## 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.

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.

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.

#### Difference among using an exact optimization technique, What is the differe...

What is the difference between using an exact optimization technique and a heuristic to solve a problem?

#### Process flow and layouts, process flow and layout flows are at the core of ...

process flow and layout flows are at the core of lean manufacturing, do you agree or disagree?

#### Explain how many units are needed to break, A manufacturing process has a f...

A manufacturing process has a fixed cost of \$150,000 per month. Each unit of product being produced contains \$25 worth of material and takes \$45 of labour. How many units are neede

#### Results and enabler are features of which quality management, Results and e...

Results and enablers are features of which quality management The European Foundation for Quality Management (EFQM) excellence model

#### Explain how can you determine a core competency, How can you determine a co...

How can you determine a core competency?

#### Explain potential unethical actions, Identify four potential unethical acti...

Identify four potential unethical actions or inactions related to capacity planning, and the ethical principle each violates

#### Explain collective bargaining process, Detail the five measures that unions...

Detail the five measures that unions have taken in the collective bargaining process to introduce provisions that would protect employees displaced or laid off due to technology ch

#### Explain what is the largest stnd dev, The Good Chocolate Company. Specifica...

The Good Chocolate Company. Specifications for the 12-ounce bar are 330 grams to 350grams. What is the largest stnd dev, in grams, and still considered capable of ave fill of 340 g

#### Evolution of the supply chain, Evolution of the supply chain  Procurem...

Evolution of the supply chain  Procurement, materials management and logistics management activities can be combined by the integration of software packages such as ERP. For m

#### Explain opportunity costs of capital at tep, How would the EBQ change if th...

How would the EBQ change if the set-up costs were reduced by 50 percent, and the holding costs were reassessed by 40 percent, taking account of the opportunity costs of capital at