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

Limitations of e-business, Limitations of E-Business 1.      Problems ...

Limitations of E-Business 1.      Problems relating to the security of the data  2.      Limitations of bandwidth (speed of data transmission)  3.      Standardisation o

Explain subcontractors for a government project want, The government spends...

The government spends a large amount of money each year on contracts. In fact, the federal procurement department spent over $425 billion in the fiscal year 2006 with over $33 mill

Explain the managerial process, The Managerial Process text. Given the proj...

The Managerial Process text. Given the project network provided, compute the early, late, and slack times for the project. Share your calculations and explain how you came up with

Explain basic concepts of construction management, How does the transformat...

How does the transformation process apply to the field of construction management, and how you might apply the basic concepts?

Define performance appraisals are they necessary or not, Performance Apprai...

Performance Appraisals- 1. What purpose do they serve under a performance management system? 2. Performance appraisals are they necessary or not? 3. What to do if a perfor

Johnson''s rule, Please help with sequencing the following jobs; T,U,V,W,X,...

Please help with sequencing the following jobs; T,U,V,W,X,Y,Z (WORK CENTER 1 - 15,7,4,7,10,4,7) (WORK CENTER 2 - 3,9,10,6,9,5,8) RESPECTIVELY TO THE JOBS. THE REST I WILL CALCULATE

Determine the break-even point, Question: Le Bistro makes more than one...

Question: Le Bistro makes more than one product and would like to know its break-even point (price). Monthly fixed cost is estimated at $3,500 and management has gathered the f

Explain average age of the us workforce is increasing, The average age of t...

The average age of the US workforce is increasing and will continue for several years.

Explain quality is considered to be a structural element, Quality is consid...

Quality is considered to be a structural element of the strategic service concept.

Explain an increased velocity in sensing and responding, Discuss an example...

Discuss an example of an unknown-unknown risk that proved damaging to a supply chain. Explain how the following strategies might have mitigated this risk: • Investment in redund

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