Page 27 - DMGT501_OPERATIONS_MANAGEMENT

Unit 1: Introduction to Operations Management

Notes
Example: In a manufacturing unit, the standard time allowed for the production of a
unit is 5 hrs. If in a particular month 126 units are produced by employing 4 persons and the
allowable delays are found to be 44 man-hours, find the productivity and wastivity of the
concern.
Solution:
ESH = Earned Standard Hours
STD Time/Unit = 5 hrs
Production = 126 units
Earned standard man-hours = 5 × 126
= 630 hrs

AMH = Available Man-hours
Manpower Employed = 4 P
Monthly working hrs = 4 × 25 × 8 = 800 hrs
Allowed delays = 44 hrs
Therefore, AMH = Actual Man-hours available for production
= (800 – 44) hrs
= 756 hrs.

Therefore, Productivity = (ESH/AMH) × 100
= (630/756) × 100
= 83.33% Ans
Wastivity = 100 – 83.33
= 16.67%

Case Study The Bicycle Ride

I Cycles was promoted by the family of Murugappa Chettairs in September 1949.
The company was a collaboration formed with Hercules Cycles & Motor Co. of
TU.K., to indigenously produce complete bicycles and bicycle parts, and substitute
imports. The bikes that TI Cycles manufactured were elegant, well-built and based on
British designs. They had immaculate reputations for quality and durability. For almost
forty years, the name "BSA" and "Hercules" were synonymous with value. The future
looked bright. Generations of kids learned how to ride on elegant BSA or Hercules bikes.
A good bike enters the life of a child like a good friend, and many of these kids grew up to
be parents—parents who wanted their kids to ride these bikes.

However, over the 1970s and 1980s, the market for bicycles was changing but TI Cycles
seemingly did not quite understand what was happening. In Ludhiana, Hero Cycles grew
from its origin as a small producer of bicycles to the largest manufacturer of bicycles, right
under the nose of TI Cycles. At the heart of Hero Cycle's success lay a different value
creating logic. Hero Cycles developed their cycles to meet specific Indian needs. They
designed a cycle that could carry two people plus a heavy load at the cheapest price. They
Contd...

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