Sub optimisation - operations function, Operation Management

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).

Posted Date: 3/16/2013 6:08:16 AM | Location : United States







Related Discussions:- Sub optimisation - operations function, Assignment Help, Ask Question on Sub optimisation - operations function, Get Answer, Expert's Help, Sub optimisation - operations function Discussions

Write discussion on Sub optimisation - operations function
Your posts are moderated
Related Questions
what advantage and disadvantage stepping stone method?

Year 1 2 3 4 5 6 7 8 9 10 11 Demand 7 9 5 9 13 8 12 13 9 11 7 a) Plot the above data on a graph. Do you observe any trend, cycles, or random variations? b) Starting in yea

Assess the importance of completing post-project reviews, and determine what project documentation must be updated as the result of the review meeting. Discuss the risks associated

Is employee turnover ever a significant barrier to good customer service? Why, or why not?


An analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is

Security Services, Inc. and Redline Protectors were the two predominant providers of home alarm systems in the Dallas area. They had become the two big businesses after the smaller

Discuss Michael Porter's Competitive Forces Model. Provide examples to illustrate your points.


Task time estimates for a production line setup project at Robert Klassens Ontario factory are as follows: Activity Time (in hours) Immediate Predecessors A 6.0 B 7.2 C 5.0 A D 6.0