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„ Define „ Improve 4. Cost for making accessories


„ Measure „ Control 5. Administrative expenditure
„ Analyse 6. Profit

10.18.1 Cost of Raw Materials


DMADV
The cost of raw materials includes the
„ Define „ Design price of the material required, import
„ Measure „ Verify tax, labour charges paid for loading and
„ Analyse unloading and transportation charges.

10.18.2 Machining Charges


A part or component obtained only
after it is subjected to several operations
performed on different machine tools.
The machining charges are calculated
by the duration of machining on each
of these machine tools involved in
manufacturing the particular component.
The machining charges differ for
10.17 Kaizen different type of machine tools.
Kaizen is a Japanese word and it means The table prepared here is
Continuous Improvement. approximately for calculating the
machinery charges. The charges may
Kaizen is small improvements
vary accordingto the cost of the machine,
systematically carried out on a continual
capacity and accuracy of the machine
basis by all employees.
tool.
Principle of Kaizen Machine Duration Rate per
Large number of small improvements Hour
= Large improvement. Drilling 1 hour ₹100.00
machine
Lathe 1 hour ₹150.00
10.18 Cost Estimation Shaping 1 hour ₹200.00
Cost estimation can be defined as the machine
estimation of expenditure for the entire Milling 1 hour ₹250.00
manufacturing process of an object machine
produced in a factory. Cost estimation Grinding 1 hour ₹300.00
can be classified by the following points. machine
1. Cost of raw materials
2. Machining charges 10.18.3 Wages for the Worker
3. Wages for the worker This includes the amount of wages paid
to the workers employed for operating
144 CHAPTER 10 INDUSTRIAL MANAGEMENT
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the machine tools and the expenditure 3. Expenditure on fuels and electricity.
for miscellaneous operations performed 4. Rent and maintenance paid for the
on the workpieces. Charges for hacksaw building of the manufacturing unit.
cutting, filing, fitting, and assembling are
5. Salary paid to the administrative staff
counted under this head.
and expenses for purchasing office
records.
10.18.4 Cost for Making
6. Salary paid to the supervisors, store-
Accessories like Jigs and
keepers and watchman.
Fixtures
7. Expenditure for advertising, travel
When the mass production process
involves the same size and quantity of and postage.
materials are produced. Some special 8. Amount spend for the Welfare of
equipments like jigs and fixtures are the workers, and contribution to the
used. The cost paid for manufacturing employee’s fund (it includes savings
or purchasing the same is called cost for for workers, medical insurance,their
accessories. It reduces the production child education fund and other
time and increase the production. expenses)
9. Interest on capital.
10.18.5 Administrative Expenditure
The administrative expenditure can also 10.18.6 PROFIT
be called as ‘overhead charges’. It includes: Profit is calculated in the range of 10% to
1. Depreciation (wear and tear on 30% of the total cost of estimation. The
machine tools and other tools) profit percentage varies for each factory
2. Repairs and maintenance of the according to their capital invested.
machine tools.

QUESTIONS

Part I
Choose the correct option 1 Mark
1. Work study is
a. Method of plant study b. A technique of increasing production
c. Method study d. Work measurement
2. Production planning is
a. Productivity of men b. Productivity of land
c. S
 cheming of productivity procedure d. Quality control

CHAPTER 10 INDUSTRIAL MANAGEMENT 145


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3. Father of ‘scientific management’ is 8. The expenditure on the


a. Henry Fayol maintenance of the machines are
b. Pierre Vernier a. Administrative expenditure

c. F.W. Taylor b. Worker’s wages

d. Michael Faraday c. Cost of raw material

4. The book “general and industrial d. Tax


management” was written by 9. Cost of accessories which is used to
a. Michael Faraday hold and guide the job are
b. Henry Fayol a. Administrative expenditure
c. F.W. Taylor b. Jigs and fixtures cost
d. Pierre Vernier c. Worker’s wages
5. The book “ the principles of scientific d. Cost of raw material
management” was written by
a. Pierre Vernier Part II
b. F.W. Taylor Answer the following questions
c. Michael Faraday in one or two sentences 3 Marks
d. Henry Fayol 10. What do you know about “plant
6. DMAIC stands for Location” ?
a. D
 efine, Make, Act, Improve, 11. What do you know about “industrial
Control management” ?
b. D
 efine, Measure, Analyse,
12. Define “work study”
Improve, Control
c. D
 esign, Mould, Alter, Interact, 13. Define “method study”
Cold
14. Define “work measurement”
d. D
 efine, Mould, Analyse,
Improve, Control 15. List Seven quality control tools.

7. DMADV stands for 16. What is Statistical Process Control

a. D
 efine, Measure, Act, Deliever, (SPC) and Process Capability?
Verify 17. Define Six Sigma.
b. D
 o, Make, Analyse, Design, 18. Define Kaizen.
Vertical
19. Define “cost estimation”
c. D
 efine, Measure, Analyse,
Design, Verify 20. What is machining charges

d. D
 efine, Make, Analyse, Design,
Verify

146 CHAPTER 10 INDUSTRIAL MANAGEMENT

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