will not find many differences between the brands but the price of the product and its technicality makes customer to involve more. But customer will into show post purchase dissonance which is very difficult to control.
Variety seeking buying behaviour:
When there is significant difference between the bands existing but customer will not involve more while purchasing, marketer identify this behaviour as variety seeking behaviour. There are many varieties of biscuits available. One can purchase salt biscuits, cream biscuits, Marie biscuits etc. The customer who purchases Britannia tiger earlier may purchase sun feast biscuit next time. This does not mean that the quality of tiger is inferior to other. In this situation marketer should understand the following: -
- The market leader should encourage customers to buy repeatedly.- Make product available and visible to customer.- The firm who is not market leader should come out with promotional
techniques to encourage customer to purchase the product.
Habitual Buying behaviour:
The low involvement between the brands and few differences in brands leads to this type of behaviour. For example spice powder marketed by MDH, Everest or MTR have very few differences between them and customers do not search the information to purchase particular product. The following strategies can be followed by marketer:
- Use price and sales promotions to stimulate product trial.- Use more visible aspects than wording in the advertisements.- Television is the better medial for this type of products.- Use classical conditioning theory to create advertisements.
5.Company A has homogeneous consumer preferences in the market; Company B sells different variants of soaps, While Company C is a small firm with constrained
resources. What do you think is the most suitable market coverage strategy for the all the three companies.
Depending on the emerging patterns of the market segmentation, homogenous preferences, diffused segmentation and cluster preference, a company chooses its market segmentation strategy.
Company A:
This company can follow un-differentiated marketing strategy. In this market coverage strategy, in which the company A treats the target market as one and does not consider that there are market segments that exhibit uncommon needs. The company A, focuses on the centre of the target market to get maximum advantage. The feature of one product all segments calls for presenting one market mix for the target market.
Company B:
This company can follow Differentiated marketing strategy. The company B goes for proper market segmentation as depicted by its analysis of the total market. The company, therefore, goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment. This strategy can be followed by company B which sells different soaps and each of them has its own market. Thus the company B creates segment in the soap market and not in toiletries market.
Company C:
This company can follow concentrated marketing strategy. The company C follows one product one segment principle. The manufacturer gets
maximum knowledge about the segment needs and therefore acquires special reputation. This strategy can also help the small companies like C to stand against a large corporation because the small company can create niches in its one product one segment approach by providing maximum varieties.
Comparison of market coverage strategy:
Focus Undifferentiated marketing
Differentiated Marketing
Concentrated Marketing
Product One/few Many One/ Few
Segment All Many One/ Few
Marketing Mix
One Many One/ Few
Given the comparison of different coverage strategies, it is easy to locate the strategies for companies A, B and C.
Company
Undifferentiated marketing
Differentiated Marketing
Concentrated Marketing
A Least Suitable Most Suitable More Suitable
B Most Suitable More Suitable Least Suitable
C More suitable Least Suitable Most Suitable
Given the above table, the firm’s resources and the products requirement in its present form would decide the choice of a particular market-coverage strategy. Finally the competitor’s adoption of a particular strategy should be considered for deciding company’s own strategy.
6. Describe various bases for positioning the product with example.
Overcoming positioning difficulties enables the company to solve the marketing-mix problem. Thus seizing the high-quality position, requires the firm to produce high quality products, charge a high price, distribute through high-class dealers and advertise in high-quality media vehicles.
The bases of positioning strategies htat are available are:
a. Attribute Positioning:
A company positions itself on an attribute such as size or number of years in existence. Sunfeast position its snack brand as bigger lighter and crisper.
b. Benefit Positioning:
The product is positioned as a leader in certain benefit.
Automotive Hyundai santro
Headline:
India’s best loved family car is now india’s simplest car to drive
Sub headline:
Hyundai introduces santro zip line automatic. No shifting gears, no clutch no problem.
Baseline:
The simplest car to drive (Positioning)
c. Use or Application Positioning:
Positioning the product as best ofrsome use and application. For example kenstar positioned its product as unexpectedly cold.
d. User positioning:
Positioning the product as best for some user group. For example in Parle-G, the booy was positioned as rock star. This advertisement basically targets kids and boys.
e. Competitor Positioning:
The product claims to be better in some way than a named competitor. For example, in the advertisement of Matrubhumi, base line says, “In the wake of ABC results, Matrubhumi celebrates the addition of 33960 copies while nearest competitor laments the loss of 7258 copies”. Planner, “take note”. It is directly mentioning its and competitors sales of news paper.
f. Product Category Positioning:
The product is positioned as the leader in a certain product category. Bajaj CT100 was positioned as leader in the entry segment bikes.
g. Quality or Price Positioning:
The product is positioned as offering best value. Vegitable oil brand dhara position itself as ‘ anokhi shuddata, anokha asar’ This means, company offers unique purity and unique effect.
NAME
GALI NEHRU
SUBJECT
MARKETING MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0034SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Write a short note on product life cycle.
Answer: The product life cycle goes through many phases, involves many
professional disciplines, and requires many skills, tools and processes.
Product life cycle (PLC) has to do with the life of a product in the market
with respect to business/commercial costs and sales measures; whereas
product life cycle management (PLM) has more to do with managing
descriptions and properties of a product through its development and
useful life, mainly from a business/engineering point of view. To say that a
product has a life cycle is to assert four things: 1) that products have a
limited life, 2) product sales pass through distinct stages, each posing
different challenges, opportunities, and problems to the seller, 3) profits
rise and fall at different stages of product life cycle, and 4) products
require different marketing, financial, manufacturing, purchasing, and
human resource strategies in each life cycle stage.
The different stages in a product life cycle are:
1.Market introduction stage
I:* costs are high
II:* slow sales volumes to start
III:* little or no competition - competitive manufacturers watch for
acceptance/segment growth losses
IV:* demand has to be created
V:* customers have to be prompted to try the product
VI: makes no money at this stage
2.Growth stage
I:* costs reduced due to economies of scale
II:* sales volume increases significantly
III:* profitability begins to rise
IV:* public awareness increases
V:* competition begins to increase with a few new players in establishing
market
VI:* increased competition leads to price decreases
3.Mature stage
I:* Costs are lowered as a result of production volumes increasing and
experience curve effects
II:* sales volume peaks and market saturation is reached
III:* increase in competitors entering the market
IV:* prices tend to drop due to the proliferation of competing products
V:* brand differentiation and feature diversification is emphasized to
maintain or increase market share
VI:* Industrial profits go down
4.Saturation and decline stage
I:* costs become counter-optimal
II:* sales volume decline or stabilize
III:* prices, profitability diminish
IV:* profit becomes more a challenge of production/distribution efficiency
than increased sales
Request for Deviation
In the process of building a product following defined procedure, an RFD is
a request for authorization, granted prior to the manufacture of an item,
to depart from a particular performance or design requirement of a
specification, drawing or other document, for a specific number of units or
a specific period of time.
Market Identification
A "micro-market" can be used to describe a Walkman, more portable, as
well as individually and privately recordable; and then Compact Discs
("CDs") brought increased capacity and CD-R offered individual private
recording...and so the process goes. The below section on the "technology
lifecycle" is a most appropriate concept in this context.[clarification
needed] Most of the context is not in English so you may need a
translator.[clarification needed]
In short, termination is not always the end of the cycle; it can be the end
of a micro-entrant within the grander scope of a macro-environment. The
auto industry, fast-food industry, petro-chemical industry, are just a few
that demonstrate a macro-environment that overall has not terminated
even while micro-entrants over time have come and gone.
It is claimed that every product has a life cycle. It is launched, it grows,
and at some point, may die. A fair comment is that - at least in the short
term - not all products or services die. Jeans may die, but clothes probably
will not. Legal services or medical services may die, but depending on the
social and political climate, probably will not.
Even though its validity is questionable, it can offer a useful 'model' for
managers to keep at the back of their mind. Indeed, if their products are
in the introductory or growth phases, or in that of decline, it perhaps
should be at the front of their mind; for the predominant features of these
phases may be those revolving around such life and death. Between these
two extremes, it is salutary for them to have that vision of mortality in
front of them.
However, the most important aspect of product life-cycles is that, even
under normal conditions, to all practical intents and purposes they often
do not exist (hence, there needs to be more emphasis on model/reality
mappings). In most markets the majority of the major brands have held
their position for at least two decades. The dominant product life-cycle,
that of the brand leaders which almost monopolize many markets, is
therefore one of continuity.
In the criticism of the product life cycle, Dhalla & Yuspeh state:
The PLC is a dependent variable which is determined by market actions; it
is not an independent variable to which companies should adapt their
marketing programs. Marketing management itself can alter the shape
and duration of a brand's life cycle.[1]
Thus, the life cycle may be useful as a description, but not as a predictor;
and usually should be firmly under the control of the marketer. The
important point is that in many markets the product or brand life cycle is
significantly longer than the planning cycle of the organisations involved.
Thus, it offers little practical value for most marketers. Even if the PLC
(and the related PLM support) exists for them, their plans will be based
just upon that piece of the curve where they currently reside (most
probably in the 'mature' stage); and their view of that part of it will almost
certainly be 'linear' (and limited), and will not encompass the whole range
from growth to decline.
2. Explain various categories of brand sponsorship with example.
Answer: Sponsorship plays a significant role in the planning and
execution of any brand promotion. Sponsors consider return on
investment (ROI) when measuring the value of sponsorships. And the
most important elements include awareness and financial benefits. For
the Taste of Chicago 2007, a total of 69 sponsors across 12 different
sponsorship categories supported the event.
Christine Jacob, senior manager of corporate sponsorships in the Mayor’s
Office of Special Events in Chicago, supports numerous programs
throughout the year. But for the Taste, her goal is to identify sponsors and
secure/negotiate terms early to help maximize the event's total revenue.
Sponsorship categories at the Taste include the following:
Presenting ($750,000)
Family Village ($125,000)
3rd of July ($125,000)
Official Credit Card ($90,000)
Taste Stage ($90,000)
Concert: 1 per night (customized)
Gourmet Dining Pavilion ($50,000)
Dining Pavilion ($40,000)
Participating ($30,000)
On-Site: 10 days ($25,000)
On-Site: 1 day ($5,000)
Media: in-kind value ($120,000)
Of course, sponsors are savvy and measure the benefits of participating in
a community festival against their own business objectives.
For example, some sponsors use the Taste as an opportunity to brand
themselves with some of the entertainment options to expand their
visibility with event attendees. The result: Humana Senior Pavilion,
Dominick’s Cooking Corner, Gallo Wine Pavilion (part of Gourmet Dining).
How to Secure Sponsors
Because the Taste of Chicago is an established annual event, sponsorship
renewals typically begin in September for the following year with contract
commitments by December.
“We’re fortunate that Taste is what it is,” Jacob explains. “People call us –
which is great. It’s a marketer’s dream to be part of Taste.”
When the programming committee for the Taste meets each year in the
fall, they consider new programming areas and that’s when the
sponsorship team begins to integrate these ideas into the their platform.
In 2007, the Taste included three new areas: Goin’ Green Pavillion, Sports
Pavilion, and a International Pavilion. If a sponsor isn’t identified, the
category is simply sponsored by the city, and the benefits are measured
and used to find a sponsor for the following year (as long as the for the
next year.
If sponsors do not commit by year end or drops out for any reason, it’s
time for the sponsorship team to pursue new sponsors.
“That could mean cold calls and pitches,” Jacobs explains. “For example, if
an automotive sponsor drops out, we’ll approach another automotive
sponsor who we’ve worked with in the past.”
For those approaching sponsorship for the first time or those who are
holding a previous organized event that is now annualized, Jacobs offers
the following tips:
Even if you’re not successful, try to secure a first year sponsor.
Sponsorships must be identified as part of the initial planning phase.
Brainstorm program elements early to allow maximum time to secure
sponsors.
Identify the value of each category; reinforce the benefits of a previously
held program and its sponsorship levels.
Create a fact sheet for each property/individual sponsorship category.
Offer higher level sponsors the right of first refusal. Majority of sponsors
are either participatin or onsite. Many Renew all sponsorships at least six
months prior to the event.
Secure new/replacement sponsors at least three months prior to the
event.
Hold weekly or regular meetings to communicate sponsor status and
renewals.
Common Elements in a Sponsorship Package
Sponsors consider return on investment (ROI) when measuring the value
of sponsorships. And the most important elements include awareness and
financial benefits.
Nevertheless, event planners who organize community events such as a
food festival will determine sponsorship levels and direct benefits from the
organizer to help support those ROI objectives. Depending on the
sponsorship level, visibility included in the Taste may include any portion
or all of the following:
Signage/banner opportunities (stage, railing, towers, street pole, etc.)
Corporate logo on main stage
Category exclusivity
Promotional tent
Advertisement in program materials
Status level on event brochure
Corporate logo on event advertisements
Corporate logo at ticket windows
Mentions in radio advertising
Priority seating tickets
Use of corporate hospitality tents
Main stage presentations
Main stage mentions
Opportunity to bring inflatable for increased visibility
Corporate press releases with event press kits
Parking and delivery permits
Invitations to press preview party
Opportunity to distribute pre-approved sample items
Benefits of Sponsorship
While “cash” may seem like the most obvious reason to secure sponsors,
many other benefits exist for incorporating sponsorship categories into a
community food festival, according to Jacob:
Concert sponsorship helps bring top name artists.
Corporate sponsorships enhance programming.
The Value of In-Kind Offers
To be sure, sponsoring an established event like the Taste is beneficial to
both sponsor and organizer, so in-kind offers can sometimes be viewed as
cash. Some examples that Jacob suggests include the following:
Media sponsors to provide TV, radio and print advertising.
Radio sponsors to offset talent expenses.
Airline sponsors to provide seats for out of town entertainment.
Hotels to provide complimentary guest rooms for entertainment.
Another important factor when identifying sponsors for a family event:
“We do not have any ‘sin’ categories. We avoid tobacco and sex related
sponsors,” Jacob says. “And because this is a food festival, no food
sampling is allowed.”
For anyone who is considering an event like this for the first time, Jacob
recommends doing a lot of research, and suggests that planners consider
using an experienced firm to find out how other people do it.
3. Explain the product mix pricing strategies with example.
Answer: Pricing is one of the most important elements of the marketing
mix, as it is the only mix, which generates a turnover for the organisation.
The remaining 3p’s are the variable cost for the organisation. It costs to
produce and design a product, it costs to distribute a product and costs to
promote it. Price must support these elements of the mix. Pricing is
difficult and must reflect supply and demand relationship. Pricing a
product too high or too low could mean a loss of sales for the
organisation. Pricing should take into account the following factors:
Fixed and variable costs.
Competition
Company objectives
Proposed positioning strategies.
Target group and willingness to pay.
Types of Pricing Strategies
An organisation can adopt a number of pricing strategies. The pricing
strategies are based much on what objectives the company has set itself
to achieve.
Penetration pricing: Where the organisation sets a low price to increase
sales and market share.
Skimming pricing: The organisation sets an initial high price and then
slowly lowers the price to make the product available to a wider market.
The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors.
Product Line Pricing: Pricing different products within the same product
range at different price points. An example would be a video manufacturer
offering different video recorders with different features at different
prices. The greater the features and the benefit obtained the greater the
consumer will pay. This form of price discrimination assists the company
in maximizing turnover and profits.
Bundle Pricing: The organisation bundles a group of products at a reduced
price.
Psychological pricing: The seller here will consider the psychology of price
and the positioning of price within the market place. The seller will
therefore charge 99p instead £1 or $199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the
product. An example of products using this strategy would be Harrods,
first class airline services, Porsche etc. Optional pricing: The organization
sells optional extras along with the product to maximize its turnover. This
strategy is used commonly within the car
industry.
4. What are various logistics functions? Describe in brief.
Answer: It is important to recognize that the various logistic functions
come together to form the totality of logistics support. A NATO logistician
of one discipline will often work with a staff officer of another discipline
and, as a very minimum, will have to appreciate the other's
responsibilities and problems. For example, logistic planning originates in
national, NATO or MNC policy guidance and has to be coordinated with all
the staff branches concerned, whether they be operational, administrative
or logistic, military or civil.
Materiel Function of Logistics
Production or acquisition logistics covers materiel, from the first phase of
the life cycle to its final disposal from the inventory. The first part of the
cycle, from specification, design and production is clearly a function of
production logistics. Reception of the equipment into service, its
distribution and storage, repair, maintenance and disposal are clearly a
consumer logistic task. However, the initial design of the equipment which
is part of production logistics has to take account of the consumer aspects
of repair and maintenance, and therefore involves both disciplines.
Supply Function of Logistics
Supply covers all materiel and items used in the equipment, support and
maintenance of military forces (classes of supply are listed at Annex A).
The supply function includes the determination of stock levels,
provisioning, distribution and replenishment.
Maintenance and Repair Function of Logistics
Maintenance means all actions to retain the materiel in or restore it to a
specified condition. The operational effectiveness of land, naval and air
forces will depend to a great extent on a high standard of preventive
maintenance, in peacetime, of the equipment and associated materiel in
use. Repair includes all measures taken to restore materiel to a
serviceable condition in the shortest possible time.
Battle Damage Repair (BDR) is an important element in maintaining
materiel availability during operations. It is designed to restore damaged
materiel to a battleworthy condition, irrespective of the cause of the
failure, as quickly as possible. Damage assessment has to be done rapidly
and must not always require the use of automated test equipment or
sophisticated tools. The considerations are primarily aimed at limiting the
damage, determining the cause of the damage, establishing a plan for
damage repair, and minimizing the risk to equipment and operators. Once
the operational mission has been accomplished, BDR must be followed by
specialized maintenance or repair to restore the equipment to fully
serviceable condition.
Service Function of Logistics
The provision of manpower and skills in support of combat troops or
logistic activities includes a wide range of services such as combat
resupply, map distribution, labour resources, postal and courier services,
canteen, laundry and bathing facilities, burials, etc. These services may
be provided either to one's own national forces or to those of another
nation and their effectiveness depends on close cooperation between
operational, logistic and civil planning staffs.
Explosive Ordnance Disposal (EOD) Function of Logistics
EOD involves the investigation, detection, location, marking, initial
identification and reporting of suspected unexploded ordnance, followed
by the on-site evaluation, rendering safe, recovery and final disposal of
unexploded explosive ordnance. It may also include explosive ordnance
which has become hazardous by damage or deterioration. The NATO EOD
Technical Information Centre (EODTIC) holds records of all past and
present ammunition and explosives, and provides an immediate advisory
service on EOD problems.
Movement and Transportation Function of Logistics
It is a requirement that a flexible capability exists to move forces in a
timely manner within and between theatres to undertake the full
spectrum of Alliance roles and missions. It also applies to the logistic
support necessary to mount and sustain operations.
Engineering Function of Logistics
The area of logistic engineering, while not exclusively a logistic function
will require close coordination with logistics as the mission is very closely
aligned with logistics in terms of facilitating the logistic mission of opening
lines of communication and constructing support facilities. The
engineering mission bridges the gap from logistics to operations and is
closely related to the ultimate success of both. The acquisition,
construction and operation of facilities forms the basis for the NISP. This is
the term generally used in NATO for installations and facilities for the
support of military forces.
Medical Function of Logistics
This function entails the provision of an efficient medical support system
to treat and evacuate sick, injured and wounded personnel, minimise man
days lost due to injury and illness, and return casualties to duty. An
effective medical support system is thus considered a potential force
multiplier. Though medical support is normally a national responsibility,
planning must be flexible and consider coordinated multinational
approaches to medical support. The degree of multinationality will vary
depending on the circumstances of the mission, and be dependent upon
the willingness of nations to participate in any aspect of integrated
medical support.
Contracting Function of Logistics
Contracting has become increasingly important to the conduct of
operations, particularly when operating beyond NATO's area of
responsibility. It is a significant tool that may be employed to gain fast
access to in-country resources by procuring the supplies and services that
the NATO Commander requires.
Budget and Finance Function of Logistics
The areas of budget and finance impact virtually every aspect of logistic
operations. The funding and budget policies to pay for deployment and
sustainment and redeployment are unique. While nations are generally
expected to finance their own operations.
5. What is IMC? Describe the communication development
process in brief.
Answer: A management concept that is designed to make all aspects of
marketing communication such as advertising, sales promotion, public
relations, and direct marketing work together as a unified force, rather
than permitting each to work in isolation.
It aims to ensure consistency of message and the complementary use of
media. The concept includes online and offline marketing channels. Online
marketing channels include any e-marketing campaigns or programs,
from search engine optimization (SEO), pay-per-click, affiliate, email,
banner to latest web related channels for webinar, blog, micro-blogging,
RSS, podcast, and Internet TV. Offline marketing channels are traditional
print (newspaper, magazine), mail order, public relations, industry
relations, billboard, radio, and television. A company develops its
integrated marketing communication programme using all the elements
of the marketing mix (product, price, place, and promotion).
Integrated marketing communication is integration of all marketing tools,
approaches, and resources within a company which maximizes impact on
consumer mind and which results into maximum profit at minimum cost.
Generally marketing starts from "Marketing Mix". Promotion is one
element of Marketing Mix. Promotional activities include Advertising(by
using different medium), sales promotion (sales and trades promotion),
and personal selling activities. It also includes internet marketing,
sponsorship marketing, direct marketing, database marketing and public
relations. And integration of all these promotional tools along with other
components of marketing mix to gain edge over competitor is called
Integrated Marketing Communication.
Reasons for the Growing Importance of IMC
Several shifts in the advertising and media industry have caused IMC to
develop into a primary strategy for marketers:
From media advertising to multiple forms of communication.
From mass media to more specialized (niche) media, which are centered
around specific target audiences.
From a manufacturer-dominated market to a retailer-dominated,
consumer-controlled market.
From general-focus advertising and marketing to data-based marketing.
From low agency accountability to greater agency accountability,
particularly in advertising.
From traditional compensation to performance-based compensation
(increased sales or benefits to the company).
From limited Internet access to 24/7 Internet availability and access to
goods and services.
Selecting the Most Effective Communications Elements
The goal of selecting the elements of proposed integrated marketing
communications is to create a campaign that is effective and consistent
across media platforms. Some marketers may want only ads with the
greatest breadth of appeal: the executions that, when combined, provide
the greatest number of attention-getting, branded, and motivational
moments. Others may only want ads with the greatest depth of appeal:
the ads with the greatest number of attention-getting, branded, and
motivational points within each.
Although integrated marketing communications is more than just an
advertising campaign, the bulk of marketing dollars is spent on the
creation and distribution of advertisements. Hence, the bulk of the
research budget is also spent on these elements of the campaign. Once
the key marketing pieces have been tested, the researched elements can
then be applied to other contact points: letterhead, packaging, logistics,
customer service training, and more, to complete the IMC cycle.
6. What are alternative approaches to marketing while going
international? Study Pepsi’s international marketing strategy.
Answer: Markets and marketing are becoming ever more international in
their nature and managers around the world ignore this fact at their peril.
To achieve sustainable growth in markets that are becoming increasingly
global, or merely to survive in domestic markets that are increasingly
attacked by international players, it is essential that organisations
understand the complexity and diversity of international marketing and
that their managers develop the skills, aptitudes and knowledge
necessary to compete effectively around the globe.
A company must learn how to enter foreign markets and increase their
global competitiveness. Firms that do venture abroad find the
international marketplace far different from the domestic one. Market
sizes, buyer behavior and marketing practices all vary, meaning that
international marketers must carefully evaluate all market segments in
which they expect to compete.
Whether to compete globally is a strategic decision (strategic intent) that
will fundamentally affect the firm, including its operations and its
management. For many companies, the decision to globalize remains an
important and difficult one (global strategy and action). Typically, there
are many issues behind a company`s decision to begin to compete in
foreign markets. For some firms, going abroad is the result of a deliberate
policy decision (exploiting market potential and growth); for others, it is a
reaction to a specific business opportunity (global financial turmoil, etc.)
or a competitive challenge (pressuring competitors). But, a decision of this
magnitude is always a strategic proactive decision rather than simply a
reaction (learning how to business abroad). Reasons for global expansion
are mentioned below:
a) Opportunistic global market development (diversifying markets)
b) Following customers abroad (customer satisfaction)
c) Pursuing geographic diversification (climate, topography, space, etc.)
d) Exploiting different economic growth rates (gaining scale and scope)
e) Exploiting product life cycle differences (technology)
f) Pursuing potential abroad
g) Globalizing for defensive reasons
h) Pursuing a global logic or imperative (new markets and profits)
Moreover, there can be several reasons to be mentioned including
comparative advantage, economic trends, demographic conditions,
competition at home, the stage in the product life cycle, tax structures
and peace. To succeed in global marketing companies need to look
carefully at their geographic expansion. To some extent, a firm makes a
conscious decision about its extent of globalization by choosing a posture
that may range from entirely domestic without any international
involvement (domestic focus) to a global reach where the company
devotes its entire marketing strategy to global competition. In the
development of an international marketing strategy, the firm may decide
to be domestic-only, home-country, host-country or regional/global-
oriented.
Each level of globalization will profoundly change the way a company
competes and will require different strategies with respect to marketing
programs, planning, organization and control of the international
marketing effort. An industry in which firm competes is also important in
applying different strategies. For example, when a firm which competes in
the pharmaeutical industry which is heavily globalized, it has to set its
own strategies to deal with global competitors. (constant innovation)
Tracking the development of the large global corporations today reveals a
recurring, sequential pattern of expansion. The first step is to understand
the international marketing environment, particularly the international
trade system. Second, the company must consider what proportion of
foreign to total sales to seek, whether to do business in a few or many
countries and what types of countries to enter. The third step is to decide
on which particular markets to enter and this calls for evaluating the
probable rate of return on investment against the level of risk (market
differences). Then, the company has to decide how to enter each
attractive market. Many companies start as indirect or direct export
exporters and then move to licensing, joint-ventures and finally direct
investment; this company evolution has been called the
internationalization process. Companies must next decide on the extent to
which their products, promotion, price and distribution should be adapted
to individual foreign markets. Finally, the company must develop an
effective organization for pursuing international marketing. Most firms
start with an export department and graduate to an international division.
A few become global companies which means that top management plans
and organizes on a global basis (organization history).
Typically, these companies began their business development phase by
entrenching themselves first in their domestic markets. Often,
international development did not occur until maturity was reached
domestically. After that phase, these firms began to turn into companies
with some international business, usually on an export basis. But, this
process may vary dramatically with the size of the domestic market.
Pepsi’s international marketing strategy
When the "You're in the Pepsi Generation" advertising campaign launched
in 1963, it may have been the first time a brand was marketed primarily
with an association to its consumers' aspirational attitudes. A decidedly
youth-oriented strategy, The newest campaign slogan, introduced this
year, is "More Happy," which definitely coincides with one concrete
example of "more" in the packaging of Pepsi products today—more
designs. Many more. At least 35 distinct design ideas will grace the
packaging of Pepsi's cans and bottles this year alone, and this design
strategy may continue indefinitely.
Though not "generational" in word, the campaign certainly has a youth-
oriented feel with package designs, advertising, and websites that are fun
and playful. PepsiCo worked closely with Peter Arnell and Arnell Group,
based in New York City, to devise a comprehensive new strategy that
would connect with Pepsi's core consumers. Arnell reinvented the Pepsi
package as a meaningful and appealing communications tool for the latest
generation of youth that are not overwhelmed by media, music, or digital
distractions.
Pepsi actually asked their loyal consumers what brand elements would
have to remain so that they would be intuitively reassured that their
favorite drinks were not changing and the brand they trusted was still
essentially the same. Their answer was direct and consistent. Pepsi-lovers
needed to see three elements for sure—the Pepsi "globe," the iconic Pepsi
blue, and the familiar tilted Pepsi capital letters.
The most recent logo design had the Pepsi wordmark on top of and
slightly overlapping the iconic Pepsi red-white-and-blue "globe." On the
previous can design, the wordmark wrapped halfway around the can, and
the globe was off-center. The new cans and bottles have un-bundled the
word and globe, making the newly centered globe more of the hero, and
the smaller Pepsi wordmark less prominent.
Television ad campaigns are reinforcing the globe-centric approach by
featuring a boulder-sized Pepsi globe in various settings careening to and
fro like a pinball. In the ads and on the front of most of the new packages
is the reassuring tag line: "Same Pepsi inside, new look outside." Miller
explains that it is customary and important to reassure consumers for at
least six months in situations like this.
Today's youth as demanding authenticity from the products they come
into contact with in their day-to-day experiences. The new Pepsi design
strategy is versatile because it can be authentic and stay current, and it
could also make introducing special seasonal or regional designs more
intriguing and less disruptive. "This is a new way of using packaging as
media," explains Miller. "The consumer is looking for more variety and
expecting more from their brands. They want to have a dialogue with their
favorite brands.”
NAME
GALI NEHRU
SUBJECT
MANAGEMENT INFORMATION SYSTEMS
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0035SET 1
STUDY CENTRE
2542
DATE OF SUBMISSION
1. Define MIS? What are the objectives and characteristics of
MIS ?
Answer: MIS can be defined as a system that
1. Provides information to support managerial functions like Planning,
organizing, directing, controlling.
2. Collects information in a systematic and a routine manner which is in
accordance with a well defined set of rules.
3. Includes files, hardware, software and operations research models of
Processing, storing, retrieving and transmitting information to the
users.
OBJECTIVES OF MIS:-
An effective MIS has the following objectives
1. Facilitate the decision - making process by furnishing information in the
proper time frame. This helps the decision - maker to select the best
course of action.
2. Provide requisite information at each level of management to carry out
their functions.
3. Help in highlighting the critical factors to the closely monitored for
successful functioning of the organization.
4. Support decision-making in both structured and unstructured problem
environments.
5. Provide a system of people, computers, procedures, interactive query
facilities, documents for collecting, sorting, retrieving and transmitting
information to the users.
CHARACTERISTICS OF MIS:-
Management Oriented
The system is designed from the top to work downwards. It does not mean
that the system is designed to provide information directly to the top
management. Other levels of management are also provided with
relevant information. For example, in the marketing information system,
the activities such as sales order processing, shipment of goods to
customers and billing for the goods are basically operational control
activities. A salesman can also track this information, to know the sales
territory, size of order, geography and product line, provide the system
has been designed accordingly. However, if the system is designed
keeping in mind the top management, then data on external competition,
market and pricing can be created to know the market share of the
company's product and to serve as a basis of a new product or market
place introduction.
Management Directed
Because of management orientation of MIS, it is necessary that
management should actively direct the system development efforts. In
order to ensure the effectiveness of system designed, management
should continuously make reviews.
Integrated
The world "integration" means that the system has to cover all the
functional areas of an organization so as to produce more meaningful
management information, with a view to achieving the objectives of the
organization. It has to consider various sub-system their objectives,
information needs, and recognize the interdependence, that these
subsystem have amongst themselves, so that common areas of
information are identified and processed without repetition and
overlapping
Common Data Flows
Because of the integration concept of MIS, common data flow concept
avoids repetition and overlapping in data collection and storage
combining similar functions, and simplifying operations wherever possible.
Heavy Planning Element
A management information system cannot be established overnight. It
takes almost 2 to 4 years to establish it successfully in an organization.
Hence, long-term planning is required for MIS development in order to
fulfill the future needs and objectives of the organization. The designer of
an information system should therefore ensure that it will not become
obsolete before it actually gets into operation.
Flexibility and Ease Of Use
While building an MIS system all types of possible means, which may
occur in future, are added to make it flexible. A feature that often goes
with flexibility is the ease of use. The MIS should be able to incorporate all
those features that make it readily accessible to the wide range of users
with easy usability.
2. Explain strategic MIS categories in detail. Give illustrations for
each category.
Answer: Strategic Information System - A Strategic Information
System (SIS) is a system to manage information and assist in strategic
decision making. A strategic information system has been defined as,
"The information system to support or change enterprise's strategy."
A SIS is a type of Information System that is aligned with business
strategy and structure.
The alignment increases the capability to respond faster to environmental
changes and thus creates a competitive advantage. An early example was
the favorable position afforded American and United Airlines by their
reservation systems, Sabre and Apollo. For many years these two systems
ensured that the two carriers' flights appeared on the first screens
observed by travel agents, thus increasing their bookings relative to
competitors. A major source of controversy surrounding SIS is their
sustainability.
SISs are different from other comparable systems as:
1. they change the way the firm competes.
2. they have an external (outward looking) focus.
3. they are associated with higher project risk.
4. they are innovative (and not easily copied).
It is mainly concerned with providing and organization and its members
an assistance to perform the routine tasks efficiently and effectively. One
of the major issue before any organization is the challenge of meeting its
goals and objectives. Strategic IS enable such organization in realizing
their goals. Strategic Information System (SIS) is a support to the existing
system and helps in achieving a competitive advantage over the
organizations competitors in terms of its objectives. This unit deals with
the critical aspects of the strategic information system. This units
indicates the theoretical concepts and the way in which the same are
realized in practice. The flow of the unit is in such a way that it starts with
the development of contemporary theory about strategic uses of
corporations' internal information systems leading to systems which
transcend the boundaries of particular organizations. The process
whereby strategic information systems are created or identified is then
examined. A number of weaknesses in the existing body of theory are
identified, and suggestions made as to directions in which knowledge is or
may be progressing. A strategic information system is concerned with
systems which contribute significantly to the achievement of an
organization's overall objectives. The body of knowledge is of recent origin
and highly dynamic, and the area has an aura of excitement about it. The
emergence of the key ideas, the process whereby strategic information
systems come into being is assessed, areas of weakness are identified,
and directions of current and future development suggested.
Information system is regarded as a tool to provide various services to
different management functions. The tools have been developing year by
year and the application of the tool has become more and more diverse.
In management it is now a very power means to manage and control
various activities and decision making process. The original idea of
automating mechanical processes got quickly succeeded by the
rationalization and integration of systems. In both of these forms, IS was
regarded primarily as an operational support tool, and secondarily as a
service to management. Subsequent to the development, it was during
the last few years that an additional potential was discovered. It was
found that, in some cases, information technology (IT) had been critical to
the implementation of an organization's strategy.
An organization’s strategy supported by information system fulfilling its
business objectives came to be known as Strategic Information System.
The strategic information system consists of functions that involved
gathering, maintenance and analysis of data concerning internal
resources, and intelligence about competitors, suppliers, customers,
government and other relevant organizations.
3. Write a detailed note on the planning and development of
Management Information Systems.
Answer: Information is a corporate resource, as important as the capital,
labour, know-how etc. and is being used for decision-making. Its quality,
therefore, is required to be very high.
A low quality information would adversely affect the organizational
performance as it affects decision-making. The quality of information is
the result of the quality of the input data, processing design, system
design, system and procedures which generate such a data, and the
management of the data processing function. Quality, unlike any other
product, is not an absolute concept. Its level is determined with reference
to the context and its use, and the user. Perfect quality just as perfect
information is no achievable and has cost-benefit implications.
However, it is possible to measure the quality of information on certain
parameters. All these parameters need not have a very high value. Some
parameters may have lesser importance in the total value on account of
their relevance in the information and its use.
The quality parameters which are generally considered are shown in the
table
Individual
DifferencesExplanation
Effect on
information
processing
Examples
Locus of control
internal or
external to the
The degree of
perception in
assessing the
More
information
gathering and
The production
decisions,
selection of
situation.
control which is
internal to the
organization or
external to the
organization.
analysis, if
internal.
tools and
materials
etc.
Personal
dogmatism.
The degree of
faith in beliefs,
opinions and
past
experience.
Low dogmatism,
then more
information
collection and
processing.
The pricing,
advertising in a
Competitive
environment.
Risk propensity.
The ability to
take the risk.
Higher, then
more
information
gathering
and analysis.
The top
management
decision-making
in a strategic
planning.
Tolerance for
ambiguity.
Level of clarity
required in the
information. The
ability to read
through the
information.
Tight tolerance
then
more
information
collection and
analysis.
Manager
Constantly
asking for more
information.
Manipulative
intelligence.
The ability to
manipulate the
data and
information vis-
à-vis the stored
information and
knowledge.
High ability,
then less
information and
more self
analysis.
Experienced
and Skillful
managers rely
on the
manipulative
intelligence.
Experience in
decision-
making.
Extent of
experience at
particular level
of decision
making.
High, then
correct filtering
of data and
appropriate
choice of
decision making
process.
The managers
with a wide
experience in
the different
fields
of management
call
for precise and
less
but pertinent
information.
Knowledge of
the
task, tools and
technology.
The extent of
knowledge in
the application
of the
tools and
technology.
Higher, then
less
information
relevant
to and tools
correct
analysis.
The Technocrat
scientists, and
managers of
technology have
definite
information.
The quality of these important parameters is ensured by conducting a
proper systems analysis, designing a suitable information system and
ensuring its maintenance from time to time, and also subjecting it to audit
checks to ensure the system integrity.
The quality of the parameters is assured if the following steps are taken.
1. All the input is processed and controlled, as input and process design.
2. All updating and corrections are completed before the data processing
begins.
3. Inputs (transactions, documents, fields and records) are subject to
validity checks.
4. The access to the data files is protected and secured through an
authorization scheme.
5. Intermediate processing checks are introduced to ensure that the
complete data is processed right through, i.e. run to run controls.
6. Due attention is given to the proper file selection in terms of data,
periods and so on.
7. Backup of the data and files are taken to safeguard corruption or loss
of data.
8. The system audit is conducted from time to time to ensure that the
information system specifications are not violated.
9. The system modifications are approved by following a set procedure
which begins with authorization of a change to its implementation
followed by an audit.
10. Systems are developed with a standard specification of design and
development.
11. Information system processing is controlled through programme
control, process control and access control.
12. Ensure MIS model confirms consistency to business plan satisfying
information needs to achieve business goals.
The assurance of quality is a continuing function and needs to be evolved
over a period and requires to be monitored properly. It cannot be
assessed in physical units of measure. The user of the information is the
best judge of the quality.
4. Explain in detail the necessity and importance of Systems
Design in MIS.
Answer: The business application system demands designing of systems
suitable to the application in project.
The major steps involved in the design are the following:
Input Design - Input design is defined as the input requirement
specification as per a format required. Input design begins long before the
data arrives at the device. The analyst will have to design source
documents, input screens and methods and procedures for getting the
data into the computer.
Output Design – The design of the output is based on the requirement of
the user – manager, customer etc. The output formats have to very
friendly to the user. Therefore the designer has to ensure the
appropriateness of the output format.
Development – When the design and its methodology is approved, the
system is developed using appropriate business models. The development
has to be in accordance to a given standard. The norms have to be strictly
adhered to.
Testing – Exhaustive and thorough testing must be conducted to
ascertain whether the system produces the right results. Testing is time
consuming: Test data must be carefully prepared, results reviewed and
corrections made in the system. In some instances, parts of the system
may have to be redesigned. Testing an information system can be broken
down into three types of activities: unit testing, system testing and
acceptance testing. Unit testing or program testing consists of testing
each program separately in the system. The purpose of such testing is to
guarantee that programs are error free, but this goal is realistically
impossible. Instead, testing should be viewed as a means of locating
errors in programs, focusing on finding all ways to make a program fail.
Once pinpointed, problems can be corrected. System testing tests the
functioning of the information system as a whole. It tries to determine if
discrete modules will function together as planned and whether
discrepancies exist between the way the system actually works and the
way it was conceived. Among the areas examined are performance time,
capacity for file storage and handling peak loads, recovery and restart
capabilities and manual procedures. Acceptance testing provides the final
certification that the system is ready to be used in a production setting.
Systems tests are evaluated by users and reviewed by management.
When all parties are satisfied that the new system meets their standards,
the system is formally accepted for installation.
Implementation and Maintenance
Conversion – Conversion is the process of changing from the old system to
the new system. Four main conversion strategies can be employed. They
are the parallel strategy, the direct cutover strategy, the pilot strategy
and the phased strategy.
In a parallel strategy both the old system and its potential replacement
are run together for a time until everyone is assure that the new one
functions correctly. This is the safest conversion approach because, in the
event of errors or processing disruptions, the old system can still be used
as a backup. But, this approach is very expensive, and additional staff or
resources may be required to run the extra system.
The direct cutover strategy replaces the old system entirely with the new
system on an appointed day. At first glance, this strategy seems less
costly than the parallel conversion strategy. But, it is a very risky
approach that can potentially be more costly than parallel activities if
serious problems with the new system are found. There is no other system
to fall back on. Dislocations, disruptions and the cost of corrections are
enormous.
The pilot study strategy introduces the new system to only a limited area
of the organization, such as a single department or operating unit. When
this version is complete and working smoothly, it is installed throughout
the rest of the organization, either simultaneously or in stages.
The phased approach strategy introduces the new system in stages,
either by functions or by organizational units. If, for example, the system
is introduced by functions, a new payroll system might begin with hourly
workers who are paid weekly, followed six months later by adding salaried
employees( who are paid monthly) to the system. If the system is
introduced by organizational units, corporate headquarters might be
converted first, followed by outlying operating units four months later.
Moving from an old system to a new system requires that end users be
trained to use the new system. Detailed documentation showing how the
system works from both a technical and enduser standpoint is finalized
during conversion time for use in training and everyday operations. Lack
of proper training and documentation contributes to system failure, so this
portion of the systems development process is very important.
Production and maintenance
After the new system is installed and conversion is complete, the system
is said to be in production. During this stage the system will be reviewed
by both users and technical specialists to determine how well it has met
its original objectives and to decide whether any revisions or modifications
are in order. In some instances, a formal post implementation audit
document will be prepared. After the system has been finetuned, it will
need to be maintained while it is in production to correct errors, meet
requirements or improve processing efficiency.
Once a system is fully implemented and is being used in business
operations, the maintenance function begins. Systems maintenance is the
monitoring, or necessary improvements. For example, the implementation
of a new system usually results in the phenomenon known as the learning
curve. Personnel who operate and use the system will make mistake
simply because they are familiar with it. Though such errors usually
diminish as experience is gained with a new system, they do point out
areas where a system may be improved.
Maintenance is also necessary for other failures and problems that arise
during the operation of a system. End-users and information systems
personnel then perform a troubleshooting function to determine the
causes of and solutions to such problems.
Maintenance also includes making modifications to an established system
due to changes in the business organizations, and new e-business and
ecommerce initiatives may require major changes to current business
systems.
5. Explain in detail about e-business, e-commerce and e-
collaboration. Give suitable examples.
Answer: Managing an E-business & Challenges before an E-
business - Due to Internet capabilities and web technology, traditional
business organization definition has undergone a change where scope of
the enterprise now includes other company locations, business partners,
customers and vendors. It has no geographic boundaries as it can extend
its operations where Internet works. All this is possible due to Internet and
web moving traditional paper driven organization to information driven
Internet enabled E-business enterprise. E-business enterprise is open
twenty-four hours, and being independent, managers, vendors, customers
transact business any time from anywhere. Internet capabilities have
given E-business enterprise a cutting edge capability advantage to
increase the business value. It has opened new channels of business as
buying and selling can be done on Internet. It enables to reach new
markets across the world anywhere due to communication capabilities. It
has empowered customers and vendors / suppliers through secured
access to information to act, wherever necessary. The cost of business
operations has come down significantly due to the elimination of paper-
driven processes, faster communication and effective collaborative
working. The effect of these radical changes is the reduction in
administrative and management overheads, reduction in inventory, faster
delivery of goods and services to the customers.
In E-business enterprise traditional people organization based on
'Command Control' principle is absent. It is replaced by people
organization that is empowered by information and knowledge to perform
their role. They are supported by information systems, application
packages, and decision-support systems. It is no longer functional,
product, and project or matrix organization of people but E-organization
where people work in network environment as a team or work group in
virtual mode. E-business enterprise is more process-driven, Technology-
enabled and uses its own information and knowledge to perform. It is lean
in number, flat in structure, broad in scope and a learning organization. In
E-business enterprise, most of the things are electronic, use digital
technologies and work on databases, knowledge bases, directories and
document repositories. The business processes are conducted through
enterprise software like ERP, SCM, and CRM supported by data
warehouse, decision support, and knowledge management systems.
Today most of the business organizations are using Internet technology,
network, and wireless technology for improving the business performance
measured in terms of cost, efficiency, competitiveness and profitability.
They are using E-business, Ecommerce solutions to reach faraway
locations to deliver product and services. The enterprise solutions like
ERP, SCM, and CRM run on Internet (Internet / Extranet) & Wide Area
Network (WAN). The business processes across the organization and
outside run on E-technology platform using digital technology. Hence
today's business firm is also called E-enterprise or Digital firm.
The paradigm shift to E-enterprise has brought four transformations,
namely:
1. Domestic business to global business.
2. Industrial manufacturing economy to knowledge-based service
economy.
3. Enterprise Resource Management to Enterprise Network Management.
4. Manual document driven business process to paperless, automated,
electronically transacted business process.
These transformations have made conventional organization design
obsolete.
In E-enterprise, business is conducted electronically. Buyers and sellers
through Internet drive the market and Internet-based web systems.
Buying and selling is possible on Internet. Books, CDs, computer, white
goods and many such goods are bought and sold on Internet. The new
channel of business is well-known as Ecommerce. On the same lines,
banking, insurance, healthcare are being managed through Internet E-
banking, E-billing, E-audit, & use of Credit cards, Smart card, ATM, E-
money are the examples of the Ecommerce application. The digital firm,
which uses Internet and web technology and uses E-business and
Ecommerce solutions, is a reality and is going to increase in number.
MIS for E-business is different compared to conventional MIS design of an
organization.
The role of MIS in E-business organization is to deal with changes in global
market and enterprises. MIS produces more knowledge-based products.
Knowledge management system is formally recognized as a part of MIS. It
is effectively used for strategic planning for survival and growth, increase
in profit and productivity and so on. To achieve the said benefits of E-
business organization, it is necessary to redesign the organization to
realize the benefits of digital firm. The organization structure should be
lean and flat. Get rid of rigid established infrastructure such as branch
office or zonal office. Allow people to work from anywhere. Automate
processes after reengineering the process to cut down process cycle time.
Make use of groupware technology on Internet platform for faster
response processing. Another challenge is to convert domestic process
design to work for international process, where integration of
multinational information systems using different communication
standards, country-specific accounting practices, and laws of security are
to be adhered strictly.
Internet and networking technology has thrown another challenge to
enlarge the scope of organization where customers and vendors become
part of the organization. This technology offers a solution to communicate,
coordinate, and collaborate with customers, vendors and business
partners. This is just not a technical change in business operations but a
cultural change in the mindset of managers and workers to look beyond
the conventional organization. It means changing the organization
behaviour to take competitive advantage of the E-business technology.
The last but not the least important is the challenge to organize and
implement information architecture and information technology platforms,
considering multiple locations and multiple information needs arising due
to global operations of the business into a comprehensive MIS.
E-COMMERCE is a second big application next to ERP. It is essential deals
with buying and selling of goods. With the advent of intent and web
technology, E-Commerce today covers an entire commercial scope online
including design and developing, marketing, selling, delivering, servicing,
and paying for goods. Some E-Commerce application add order tracking
as a feature for customer to know the delivery status of the order.
The entire model successfully works on web platform and uses internet
technology.
Ecommerce process has two participants, namely Buyer and Seller, like in
traditional business model. And unique and typical to E-commerce there is
one more participant to seller by authorization and authentication of
commercial transaction.
E-Commerce process model can be viewed in four ways and categories:
1. B2C: Business Organization to Customer
2. B2B: Business Organization to Business
3. C2B: Customer to Business Organization
4. C2C: Customer to Customer
In B2C Model, business organization uses websites or portals to offer
information about product, through multimedia clippings, catalogues,
product configuration guidelines, customer histories and so on. A new
customer interacts with the site and uses interactive order processing
system for order placements. On placements of order, secured payment
systems comes into operation to authorize and authenticate payment to
seller. The delivery system then take over to execute the delivery to
customer.
In B2B Model, buyer and seller are business organizations. They
exchange technical & commercial through websites and portals. Then
model works on similar line like B2C. More advanced B2B model uses
Extranet and Conducts business transaction based on the information
status displayed on the buyer’s application server.
In C2B Model, customer initiates actions after logging on to seller’s
website or to server. On the server of the selling organization, E-
Commerce applications are present for the use of the customer. The
entire Internet banking process work on C2B model, where account
holders of the bank transact a number of requirements such as seeking
account balance, payment and so on.
In C2C model, Customer Participates in the process of selling and buying
through the auction website. In this model, website is used for personal
advertising of products or services. E-Newspaper website is an Example of
advertising and selling of goods to customer.
In B2B Model, the participants in E-business are two organization with
relations as buyer=seller, distributor-dealer and so on.
E-Collaboration every business has a number of work scenarios where
group of people work together to complete the tasks and to achieve a
common objective. The group could be teams or virtual teams with
different member strength. They come together to platform a task to
achieve some results. The process is called Collaboration. The Biggest
Advantage of E-Collaboration
It taps the collective wisdom, knowledge and experience of the members.
The collaboration team or group could be within the organization and
between the organizations as well.
Since, E-Collaboration works on an internet platform and uses web
technology, work group/team need not be at one physical location.
E-collaboration uses E-Communication capabilities to perform
collaborative tasks or project assignment. Its effectiveness is increased by
software ‘GroupWare’ that enables the members of the group to share
information, invoke an application and work together to create documents
and share them and so on.
E-Collaboration helps work effectively on applications like calendaring and
scheduling tasks, event, project management, workflow application, work
group application.
E-collaboration system components are internet, Intranet, Extranet and
LAN, WAN networks for communication through GroupWare tools,
browser.
Let us illustrate the model using an event in the business such as receipt
of material for a job to be processed on the shop floor. In this event there
is a transaction receipt of material, which needs to be processed, and then
a workgroup will use this information of material receipt. Each member of
this workgroup has a different goal.
6. What is an internet? Explain the differences between internet,
intranet and extranet.
Answer: Internet is a global network of interconnected computers,
enabling users to share information along multiple channels. Typically, a
computer that connects to the Internet can access information from a vast
array of available servers and other computers by moving information
from them to the computer's local memory. The same connection allows
that computer to send information to servers on the network; that
information is in turn accessed and potentially modified by a variety of
other interconnected computers. A majority of widely accessible
information on the Internet consists of inter-linked hypertext documents
and other resources of the World Wide Web (WWW). Computer users
typically manage sent and received information with web browsers; other
software for users' interface with computer networks includes specialized
programs for electronic mail, online chat, file transfer and file sharing.
The movement of information in the Internet is achieved via a system of
interconnected computer networks that share data by packet switching
using the standardized Internet Protocol Suite (TCP/IP). It is a "network of
networks" that consists of millions of private and public, academic,
business, and government networks of local to global scope that are
linked by copper wires, fiber-optic cables, wireless connections, and other
technologies.
Difference between internet, intranet and extranet as follow:
Extranet :
An extranet is a private network that uses the Internet protocols and the
public telecommunication system to securely share part of a business's
information or operations with suppliers, vendors, partners, customers, or
other businesses. An extranet can be viewed as part of a company's
intranet that is extended to users outside the company. An extranet
requires security and privacy.
A new buzzword that refers to an intranet that is partially accessible to
authorized outsiders.
Whereas an intranet resides behind a firewall and is accessible only to
people who are members of the same company or organization, an
extranet provides various levels of accessibility to outsiders. You can
access an extranet only if you have a valid username and password, and
your identity determines which parts of the extranet you can view. An
extranet is somewhat very similar to an intranet. Extranets are designed
specifically to give external, limited access to certain files of your
computer systems to:
Certain large or privileged customers.
Selected industry partners.
Suppliers and subcontractors... etc.
Therefore, a carefully designed extranet can bring additional business to
your company.
Intranets and extranets all have three things in common:
They both use secured Internet access to the outside world.
Both can drastically save your company or organization a lot of money.
Both need a user ID & password to control access to the whole system.
The professional development team at My Web Services has the expertise
and the right tools to design the right intranet or extranet that will meet
your exact needs, both for today and the future.
Intranet:
An internal use, private network inside an organization that uses the same
kind of software which would also be found on the Internet. Inter-
connected network within one organization that uses Web technologies for
the sharing of information internally, not world wide. Such information
might include organization policies and procedures, announcements, or
information about new products.
An intranet is a restricted-access network that works like the Web, but
isn't on it. Usually owned and managed by a company, an intranet enables
a company to share its resources with its employees without confidential
information being made available to everyone with Internet access.
A network based on TCP/IP protocols (an internet) belonging to an
organization, usually a corporation, accessible only by the organization's
members, employees, or others with authorization. An intranet's Web
sites look and act just like any other Web sites, but the firewall
surrounding an intranet fends off unauthorized access. Like the Internet
itself, intranets are used to share information.
An intranet is an information portal designed specifically for the internal
communications of small, medium or large businesses, enterprises,
governments, industries or financial institutions of any size or complexity.
Intranets can be custom-designed to fit the exact needs of businesses no
matter where they are situated.
Users of intranets consist mainly of:
Members of the executive team.
Accounting and order billing.
Managers and directors.
Sales people and support staff.
Customer service, help desk, etc..
Internet:
An electronic network of computers that includes nearly every university,
government, and research facility in the world. Also included are many
commercial sites. It started with four interconnected computers in 1969
and was known as ARPAnet. A network of computer networks which
operates world-wide using a common set of communications protocols.
The vast collection of inter-connected networks across the world that all
use the TCP/IP protocols.
A global network connecting millions of computers. A worldwide network
of computer networks. It is an interconnection of large and small networks
around the globe. The Internet began in 1962 as a resilient computer
network for the US military and over time has grown into a global
communication tool of more than 12,000 computer networks that share a
common addressing scheme.
NAME
GALI NEHRU
SUBJECT
MANAGEMENT INFORMATION SYSTEMS
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0035SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
1. What are limitations of MIS? What are the factors which lead to
the success and failure of MIS in an organization?
Answer: Limitations of MIS
1. Highly sensitive and requires constant monitoring
2. Budgeting of Budgeting extremely difficult
3. Lack of flexibility to update it.
Factors Contributing to Success
If a MIS is to be success then it should have all the features listed as
follows:
The MIS is integrated into the managerial functions. It sets clear
objectives to ensure that the MIS focuses on the major issues of the
business.
An appropriate information processing technology required to meet
the data processing and analysis needs of the users of the MIS is
selected.
The MIS is oriented, defined and designed in terms of the user’s
The MIS is kept under continuous surveillance, so that its open
system design is modified according to the changing information
needs.
MIS focuses on the results and goals, and highlights the factors and
reasons for non achievement.
MIS is not allowed to end up into an information generation mill
avoiding the noise in the information and the communication
system.
The MIS recognizes that a manager is a human being and
therefore, the systems must consider all the human behavioral
factors in the process of the management.
The MIS recognizes that the different information needs for
different objectives must be met with. The globalization of
information in isolation from the different objectives leads to too
much information and information and its non-use.
The MIS is easy to operate and, therefore, the design of the MIS has
such features which make up a user-friendly design.
MIS recognizes that the information needs become obsolete and
new needs emerge. The MIS design, therefore, has a basic
potential capability to quickly meet new needs of information.
The MIS concentrates on developing the information support to
manager critical success factors. It concentrates on the mission
critical applications serving the needs of the top management
Factors Contributing to Failures
Many a times MIS is a failures. The common factors which are responsible
for this are listed as follows:
The MIS is conceived as a data processing and not as an information
processing system.
The MIS does not provide that information which is needed by the
managers but it tends to provide the information generally the
function calls for. The MIS then becomes an impersonal system.
Under estimating the complexity in the business systems and not
recognizing it in the MIS design leads to problems in the successful
implementation.
Adequate attention is not given to the quality control aspects of the
inputs, the process and the outputs leading to insufficient checks
and controls in the MIS.
The MIS is developed without streamlining the transaction
processing systems in the organization.
Lack of training and appreciation that the users of the information
and the generators of the data are different, and they have to play
an important responsible role in the MIS.
The MIS does not meet certain critical and key factors of its users
such as a response to the query on the database, an inability to get
the processing done in a particular manner, lack of user-friendly
system and the dependence on the system personnel.
A belief that the computerized MIS can solve all the management
problems of planning and control of the business.
Lack of administrative discipline in following the standardized
systems and procedures, wrong coding and deviating from the
system specifications result in incomplete and incorrect information.
The MIS does not give perfect information to all the users in the
organization.
2. What is Business Process Re-engineering? Explain in detail the
focus of BPR on the current issues in Business.
Answer: The existing system in the organization is totally reexamined
and radically modified for incorporating the latest technology. This
process of change for the betterment of the organization is called as
Business process reengineering.
With Business process being reengineered, the organizations have to
change the workflow and business procedures for efficiency in the
organization. Latest software are used and accordingly the business
procedures are modified, so that documents are worked upon more easily
and efficiently. This is called as workflow management.
Business process reengineering is a major innovation changing the way
organizations conduct their business. Such changes are often necessary
for profitability or even survival. BPR is employed when major IT projects
such as ERP are undertaken. Reengineering involves changes in structure,
organizational culture and processes. Many concepts of BPR changes
organizational structure. Team based organization, mass customization,
empowerment and telecommuting are some of the examples. The support
system in any organization plays a important role in BPR. ES, DSS, AI
(discussed later) allows business to be conducted in different locations,
provides flexibility in manufacturing permits quicker delivery to customers
and supports rapid paperless transactions among suppliers,
manufacturers and retailers. Expert systems can enable organizational
changes by providing expertise to non experts. It is difficult to carry out
BPR calculations using ordinary programs like spreadsheets etc. Experts
make use of applications with simulations tools for BPR.
Reengineering is basically done to achieve cost reduction, increase in
quality, improvement in speed and service. BPR enable a company to
become more competitive in the market. Employees work in team
comprising of managers and engineers to develop a product. This leads to
the formation of interdisciplinary teams which can work better than mere
functional teams. The coordination becomes easier and faster results can
be achieved. The entire business process of developing a product gets a
new dimension. This has led to reengineering of many old functional
processes in organizations.
BPR – the current focus
Apart from the usual ways of managing a process in any business
information system, it is necessary to enhance the value of the process
and also the methods used in improving the process. Some of the
concepts of information management for effective information systems
are the traditional concept of database, the emerging concepts of data
mining and data warehousing.
Concept of Database – Database is a data structure used to store
organized information.
A database is typically made up of many linked tables of rows and
columns. For example, a company might use a database to store
information about their products, their employees, and financial
information. Databases are now also used in nearly all ecommerce sites to
store product inventory and customer information. Database software,
such as Microsoft Access, FileMaker Pro, and MySQL is designed to help
companies and individuals organize large amounts of information in a way
where the data can be easily searched, sorted, and updated.
Data Mining - Data mining is primarily used as a part of information
system today, by companies with a strong consumer focus retail,
financial, communication, and marketing organizations. It enables these
companies to determine relationships among "internal" factors such as
price, product positioning, or staff skills, and "external" factors such as
economic indicators, competition, and customer demographics. And, it
enables them to determine the impact on sales, customer satisfaction,
and corporate profits. Finally, it enables them to "drill down" into
summary information to view detail transactional data. With data mining,
a retailer could use point of sale records of customer purchases to send
targeted promotions based on an individual's purchase history. By mining
demographic data from comment or warranty cards, the retailer could
develop products and promotions to appeal to specific customer
segments.
Data Warehousing – A data warehouse is a copy of transaction data
specifically structured for querying and reporting. The main output from
data warehouse systems are either tabular listings (queries) with minimal
formatting or highly formatted "formal" reports on business activities. This
becomes a convenient way to handle the information being generated by
various processes. Data warehouse is an archive of information collected
from wide multiple sources, stored under a unified scheme, at a single
site. This data is stored for a long time permitting the user an access to
archived data for years. The data stored and the subsequent report
generated out of a querying process enables decision making quickly. This
concept is useful for big companies having plenty of data on their
business processes. Big companies have bigger problems and complex
problems. Decision makers require access to information from all sources.
Setting up queries on individual processes may be tedious and inefficient.
Data warehouse may be considered under such situations.
3. Explain the various role of a Systems Analyst. What is meant
by Feasibility of systems ? What are the various types of
Feasibility study?
Answer: The system analyst is the person (or persons) who guides
through the development of an information system. In performing these
tasks the analyst must always match the information system objectives
with the goals of the organization.
Role of System Analyst differs from organization to organization. Most
common responsibilities of System Analyst are following
1) System analysis
It includes system's study in order to get facts about business activity. It is
about getting information and determining requirements. Here the
responsibility includes only requirement determination, not the design of
the system.
2) System analysis and design:
Here apart from the analysis work, Analyst is also responsible for the
designing of the new system/application.
3) Systems analysis, design, and programming:
Here Analyst is also required to perform as a programmer, where he
actually writes the code to implement the design of the proposed
application.
Due to the various responsibilities that a system analyst requires to
handle, he has to be multifaceted person with varied skills required at
various stages of the life cycle. In addition to the technical know-how of
the information system development a system analyst should also have
the following knowledge.
Business knowledge: As the analyst might have to develop any
kind of a business system, he should be familiar with the general
functioning of all kind of businesses.
Interpersonal skills: Such skills are required at various stages of
development process for interacting with the users and extracting
the requirements out of them
Problem solving skills: A system analyst should have enough
problem solving skills for defining the alternate solutions to the
system and also for the problems occurring at the various stages of
the development process.
Feasibility of Systems
Feasibility is a measure of how beneficial the development of an
information system would be to an organization. Feasibility analysis is the
activity by which the feasibility is measured.
Feasibility study is a preliminary study which investigates the information
needs of prospective users and determines the resource requirements,
costs, benefits and feasibility of a proposed project. The data is first
collected for the feasibility study. Later on, the findings of the study are
formalized in a written report that includes preliminary specifications and
a development plan for the proposed system. If the management
approves these recommendations of the report the development process
can continue.
Types of feasibility
The goal of feasibility study is to evaluate alternative systems and to
propose the most feasible and desirable system for development. The
feasibility of a proposed system can be evaluated in four major
categories:
a) Technical feasibility: It is a measure of a technology’s suitability to
the application being designed or the technology’s ability to work with
other technologies. It measures the practicality of a specified technical
solution.
b) Economic feasibility: It is the measure of the cost effectiveness of a
project. It is also known as cost benefit analysis.
c) Operational feasibility: It is a measure of how comfortable the
management and users are with the technology.
d) Schedule feasibility: It is a measure of how reasonable the project
schedule is.
4. Explain the significance of DSS. What are the components of
DSS and explain DSS model?
Answer: Decision Support Systems
Introduction to DSS
DSS is an interactive, flexible computer based information system. It uses
rules and models for processing data, to support various managerial
levels, ranging from top executives to mangers, in their decision making.
It supports all phases of decision making: intelligence, design, choice and
implementation.
A DSS is usually built to support the solution of certain problem and does
not replace the decision maker. As such, it is called a DSS application. It is
user friendly with strong graphical capabilities.
DSS components
The components of a DSS include a database of data used for query and
analysis, software with models, data mining and other analytical tools and
a user interface.
The DSS database is a collection of current or historical data from a
number of applications or groups. It can be small database or a massive
data warehouse from a large company, which is continuously being
updated.
The DSS software system includes software tools for data analysis. They
contain various OLAP tools, data mining tools or a collection of
mathematical and analytical models. A model can be a physical model, a
mathematical model or a verbal model. Most commonly used are the
statistical functions such as means, medians, deviations and scatter plots.
Optimization models such as linear programming are used to determine
optimal resource allocation.
Component of a Decision Support System
TPS External Data
DSS database
DSS software system
Models
OLAP tools
Data mining tools
User
Interface
User
Model of DSS
The model of a DSS may be represented as a block diagram as indicated
below –
5. Read the following case and answer the question (20)
You have 10 messages on voice mail, six faxes in your in-basket, three
people standing outside of your office waiting either for you to get off of
the phone or finish speaking with the guy sitting in your office (whichever
Database
management to
support decision
Managing the
decision models
Use
of
appropriate
decision
support
software
MANAGER
comes first). Your computer just beeped to inform you, again, that an e-
mail message has just been added to your stockpile of unread messages
gathering electronic dust. You make a mental note to change the
notification sound to an evil laugh. Your reading pile is teetering,
threatening to put out of misery the plant you haven't watered in three
weeks. You wonder who the strange people are in the picture on your
desk. ... Oh yeah, it's your spouse and kids.
Your boss strides into your office, throws a letter under your nose, and
says, "Read this. We just got a project that requires us to `collaborate
over the Internet'-whatever that means-and since you're the computer
guru around here, you have to get a handle on it and teach us all what to
do by next Thursday." As he leaves, you make a few e-comments about
what he can e-do with his e-letter. Welcome to e-hell. Most professionals
know by now that eventually they will have to deal with e-business. It's
too early to tell if e-collaboration will resolve the communications overload
engineers are facing today or just clutter the available bandwidth even
more. Look around you. Did PCs lead to a paperless office? Waiting for the
e-collaboration to stabilize or shake out, however, might be
counterproductive. You might find yourself in a situation like the one
described above where you'll have to "e-collaborate" in a pinch. If this
happens, here are a few survival tips: read about e-collaboration to get a
general impression of what it is and how it works and then visit some
Websites where some of the more popular products exist and try them
out. Visit the HPAC Engineering Interactive Website at www.hpac.com
and, under Heavy Duty Content, choose the Information Technology (IT)
Tips area. Read the columns on extranets that were published by Dr. Joel
Orr in April and May 2000 and the August column by Digital Media Editor
Lynne Brakeman on collaboration software exhibited during the A/E/C
Systems show earlier this year. These three columns introduce you to
collaboration software and point you to some products that are tailored to
our industry.
I'd also recommend visiting Orr's Website (www.extranets.cc) for a
comprehensive list of sites. Some of these sites allow you to download
"demo" versions. Trying out the software demo will help you decide which
method is right for you and possibly your whole company. Call some of
the vendors and ask if they provide training either online or at a nearby
facility. Depending on the stock market, some might be desperate enough
to come to your office.
If your firm is being required to e-collaborate, as the story goes above, try
and find the people who are leading the e-collaboration effort and ask
them what method they're using. If they have not made a decision on
which product to use, you may be able to sway them toward a decision
that benefits you and your company. If you need to teach others in your
company how to use e-collaboration tools or make a corporate-wide
procurement/standardization decision, I recommend that you do further
research and get others in your company involved. To learn more about
introducing new information technologies gradually into a company, read
the IT Tips column "Strategic Planning for Information Technology" in the
December 1996 issue. This e-business is a tough nut to crack. It
represents a pivotal time in our industry. The best way to deal with it is
proactively.
[Source: Proquest by Ivanovich, Michael G.. Heating/Piping/Air
Conditioning Engineering: HPAC. Cleveland: Sep 2000. Vol. 72, Iss. 9; pg.
9, 1 pgs, Copyright Penton Media, Inc. Sep 2000]
Question: Which particular concept of MIS is being dealt here in this
particular case? List out all the issues related to MIS mentioned in the
above case. List out all the advantages and disadvantages what you feel
is appropriate in this case.
Answer: In the above Case presentation – the Question has 3 parts:
Concept of MIS being spoken about in the case.
Issues related to MIS in the above case
Advantages and Disadvantages, which we feel, is appropriate in
the case.
1) To begin with, in the above Case presentation, the initial paragraph is
on the typical work scenario faced by a Manager in most of the service
sector organization. The amount of pressure he is in during his daily
routines work. Here he seems to be senior most and most computer
literate among others in the office. Hence his boss comes to him and
hands over a letter to him, which mentions about Collaboration over
Internet. The manager is supposed to go through the contents and brief
everyone by Thursday. The matter is related to E-Collaboration and E
Business. Further there are information on how to get more information
on E-Collabration. There are references of various Internet sites given to
gather more inputs on E-Enterprise, E Business and E Collaboration. .
E business systems lay foundation of other Enterprise applications,
namely E commerce, E communication and E collaboration.
To understand and discuss about the above terms we need to know that
MIS has been evolving in different forms under different levels of
management. Some of the developments are recent and some are still in
the development stage. The research continues.
With the emergence of Internet, business organization has undergone
structural, cultural, and qualitatitive change and a new organization
structure has emerged which is known as E business enterprise. In this
Enterprise business operations are performed through E Communication
and E Collaboration initiatives. Therefore, E business enterprise has a
global market, reach, source and global competition.
E business enterprise is more process driven, technology – enabled and
uses its own information and knowledge to perform. It has no geographic
boundaries as it can extend its operations where Internet works.
About E Collaboration -
Every business has a number of work scenarios where group of people
work together to complete the tasks and to achieve a common objective.
The groups could be teams or virtual teams with different member
strength. They come together to perform a task to achieve some results.
The process is called collaboration. The collaboration now is possible with
e-technologies, which put these teams in network with Internet support
for communication, access to different databases and servers. These
capabilities help to create collaborative work systems and allow members
to work together cooperatively on projects and assignments.
The biggest advantage of E-collaboration is that it taps the collective
wisdom, knowledge and experience of the members. The collaboration
team or group could be within the organization and between the
organizations as well.
Since, E-collaboration works on an Internet platform and uses web
technology, work group / team need not be at one physical location. They
can be at different locations and form a virtual team to work on project or
assignment.
E-collaboration uses E-communication capabilities to perform
collaborative tasks, or project assignment. Its effectiveness is increased
by software 'GroupWare' that enables the members of the group to share
information, invoke an application and work together to create documents
and share them and so on. GroupWare is collaboration software.
E-collaboration helps work effectively on applications like calendaring and
scheduling tasks, event, project management, workflow applications, work
group applications, document creation and sharing, and knowledge
management.
E-collaboration system components are Internet, Intranet, Extranet and
LAN, WAN networks for communication through GroupWare tools,
browsers. Application packages are software suit, which help process
customer requirements. It is supported by databases present on various
servers like mail server, material database, knowledge server, document
server and so on.
2) MIS for E-business is different compared to conventional MIS design of
an organization. The role of MIS in E-business organization is to deal with
changes in global market and enterprises. MIS produces more knowledge-
based products. Knowledge management system is formally recognized
as a part of MIS. It is effectively used for strategic planning for survival
and growth, increase in profit and productivity and so on.
To achieve the said benefits of E-business organization, it is necessary to
redesign the organization to realize the benefits of digital firm.
The organization structure should be lean and flat.
2) Get rid of rigid established infrastructure such as branch office or zonal
office.
3) Allow people to work from anywhere.
4) Automate processes after reengineering the process to cut down
process cycle time.
Make use of groupware technology on Internet platform for faster
response processing.
3) Advantages and Challenges:
Internet and networking technology has thrown challenge to enlarge the
scope of organization where customers and vendors become part of the
organization. This technology offers a solution to communicate, co
ordinate and collaborate with customers, vendors and business partners.
E-business enterprise is open twenty-four hours, and being independent,
managers, vendors; customers transact business any time from
anywhere.
It has no geographic boundaries as it can extend its operations where
Internet works. All this is possible due to Internet and web moving
traditional paper driven organization to information driven Internet
enabled E-business enterprise.
MIS in E-organization deviates from traditional report formats to
automated intelligent knowledge driven system. It enforces manager to
act quickly to response displayed on the screen. Most of the decisions of
middle and operational management are delegated to IT-enabled
information and knowledge driven systems. They are supported by the
rule-based transaction processing system, decision support systems,
expert systems, artificial intelligence (AI) systems, and data warehouse
and mining systems.
MIS in E-organization deviates from the conventional model of 'Capture
Compute
Process Analyses Report Think and Act' to 'Point Click Respond Act.
Challenges:
One challenge is to convert domestic process design to work for
international process, where integration of multinational information
systems using different communication standards, country specific
accounting practices, and laws of security are to be adhered strictly.
This is just not a technical change in business operations but a cultural
change in the mindset of managers and workers to look beyond the
conventional organization. It means changing the organization behaviour
to take competitive advantage of the E-business technology.
The last but not the least important is the challenge to organize and
implement information architecture and information technology platforms,
considering multiple locations and multiple information needs arising due
to global operations of the business into a comprehensive MIS.
NAME
GALI NEHRU
SUBJECT
OPERATIONS RESEARCH
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0036SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
“
1. Describe in details the OR approach of problem solving. What are the limitations of the Operations Research?
Answer:
OR approach of problem solvingOptimization is the act of obtaining the best result under any given circumstance. In various practical problems we may have to take many technical or managerial decisions at several stages. The ultimate goal of all such decisions is to either maximize the desired benefit or minimize the effort required. We make decisions in our every day life without even noticing them. Decision-making is one of the main activity of a manager or executive. In simple situations decisions are taken simply by common sense, sound judgment and expertise without using any mathematics. But here the decisions we are concerned with are rather complex and heavily loaded with responsibility. Examples of such decision are finding the appropriate product mix when there are large numbers of products with different profit contributions and productional requirement or planning public transportation network in a town having its own layout of factories, apartments, blocks etc. Certainly in such situations also decision may be arrived at intuitively from experience and common sense, yet they are more judicious if backed up by mathematical reasoning. The search of a decision may also be done by trial and error but such a search may be cumbersome and costly. Preparative calculations may avoid long and costly research. Doing preparative calculations is the purpose of Operations research. Operations research does mathematical scoring of consequences of a decision with the aim of optimizing the use of time, efforts and resources and avoiding blunders.
The application of Operations research methods helps in making decisions in such complicated situations. Evidently the main objective of Operations research is to provide a scientific basis to the decision-makers for solving the problems involving the interaction of various components of organization, by employing a team of scientists from different disciplines, all working together for finding a solution which is the best in the interest of the organization as a whole.
The solution thus obtained is known as optimal decision. The main features of OR are:
•It is System oriented: OR studies the problem from over all points of view of organizations or situations since optimum result of one part of the system may not be optimum for some other part.
•It imbibes Inter – disciplinary team approach. Since no single individual can have a thorough knowledge of all fast developing scientific know-how, personalities from different scientific and managerial cadre form a team to solve the problem.•It makes use of Scientific methods to solve problems.•OR increases the effectiveness of a management Decision making ability.•It makes use of computer to solve large and complex problems.•It gives Quantitative solution.•It considers the human factors also.
The first and the most important requirement is that the root problem should be identified and understood. The problem should be identified properly, this indicates three major aspects:(1) A description of the goal or the objective of the study,(2) An identification of the decision alternative to the system, and(3) A recognition of the limitations, restrictions and requirements of
the system.
Limitations of OR
The limitations are more related to the problems of model building, time and money factors.•Magnitude of computation: Modern problem involve large number of variables and hence to find interrelationship, among makes it difficult.•Non – quantitative factors and Human emotional factor cannot be taken into account.•There is a wide gap between the managers and the operation researches.•Time and Money factors when the basic data is subjected to frequent changes then incorporation of them into OR models are a costly affair.•Implementation of decisions involves human relations and behaviour
2. What are the characteristics of the standard form of L.P.P.? What is the standard form of L.P.P.? State the fundamental theorem of L.P.P.
Answer:
The characteristics of the standard form are:
1.All constraints are equations except for the non-negativity condition which remain inequalities (≥, 0) only. 2.The right-hand side element of each constraint equation is non-negative.3.All variables are non-negative. 4.The objective function is of the maximization or minimization type. The inequality constraints can be changed to equations by adding or subtracting the left-hand side of each such constraint by a non-negative variable. The non-negative variable that has to be added to a constraint inequality of the form to change it to an equation is called a slack variable. The non-negative variable that has to be subtracted from a constraint inequality of the form to change it to an equation is called a surplus variable. The right hand side of a constraint equation can be made positive by multiplying both sides of the resulting equation by (-1) wherever necessary. The remaining characteristics are achieved by using the elementary transformations introduced with the canonical form.
The Standard Form of the LPPAny standard form of the L.P.P. is given by
Fundamental Theorem of L.P.P.
Given a set of m simultaneous linear equations in n unknowns/variables,n ≥ m, AX =b, with r(A) = m
.If there is a feasible solution X ≥ 0, then there exists a basic feasible solution.
3. Describe the Two-Phase method of solving a linear programming problem with an example.
Answer: Two Phase Method The drawback of the penalty cost method is the possible computational error that could result from assigning a very large value to the constant M. To overcome this difficulty, a new method is considered, where the use of M is eliminated by solving the problem in two phases. They are Phase I: Formulate the new problem by eliminating the original objective function by the sum of the artificial variables for a minimization problem and the negative of the sum of the artificial variables for a maximization problem. The resulting objective function is optimized by the simplex method with the constraints of the original problem. If the problem has a feasible solution, the optimal value of the new objective function is zero (which indicates that all artificial variables are zero). Then we proceed to phase II. Otherwise, if the optimal value of the new objective function is non zero, the problem has no solution and the method terminates. Phase II : Use the optimum solution of the phase I as the starting solution of the original problem. Then the objective function is taken without the artificial variables and is solved by simplex method. Examples: Use the two phase method toMaximize z = 3x1 – x2
Phase I is complete, since there are no negative elements in the last row. The Optimal solution of the new objective is Z* = 0.Phase II: Consider the original objective function,Maximize z = 3x1 – x2 + 0S1 + 0S2 + 0S3Subject to x1 + x2/2 – S1/2=1 5/2 x2 + S1/2 + S2=1 x2 + S3 = 4x1, x2, S1, S2, S3 ≥ 0 with the initial solution x1 = 1, S2 = 1, S3 = 4, the corresponding simplex table is
4. What do you understand by the transportation problem? What is the basic assumption behind the transportation problem? Describe the MODI method of solving transportation problem.
Answer: Transportation Problem & its basic assumption This model studies the minimization of the cost of transporting a commodity from a number of sources to several destinations. The supply at each source and the demand at each destination are
known. The transportation problem involves m sources, each of which has available a
i (i = 1, 2, …..,m) units of homogeneous product and n destinations, each of which requires bj (j = 1, 2…., n) units of products. Here ai and bj are positiveintegers. The cost cij of transporting one unit of the product from the ith source to the jth destination is given for each i and j. The objective is to develop an integral transportation schedule that meets all demands from the inventory at a minimum total transportation cost.It is assumed that the total supply and the total demand are equal.i.e.
Condition (1)The condition (1) is guaranteed by creating either a fictitious destination with a demand equal to the surplus if total demand is less than the total supply or a (dummy) source with a supply equal to the shortage if total demand exceeds total supply. The cost of transportation from the fictitious destination to all sources and from all destinations to the fictitious sources are assumed to be zero so that total cost of transportation will remain the same.Formulation of Transportation Problem The standard mathematical model for the transportation problem is as follows.Let xij
be number of units of the homogenous product to be transported from source i to the destination j Then objective is to
Theorem: A necessary and sufficient condition for the existence of a feasible solution to the transportation problem (2) is that
The Transportation Algorithm (MODI Method)
The first approximation to (2) is always integral and therefore always a feasible solution. Rather than determining a first approximation by a direct application of the simplex method it is more efficient to work with the table given below called the transportation table. The transportation algorithm is the simplex method specialized to the format of table it involves: i. finding an integral basic feasible solution ii. testing the solution for optimality iii. improving the solution, when it is not optimal iv. repeating steps (ii) and (iii) until the optimal solution is obtained. The solution to T.P is obtained in two stages. In the first stage we find Basic feasible solution by any one of the following methods a) North-west corner rule b) Matrix Minima Method or least cost method c) Vogel’s approximation method. In the second stage we test the B.Fs for its optimality either by MODI method or by stepping stone method.
5. Describe the North-West Corner rule for finding the initial basic feasible solution in the transportation problem.
Answer:
The Initial basic Feasible solution using North-West corner ruleLet us consider a T.P involving m-origins and n-destinations. Since the sum of origin capacities equals the sum of destination requirements, a feasible solution always exists. Any feasible solution satisfying m + n – 1 of the m + n constraints is a redundant one and hence can be deleted. This also means that a feasible solution to a T.P can have at the most only m + n – 1 strictly positive component, otherwise the solution will degenerate.It is always possible to assign an initial feasible solution to a T.P. in such a manner that the rim requirements are satisfied. This can be achieved either by inspection or by following some simple rules. We begin by imagining that the transportation table is blank i.e. initially all xij = 0. The simplest procedures for initial allocation discussed in the following section.North West Corner Rule Step1:
The first assignment is made in the cell occupying the upper left hand (north west) corner of the transportation table. The maximum feasible amount is allocated there, that is x11 = min (a1,b1)So that either the capacity of origin O1 is used up or the requirement at destination D1 is satisfied or both. This value of x11 is entered in the upper left hand corner (small square) of cell (1, 1) in the transportation table.Step 2: If b1 > a1 the capacity of origin O, is exhausted but the requirement at destination D1 is still not satisfied , so that at least one more other variable in the first column will have to take on a positive value. Move down vertically to the second row and make the second allocation of magnitude x21 = min (a2, b1 – x21) in the cell (2,1). This either exhausts the capacity of origin O2 or satisfies the remaining demand at destination D1.If a1 > b1 the requirement at destination D1 is satisfied but the capacity of origin O1 is not completely exhausted. Move to the right horizontally to the second column and make the second allocation of magnitude x12 = min (a1 – x11, b2) in the cell (1, 2) . This either exhausts the remaining capacity of origin O1 or satisfies the demand at destination D2 .If b1 = a1, the origin capacity of O1 is completely exhausted as well as the requirement at destination is completely satisfied. There is a tie for second allocation, An arbitrary tie breaking choice is made. Make the second allocation of magnitude x12 = min (a1 – a1, b2) = 0 in the cell (1, 2) or x21 = min (a2, b1 – b2) = 0 in the cell (2, 1).Step 3: Start from the new north west corner of the transportation table satisfying destination requirements and exhausting the origin capacities one at a time, move down towards the lower right corner of the transportation table until all the rim requirements are satisfied.
6. Describe the Branch and Bound Technique to solve an I.P.P.
problem.
Answer:
The Branch And Bound Technique
Sometimes a few or all the variables of an IPP are constrained by
their upper or lower bounds or by both. The most general technique
for the solution of such constrained optimization problems is the
branch and bound technique. The technique is applicable to both all
IPP as well as mixed I.P.P. the technique for a maximization problem
is discussed below:Let the I.P.P be
Or the linear constraint xj ≤ I ………………...(7)To explain how this
partitioning helps, let us assume that there were no integer
restrictions (3), and suppose that this then yields an optimal
solution to L.P.P. – (1), (2), (4) and (5). Indicating
x1 = 1.66 (for example). Then we formulate and solve two L.P.P’s
each containing (1), (2) and (4). But (5) for
j = 1
is modified to be
2 ≤ x1 ≤ U1
in one problem and
L1 ≤ x1 ≤ 1
in the other. Further each of these problems process an optimal
solution satisfying integer constraints (3) Then the solution having
the larger value for z is clearly optimum for the given I.P.P.
However, it usually happens that one (or both) of these problems
has no optimal solution satisfying (3), and thus some more
computations are necessary. We now discuss step wise the
algorithm that specifies how to apply the partitioning (6) and (7) in a
systematic manner to finally arrive at an optimum solution.
We start with an initial lower bound for z, say )0(Zat the first
iteration which is less than or equal to the optimal value z*, this
lower bound may be taken as the starting Lj for some xj.In addition
to the lower bound )0(Z, we also have a list of L.P.P’s (to be called
master list) differing only in the bounds (5). To start with (the 0th
iteration) the master list contains a single L.P.P. consisting of (1),
(2), (4) and (5). We now discuss below, the step by step procedure
that specifies how the partitioning (6) and (7) can be applied
systematically to eventually get an optimum integer valued
solution.
Branch And Bound Algorithm
At the tth iteration (t = 0, 1, 2 …)
NAME
GALI NEHRU
SUBJECT
PROJECT MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0037SET 1
STUDY CENTRE
2542
DATE OF SUBMISSION
1: What are the various characteristics of a project? What is the importance of each characteristic? Give examples.
Answer:
It is well known to all that the organizations continue to grow year by year. As there is a need to grow it becomes necessary for a growing organization to resort to proper growth plan. The plan needs to be properly prepared. It is possible to prepare proper plans only if the manager has sufficient knowledge of the various process of the project envisage for growth. The manager has to work on the various life cycle stages and apply necessary planning tools to come out with a proper growth plan of the company. The various techniques of identifying the project items, work break down structure of the project , task duration, estimation etc are to be done meticulously.
Characteristics
Any project may be considered to have the following characteristics:
a) Resource requirement - During the course of executing the project, it is seen that the resource requirement increases from start to an intermediate stage of the project. It further increases at rapid rate and becomes constant while the project is during its 80 to 95% progress stage. Thereafter the resources requirement decreases to zero i.e when the project comes to a finish.
b) Funds - The requirement of funds for the completes execution of the project also follows the same trend as that of the resources. The two are more or less proportional.
c) Probability of completion - The probability of completing the project can be estimated based upon the normal distribution curve. In the initial stage of the project the probability of completing the project is low though not zero. It gradually increases and as the
project approaches finish the probability of completing the project tends to become 100%.
d) Risk - The risks involved in the project affecting its completion time is high at the initial stages and low at the later stages of the project.
e) Design changes - The project during the course of its progress may be subjected to changes because of some external factors. The influence of such external factors on the project may result in changes in the design f the project though not very often. It is observed that such changes if any are normally high during the initial stages of the project and decreases as the project approaches finish.
2: State the principles of Deming’s Philosophy relevant to Project Management. Explain how each one is applicable in management?
Answer:
Dr. Deming's teachings and philosophy can be seen through the results they produced when they were adopted by the Japanese, as the following example shows: Ford Motor Company was simultaneously manufacturing a car model with transmissions made in Japan and the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the USA-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers could not understand the customer preference for the model with Japanese transmission. It delivered smoother performance with a lower defect rate. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts had much closer tolerances than the USA-made parts - i.e. if a part was supposed to be one foot long, plus or minus 1/8 of an inch - then the Japanese parts
were within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems.
Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved products and services. "Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment."
Deming philosophy synopsis
The philosophy of W. Edwards Deming has been summarized as follows:
"Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces."
In the 1970s, Dr. Deming's philosophy was summarized by some of his Japanese proponents with the following 'a'-versus-'b' comparison:
(a) When people and organizations focus primarily on quality, defined by the following ratio,
quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
Deming offered fourteen key principles for management for transforming business effectiveness.
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease cost.
6. Institute training on the job. 7. Institute leadership. The aim of supervision should be to help people
and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company.
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute workmanship.
12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everyone in the company to work to accomplish the transformation. The transformation is everyone's work.
3: Explain the concept of concurrency in High Technology Development.
Answer:
Concurrency in High Technology Development
As the application of technology has become critical for the survival of organisation it has become imperative for organizations to initiate measures for the development of high technology to be ahead of competition. No doubt, there are many specialized Research and Development firms which offer their expertise to their clients’ problems. However, their services are available to the competitors and many technologies developed by the company’s own research personnel cannot be shared with outsiders. So the strategy would be utilize the services of external resource to the extent they are suitable for our purpose, but with a strong base of R and D of our own. This will really differentiate the best companies from other ordinary ones. The following give some guidelines in the form of rules which would help organisation to be strong in this area.
Building concurrency into every activity is essential to reduce the development cycle time and to counter the technology obsolescence. Many of the tasks that are normally done in a serial fashion can be done in parallel by synchronizing the flow of information. The practices of the concurrent engineering where the design of the product and all its associated processes are carried out simultaneously based on team work and participation. Would not only help in reducing the development cycle time, but also improves the product functionality with regard to
requirements. Concurrency can be accomplished in many ways both for product development as well as technology transfer, user evaluation and production.
Example - Tactical Aircraft: Concurrency in Development and Production of F-22Aircraft Should Be Reduced (Letter Report, 04/19/95, GAO/NSIAD-95-59).
Because the F-22 fighter plane is not urgently needed and the Defense Department (DOD) has discovered engine and software problems with the aircraft, GAO urges that the F-22 be thoroughly tested before large numbers of these expensive aircraft are acquired. Concurrency between the development and production phases of F-22 means that independent testing of high-tech features of the aircraft will not be completed before the Air Force makes a significant commitment to producing the F-22. Among other things, the F-22 boast an advanced architecture for the integrated avionics system, a propulsion system that will allow cruising a supersonic speeds without the afterburners that current fighters needs, and low observable technologies. The military has already disclosed engine and stealth ness problems, and the potential for avionics and software problems underscore the need to demonstrate the aircraft's capabilities before committing to production.
4: Explain in detail the project management review process. What are the various post review activates?
Answer:
Project Management Review Process
There is mutual benefit for corporate and major information systems project teams and many of the programs as a result of the information exchange generated by the Project Management Reviews. Throughout the
project lifecycle, project staff should collaborate and communicate with staff responsible for capital planning, information architecture, standards, information security, safety, configuration management, risk management, quality management and assurance. The information exchange may address status, issued, process, requests, requirements, approvals, and assistance in the areas of project plans, schedule, budget, functional content, scope, staffing, infrastructure and operations.
Corporate and major information systems are reviewed from their inception to retirement, i.e., throughout the Capital Planning and Investment Control (CPIC) phases of Identification, Selection, Control, and Evaluation.
The Project Management Review Process includes the following steps:
Identification of projects that will participate in the Reviews Development and adherence to a quarterly reporting schedule Compilation of standard project management data into a
presentation data Collection of detailed project files that support the information
reported during the project Management Reviews and may be requested for inspection during a formal audit
Participation in the Review meetings with any required follow-up activities
Post Review Activities
Once the Project Management Review has been conducted, follow up with program/project managers on any issues or concerns requiring attention, the status of open items from the review, and CIO reporting actions, e.g., reports to the CIO Council. The CIO may also recommend quality assurance analysis be conducted.
1. Issues or Concerns Requiring Attention
The project manager is responsible for raising issues or concerns that require assistance or guidance to the attention of the CIO. These items
should be communicated whenever they become known, and not held to the next Project Management Review. The CIO will assign appropriate OCIO staff available to help resolve open items. The program / project manager should communicate the status of these items in each quarterly reviews until the items are resolved / closed.
2. Status of Open Items from Review
The program/project manager is responsible for tracking the open items from the review and communicating the status in each quarterly review until the items are closed. The supporting the scheduling of reviews will coordinate with the program/project manager after the quarterly reviews to help ensure that new items have been captured for tracking and action by the program/project manager.
3. CIO Reports
The staff supporting the CIO Quarterly Reviews will prepare a summary report after each Project Management Review. The summary report will include the following information:
i) Summary Status
ii) Open Issues/Items
iii) Status Performance Objectives/Measures
iv) Status of Schedule/Cost
The summary report will be provided to the program/project manager to gain concurrence on the content. The summary report will be used by the CIO when reporting status to the CIO Council.
5: Explain the structure of the documentation systems as required by supply chain monitoring. What is the significance of documentation? How does it help a manager?
Answer:
Requirement of Documented systems in Supply Chain Monitoring (SCMo)
It is possible today to establish a system aligned with an organizations supply chain. It can be an add-on to existing ERP-systems. The main objectives are
i) Prevention of stock-out and over supply
ii) Early warnings, elimination of bullwhip effect
iii) Optimized allocation in bottleneck situations due to network-wide inventory and demand transparency
The main Principles behind is the Integration of supply chain participants, Exchange of demand and inventory information, transparency & Visibility of inventories and demands for multilevel supply chains. It also eliminates time lags in the information flow and ensures synchronization of demand information. SCMo set up (Initialization) The main steps for the set up are :
a) Determination of the potentially critical part of the supply network Criteria:
b) Mapping of Structures a) high shortage risk and effect, long lead and reaction times, high total inventory cost, frequent engineering changes.
Main Features – The main features of such system are –
i) Releases and Iterations planning – It is a simple way to create project plan.
ii) Dashboard – It is a quick project status reporting tool.
iii) To-Do lists – Identify and list the Integrated assignments.
iv) Integrated QA - Bug Tracking, Test Cases management, user story-to-bugs
Trace-ability, QA stats and charts.
v) Time Tracking - Create more accurate estimates of time.
Significance of Documentation
It might sometimes be difficult for an organization to straightaway launch into a Project Management exercise, even if they are well equipped, particularly if the project is too large – for e.g., development of a new product, expansion of capacity, modernization of facilities, diversification into a totally new business area, getting into a Joint venture etc. In this case, the core project team itself might feel the need to have some major inputs before even a tentative plan could be drawn up. A well-drafted Business Plan would ideally serve this purpose, provided it is handled systematically & professionally.
The documentation system is intranet based to provide immediate access to current, up-to-date process documentation. The system allows users to navigate through graphical structures to relevant documentation and processes which were created with the ARIS-Toolset.
The content of the process Documentation System includes the area supply chain management from the Odette supply chain Management Group. The system includes graphical process documentation, in the form of process chains, as well as the entire range of documentation related to the processes.
The Process Documentation System gives, according to its objectives, as overview and a detailed view of the relevant processes for SCMo.
The entry point in the documentation system is the model “Process Overview SCMo”. This model is the starting point for the navigation to other models.
The vertical navigation is the navigation on different levels. The horizontal navigation is the navigation on one level.
Microsoft has a team project management solution that enables project managers and their teams to collaborate on projects. The Microsoft Project 2002 products in this solution are Microsoft Project Standard 2002, Microsoft Project Server 2002, and Microsoft Project Server Client Access License (CAL) 2002.
6: Write down a brief outline on any assumed project management plan.
Answer:
Various sections and subsections of this unit would cover as part of Project Management Plan, the following key aspects:
1. · Project Management Plan – Sample Project
Project Summary
Project Overview – Consider a firm XYZ as a Stock Broker/ Dealer firm. Any re will have applications supporting the following components:
· first, a Brokerage Account Opening application on XYZ’s Web site that will allow any internet user to open a brokerage account with XYZ.
· Second, an account opening and maintenance application, which is primarily for XYZ’s representatives to open accounts for the applications received in paper format.
Project Scope
i. · To provide an effective, efficient means of amount maintenance activities
ii. · To allow representatives to provide informationiii. · To provide a complete picture to the client
representatives for account status, valuation, order status, and trade activity
iv. · To increase the intelligence of the update process
2. · Project’s Value-add to the Customer
Objectives
Strengthen relationship with XYZ by delivered high quality software on time
Become preferred vendor by developing expensive on XYZ product and systems.
Commitment made to customers
3. · Assumptions made While Planning
Intelligent update to business partners will be incorporated in only the maintenance part of the application and not in the Account opening engine.
Qualified people will approve Rational Unified Process methodology for implementing this project
XYZ reviewers will take seven days to approve a milestone documents. If no comments are received within this time period, it will be considered as approved.
4. · Standard Process Followed and Deviation from standard Process
Tailoring Notes
Requirement trace ability will be done through the requisite pro-tool.
Physical data base design may be refined | later iterations.
Change request tracking
Changes requested by customer will be logged in change request and analyzed for impact of project
Major change usually has an effort/delivery-on-time impact on the project. The customer needs to formally approve these changes.
5. · Requirement Trace Ability
Requisite tool will be used along with estimated size and effort. This is the estimation criteria to check everything is in place.
6. · Automated Estimation Process
Estimate the total effort wrt each activity and effort for each phase of a project expressed as of percentage of man days.
7. · Scheduling and Estimation of Resources
People Hardware, software and Tools Training Plan
8. · Quality Plan – Quality Goals
Project Goals
Prepare a strategy for meeting quality goals indicating the expected benefits
Estimation of Defects to be defected Reviews
9. · Project Tracking
Prepare the reports to be given to the customer which indicates –
Milestone reports & weekly status reports Issue requiring clarification
Plus other reports which needs to be given to Business Managers
10. · Defect Control System Performance Summary
Prepare a list probable defects & defect distribution table to find out deviation for the same. There were very few large deviations in the process performance; the actual performance was close to what is expected. This will give a chance to improve the poor performance.
11. · System Driver Risk Management
Prepare a table on risk management indicating the type of risk, actual elapsed time, estimated time, percentage slippage and reasons for slippage.
12. · Global Delivery Model the Latest Trend in Project Management
Standardization Modularization Minimum Cutomerization Maximum Micro Structure
NAME
GALI NEHRU
SUBJECT
PROJECT MANAGEMENT
ROLL NUMBER
530910855
ASSIGNMENT
MBA 2 SEM MH0037SET 2
STUDY CENTRE
2542
DATE OF SUBMISSION
1: How can risks cab be prioritized in a project management? Give any suitable example.
Answer:
Risk Management Risks are those events or conditions that may occur and whose occurrence has a harmful or negative impact on a project. Risk management aims to identify the risks and then take actions to minimize their effect on the project. Risk management entails additional cost. Hence risk management can be considered cost effective only if the cost of risk management is considerably less than the cost incurred if the risk materializes.
Risk prioritization – Risk prioritization focus on the highest risk. Prioritization requires analyzing the possible effects of the risk event in case it actually occurs. This approach requires a quantitative assessment of the risk probability and the risk consequences. For each risk rate the probability of its happening as low, medium or high. If necessary, assign probability values in the ranges given for each rating. For each risk, assess its impact on the project as low, medium, high or very high. Rank the risk based on the probability. Select the top few risk items for mitigation and tracking.
Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the PM and select a suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating them into the project schedule. In addition to monitoring the progress of the planned risk mitigation steps periodically revisit the risk perception for the entire project. The results of this review are reported in
each milestone analysis report. To prepare this report, make fresh risk analysis to determine whether the priorities have changed.
2: Mention any six charactertics of interpersonal behavior. What are the types of reviews?
Answer:
Interpersonal Behaviour - In a team the maxim that all members will do well to remember is “Learn to appreciate the problems of others, and some others would appreciate yours”. It is therefore important that in a business environment, particularly in Project Management, an effort to evolve solutions jointly has great benefits, both for the teams as well as the organization. The top management has the responsibility of encouraging such a culture to develop team work to healthy interpersonal behaviour.
Interpersonal behaviour calls for:
Projection of a pleasant, but firm personality Clarity of expression and communication Patience in listening and reacting with empathy Documentation and correct recording Offer to help Call for help whenever necessary Seeking information before attempting decisions Not waiting for things to go wrong Motivation of others through efficiency and meticulousness, rather
than urging and exhibiting dependency Putting team goals ahead of individual targets.
The project manager should make it a habit of expressing appreciation openly for any good work done. Cross Functional Teams have become a necessity and the synergy they generate would be lost if interpersonal
behaviour is not of high standard. As members are from different functions, understanding the requirements or compulsions of others is difficult. This fact should be impressed upon all the members and requesting them to cooperate is vital.
Reviews Types
The reviews are generally divided into four types which are conducted at different stages of the project.
1. Initiation Reviews (IR)
2. Planning and Proposal Reviews (PPR)
3. Procurement Reviews (PR)
4. Quality Assurance Reviews (QAR)
A project review is a process where we capture information from the team experience and see the variances and deviations from the plan. These reviews help in increasing productivity and improve organizational success. The purpose of the reviews can be generally stated as under. Depending on the manager’s ability they can be made more meaningful. Performance improvement starts with commitment to an agreed plan. The reviews are meant to keep the activities are according to the plan. The purpose of them can be states as:
Finding out the feasibility of the project and helping management team to take a decision based on this initial Review.
Checking if all the necessary activities were done before presenting a customer the proposal or solution
Checking if all the formal agreements and procedures were formally accepted and reviewed between the customer and the project delivery organization.
Finding out the deviation and allowing elbow room for changes in the action plan for improvement.
3: What are main considerations in planning P2M? Give relevant examples.
Answer:
Consideration in Planning P2M
Some of the considerations for effective programme management are given below:
Focusing on the various strategic initiatives taken up for multiple projects and the issues related to benefits and risks.
Bringing about the attention of management to a defined set of benefits, which are understood immediately, which are managed throughout the implementation and at completion.
Helping top management to set priorities, choosing options and allocate resources
Setting up mechanisms to measure and ensure that the projects making contributions for realizing expected business benefits.
Leading the organization on the path of ‘where it’ an ‘where it wants to be’
Ensuring that the effects of the programme driven changes are coordinated, the transitions are successfully managed. The operations are effective and efficient.
Process of P2M
The objectives sought to be achieved and the methods which are adopted and the activities that are going to be undertaken i.e. the process include the following steps:
Preparing and maintaining a set of activities and the workflow that is to be followed and identifying business areas responsible for different stages in the above;
1. Making sure that the priorities that the above generate are relevant and the projects are run on the basis of their impact on the business as a whole;
2. Structuring the programme so that the responsibilities and roles – at both programme and project level – are acceptable to both the top management and managers;
3. Planning the various points of review between various phases of the projects. The process has to incorporate all the important aspects which are to be addressed during implementation and management of the projects. It is important to identify all factors and incorporate resources – men, materials, technology and time – so that their provision can be planned.
Managing the Programme
When we consider the portfolio of projects as a programme, the main considerations will be on resources, risks associated with the programme, quality of the projects at every stage of the execution as meeting the requirements of the client as per the contract and monitoring the change
processes that get enmeshed during implementation. The specifics concerning the above are listed below:
i) Evaluating the risks associated with the programme – the planned changes to the business operations;
ii) Ensuring that the processes to ensure quality are sufficient and purposes are fully met;
iii) Keeping track of the changes and developments external to the project environment and studying their impact on the programme.
iv) Making sure that the personnel in business affected by the above are informed and trained so that the projects are smoothly;
v) Ensuring that the support services like human resources and IT are able to adopt to the changes that take place in the projects and business operations as a whole.
4: What is the significance of reviewing ROI? Explain in detail.
Answer:
ROI - Return on Investment (ROI) is the calculated benefit that an organization is projected to receive in return for investing money (resources) in a project. Within the context of the Review Process, the investment would be in an information system development or enhancement project. ROI information is used to assess the status of the business viability of the project at key checkpoints throughout the project’s lifecycle.
ROI may include the benefits associated with improved mission performance, reduced cost, increased quality, speed, or flexibility, and increased customer and employee satisfaction. ROI should reflect such risk factors as the project’s technical complexity, the agency’s management capacity, the likelihood of cost overruns, and the consequences of under or nonperformance. Where appropriate, ROI
should reflect actual returns observed through pilot projects and prototypes.
ROI should be quantified in terms of dollars and should include a calculation of the breakeven point (BEP), which is the date when the investment begins to generate a positive return. ROI should be recalculated at every major checkpoint of a project to se if the BEP is still on schedule, based on project spending and accomplishments to date. If the project is behind schedule or over budget, the BEP may move out in time; if the project is ahead of schedule or under budget the BEP may occur earlier. In either case, the information is important for decision making based on the value of the investment throughout the project lifecycle. Any project that has developed a business case is expected to refresh the ROI at each key project decision point (i.e., stage exit) or at least yearly.
Exclusions
If the detailed data collection, calculation of benefits and costs, and capitalization data from which Return on Investment (ROI) is derived was not required for a particular project, then it may not be realistic or practical to require the retrofit calculation of ROI once the project is added to the Review portfolio. In such a case, it is recommended that a memorandum of record be developed as a substitute for ROI. The memorandum should provide a brief history of the program, a description of the major benefits realized to date with as much quantitative data as possible, and a summary of the process used to identify and select system enhancements.
Some of the major benefits experienced by sites that installed the information system that would be important to include in the memorandum are:
a) Decommissioning of mainframe computers
b) Reduction/redirection of labour
c) Elimination of redundant systems
d) Ability to more cost effectively upgrade all sites with one standard upgrade package.
In each case above, identify the specific site, systems, and labour involved in determining the cited benefit. Identify any costs or dollar savings that are known or have been estimated. The memorandum will be used as tool for responding to any future audit inquiries on project ROI.
For the Project Management Review, it is recommended that the project leader replace the text on the ROI document through -
1) a note stating which stage of its cycle the project is in;
(2) A bulleted list of the most important points from the memorandum of record; and
(3) a copy of the memorandum of record for the Review repository.
In subsequent Reviews of the information system, the ROI slide can be eliminated form the package. There is one notable exception to this guidance. Any internal use software project in the maintenance phase of its lifecycle that adds a new site or undertakes an enhancement or technology refresh that reaches the cost threshold established by Standard will need to satisfy capitalization requirements. It requires all agencies to capitalize items acquired or developed for internal use if the expected service life is two or more years and its cost meets or exceeds the agency’s threshold for internal use software. The standard requires capitalization of direct and indirect costs, including employee salaries and benefits for both Federal and Contractor employees who materially participate in the Software project. Program managers are considered to be the source of cost information for internal use software projects. If
capitalization data is collected for the project in the future, the project would be expected to calculate and track its ROI.
5: What is meant by baseline? How is it reviewed?
Answer:
Baseline
The Baseline created can be used to compare the original project plan with actual events and achievements. This will display the days required for each task and project phase. For actual operating instruction please refer the Microsoft Project User Handbook. The Microsoft Project family of products offers tools to work on a Project from management point of view. Microsoft Project is designed for people who manage projects independently and don’t require the capability to manage resources from a central repository. Microsoft has a team project management solution that enables project managers and their teams to collaborate on projects. After creating a fairly complete final project plan it is a good idea to create a baseline to compare the original project plan with actual events and achievements.
Reviewing baseline
This will display the days required for each task and project phase. It includes -
Tracking Progress
After creating a baseline, if the project has begun, it is necessary to enter actual dates that tasks are being completed and the resource utilization used to complete them. Again review different views and the cost and summary tables before proceeding to the next section. Return to the Entry view of the Gantt chart before proceeding.
Balancing Workloads
At times people and equipment can become assigned more work than they can complete in normal working hours. This is called over allocation.
Project can test for this condition and reschedule (or level) their workload to accommodate completing tasks during a normal day.
Monitoring Variance
After a baseline has been established and the project has begun, it is desirable to determine if tasks are being accomplished on time and /or if cost over runs are occurring.
Creating Reports
Project has many different built-in reports and has the capability building custom reports and exporting data to other MS Office applications for integration into other reporting venues
6: Explain in detail GDM and its key features.
Answer:
GDM - The Global Delivery Model (GDM) is adopted by an Industry or Business such that it has a capability to plan design, deliver and serve to any Customers or Clients Worldwide with Speed, Accuracy, Economy and Reliability. The key Features of GDM are ·
Standardization
Modularization
Minimum Customization
Maximum Micro structure
Adoption of a Combination of the Greatest Common Multiple and the Least Common
Factor of a Large Mass of Microbial Components-
a) Standardization - Ingenious Design and Development of Components and Features which are like to be accepted by 90% of Worldwide Customers. Global Standards of Design focusing on highly standardized Methods and Processes of manufacture or Development. Adopt Plug and socket Concepts with minimum adaptable joints or Connections.
b) Modularization - Product or Solution split up into smallest possible individual Identifiable Entities, with limited Individual Functioning Capability but powerful and robust in Combination with other Modules.
c) Minimum Customization - Minimum Changes or Modifications to suit Individual Customers.
d) Maximum micro structuring - Splitting of the Product Modules further into much smaller entity identifiable more through characteristics rather than application Features. Approach through Standardization of these Microbial Entities even across Multiple Modules. Application of these Microbial Entities to rest within multiple Projects or Products or even as add-ons suit belated Customer Needs.
Special Features of GDM
Some of the special features of GDM are ·
Cuts across Geographical and Time Zone Barriers Unimaginable Speeds of Response and Introduction. Common Pool of Microbial Components Largely Independent of Skill Sets required at Delivery Stages Highly automated Processes Quality Assurance as a Concurrent rather than a Control Process Near Shore Development, Manufacture and Delivery for better
Logistics Mapping of Economical Zones rather than Geographic Zones Continuous Floating virtual Inventory to save Time and Efforts.
Gali nehru
Mba hcs second semester
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Sikkim manipal university
