CIVILS MAINS 2013 MANAGEMENT (PAPER-II)

ITime Allowed Three Hours I IMaximum Marks 250 I

QUESTION PAPER SPECIFIC INSTRUCTIONS

(Please read each of the following instructions carefully before attempting questions)

There are EIGHT questions divided in two Sections and printed both in HIND! and
in ENGLISH.

Candidate has to attempt FIVE questions in all.

Question Nos. 1 and 5 are compulsory and out of the remammg, THREE are to be

attempted choosing at least ONE question from each Section.
The number of marks carried by a question/part is indicated against it.
Answers must be written in the medium authorized in the Admis.sion Certificate which
must be stated clearly on the cover of this Question-cum-Answer Booklet in the
space provided. No marks will be given for answers written in medium other than the
authorized one.

Assume suitable data, if considered necessary, and indicate the same clearly.
Normal probability distribution tables are attached for necessary reference.
Attempts of questions shall be counted in chronological order. Unless struck off, attempt
of a question shall be counted even if attempted partly. Any page or portion of the page
left blank in the Question-cum-Answer Booklet must be clearly struck off.

sECTION-A

In a post office, three clerks were assigned to process incoming mail. The
fIrst clerk, processes the second clerk, C2 processes 35% and the
third clerk, C3 processes 25% of the mail. The fIrst clerk has an error rate
of the second clerk has an error rate of 0'06 and the third clerk has
an error rate of 0'03. A mail selected at random from a day's output is
found to have an error. The Postmaster wishes to know the probability
that the mail was processed by the fIrst, second or third clerk respectively.
Find the probabilities. 6

The odds that A speaks the truth is 3 2 and the odds that B speaks the
truth is 3. In what percentage of cases are they likely to contradict each
other on an identical point? 4

There are 50 students in a class. The regression equation of marks in
Economics on marks in Management is 3Y 5X +180 O. The mean
marks in Management is 44 and the variance of marks in Econom'ics is .2-th of
16

the variance of marks in Management. Find the mean marks in Economics and
the coefficient of correlation between marks, in the two subjects. 10

A light metal company manufactures two products A and B. Each product
must pass through two processing sections L and M. A good number of
machines are available in both the sections. One unit of product A requires
2 hours of processing time in L and. 1 hour in M. One unit of product B
requires 1 hour of processing time in L and 4 hours in M. Total time available
in section L is 6000 hours whereas in section it is 10000 hours. The net
profit for product A is 3·50 per unit and for product B is 5·00 per unit. The
company wishes to maximize the total net profit.

Formulate the problem as a linear programming problem.

Find the optimum production schedule that will maximize the total net
profit per week by graphical method or otherwise. 16

Describe' briefly each step of the six-sigma methodology popularly known
as DMAlC methodology.

In statistical quality control, what is the difference between 'control by
variables' and 'control by attributes'? What are the most popularly used
control charts used for 'control by variables' and 'control by attributes'?

In Just In Time manufacturing system, how does the 'subsequent
process' signal the 'preceding process' to produce the quantity required?


What is an Electronic Business (e-commerce)? What is Electronic Data
Interchange What are the elements of e-commerce and EDI? What are
the benefits of e-commerce and EDI? 10

A furniture company manufactures four-drawer filing cabinets in six stages. In
the fIrst stage, the boards forming the walls of the cabinet are cut; in the
second stage, the front door panels are woodworked; in the third stage, the
boards are sanded and fInished; in the fourth stage, the boards are cleaned,
stained and painted with a clear fmish; in the fIfth stage, the hardware for
pulls, runners and fIttings is and in the fmal stage, the cabinets are
assembled. Inspection occurs at each stage of the process, and the average
percentages of good quality units are as follows

Stage 1 2 3 4 5 6
Average percentage of good quality 87 91 93 93 96

The cabinets are produced in weekly production runs with a product input of
300 units. The company later investigated the manufacturing process to
identify potential improvements that would improve quality. The company
identifIed two alternatives each costing " 9,00,000 as follows:

Alternative Quality improvement
1 stage2:96% stage4:97%
2 stage5:95% stage6:98%

(i)Determine the weekly product yield of good quality cabinets without
process improvement.

(ii)Which alternative will yield greatest increase in product of good quality
and why?
(iii)Which alternative will be most cost-effective and why?

The determination of yields of three different varieties (say Y and was
subject of a recent experiment. Different blocks chosen at random from a larger
group were used for this purPose. The data recorded were as follows
X Y Z
&5 Blocks
1 12 16 30
2 5 10 18
3 7 28 35
4 10 26 51

(i)Analyze the above two-way classified data.

(ii)Test for the effects of blocks and varieties at the level of significance.

(iii)Determine which varieties differ, if any. Is it possible to do the same with
the blocks?

oil company is considering a bid for a shale oil development contract to be
awarded by the Central Government. The company has decided to bid
i" 660 crores. The company estimates that it-has a 60% chance of winning the
contract with this bid. If the fIrm wins the contract, it can choose one of the
three methods for getting the oil from shale. It can develop a new method for oil
extraction, use an existing (inefficient process), or subcontract the processing
out to a number of smaller compiillies once the shale has been excavated. The
results from these alternatives are given in the table below

Develop new process

Outcomes Probability Profit in crores)

Great success 0·30 3.600

Moderate success 0·60 1.800

Failure 0·10 600

Use present process

Great success 0·30 1.200

Moderate success 0·20 240

Failure 0.20 -240

Suboontract

Moderate success 1'00 1.500


The cost of preparing the contract proposal is i" 12 ·crores. If the company does
not make a bid, it will invest in an alternative venture with a guaranteed profIt
of i" 180 crores.

Should the company make the bid?

If yes, what method for oil extraction should it adopt? 8+7=15


3. Product A is assembled from two parts B and C. One unit of A is assembled
from 1 unit of B and 2 units of C. Each item requires one or more operations
and the lead time everywhere is assumed negligible. Part C requires first
machining operation followed by heat treatment. Part B requires only
machining operation. Product A requires an assembly operation. The Master
Production Schedule for product A is given in the table below

'TrfFrr 1 2 3 4 5 6
Month

100 150 100 200 125 100
Product A (in units)

The process time data is shown in the table below

Operation Item Work center Standard time/unit (in hr)

10 C Machining 0·5

20 C Heat treatment 2·0

30 B Machining 1·0

40 A Assembly 0·5

What will you recommend as normal capacity at each work center?

(ii)If the setup cost to produce a batch of product A is 5,000, the
manufacturing cost of the product A is 2,000 per unit and the inventory
holding cost per unit per year is 20% of the product cost,what Master
Production Schedule will you recommend to minimize sum total of
setup and inventory holding costs?

Given the MPS in the table above, what is the schedule of gross
requirements of part

Forecast of demand for cakes made by a baking company needs to be
made with accuracy. The bakery markets cakes through a chain of food
stores. It has been experiencing over- and under-production due to
forecasting errors. The demand in dozens of cakes for the past four weeks
is shown in the table below. Cakes are made for sale on the following day,
for example, Monday's cake production is for Tuesday's sales and so on.
The bakery is closed on Saturday. So Friday's production must satisfy
demand for both Saturday and Sunday

Day 4 weeks ago 3 weeks ago 2 weeks ago 1 week ago

Monday 2200 2400 · 2300 2400

Tuesday 2000 2100 2200 2200

Wednesday 2300 2400 2300 2500

Thursday 1800 1900 1800 2000

Friday 1900 1800 2100 2000

Saturday Sunday 2800 2700 3000 2900

Using a weighted average of 0040,0'30,0'20 and 0·10 for week week
week 3 and week 4 ago respectively, what is the weighted average forecast·
for Monday of the current week?

The bakery also produces bread and is planning its purchases of
ingredients for bread production. If bread demand forecast for last week
had been 22000 loaves, and only 21000 loaves were actually demanded,
what would the forecast be for this week using exponential smoothing
method with smoothing coeffi,cient a

In part above, if actual demand in current week turns out to be 21500,
what will be the forecast for the next week with exponential smoothing
method, using a 5+5+5=15.

XYZ is famous for homemade pizzas which are crisp with thin crust and varied
toppings giving the pizzas fabulous tastes. xyz' is revamping its order
processing and pizza-making process. In order to deliver fresh pizza fast, six
work elements must be completed as shown in the table below


Element Description Precedence Time (in min)

A Receive order 2.0

B Shape dough A 1·0

C Prepare toppings A 2.0

D Assemble pizza C 3.0

E Bake pizza D 3.0

F Deliver pizza E 3.0

(i)Construct a precedence diagram for the process.

If the demand is 120 pizzas per night pm to 1:00 compute the
cycle time for the process. Compute the lead time for the process.
What is the theoretical minimum number of workstations needed to
achieve the required production?

How will you balance the production line to produce and deliver 120 pizzas
per night? What is the actual minimum number of workstations needed?



4. An antiseptic mouthwash is one of the major products of WL Company.
Materials collected from eucalyptus farms are shipped to WL's manufacturing
plants. The mouthwash is purchased by thousands of retail stores, some of
them are giants like Walmart and many are small. The manufacturing plant
must forecast the overall demand to avoid high inventories or shortages. WL
decided to use Demand Planning Decision Support System lOSS) from a
well-known vendor of IT software. Used with other products in the vendor's
Supply Chain Planning Suite, the system analyzes manufacturing, distribution
and sales data against expected demand and business climate information to
help WL decide how much mouthwash land other products) to produce and
distribute and how much each raw ingredient is needed. For example, the
model anticipates the impact of promotions or of a production line being down.
The sales and marketing people at WL meet monthly with employees in
finance, procurement and other departments. The groups enter the expected
demand for mouthwash into a Capacity Planning DSS supplied by another
firm. The system schedules the production of mouthwash in amounts needed
and generates electronic purchase orders for WL's suppliers. The innovative
Collaborative Planning, Forecasting and Replenishment system (CPFR)
program launched a few years ago has led to supply chain excellence at WL.
During CPFR pilot, WL increased its products' shelf fill rate-the extent to
which a store's shelves are fully stocked-from 87% to earning the
company about US 8 million a year in additional sales or equivalent of a new
product launch. Later WL decided to use Internet to expand the CPFR program
to all its suppliers and retail partners.

How are Supply Chain Management and Enterprise DSS related?

In WL case, how do Demand Planning DSS, Capacity Planning DSS and
CPFR result in supply chain excellence?

(iii)How is second generation ERP different from first generation ERP?

Can first generation ERP help achieve supply chain excellence?Can
second generation ERP help do this?

5x4-20

Design a model for banking application. Banks have customers. Banks are
identified by a code, name and address of the main branch. Customers are
identified by cusCid, name, address and phone number. A customer can have
one or more bank accounts. Accounts are identified by an account number,
account type (savings or current) and a balance. Customers can avail loans:
Loans are identified by loan_id, loan_type (home, car, personal). and an
amount. Banks have branches. Branches are identified by Branch_ID,
Branch_Name, Address. Accounts and loan are related to branches.

Identify the entities.

Find the relationship among the entities.

Show the cardinality ratio of the relationship..

Identify the key attributes and other attributes of each entity.

(v)Write relational scheme for branch and bank. 3x5=15

Name three principal methods of creating database. Describe any two
methods in detail.

(ii)What are the key differences between traditional commerce· and
e-commerce?
Explain the required features of a B2Bplatform for e-commerce.


SECTION-B

5. In the context of business strategy analysis, what is 'growth matrix? How do
'product scope' and 'market ·scope' analysis help in developing the growth
matrix for a business? How do these help defme 'mission' of a business? 10

What are the advantages and disadvantages that Multinational Corporations
(MNCs) bring to a host country? How do you distinguish between MNC and
Transnational Corporation 10

In analyzing competitive strategy, what is the need to analyze the value chain
of a company? Why is it necessary to analyze the competitive forces in an
industry? How do these help in formulating competitive strategy? 10

In international trade theory, how is 'theory of absolute advantage' different
from 'theory of comparative advantage? Which of these is more preferred?
Why? 10

What do you understand by the term 'public policy? How is it classified? What
are the important elements of public policy? 10

Read the case below and answer the questions based on it

Long ago ABC Company had a single store in USA selling premium roasted
coffee. Today it is a global roaster and retailer of coffee with over 17000 stores
in over 50 countries. In 1980, the company experimented with coffeehouse
format to sell the company's premium roasted coffee and freshly brewed coffee
beverages along with a variety of pastries, coffee accessories, teas and other
products in tastefully designed coffeehouse setting. The company hired,
trained, motivated and compensated employees for superior customer service
giving stock option grants and medical benefits to even part-timers. In 1995,
with over 700 stores in US, the company explored foreign opportunities and
licensed its format in Japan. Realizing that pure licensing would not give it the
control needed, the company set up a 50/50 Joint Venture with a local
retailer XYZ. The company initially invested US 10 million, its first FDI. ABC
transferred some employees to the Japanese operation to replicate ABCs
experience in Japan. Training of Japanese store managers, employees, design
parameters of the stores, stock options for Japanese employees were all meant
to replicate the ABCs experience. By 2006, the company had 600 stores in
Japan. ABC continued with its overseas expansion aggressively. In 1998, it
purchased a British coffee chain with 60 retail outlets for US 84 million. In
late 1990s, it opened stores in Taiwan, China, Thailand, New Zealand, South
Korea and Malaysia. Starting initially with licensing and replication of other
practices in Japan, the company converted several of these into JVs or
wholly owned subsidiaries, partly due to funding problems of local partners. By
2002, the company expanded into Europe, beginning with a JV with largest
Swiss food service company. Thiswas followed by JVs in other countries. In
2006, the company saw a major opportunity in China, which it believed to be
the largest outside USA.

G-JOI'U!-lb2-NJ<GJO/35 14

Why did ABC become disenchanted with licensing strategy?

Why does ABC prefer to expand internationally through local joint
ventures?

What are the advantages for ABC of entry through joint ventures over
owned subsidiaries?

Which theory of Foreign Direct Investment best explains the .
international expansion strategy adopted by ABC?

In the year 2004, inward FDI accounted for some 24% of capital formation in
Ireland, but only in Japan. What do you think explains the difference in
FDI inflows into the two countries? 10

'Project management in India, in particular of projects in infrastructure sector,
has been characterized by severe time and cost overruns. What are the major
factors accounting for these overruns? Currently, what are the estimates of
these overruns? 10

Read the case below and answer the questions based on it

An ice cream manufacturing company X had achieved remarkable success in
the State where the company had established its manufacturing plant. Driven
by the quality, easy availability, image of innovative value-added product and
packaging, and very good brand promotion efforts, the manufacturer gained
rapid recognition for his products in the State and soon became the dominant
player in the market, even though the prices charged were higher than most of
the many competing brands in the State. In fact, the company's brand had
become synonymous with the ice cream itself. Slowly the brand began gaining
popularity outside the State as well. While earlier the company sold the
product outside the State through select outlets, it was clear that there was
strong potential for the company to expand greatly outside the State and
eventually emerge as a national player. The company found that it could not
hope to cash in the growing popularity of the brand by just expanding
manufacturing facilities in the State and distributing the product on
nationwide basis. Throughout the nation, there were numerous manufacturers
of ice cream, majority of them preferred to remain as local or regional players,
where they enjoyed good market positions. Very few brands had become truly
national brands. Companies that operated nationally offered generally
attractive prices, easy availability and convenience packaging. They had large
capacities, set up manufacturing facilities at a number of locations nationwide
and developed strong distribution and supply networks. They also invested
heavily in building brand image nationwide. All national players faced intense
competition from local/regional players as well as some niche players.

what strategy did the company grow in its home State?

Can it compete nationally with the same strategy or will it need to modifY
the strategy to emerge as a successful national player?

(iii)What are the distinguishing differences between company X strategy and
the strategy adopted by large national players?

What do you understand by the term sector? What is the need for joint
sector when there are other well-defined sectors to promote industrial
development? What are the different types of Joint Sector Enterprises
What type of JSE has been found to be suitable for India? Give some examples
of joint sector enterprises inindia. 15

'Why is it necessary to have price and distribution controls of essential
commodities in India? How do these controls help manage demand and supply
of commodities? What problems do 'controls' cause? What are the key steps
taken to improve the public distribution in India? 15

8. A textile mill was inspected by government safety inspection team and found to
be in violation of a number of safety regulations. The inspectors ordered the
mill to alter some existing machinery to make it safer (i.e., add safety guards,
etc.); purchase some new machinery to replace older, dangerous machinery;
-and relocate some machinery to make safer passages and unobstructed
entrances and exits. The mill was given only 35 weeks to make the changes. If
the changes were not made by then, the mill would be fined 2 crares. The mill
determined the activities to be completed, prepared three time estimates for
each activity namely: pessimistic time, optimistic time and most likely time.
Table below gives the data compiled by the mill

Activity Activity (immediate Time estimates (in weeks)
predecessor) a m b

1 Order new machinery

2 Plan new physical layout

3 Determine safety changes

4 Receive equipment

5 Hire new employees

6 Make plant alterations

7 Make changes in existing
machinery

8 Train new employees

9 Install new machinery

10 Relocate old machinery

11 Conduct employee safety
orientation

(i)Determine the expected duration of the project.

(ii)Identify the critical activities in the project.

(iii)What is the probability that the mill will be fined'" 2 crores? 10+5+10=25

Assume two countries A and B have the same amount of resources which can
be used to produce either rice or cocoa. A total of 200 units of resources are
available. Country A needs 10 resources to produce 1 tonne of cocoa and
20 resources to produce I tonne of rice. Country B takes 40 resources to
produce 1 tonne of cocoa and 10 resources to produce 1 tonne of rice. Assume
a linear relationship between production and resources consumed.

Draw the Production Possibility Frontier for countries A and B
respectively.

Assume both countries engage in trade with each other and decide to
produce only that item in which they have absolute advantage. Assume
they can swap 1 tonne of rice for 1 tonne of cocoa and the unit price of rice
and cocoa are equal. Country A exports 6 tonnes of cocoa to country B and
imports 6 tonnes of rice in return. What will be the change in combined
output of cocoa and rice of the two countries as a result of the trade,
compared to what would have been possible before specialization and
trade, with each country devoting half of its resources each to produce
cocoa and rice? 5+10=15

What do you understand by the term 'privatization'? What is the rationale for
privatization? What have been various methods adopted for privatization in
India? Does 'disiovestment' alone constitute privatization? 10

20

TABLE-I
SIGNIFICANCE POINTS OF t
Values of t for given probabilities P Prob. I to) J
Degrees of Probability
freedom 0-10 0·05 0·02 0·01
1 . 6·31 12·71 31-82 63·66
2 2·92 4-30 6-97 9·93
3 2·35 3-18 4·54 5·84
4 2·13 2·78 3·75 4·60
5 2·02 2·57 3-37 4·03
6 1-94 2-45 3·14 3-71
7 1·90 2·37 3·00 3-50
8 1·86 2·31 2·90 3·36
9 1·83 2·26 2·82 3·25
10 1-81 2-23 2·76 3-17
11 1·80 2-20 2·72 3·11
12 1·78 2·18 2·68 3-06
13 1·77 2-16 2·65 3-·01
14 1·76 2·15 2-62 2·98
15 1·75 2·13 2·60 2·95
16 1·75 2·12 2·58 2·92
17 1·74 2·11 2·57 2·90
18 1·73 2·10 2·55 2·88
19 1·73 2·09 2·54 2·86
20 1·73 2·09 2·53 2·85
21 1·72 2·08 2·52 2·83
22 1·72 2·07 2·51 2·82
23 1·71 2·07 2·50 2·81
24 1·71 2·06 2·49 2·80
25 1·71 2·06 2-49 2·79
26 1-71 2·06 2-48 2·78
27 1·70 2·05 2-47 2·77
28 1·70 2-05 2-47 2·76
29 1·70 2-05 2-46 2·76
30 1·70 2·04 2·46 2·75

TABLE-II
SIGNIFICANCE POINTS OF F
values)
Degrees of Degrees of freedom (nj
freedom 1 2 3 4 5 6 7 8 9
1 161-40 199·50 215·70 224·60 230'20 234'00 236·80 238·90 240·50 254·30
2 18·51 19·00 19·16 19·25 19'30 19·33 19'35 19'37 19'38 19'50
3 10·13 9·55 9·28 9·12 9·01 8·94 8·89 8·85 8·81 8'53
4 7·71 6·94 6·59 6·39 6·26 6·16 6·09 6·04 6·00 5·63
5 6·61 5·79 5'41 5·19 5·05 4'95 4'88 4'82 4'77 4·36
6 5·99 5·14 4·76 4·53 4·39 4·28 4·21 4'15 4'10 3·67
7 5'59 4·74 4·35 4'12 3'97 3·87 3·79 3'73 3'68 3'23
8 5·32 4'46 4'07 3·84 3'69 3'58 3'50 3-44 3'39 2·93
9 5'12 4'26 3'86 3'63 3'48 3'37 3·29 3'23 3·18 2·71.
10 4·96 4·10 3·71 3-48 3·33 3·22 3'14 3·07 3·02 2·54
11 4·84 3·98 3'59 3'36 3·20 3·09 3·01 2·95 2·90 2'40
12 4·75 3·88 3'49 3·26 3'11 3'00 2·91 2·85 2·80 2·30
13 4·67 3·80 3-41 3'18 3'02 2·92 2·83 2·77 2·71 2·21
14 4·60 3·74 3·34 3'11 2·96 2·85 2·76 2'70 2'65 2'13
15 4·54 3'68 3'29 3'06 2'90 2·79 2·71 2·64 2'59 2·07
16 4-49 3'63 3·24 3·01 2'85 2·74 2·66 2·59 2·54 2'01
17 4-45 3·59 3·20 2·96 2'81 2·70 2·61 2'55 2'49 1'96
18 4-41 3·55 3·16 2·93 2·77 2'66 2'58 2·51 2-46 1·92
19 4'38 3'52 3'13 2·90 2·74 2·63 2·54 2-48 2-42 1·88
20 4·35 3'49 3'10 2·87 2·71 2·60 2·51 2-45 2·39 1·84
30 4·17 3·32 2·92 2·69 2·53 2'42 2·33 2'27 2·21 1·62
3·84 3'00 2'60 2'37 2'21 2·10 2·01 1·94 1'88 1·00
22
TABLE-II (Contd.)
SIGNIFICANCE POINTS OF F
values r
Degrees of Degrees of freedom
.
freedom 1 2 3 4 5 6 7 8 9
1 4052 4999 5403 5625 5764 5859 5928 5981 6022 6366
2 98·50 99·00 99·17 99·25 99·30 99·33 99·36 99·37 99·39 99·50
3 34·12 30·82 29·46 28·71 28·24 27·91 27·67 27-49 27·35 26·13
4 21·20 18·00 16·69 15·98 15·52 15·21 14·98 14·80 14·66 13·46
5 16·26 13·27 12·06 11·39 10·97 10·67 10·46 10·29 10·16 9·02
6 13·75 10·92 9·78 9·15 875 8·47 8·26 8·10 7·98 688
7 12·25 9·55 8·45 7·85 7·46 7·19 6·99 6·84 6·72 5·65
8 11·26 8·65 7·59 7·01 6·63 6·37 6·18 6·03 5·91 4·86
9 10·56 8·02 6·99 6-42 6·06 5·80 5·61 5-47 5-35 4-31
10 10·04 7·56 6·55 5·99 5-64 5-39 5-20 5·06 4-94 3-91
11 9·65 7·21 6·22 5-67 5-32 5-07 4-89 4-74 4-63 3·60
12 9-33 6-93 5-95 5·41 5-06 4-82 4-64 4-50 4-39 3·36
13 9·07 670 5·74 5·21 486 4-62 4-44 4-30 4·19 3·17
14 8·86 6-51 5-56 5·04 4-69 4-46 4-28 4-14 4-03 3-00
15 8·68 6·36 5·42 4-89 4-56 4-32 4-14 4·00 3·89 2·87
16 8-53 6-23 5-29 4·77 4-44 4-20 4-03 3·89 3·78 2·75
17 8-40 6-11 5·18 4·67 4-34 4·10 3·93 3-79 3-68 2-65
18 8-29 6-01 5·09 4-58 4-25 4-01 3·84 3·71 3-60 2-57
19 8·18 5-93 5-01 4-50 4-17 3-94 3-77 3·63 3·52 2-49
20 8-10 5-85 4·94 4-43 4-10 3-87 3-70 3·56 3-46 2·42
30 7-56 5-39 4-51 4·02 3-70 3-47 3·30 3-17 3-07 2-01
6·63 4·61 3-78 3-32 3-02 2-80 2·64 2·51 2-41 1-00