December, 2009
MS-53 : Production/Operations Management
SECTION – A
1. (a) What factors have contributed to the increased emphasis on faster product development and introduction ?
(b) A manufacturing firm has three proposals for a product. Either it can be purchased from an outside vendor at Rs. 4.00 per unit or it can be manufactured in-plant. There are two alternatives for in-plant manufacturing. Either a fully automatic unit is procured, involving fixed cost of Rs. 30,000 and variable cost of Rs. 2.75 per unit. Alternatively, a semi-automatic unit would cost Rs. 20,000 as fixed cost and Rs. 3.00 per unit as variable cost. Draw a break-even chart for these alternatives. Suggest range of production - volume suited for these alternatives.