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

Group technology - cellular manufacturing system, Group Technology- Cellula...

Group Technology- Cellular Manufacturing System In group technology/ cellular manufacturing (CM) machines are grouped into cells and the cells functions somewhat like a produc

Master production scheduling, Master Production Scheduling The master s...

Master Production Scheduling The master schedule ( or master production schedule of MPS) sets the quantity of each end item (finished product) to be completed in each time peri

Explain how does safety management address fatigue issues, Fatigue is a maj...

Fatigue is a major safety concern in the aviation industry. How does safety management address fatigue issues yet accomplish the job without incurring more costs in the company. We

Explain supply chain activities, Compile a list of major system life-cycle ...

Compile a list of major system life-cycle activities. For each activity on the list, try to find the related supply chain activities. Present your finding in a table with the syste

Describe main motivational theories described in the text, There are a vari...

There are a variety of theories of motivation, many of which are complementary. Of the main motivational theories described in the text, which theory or theories do you think would

How minimizes the number orders waiting in the queue, Which of the followin...

Which of the following rules maximizes the number of orders processed in a center and minimizes the number orders waiting in the queue? Shortest operation next First-come/fir

Illustrate the quality control systems, Illustrate the quality control syst...

Illustrate the quality control systems? Quality Control verses Quality Assurance: Quality control systems comprise sampling, testing and inspection of raw materials, work-in

Explain which goal is same to lead to the best performance, if the average ...

if the average worker can produce 15 wedges an hours/which goal is like to lead to the best performance/ which id the correct answer a.10/ b.15 c.15 c.do you best d. 18 e.

Explain probabilities of various caseloads to be unreliable, The director o...

The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The dir

Explain self-awareness and empathy, The perceptual distortion of projection...

The perceptual distortion of projection can be controlled thru a high degree of/ 1.ethical behaviour/2.cognitive consistency/3.emotional discernment/4. self-awareness and empathy/5

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