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 briefly the vrooms expectancy theory of motivation, Question 1: ...

Question 1: More and more organizations are showing greater reliance on team building and team work as opposed to individual work. Please discuss. i. Give characteristics o

Explain expects to perform the modifications to vehicles, Honda Motor Compa...

Honda Motor Company has discovered a problem in the exhaust system of one of its automobile lines and has voluntarily agreed to make the necessary modifications to conform with gov

Illustrate example of queuing theory in operation management, Illustrate th...

Illustrate the examples of the queuing theory in operation management? Example of Queuing theory, a mathematical study of the formation of waiting queues or lines (physical or

Explain what is the minimum number of workstations output, An assembly line...

An assembly line with a number of tasks is to be balanced. The sum of the task times is 100 minutes. The line will operate for 7 hours per day. What is the minimum number of wor

Explain the process of outsourcing, Outsourcing The process of outsourci...

Outsourcing The process of outsourcing the creation of a product or a service is a controversial, yet critical strategic decision for many employers. Describe one example from y

What options are open to coral to address this issue, Read Space Age Furnit...

Read Space Age Furniture Company in Chapter 9 of your text. Answer the following seven questions: (Include any MRP calculations). • What options are open to Coral to address th

Define how the data resource management methods need, Discuss how the data ...

Discuss how the data resource management methods of today will need to evolve as more types of data emerge. Why the role of a data steward is considered innovative? Explain.

Explain objective functions for an lp model equivalent, Are the following o...

Are the following objective functions for an LP model equivalent? That is, if they are both used, one at a time, to solve a problem with exactly the same constraints, will the opti

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