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 national cattlemens beef association advertises beef, When the Nati...

When the National Cattlemens Beef Association advertises Beef, Its Whats for Dinner, it is trying to stimulate _____ demand. selective primary derived generic second

Explain that they receive the training they need, The Chief Projects Office...

The Chief Projects Officer (CPO) is responsible for the individuals working on a project in all of the following way EXCEPT: A. That they perform project activities according to

Explain arbitration and judicial resolution of disputes, The difference bet...

The difference between arbitration and judicial resolution of disputes

Explain what changes in culture are needed at the plaza inn, 1. How could t...

1. How could the Plaza Inn develop a collaborative strategy? Develop a specific plan. 2. How could technology help solve the problems at the front desk? Explain what you propose

Explain the mystery cat, In TS Elliot's book of practical cats name the mys...

In TS Elliot's book of practical cats name the mystery cat?

Explain why do you prefer that method, We need to consider some accounting ...

We need to consider some accounting ideas in order to cover this week%u2019s Objective # 3. So in that regard, for your own business, which method of accounting would you use, the

Explain grievances handling, Explain grievances handling. Grievances H...

Explain grievances handling. Grievances Handling: Individual workers generally have some complaints termed as grievances against the working rules of the business enterprise,

Lay out, how does an operation manager decide what layout type is most appr...

how does an operation manager decide what layout type is most appropriate for his or her business

Explain what charles schwab & pfizer works, Read the Ask Chuck & a New Kind...

Read the Ask Chuck & a New Kind of Structure Case Applications on pages 283 & 284. Describe what Charles Schwab & Pfizer Works are doing. Discuss what role organizational structure

Calculate the expected value of perfect information, Clay Why bark, a soft-...

Clay Why bark, a soft-drink vendor at Hard Rock Cafe%u2019s annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of na

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