Sub optimisation - operations function, Operation Management

Assignment Help:

Sub optimisation - Operations Function

Another important issue raised by the systems approach is that of sub-optimisation. This is of considerable significance for managers, as it refers to situations where a sub-system is configured such that its performance appears to be optimal, yet the performance of the larger system is prejudiced. A hypothetical example might be a firm comprising several divisions (sub-systems), one of which is responsible for the assembly of final products.

The management of this division decides to reduce operating costs by cutting the stock levels of component parts, and placing replenishment orders for smaller quantities, and more frequently than previously. If this division is supplied by other manufacturing divisions of the firm, they may be obliged to produce in uneconomically small batches: the resulting increases in set-up costs of the supplying divisions may turn out to be greater than the stock-holding savings made by the assembly division. What appears to be optimal for a sub-system (the assembly division in this case) may not be not be optimal for the higher level system (the firm).


Related Discussions:- Sub optimisation - operations function

Explain cause organizations to redesign their products, What are some of th...

What are some of the factors that cause organizations to redesign their products or services?

Define contribute toward building a more ethical environment, How can you c...

How can you contribute toward building a more ethical environment?

Explain development performance management, Human resource activities that ...

Human resource activities that do NOT relate to motivating workers include: Answer career development performance management training initiatives retention initiatives

By whom dual factor theory was propose, By whom Dual factor theory was prop...

By whom Dual factor theory was propose? Dual factor theory has been proposed by Herzberg.

Is true or not that demand for product is not a constraint, Which of the fo...

Which of the following is true? Once you complete the five steps, the process is complete. Another constraint will always appear when the original constraint is broken. De

Design methods, Computer-Aided Design is one of the techniques used by Rega...

Computer-Aided Design is one of the techniques used by Regal Marine in the manufacturing of boats. With the aid of examples, critically discuss FIVE (5) techniques that are import

Define fddi network must be practicing what type of bridging, A bridge that...

A bridge that is used to connect an Ethernet network with a FDDI network must be practicing what type of bridging. a. a cut-through mode bridging b. source-route bridging

Compute the expected weeks of supply, The owner of Genuine Reproductions (G...

The owner of Genuine Reproductions (GR), a company that manufactures reproduction furniture, is interested in measuring inventory effectiveness. Last year the cost of goods sold at

Factors for plant location choice - suitability of climate, Factors for pla...

Factors for plant Location choice - Suitability of Climate The climate has its own importance in the location of a plant because of two reasons. First there are certain indust

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd