Ans 1.

Inventory planning helps companies buy the right amount of stock and decide how often to
reorder. Inventory planning helps lower the costs of keeping items in stock and helps make sure there
is enough stock for making and selling items. Inventory planning is an essential part of supply chain
management. Supply chain management ensures that raw materials, work-in-progress items and
finished goods move efficiently from the source or factory to the consumer.

First, we need to understand what is inventory.

Finished goods are items that are ready to sell.
MRO is inventory — often in the form of supplies — that supports making a product or the maintenance
of a business.
WIP inventory refers to items in production and includes raw materials or components, labour,
overhead and even packing materials.
Raw materials are the materials a company uses to create and finish products. When the product is
completed, the raw materials are typically unrecognizable from their original form, such as oil used to
create shampoo.
Excess Inventory also known as obsolete inventory, excess inventory is unsold or unused goods or raw
materials that a company doesn’t expect to use or sell, but must still pay to store.
There are few Inventory management techniques which are as follow:
Just-in-time (JIT) inventory. JIT involves holding as little stock as possible, negating the costs and risks
involved with keeping a large amount of stock on hand. The just-in-time (JIT) inventory system is a
management strategy that aligns raw-material orders from suppliers directly with production schedules.
Companies employ this inventory strategy to increase efficiency and decrease waste by receiving
goods only as they need them for the production process, which reduces inventory costs. This method
requires producers to forecast demand accurately.
ABC inventory analysis. This technique aims to identify the inventory that is earning you profit, by
classifying goods into different tiers. ABC analysis is an inventory management technique that
determines the value of inventory items based on their importance to the business. ABC ranks items on
demand, cost and risk data, and inventory mangers group items into classes based on those criteria.
This helps business leaders understand which products or services are most critical to the financial
success of their organization. The most important stock keeping units (SKUs), based on either sales
volume or profitability, are “Class A” items, the next-most important are Class B and the least important
are Class C. Some companies may choose a classification system that breaks products into more than
just those three groups.
FIFO and LIFO. LIFO and FIFO are methods to determine the cost of inventory. FIFO, or First in, First
out, assumes the older inventory is sold first. FIFO is a great way to keep inventory fresh.
LIFO, or Last-in, First-out, assumes the newer inventory is typically sold first. LIFO helps prevent
inventory from going bad.
Minimum order quantity. On the supplier side, minimum order quantity (MOQ) is the smallest amount of
set stock a supplier is willing to sell. If retailers are unable to purchase the MOQ of a product, the
supplier won’t sell it to you. For example, inventory items that cost more to produce typically have a
smaller MOQ as opposed to cheaper items that are easier and more cost effective to make.
Economic order quantity. Economic order quantity, or EOQ, is a formula for the ideal order quantity a
company needs to purchase for its inventory with a set of variables like total costs of production,
demand rate, and other factors. The overall goal of EOQ is to minimize related costs. The formula is
used to identify the greatest number of product units to order to minimize buying. The formula also
takes the number of units in the delivery of and storing of inventory unit costs. This helps free up tied
cash in inventory for most companies.
Demand forecasting. Demand forecasting should become a familiar inventory management technique to
retailers. Demand forecasting is based on historical sales data to formulate an estimate of the expected
forecast of customer demand. Essentially, it’s an estimate of the goods and services a company
expects customers to purchase in the future.
Inventory Cycle Counting: Counting a bit of stock on a sure day without undertaking a
complete manual stock take is called cycle counting. It is a form of sampling that lets you test
how closely your inventory facts are healthy what you, in reality, have on hand. This approach is
used in many firm’s inventory control techniques because it guarantees that customers get what
they need once they need it while keeping inventory holding expenses to a minimum. Advantages of
Cycle Counting It takes less time and money to adopt a partial stock-take than to do a complete stock
take. It’s miles possible to achieve this without affecting operations, lowering inventory protecting
charges. The risks of cycle counting A partial stock take is much less good-sized and accurate than a
complete stock take. Seasonality might not be considered.
For, automobile service shops we can use multiple inventories as mentioned above techniques. ABC
inventory management would be the quality way to manage their inventory. Inventories can be
categorized among A, B, C and, as a result, can be managed.

Ans 2. Layout planning is deciding on the best physical arrangement of all resources that consume
space within a facility. These resources might include a desk, a work center, a cabinet, a person, an
entire office, or even a department. Decisions about the arrangement of resources in a business are not
made only when a new facility is being designed; they are made any time there is a change in the
arrangement of resources, such as a new worker being added, a machine being moved, or a change in
procedure being implemented. Also, layout planning is performed any time there is an expansion in the
facility or a space reduction.
A good plant layout strives to attain the following objectives:

1. Minimization of material handling.

2. Elimination of bottlenecks through the balancing of plant capacities.
3. High material turnover through a shorter operating cycle.
4. Effective utilization of installed capacity so that the returns on the investments may be
maximized.
5. Effective utilization of cubic space in the factory area.
6. Effective utilization of manpower resources through the elimination of idle time.
7. Elimination, improvement or confinement of objectionable operations e.g., operations with bad
odour, vibrating operations etc.
8. Elimination of physical efforts required by operative workers.
9. Avoidance of industrial accidents.
Over the years, operations management researchers and practitioners have evolved four major types of
layouts. These include product layout, process layout, group technology layout and fixed position
layout. The salient aspects of these layouts are described here.
Product or Line Layout: If all the processing equipment and machines are arranged according to the
sequence of operations of the product, the layout is called product type of layout. In this type of layout,
only one product of one type of products is produced in an operating area. This product must be
standardized and produced in large quantities in order to justify the product layout. The raw material is
supplied at one end of the line and goes from one operation to the next quite rapidly with a minimum
work in process, storage and material handling.
Advantages offered by Product Layout:
(i)Lowers total material handling cost.
(ii)There is less work in processes.
(iii)Better utilization of men and machines
(iv)Less floor area is occupied by material in transit and for temporary storages.
Limitations of Product Layout:

(i)No flexibility which is generally required is obtained in this layout.

(ii)The manufacturing cost increases with a fall in volume of production.

(iii)If one or two lines are running light, there is a considerable machine idleness.

(iv)A single machine break down may shut down the whole production line.

(v)Specialized and strict supervision is essential.

Process or Functional Layout: The process layout is particularly useful where low volume of
production is needed. If the products are not standardized, the process layout is lower desirable,
because it has creator process flexibility than other. In this type of layout, the machines and not
arranged according to the sequence of operations but are arranged according to the nature or type of
the operations. This layout is commonly suitable for non-repetitive jobs. Same type of operation
facilities are grouped together such as lathes will be placed at one place, all the drill machines are at
another place and so on.
Advantages of Process Layout:

(i)There will be less duplication of machines. Thus, total investment in equipment purchase will be

reduced.

(ii)It offers better and more efficient supervision through specialization at various levels.

(iii) There is a greater flexibility in equipment and man power thus load distribution is easily controlled.

(iv) Better utilization of equipment available is possible.

(v) Break down of equipment can be easily handled by transferring work to another machine/work

station.

(vi) There will be better control of complicated or precision processes, especially where much

inspection is required.

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive handling is required.

(ii) Total production cycle time is more owing to long distances and waiting at various points.

(iii) Since more work is in queue and waiting for further operation hence bottle necks occur.

(iv) Generally, more floor area is required.

(v) Since work does not flow through definite lines, counting and scheduling is more tedious.

(vi) Specialization creates monotony and there will be difficult for the laid workers to find job in other

industries.

Fixed Position Layout: This type of layout is the least important for today’s manufacturing industries. In

this type of layout the major component remain in a fixed location, other materials, parts, tools,

machinery, man power and other supporting equipment’s are brought to this location. The major

component or body of the product remain in a fixed position because it is too heavy or too big and as

such it is economical and convenient to bring the necessary tools and equipment’s to work place along

with the man power. This type of layout is used in the manufacture of boilers, hydraulic and steam

turbines and ships etc.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced.

(ii) Capital investment is minimized.

(iii) The task is usually done by gang of operators, hence continuity of operations is ensured

(iv) Production centers are independent of each other. Hence, effective planning and loading can be

made. Thus total production cost will be reduced.

(v) It offers greater flexibility and allows change in product design, product mix and production volume.

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may be time consuming.

(iii) Complicated fixtures may be required for positioning of jobs and tools. This may increase the cost

of production.

Combination Type of Layout: Now a days in pure state any one form of layouts discussed above is

rarely found. Therefore, generally the layouts used in industries are the compromise of the above

mentioned layouts. Every layout has got certain advantages and limitations. Therefore, industries would

to like use any type of layout as such. Flexibility is a very important factory, so layout should be such

which can be molded according to the requirements of industry, without much investment. If the good

features of all types of layouts are connected, a compromise solution can be obtained which will be

more economical and flexible.

The planned utilization of the location in a retail shop layout (whether or not actual or digital) influences
the client’s enjoyment. client’s shopping selections are inspired by how they connect to your products.

Ans 3(A). Choosing a location for your restaurant is one of just a few keys to profitability. Parking and
accessibility can be as crucial to a restaurant's success as great food and service. There is a famous
saying in real estate that also holds true for restaurants: "You make your money when you buy." A
restaurant's location influences many aspects of your operation, including the menu and style of the
dining room. If you already have a certain restaurant location in mind, don’t get too attached until you
know if it has all the right requirements for a successful restaurant. Few factors important to find the
new restaurant location.

1. Parking: Ideally, a new restaurant location should have its own parking lot. If that isn’t an
option—for example, in a major city—consider partnering with a hotel in the area that has its own
parking options. Many famous restaurants are housed in hotels, and for a good reason. Not only
is there parking, but the benefit of foot traffic that is staying right upstairs is incalculable.
2. Accessibility: There’s a reason that major restaurant chains are often located near highway exits:
It makes them accessible for customers. Certain restaurants can get away with food or service
that isn't the best simply because their locations are so accessible, like restaurants near the
Eiffel Tower or Collisseum. There is plenty of foot traffic in urbanized areas, and restaurants only
need to attract customers from the street into their business. Most successful restaurants—other
than the truly elite—are easy to find, and you will find them in city centers or unique locations
throughout the world.
3. Visibility: This goes along with accessibility and is very important for new restaurant locations.
People have to know the restaurant is there, either in person or on their mobile devices. It is why
property prices in downtown districts and developed strips are higher than in other areas. They
offer a level of visibility that can bring in a great deal of walk-in business. Consider advertising in
search engines and social media to enhance your presence across all forms of media. Make sure
to register your restaurant in search engines as the type of food you offer and your price point,
as it will be easier to attract the clientele you want when they go to search.
4. Population Base: Are there enough people in the area to support your business? There need to
be enough people who live in or pass through the area regularly to keep you busy. To determine
a particular area's population base
5. Building amenities: Take a look to understand if the building you’ve picked in your restaurant
incorporates the functions you seek. A restaurant’s achievement relies primarily on its region,
which needs to be appropriately packed. In the restaurant construction, there need to be
ultimately energy backups usually. A restroom is also a need-to-have at a restaurant and should
not be left out while choosing a place.

Ans 3(B): An organization can finalize its business plans on the recommendation of demand forecast.
Once business plans are ready, an organization can do backward work from the final sales unit to raw
materials required. Thus annual and quarterly plans are broken down into labour, raw material, working
capital, etc. requirements over a medium-range period (6 months to 18 months). This process of
working out production requirements for a medium range is called aggregate planning.
Importance of Aggregate Planning
Aggregate planning plays an important part in achieving long-term objectives of the organization.
Aggregate planning helps in:

 Achieving financial goals by reducing overall variable cost and improving the bottom line
 Maximum utilization of the available production facility
 Provide customer delight by matching demand and reducing wait time for customers
 Reduce investment in inventory stocking
 Able to meet scheduling goals there by creating a happy and satisfied work force
There are three types of aggregate planning strategies available for organization to choose from. They
are as follows.

1. Level Strategy: As the name suggests, level strategy looks to maintain a steady production rate
and workforce level. In this strategy, organization requires a robust forecast demand as to
increase or decrease production in anticipation of lower or higher customer demand. Advantage
of level strategy is steady workforce. Disadvantage of level strategy is high inventory and
increase back logs.
2. Chase Strategy: As the name suggests, chase strategy looks to dynamically match demand with
production. Advantage of chase strategy is lower inventory levels and back logs. Disadvantage
is lower productivity, quality and depressed work force.
3. Hybrid Strategy: As the name suggests, hybrid strategy looks to balance between level strategy
and chase strategy.