Production Management and Quantitative Methods November 2012 Past Examination Question Paper – KNEC
This Past Paper examination was examined by the Kenya National Examination Council (KNEC) and it applies to the following Certificate course
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Diploma in Entrepreneurship Development
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THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN ENTREPRENEURSHIP DEVELOPMENT
PRODUCTION MANAGEMENT AND QUANTITATIVE METHODS
November 2012
Time: 3 hours
1. (a) Explain the role of a production manager in a small manufacturing enterprise.
(10 marks)
(b) An entrepreneur who wishes to conduct a market survey intends to sample his target respondents through simple random sampling. Advise him on five limitations of using this method. (10 marks)
2. (a) The table below shows the wages paid to 50 part-time employees of an enterprise.
| Wages (Ksh 000) | No. of Employees |
| 20 to under 30 | 3 |
| 30 to under 40 | 5 |
| 40 to under 50 | 7 |
| 50 to under 60 | 13 |
| 60 to under 70 | 11 |
| 70 to under 80 | 9 |
| 80 to under 90 | 2 |
Determine:-
(i) Mean wage.
(ii) Standard deviation. (12 marks)
(b) Explain four ways in which an entrepreneur may minimise production costs in order to gain a competitive advantage. (8 marks)
3. (a) The owner/manager of Kaki Manufacturers has decided to relocate his production facility. Explain five factors that may have influenced this decision. (10 marks)
(b) An entrepreneur who conducted a market survey formulated a hypothesis before collecting data. Explain five limitations of setting hypothesis in research. (10 marks)
4. The production manager at Broke Engineering Limited suspects that there is an association between production volume and production cost. to prove this, he obtained the total cost of production for different production volumes as follows:-
| Units produced (000s) | 1 | 2 | 3 | 4 | 5 | 6 |
| Production cost (Ksh 000) | 5.0 | 10.5 | 15.5 | 25.5 | 16.0 | 22.5 |
Determine:-
(a) Pearson’s Product Moment Correlation Coefficient (r). (10 marks)
(b) (i) linear regression equation.
(ii) Cost of producing 20,000 units. (10 marks)
5. a) Lalet Enterprises uses FIFO (First-In-First-Out) method of pricing materials issued from store to the production department. Explain five benefits of using this method to the enterprise. (10 marks)
b) Explain five essentials of a good inventory control system for a small enterprise. (10 marks)
6. a) Quick Enterprises which deals in the manufacture of electronic goods has adopted a process layout of facilities. Explain the advantages that may accrue to the enterprise as a result of this system. (10 marks)
b) Maisha Bora Women Group has received two project proposals whose project cash flows are as follows:-
| Year | 0 | 1 | 2 | 3 | 4 |
| Project A Cash Flow | -70 | 25 | -30 | 40 | 50 |
| Project B Cash Flow (Ksh 000) | -50 | -15 | 20 | 30 | 45 |
NB: Discounted factor rates (10%) are given as follows.
| Year | 1 | 2 | 3 | 4 |
| Discounted factor rate (10%) | 0.909 | 0.826 | 0.751 | 0.683 |
i) Determine the Net Present Value of the two projects.
ii) Advise the Women Group on the most viable project to invest in. (10 marks)
7. a) A consultant has advised the small scale entrepreneurs to adopt a regular preventive maintenance programme. Explain five benefits that small scale entrepreneurs may derive from instituting the programme (10 marks)
(b) Mwema Enterprises intends to undertake a project whose activities and time estimates are outlined as follows:—
| Time estimates (Weeks) | ||||
| Activity | Preceding | optimistic | Most Likes | Pessimistic |
| A | 5 | 7 | 10 | |
| B | 4 | 6 | 8 | |
| C | A | 6 | 10 | 12 |
| D | A | 8 | 9 | 15 |
| E | A,B | 7 | 10 | 20 |
| F | A,B | 3 | 9 | 14 |
| G | D,E | 10 | 14 | 18 |
| u | C | 5 | 9 | 12 |
| I | F | 7 | 10 | 13 |
(i) Draw a network diagram.
(ii) Determine the critical path.
(iii) Determine the project duration.
