Operation Management (BMP-2)

Qualitative (judgmental) forecasting methods (any three):

• Delphi method: experts give forecasts in rounds; feedback is shared until consensus is reached.
• Sales force composite: salespeople estimate future demand based on customer interactions.
• Market research: surveys, interviews and test marketing to estimate demand.
• Managerial judgment: experienced managers estimate demand using knowledge of market conditions.

Thus, qualitative methods are useful when historical data is limited or demand conditions are changing.

Lean Supply Chain Concept

A lean supply chain aims to deliver value to the customer by eliminating waste (non‑value‑added activities) across the end-to-end flow.

Wastes reduced (any three):

• excess inventory (extra carrying cost)
• waiting time (delays due to poor coordination)
• unnecessary transportation and handling
• defects/rework in supply and production

Hence, lean supply improves flow, reduces cost, and supports faster response with reliable suppliers and better information sharing.

Make-or-Buy Decision — Exam-Style

Meaning: Make-or-buy is a decision whether to manufacture a component in-house or purchase it from an outside supplier.

Factors considered

• Cost: compare variable and fixed costs; consider total cost of ownership.
• Capacity: availability of machines, manpower and time.
• Quality: ability to meet specifications and control quality.
• Confidentiality/technology: strategic importance and IP.
• Supplier risk: delivery reliability, lead time and continuity.

Table:

Conclusion: The best decision is the one that meets quality and delivery needs at minimum total cost with acceptable risk.