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

Is true that a mpc can run independent of the operation plan, Which of the ...

Which of the following is true? MPC can run independent of the operation plan. Business failure can result from poor MPC performance. In PAC, order release directly affect

ROLE OF PRODUCTION PLANNING AND CONTROL, WHAT IS MEAN BY RODUCT DESIGN IN O...

WHAT IS MEAN BY RODUCT DESIGN IN OPERATION MANAGEMENT?

Explain a global corporation, A global corporation sees the world as its la...

A global corporation sees the world as its labor source as well as its marketplace. Therefore, a global corporation will locate an operation wherever it can accomplish its goals in

Explain sales-force composite, List the specific weaknesses of each of thes...

List the specific weaknesses of each of these approaches to developing a forecast: a. Consumer surveys. b. Sales-force composite

Describe detect the presence of assignable causes, If the time order of pro...

If the time order of production has not been recorded in a set of data from a process is it possible to detect the presence of assignable causes?

Concept of a productivity boundary and operating efficiency, 1. Porter (199...

1. Porter (1996) attempts to resolve the issue of Skinner's quandary with trade-offs by introducing the concept of a productivity boundary and operating efficiencies. Explain where

How conduct an analysis of american apparel, Conduct an analysis of America...

Conduct an analysis of American Apparel. Assess American Apparel's vertical integration, global strategy, and diversification. Compare American Apparel's approach to Google's

Explain separately compiled modules of a program, A system program that com...

A system program that combines the separately compiled modules of a program into a form suitable for execution A. assembler B. linking loader C. cross compiler D. load

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