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

Define manufacturers should feel free to sell private labels, Should Nation...

Should National-Brand Manufacturers Also Supply Private Label Brands? Take a position: Manufacturers should feel free to sell private labels as a source of revenue versus nation

Explain work study, Explain work study. Definition of Work Study: it,...

Explain work study. Definition of Work Study: it, as defined by British Standard Institution, is a generic form for those techniques mainly 'Method Study' and 'Work Measureme

Management and operations, a. Describe who will be the CEO and his/her qual...

a. Describe who will be the CEO and his/her qualifications/experiences in the product/service industry, including both education and work and other relevant experiences. b. Desc

Objectives of motion study, Objectives of Motion  Study 1.   Combine  ...

Objectives of Motion  Study 1.   Combine  relative  activities. 2.   Increases the  efficiency of activities. 3.   Reduce physical fatigue. 4.   Eliminate as many unne

Layout, disconnected or functional layout

disconnected or functional layout

Explain efficiently report of schedule of a project, Illustrate how to effe...

Illustrate how to effectively and efficiently report on the schedule of a project to the different stakeholder groups. Show calculations and provide rationale for each strategy.

Product-focused organizatioin, Describe the forms of production or manufact...

Describe the forms of production or manufacturing in a product-focused organization

Which one technique i recommend is because, Complete the below table. Which...

Complete the below table. Which one of these techniques would you recommend to use and indicate your rationale. Technique Ave Bias Ave MAD MSE Ave MAPE Naïve 4 Per MA Exp Smooth Th

Define management information system and its scope, Normal 0 fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

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