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 supply managers have impact on economic trends, Why does the collec...

Why does the collective behavior of supply managers have such an impact on economic trends?

Explain other type of business planning, Is Logistics planning more importa...

Is Logistics planning more important than any other type of business planning? WHY or Why not?

Planning tools or techniques, Planning Tools or Techniques General Fra...

Planning Tools or Techniques General Framework Discuss the Planning function in the context of the work of the manager.  Illustrate with a case study. Individual Compone

Explain strategies in the business buying decision process, Describe the ei...

Describe the eight general strategies in the business buying decision process.

Define the information security issues facing the government, Evaluate: Eva...

Evaluate: Evaluate the information security issues facing the government and identify its three biggest concerns

Major concerns confronting thomas regarding the management, Analyze the thr...

Analyze the three primary concerns confronting Thomas regarding the management of this project. Suggest a method of addressing each of the three concerns

Global supply chain issues, Global Supply Chain Issues  Global supply ...

Global Supply Chain Issues  Global supply chains bring problems of their own. As companies begin to apply organisational efficiencies achieved in their home markets to oversea

supply chain, What is the primary objective of supply chain managemen

What is the primary objective of supply chain management

Explain wrongfully discharged have against an employer, Pam worked at a loc...

Pam worked at a local retail store for the past two years. At first, she loved her job; however, the store made a change in management at the end of her first year of employment. T

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