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 styles of leadership are situational and charismatic, The five type...

The five types of leadership styles are most applicable in certain situations. Discuss the applicability of each of the five types in project leadership situations and its usefulne

Criteria for a good layout, Criteria for a Good Layout Maximum Fl...

Criteria for a Good Layout Maximum Flexibility: A good layout will be one which can be rapidly modified to meet changing circumstances. In this context particular attent

The sales manager of a company making automotive pumps, • Summarize how thi...

• Summarize how this chapter is of value to two of the following individuals: o A new business owner of a residential and commercial carpet cleaning service o The executive d

Importance of layout, Importance of Layout 1. Economic in Handling : ...

Importance of Layout 1. Economic in Handling : Nearly 30 per cent   to 40 per cent of the manufacturing costs in accounted for by materials handling. Every effort should ther

Innovative ideas for management position, These are questions I were asked,...

These are questions I were asked, i'm assuming you could understand the question based on the way I worded the answers. It's suppose to be a paragraph but i'm not exactly sure what

How employer pay for employee benefits, 1. Why would the government not tax...

1. Why would the government not tax us for the Employee Benefits we receive? 2. As a percent of payroll, how much does your employer pay for Employee Benefits? 3. Explain the

Define the minimal long-term effect on the environment, Define the minimal ...

Define the minimal long-term effect on the environment. Practices for minimal continuing effect onto the environment: a. Reduction within the use of toxic substances. b.

Define high inventory holding cost can lead to low eoq value, 1)The standar...

1)The standard time at Lensco Inc for grinding a set of prescription lenses is 18 minutes. If the typical efficiency for their operations is 80%, and typical machine reliability is

Explain what would be the increase in the safety, A local bar serves a prem...

A local bar serves a premium draft beer to its customers. The daily demand for beer is assumed to follow a normal distribution with a mean of 80 litres and a standard deviation of

Explain what the main organizational problems, What do you see as the main ...

What do you see as the main organizational problems that are likely to be associated with implementation of a transnational strategy? Explain

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