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Introduction to Operations Management
Operations Management
William J. Stevenson
8th edition
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Introduction to Operations Management
CHAPTER
1
Introduction to
Operations Management
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. Stevenson Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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Introduction to Operations Management
Operations Management
Figure 1.1
The management of systems or processes
that create goods and/or provide services
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Introduction to Operations Management
Value-Added
Figure 1.2
The difference between the cost of inputs
and the value or price of outputs.
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Introduction to Operations
…show more content…
– Physical – Schematic – Mathematical
Tradeoffs
What are the pros and cons of models?
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Models Are Beneficial
Easy to use, less expensive • Require users to organize • Systematic approach to problem solving • Increase understanding of the problem • Enable “what if” questions • Specific objectives • Consistent tool • Power of mathematics • Standardized format
•
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Quantitative Approaches
• Linear programming • Queuing Techniques • Inventory models • Project models • Statistical models
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Systems Approach
“The whole is greater than
the sum of the parts.”
Suboptimization
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Pareto Phenomenon
• A few factors account for a high percentage of the occurrence of some event(s). • 80/20 Rule - 80% of problems are caused by
A company manufactures a product currently using two machines. Each machine averages 225 units of the product per day. However, annual demand is forecasted to reach 150000 units of product in year 2013. How many machines in total should the company plan to use in order to be able to satisfy demand in the future? Assume 240 workdays per year. 225x240=54,000 so 150,000/54,000=2.78 or 3
Hence, the bottleneck is due to high variability in order arrival rate and order processing time. Hence, we need to analyse the quarterly utilization level.
In the traditional context, lead time is fixed—either as a discrete time or as a probability distribution. Such lead time constancy or variation is outside of the inventory model. Lead time in an MRP system is assumed to be a variable. While specific lead times are stated for planning purposes, these times may be speeded up or delayed as conditions warrant. Indeed, it is this ability to detect needed changes in lead times, either by expediting or de-expediting, that many users cite as one of the most valuable features of MRP.
Capacity planning is a critical process for the successful implementation of IT projects. This is especially true for information management programs since resource utilization increases with rapidly growing data. As businesses consider more opportunities for leveraging data for different purposes, resources are impacted, resulting in poor loading and response times.
RCCP allocate capacity needs for labor departments, individuals, or work center based on workload data in the past. This technique is used to explain / verification of capacity in each work center where the comparison between the required engine load with the available capacity in each work center. This study will use a rough cut capacity planning approach to help resolve the problem of shortage of production capacity at PT XYZ.
The data-collection and analysis company is expecting to grow by 60% over the next 18 months. According to Baltzan & Phillips (2009), the project scope defines what is needed to have the projected completed, such as requirements, project goals, costs, and deadlines, (p 415). The project will consist of expanding the company from one floor to three floors over the next six months. The availability of the servers need to be maintained during hours of operations. To handle the company growth with the new floors, a network will need to be installed along with computers, printers, and copiers for employees to use. Once the network is installed and
One of the key problems arises when quoting project times aggressively, resulting in revenue shortfalls in essential areas such as staff wages, operating costs, equipment, supplies, third-party procurement needs and administrative costs.
Assumption: During peak demand times, each piece of equipment is limited to 30 minutes per member.
It is acknowledged that real-world situations could be represented by well structured and formulated Linear programming models. These mathematical tools contribute significantly to business activities and can be used to tackle problems that constantly arise.
Advantages: Easy to learn, great client benefit, can deal with a huge number of complex undertakings.
Queuing Characteristics: Queuing system has three characteristics they are: arrivals of inputs to the system, the waiting list and the service facility (Render et al, 2015). A simulation modeling process is based mainly on feeding the quantitative data into a model to produce quantitative results in a structured sequential process (Eldabi, 2002). This method assists managers by allowing them the opportunity to create a simulation model to see the various advantages and disadvantages of any changes they would like to integrate into their
Capacity management and all its elements including, staff, delivery systems and processes is such a large part of any organisation it is vital to its success. For any organisation being able to manage capacity is critical to the simple business function of providing a service to meet the demand set by customers. (Hill et al, 2011)
In order to run an organization to its best ability, operations managers can rely on linear programming as a way to guide them in to better decision making in a more confident fashion. Linear programming gets the most effective use out of an establishment’s resources, this is always the ideal condition for companies, and nobody wants to be knowingly throwing resources down the drain. In order for an operations manager to successfully administer a linear programming equation, the OM must have four requirements: an objective, constraints, alternative and linearity.
Capacity planning based on the timeline is classified into three main categories long range, medium