Time lag effects - operations function, Operation Management

Assignment Help:

Time Lag Effects - Operations Function

Feedback control in complex systems can bring its own problems, due to time lag between measuring the output deviation and realising the effects of the corrective adjustments. A well-known illustration of this phenomenon was presented by Jay W Forrester in his book, Industrial Dynamics. He had been consulted by a white goods manufacturing concern which had been experiencing wildly fluctuating production levels over a period of years; despite the best efforts of the company's management they had been unable to keep production output in reasonable balance with customer demand. Forrester and his team studied the operations of the company's distribution chain (shown in simplified form in the figure) and formulated a computer simulation model of the factory - warehouse - distributor - retailers.

1355_Time Lag Effects – Operations Function.png

The figure below (adapted from Forrester, 1965) shows the results obtained when a 10 per cent step-increase in demand at the retail outlets was introduced. This chart is necessarily 'cluttered', to show how the various order, inventory and production levels changed in response to the initial increase in sales.

1964_Time Lag Effects – Operations Function 1.png

For our purposes it will be sufficient if you locate the two lines labeled 'Retail sales' and 'Factory production output'. It was found that, because of a series of time-lags in the chain, the feedback signal was greatly amplified by the time it reached the factory, resulting in over-reaction. Note that the production level climbs by 45 per cent, creating an excessive build up of inventories. In response the production level falls to 3 per cent less than the original level, and so on. It takes about 18 months for the fluctuations to be damped out.


Related Discussions:- Time lag effects - operations function

Explain concepts in the world of marketing, In the world of marketing, ____...

In the world of marketing, _____ are ideas about products or services. (Points : 3) concepts notions perceptions impressions theories

Explain what is your understanding of the term brand equity, What is your u...

What is your understanding of the term: Brand Equity?

Explain own personal devices used for work, BYOD and we are reading so much...

BYOD and we are reading so much about BYOD (bring-your-own-device). Are the mobile devices you use for business owned by the company or are they your own personal devices used for

Why a small business owner consider the demographics, Why should the small ...

Why should the small business owner consider the demographics of an area when choosing a location for opening a new business? Name some sources of demographic information that are

Explain staff time is saved in the form of reduced staff, As throughput imp...

As throughput improves, staff time is saved in the form of reduced staff worked hours per unit of service

Explain improve motivation of the employees, You are a manager of a Consult...

You are a manager of a Consulting firm, with 25 employees under your supervision. Employee Motivation appears to be slipping as well as employee performance. Employees seem to have

Explain charlotte inventory levels, L. Houts Plastics is a large manufactur...

L. Houts Plastics is a large manufacturer of injection moulded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the informat

Business management, Six Operators are to be assigned to five jobs with the...

Six Operators are to be assigned to five jobs with the cost of assignment in Rs. given 10 marks in the matrix below. Determine the optimal assignment. Which operator will have no a

Explain guidelines on discrimination because of religion, Inez Garcia was b...

Inez Garcia was born in Portland, Oregon. Her mother is from Italy and Jewish. Her father is Mexican. Under the Guidelines on Discrimination Because of Religion or National Origin,

Explain organizations need to calculate a threshold, Why do organizations n...

Why do organizations need to calculate a threshold for a reorder? How could this affect sales?

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