IIBM Assignments of 1st Semester 2nd Semester.and 3rd semester Contact @ konstantine123aaa@gmail.com

IIBM Assignments of Semester 1, Semester 2 and semester 3.
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Semester II Examination Papers
IIBM Institute of Business Management
IIBM Institute of Business Management
Semester-II Examination Paper MM.100

Production and Operation Management


Section A: Objective Type (30 marks)
• This section consists of Multiple choice questions & Short Notes type questions.
• Answer all the questions.
• Part One questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple choices:
1. If the number of restrictions on sources be ‘a’ and the number of restrictions on destinations be
‘b’ then with the use of ‘stepping stone procedure’, the number of ‘used cells’ will be
a. a+b+1
b. a+b+2
c. a-b-1
d. a+b-1
2. Value of smoothing coefficient ‘α’ lies
a. Between 1 and ∞
b. Between 0 and 1
c. Between -1 and 1
d. Between 1 and 2
3. Forecasting error is
a. The difference between forecasted demand and actual demand
b. The ratio of forecasted demand and actual demand
c. The difference between the standard forecast demand and the evaluated forecast demand
d. Ratio of standard forecast demand and the evaluated forecast demand
4. For forecasting the analyzers plot the demand data on a time scale, study the plot and then look
for the consistent patterns. Now what does the high noise mean to these patterns
a. Many of the point lie away from the pattern
b. Most of the points lie close to the pattern
c. All the points lie on the pattern
d. None
5. Payback period is
a. The length of time after which the production starts
b. The length of time after which the selling starts
c. The length of time required to recover the investment
d. The length of time for which firm bears replacement of the good.
Semester II Examination Papers
IIBM Institute of Business Management
6. Salvage value is the income from
a. Selling an asset
b. Buying an asset
c. Bargaining in selling
d. Price raised stock
7. On total factor basis ‘Productivity’ is given by x/y, where ‘y’ is
a. Labor + Capital +Materials
b. Labor + Capital + Materials + Energy
c. Capital
d. Capital + Materials
8. Economic efficiency is given by
a. Input /output
b. Input /100
c. (Output-input)/input
d. Output /input
9. This implies an effective management that ensures an organization’s long-term commitment to
the continuous improvement of quality.
a. Quality management
b. Strategic management
c. Total quality management
d. Operations management
10. This techniques for improving productivity involves analyzing the operations of the product or
service, estimate the value of each operation, and modifying (or) improving that operation so that
the cost is lowered.
a. Value engineering
b. Time-event network
c. Work simplifications
d. Quality circles
Part Two:
1. What are the different types of models in production and operation management?
2. Define ‘Depreciation’.
3. What do you understand by ‘Bias’?
4. What are ‘Learning curves’?
END OF SECTION A
Semester II Examination Papers
IIBM Institute of Business Management
Section B: Caselets (40 marks)
• This section consists of Caselets.
• Answer all the questions.
• Each caselet carries 20 marks.
• Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
COMPANY BACKGROUND
The Bronson Insurance Group was originally founded in 1900 in Auxvasse, Missouri, by James Bronson.
The Bronson Group owns a variety of companies that underwrite personal and commercial insurance
policies. Annual sales of the Bronson Group are $100 million. In recent years, the company has suffered
operating losses. In 1990, the company was heavily invested in computer hardware and software. One of
the problems the Bronson Group faced (as well as many insurance companies) was a conflict between
established manual procedures and the relatively recent (within the past 20 years) introduction of
computer equipment. This conflict was illustrated by the fact that much information was captured on
computer but paper files were still kept for practical and legal reasons.
FILE CLERKS
The file department employed 20 file clerks who pulled files from stacks, refilled used files, and delivered
files to various departments including commercial lines, personal lines, and claims. Once a file clerk
received the file. Clerks delivered files to underwriters on an hourly basis throughout the day. The
average file clerk was paid $8,300 per year. One special file clerk was used full time to search for
requested files that another file clerk had not been able to find in the expected place. It was estimated that
40 percent of the requested files were these “no hit” files requiring a search. Often these “no hit” files
were eventually found stacked in the requester’s office. The primary “customers” of the file clerks were
underwriters and claims attorneys.
UNDERWRITING
Company management and operations analysts were consistently told that the greatest problem in the
company was the inability of file clerks to supply files in a speedy fashion. The entire company from top
to bottom viewed the productivity and effectiveness of the department as unacceptable. An underwriter
used 20-50 files per day. Because of their distrust of the files department, underwriters tended to hoard
often used files. A count by operations analysts found that each underwriter kept from 100-200 files in his
or her office at any one time. An underwriter would request a file by computer and work on other
business until the file was received. Benson employed 25 underwriters.
MANAGEMENT INFORMATION SYSTEM
Upper management was deeply concerned about this problem. The MIS department had suggested using
video disks as a possible solution. A video disk system was found that would be sufficient for the
Semester II Examination Papers
IIBM Institute of Business Management
companies needs at a cost of about $12 million. It was estimated that the system would take two years to
install and make compatible with existing information systems. Another, less attractive was using
microfilm. A microfilm system would require underwriters to go to a single keyboard to request paper
copies of files. The cost of a microfilm system was $5 million.
1. What do you recommend? Should the company implement one of the new technologies? Why or
why not?
2. An operations analyst suggested that company employees shared a “dump on the clerks”
mentality. Explain.
Caselet 2
Harrison T. Wenk III is 43, married, and has two children, ages 10 and 14. He has a master’s degree
in education and teachers junior high school music in a small town in Ohio. Harrison’s father passed
away two months ago, leaving his only child an unusual business opportunity. According to his
father’s will, Harrison has 12 months to become active in the family food-catering business, Kare-
Full Katering, Inc., or it will be sold to two key employees for a reasonable and fair price. If
Harrison becomes involved, the two employees have the option to purchase a significant, but less
than majority, interest in the firm. Harrison’s only involvement with this business, which his
grandfather established, was as an hourly employee during high school and college summers. He is
confident that he could learn and perhaps enjoy the marketing side of the business, and that he could
retain the long-time head of accounting/finance. But he would never really enjoy day-to-day
operations. In fact, he doesn’t understand what operations management really involves. In 1991
Kare-Full Katering, Inc. had $3.75 million in sales in central Ohio. Net profit after taxes was $
105,000, the eleventh consecutive year of profitable operations and the seventeenth in the last 20
years. There are 210 employees in this labor-intense business. Institutional contracts account for
over 70 percent of sales and include partial food services for three colleges, six commercial
establishments) primarily manufacturing plants and banks), two long -term care facilities, and five
grade schools. Some customer location employs a permanent operations manager; others are served
from the main kitchens of Kare-Full Katering. Harrison believes that if he becomes active in the
business, one of the two key employees, the vice president of operations, will leave the
firm.Harrison has decided to complete the final two months of this school year and then spend the
summer around Kare-Full Katering – as well as institutions with their own food services – to assess
whether he wants to become involved in the business. He is particularly interested in finding out as
much as possible about operations. Harrison believes he owes it to his wife and children to fairly
evaluate this opportunity.
1. Prepare a worksheet of operations activities that Harrison should inquire about this summer.
2. If you were Harrison, what would you do? Why?
END OF SECTION B
Semester II Examination Papers
IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
• This section consists of Long Questions.
• Answer all the questions.
• Each question carries 15 marks.
1. Productivity is an important tool for mangers as it helps them to track progress toward the more
efficient use of resources in producing goods and services. Elucidate.
2. In additional to operations research, what are the other tools and techniques used by organizations
to improve productivity?
END OF SECTION C
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IIBM Institute of Business Management







Examination Paper : Semester II
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Business Communication
Section A: Objective Type (30 marks)
 This section consists of multiple choices and Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part Two questions carry 4 marks each.
Part one:
Multiple choices:
1. __________is an essential function of Business Organizations:
a. Information
b. Communication
c. Power
d. None of the above
2. Physiological Barriers of listening are:
a. Hearing impairment
b. Physical conditions
c. Prejudices
d. All of the above
3. Which presentation tend to make you speak more quickly than usual:
a. Electronic
b. Oral
c. Both ‘a’ and ‘b’
d. None of the above
4. What is the main function of Business Communication:
a. Sincerity
b. Positive language
c. Persuasion
d. Ethical standard
5. The responsibilities of the office manager in a firm that produces electronics spares is:
a. Everything in the office runs efficiently
b. Furniture and other equipment in the office is adequate
c. Processing all the incoming official mail and responding to some
d. All of the above
Examination Paper : Semester II
IIBM Institute of Business Management
6. Labov’s Storytelling Model based on:
a. Communication through speech
b. Language learning
c. Group Discussions
d. None of the above
7. Diagonal Communication is basically the:
a. Communication across boundaries
b. Communication between the CEO and the managers
c. Communication through body language
d. Communication within a department
8. How to make Oral Communication Effective?
a. By Clarity
b. By Brevity
c. By Right words
d. All of the above
9. Direct Eye contact of more than 10 seconds can create:
a. Discomfort & Anxiety
b. Emotional relationship between listeners and speakers
c. Excitement
d. None of the above
10. Encoding means:
a. Transmission
b. Perception
c. Ideation
d. None of the above
Part Two:
1. Define Communication. How can you classify Communication?
2. Explain ‘Space Language’.
3. Differentiate between good listeners and bad listeners.
4. What are the different types of Business Reports?
5. What is Synopsis?
END OF SECTION A
Examination Paper : Semester II
IIBM Institute of Business Management
Section B: Case lets (40 marks)
 This section consists of Case lets.
 Answer all the questions.
 Each Case let carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Case let 1
Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the price tag on
the piece selected by him. At the counter, while making the payment he asked for the price. Rs. 950 was
the answer.
Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She was glad that
he had selected a nice black shirt for himself. She pointed out that there was a 25% discount on that item.
The counter person nodded in agreement.
Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That’s fantastic”, said
Mr. Sharma.
He decided to buy one more shirt in blue color.
In no time, he returned with the second shirt and asked them to be packed. When he received the cash
memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs. 1,424.
Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted the discounted
price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.
Questions
1. What should Mr. Sharma have done to avoid the misunderstanding?
2. Discuss the main features involved in this case.
Case let 2
I don’t want to speak to you. Connect me to your boss in the US,” hissed the American on the phone. The
young girl at a Bangalore call centre tried to be as polite as she could. At another call centre, another day,
another young girl had a Londoner unleashing himself on her, “Young lady, do you know that because of
you Indians we are losing jobs?”
The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young men and
women taking calls at these outsourced job centers. Supervisors tell them to be ‘cool’. Avinash Vashistha,
managing partner of NEOIT, a leading US-based consultancy firm says, “Companies involved in
outsourcing both in the US and India are already getting a lot of hate mail against outsourcing and it is
hardly surprising that some people should behave like this on the telephone.” Vashistha says Indian call
centres should train their operators how to handle such calls.
Examination Paper : Semester II
IIBM Institute of Business Management
Indeed, the furor raised by the Western media over job losses because of outsourcing has made ordinary
citizens there sensitive to the fact that their calls are being taken not from their midst, but in countries
such as India and the Philippines.
The angry outbursts the operators face border on the racist and sexist, says the manager of a call centre in
Hyderabad. But operators and senior executives of call centres refuse to go on record for fear of kicking
up a controversy that might result in their companies’ losing clients overseas.
“It’s happening often enough and so let’s face it,” says a senior executive of a Gurgaon call centre,
adding, “This doesn’t have any impact on business.”
Questions
1. Suppose you are working as an operator in a call centre in India and receiving calls from
Americans and Londoners. How would you handle such calls?
2. Do you agree with the view such abusive happenings on the telephone do not have any impact
on business?
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. What is meant by Communication Barriers? How and why do they occur? What can be done to
overcome the Barriers to Communication?
2. Define and explain the term Negotiation and also briefly explain the phases of Negotiation.
END OF SECTION C





Examination Paper: Operation Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Operations Research
Section A: Objective Type (30 marks)
· This section consists of Multiple choices/Fill in the blanks/True-False & Short Answer type
questions.
· Answer all the questions.
· Part One questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
1. In case of (<=) inequality, to convert the inequality to an equation, we used to add a slack
variable to the left hand side of the constraint, this slake variable should be:
a. Negative
b. Positive
c. May be positive or negative
d. Zero
2. In a set of m Χ n equations (m<n) the maximum number of corner points is given by…………
3. According to penalty rule for artificial variables, the objective coefficient of the artificial variable
represents an appropriate penalty, positive or negative depending on the problem, but the
necessary condition required to hold this is, the value should be:
a. ∞
b. 0
c. 1
d. None of the above
4. The cases of the Simplex method in which the value of the variables may increased indefinitely
without change in the constraints is:
a. Degeneracy
b. Alternative optima
c. Unbounded solutions
d. Nonexisting solutions
5. An arc in network model is said to be ‘Directed’ if it allows positive flow in one direction and
a. Negative flow in negative direction
b. Zero flow in negative direction
c. Negative flow in perpendicular direction
d. None of the above
6. PERT stands for……………………………………………………………………………………..
Examination Paper: Operation Management
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7. In preemptive method for goal programming , the optimum value of a higher priority goal is
never degraded by a lower priority goal.(T/F)
8. The column dropping rule does not guarantee the non degradation of higher priority goals.(T/F)
9. The additive algorithm developed by E Balas for solving ILP problems was based on pure binary
variables.(T/F)
10. According to inventory model for commodity possession for smooth business operation, Holding
cost represents:
a. Price per unit of an inventory item.
b. The fixed charge incurred when an order is placed regardless of its size.
c. The cost of maintaining inventory in stock.
d. None of the above
Part Two:
1. What do you understand by ‘Degeneracy’ found in using simplex method?
2. What do know about ‘The Balancing of Transportation Model’? If unbalanced then remedy.
3. Explain ‘Vogel Approximation Model (VAM)’.
4. Explain ‘Dijkstra’s Algorithm’ for routing.
END OF SECTION A
Section B: Practical Problems (40 marks)
· This section consists of Practical Problems.
· Answer all the questions.
· Each Practical Problem is of 10 marks.
1. The stock of WalMark Stores, Inc., trades on the New York Stock Exchange under the symbol
WMS. Historically, the price of WMS goes up with the increase in the Dow average 60% of the
time and goes down with the DOW 25% of the time. There is also a 5% chance that WMS will go
up when the Dow goes and 10% that it will go down when the Dow goes up.
a) Determine the probability that WMS will go up regardless of the Dow.
b) Find the probability that probability that WMS goes up given that the Dow is up?
c) What is the probability WMS goes down given that Dow is down?
2. Prove that if the probability P {A/B} = P {A}, then A and B must be independent.
Examination Paper: Operation Management
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3. Tasco Oil owns a pipeline booster unit that that operates continuously. The time between
breakdowns for each booster is exponential with a mean of 20 hours. The repair time is
exponential with mean 3 hours. In a particular station, two repairpersons attend 10 boosters. The
hourly wage for each repairperson is $18. Pipeline losses are estimated to be $30 per broken
booster per hour. Tasco is studying the possibility of hiring an additional repairperson.
a) Will there be any cost savings in hiring a third repairperson?
b) What is the schedule loss in dollars per breakdown when the number of repairpersons on duty
is two? Three?
4. Cars arrive at a one-bay car wash facility the interarrival time is exponential, with a mean of 10
minutes. Arriving cars line up in a single lane can accommodate at most five waiting cars. If the
lane is full, newly arriving cars will go elsewhere. It takes between 10 and 15 minutes, uniformly
distributed, to wash a car. Simulate the system for 960 minutes, and estimate the time a car spends
in the facility?
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory questions.
· Answer all the questions.
· Each Question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words)
1. Define Transportation Model and its variant in brief.
2. Explain in detail Game Theory. Support you answer examples.
END OF SECTION C
Examination Paper: Operation Management
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IIBM Institute of Business Management
Examination Paper MM.100
Logistics Engineering and Management
Section A: Objective Type (30 marks)
· This section consists of Multiple choices & Short Answer type questions.
· Answer all the questions.
· Part One questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Analysis method in which evaluation of alternative design configuration using multiple criteria is:
a. Level of repair analysis
b. Maintenance task analysis
c. Evaluation of design alternatives
d. None of the above
2. Orientation of Logistic are:
a. Product among organization
b. Total benefits among organization
c. Towards managing of labour
d. Towards managing the physical flow of material & product among organization
3. LMI stands for:
a. Logistics Management Information
b. Legal Management Information
c. Logistics Managerial Information
d. None of the above
4. Technical performance measures (TPMs) is applied for:
a. Evaluation of prime mission related system & elements for expenses
b. Evaluation of prime mission related system & elements for labour
c. Evaluation of prime mission related system & elements for support
d. None of the above
5. System structure should facilitate:
a. Design on an evolutionary basis
b. Design a system within a minimum cost
c. Design on an evolutionary basis & with minimum cost
d. Both (a) & (b)
6. Conceptual design is initiated in response of:
a. Identification of customer need
b. Identification of consumer demand
c. Identification of Industry demand
Examination Paper: Operation Management
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IIBM Institute of Business Management
d. None of the above
7. Industrial engineering refers to:
a. Design & development of a product
b. Design & development of industrial tools
c. Design & development of expenses
d. Design & development of production capability
8. Contractor logistic support (CLS) refers to:
a. System maintenance activities
b. System evaluation activities
c. Both (a) & (b)
d. None of the above
9. Discounting refers to:
a. Application of selected rate of interest
b. Application of selected difference measure
c. Application of selected of interest & measure differences
d. None of the above
10. A plan which is directed towards covering of logistic support for a system is:
a. System Retirement Plan
b. Post production Support plan
c. Facilities plan
d. Computer Resource plan
Part Two:
1. Personal training requirement are based on what factors?
2. What is meant by Design criteria? Provide some examples.
3. Briefly describe evaluation of logistic’s elements.
4. What are the advantages & disadvantages of functional organization?
END OF SECTION A
Examination Paper: Operation Management
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Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Company Profile
Indian Steels Limited (ISL) is a Rs 6000 crore company established in the year 1986. The company
envisaged being a continuously growing top class company to deliver superior quality and cost effective
products for infrastructure development. The company performed with a mission to attain 7 million ton
liquid steel capacity through technological up-gradation, operational efficiency and expansion; to produce
steel with the international standards of cost and quality; to meet the aspirations of the stakeholders. The
production started in the year 1988 and initially, it manufactured Angles, Pig Irons, Beams and Wire Rods
that were mainly used for constructing roads, dams and bridge. The products were mainly supplied to
Public Sector Undertaking such as Railway ,Public Work Department (PWD), Central Public Work
Department (CPWD), Rashtriya Setu Nigam, Audyogik Kendrya Vikas Nigam Ltd.and various foundry
units. The company had its headquarters at Raipur with three stockyards
The company has establish itself well and is said to be considering its expansion plan and proposed
merger with another steel making giant in the country. The company was awarded ISO 9001, ISO 14001
and ISO 18001 certifications. The temperature in the plant premises is reportedly about 6 degrees Celsius
lesser than that of the township, thanks to the greenery being maintained therein.
Logistics Outsourcing
Outbound logistics, which basically connects the source of the supply with the sources of demand with an
objective of bridging the gap between the market demand and capabilities of the supply sources, was
always a problem for companies operating in this industry. Consisting of components like warehousing
network, transportation network, inventory control system and supporting information systems, outbound
logistics was always playing a key role in making the right product available at the right place, at the right
time at the least possible cost. In 1996, owing to the cut throat competition in the emerging dynamic
global markets, ISL emphasized on both effectiveness and efficiency. The company strongly believed in
focusing on its core competency and outsourcing the rest to its reliable partners. Outsourcing of its
outbound logistics was one such move in the direction.
Recognizing the growing demand for its products from the big, diversified and geographically dispersed
customers, the company started expanding the number of warehousing stockyards. From a humble
beginning, the company today has 26 stock yards; most of them is outsourced. Each of the outsourced
stockyards was managed by the third party, which the company referred to sa Consignment Agent in the
area. The CA was selected on the annual basis through competitive bidding process. The performance of
CA was closely monitored by a company representative. The CA was responsible for the entire
distribution of the products within the geographical limits of the allotted market segments and was paid
by the company according to the loads of transaction dealt by him. Based on the sales turnover, CAs were
trifurcated into A, B, and C categories. The CAs with a monthly turnover of Rs 150-200 crore fell under
A category, whereas those with Rs 100-150 crore were B and less than Rs 100 crore were C category.
In addition to the company representative, a team of marketing division operated in the town where the
site of CA was located. This department was responsible for estimating the-future demand, translating it
into orders and sending to the manufacturing plant. Material dispatch was done using either one or a
Examination Paper: Operation Management
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IIBM Institute of Business Management
combination of the two modes: rail, road. While rail as the mode of transportation, the company had a
choice to book a Normal Rake or a Jumbo Rake. At times, the company was engaging the services of the
CONCOR (Container Cooperation of India) where a train of 62 to 70 wagons, each wagon with about
26tonnes capacity was used for transportation. Instead, if the company decided to send the material by
road, the company had a choice between Trailer (25 to 30 tones) and Truck (52 to 20 tones). The choice
of transportation mode was majorly based on the quantity of dispatch.
As soon as the material was dispatched from the manufacturing plant, the respective CA used to get a
Stock Transfer Chalaan electronically through Virtual Private Network, which was develop by a
professional software service provider. In-transit, monitoring was generally done with the help of Indian
railways, if the mode was Rail. Otherwise, truck/trailer drivers were contact through mobile phones.
Transit generally took 5-6 days, providing time for CA took plan for receiving material. The CA use to
utilize this time for arranging material handling devices like: Heavy cranes and required labour. The
material thus unloaded was reaching the warehousing stock yard where CA was responsible for arranging
the material as per the warehousing norms of ISL.
The company broadly classified materials into Long Products and Rounds. Products following into each
category were further classified by their size, shape and utility and the company used a distinct colour
code for this purpose. Each sub category of material had a specific place for down loading. The company
used Bin System for this purpose. While downloading the material in stockyard, the company norms
insisted that CA arrange for providing Dunnage Material. This unable the CA to store material without a
direct contact with land surface and thus reduced the probability of material deterioration. Material was
stored in the stockyard until an authorized representative of the customer used to come and collect it.
While dispatching material to the customer, a Loading Slip was generated against the Delivery Order. The
company also belived in maintaining long-term relationships with the suppliers as well as the buyers. It
always prioritized the needs of its regular and important customers over others and this worked out to be a
win-win strategy.
Operational problems were majorly because of uncertainties in transportation, fluctuations in supply of
electricity and the load bearing capacity of the soil in the stockyard. Some more problems were
encountered whenever there was a change in CA and these were overcome by training the employees of
the new CA and keeping the old CA responsible for the material in his stockyard for six months after the
contract as well. Observations reveal that, at times there were situations wherin CAs had to do those
things which they were not legally supposed to do because of the pressures mounted by political leaders
with selfish interests.
Conclusions
Despite these problems, this model of outsourcing logistics was working out very well for the company.
The practices, which were started in the year 1996 have sustained major changes in the environment and
are being practiced even in 2006. It has enhanced the supply chain competency of the company by
enabling it leverage more on its core competency, which leads to increased productivity.
Questions:
1. Analyze the case in view of the logistics outsourcing practices of the ISL.
2. Discuss the importance of logistics outsourcing with reference to Supply Chain Management.
Examination Paper: Operation Management
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Caselet 2
Introduction
S.K Das established ABC Pharma in 1961 in New Delhi, marketed antibiotics and became brand leaders
in Amphicilin and Cephalexin orals. The company went public in the year 1973. In 1983, ABC
established a plant in Mandideep (MP, India) with various dosage form facilities. In 2004, it became
India’s largest pharmaceutical company, manufacturing and marketing world-class generics, branded
generic pharmaceuticals and active pharmaceutical ingredients. It was ranked amongst the top 10 generic
companies worldwide. The company’s products were sold in over 100 countries with manufacturing
operations in 7 countries and ground presence in 44. The company had an expanding international
portfolio of affiliates, joint ventures and representative offices across the globe with joint venture/
subsidiaries in US, UK, Germany, France, Spain, Ireland, Netherlands, India, China, Brazil, South Africa,
etc.While ABC aggressively pursued the internationalization of its business, the growth strategy equally
focused on enhancing market share n India. The company had a strong brand marketing team and
distribution network in India.
Milestones
By the end of December 31, 2004, global sales had reached US $ 1178 million and registered a growth of
21%. Overseas market accounted for 78% of the global sales. US accounted for 36%, while Europe and
BRIC (Brazil, Russia, India and China) countries contributed 16% and 26% to global sales, with a
combined turnover of US $924 million. The company’s vision was to achieve significant business in
proprietary prescription products with a strong presence in developed markets. It also aspired to be
amongst the top 5 generic players with a US $5 billion sale by next decade. To translate these objectives
into reality and to optimize value creation, the Company had adopted a multi-pronged strategy. The major
thrust areas for future were acquisition of brands overseas, emphasis on brand marketing in the US and
Europe and entering high potential new marets with value added product offerings.
The company had established state-of-the-art multi-disciplinary R&D facilities at Gurgaon, India. ABC
was one of the largest investor on R&D in the Indian pharmaceutical industry, with 7% of its sales during
2004. The company’s major research focus was in the areas of Urology, Anti-invectives, Respiratory,
Anti-inflammatory and Metabolic disorders segments. ABC’s continued focus on R&D had resulted in
several approvals in developed markets and significant progress in New Drug Delivery Response
(NDDR).
Fourth Party Logistics (4PL)
The company believes in building strong and long term relationships with limited number of logistics
service providers. They also focoused on outsourcing the activities like warehouse management, packing
and custom clearance through Freight Forwarders. They always believed in their core competencies. The
logistics service providers took care of storage and inventory management and ensured the availability of
the right product at the right place and at right time. Through outsourcing, they achieved focus on the core
competencies, cost saving, effective supply chain management, cross-pollination of better available
practices and wider and effective geographical coverage. The company practiced Fourth Party Logistics
(4PL) services by providing ERP as a backbone system for the third party logistics service providers. The
palette packing services were outsourced from a local company including the packing material. The
responsibility of complete documentation and custom clearance for import and export of goods had also
been outsourced through Custom House Agents (CHA) and Freights Forwarders (FF) under the
supervision of GM – Global Supply Chain.
The warehouse management was done with the help of Bar-code Technology, which facilitied in tracing
of materials on a single click of a mouse resulting into smooth inward and outward flow of materials. In
future, ABC was planning to have Radio Frequency Identification (RFID) Technology to manage the
warehouse activities in a more effective and efficient manner. The company had divided its global
Examination Paper: Operation Management
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IIBM Institute of Business Management
operations into four regions viz., R1-Middle East with headquarter at India; R2-CIS, Africa and Europe
with headquarter at London; R3-Far East ad Latin America with headquarter at Singapore; R4-US with
headquarters at New York on the basis of convenience, market potential and market share.
Collaborative Relationship
The company established its global supply chain hub at Mandideep (near Bhopal, India). They managed
their operations with one GM-Supply Chain, one Senior Manager Commercial and four Shipment
Officers. Each Shipment Officer had four support employees outsourced through freight forwarders.
These people were responsible for the day-to-day activities under the administrative control of ABC. GMSupply
Chain was responsible for managing the relations with Supply Chain Partners, Freight forwarders
and Custom House Agents (CHA). The company had been a pioneer in launching the genetic versions of
products on the same day at which the product to get off patent, which helped them in getting an edge
over competitors. They managed to maintain the dignity, discipline and business ethics without violating
the laws of patent. This was possible because of the strong and long term relationship with logistic service
providers. There was a strong level of belonging, faith and trust amongst the supply chain partners. To
maintain the good relations, the company practiced making timely payments to the service providers.
They also opened the account in the same bank in which the service providers had their account so that
prompt money transfer could take place. As a result of this, service providers were so concerned about the
shipments of the company that they dedicated 25 refrigerated cargos each equipped with location tracking
facility to track the status of the shipments.
The relationship and commitments of service providers was endorsed on January 10, 2003 when Ramipril
was going off patents in Europe. ABC having strong presence n Germany wanted to encash the
oppournity by making its Rampril available in Germany right on January 11, 2003, so as to take lead in
available generic market. However, ABC did not know the number and size of competition they would be
facing. The underlying fear of getting the shipment late and therby losing the advantage of being first was
very clear on the faces of ABCs top managers. The task was urgent and important; any delay in
availability was to cost heavily. The D-day was January 10, 2003 and the shipment was to be airlifted
from Mumbai so as to reach Germany after midnight of January 10, 2003 but before dawn of January 11,
2003. Two Boeing were chartered to lift the goods from Mumbai Airport, but the task was not simple, as
the goods were to be surface transported from Mandideep to Mumbai in a carvan of 70 cargos. To worsen
the things, the transporters had announced strike during that period.
The urgency was briefed to freight forwarder, who was caught between relationship with ABC and
membership of the Transporters’ Association. He had the option of pleasing any one of them. The long
association and the relationship with ABC got priority and the freight forwarder assured ABC’s Senior
Commercial Manager to carry out the assigned responsibility. Going against the directives of association,
the freight forwarder contacted the police authorities and obtained a security cover throughout
Maharastra. The freight owner consider himself as one of the responsible members of ABC and was
personally receiving the cargo and getting it loaded at Mumbai airport. The scheduled departure had a
lead-time of two days. However, he freight forwarder insisted and stayed at Mumbai at his own cost to
see the goods leaving India successfully. It was a mission for ABC and the freight forwarder in which
collaborative relationship surpassed all limitations and the goods landed in Germany-just-in-time.
Questions:
1. What modification would you suggest in enhancing the existing logistics system?
2. Critically analyze the efforts of ABC in launching generic versions of products going off
patents.
END OF SECTION B
Examination Paper: Operation Management
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Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Define Logistic support in the context of the production /construction phase. What are the
elements of Logistic support?
2. Define reliability & maintainability. What are their major characteristics?
END OF SECTION C






Examination Paper: Production Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Product Design and Development
Section A: Objective Type (30 marks)
· This section consists of Multiple Choices/Fill in the blanks/True-False & Short notes type
questions.
· Answer all the questions.
· Part One questions carries 1 mark each & Part Two questions carry 5 marks each.
Part One:
1. The concept of a contract book is detailed by:
a. Wheelwright
b. Clark
c. Both (a) & (b)
d. None of the above
2. BOM stands for Bill of Materials.(T/F)
3. Concept screening is based on a method developed by the late Stuart Pugh in the 1980s and is
often called ………………………………………………………………………………….
4. …………………….. is used when increased resolution will better differentiate among company
concepts.
5. ……………………………… are the first products produced by the entire production process.
6. The first commercial free-form fabrication system was introduced by 3D Systems in the year:
a. 1984
b. 1986
c. 1964
d. 1948
7. Concepts are turned over the customer, client, or some other external entity for selection is called:
a. Intuition
b. Pros and Cons
c. External decision
d. Decision materials
8. A Russian problem-solving methodology called TRIZ began to be disseminated in Europe and in
the United States in the year:
a. 1998
b. 1997
c. 1976
d. 1990
Examination Paper: Production Management
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IIBM Institute of Business Management
9. Functional elements of a Product Architecture are …………………. & ………………………
10. …………………………… is a key determinant of the economic success of a product.
Part Two:
1. What is “Control Drawings”?
2. Write short note on “Resource Allocation”.
3. Write short note on “Product Variety”.
4. What is “Project Risk Plan”?
END OF SECTION A
Section B: Caselets (40 marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
New Product Development at Smart India Ltd.
Ajay Kumar, the Vice-President, (Sales) of a leading Delhi based bicycle manufacturer of the country
called SMART LTD., was wondering at the increase in the quantum of Traffic on roads during the
last 10 years, while glancing outside his office window. But not much had changed in his company in
th23e year 2001. His company’s market share was dwindling since the last 10 years, though the
profits and sales were showing an increasing trend. The threat of cheap imports was also knocking at
the doors. The competitors were using marketing strategies to the hilt in order to get larger chunk of
market share. The things were not showing improving trend despite the continuous efforts by the
company. SMART LTD. was equally poised with RUSH LTD. in respect of market share just 10
years back. Now the ground realties were very much adverse to SMART LTD.. While RUSH LTD.
was having a market share of about 45 per cent, SMART LTD. lagged behind with only about half
i.e. 23 percent closely followed by CLIMB LTD. with 20 per cent. The rapid erosion in the market
share of SMART LTD. was of concern to Ajay Kumar, who was trying to find out ways to stop the
downfall. The problem of losing market share had become more prominent keeping in view that the
bicycle business was a volume led business to an extent. To make the matters worse, the credit rating
agency had downgraded the debt instrument issued by the company in view of a possible feud
between the family members of the promoter and the majority share holders.
An important factor in the bicycle market, which had recently gained importance, was the
increasing demand for different types of bicycles among youth, particularly those of the sports
variety. Unlike in the past, improved technology had led to a newer variety of bicycle ranging from
the very basic to the 21 gear models. Such value added products also provide better profit margins.
Also, some manufacturers had started rolling out products provide better profit margins. Also, some
Examination Paper: Production Management
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IIBM Institute of Business Management
manufacturers had started rolling out products that were not strictly bicycles but had similar
technological inputs. These included exercise bicycles popularly found in the clubs and gymnasiums.
At the plant level, the top post was that of the Joint President and was held by one of the family
members. Most of the decisions were subject to the gut feel of the Joint President.
Though perceived as ‘a poor man’s product’, the scenario was changing of late. Earlier the product
was positioned using only one plank i.e., cost effective transport utility vehicle. Now the market was
being segmented multidimensionality by all the players. Age, benefit, income, occasions etc. were the
added criteria. SMART LTD. had come up with bikes for kids, city bikes, mountain bikes and
classics. This reflected the changing needs of buyers as well. CLIMB LTD. had segmented market on
the basis of usage, road bikes, mountain bikes and tandems. SMART LTD. had also jumped to the
bandwagon recently and had introduced bikes in ladies, kids, adventure and health segments. The
trend was to increasingly use the platform of health, fun, sports etc., to increase the penetration into
the market. Once the leader in the bicycle industry had 35 models in the market with about eight color
variants for each. The competitor RUSH LTD. had about 45 models in the market with more color
variants.
The financial stakes of introducing of a new product in the bicycle industry ranged from Rs
45000 to a couple of lakhs. The manufacturing process of bicycle was composed of many subassemblies.
The synergic use of these sub-assemblies helped in reaping economies of scale. To
remain to the competition, it was imperative to introduce innovative products that could meet the
differentiated needs in a better fashion. Ajay Kumar, the Vice President (Sales) had seen a bike in a
foreign magazine and had sent the picture of the same 6 months back to design and development
department. The feasibility report was still awaited from the design and development department. He
appraised the Vice-President (Production) regarding the issue but the things still had to be sorted out.
Ghanshyam, the HOD(Sales Department) had visited Taiwan and brought designs of four bicycles
which could be manufactured by the company. But his sales division suggested that those bikes
would be out of reach for the poor, therefore, the idea could not be taken up. He was very enthusiastic
over a project to launch a new bike for fun loving people. After detailed deliberations with the
production and design development department for about 8 months, the proposal was sent to the top
management for approval. He was sad, as the file was pending for about 2 months with his boss.
While Ajay Kumar was pondering over the issues, his colleague from the finance department entered
into the room and said, “I was watching a movie on HBO last night, I saw a very different kind of
bike in it. Did you view it?” Ajay Kumar replied in negative and wondered what could be the right
approach for product development. He was also concerned with the time involved in the process of
development of new products.
Ajay while passing by the market simply gazed at the bicycle showroom on his way and
appreciated the speed at which the competitors were able to come up with various color variants.
Recently, Ajay Kumar also discussed with the Vice-President (Production) regarding the
experimentation with some new colours. The officer agreed with his new proposal and assured that
the same shall be forwarded to the top management for a final decision. Ajay kumar prepared himself
to wait for a long time as his experience curve suggested. One of the only solacing fact for Ajay
Kumar was the success of the bike ‘football’ which they launched on the eve of soccer world cup.
The bike was an instant success. A friend of Ajay Kumar, who worked with him till last year, called
upon him. He remembered how enthusiastically he was explaining his new challenging job. He was
very happy about the confidence the management had put in him. He was also being sent abroad on
training by his new employers. The sales department had subjectively come up with the
multidimensional mapping of the three major players on two relevant attributes.
The company planned to come up with a new campaign focusing upon the environment
friendliness of bicycle over motor bikes that use fossil fuels. The government also promised to aid the
concern in this effort. One of the main strengths of SMART LTD. was its undisputed leadership in the
rural areas. The company did not intend to lose it. His main rival was also closing in for the rural
market. SMART LTD. had initiated a restructuring exercise in 1999-2000, whereby, three new
Examination Paper: Production Management
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IIBM Institute of Business Management
wholly owned subsidiaries were created, each being named after the respective cycle manufacturing
locations, namely, SMART LTD. (Delhi), SMART LTD. (Gujarat) and SMART LTD. (Andhra
Pradesh). Although the originally stated intention of setting up these subsidiaries was to treat them as
profit centers, current developments indicate the likelihood of distribution of assets and liabilities into
these companies.
Ajay Kumar was quite confident of the quality of the bicycles manufactured as the steel used for
the sale was produced by one of its own unit. The firm had also bagged an international award for its
quality standards. The sales figures had gone up from 250 crores in the year 1995 to 350 crores in the
year 1998. The inflow of foreign exchange showed a steady increase from 100 to 120 during the same
period. SMART LTD. was exporting bikes to more than 35 countries.
Questions:
1. How new product development process be improved at SMART LTD.?
2. What strategies should be used by SMART LTD. to increase its market share?
Caselet 2
Swastik Cycles Limited
Swastik Cycles Limited was a key manufacturer of a wide variety of cycles. Its products were
available almost all over the country and were also exported. It was the second largest bicycles selling
organization followed by Star Cycles. The total turnover of the company was Rs 400 crores during
the year 1999-2000 and its market share in the year 2000-2001 was about 24%, whereas Star Cycle
had captured about 46% of the total market in the same year, rest of the market was shared by all
other brands. The company had classified its entire products into.
1. Utility segment: popularly called as the standard cycles, widely used by milkmen, hawkers, and
other lower income group people.
2. Fancy cycles: multi colored bicycles with modern features like gear changing, stylish handle, slim
frame etc., used by kids, teenagers and sportsmen.
3. Health segment: health maintaining products i.e., walker, cycle etc., for all age group had been
put under this categories.
The company had its strength in the utility segment and was accepted as the market leader, whereas in
other segments, it had yet to prove itself. In other segments i.e., fancy cycle segment, health segment
the Star Cycle was far ahead. The company was striving to fight the stiff competition from domestic
players. It also anticipated the competition from Chinese players who were expected to enter the
Indian market with low cost products. On account of heavy import duties levied by the government in
the budget of 2001-2002, the chances of their invading the domestic market were, however,
substantially minimized.
Now, the company had confined itself to win over the domestic players in these segments. The
major issue for a company was that despite their presence in the fancy cycles the segment for last 10
years they were not able to attract the target market and the sales were lagging behind. The immediate
requirement was to push the sales of these two segments.
The company had been trying to push sales through their dealers network all over the country
which was the only intermediately between the company and the customers. In order to fresh the
desired sales company had the policy of offering monetary and non-monetary incentives in the form
of rebates on target lifting.In addition to it, the company also offered incentives like foreign trips to
Bangkok etc. and free passes of mega events. The company also went for some other sales promotion
activities the like point of purchase (POP), joint promotion schemes (JPS) with dealers, in which the
dealers offered gifts on every purchase to their customers and the cost incurred was born jointly by
Examination Paper: Production Management
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IIBM Institute of Business Management
the company and the dealer concerned. Cycle races organized by schools and educational institutes
were other promotional measures adopted by the company.
The company had invested marginally in advertising. They ran the show through print media and
the advertisement on the electronic media was very low. Decision making regarding promotional
activities was centralized with the corporate office, whereas, other decisions regarding sales, R&D
and production could be taken by the respective units. The field force comprising of sales executives
and field officers who were in constant touch with the dealers and the customers for getting their
feedbacks regarding sales promotion strategies, used to send the feedbacks to the corporate office for
further processing and decision making. This consumed time and little was left with the particular
unit to decide.
The changing trends in the markets gave enough scope to make the bicycle popular amongst the
elite class in the form of health maintaining products, pollution free vehicles etc. Though the
company was making efforts to tap this newly emerging customer group by offering them health
maintaining cycles, stylish racing cycles, yet it was a hard task for the company because it had not
made any strategy to reach the customers directly to bring about awareness of the products. To
improve its market share and maximize sales, a lot was required to be done by the company to devise
the marketing strategies if it was to cope up with the changed market scenario and the strategies
adopted by its competitors.
Questions:
1. Discuss key problem faced by Swastik Cycles.
2. Design an appropriate marketing strategy comprising of all the essentials to overcome this
problem.
END OF SECTION B
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Many product development teams separate the “looks like” prototype from the “works like”
prototype. They do this because integrating both function and from is difficult in the early phase
of development. What are the strengths and weaknesses of this approach? For what types of
products might this approach be dangerous?
2. The argument for the motorcycle architecture is that it allows for a lighter motorcycle than the
more modular alternative. What are the other advantages and disadvantages? Which approach is
likely to cost less to manufacture?
END OF SECTION C
Examination Paper: Production Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Quantitative Techniques
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & Short Answer type questions.
· Answer all the questions.
· Part One question carries 0.5 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. The value of 3n+4 - 6.3n+1 is:
a. 27.3n+1
b. 21.3n-1
c. 21.3n+1
d. 27.3n-1
e. 21.3-n-1
2. The value of x which satisfies the question x/2-x/4=x-9 is:
a. 12
b. 14
c. 16
d. 18
e. 20
3. The sum of 5ax-7by+cz and ax+2by-cz is:
a. 6ax+5by
b. 6ax-5by
c. 6ax+5by-2cz
d. 6ax-5by-cz
e. 6ax-5by+2cz.
4. The product of 3x-5 and 2x+7 is:
a. 6x2-11x-35
b. 6x2-11x+35
c. 6x2+11x-35
d. 6x2 +10x-35
e. 6x2+11x+35
5. The 37th term in the series -2.8, 0, 2.8,…. is:
a. 98
b. 89
c. 87
d. 78
e. 68
Examination Paper: Production Management
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IIBM Institute of Business Management
6. The sum of the series 14, 64, 114, … to 20 terms is:
a. 7890
b. 8970
c. 9780
d. 10820
e. 10920
7. The last term in the series 2, 4, 8, … to 9 terms is:
a. 612
b. 512
c. 412
d. 312
e. 212
8. If an unbiased coin is tossed 3 times then the probability that at least one head occurs is:
a. 0.875
b. 0.5
c. 0.375
d. 0.125
e. 0.1.
9. Again in continuation with the above question the probability that 3 heads result is:
a. 0.100
b. 0.125
c. 0.250
d. 0.500
e. 0.875
10. The line y=5-10x cuts the y axis at………. and has slope………
a. (0,10), -5
b. (0,-10), 5
c. (0,5), -10
d. (0,-5), 10
e. (0,5), 10
11. If y=F(x) is the equation of a line then the slope at (5,2) is given by:
a. F’(2)
b. F’(5)
c. F(2)
d. F(5)
e. None of the above
12. Slope of the line passing through the points (4,4) and (5,5) is:
a. 1
b. 9
c. 1/9
d. 20
e. 1/20
Examination Paper: Production Management
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IIBM Institute of Business Management
13. An ‘Ogive’ is:
a. A graph of ungrouped data
b. A graph of grouped data
c. A graph of cumulative frequencies
d. A graph of ranges of fractiles
e. A graph with rectangles as opposed to a line graph.
14. If p=3x4 + 9xy + y3 then ∂p/∂y is given by:
a. 12x3+9x
b. 12x3+9x+3y2
c. 9x+3y2
d. 9y+3y3
e. 12x3+9y+3y2
15. For a function f(x), f’(x)=0 at x=a then ‘a’ is a point of minima if:
a. F(a)<0
b. F(a)=0
c. F’’(a)=0
d. F’’(a)< 0
e. F’’(a)>0
16. The function 2x2 + 3x +2 has a:
a. Maximum value at x = - 3/4
b. Minimum value at x = - 2
c. Maximum value at x = -3/2
d. Minimum value at x = -3/4
e. The equation has no maxima and minima.
17. The probability of getting exactly 3 heads in four tosses of a fair coin is:
a. 1/2
b. 1/4
c. 1/8
d. 1/10
e. 1/16
18. In multiple regression, the number of normal equations will be:
a. Two
b. Three
c. One
d. More than three
e. More than or equal to three
19. The index of industrial production is an example of:
a. Price index
b. Value index
c. Quality index
d. Relative index
e. Industrial production index
Examination Paper: Production Management
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IIBM Institute of Business Management
20. As the sample size is increased, the standard error of the mean would:
a. Increase
b. Decrease
c. Remain unchanged
d. May or may not increase
e. The value of sample mean would be lot closer of population mean
Part Two:
1. What do you understand by ‘Infeasibility’ of the solution?
2. Write about ‘Big – M’ method for minimization.
3. Write about the ‘Classical Economic Order Quantity (EOQ) models.
4. Write a short note on ‘Interfering Float’.
END OF SECTION A
Section B: Practical Problems (40 marks)
· This section consists of Practical Problems.
· Answer all the questions.
· Each Practical Problems carries 20 marks.
1. A car retailer thinks that a 40,000 mile claim for tire life by the manufacturer is too high. She
carefully records the mileage obtained from a sample of 64 such tires. The mean turns out to
be 38,500 miles. The standard deviation of the life of all tires of this type has previously been
calculated by the manufacturer to be 7,600 miles. Assuming that the mileage is normally
distributed, determine the largest significance level at which we should accept the
manufacturer’s mileage claim, that is, at which we would not conclude the mileage is
significantly less than 40,000 miles.
2. Consider the following data:
Output Total Cost
(in lakhs of units) (in lakhs of rupees)
5 140
7 155
9 170
11 180
14 200
17 230
20 240
22 260
24 275
28 310
Identify the fixed and variable cost components using the least squares method.
END OF SECTION B
Examination Paper: Production Management
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IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 15 marks.
· Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. In a recent survey, senior company executives in five metros has ranked two former finance
ministers Mr. Manmohan Singh and Mr. P. Chindambaram as first and second and the present
finance minister Mr. Yashwant Sinha in third position as regarding their popularity.
In this, an example of sampling survey? Discuss about necessity of sampling and the different
methods of sampling?
2. “Index numbers are an indispensible tool in day to day life. Comment. Also, explain with
examples how index numbers provide a summary measurement of movements of a large number
of economic variables. Is there a possibility that, their method of computation could give a
distorted picture of reality?
END OF SECTION C
S-2-210311

Examination Paper: Sales Management
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Examination Paper MM.100
Sales and Distribution Management
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & short notes type questions.
· Answer all the questions.
· Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Out of the following which gap arise when the sales force does not have the required knowledge,
skills or capabilities to become successful on the Job.
a. Knowledge gap
b. Capability gap
c. Methods gap
d. Training gap
2. This method is used by the trainers to present more information in a short time to a large number
of participants.
a. Lecture
b. Demonstration
c. Group discussion
d. None of the above
3. It improves on traditional computer based training by making the information available to the
salesperson immediately and in a personalized manner.
a. Distance Learning
b. Interactive Multimedia Training
c. Mentoring
d. Electronic Performance Support System
4. These are preprogrammed computer packages, and are based on reality:
a. Role Playing
b. Case Studies
c. Simulation Games
d. Job Rotation
5. The responsibility which include dealing with stakeholders with fairness impartiality and equality
is known as:
a. Ethical Responsibilities
b. Legal Responsibilities
c. Economic Responsibilities
d. Voluntary Responsibilities
Examination Paper: Sales Management
IIBM Institute of Business Management 2
6. They are the shopkeepers who set up shops in the market place to cater to the needs of hundreds
of consumers.
a. Distributors
b. Wholesalers
c. Agents
d. Retailers
7. This strategy is to make sure that the product is made available in as many outlets as possible so
that anywhere the consumer go, he or she should be able to get the product of his choice.
a. Exclusive Distribution
b. Selective Distribution
c. Intensive Distribution
d. Distribution Channel
8. This is the stage of the birth of multiple retail formats to please the customer.
a. Stage of Infancy (Child hood)
b. Meeting Customer Expectations (Youth)
c. Shift in the power equation (Adulthood)
d. Consolidation (Maturity)
9. It is the identity that the store develops for itself in terms of what it has to offer the customers.
a. Positioning Strategy
b. Product Differentiation Strategy
c. Operational Strategy
d. Targeting
10. It is the most convenient size of the product that the customer can buy at a time.
a. Lot Size
b. Waiting Time
c. Choice to the consumer
d. Place Utility
Part Two:
1. What is Channel Conflict?
2. What is an Information System? What is the purpose of Information Systems?
3. State the different categories of Inventory.
4. What is Electronic Data Interchange?
END OF SECTION A
Examination Paper: Sales Management
IIBM Institute of Business Management 3
Section B: Caselets (40 Marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Swish flow Ltd. - Hiring Salespeople
“Why two out of five salesperson have resigned within six months of joining the company/” asked
marketing director to the sales manager, Sunil Kumar of Swish flow Ltd. “I think, there is
something wrong with our staffing process, “responded Sunil Kumar, without knowing the real reasons
for the turnover of salespeople.
Swish flow Ltd started manufacturing and marketing consumer durables like fans and water purifiers for
household consumer’s commercial firms in 1993. The sales and marketing office was located in Mumbai,
the commercial capital of India. Swish flow was a newly established company and for its first year of
operations, the company decided to recruit five salesperson to cover major metros and cities of
Maharashtra. The staffing process included the sales manager deciding the job qualifications salespersons
based on what he learnt in the MBA programme. The administration manger was asked to place the
advertisement in the local newspapers. The resumes of applicants were forwarded to Sunil Kumar, who
screened the same and sent interview calls to about ten applicants. The interviews were conducted by
Sunil Kumar and the marketing director and the selected candidates were given the appointment letters.
Some of the candidates had a problem of finding suitable residence, but the company policy did not
provide any consideration for he3 same. Sunil Kumar conducted one-week training programme and
generally guided the new salesperson, who reported to him directly. There was a delay in the receipt of
the fans from the factory, located at Baroda in Gujarat. During this period of three months, Sunil Kumar
was asked to conduct market surveys and look after advertising function of the entire group. He asked the
salespersons to collect market information on various other products like water purifiers, power tillers,
and so on in which the group was interested to diversify. During this period, two salespersons suddenly
stopped coming to work, after collecting their salaries of the previous working month.
Questions:
1. What improvements do you suggest in the staffing process followed by the company?
2. Was Sunil Kumar right in getting market surveys done by the new salesperson?
Caselet 2
Snow White Paper Company is located in an agricultural belt about 300 kilometers from a metro city.
The company is into writing and printing papers. Its primary raw material is wheat straw. Last year,
the company had a turnover of Rs. 134 crore on a volume of 45,000 tons of paper. While preparing
the business plan for the current year, the top management was concerned with the following
distribution issue that they want you to help resolve:
PROBLEM: FINISHED GOODS DISTRIBUTION
The paper industry is dominated by selling agents who bring the manufacturer like Snow White and
the buyer like printing/publishing companies, and note book makers, together. They make a
commission of about 2 percent on all transactions. Some other points:
Examination Paper: Sales Management
IIBM Institute of Business Management 4
· Snow White depends on about 110 agents to canvass business for it from the users.
· The Company sells about 23 percent of its paper directly to some government organizations.
· The agent arranges for the buyer to pay the company for its produce by a advance demand
draft. It is expected that the agent provides the credit support to the buyer.
· Agents are not exclusive for Snow White and work for other paper mills also and normally
play the mills against each other. They have a grip on the business and are reluctant to put the
mill directly in touch with the buyers.
· There is always an uncertainty on the orders and the price, which would be obtained on the
orders- the company cannot plan its profits properly nor offer the best service to end users so
that they always ask for Snow white.
Question:
1. How can you help Snow White become less dependent on the selling agents and plan its sales and
profitability better? How can they plan their customer service efforts?
Section C: Applied Theory (30 Marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 10 marks.
· Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. Explain in detail the Role of Retailers.
2. How does the availability of the Internet impact on International sales?
3. What are the basic concepts of Sales Organization? Explain any one of those concepts.
END OF SECTION C
END OF SECTION B
Examination Paper: Sales Management
IIBM Institute of Business Management 5
IIBM Institute of Business Management
Examination Paper MM.100
Management of a Sales Force
Section A: Objective Type (30 marks)
· This section consists of Multiple Choice questions & short notes type questions.
· Answer all the questions.
· Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. ____________ is the stage in which the salesperson must discover, clarify and understand the
buyer’s needs.
a. Customer Research
b. Approach
c. Need Assessment
d. Planning
2. This outcome equates to how much information was absorbed and usually involves in giving the
trainee some type of test.
a. Reactions
b. Leaving
c. Behavior
d. Results
3. A salesperson’s ______________ is calculated by dividing the number of orders received by the
number of calls made (O/C).
a. Batting Average
b. Call Rate
c. Size of Orders
d. Direct Selling Expense
4. Such costs are incurred in connection with a single unit of sales operations.
a. Direct Costs
b. Indirect Costs
c. Overhead Costs
d. Fixed Costs
5. These are the activities that people must perform in orders to carry out the strategy.
a. Objectives
b. Strategies
Examination Paper: Sales Management
IIBM Institute of Business Management 6
c. Tactics
d. Goals
6. The highest executives in sales management is most often called:
a. Vice President of Sales
b. Branch Manager
c. Team Leader
d. District Sales Manager
7. A ____________ is someone with knowledge, experience, rank, or power that provides personal
counseling & career guidance for younger employees.
a. Mentor
b. Leader
c. Supervisor
d. Peer
8. The most widely used method of expense control in which the company reimburses sales
representatives for all legitimate business & travel costs they incur while on company business is
known as:
a. Clarity
b. Payment Plans
c. Limited Payment Plans
d. Unlimited Payment Plans
9. It is a direct monetary reward paid for performing certain duties over a period of time.
a. Salary
b. Incentives
c. Bonus
d. Pension
10. This is a performance goal assigned to a marketing unit for a specific period of time.
a. Salary Plus Bonus
b. Salary plus Commission
c. Salary Plus Commission & Bonus
d. Sales Quota
Part Two:
1. Write a short note on ‘Strategic Account Management’.
2. Why there is a need of a detailed data in sales?
3. Briefly explain the nature & benefits of Territories.
4. What is Market Specialization?
END OF SECTION A
Examination Paper: Sales Management
IIBM Institute of Business Management 7
Section B: Caselets (40 Marks)
· This section consists of Caselets.
· Answer all the questions.
· Each Caselet carries 20 marks.
· Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
MAJESTIC PLASTICS COMPANY
Reps Selling Too Many Low-Profit Products
Over the past several days the top executives in the Majestic Plastic Company had been conducting their
annual performance review of the company’s operations. The company president, Boyd Russell, sat in on
most of these sessions and periodically became quite involved in some of the departmental reviews. The
sales department was the one currently under discussion, and Clyde Brion, the general sales manager, was
the focus of attention. Overall, the sales and profit results were satisfactory, but the executives noted what
they thought was a problem in two Louise Shannon was the rep, and the other was in Chicago, which was
Henry Sadowski’s territory.
In each of these territories, the sales reps total sales volume was satisfactory. The problem was that the
bulk of their sales volume was in low profit products- that is, products whose gross margin was well
below the company’s desired average. Then the chief financial officer, Oliver Twombly, recalled that this
same situation had been brought up at last year’s performance review. Clyde Brion realized he was on the
spot with his fellow executives, including the president.
Top management really did not want to change the basic compensation plan because, ore the company as
a whole, it apparently had been working okay. And Brion concurred in this decision. He pointed out that
Shannon ad Sadowski consistently met their total sales quotas and that each had won a sales contest
designed to stimulate total sales. But their performance was not balanced. They went way over quota on
low-margin goods. They were not selling a desirable mix of products, nor were they generating their share
of new accounts. Basically they were getting large repeat orders from a few established accounts. And
Shannon and Sadowski generally were neglecting the newer products that were the foundation of the
company’s future growth.
Brion had been aware of this situation for some time, but he had never given it the attention it deserved,
partly because the two reps total sales volume was satisfactory and partly because he had other brushfires
to put out. Now he was convinced that he had better do something-and do it quickly.
Question:
1. What should Clyde Brion do to remedy the imbalanced sales performance of Louise Shannon and
Henry Sadowski?
Examination Paper: Sales Management
IIBM Institute of Business Management 8
Caselet 2
SUNRISE CLEANERS
To Train or Not to Train
Sunrise Cleaner Company’s sales have been expanding rapidly in the past several years and are expected
to continue increasing throughout the next decade. In order to meet this demand, Mickie Parsons,
Sunrise’s sales manager, has hired a number of sales representatives and expects to hire 6 to 10
salespeople in the coming year and more the following year. In the past, Sunrise hired only experienced
reps, but lately the company has been hiring recent marketing graduates. While the new grades don’t have
experience, they often are a high level of motivation and a good understanding of overall marketing
planning. However, the less experience reps need more training-both on company policies and sales
procedures-before they are effective in making sales calls. Parson is trying to design a training program
that will provide the necessary training at the lowest possible cost.
Currently, Sunrise does not have a training program. Te new hires just spend a week in a territory with an
experienced rep, and ten they are given their own territory. While this system was satisfactory with
experienced people, it is not adequate for the inexperienced people the company is now hiring.
Mickie Parsons has suggested the president of Sunrise, Keat Markley, that the company institute a one-or
two-week training program at company headquarters. Parsons has suggested two options. The first option
is to hire a staff recruiter/ trainer who would spend half of his or her time on recruiting and the other half
on training. The new staff specialist would be paid a salary of about $60,000 a year- so the added cost
with respect to the training responsibilities would be $30,000 a year. The second option is to contract with
an outside company that specializes les force training. That company would provide a specialist to set up
and conduct a training program at a cost of approximately $20, 0000 per week.
Parsons was just concluding her presentation to Keat Markley. “I feel that a training program would
increase the average annual sales per rep a minimum of 5 percent- to $1,050, 000 per rep.”
Markley replied, “I am not convinced that the training would improve performance enough to justify the
costs. You know it isn’t just the cost of the trainer. We would also have to bring these reps into
headquarters and pay their expenses while they are here. There would be some equipment and materials
involved…. All for a 5 percent increase in sales! I want to be sure that the 5 percent would more than
cover these costs. What about using computer training software to train the new reps? Eng I read says that
all of the top companies are using online programs to do a lot of their training and that they are saving
bundles in the process.”
“I’ve have checked into that option,” Parsons said, “but I don’t think that a basic off-the –shelf program
would be very effective for training inexperienced graduates and the initial cost of developing a
customized program would be excessive- a minimum of $3,00,000 with each additional week module
costing $50,000. Besides, I think an online program works best for refresher training or for introducing
new product information, not for teaching basic selling skills- that should be face-to-face training.” “OK,”
said Markley, “you put together an analysis that considers all the costs of these training options, and ten
make a recommendation to me. Be sure that you look at the increase in sales that will be necessary to
cover these additional costs.”
Parsons left the meeting already calculating the costs in her head. She knew that bringing a rep into
headquarters would cost $250 per rep for travel and $750 per rep per week for lodging and meals.
Materials for any of the programs would likely add an extra $100 per rep and the audiovisual equipment
for the face-to-face training would be headed for her office, where she could put all of these costs together
in order to make a reasoned recommendation to Markley as soon as possible.
Examination Paper: Sales Management
IIBM Institute of Business Management 9
Question:
1. What type of training program should Mickie Parsons recommend to Keat Markley? What’s your
reasoning for your recommendation?
Section C: Applied Theory (30 Marks)
· This section consists of Applied Theory Questions.
· Answer all the questions.
· Each question carries 10 marks.
· Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. ‘Sales Forecasting is a very difficult task’ Comment on the statement and also suggest some
guidelines for the manager that can enhance the accuracy of the states forecast.
2. Certain Leadership & Supervisory problems are commonly encountered when managing sales
people. State those problems which are encountered in leadership.
3. What is Training Assessment? What are the Training Program objectives?
S-2-210311
END OF SECTION B
END OF SECTION C