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

Approaches for handling customer complaints and listening to, explain appro...

explain approaches for handling customer complaints and listening to customers

Explain best time for performance appraisal, Is there one best time for per...

Is there one best time for performance appraisal? Explain

Meaning and definition of production management, Meaning and Definition of ...

Meaning and Definition of Production Management Production management is a stream of management that is associated to the production function. Production might be termed to as th

Why surprised by environmental changes, Why do you think many managers are ...

Why do you think many managers are surprised by environmental changes and hence are less able to help their organizations adapt?

Assignment on erp jit, how to write a good assignment report on erp jit

how to write a good assignment report on erp jit

#Process design plant locatiom.., Relation with types of manufacturing plan...

Relation with types of manufacturing plant location and layout.?

Explain control board meeting to approve a scope change, Which of the follo...

Which of the following is normally not addressed in a change control board meeting to approve a scope change? Answer Cost of the change Which functional unit will perform

Explain what does the term product positioning refer to, What does the term...

What does the term product positioning refer to? A careful analysis of cross tabulations Shelf locations in major chain, grocery, and department stores Geographic segmenta

Explain the role of the hrm professional, How do these policies and practic...

How do these policies and practices align with Apple, Inc.'s legal compliance standards? If alignment is not present, how does this affect the role of the HRM prof

Explain is this the only way to get assitance, Can someone please help me w...

Can someone please help me with the questions below, Also, this is my first time usng cheggs for my assigments. Is this the only way to get assitance? or is there a search tool to

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