Operations Management — 2024

KNEC Diploma in Supply Chain Management, Module III. Original examination questions with explained answers for revision. Answers are independently prepared for study and are not an official KNEC marking scheme.

November 2024

Paper codes: 2903/302; 2922/302; 3304
Time: 3 hours
Instructions: Answer any FIVE questions. All questions carry equal marks. Answer the questions in English.

Question 1(a) — 10 marks

Explain five aspects of manufacturing where technology may be applied to increase productivity in a firm.

Answer

  1. Computer-aided design and simulation can shorten design work and reduce development errors.
  2. Automated production and machine control can increase consistent output per operating hour.
  3. Computerised scheduling coordinates jobs, materials and capacity to reduce waiting.
  4. Automated handling and inventory systems reduce unnecessary movement and stock-record errors.
  5. Sensors, quality analytics and maintenance systems detect defects and equipment deterioration earlier.

Question 1(b) — 10 marks

Explain five strategies that a firm should adopt to improve the aesthetics of a product during the design and development stage.

Answer

  1. Research target customers’ preferences for appearance and perceived product identity.
  2. Use balanced shapes and proportions that suit the intended function.
  3. Select colours, materials and finishes that communicate the desired quality and style.
  4. Integrate attractive detailing, packaging and branding without undermining usability.
  5. Test prototypes with users and refine the visual design using their feedback.

Question 2(a) — 10 marks

Outline five objectives of plant and equipment maintenance in a manufacturing firm.

Answer

  1. Reduces unplanned breakdowns and lost production time.
  2. Maintains equipment accuracy and product quality.
  3. Protects employees and users by keeping plant in safe working condition.
  4. Extends useful asset life and protects the value of the investment.
  5. Controls operating costs through efficient running and timely repair before major damage occurs.

Question 2(b) — 10 marks

Alpha manufacturing company recently introduced several new products into the market. Explain five reasons that may account for such a move.

Answer

  1. Meet changing customer preferences and previously unmet needs.
  2. Replace declining or obsolete products and sustain sales over the product life cycle.
  3. Respond to competitors and protect or expand market share.
  4. Use new technology or existing capacity to create additional value.
  5. Diversify revenue sources and enter attractive new market segments.

Question 3(a) — 10 marks

Explain five reasons that may make it necessary for a manufacturing firm to re-design its plant layout.

Answer

  1. New products or changed product mix may require different equipment and work flows.
  2. Increased demand may exceed the capacity of the present arrangement.
  3. Excessive movement, congestion or long waiting times may make the layout inefficient.
  4. New technology or machinery may require revised space and utility arrangements.
  5. Safety problems, poor working conditions or changing compliance requirements may require physical reorganisation.

Question 3(b) — 10 marks

Transformation of new materials into finished goods may be affected by certain factors. Explain five such factors.

Answer

  1. Material quality and availability determine whether production can proceed to specification.
  2. Labour skills, motivation and attendance affect operating speed and accuracy.
  3. Equipment capacity, reliability and technology affect achievable output.
  4. Methods, scheduling and layout influence flow, waste and waiting time.
  5. Finance, energy, utilities and external supply conditions constrain continuity and operating cost.

Question 4(a) — 10 marks

Explain five circumstances under which a manufacturing firm may sub-contract plant and equipment maintenance.

Answer

  1. The work requires specialist skills or diagnostic equipment unavailable internally.
  2. A temporary workload peak exceeds the maintenance department’s capacity.
  3. Manufacturer-authorised servicing is needed for warranty or technical reasons.
  4. A competent provider can deliver a better total-cost and service result.
  5. The task is infrequent or specialised, making a permanent internal capability uneconomical.

Question 4(b) — 10 marks

Explain five factors that may influence capacity planning in a manufacturing firm.

Answer

  1. Forecast demand and its variability to determine the required output level.
  2. Assess finance and the total cost of acquiring and operating extra capacity.
  3. Check labour, materials, technology and support infrastructure needed for the proposed capacity.
  4. Consider existing bottlenecks, utilisation and opportunities to improve the current system.
  5. Assess expansion lead time, flexibility, competitive conditions and the risk of excess capacity.

Question 5(a) — 12 marks

Outline six disadvantages of benchmarking to an organization.

Answer

  1. Collecting comparable performance information can be expensive and time-consuming.
  2. Competitors may refuse to share reliable or commercially sensitive data.
  3. Different operating contexts can make comparisons misleading.
  4. Copying another organisation may discourage original innovation.
  5. A benchmark can become outdated as technology and customer needs change.
  6. Staff may resist demanding targets or pursue measures that do not support the organisation’s actual priorities.

Question 5(b) — 8 marks

Uzima Bord limited has adopted the process plant layout in its manufacturing process. Explain four disadvantages of such layout.

Answer

  1. Jobs may follow different routes, increasing travel and material-handling costs.
  2. Complex scheduling and routing can increase delays and work in progress.
  3. General-purpose equipment and varied work often require more skilled labour.
  4. Coordination and supervision can be difficult because each job has different processing requirements.

Question 6(a) — 10 marks

Differentiate between product operations and service operations in manufacturing.

Answer

  1. Product operations mainly create tangible goods, while service operations mainly deliver intangible activities or benefits.
  2. Goods can usually be stored, while unused service capacity generally cannot be inventoried.
  3. Goods production can be separated from consumption, while many services are produced and consumed together.
  4. Goods operations often have lower direct customer contact, while service delivery commonly involves customer participation.
  5. Physical goods characteristics are often easier to standardise and measure, while service quality depends more heavily on the delivery experience.

Question 6(b) — 10 marks

Explain five factors that may cause the actual production volume to deviate from planned production volume in a manufacturing firm.

Answer

  1. Equipment breakdowns reduce the operating time available.
  2. Material shortages or poor-quality inputs prevent the planned work being completed.
  3. Absenteeism or inadequate skills reduce effective labour capacity.
  4. Demand changes, scheduling errors or altered priorities change the production programme.
  5. Power failures, rework, accidents or other disruptions reduce useful output.

Question 7(a) — 8 marks

Explain four challenges that a manufacturing firm may face as a result of globalization of business.

Answer

  1. International competitors can intensify price and quality pressure.
  2. Currency movements and global input-price changes make costs less predictable.
  3. Distant supply-chain disruptions can interrupt materials and logistics.
  4. Different national standards, cultures and regulations increase coordination and compliance complexity.

Question 7(b) — 12 marks

Explain six benefits of adopting mass production in a manufacturing firm.

Answer

  1. High output spreads fixed costs over more units.
  2. Specialised machinery can achieve high processing speeds.
  3. Repetitive tasks allow efficient training and work specialisation.
  4. Standardised methods improve consistency of product quality.
  5. Large regular input requirements can support favourable bulk-purchasing terms.
  6. Continuous planned flow reduces unit handling and scheduling effort where demand is sufficiently stable.
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